Beiersdorf continues to invest in C.A.R.E.+ despite sales decline in the first quarter of 2020

• Group’s organic sales down 3.6% on previous year
  
• Organic sales 3.3% lower year on year in Consumer Business Segment
• Organic sales at tesa decline 5.1% on prior-year figure
• Strong sales growth in Derma and Healthcare business units
• €50 million international aid program activated
• Guidance for 2020 withdrawn

Hamburg, May 5, 2020 – Beiersdorf recorded a drop in sales in the first quarter of 2020 as a result of the global spread of the COVID-19 pandemic. Organic Group sales fell by 3.6% in the first three months of the year. In nominal terms, Group sales stood at €1,910 million, down 1.9% on the prior-year figure of €1,947 million.

“The global COVID-19 crisis is changing our life and work radically. From the very beginning, we have focused on ensuring the health and safety of our employees, continuing to serve our consumers, and supporting communities in their fight against the coronavirus. As expected, the ongoing COVID-19 pandemic has affected the company’s results for the first quarter. Our selective cosmetics brand LA PRAIRIE has been particularly hit by the drop in international travel. At the same time, our core brand NIVEA remained steady with only a slight fall in sales, while our Derma and Healthcare brands achieved strong, double-digit sales growth. Beiersdorf’s foundations are strong enough to enable us to master and overcome this unprecedented crisis together – and emerge from it stronger in the long term. Despite today’s major economic challenges, we will stay on course with our strategy and will maintain investing in our initiatives under C.A.R.E.+,” said Stefan De Loecker, CEO of Beiersdorf AG.

Organic Group sales in the first three months were down 3.6% year on year. Structural effects lifted sales growth by 2.4 percentage points. Exchange rate changes lowered the growth rate by 0.7 percentage points. At €1,910 million, nominal Group sales were down 1.9% year on year (€1,947 million).

Organic sales in the Consumer Business Segment fell by 3.3% in the first three months of the year. Negative exchange rate effects of 0.7 percentage points were offset by structural effects, which added 3.0 percentage points to growth. At €1,581 million, nominal sales were down 1.0% on the previous year’s figure of €1,598 million.

Sales by NIVEA fell by 0.6%, while the Derma business unit with the EUCERIN and AQUAPHOR brands achieved strong sales growth of 11.5%. The Healthcare business unit, mainly comprising the plaster business, also performed very positively with growth of 10.1%. The LA PRAIRIE brand was particularly hit by the drop in international travel and recorded a 35.8% decline in sales.

Organic sales in the Europe region fell by 6.8%. At €750 million, nominal sales were 6.6% below the previous year’s figure of €804 million.

In Western Europe, sales were down 9.6% on the previous year, affected by weak performance in countries such as France, Italy, and Spain, which were affected by early curfews due to the COVID-19 pandemic and especially by the sharp fall in sales in the travel retail business at LA PRAIRIE. In Germany, however, strong growth was achieved. In Eastern Europe, sales climbed by 5.4%, driven especially by a strong performance in Russia and Poland and good growth figures in Ukraine and Kazakhstan.

Organic sales in the Americas region were up 10.6% year on year. The acquisition of the COPPERTONE business lifted growth in the region by 20 percentage points. Exchange rate effects reduced sales by 4.1 percentage points. At €337 million, nominal sales were 26.5% higher than in the previous year.

In North America, organic sales grew by 1.3%. Sales in Latin America were up by a strong 18.9%, fueled especially by very good performance in Brazil and Chile. Mexico also achieved strong sales growth. Sales in Argentina remained substantially short of the previous year’s figure due to the difficult market environment and negative exchange rate effects.

The Africa/Asia/Australia region reported a 5.0% fall in sales. Nominal sales fell by 6.4% to €494 million (previous year €528 million), partly due to the disposal of the SLEK brand. Due to the COVID-19 pandemic, there was a particular decline in sales performance at LA PRAIRIE and at country level in China, India, and Japan. Meanwhile, performance was well into positive territory in Turkey, Australia, the Philippines, Malaysia, and parts of Africa.

tesa recorded a fall in sales from January to March compared to the same quarter of the previous year. Organic sales at tesa declined by 5.1%. Negative exchange rate effects reduced growth by a further 0.6 percentage points. In nominal terms, tesa therefore recorded a 5.7% fall in sales to €329 million (previous year: €349 million).

This trend was caused by the impact of the coronavirus pandemic on the global economy. tesa recorded falling sales especially in the Direct Industries division, which handles business directly with industrial customers. In the Trade Markets division, which includes the retail consumer business, tesa recorded slight growth in sales.

In a difficult market environment, automotive business in particular saw a negative sales trend. This was also the main factor behind the declining sales in the Americas and Europe. In Asia, there was a marked year on year fall in sales in the electronics business.

There were no significant changes in the Group’s net assets and financial position in the first three months of the year compared with December 31, 2019. With a strong balance sheet and high net liquidity, Beiersdorf is well equipped to meet the challenges of the COVID-19 crisis.

The health and safety of its employees and partners, as well as the service the Group provides for its customers and consumers, is the top priority for Beiersdorf. As a global company, Beiersdorf wants to quickly and effectively help support society in the fight against the COVID-19 pandemic. It therefore activated an international emergency aid program at the end of March of €50 million.

Among the immediate measures are:

• Donation of 1,000,000 liters of disinfectant: Beiersdorf has now converted its production plants on five continents to work in producing hand sanitizers.
• Donation of at least 5,000,000 tins of NIVEA Creme to medical staff all around the world whose skin is under particular stress at this time.
• Direct financial support for global and local partner NGOs.
  
• As Beiersdorf employees are coming together to support international aid organizations, Beiersdorf commits to double any employees’ personal donations.

For 2020 as a whole, the company is unable to currently project the future development or the economic impact of the coronavirus crisis. The targets set in the company’s guidance issued on March 3, 2020, are unlikely to be achieved. The company has withdrawn this guidance as a result.