Beiersdorf Ag

Good morning and welcome to Biosdorf's first quarter conference call. Thank you for joining us today. I'm here with our CEO, Vincent Warnery, as well as our CFO, Astrid Herrmann. We would like to share with you Biosdorf's sales performance of the first three months of 2025. We will start with a presentation of our results, 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 sales figures for the first three months of 2025. Following a very strong performance in 2024, Basel delivered against expectations in the first quarter of the new financial year. Our first quarter's results are influenced by a strong prior year base and support our outlook for the full year. Our derma business deserves again a special mention as we continue to see a strong performance. Eucerin delivers not only in our established markets, but also expands successfully into new countries. At the same time, we are setting the foundation for our future success in China. With proactive measures, we are refocusing on EVA business to win in skincare with strategic innovations in these key markets. Delivering breakthrough innovation across our brands and expanding into more wide spaces remained the key driver of our growth of our first quarter results. In the first quarter, we delivered plus 2.3% organic sales growth in our consumer segment against a high-priority baseline, despite the stocking measures due to ongoing challenges in the travel retail market and in the face of a strategic repositioning in China. Excluding China, our consumers' business grew by 4% organically, which is within the range of the full-year guidance. Nivea sales increased by 2.5% compared to an exceptionally strong first quarter in 2024. Against the negative effect from the repositioning in China, this performance was primarily driven by strong skincare categories and outstanding double-digit sales growth in North America. Our derma brands, Eucerin and Aquaphor, achieved strong double-digit organic sales growth of 11.4% in the first three months, fueled by the continued success of our face and body categories, the further rollout of our breakthrough innovations, as well as the continued strength of Aquaphor. The healthcare business, which comprises the Anzaplast and Elastoplast plaster brands, reporting fantastic double-digit sales growth of 10.8%. This was supported by the launch of our next generation of plasters. Sales of La Prairie declined by 17.5% in organic terms in the first three months on the back of our best-performing quarter in 2024. This decline was mainly driven by continued challenges in China and the travel retail market, which we addressed by destocking activities. Tesa sales grew by an impressive double-digit 10.7%. On the one hand, this needs to be viewed in a context of quarterly phasing and a very low prior year comparison base. On the other hand, organic growth was supported by a strong electronics business, while the changes in the automotive market continue to impact the business. Overall, our growth results are well in line with expectations. At plus 2.5%, Nivea delivered a robust organic sales growth in the first quarter of 2025, especially compared to the strong previous year period. In Q1 2024, Nivea grew by an impressive 12.6%, which was largely driven by significant price increases and launches. And while pricing continues to play a role this year, its contribution to growth is substantially lower. In addition, we are putting our house in order in China, where we have decided to focus on what we do best at Biosoft, skin care. I will come back to that shortly. As mentioned in previous presentations, our Nivea innovation pipeline for 2025 is impressive. With the planned launches and relaunches this year, we expect an acceleration of profitable growth in the quarters to come. Our derma business with Usurin and Aquaphor continued its trajectory, showing excellent growth across regions. In our emerging market region, we achieved double-digit growth of 18.5%. This was supported by further wide space expansion in countries like India and a successful launch of our breakthrough innovation, Epicelin. The same applies to Europe, where we rolled out Epicelin last year. Overall, our derma business in Europe grew by 7.9%. In North America, our biggest market for Derma, we achieved double-digit growth of 10.4%. Just one year after the successful launch of Usurine Face in the US, we continued the momentum with a market entry of our hero ingredient, Tiamidol. New products from the Tiamidol-based Usurine Radiant Tone Collection hit the shelves in Q1 2025. In China, we are taking a bold approach to put our house in order. On EVA, we are shifting our focus away from less strategic and price-sensitive personal care categories and partners. Instead, we want to drive premiumization in skincare, expand through digital-first channels, and accelerate innovation. Of course, these repositioning efforts in China have a negative impact on our EVA results, which is also visible in our Q1 performance. but we are convinced that our measures are setting the foundation for future growth in this key market. On La Prairie, we continue to be challenged by the difficult situation in travel retail. Therefore, we significantly reduce our stock level, especially in Hainan over the course of the first quarter. In addition, we continue our efforts to modernize La Prairie by broadening the price range, driving innovation, putting more effort on e-commerce and consumer engagement, and changing the look and feel of the brand. Excluding the negative effect of our repositioning greater China, our consumer business would have grown by 4%. China remains a strategic priority, both mid and long term. With a bold repositioning of our China business, we are getting ready for the next big moment, the launch of Tiamidol in China in 2026. This follows the official approval of our patented ingredient Tiamidol in China last year. a major milestone for Biosoft. It is only the second hyperpigmentation ingredient to receive such approval in China, and the first since the implementation of the cosmetic supervision and administration regulation. Tiamidol is already a game-changer in China's cross-border e-commerce, with Nivea Lumina 630 growing 43% in 2024, and we are just getting started. In 2026, full market access will allow us to scale this breakthrough innovation even further. By launching Tiamidol across all our core brands, Nivea, Usuin, La Prairie, and Chantecaille, we are setting a new standard in hyperpigmentation in the country. Let us now have a look at the progress of our wind whisker growth drivers. Our focus on expanding into wide spaces paired with breakthrough innovation has proven to be the winning strategy. As mentioned on the full-year results call, Shantokai is expected to accelerate this year. Following the 4.5% growth in 2024, our luxury brand continued to build on its strong performance and delivered double-digit sales growth of 15.9% in the first three months of this year. After the launch of Shantokai in China in record time last year, we are taking another step, the introduction of Tiamidol under the Shantokai brand. We just launched the Brank Peony collection in the first markets, and we are confident that this strategic launch will unlock new growth opportunities for our luxury portfolio and further strengthen Biosoft's overall market position. In the first quarter, we further strengthened our global presence and commitment to key skincare markets like India and the U.S. In early 2025, we introduced seven Tiaminol-based Nivea Luminous face care products to the Indian market. marking a major step in bringing our innovation to a broader audience. Following the successful Usuin launch in October 2024, the Nivea rollout brings our hero ingredient to the mass market, supported by tailored formats with smaller, more affordable packaging to meet local consumer needs. In Q1, Nivea recorded impressive growth of 31.9% in India. In the US, we continued our strong momentum Following the successful launch of Eucerin Face last year, in the first quarter of this year, we expanded the portfolio with Tiamidol-based products under the Radiantone collection. We are directly addressing growing consumer demand for hyperpigmentation solutions and strengthening our footprint in the U.S. skincare market further. Driven by this successful launch, our Eucerin Face category delivered outstanding 37.2% growth in the U.S., I am also pleased to share that the global rollout of our epigenetic anti-aging innovation continues to be the best launch ever. And we are now present in more than 45 countries. Outstanding repurchase rates underline the product's relevance and consumer acceptance. In fact, the repurchase rate in our all-market Germany remains at twice the level of the top-performing launch of key competitors. We are also seeing excellent repurchase rates in other countries, for example, in Mexico. Even in our long-standing and trusted consumer brands like Anzaplast or Elastoplast, we consistently deliver groundbreaking innovations. At the beginning of this year, we introduced the next generation of plasters, the Sogon Skin Protection Plaster. With this innovation, we are setting a new benchmark in wound care. We're not just launching a product. Instead, we are challenging old myths like wounds heal best in fresh air. This advanced hydrocolloid innovation supports faster healing and strengthens our position in the category. Through digital in-store campaigns, we aim to shift mindsets and improve healing outcomes for millions of consumers. And it is paying off. Our healthcare business grew by 10.8% in Q1, supported by this strong innovation and our commitment to advancing everyday skincare. No other to you, Astrid, for the financial of the first quarter.

