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Cosmed Sales Gain 14%

<?XML:NAMESPACE PREFIX = CS /><CS:BOLD>BERLIN -- The Cosmed division of the Beiersdorf Group continued its double-digit growth pattern in 2001, with sales up 14.1 percent to $2.6 billion. All dollar figures are converted from the euro at current...

BERLIN — The Cosmed division of the Beiersdorf Group continued its double-digit growth pattern in 2001, with sales up 14.1 percent to $2.6 billion. All dollar figures are converted from the euro at current exchange rates.

At constant exchange rates, the percentage increase would have been as high as 15.5 percent, and this primarily generated through internal growth, not acquisitions, the company pointed out. The division’s earnings increased by 17.7 percent, with earnings before interest and taxes rising to $336.5 million, up from $285.8 million in 2000.

Uwe Wolfer, the member of the Beiersdorf executive board responsible for the Cosmed division, said 2001 was a record year on all counts, featuring the largest sales growth — $319.9 million — that has ever been achieved in a single year. But at the annual Cosmed press conference here Tuesday, Wolfer continually emphasized the importance of the division’s qualitative rather than quantitative growth.

Nivea, which fuels Beiersdorf sales, is now the market leader in skin creams and skin lotions in 28 countries, in facial care in 18 counties, facial cleansing in 23 countries, sun protection in 15 countries, deodorants in 12 countries and aftershave in 13 countries. All in all, Nivea holds more than 140 first-place rankings in the international skin care market, according to the company. And in the next five years, the division aims to raise that number to around 250 “Number-One” positions.

International sales now contribute 73 percent of total division sales, up two points, with sales outside of Germany growing 16.3 percent to $1.89 billion. Sales in Europe rose 20.7 percent, with Russia more than doubling its sales in 2001 to reach $79.5 million and Polish sales climbing 25 percent.

In the U.S., sales hit $154.7 million, up 10 percent, and in South America, sales grew 9 percent. Argentina’s financial problems arose too late in 2001 to have any impact on sales in the region or the country itself, which recorded an 18 percent increase. Japan’s continuing financial woes, on the other hand, lead to a minus 6.2 percent decline when calculated in terms of the German Mark, but a plus of 2.6 percent in local currency. Sales elsewhere in Asia increased to $83.9 million , up from $70.8 million.

Domestically, Beiersdorf Cosmed sales were up 8.6 percent to $697.4 million.

The Juvena/La Prairie division generated $147.7 million in sales, compared with $146.8 million the previous year. Wolfer attributed the minimal growth to the termination of some of the firm’s distribution contracts for third parties, such as that for Calvin Klein in Australia, which no longer figure in Juvena/La Prairie sales. La Prairie, initially hit by a decline in tax-free business in the aftermath of Sept. 11, is nonetheless performing very well, Wolfer said. “The La Prairie brand is developing long-term as dynamically as Nivea, though the volume of sales is clearly on a much smaller level,” he noted.

In the year ahead, Wolfer said he expects sales worldwide to grow 7 to 8 percent. There are turbulent conditions in the currency market at the moment, such as Argentina, “which Beiersdorf can’t control, and we’d rather be cautious in our prognosis than have to correct it later,” he stated.

As for speculation concerning a possible takeover or shift in the majority stake ownership of Beiersdorf, Wolfer told the assembled journalists and analysts “my level of information is no better than yours. I can only say that I’m convinced that with our brands, employees and infrastructure, we can continue to successfully build our business autonomously and independently.”

As previously reported, the German insurance giant Allianz raised its stake in the Hamburg-based company from 38 percent to 43.6 percent in late January. This move was seen by some as a maneuver to block the German coffee group Tchibo from turning its 30 percent share in Beiersdorf into a majority stake. Both companies, Wolfer noted, have long associations with Beiersdorf, Allianz’s affiliation going back 65 years and Tchibo’s 30 years.

Analysts are on the alert, though some suggest there is no overwhelming pressure on Allianz to sell its stake in Beiersdorf at the current time. One suggested scenario is an Allianz-driven Beiersdorf linkup with Wella, Henkel or Gillette to create a larger company that could interest global players like L’Oreal or Procter & Gamble.