Beiersdorf Ag

Good morning and welcome to Biosdorf's 2024 full-year results presentation. It's great to have you with us today. I'm here with our CFO, Astrid Herrmann, and our CEO, Vincent Warnery, who will walk you through our full-year and fourth-quarter results shortly. As always, after the presentation, you will have the opportunity to ask questions. If you would like to ask a question, please click on the respective link in the webcast or press 1 if you're connected via phone. And with that, I'd like to hand it over to Vincent.

Thank you, Christopher, and good morning to all of you. Thank you for joining our 2024 Full Year Results Conference. Astrid and I have now the pleasure to walk you through our financial results and share an update on the significant progress we have made in implementing our Win With Care strategy. Moreover, we'll provide an outlook on our plans for 2025 and beyond. After that, the floor will be open for your questions. Let's start by looking back on 2024. 2024 was yet another challenging year marked by ongoing geopolitical instability and macroeconomic volatility. Despite these significant headwinds, Biosoft proved its strength, resilience and innovative power, delivering yet another outstanding year and confirming our position as the leader in our industry. Let's kick off with the highlights. we fully delivered on our promise and achieved sustained growth of sales and profit. Net sales reached an all-time high of €9.9 billion, and our EBIT margin, excluding special factors, increased by 50 base points to 13.9%. This development is extraordinary, especially when comparing it to the high base in 2023. For the second consecutive year, our remarkable performance continues to put us ahead of the competition. We also delivered an on-wind whisker strategy announced at the Capital Market Day in June 2024. With groundbreaking innovations and the pursuit of wide spaces, we are ideally positioned for continued success for the years to come. We are pressing ahead with our commitment to care beyond skin. We lead in climate care and champion diversity and inclusion within Biosdorf and society. Our employees are the driver of our success. I sincerely thank our teams for their dedication, which has driven Biosdorf to yet another record year. Their passion, creativity, and energy have been truly outstanding, forming the backbone of our success. Together, we have built an impressive track record. Since 2021, we consistently increased net sales and EBIT year on year. Over the past years, our net sales grew by 8.9% per year on average. Our EBIT increased even stronger at a double-digit compound annual rate, reaching a record level of close to €1.4 billion in 2024. This is a testament to our strength and reliability to deliver profitable growth to all our stakeholders. And with that, we were again able to outperform the market. Our organic sales growth was more than 200 basis points ahead of key peers in the market. How did we do this? By delivering transformative innovation across our portfolio, by strengthening our iconic brands and conquering white spaces with our exceptional team. Let's look at the figures in more detail. In the fiscal year 2024, Biosoft generated strong organic sales growth of 6.5% at group level. The main driver was the consumer segment with an organic sales increase of 7.5% for the first time surpassing the 8 billion euro mark in net sales. Nivea outperformed the market with an outstanding growth rate of 9%, which is particularly impressive in light of the record I achieved in 2023. Our derma business with Eucerin and Aquaphor continued to grow double-digit by 10.6%, extending its very exciting trajectory. The successful launch of our breakthrough anti-aging innovation, Epicelin, in Q3 2024, contributed to this excellent result. Wells Care Business, which comprises the Anzaplast and Elastoplast plaster brands, reported a strong 6.1% increase in organic sales. La Prairie recovered slightly as a decline in head sales slowed down to minus 6.2%. Despite the continued weakness of the greater China ecosystem, the luxury brand managed to gain market shares in 2024. Teza delivered a solid 1.9% organic sales increase, mainly driven by electronics business. This is a strong result given the very challenging business environment, specifically in the automotive sector. Our iconic Nivea brand continued to be a key growth driver. Following a strong 5.9% increase in Q3 2024, Nivea managed to accelerate to 7.9% in Q4. The excellent full-year results of 9% was growth-based, with all categories contributing substantially to this performance, from face care, universal creams, and lip, to body care and deodorants. With a double-digit growth rate in 2024, deodorant had an exceptionally successful year. This underscores its continued importance as one of the leading Nivea categories. Within the Nivea portfolio, the Luminous 630 range, with our patented hero anti-spot ingredient Tiamidol, continues to drive our success in face care across markets. In year 4 after launch, Luminous 630 generated an outstanding 34% organic growth. In 2024, Nivea delivered exceptional growth across all key regions. More specifically, in Europe, Nivea's sales increased by 6.2%, while in the Africa, Asia, and Australia region, net sales grew double-digit at 11.5%. The ongoing strong performance of our global icon in North America is underpinned by a robust 4.1% sales increase. This contributed to the solid results of our overall North America business and supported the region in regaining its strength in the second half of the year. In the Latin America region, Nivea demonstrated sustained growth, reaching nearly double digits at 9.8%. Nivea's growth was widespread, not only across region and category, but also with a well-balanced contribution from both price and volume. While pricing continues to play an important role across all regions, including Europe, volume contributed 60% of growth. In the