Thank you, Vincent, and good morning from my side as well. I am happy to walk you through our first quarter 2025 results in more detail. Let's start by reviewing our sales performance at both segment and group levels. In the first quarter of 2025, Byersdorf Consumer Division recorded organic sales growth of plus 2.3%. Due to negative foreign exchange impacts, nominal sales grew by plus 1.9%. Our TESA division achieved strong double-digit organic sales growth of plus 10.7% during the same period, resulting in nominal growth of plus 11.2%. Overall, the group delivered organic sales growth of plus 3.6% and nominal growth of plus 3.3%. Now, let's take a closer look at our regional performance for the first quarter of 2025. In Western Europe, we achieved organic sales growth of plus 2.1%, with particularly strong results in Northern and Southern Europe. It is important to note that our luxury travel retail business has negatively affected our overall growth in Europe, as it is reported in our Western Europe figures. The negative impact amounts to more than 200 basis points of growth. In Eastern Europe, our sales recorded a slight increase of plus 0.3%, primarily due to a very high comparison base from the first quarter of 2024. The Americas region concluded the first quarter of 2025 with an organic sales growth of plus 3.7%. North America achieved a growth rate of plus 3.0% with Nivea and Derma generating fantastic double-digit growth. Latin America experienced growth of plus 4.3% in the first three months of this year building on a particularly strong performance in the same period last year. The Africa, Asia, Australia region recorded an organic sales growth of plus 1.9%. The numbers are significantly affected by the repositioning measures we are taking on Nivea in China. Excluding this impact, the growth rate would have been in the high single-digit range. Now let us review the TASA business performance for the first quarter of 2025. During this period, TES achieved a double-digit growth rate of plus 10.7%, primarily driven by the strong performance of the electronics segment. It is important to note that this exceptional growth is influenced by a low comparison base from the first quarter of the previous year, as well as phasing effects related to the transition of manufacturing from China to India in the electronics industry. At the same time, I would like to flag the ongoing challenges in the automotive market, particularly in Europe. Recent developments regarding tariffs are expected to further complicate conditions for the sector, adding to the existing pressures. While the first quarter has demonstrated strong growth, the overall market dynamics present a mixed outlook, leading us to maintain our guidance in light of the challenges ahead. This concludes our review of the first quarter 2025. I will now hand over to Vincent, who will give you an update on our outlook for the full year.

