Beiersdorf ends 2004 on a strong note

German health and beauty care manufacturer Beiersdorf has reported marginally better than expected results for the fourth quarter and financial year 2004, reflecting the success of its lengthy restructuring project.

The company said that despite a difficult trading environment in Europe its sales grew by 4.5 per cent for the year as a whole to reach €4.545 billion. This figure was above analysts' expectations, with Goldman Sachs estimating that sales would increase by 3 per cent for the year.

Operating results reached approximately €480 million, which was above 10 per cent of sales. The company added that despite higher financing costs, profit after tax amounted to €300 million, representing 6 per cent of sales.

Goldman Sachs said it believed that a 4 per cent increase in the company's sales was attributable to a reduction in marketing costs, although Beiersdorf has not commented on this.

On a regional basis the company said that its growth in Europe was held back by a sluggish German economy, which is also one of the company's core markets and still accounts for 27 per cent of its total sales. Elsewhere significant growth was reported in the Americas as well as the African, Asian and Australian markets.

Beiersdorf said that it was expecting its results to be largely driven by the markets outside Europe, where strong economic performance, particularly in Asian and South American countries, is continuing to drive major sales growth for many of the global players in the cosmetics and personal care industry.

Reflecting the positive results, Goldman Sachs said that it was slightly upgrading its expectations of Beiersdorf for 2005, upgrading its Earnings Per Share expectations by 3 per cent to €3.82. However, Goldman Sachs also said that it would continue to carefully monitor the company's performance in the troubled German market and that slated acquisitions in the US could also affect future profitability.