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Beauty Beat: German Beauty Firms See Strong Sales

Germany's three beauty leaders, Beiersdorf, Henkel and Douglas, have reported relatively strong quarterly results.

BERLIN — Germany’s three beauty leaders, Beiersdorf, Henkel and Douglas, have reported relatively strong quarterly results.

While operating results for Beiersdorf’s consumer division declined a nominal 10.8 percent to 83 million euros, or $103.4 million at average exchange, in the quarter ended June 30, when expenses related to the realignment of the consumer supply chain are eliminated, the division’s second-quarter earnings before interest and taxes rose 12.2 percent, Beiersdorf pointed out.

Second-quarter sales for the consumer division, which includes the skin care brands Nivea, Eucerin, La Prairie, Juvena, Marlies Möller, La­bello, Florena and others, as well as bandages under the Hansaplast, Curad, Curitas and Elastoplast names, rose a nominal 6.8 percent to 1.14 billion euros, or $1.42 billion, a gain of 5.8 percent when adjusted for currency effects.

Group sales, including the Tesa division, rose 7.2 percent to 1.26 billion euros, or $1.57 billion in the quarter, with EBIT down 6.7 percent. Excluding supply chain realignment expenses, group operative earnings were up 13.8 percent for the quarter. Beiersdorf did not state specific year-end sales goals, other than to say that the consumer division is expecting sales, excluding currency effects, to exceed last year’s levels, with a further increase on return on sales.

Düsseldorf-based Henkel Group reported a 12.3 percent gain in EBIT to 95 million euros, or $118.4 million, for its cosmetics and toiletries unit in the second quarter. Divisional sales rose 9 percent to 746 million euros, or $929.4 million, with organic growth placed at 3 percent. Geographically, Henkel said Eastern Europe, North America and Latin America performed particularly well.

The group, which includes laundry and home care, cosmetics and toiletries, consumer and craftsman adhesives and Henkel technologies business sectors, boosted EBIT 21.2 percent to 359 million euros, or $447.3 million, on sales of 3.23 billion euros, or $4.02 billion, an increase of 7.23 percent. Organic growth, when adjusted for foreign exchange and acquisitions and divestments, was set at 6.1 percent.

Ulrich Lehner, chairman of Hen­kel’s management board, said he was “very confident we will achieve the targets we have set for ourselves for the full fiscal 2006.” These call for organic sales growth of 3 to 4 percent, a rise in EBIT of about 10 percent — after adjusting for foreign exchange — and a 10 percent gain in earnings per preferred share.

This story first appeared in the August 9, 2006 issue of WWD.  Subscribe Today.

In the Douglas Group’s third quarter ended June 30, Douglas Perfumeries reported earnings before interest, taxes, depreciation and amortization of 34.6 million euros, or $43.1 million, a gain of 12.3 percent. Sales for 500 Douglas perfumery doors jumped 18.7 percent to 365.6 million euros, or $455.5 million. On a comparable-store basis, third-quarter sales were up 6.5 percent.

In Germany, Douglas’ sales for the period rose 9.9 percent, or 6.3 percent on a like-for-like basis, to 196.2 million euros, or $244.4 million, whereas its non-German doors saw sales rise 30.6 percent, or 6.6 percent on a like-for-like basis, to 169.4 million euros, or $211 million. Non-German sales account for 46 percent of Douglas’ perfumery business, up from 41 percent last year. Since the opening of the first Douglas door in Turkey at the end of May, the chain is now active in 18 countries.

Douglas has already opened 59 perfumeries in its current fiscal year, which will end Sept. 30, and more openings are planned in Italy, France, Spain, Portugal and Poland. Douglas, which acquired the 150 Elytis perfumeries in France in July 2005, did not rule out further acquisitions or stakes in other perfumery chains, domestic and foreign, as a path to future growth.

The Hagen-based group, consisting of perfumery, book, jewelry, apparel and confiserie retail operations, boosted EBITDA by 22.5 percent to 37 million euros, or $46.1 million in the quarter, on sales of 601 million euros, or $748.8 million, a gain of 14.3 percent, or 5.3 percent on a like-for-like basis.

Douglas’ executive board reaffirmed its full-year projections calling for a sales increase of between 8 and 10 percent, with EBIT rising to between 125 million and 127 million euros, or $159.4 million and $161.9 million at current exchange rates.