BERLIN — Negative foreign exchange rates and a difficult economic climate worldwide dampened the sales and profit performance of both the Wella and Beiersdorf Groups in the first half of 2002.
This story first appeared in the August 16, 2002 issue of WWD. Subscribe Today.
The Darmstadt-based Wella Group reported that sales rose 5.5 percent to $1.57 billion, but after adjustments for currency effects, sales would have grown 8.3 percent, the company said. All dollar figures are calculated from the euro at current exchange rates.
Earnings before interest and taxes dropped 4.9 percent to $111.1 million, but Wella emphasized this was “in line with expectations.” A spokeswoman explained that operating profits or EBIT in the first half of 2001 were particularly high, due to key launches during the period, whereas in 2002, most key launches will be introduced in the third and fourth quarters. In addition, negative developments with the yen, dollar and Latin American currencies further affected earnings, she said.
For the six-month period, sales in the professional division were up 8.6 percent, cosmetics and fragrances sales grew 11.8 percent, but consumer sales declined due to “a continually bad situation in the German retail trade.”
Weak conditions in the German market also helped boost the percentage of sales generated by exports, which now account for 73.8 percent of sales compared with 72.4 percent a year ago.
For the year as a whole, Wella said it “still expects sales growth of between 10 to 14 percent, based on unchanged foreign exchange rates.”
In Hamburg, Beiersdorf reported a 3.3 percent rise in group sales for the period to $2.40 billion. For the first time, sales figures include sales by Florena Cosmetic GmbH, which Beiersdorf acquired in April. The resulting sales largely offset other special effects from 2001, such as the sale of the advanced wound care business, Beiersdorf pointed out.
Sales for Beiersdorf’s beauty or Cosmed division rose 6.1 percent to $1.62 billion, supported by innovations launched under the Nivea brand, the “world’s biggest personal care brand,” according to Beiersdorf. Nivea hair care sales rose 10.9 percent in the period, Nivea deodorant 14.6 percent and Nivea for Men 20.6 percent.
EBIT were $254.8 million for the period, compared with $284.2 million in 2001. However, the 2001 EBIT figure includes $37.2 million generated by the sale of Beiersdorf’s wound care business during the first half of the year. Without this sum, EBIT for the first half of 2002 would have risen 3.3 percent.
For 2002, Beiersdorf is now projecting a 6 percent sales increase for the Cosmed division compared to 8 percent the company had previously forecast. The firm plans to grow group sales by around 4 percent to $4.61 billion, somewhat less than the originally projected $4.66 billion.
While talk of a pending Beiersdorf sale has quieted down of late, a report in the French press ruled Unilever out of the acquisition race, saying that the firm claims Nivea products would be in direct competition with its Dove brand.