Beiersdorf Hit by Weak Consumer Demand in 2004

Beiersdorf, German maker of Nivea hand cream, said Tuesday that earnings and sales developed in line with expectations last year, but its performance was hampered by weak consumer demand. Beiersdorf said in a statement it booked net profit of around €300 million ($393 million) in 2004, equivalent to more than six percent of sales. It did not provide a comparable year-earlier figure, but the 2003 annual report published on Beiersdorf's website put the bottom-line 2003 profit at €301 million. Operating profit, as measured by earnings before interest and tax (EBIT), was also slightly lower, amounting to €480 million in 2004 compared with €484 million in 2003. Group sales rose by a modest 2.5 percent to €4.546 billion. The operating profit margin was therefore "well above 10 percent". Looking ahead to the current year, Beiersdorf said it expected the difficult environment to continue. Nevertheless, sales were expected to grow faster than in 2004. In terms of profit margins, pre-tax profit was expected to reach about 11 percent of sales, and net profit would amount to close to seven percent of sales, Beiersdorf said.