Thank you, Astrid. Let us conclude with our guidance for 2025. We maintain our expectation for organic sales growth in the consumer business segment to be in the range of 4% to 6%. We anticipated a slower start to the year, which is fully factored into our guidance. The strategic refocus in China will continue to affect net sales, but we expect growth to pick up as the year progresses, particularly in the second half of the year. We confirm our guidance for the EBIT margin, excluding special factors, in the consumer segment to be 50 basis points above last year's level. In the TESA business segment, we maintain our guidance for organic sales growth of 1% to 3%, with the development of the automotive sector playing a key role in determining whether we expect to reach the upper or lower end of this range. Additionally, we reaffirm our guidance for the EBIT margin, excluding special factors, which is expected to be around 16%. Overall, our group organic sales growth is expected to be in the range of 4% to 6%, with the EBIT margin, excluding special factors, projected to be slightly above last year's level. We remain confident in the outlook for our business and have strong plans to grow across our portfolio with a great innovation pipeline and further wide space expansion potential. However, it is currently difficult to predict how the overall uncertainties in the global economy may affect consumer confidence in our business, especially in the short term. With persistent geopolitical tensions, the unpredictable impact of tariff policies, and general economic volatility, there is a risk of potential scenarios that can adversely affect our performance. Over to you, Christopher, for the Q&A.

Thank you, Vincent. Now you have the opportunity to ask questions. If you would like to ask a question, please press star one on your phone. And please note that we have a maximum of two questions per caller. And I see the first one in line is Jeremy Fialco from HSBC. Jeremy, please go ahead. Your line is open.

Hi, morning. Thanks for taking the questions. So a couple from me. I guess the first one is as you have kind of exited the quarter and we've gone through all of these, issues with the tariffs. To what extent do you see that affecting consumers and is there any greater degree of hesitancy that you saw as the course went on or is that not really something that you would kind of characterize? And then the second thing is whether you could just reiterate the expectations for La Prairie I think that you've spoken about this achieving low single-digit growth for the year, being back in positive growth in Q2. So is that still something that you would be expecting? Thanks.

jeremy on you on your first question as you you might have seen we are really slightly hit by the u.s tariffs because in fact we have a two-third of our production what we sold in the u.s which is coming either from the u.s or from mexico and mexico is covered by the free trade agreement so we have only a small part of the business which is coming from europe so so far so good the question we have is more on the consumer confidence on the consumption we are Lucky enough to have a market which is growing low single digit in the U.S., and you've seen that we are overperforming this market. So we see the big question would be if we see some kind of consumer dissatisfaction or some consumer lack of confidence in the U.S., which might affect our business. But we see on terms of U.S. tariffs, we are in a good situation. On La Prairie, you're absolutely right to say that we are expecting better figures. What we have done clearly in the first quarter, it's really to be sure that we end the quarter with clean stocks. You know that La Prairie being a brand which is not promoting, the only way to reduce stock is to stop selling. This is why we definitely decided to reduce the sell-in. in the first quarter of 2025 in China, and we are destocked strongly. We are not expecting a strong growth in Q2. Hopefully, it will be a flat, but we are expecting a much better performance in Q3 and Q4. together with also the launch of the new products, the new look and feel, and also the continuous support of e-commerce. We are growing extremely strongly on e-commerce. We are growing 20% and particularly strong also in China. So this is why we are pretty optimistic with La Prairie starting next quarter, but even more in Q3 and Q4.

Thanks very much.

So the next one in line is Celine Panotti from J.P. Morgan. Celine, good morning. Your line is open.

Thank you. Good morning, everyone. Yes, so I would like to come back on Vincent on the outlook for the year. You seem quite confident because of the pipeline, but in the short term, could you say whether you think you would be within the four to six? You said that ex-China, you would be already at four for consumer. That wasn't you one. And then you said that the travel retail drag probably is not there anymore because you're happy with... So just try to understand, you know, like it seems that some of the headwinds for Q1 are not going to repeat in Q2. I understand maybe the comment you just made about the U.S. low consumer confidence, but just trying to understand how your business could not be sequentially improving given that you have less of the headwinds from Q1. That's my first question. And then my second question on the innovation, is it possible to get the size of the epithelium business or the percentage of the total derma in the first quarter? And how do you see the repeat purchase in Western Europe? I mean, derma was up 7%, you said, in Western Europe. How much of that was driven by the epithelium, please? Thank you.

