Beiersdorf Ag

Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the H1 Results 2024 Conference Call of Beiersdorf AG. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question and answer session. If you would like to ask a question, you may press star followed by one on your telephone. Please press the star key followed by zero for operator assistance. Please note that there is a limit of two questions per caller. I would now like to turn the conference over to Christopher Sheldon, Head of Investor Relations. Please go ahead, sir.

Thank you, Moritz. Good morning and welcome to Biosdorf's Half Year One conference call. This is Christopher Sheldon. It's a pleasure to be with you this morning. I'm here with our CEO, Vincent Warnery, and our CFO, Astrid Herrmann. We would like to share with you Biosdorf's financial results of the first six months of 2024. And with that, I'd like to hand it over to Vincent.

Thank you, Christopher, and good morning, everyone, and thank you for joining us today. I'm pleased to welcome you to our conference call. In the next 30 minutes, I will provide you with an overview of our financial results and key developments of the first six months of 2024. I will then focus on the strategic initiatives that will continue to drive our performance in the future and enable us to be the best skincare company in the world. Following my remarks, Astrid will provide a detailed analysis of her financial statements. We'll then open the floor for your questions. Thank you for being with us this morning. Let's get started. First of all, I'd like to take this opportunity to express my gratitude to my BioServe colleagues around the globe. Over the past six months, our team has again demonstrated remarkable dedication and resilience in the face of challenging market conditions. And the result speaks for itself. We delivered a strong performance in the first half of the year, achieved significant sales growth, and outperformed the market. and we gained substantial market shares across brands and categories. As we look ahead to the second half of the year, we balance this outstanding performance and our full innovation pipeline against the ongoing macroeconomic volatility around the world. Based on this, we confirm our sales and EBIT guidance. Now we come to the top line figures for the first six months of the year. We grew our consumer business organically by 8%. This was in particular driven by broad-based double-digit growth at Nivea across key categories and regions. Nivea also again delivered balanced growth in terms of price and volume. A strong performance of our Derma brands fuels this consumer success as well. As predicted and promised in the first quarter, the Teza business picked up significantly in the second quarter with double-digit organic sales growth. This results in overall growth of 2.9% for the first six months for Teza. At group level, we kept our successful course and delivered strong growth of 7.1% in the first half of 2024. At the Capital Markets Day in June, we shared with you our vision to be the best skincare company in the world and introduced you to our corporate strategy, Win With Care, which will guide us towards this vision. Therefore, Let's zoom in on some top-line care performance indicators of the consumer business overall before I take you through the performance at brand level. Looking at the overall market growth and our peers' performance in terms of organic sales growth in the first half of the year, I am particularly pleased to see us at the top of the list. We have clearly outperformed the market. It proves that we have a winning formula with our strong brands and our strategic direction, and it gives us confidence as we look to the future. The ongoing global success of Nivea was a main driver for our strong performance in the consumer segment. Our icon delivered excellent double-digit organic sales growth of 11.1% in the first half of the year. Significant growth across all regions fueled this positive development. All key categories post impressive double-digit growth rates with a healthy balance between price and volume. The Derma business delivered strong growth of 8.3% on top of the high comparison base from last year. Excluding Argentina, the performance continued on a double-digit level with strong growth across most regions. We also gained significant market shares with our Derma brands in every region in every category. The healthcare business, which comprises the plastic business of Anzaplast and Elastoplast, contributed with solid sales growth of 4%. The economic situation in China remains highly volatile and challenging, which was the main reason for the 7% decline in organic sales at La Prairie for the first six months of 2024. Noteworthy, we outperformed the Chinese market with La Prairie in this declining environment. Our business is strong, resilient, and based on a broad, successful global portfolio of brands, allowing us to compensate the headwinds in the luxury market with only limited impact to our overall results. This leads to substantial sales growth at group level and confirms that we are well on track to deliver our sales guidance of 6% to 8% organic growth for the full year. We are particularly pleased with the performance