Beiersdorf Ag

Thank you, Sasha. Good morning, and welcome to Biosdorf's third quarter conference call. Thank you for joining us at such an early hour. This is Christopher Sheldon, and I'm here with our CEO, Vincent Vanery, as well as our CFO, Astrid Herrmann. We would like to share with you Biosdorf's sales performance for the first nine months of 2024. We will start with a presentation and the business review, followed by a Q&A session. And with that, I'd like to hand over to Vincent.

Thank you, Christopher, and good morning. Welcome to today's conference call. Astrid and I will now guide you through our financial figures at group and brand level regarding our nine-month NQ3 performance before we then share an outlook for the coming months. At the end, we'll open the floor for your questions. In the first nine months of 2024, BuysOff continued to deliver strong growth and achieved an organic sales increase of plus 6.5% at group level. Given the current market dynamics, this steady performance is in line with our expectations and reaffirms our confidence in our guidance for the full year. Our consumer sales grew by 7.3%, while Teza delivered 3.1% of growth. Our Icon Nivea continued its outstanding performance around the globe throughout the year and grew by 9.4%. Our key categories performed well, and this broad-based success was further driven by growth in all key regions. For Dermabranche, Eucerin, and Aquaphor achieved very strong organic sales growth of 8.8% in the first three quarters, despite a very high comparison based in 2023 and the unfavorable impact of Argentina. In the third quarter, this was powered by double-digit growth on a global level, an outstanding resurgence performance in North America, and the successful launch of our breakthrough anti-aging innovation, EpiCellin. The healthcare business, which comprises the Onzaplast and Elastoplast plaster brands, reported substantial sales growth of 5.1%. Tales of La Prairie, declined by 7.3% in organic terms in the first three quarters. This decrease was mainly driven by the continued weakness of the greater China ecosystem and its negative impact on the travel retail market. In this demanding environment, La Prairie again managed to outperform the market and gain significant market share. Now let us zoom on the third quarter performance of a consumer business. I will share an update on our reinvigorated North America business, the double-digit sales growth of Eucerin and Aquaphor, and the ongoing strong performance of our global icon Nivea. These positive results are even more noteworthy given the very high comparison base from last year. In the third quarter of 2023, we achieved outstanding sales growth with our Nivea and our Derma businesses and recorded one of the strongest quarters ever for Nivea in Europe. Our focus on skin care continues to pay off. All these, guided by our win-with-care strategy and paired with a strong outlook and exciting innovation pipeline, fuels our confidence in our full-year guidance. In North America, like many of our peers, we experienced a challenging first half of the year. I'm delighted to now report that our North America business regained its strength and achieved fantastic double-digit growth of 11.1% between July and September. Both our U.S. and Canadian businesses delivered a double-digit performance. Especially, our Derma brands contributed to these results with an impressive growth rate of 19.6% in the U.S. in the third quarter. Nivea also further increased its growth momentum throughout the year. In North America, a key market in our wind with care strategy, we continue to expand our brand presence, which is visible both in sales growth and market share. In the third quarter, Aquaphor continued its stellar performance and grew by 16% in organic terms. Usurin contributed strongly as well with a recently launched face care range, further gaining momentum. It has already been successfully rolled out at major retailers such as Amazon, Walgreens, CVS, Target, and Kroger. As we look ahead to the next year, we are excited about the upcoming launch of our Usuin Tiamidol product range in North America, which has tremendous economic potential for this key region. Now to our icon. Nivea delivered impressive growth of 9.4% year-to-date, outperforming key competitors in the market. This confirms that we are fully on track to reach our target for the full year. Sales in both the skincare and personal care categories increased significantly. In addition to the face care and sun businesses, the categories body care and they all performed particularly well. This broad-based success was driven by continued double digit sales growth in emerging markets with all other key regions growing as well. Nivea continued its strong organic growth in Q3 with 5.9% compared to an exceptional Q3 in 2023. Last year's Q3 saw record growth in Western Europe on the back of a double-digit price increase in a high inflationary environment and a catch-up effect following customer sanctions. Looking ahead, we are very excited about our strong innovation pipeline for Nivea. In addition to the ongoing sustainable product transformation, 2025 will be the year with the strongest launch and relaunch pipeline in the history of Nivea. We'll further leverage the success of our Luminous 630 franchise, introduce our epigenetics innovation to Nivea, and enter the market with several other products. Over 45% of our Nivea sales in 2025 will be impacted by these innovations and renovations. This pipeline and well-balanced growth via price and volume makes us confident that we will be able