mid-term, we expect a healthy growth ratio of 1 third price, 2 third volume. Sales of our derma business, including our USUIN and AQUA4 brands, accelerated further in Q4 2024, resulting in a double-gidded sales growth of 16.5%. Overall, in 2024, we outperformed our peers in the derma market with a 10.6% net sales increase. And there is more to celebrate. Usurin became the second billion-euro brand in our consumer portfolio in 2024, after Nivea. This exciting development was mainly driven by what has been defined by us for over 140 years, innovation that changes the life of our consumers. As a true game-changer, the Usurin TIA middle range continues to be a cornerstone of our growth. Our hero anti-spot ingredient in our Eucerin products continues to deliver outstanding growth rates even six years after its launch. In 2024, it recorded a fantastic 29% increase in sales. And 2024 saw another groundbreaking innovation. In September 2024, we successfully launched our active anti-aging ingredient, Epicillin. Our first epigenetic product contributed to the outstanding Q4 performance with the best-in-class global launch. Our derma growth is broad-based across our key regions. North America remains our biggest market for derma, contributing again with a growth of 9.1%. Europe delivered a strong sales increase with 7.1%, particularly supported by our Epicillin launch and by double-digit growth in Spain, Italy, and the UK, and high single-digit growth in France. In India, our Usurin brand hit the shelves in Q4, showcasing a very successful launch which contributed to our 15.5% organic sales growth in the Africa, Asia, and Australia regions. Orlando region grew dynamically by 12.5%. Given how strong there are my innovation pipeline and expansion plans, we are looking confidently into 2025 and beyond. The luxury market remains challenging. La Prairie sales declined by 6.2% in 2024. This was mainly driven by the continued weakness of the greater China ecosystem and the ongoing slowdown of the travel retail market. Or whether we are gaining market share with our luxury brand La Prairie. With a 2.8% decrease in Q4, we managed to slow down the decline. Looking at our e-commerce business, we are catching up quickly in the market. In China, a more refined strategic setup for luxury brands has fueled impressive full-year growth of 32%. China will remain a key market for La Prairie in the mid- and long-term. The expansion of our e-commerce activities and our increased focus on digital consumer engagement contributed to the positive development. As we continue launching products at their upper price range, we have expanded our offerings to more affordable entry-level options. With this strategy, we reach a broader consumer base, particularly attracting younger shoppers. Following a difficult year for Chantecaille in 2023, I'm pleased to say that our premium brand was on the up in 2024. The key driver of this success was our expansion in Asia. With Shantokai closing the financial year with a 4.5% increase, we are confident to have laid a solid foundation for accelerated growth of the brand in 2025. We launched Shantokai in China in record time and generated very encouraging results. And the next launch event is on the horizon. In April, we will launch Tiamidol under a Shantokai brand across all our markets. We are confident that this launch will lead to dynamic growth of our luxury brand and contribute to our company's success. Our success is defined by our strategy, Win With Care, a clear commitment to our vision to be the best skincare company in the world. With our Win With Care strategy announced in 2024 at the Capital Market Day, we have raised the bar for our growth and built a strong foundation for Bison's future success. Our outstanding performance in 2024 shows that we are fully on track. Innovation is the heartbeat of Biosdorf. We are leveraging our R&D capabilities at the growth engine to drive groundbreaking innovations. Our formula is simple. Our successful active ingredients are integrated across Biosdorf brands in both established markets and emerging growth regions such as India, China, and the USA. Since its launch in 2019, our highly effective anti-spot ingredient Siamidol helps our consumers to reduce pigmentation marks. And it does so effectively that it has become a significant growth driver for our business, contributing on average 52% organic sales growth per year since 2019. In 2024, we generated nail sales of €435 million across our Nivea, Yosurin and La Prairie brands. The momentum continues as we are launching Tiamidol in new markets such as the US and India. In addition to the market entry of our anti-spot ingredient across the Shantakai brand in Q2 2025, there is much, much to say about our launch plan for Tiamidol in China in 2026. To sum it up, there continues to be a bright future ahead for Tiamidol. Our innovation highlight of 2024 was the record launch of our first epigenetic serum under our Eucerin brand in September. It has been the single biggest product launch in BioServe history. Our groundbreaking product is a game changer in anti-aging solutions. It demonstrates how we truly transform skincare by reversing signs of aging and helping people look up to five years younger. After 15 years of intensive research, we've paved the way to reactivate the youth genes of our skin. With our patented H-Clock technology and the active ingredient, epicillin, we have solidified our position as pioneers in skincare science. And we will continue to write history. The potential of epicillin is enormous. Therefore, we are bold and moving fast. Our serum is today available in 40 countries. As I speak, South Africa is launching our epigenetic serum. We have taken number one positions in many markets, such as Germany, Spain, France, Mexico, and Chile. And we are particularly happy to see that in Germany, one of the first countries we launched, the repurchase rate in month six is nearly double the rate of