of our two biggest regions, Europe and emerging markets. These regions are the two main drivers for our growth. They account for roughly three-quarters of our sales, and they keep on growing with continued strong performances across brands and categories. And this growth trajectory is far from over. In the emerging markets, we are also fueling this development via strategic focus on conquering several white spot opportunities. I will share more on that in a moment. In Europe, we see a lot of further growth potential in the years to come based on the anticipated impact of a strong innovation pipeline. Our e-commerce business continues to expand at a double digit rate with an increase of 16% in the first six months of 2024. Even more significant in this context is a strong growth of our e-commerce share. With impressive growth trajectory this year, in the last three years, we are outperforming the competition and narrowing the gap to the industry leader. Now to a part of our business that continues to deliver extraordinary results, the Sun business. We delivered strong double-digit growth in the first half, driven by Nivea and Usurin. While our brands Nivea and Usurin performed strongly in the Sun category, The predominantly bad weather in North America led to a sun market decline and a negative impact on Coppertone and sales results in North America. However, it is important to point out that Coppertone accounts for less than 20% of our overall sun business. Additionally, we are seeing some positive momentum there since June. I also would like to give a bit of color on our home country, on Deutschland. In terms of absolute net sales, Germany represents our largest market. We are currently on track to reach 1 billion in annual sales, which is a fantastic development. It is even more impressive that we achieved 9% organic growth for Nivea, 8% for U3 in the first half of the year, given our long-standing strong position in Germany. Our pioneering spirit has its roots in Germany. We power our global success from here. This is the place where most of our innovations are created, enter the market, and start to develop into global success stories. We'll have our new EpiCellin product under the Eucerin brand on the shelves in Germany in a couple of weeks from now. We are also particularly proud of our gross margin expansion in the first half of the year. We managed to grow plus 110 base points in comparison to the first half year of 2023. This excellent overall figure is attributable to significant growth margin gains across key regions all over the world. For instance, we managed to increase our growth margin significantly in our largest region, Europe, as well as in North America and in the volatile Chinese market environment. This amount of growth is extraordinary, especially given the fact that La Prairie sales declined in the first six months of 2024. Let us look at our icon in more detail. Nivea led our brand portfolio in the first half of the year with outstanding double-digit organic sales growth of 11.7%. We are excluding Argentina here, where macroeconomic factors such as extremely high foreign exchange evaluation and inflation distort the performance. We've also managed to keep an excellent balance between price and volume growth. market volatility, or efforts to modernize, digitalize, and globalize Nivea continue to pay off, we look to the future with confidence and have further ambitious plans for a global icon. This double-digit growth for Nivea is driven by growth in all regions of the world. In particular, the regions Latam, Eastern Europe, and Africa, Asia, and Australia posted outstanding double-digit sales growth. Furthermore, the 9% organic sales increase in the Northeast Asia region highlights our robust and successful market presence in diarrhea with Nivea despite the well-known volatility of the Chinese ecosystem. Now we come to the Nivea categories. First of all, we grew significantly across all major categories of Nivea in the first six months of the year. Our strategic focus on face care continues to pay off, led by the success of our Luminous 630 product range. In the first half of 2024, we grew by 49% organically with our Nivea products containing the most effective anti-spot ingredient in the world. The body category also grew by double digits in the first half of the year. personal care complement the strong overall performance of Nivea, with Deo increasing by 19% in organic cells. The Leap category also posted strong sales growth of 17%. Japan is also of great importance for us, and Japan delivers fantastic results. Having worked myself there for several years, I know how difficult it is to grow and deliver against the skincare expectations of the most demanding consumers in the world. In this context, I am even more delighted to report this strong sales growth of 10% in the first half of the year. Let me move to an outlook for the next months and quarters for Nivea. We stated at the Capital Markets Day that our Nivea face products are only present in 40% of the global face market. We see one of the largest potentials in the face category in India, a key geographical white spot for us in our wind risk care strategy. We have already established a strong bond with Indian consumers, voting