Beiersdorf reveals strong results for 2005

Despite tough market conditions, particularly in the all-important German market, Beiersdorf says its preliminary year-end results indicate sales growth of 5.1 per cent, while profit after tax rose by 7 per cent.

These figures meant that sales came in at €4.77 billion compared to a figure of €4.54 billion, while profit before tax stood at €330 million compared to €302 million the previous year.

The figures were largely in line with market expectations, with sales figures fractionally above and profits slightly below analysts' predictions.

Operating margins reached approximately €525 million, compared to €483 million the previous year, representing a rise of 11 per cent and confirming the company's return to form following the challenges it has had to face in both the domestic and other Western European markets.

However, the 2005 results continue on from the upturn experienced towards the end of 2004. This has been brought about by a gradual scaling down of production and a trimming down of the workforce in Europe in a bid to save €100 million annually.

With the successful implementation of this plan, financial analysts upgraded their outlook for the 2005 financial year - expectations that the company has clearly managed to live up to.

The company said that its consumer business segment grew by 5.2 per cent to reach €4.04 billion, attributable to strong growth in all regions except North America, where tough retail competition is continuing to cut back on margins as well as sales.

The maker of super brand Nivea also highlighted double digit sales growth in Eastern Europe, Latin America, as well as the Asia/Africa/Australia region. These markets will now become Beiersdorf's primary focus as it gradually scales down its Western European operations.

The company also said that it will now target expanding categories such as body care and conditioners on a global basis.

In view of its strong performance in 2005, the company said that in the course of 2006 it is now expecting to have a continued improvement in its profit margins, although it did not specify a figure.