the best-in-class competitive launches. In short, we have exceeded our 2024 targets, and we are far ahead of plan. But we are not done yet. So what's coming next? As we have been doing successfully with Siam Idol over the past years, we are cascading our breakthrough innovation, EpiCellin, across our brands and categories. Following the launch under Eucerin in 2024, we'll continue to launch EpiCellin across Nivea, starting in the second half of 2025. This will be followed by La Prairie and Chantecaille in 2026. Stay tuned. As our core brand in the market since 1911, we continue to invest in our icon Nivea. While we keep expanding the success of our powerful innovations, we are also enhancing our core products that have earned consumer trust for years. In 2025, Nivea has the strongest innovation pipeline ever, with anticipated launches and relaunches touching 47% of planned Nivea sales. Across various categories, such as face, sun, and body, we'll relaunch our product lineup with improved formulas and a more sustainable packaging, while also introducing new innovations like the Nivea Luminos 630 SkinGlow range. Our wind whisker strategy helps us strengthen our presence in our strategic markets, categories, and segments. Going forward, BioServe intends to tap into more wide spaces and gaps in its global product presence. In 2024, we have expanded our activities in our three top priority markets, India, China, and the United States, launching different brands of our portfolio. In the U.S., for example, we are establishing our position in the face care market with the launch of Usurping Face. And we are expanding our footprint in the U.S. with Eucerin Tiamidal, which we just brought to the market. India is booming. This country is a gross powerhouse for us. With the highest population in the world, the increase of the middle class, and a growing affinity for beauty products, the market has great potential for us. It is a highly competitive market with global but also local brands. However, with production and R&D capabilities in the country, we are more than ready to face the competition and significantly expand our business in this market. Usurin expansion in India is gaining momentum. Following our fastest launch yet in October 2024, we gained traction across the country, with Usurin becoming the choice recommended by dermatologists. In the fourth consecutive year, Nivea has been recognized as India's most trusted skincare brand. This position underscores the strong connection we have built with Indian consumers. With the launch of Nivea Face with our Tiamidal ingredient in Q1 2025, we are currently tapping into India's large face care market, which makes up almost 60% of the overall market. And there is more to come this year. Over the next months, we plan to launch La Prairie and Chantakai in India. Tiamidol's approval in China, the first under new regulations, marked a major milestone. The registration paves the way for the luminous product launch in mainland China in 2026. This will unlock vast potential across all our brands, Nivea, Yusril, La Prairie, and Chantecaille. Even with the current limited market access via cross-border e-commerce, we are already extremely successful in China, the country being the biggest for luminous in terms of net sales, growing at 43% in 2024. So the future is exciting and our teams are ready. Having visited China and India in recent months, I was able to witness the passion and dedication of the Biosurf teams and their desire to strengthen our position in our key markets. They send for all Biosurfers across the world who embody our vision every day to become the best skincare company in the world. Economic success alone is not enough for us. It is important to emphasize that in line with our purpose care beyond skin, we are consistently committed to DE&I and sustainability. For us, these priorities remain unwavering. Last year, we committed to achieving net zero by 2045, and we are working the talk. We are successfully transforming our global bestseller products to achieve a lower carbon footprint. For example, we converted our blue Nivea cream tin to 80% recycled aluminum globally and reinvented our Nivea body lotion range with improved formulas, lightweight packaging, and the use of recycled plastic. We are fully on track with our 30% emission reduction target. By the end of 2024, we have already made significant progress with an absolute reduction of 25.3% GHG emissions across COP 1, 2 and 3, despite significant volume growth. Furthermore, by the beginning of 2025, all our pollution sites across Europe are operating climate neutral, a huge milestone for us. At Biosof, our strength lies in our rich diversity and shared values. Embracing different perspectives and fostering an inclusive environment makes us stronger, both as a business and as a society. I personally stand for that. True equality can only be achieved when fair and equal conditions are ensured for everyone. And we at Biosof are actively working to close the gap for gender equity. Achieving gender parity in all management positions worldwide was one proud milestone in 2023. And we've kept the momentum. Readers of our first audit wave, conducted in 2024, covering around 70% of our employees worldwide, show a gender pay gap of 0.98% in favor of men. And this is a strong result. Within the fast-moving consumer goods industry in Europe, the pay gap benchmark is 2% in favor of the male population. In Germany, we stand at 0.56%. Now, the second DAX company that earned the Universal Fair Pay Leader Certification from the Fair Pay Innovation Lab, another milestone in our commitment to true workplace equity. Now we aim higher and want to set a standard for equal pay across our markets worldwide. In 2025, we'll complete our audit for all employees in the consumer business segment and aim at becoming a universal fair pay leader by 2026. And with that, I hand over to Astrid for the 2024 financial figures.