Thank you, Céline. On your first question, as you know, one of the big differences last year is the timing of Eastern, which has a huge influence on sun care. So I would say the answer to your question, are we going to be at the lower part of the guidance or slightly ahead, will be more depending on sun care. So far, we have planned to be more at the lower end of the guidance in the second quarter. Also, because most of the big launches are coming more in the Q3 and Q4. The question being, obviously, the US. On your second question, I mean, EpiCellin is, as I said, the best launch ever of Biosoft so far. It is still a small part of a business, of a derma business, which is doing 1.4 billion euros. So it's difficult to give you a percentage, especially knowing that we did the Cellin in Europe in the last quarter, Q4, and we did the Cellin in emerging market in Q1. what i can tell you is that the figures are absolutely impressive in terms of repurchase you remember i gave you the figures of 20 repurchase after six months in germany which is the best ever which is two times you know the average of the best performance in the market i just got the figures of mexico that we launched in january already after five months we have a 15 repurchase level which is also the best ever we had in history in Mexico, and I also got the figures of Thailand. It's interesting to have three different geographies. In Thailand, we have a very strong position with Tiamatol. We have a 50% market share. Despite this enormous presence of Yusrin, we grow in anti-age by 29%, so we have today an 80% market share in anti-age in Burma, in Thailand. because of the launch of epicillin. So we are not only very optimistic with the weight of epicillin on the Ustream cell, but as you might remember, we are launching the Q3 2025 Nivea epicillin, and the expectations are even bigger because of the size of the brand, because of the number of countries in which we can launch Nivea epicillin. So, by the end of the year, clearly, the combination of Nivea and Usurin and Epicillin will be a big part of the growth of our brands and will start to be a big part of the business in total.

Thank you. Can I just clarify on my first question? So, you said that you expect Q2 to be at the low end of the 4 to 6. And it's dependent on Suncare. What kind of assumption for Suncare have you made there? Because I presume that Suncare, you should have the selling more in Q2 while it was in Q1 last year.

We have taken the normal season of sun, in the sense that, you know, we look at the last five years, we look at what we sold, and we look at what the sellout, and we consider that with a normal season, which means that there is sun, there is sun in Europe, there is sun in emerging markets, this is where we would deliver the 4% of the quarter.

Thank you.

And the next one in line is David Hayes from Jefferies. David, your line is open. Please go ahead.

Thank you so much. Good morning all. So my two, I'll start in the U.S. Just in terms of the U.S. performance, obviously very strong Nivea Derma at over 10% for both of those, but 3% overall. So just to understand, is that the copper tone weakness that's offsetting that strong performance in those two categories? And I guess beyond Easter that you just kind of mentioned, is there anything specifically going on in copper tone, destocking, innovation changes that means that that might pick up through into the second quarter? And then the second question, just in terms of the China headwind impact with the repositioning of the portfolio, is that sort of circa six percentage points of impact that you called out in the AAA region going to diminish through the quarters, or is that now constant all the way through until we lap the effect of that, or is there kind of a first quarter higher level of impact? Thank you very much.

So on your first question, David, you're absolutely right. This is Coppertone. Coppertone is decreasing slightly market share in a market which is declining. And in fact, there are two phenomena which are impacting Coppertone as well as all the Sun mass market brands. First, the beginning of the season was not so good. The weather was not so good in the U.S., The market is down. But also what is happening is that the derma brands are progressing at the expense of the mass brands. So we are lucky enough because we are gaining with Usurin Sun what we are losing with Coppertone. But overall, the perspective is not that good on Coppertone. The good news for Coppertone is that we've been prioritizing the sport business with a new rugby player, female rugby player, which is extremely well-known in the U.S. So we see our sellout in sport increasing. going going up for the first time since years and we also pretty successful with the the face care that we launched two years ago but it is compensated by the loss on general protection and baby so copperton is negative uh la prairie is slightly negative also because the market is down and we you know you might remember i told you we would launch uh um la prairie in on amazon with success avenue by amazon The launch has been slightly delayed by Amazon, and we will be eating the online shelves by the 29th of April. So you see the figures are more in April than they are in March. So that's the reason why the U.S. figures are below what I shared about Nivea and Usuin. On your second question, what we have been doing since Q4 is really to clean totally the old and the unsuccessful businesses over there. This is something we could not do it in the past because we didn't know if we had the chance to launch one day. Now that we have done, we got this decision in October, we have immediately started to put our house in order. It means that we are stopping some categories where we have no right to win. It could be face cleansing, it could be shaving for men, it could be deodorant, it could be shower gel. So all of that we are stopping. We are also revisiting our trade partners. We are decreasing the number of distributors by 70% because we have a lot of small distributors which are absolutely not the right one when we start to go domestic online. So that also has an impact, sell in, sell out, because we are also absorbing the stocks. and we are also renegotiating with a few offline retailers with whom we never made money in order to be sure that we have better conditions so this has strongly affected the q4 this has extremely strongly affected the q1 and you're right this is exactly the reason why you know the aa is is at this level we will start to have a much better performance in q2 and even more in q3 and q4 being the best quarter in the year so we are pretty optimistic but we had to go through this cleaning in order to be sure that when we have the chance to launch TI Middle, we have a clean portfolio, we have the right partners, and we are working with people with whom we can make money. Great. Thank you.

And next one in line is Callum Elliott from Bernstein. Good morning, Callum. Please go ahead.

