Beiersdorf holds dividend steady as profit rises

BERLIN - Beiersdorf, the maker of Nivea face creams, reported a smaller than expected 14 percent rise in 2012 profit and kept its dividend stable, disappointing investors who hoped for more.

Under new CEO Stefan Heidenreich, the group has speeded up a restructuring programme, given all its Nivea products a single logo and is focusing on new products and markets.

The company raised its sales forecasts twice in swift succession at the end of last year and in January it reported a 4.7 percent rise in 2012 sales as markets like Russia and Brazil helped counter a weak climate in Europe.

Beiersdorf, which also makes La Prairie luxury face creams and Labello lip balm, on Tuesday reported 2012 comparable earnings before interest and tax (EBIT) of 735 million euros ($956 million), against analyst expectations for 749 million for the year as a whole.

It held its dividend at 0.70 euros, compared with expectations for 0.85 euros.

Shares were indicated down 1.8 percent, against a 0.6 percent increase for the Dax index of leading German shares .

Market analyst Heino Ruland of Ruland Research said the full-year numbers were not convincing and that the disappointment was not good for the company's reputation.

Shares in the group, which is majority owned by the Herz family via the Maxingvest vehicle, are currently at record highs and trade at a multiple of 27.7 times forecast earnings, compared with an average 16.9 for its peer group. Local rival Henkel trades at a multiple of 16.8, L'Oreal at 22.

Beiersdorf also said on Tuesday that it expected to grow sales faster than the market in 2013 and that its EBIT margin, which stood at 12.2 percent at the end of 2012, would grow in both 2013 and 2014.

Heidenreich has said the group is aiming for an EBIT margin - earnings before interest and tax as a percentage of sales - of 16 percent in the medium term for its consumer division, but has not given a more precise timeframe.

The consumer division makes up almost 84 percent of sales and posted an EBIT margin of 12 percent for 2012.

Henkel will report results on Wednesday.

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