Nivea the most trusted skincare brand for several consecutive years. We aim to leverage this trust and are now preparing the launch of Nivea Face in the first quarter of 2025. In order to become the best skincare company in the world, we also continue to lead in climate care. As a certified AAA company, we established an ambitious net-zero target for 2045 this year, which received SBTI validation and with which we continue to lead the industry. An integral factor in achieving this objective is a sustainable product transformation. The Nivea body we launch follows exactly this pathway. It is the biggest relaunch of our body portfolio to date and perfectly combines improved performance of the product with an increased sustainability profile. The sustainability aspect is first. The revamped, yet recognizable packaging will help BioZoff reach its total target for fossil-based virgin plastic reduction and reduce its CO2 impact by approximately 5,000 tons by 2025. And the product performance improved as well. The Nivea body milk formula is now newly enhanced with 100% pure hyaluron and deep nourish serum, which ensures healthy-looking skin and deep, long-lasting moisturization. By incorporating the powerful moisturizer hyaluronic acid, we reach the next level of superiority in Nivea body care. An integral part of the global success of Nivea is our Luminous 630 product range. We plan to further seize its potential and extend its influence across important markets and categories. Adding innovation and enhancing the success of our Euro ingredient Tiamidol under the Nivea Luminous range is a focal point of our innovation strategy at Nivea as well as outside of Nivea. In China, we continue to work with patients on regulatory approval to introduce Luminous to the domestic market. This has been a long-standing topic, which we prioritize constantly due to the tremendous upside potential of launching Luminous in this market. Earlier on, I mentioned the launch of Nivea Faith in India in Q1 2025. On the back of this launch, we also plan to introduce an affordable luminous product range to the Indian market throughout 2025, thereby widening the appeal of our luminous franchise across emerging markets. We are also cascading the luminous success into additional categories on the global scale, most recently, for example, into the body category. In the USA, we'll add luminous to the skincare portfolio under Nivea Men. Now leaving the world of Nivea and moving to our derma brands used through in an aquaphor. Excluding Argentina, the derma business continued to grow double digit in the first half of 2024. We are very delighted with these results, especially given the high comparison base from last year and the well-known overall slowdown of the U.S. market. Exploiting the potential of the global face care market is an integral part of Biosoft's strategic plans, not only with Nivea, and also with our Derma brands. And these efforts are starting to pay off as we grew by 11% in sales organically with Derma face care in the first six months. Our strong innovation pipeline for Usurin further increasing our confidence in the continuous success of our Derma business. The regional perspective on Derma truly delights us with so many success stories around the globe. Germany keeps growing at 8% in sales, as I mentioned earlier, and China is growing at 15%, which is extraordinary given the economic circumstances there. Another key growth driver for this success of DERMA is our emerging markets business, which increased its organic sales by 18% in the first six months. In addition to the markets of Mexico, Brazil, and Thailand shown here, the list goes on. For example, with Chile at 13% organic growth, and Peru is an increase of 26%. The wait is over. More than 15 years of research in the field of epigenetics. We invested a significant double-digit million amount in this research. We discovered our now patented ingredient, epicillin. We developed a game-changing innovation unlike anything the market has seen before. This breakthrough innovation allowed us to turn back the skin's age clock. The test results were exceptional to a level I've never seen before in my life. Our first product containing epicillin, the Eucerin Hyaluron Filler Epigenetic Youth Serum, is now hitting the shelves first in the UK, then Germany, and from there to the rest of Europe and eventually the world. Our other brands will follow in 2025 and 2026. This is a proud moment for us. as the company that invented modern skincare and now is leading the industry again with a significant milestone. We may aim to make this our biggest ever launch with a clear focus on digital excellence, a tremendous point of sale impact, and in close collaboration with dermatologists and the further medical world. With the world population aging, the anti-aging skincare market is huge and has enormous potential. And the business impact will be strong as well. To provide a comparison, you can see the level of net sales we achieved with Tiamidol in its first year on the market. Right next to it, you see an anticipated forecast for the first year of Epicillin on the market. This gives us a lot of confidence for the future of this amazing innovation. Staying with the innovation power