Morning, guys. Thank you very much for the questions. I just want to follow on this theme of the China portfolio actions, if I can. Firstly, maybe just to sort of bounce back what you just said, Vincent, can you maybe explain to us why it should get better in Q2, Q3? Like if these are portfolio actions, do we not need to annualize the actions you've taken before things should start to accelerate? So if you could just sort of flesh out for us why you're expecting this immediate improvement in Q2, Q3. And then maybe more broadly, where are we globally on this personal care de-emphasis, if I can put it that way? Obviously, meaningful impact from China this year. But are there other big markets where there still remains a significant amount of pruning to do? Thank you.

On your first question, what is happening is that there is one big success story in China, which is Luminous. You know that Luminous has been launched on cross-border e-commerce. Despite the fact that cross-border e-commerce is only a small part of the e-commerce footprint in China, it's 8%. China is our number one country in the world. It's two times bigger than Germany. So we have this business which is doing extremely well, which grew 40% last year, and which will be the growth driver of Nivea China in Q2, Q3, before being even bigger when we start to launch it in domestic e-commerce at the end of Q4, beginning of Q1, 2026. So we will benefit, in fact, from Q2, from the growth. always maintain dynamics of luminance while no longer suffering from the returns, from the destocking, from the stop of TP partners that we experienced in Q4 and Q1. This is why things will start to improve strongly in Q2 and even more in Q3 and Q4. A big thank you for your question on personal care. It's very important to understand that we see a big difference within personal care between DAO and the rest of personal care. We are obviously not interested in developing our business in shower, in soap, in men's shaving, in hair, in this kind of category. but deo is not only the biggest category of nivea one of the most profitable but also where we are clearly bringing a lot of innovation in 2025 we are relaunching our historical black and white franchise we are launching also a very interesting derma control franchise which is for the first time combining the the deo expertise of biosoft together with the skin care expertise of biosoft So we have a pretty big ambition on the other end, and this is starting to happen in Q2 and even more in the second semester of the year. So more to come on the O, big priority, big category, and also big penetration tool for us in many parts of the world, not only in Europe, but also in emerging markets.

Thank you very much.

And we have Nicolas Olivier from Goldman Sachs as the next one in line. Good morning, Olivier. Hi, thank you.

Good morning, Vincent, Astrid and Chris. Just there was a couple of questions for me. First of all, there was a few negative press reports in Germany, I think it was a few weeks ago, pointing out to share losses for Nivea. Could you please comment on Nivea's ability to grow share in Europe and in Germany? I guess that was where it was referring to. And secondly, just going back to the phasing for the rest of the year. So for consumer, you're expecting the change rule to market in China to affect Q2. Should we also expect a bit of a shipment phasing in Q4 ahead of the 2026 launch? And then also on TESA, for us, since Q1 was very strong, how much of it was driven by the trade load effect in electronics? Thank you.

Thank you so much for the question. I will take the first two, and Astrid will take the third one. You are alluding to an article of a German magazine called Manager Magazine, which rightly shared a slide that we shared with a commercial organization, which was looking at the market share of Nivea in our priority countries. And we were, and I will come back to that, we are losing 0.36%. market share, so not huge, but 0.36 market share on EVR in those countries, while globally, when you look at the total perimeter in which we are acting, we are flat and we are gaining nine base points, which is not good enough. I want to do better than that, that we are not losing market share. The reality what we are facing, and which is true also for all our global competitors, We are facing not only the strengths of private labels, and it's true that we had all of us to increase prices because of the increased cost of goods. It has obviously made private labels even more competitive, and particularly in categories like fence cleansing, like sun care. where they come with prices which are three times lower than us. But also we have these new dynamics of local brands, you know, which are ingredient-based, which are coming with a very simple proposal, cheaper than the global brands, and we have to find a way to counterattack And this is something we are doing with influencers, with a much, much stronger digital activity. And we hope to see some turnaround. What is true also is that we've seen clearly that the positioning of Nivea as a value-for-money brand has to be kept. This is why you've seen that the price increase we have anticipated for 2025 is much, much lower than what we had in the years before. And also, it's a price increase which is focusing on the product and categories where we are coming with new news. So when we are coming with a relaunch, when we are coming with a launch, this is where we take the opportunity of increasing prices. We are no longer increasing prices over the board like we used to do, like we had to do in 2024 and 2023. So I'm optimistic. I think this small market share increase that we saw uh in the total perimeter should improve in the months to come on your question about the phasing we we are indeed working you know to get the registration of each and every chia middle sku in china some of them already registered but we will decide to launch both nivea and new syringe here middle on the domestic channel only when we have a sufficient number of SKUs, so to have really not a one-by-one launch, but having a range launch. So it might happen indeed sooner than expected, but for the time being, we anticipate a launch beginning of 2026 to be on the safe side. Tessa?

In terms of your question on TESA, so look, the significant growth in Q1 of this year is primarily related to the comparison to the prior year. If you might remember, Q1 taser was down, declining, while then we had a very, very strong rebound in Q2, double-digit growth in Q2 of last year. This was related to phasing and some shifts in manufacturing and so on for key electronics manufacturers. And we now are seeing, again, this comparison versus the prior year that was quite a big shift. We're seeing a normal quarter. Maybe some, you know, customers might have, you know, ordered a bit more given tariff, you know, challenges and so on. That could happen. But we think the biggest difference is really the comparison that we had to the prior year.