to continue our strong growth on Nivea for the remainder of this year and beyond. Following the consistent strategic globalization and digitalization of our iconic brand in recent years, Nivea's power, its global presence, trusted brand name, and continued development form an extremely robust, crisis-resistant, and dependable pillar of our business. Moving on to our derma business, I'm pleased to share that our derma brands returned to double-jit growth of 10% in the third quarter, significantly ahead of competition. This increase was primarily driven by the success of the North America business, where our derma sales grew by 19.6%. from a global category perspective, particularly using face care and body care, perform strongly. Looking at the first three quarters in total, we are very pleased with the organic sales growth of 8.8%, especially given the very high comparison base in 2023 and the unfavorable effect of Argentina. Our highly successful Tiamido range remains a key driver here and is still showing fantastic growth rates five years after its launch. Face care, as well as double-digit growth in Suncare and Aquaphor, contributed to this outstanding nine-month performance. Given our strong derma innovation pipeline and expansion plans, you remain confident for the full year and 2025. We launched Eucerin in India just last week. We'll further expand the Tiamidol product range around the globe. We'll continue our Eucerin face care rollout in the U.S., and we'll further accelerate the rollout of a breakthrough anti-aging innovation, EpiCellin. Now let's take a closer look at the launch EpiCellin, which we presented to you at the Capital Markets Day. In our H1 call, I stated that we aim to make this our biggest launch ever and already predicted that it will have a strong business impact. And I would like to say I did not exaggerate. Since the launch of EpiCellin in September, We are now present across Europe in some emerging market countries, a total of 32 countries. We have already reached over 80% of our anticipated global sales forecast for 2024. These fantastic first results are above our ambitious plan. For instance, in our key market Germany, the Eucerin Epigenetic Serum is already the number one bestseller in the entire dermocosmetic market. It also holds number one anti-aging positions in countries such as the UK, Belgium, Spain, Austria, and Chile. I cannot wait to talk to you again about the further launch of this groundbreaking innovation in our full-year results call in February. Now to the sales of our luxury brand, La Prairie. La Prairie sales declined by 8% in the third quarter. Throughout 2024, this decrease was mainly driven by the continued weakness of the greater China ecosystem, both in mainland China and in Hainan, and its subsequent negative impact on the travel retail market. This strongly impacts consumption and then also affects the luxury skincare market and how La Prairie sells. With the Chinese luxury and travel retail market down in the third quarter, La Prairie managed to outperform in this challenging environment and gain market shares in most geographies, namely China, brick and mortar, and online, the U.S., travel retail, and Japan. We remain cautious in the short-term outlook, but continue to see China as a key opportunity for La Prairie to generate growth in the medium and long term. Having said this, I would also like to point out that buyers' exposure to luxury in China today is rather limited. Different to our competitors, we believe to generate between 10% and 30% of their sales with luxury in China, we are well below 5%. Our focus with La Prairie continues to be on gaining market shares as proven in previous quarters. The key for La Prairie's success is a focus on breakthrough innovations such as the premium price La Prairie's New Life Matrix Oat Rejuvenation Cream. This cream encapsulates the alliance with Clinique La Prairie, the legendary Swiss longevity clinic. It was launched in September and shows encouraging first sales results in China and other markets. At the same time, we bring entry-level products such as the skin caviar mix to the market, which we successfully introduced in the first half of 2024. These two products are only two examples of our expanding product range, thereby recruiting new and younger consumers with entry-level propositions into the brand, whilst also offering high-end innovations at a premium price to existing consumers. We're also changing the look and feel of our point of sale, the way we communicate online and offline, and we are modernizing our brand image. Now to the performance of Chantecaille. I'm pleased to share that we have been able to continue the brand's growth trajectory and retain our momentum throughout the year. Following organic sales growth of 4.4% in the first half of 2024, we increased our sales by 4.9%, in the third quarter. Key contributors were Shantuka's expansion through retail and the launch in mainland China. Our strategy for Shantuka in China to focus on digital channels first paid off. The partnership with China leading e-commerce platform Tmall and our collaboration with the Chinese celebrity Beilu created a perfect environment for the domestic launch. This was followed by a commercial pop-up experience in Shanghai evolving the famous actress, singer, and model. At the results, Chantecaille was ranked the number six most influential international boutique brand in China in September. The financial results of this orchestrated launch fill us with great confidence. After this summary across our brand's portfolio, now over to you, D'Astrid.

