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H121 results and 15 questions for management
Beiersdorf AG (BEI:ETR) | 0 0 0.0%
- Published:
05 Aug 2021 -
Author:
Omanadze Mikheil MO | Stent Jeff JS | Lim Joan JL | Karia Vyoma VK -
Pages:
16
Summary of Q2/H121 results
Beiersdorf''s Q221 LFL at +28.3% came in materially ahead of the Visible Alpha consensus expectation at +23.8%, while H121 EPS was c.12% ahead of Bloomberg consensus (margin driven), with the beat driven by both Consumer and Tesa. Scanning the implied Q221 top-line drivers by Consumer regions, the main surprise relative to consensus expectations was in North America with implied LFL at +41.2% vs. Visible Alpha consensus at +8.2%.
News
Beiersdorf commented that H221 margins will be impacted by the sharp rise in commodity prices, significant increases in transportation costs and investment programs for digital and sustainability. Against this backdrop, Beiersdorf plans to take advantage of pricing opportunities and doesn''t expect FY22 margins to be lower YOY.
Earnings
We increase our EPS estimates by c.+1% in FY21e and c.+2% in FY22e/23e.
Investment thesis
Consumer margin is now likely at a nadir, and the new management team is likely be viewed as a positive change. Against this backdrop, we believe that Beiersdorf offers a good organic growth profile and will now likely see two years of above-par LFL growth; combining this with undemanding valuation vs. peers, we see attraction in the shares.
Rating and target price
We maintain our Outperform rating. Our target price moves to EUR120 from EUR114 before.
15 questions for management
You mentioned that your goal is to develop Nivea as a global, more modern and transgenerational brand. What actions are you envisaging in order to achieve this?