under Usurin, let me highlight the next steps for Usurin Tiamidol, for which the journey is far from over by any means. Two important big steps for the remainder of 2024 are the launch of Usurin Tiamidol in the U.S. market and the brand launch of Usurin in India. Again, these decisions follow our strategic goal of conquering highly relevant geographical white spaces. Usurin has the power to achieve high exposure in these markets, as does Nivea and our further brand portfolio. Let me now talk about luxury, starting with La Prairie. The weakened Chinese economy and the headwinds in travel retail are the main cause for the decline in sales for La Prairie. In the past, the success of luxury brands in China was largely driven by the high consumer confidence pre-COVID. As the economy has continued to falter since then, large sections of the population have cut back on luxury spending. As a consequence, the Chinese luxury skincare market faces a continued slowdown. But despite these developments, we continue to see China as a key opportunity to generate growth in the mid and long term. Looking at the results for La Prairie in the first half of the year, we see positive signs. In China, The luxury skincare market was down 12% in the first six months, but La Prairie strongly outperformed this market in terms of sell-out and only fell by 6%. In Hainan, the performance was similar. The market declined by 34%, and La Prairie delivered a significant market outperformance here by 20%. Looking at e-commerce in China, the power of La Prairie becomes even more evident. Fueled by an excellent launch on TikTok, we achieved double-digit growth of 17%, in a market that declined by 13%. To further put this into perspective, our retail sales, excluding Greater China, grew by over 20% in the second quarter. Looking ahead, we are modernizing the brand image. We are increasing our own and offline presence and communication, while we are focusing even stronger on topics of innovation, technology, and science. And we are expanding our product range with attractive innovations, targeting new and younger consumers with entry-level propositions. We successfully introduced the skin caviar mist in the first half of 2024 and have already beaten our sales target since launch by a factor of 1.5. At 170 euros, it is a perfect product to recruit more new clients while also enhancing the skincare routine. Around 70% of new consumers bought skin caviar mist with at least one additional product and skin caviar mist has already gained a very high penetration amongst the existing customers. Another innovation with a strong link to La Prairie's birthplace, the Clinique La Prairie, will follow in the second half of the year. Moreover, our sales figure for July to December will benefit from the extensive destocking in travel retail in the second half of 2023. Staying in the luxury and premium part of our brand portfolio, I'm pleased to share an update on the performance of Chantecaille. Following organic sales growth of 4% in the first quarter of the year, we were able to strengthen this growth to a 4.8% increase in the second quarter. This growth accelerated at the end of the quarter as we relaunched our Euro product Just Skin in May 2024. The all-in-one complexion icon now comes with a more sustainable formula and an enhanced performance, providing even more hydration and skincare benefits. And we will be expanding Shantakai to mainland China in the coming days after already being present cross-border. This marks a significant milestone for Shantakai and the expansion follows a clear strategy with the objective of bringing this beautiful brand to a broader audience while solidifying its presence in the Chinese market. The focus here lies first on the digital presence which is powered by a comprehensive partnership with Tmall, China's leading e-commerce platform. Over the course of the year, Shantokai will, among several other activation measures, also host a commercial pop-up experience in Shanghai to immerse consumers in the brand's luxury experience. Before I hand over to Astrid for a detailed look at the financial figures for the first half of the year, let me summarize. Biosoft is performing strongly, and the future is even brighter. And of course, we will win with skincare. We are a skincare company. Skin comes first at BioSurf and is our heritage, our present, and our future. And we plan to continue bringing strong innovations to the market in the coming years. BioSurf is focusing on three key areas of innovation, which are also our global growth drivers. First, hyperpigmentation, with products based on our highly effective active ingredient, tiamidol. Second, epigenetics, now entering the anti-aging market for the first time with the Eucerin product. Third, skin microbiome research, where Biazov is currently working on a very effective treatment for acne based on living skin bacteria. To ensure our continued growth, we are also focusing on conquering additional white spaces and gaps in our global product presence. Not only in 2024, but also in 2025 and beyond, we'll be expanding our activities in countries and large skincare markets such as India, China, and the United States. We look confidently into the future. Now over to you, Dea Astrid.