Industrial orders lame: travel warnings burden Beiersdorf

Sun protection, skin care and higher-priced cosmetics: The tourism traffic that has practically come to a standstill worldwide as well as the closure of the airport shops hit Beiersdorf cosmetics group hard. In addition, there are fewer orders for the adhesives division, especially from the automotive industry.

Massive travel restrictions and the slump in demand from industry have had a significant impact on the Nivea manufacturer Beiersdorf in the first half of the year. Both the luxury care brand La Prairie and sun protection products suffered severe losses for the Hamburg-based Dax group. CEO Stefan De Loecke was cautious about the further development. For the year as a whole, this means declines in sales and earnings. "Even if our business is currently recovering, the development in the second half of the year is uncertain," he said.

July developed better than June. However, a second pandemic wave and a further deterioration of the economic environment in the wake of the Corona crisis could slow this recovery. However, Beiersdorf is going into the second half of the year with a strong product pipeline, said the CEO. Beiersdorf wants to score with innovations, especially in skin care.

Overall, however, Beiersdorf expects sales to decline this year. Adjusted operating profit (EBIT) fell from EUR 593 million to EUR 472 million in the first half of the year. After taxes, only 291 million remained in the till instead of 417 million. Adjusted for purchases and sales as well as currency effects, Hamburg's revenues fell by more than a tenth to just under 3.5 billion euros. Beiersdorf recorded double-digit percentage declines in both consumer and adhesive business.

In the consumer business, the luxury care brand La Prairie suffered in particular, with sales falling by more than 40 percent. La Prairie is sold a lot at airports and is dependent on the travel market as the main sales channel. The widespread collapse in tourism therefore had a massive impact on the division's most lucrative business. The recovery will take a long time, De Loecker estimates – depending on how the travel market develops. In China, however, there are already positive signals again.

Business with Nivea products also declined significantly. In the month of June, for example, Beiersdorf suffered severe losses in its sun protection products business. Only sales with dermatological skin care (Eucerin) were able to increase. The group did not provide any details. A spokeswoman only said that during the crisis, consumers preferred to use well-known brands such as Nivea. In the Tesa adhesives business, demand from industrial customers also fell. This particularly affected the automotive industry.