Thank you so much, Vincent. Thank you so much, Vincent. Let's begin with the sales development at the segment and group levels. In the first three quarters, Biosurf Consumer Division recorded organic sales growth of plus 7.3%. Due to negative foreign exchange effects, nominal sales growth amounted to plus 4.4%. Arteza Division concluded the same period with organic sales growth of plus 3.1% or plus 2.2% in nominal terms. Together, this results in plus 6.5% organic sales growth for the group, or plus 4.0% nominal growth. Following an excellent first half in 2024, our consumer division has continued to deliver strong growth in the third quarter, further enhancing last year's remarkable achievements amidst the ongoing challenges in the luxury markets. While our third quarter experienced a slight moderation due to the significant price increases in the third quarter last year, we are fully on track and confident to deliver our full year guidance. Let's review the performance of our brands within the consumer segment. Vincent has already provided details on the year-to-date development, so I will focus on the performance for the third quarter. Nivea continued to achieve strong growth of plus 5.9%, even on the back of an exceptional performance in the third quarter last year. As Vincent alluded, to earlier, it was a record quarter for Nevaeh in Europe. The plus 5.9% growth this quarter is fully in line with our expectations for the full year. The growth was widespread across all key regions with a well-balanced contribution from both price and volume. Both our skincare and personal care categories contributed to the success. We are excited to announce that Derma returned to impressive double-digit growth of 10% in Q3, an outstanding achievement, especially in light of last year's exceptional performance. This strong growth rebound can be attributed to the remarkable progress of our derma business in the U.S., as well as the successful introduction of our epigenetics line. Both Userin and Aquaphor have surpassed market performance in terms of both revenue and market share. Our healthcare division achieved remarkable growth of plus 7.7%, significantly outpacing the market and strengthening our leading position. Key growth drivers included our top markets, Germany, Australia, Indonesia, and particularly the UK, which delivered an exceptional quarter. Even though the situation for La Prairie and the luxury market in China continues to be difficult, the strong performance of our other brands helped to more than offset these temporary setbacks. As a result, our consumer business achieved growth of plus 5.7%, reinforcing our confidence in delivering our full-year guidance. Similarly, our TESA business reported solid growth of plus 3.5% in the third quarter, despite the increasing headwinds across its key sectors. At the group level, we are pleased to report sales growth of plus 5.3%, I will now move on to the consumer sales performance by region. At the regional level, all regions and sub-regions were on a growth trajectory in the first nine months. Europe experienced a growth of plus 5.2% in the first nine months, aligning well with our expectations. Following an exceptional performance and notable price increases in Western Europe during the third quarter of the previous year, we are very pleased with these results. it's important to note that these figures also count for the ongoing slower performance in China's travel retail sector, which is reflected in Western Europe's results. Meanwhile, Eastern Europe continues to demonstrate ongoing double-digit growth. After a brief slowdown in our North American business, we returned to double-digit growth in the third quarter, turning our year-to-date performance positive once again. Latin America remains robust despite the well-known challenges in Argentina, with Nivea gaining momentum and Derma achieving outstanding results in Brazil, consistently accelerating quarter after quarter from a strong base. The Africa-Asia-Australia region also achieved impressive double-digit growth in the first nine months, despite the ongoing challenges in the Asian luxury market. Nivea was a key driver of this growth in Africa and the Middle East. I'm pleased to share that TESA has achieved an organic revenue growth of plus 3.1% in the first nine months and plus 3.5% in Q3. This growth was primarily driven by Asia and positive developments in our electronics and printing and packaging solution sectors. TESA is facing a challenging environment in both the industry and consumer segments. The automotive industry has been suffering lately, especially in Europe and in the area of e-mobility. As already announced at our H1 results in August, the electronics business saw exceptional growth in Q2, which was mainly driven by positive phasing effects of sales shifting from Q3 and Q4 to Q2. Teza's consumer business is experiencing lower traffic in DIY stores driven by cautious consumer sentiments across Europe. Nevertheless, Teza has been able to demonstrate solid growth figures despite these headwinds and continues to gain market shares. As a result, we remain cautiously optimistic for Tezos growth in a challenging market environment for Q4 and confirm our guidance. Over to you, Vincent.