Thank you so much, Vincent. Good morning from me as well. I am pleased to walk you through our full year 2024 results in more detail. Let's start by reviewing our sales development at both the segment and group levels. In the fiscal year 2024, Biosdorf Consumer Division achieved organic sales growth of plus 7.5% due to negative foreign exchange effects, nominal sales grew by plus 4.9%. Our TESA Division reported organic sales growth of plus 1.9% for the same period, translating into plus 1.2% in nominal terms. As a group, this resulted in overall organic sales growth of plus 6.5% and nominal growth of plus 4.3%. Now let's take a closer look at our performance across the different regions. In Western Europe, we achieved good sales results, particularly in key markets like Germany, the UK, Italy, and Spain. It is important to highlight that our luxury Trevor retail business is also included in this region, which has been impacted by ongoing challenges, resulting in approximately 150 basis points negative effect on the overall growth in Europe. At the same time, Eastern Europe demonstrated remarkable sales growth of plus 11.5%, with double-digit growth in most of our key markets. the Americas region concluded the year with a strong plus 7.0% sales growth. North America experienced a modest start to 2024 and accelerated strongly in the second half of the year. This was primarily driven by the exceptional performance of our Derma brands, which generated mid-teen sales growth in the latter half, as well as the strong results from Nivea throughout the year. In Latin America, we are pleased to report that the region has emerged as one of our top performers in terms of relative growth, largely attributable to sustained momentum in Brazil and Mexico. The Africa, Asia, Australia region recorded plus 11.3% sales growth, with particularly strong results in Nigeria, the United Arabic Emirates, Japan, and Thailand, supported by the robust performance of both Nivea and Derma. The strength of these brands helped to offset the ongoing challenges in the Chinese luxury market. Building on last year's stellar plus 12.5% organic sales growth, our consumer business division once again delivered dynamic growth throughout all four quarters, with particularly strong results in Q1 and Q4. The first quarter was supported by a strong start in Europe, driven by the outstanding performance of our Nivea and Derma Sun business, along with a strong performance from Nivea Dio and Faith. In the second half of the year, we experienced an acceleration in our North America business, further enhanced by the successful launch of Episeline in Europe and several emerging market countries. Now let's take a closer look at the performance of our brands within the consumer business segment. Vincent has already provided an overview of the full year results, so I will focus on a summary of our brand performance in the fourth quarter. Vivea continued to demonstrate strong broad-based growth of plus 7.9% in the first quarter. All the key regions saw substantial growth and every major category recorded positive results. We achieved a good balance between price and volume, benefiting from an increase in volume while also retaining the ability to implement pricing measures across the regions. DERMA sustained its strong momentum with an outstanding acceleration in the fourth quarter, achieving plus 16.5% organic growth that significantly outpaced both the market and our peers. Growth in the fourth quarter was driven by the strong performance in emerging markets and the successful launch of Epicillin. Building on a solid performance from the previous year, healthcare continued to strengthen its leading market position with a fantastic growth of plus 9.9% in Q4, closing the year with a clear acceleration. This performance was primarily driven by the double-digit growth in Australia and Indonesia, complemented by the strong performances in our key markets of Mexico and India. Turning to La Prairie, as expected, the quarter faced continued challenges in the travel retail sector. Despite ongoing headwinds in the Chinese market and within travel retail, we observed a gradual slowdown in the rate of decline throughout the year. However, we remain cautious regarding the short-term outlook. Now, let's take a look at the figures at the group level. With sales of 9.9 billion euros, we closed another record year, achieving strong organic growth of plus 6.5% and nominal growth of plus 4.3%. At the same time, we achieved a substantial increase in EBIT, excluding special factors, reaching 1.4 billion in 2024, which contributed to the improvements in our EBIT margin and earnings per share. In line with our guidance and our commitment to achieving profitable growth, the EBIT margin improved by 50 basis points to 13.9%, while earnings per share rose from €3.24 to €4.05. Additionally, our profit after tax margin improved, driven by enhancements in our effective tax rate. Let's now turn to the performance by segment. In the full year 2024, firestore consumer business achieved strong organic sales growth of plus 7.5% and nominal growth of plus 4.9%. Profitability also improved