Thank you very much.

And the next one in line is Fulvio Cazol from Berenberg. Good morning, Fulvio. Please go ahead. Your line is open.

Yes, good morning, and thank you for taking my questions. So I have a couple. The first one is on stock levels, whether they're in the right place now in high-end and travel retail, or whether we should expect more destocking in Q2. And then my second question is, are there any comments you can share on the timing of investments and the impact this can have on the margin phasing this year. I'm just trying to get a sense if the margin improvement you anticipate is going to be more skewed to the first half or the second half, or whether it's going to be relatively balanced this year. Thank you.

Thank you for your... I think the first question, Astrid, we talked about investment. We look at stock level, looking at the consumptions to come. This is why we might have from time to time to do again this stocking if the market is not growing the way we expected. At this time, we have absolutely the right level of stocks, not only in China brick and mortar, in China travel retail, in Hainan. So we have exactly the number of weeks we're expecting. And this is why I'm more optimistic regarding China and particularly for the quarters to come.

And your question in terms of timing on investments and obviously the profit, first half, second half, Look, given that we are saying that our growth will be much more so in the second half of the year, certainly we will see a stronger EBIT profile in the second half of the year. We also have significant investments, obviously, in the second half of the year, given that we are doing a lot of launches. But we also started the year with some strong investments. As we mentioned, we are launching in the U.S. or have launched in the U.S., Tiamatol that's being supported very strongly, the same in India, so Apicillin obviously in emerging markets. So even in the first quarter, we have already started with some strong investments. Given the growth profile, I would expect the second half to be the stronger delivery.

Thank you very much.

And then we have Guillaume Delmas from UBS as the next one. Good morning, Guillaume. Your line is open.

Thank you, Christopher, and good morning, Russell and Astrid. My first question is on the beauty industry uncertain outlook for this year. I guess, Russell, should we see a deterioration in consumers' mood and confidence? I mean, does Biosdorf have a plan B, as in measures to contain costs, maybe some investments? Also maybe emphasize more affordable offering and innovation or no need for a plan B advised off because you view your categories and your brands as resilient and almost quasi recession proof. And I guess another way to ask the question is how bad the macro would have to become to prevent you from delivering on your current 2025 guidance. And then my second question, just on two regions in Q1, so Eastern Europe and Latin America, a bit of a soft start for both regions, wondering above and beyond a challenging basis of comparison for Eastern Europe, if there were any reasons for that slow start. And are you confident we will see both regions accelerating from the second quarter onwards? Thank you very much.

I will take your first couple of questions. Look, related to the beauty outlook, we still feel like we are in very, very strong categories. They've really shown over the long term, even looking back at previous recessions and difficult times, that our categories are quite resilient. There might be always obviously hiccups, but we do think we're in good categories. That said, we are absolutely managing our profitability, our investments with agility. We're watching where everything is going. We are making sure that we manage that with the right approach in very uncertain times. Certainly, the COVID times have taught us how to do that and manage multiple scenarios and then react as well. In terms of how bad would it have to be, I think in these very uncertain times, it's really hard to make predictions. But of course, if we have very bad macroeconomic situation where we have recessions not just in the u.s but in other parts of the world regardless of how strongly we feel obviously about our plants we have very strong brands we have great innovation we'll have to see what kind of impact that has obviously on consumer confidence are we worried that that happens let's see it's really hard to predict We'll do our best to be prepared for that, but it's really, really hard to give you a really strong prognosis of what's going to happen in the future.

Guillaume, if you'll allow me to add something to what Asit said, we don't have a plan B, we have a plan N. When you have a brand like Nivea, which is obviously the biggest part of your business, and which has this value for money positioning, where you can find the best skincare product at 2 euros, but also at 20 euros, when You know, the biggest category is selling deodorants at €2.20 when you have the Nivea soft that we just relaunched with the UV protection, which is around €3, €4. This is also the best way also to, in fact, to compensate any consumption decline or any issue with prices. And this is why also we have been able to overperform the market with this brand over the last three years, despite the strength and the weight of this brand on the market.

On Eastern Europe and LATAM, we have had in the first quarter a very, very challenging comparison to strong, strong growth in the prior years. So that is the bulk of what we're seeing here. That said, in Eastern Europe, we have had also some challenges with one or the other customer. These challenges now, these are pricing negotiations primarily, these challenges are behind us, so we're looking into a brighter future.

Thank you very much.

And then we have Tom Sykes from Deutsche Bank at the next one in line. Tom, good morning. Your line is open.

Yeah, thanks, Christopher. Good morning, everybody. Just firstly on FX, could you outline at spot the translation impact, the transaction impact, and How much of your product do you export from Euro-denominated costs to non-Euro-denominated countries, please? And then just on China, and again, this H2 improvement, you said, I think, China's 200 basis points drag on consumer growth in Q1. Do you or are you modeling in the 4% to 6% that China is a drag for the full year? Because you are obviously going to, or it sounds like you're going to be restocking and stocking in more than just Tiamatol, but a lot of other products as well. So built into the 4% to 6%, are you neutral, growing, or declining in China? You know, obviously ex-laprary in that comment, please.

But we'll take your first question related to the transaction impact. Look, we have over the last five years or so really expanded our manufacturing footprint to create a much more global approach than we've had in the past. So certainly our transaction impact has reduced over time. It is still the fact, though, that we are obviously having some very big production sites in Europe that are delivering to many parts of the world, for example, Africa, Middle East, and so on. So that is still an impact there in the short term, and we will need to obviously deal with that. But it is much lower than it used to be in the past.

A new question, Tom, on China. Three different situations. We are expecting an extremely good year on Usurin because we have done, in fact, the house cleaning of Usurin last year already. So from the second quarter of 2025, we are expecting big growth on Usurin. And Usurin will be the first brand also launched on domestic e-commerce with TME Dolls. We are expecting total flat here on EVI in the sense that the Q3, Q4 will compensate the Q1, Q2. Perhaps better, but this is what we have. La Prairie, it's more a question. We have obviously a negative first quarter. Let's see the way the market evolves. We are clean in terms of stocks today. We will clearly benefit also from any kind of recovery. So let's see what happens. And last but not least, Shantoukai, extremely successful. We did a plus 60% in the first quarter. We are clearly leaving a very strong growth in China. We are opening new stores today, in fact, in Shanghai. we are online so that would be also a very good addition to our business so all in all I would expect a slightly declining China greater China taking all the plus and minuses that I just described thank you and then we have Paolo Laudani from Reuters the next one in line Paolo good morning your line is open hi good morning thanks for taking my questions yeah I had a couple

First one was regarding moving production to the States. I was wondering if you are planning to open more factories there. I understand that the situation is changing day by day, but that was my first question. And staying in the States, correct me if I'm wrong, but in February you said that you would not change your DEI targets in the country, but now we're seeing that the administration is pressing foreign companies to do more on that side and I wonder if you could share something on your targets there. And my last question is on China and I wanted to ask if you're seeing any movement in customer sentiment in the country. And thanks.

Thank you, Paolo. I'll take your first question related to production in the U.S. So we have about a third of our U.S. sales also produced in the U.S., so that is good. Now, it's really hard to make decisions around production and so on in this uncertain environment. We will take our time to do that. We will obviously always review to see where does it most make sense to produce, ship to, and so on. But in the very short term, to make changes there, I don't think makes sense. We will watch that space and continue to think about the future.

On your second question, Diana, we are clearly convinced that the inclusion of the diverse perspective backgrounds is absolutely crucial for the growth and the competitiveness of a company. We want to look like our consumers. We are not talking about quotas, we are not talking about positive discrimination we are just saying that we believe that diversity is a is a driving force for buyers of you might remember that one of the first diversity we developed was a female diversity we have today a 50 50 female male leadership not only in the board but in every part of the company including the us we believe also that we need to make also the more open to a lot of communities, and we have a fantastic program called African Talent, so that's what we are doing. Nothing more, nothing less, and we will continue to do that. China, honestly, no big evolution of the consumer feeling, which means it's not better, but it's not worse. What we've seen for our brands is that when you come with a new proposal like Chantecaille, You can seduce Chinese consumers. As I said, I was really impressed. I was there two weeks ago to see the people queuing to try this brand and the story that supports the brand. We have seen also some good, very strong figures in e-commerce. As I said, we are growing strong double digits in e-commerce since last year, not only benefiting from Tmall, JD, but also TikTok. But I will not talk about the change in the consumer feeling in China. Too early to say.

Okay, thank you. Then the next one in line is Ulrike Dawa from Dow Jones. Ulrike, your line is open. Good morning.

Yeah, good morning. Thank you for my question. I mean, all uncertainty. I'd love to hear your question about the full-year margin target. You said that you expect the margin to be slightly above the year-earlier figure of 13.9%. Are you able to quantify the slide in terms of percentage? say that we expect to arrange maybe a 14 to 14.3% or even higher would be a realistic target range. And also another one on tariffs. Can you give a little bit more flavor and quantify to what you said about US tariffs at the start of the call? Why do you think you're in a good situation on US tariffs with the one third sold in the US is produced in the US, the last two thirds is imported? How will this stand to margins this year? And the final question has already been answered. Do you plan to shift more production to the S? I think my colleague already asked and answered that. Thank you.