with EBIT margin increasing by 50 basis points, driven by strong top-line performance, gross margin expansion, and disciplined management of our overhead costs, while further increasing our AMP and R&D investments. Our TESA business recorded organic sales growth of plus 1.9% during the same period or plus 1.2% in nominal terms. The EBIT margin also increased by 30 basis points, exceeding our guidance set at the beginning of the year. Now let's look at the development of our consumer gross margin in more detail. Thanks to our strong brands and global pricing power, we were able to improve our gross margin by 120 basis points by successfully implementing pricing measures. This allowed us to more than offset the 60 basis points increase from cost of sales, which is due to unfavorable foreign exchange developments. A positive mixed effect driven by our skincare focus and the premiumization of our portfolio contributed to the gross margin improvement of 20 basis points, despite the ongoing challenges in the luxury segment. Excluding the impact of our luxury business, the mixed effect would have driven overall gross margin expansion from 80 to more than 100 basis points. In 2024, we again increased our AMP spend as a percentage to sales to support our strong innovation pipeline and invest behind our brands. We increased AMP spend by more than 200 million or 80 basis points. Additionally, we continued our efforts to significantly increase the ROI of our marketing budget. First, we placed greater emphasis on working media over the past several years. In simple terms, working media refers to the portion of the AMP spend that directly reaches our audience, while non-working media covers the cost of creating and managing content. By establishing a more centralized approach with fewer, bigger, and better global launches and relaunches, we have managed to keep the non-working media component relatively stable while significantly increasing our investment in working media. Within our working media, we have intensified our focus on digital channels and influencer marketing, enabling us to allocate resources more effectively and maximizing the impact of our spending. Furthermore, our precision marketing initiatives further enhance efficiency by significantly improving the ROI of our media expenditures and reducing activities that do not yield results. Going forward, we will focus on further unlocking these efficiencies to ensure that we spend our advertising money wisely to get the best return. Let me conclude our financial overview by highlighting the key elements of our group income statement for the year. As already mentioned, the reported sales are 9.9 billion euros in 2024, reflecting a plus 6.5% organic sales growth rate for the group. In terms of our gross profit margin, we have seen a strong improvement of 120 basis points, primarily driven by pricing and positive mixed effect. This clearly demonstrates our ability to increase prices while also benefiting from the advantages of our strategic category focus. We have made a deliberate decision to increase our R&D spending, reflecting our strong commitment to fostering breakthrough innovation that will shape our future. At the same time, we have maintained a disciplined approach to our general and administrative cost. The slight increase is fully driven by investments in our TESA segment, while our consumer segment reduced the general and administrative expenses as a percentage of sales. This altogether has enabled us to improve our EBIT margin by 50 basis points, resulting in a group EBIT of 1.37 billion pre and 1.29 billion post special factors. Our profit after tax amounts to 928 billion euros. Our working capital relative to sales in 2024 remained at a stable low level compared to the previous year. Lastly, let's look at the TESA business. In 2024, the TESA business faced significant challenges due to the persistently difficult market conditions in the chemical industry, marked by high energy costs and weakening demand across various sectors, including electrical systems, automotive and consumer Europe. Despite these headwinds, TESA achieved organic sales growth of plus 1.9%, with nominal sales reaching 1.69 billion euros. The industry segment demonstrated resilience, driven by strong results in electronics and print and packaging solution business units. The electronics sector benefited from a recovery in the smartphone and tablets market, as well as from Project Wins in China, while print and packaging solutions grew through innovative applications. Conversely, the automotive sector faced a slowdown, largely driven by declines in key markets, including Europe and Asia-Pacific. In the consumer segment, sales declined due to challenging conditions, particularly in modern trade and specialized trades, while e-commerce saw robust double-digit growth across all regions, highlighting a shift in consumer purchasing behavior. TASA's EBIT margin increased from 16.0% in the prior year to 16.3%, primarily driven by a positive mixed effect from high electronic sales. That concludes our review of 2024. I now hand over to Vincent, who will share our outlook for 2025.