Ulrike, I will take your two questions. So related to the full year margin target, as we mentioned in the consumer business, we commit to the 50 basis points increase on TESA given also the volatility we see there in the business. we are committing to be at around 16%. Given that, we can also not give you at the group level an exact number, but you can do some math and probably go a few basis points up and down on TASA either way to get a bit of a range. In terms of the U.S., yes, as just mentioned also by me, about a third of the production is in the U.S. and therefore obviously not impacted by terrorists. The other good news, at least at any point in time, because it's obviously quite volatile, is that our production in Mexico, which produces a very large part of our products sold in the U.S., is not impacted, is covered by the current agreement, USMCA. So that's fantastic news, at least in the short term. Hopefully that doesn't change. And then a much, much smaller portion of our U.S. sold products are produced in Europe. Yes, they would be at the moment impacted by some tariffs, 10%. Obviously, it's been going anywhere from 20 to 10 and so on. Let's see where it ends up. It is not a substantial impact, though, on our profitability. And we think we can manage also through what we've done to date, which is to, in the end, build a bit of inventory both on our, let's say, mass business, DERMA, but also on the luxury business.

Sure, go ahead. The question is to the group level. Are you able to give anything more than a slight increase or at this time you prefer not to? Thank you.

We prefer not to. As mentioned, we're quite clear on the consumer guidance. On the TESA guidance, we give essentially a range, which is around 16%. You can go up and down a bit from there, and that in the end adds to a number at group level that is slightly below. We have a definition for that, that we are slightly below prior, but we don't give an exact figure.

Thank you.

Thank you. And then the next one in line is Fawn Udomzilpa from RBC. Fawn, good morning.

Hi, good morning. Regarding your strategic repositioning in China, you have already provided a lot of colors, but could you share with us if there's any plan to adopt the same strategy in other regions as well, please?

No, we don't need to do that. In fact, China is a bit special. We tried a lot of things in the past since we sold our first blue team in the beginning of the 20th century. But we have a business which is made of bits and pieces of personal care, cheap, offline. So the only big, big success story we had was Luminous in cross-border e-commerce. And the good news is that we can extend it to the rest of the world. If you look at the story of BioZoff in big countries like the U.S., like India, we have done the right things at the right time, starting always with skincare, then enlarging the product to body, to sun, to deodorants, to face care, so we just continue the journey. with a strong ambition on face care, which is driven by TI Middle today and by EpiCellin tomorrow, so no need to reposition anybody else. Just China was the headache, but now we see the light at the end of the tunnel.

Very helpful. Thank you.

I would like to correct a statement I made.

I just misspoke. I meant slightly above prior year, not slightly below prior year. My apologies.

Thank you, Astrid. And then the next one and also the last one in line is Carol Zirta from Kepler. Carol, good morning. Please go ahead.

Yes, good morning. Thanks for taking the questions. I have two questions. One is on Nivea and some of the core innovations you were launching in European core ranges. Have those innovations hit the market or is that more something for the second quarter? And the other question is coming back to La Prairie. If you zoom out, the brand has been flat or down for two and a half years, very much based by the impact of China. We still have de-stocking. So my question is the following. If you take these products out of the Chinese markets, are you able to sell them in other regions? And what's the potential to broaden the shoulders of the brand, so to speak, outside China? Thank you.

Good question, Carol. On the first one, most of the launches of Nivea are coming more in the second semester. We are, in the first semester, we are leveraging the launches we did at the end of the year. This is why all the big things I'm talking about, like the launch of epizidine, the relaunch of black and white, the launch of derma-controlled deodorants, this is coming from Q3, which is also why we are pretty optimistic about the second semester. your second question is very good on la prairie we use like everybody to be very dependent on on china not only the the china uh market but also travel retail today it has been reduced and today china represents no less than 40 percent of la prairie and we have been able to develop the business not only in the us not only in europe but also we are just launching this month la pere in india and we have a good expectation from india we are also developing you know the travel retail in some countries where we do not have the presence of the brand so we will always be betting on china and as i said there are a few good signals, one of them being e-commerce, the other one being also the success of our 30 ml liquid leaf at 500 euros. But clearly, we want to be more and more diverse. And I could also mention Japan, where we had the best performance last year. We're starting also very, very strongly. So China always, but other countries are also places where we want to invest and we want to grow our brand. Super. Thank you.

We just had one additional question coming in from Misha Omanadze from BNP. Misha, good morning. Please go ahead.

Morning. Thanks for taking my question. I have just one. If I look at consensus expectation for consumer organic growth this year, it is around plus 5.5, 5.6% at the moment. Now, I understand it's very difficult to comment on outlook right now. But given what was delivered in Q1 and your expectation for the lower end of guidance range in Q2, how likely do you think this upper end of the range expectation is for the full year? Thank you.

What I can tell you is over the last four years, we have always delivered our guidance. We hope to be at the upper end. We can be at the lower end. I mean, a lot of question marks are still happening. We mentioned China. We have also La Prairie turnaround. We have the U.S. market. So allow us to keep our guidance as it is today. We will deliver net sales between 4% and 6%, and we will deliver a big growth of 50 base points. This is what we want to do, and this is what we will deliver.

Very clear. Thank you.

Thank you for all your questions. This concludes our first quarter conference call. Bayazdov's next investor relations event will be the release of our half-year results on August 6, 2025. We appreciate your interest in Bayazdov. Thank you very much, and goodbye.