BNPP Exane View
While most of the headline figures and revised guidance were pre-released yesterday after the market close, today''s release provides more colour on the Q2 delivery. We note that the Q2 miss was driven by Nivea (LFL at -0.5% vs. BBG cons. at +1.4%), while other major brands'' growth came in ahead of consensus expectations. From a geographic perspective, the main drivers behind the miss were Western Europe, North America, and Latin America. As to the shares, while guidance downgrade was likely expected by the market to a degree, its quantum is likely somewhat of a negative surprise, hence we expect a negative share price reaction relative to the sector in the MSD range.
Headline metrics
. Q2 Group LFL: +0.6% (BBG cons +1.5%)
. Q2 Consumer LFL: +1.5% (BBG cons +2.7%)
. Q2 Tesa LFL: -3.7% (BBG cons -4.2%)
. H1 EBIT margin Group: 16.1% (BBG cons 16.2%)
. H1 EBIT margin Consumer: 16.0% (BBG cons 16.0%)
. H1 EBIT margin Tesa: 16.9% (BBG cons 17.4%)
. H1 EBIT Group: EUR836m (-1% vs. BBG cons)
. H1 EPS: EUR2.54 (-6% vs. BBG cons); the material miss on the EPS level can largely be attributed to materially lower than expected net financial result (specifically, more negative other financial result and, to a lesser extent, lower interest income)
Top-line drivers
Scanning the implied Q2 top-line drivers by Consumer regions, we note the misses in Western Europe with LFL at +0.1% vs. BBG cons at +2.6%, North America with LFL at +1.6% vs. BBG cons at +4.0% and Latin America with LFL at +1.1% vs. BBG cons at +3.9%.
Examining Q2 LFL by brand, we note that Nivea declined by -0.5% (BBG cons +1.4%), La Prairie declined by -1.5% (BBG cons -2.1%), Derma grew by +13.3% (BBG cons +10.5%), and Healthcare was ahead by +5.9% (BBG cons +4.3%).
Bottom-line drivers
The -10bp margin contraction reflects GM: +20bp; Marketing and Selling -20bp; RandD: -20bp; GandA: -20bp and Other Operating: +40bp. On Consumer, Beiersdorf commented that GM rose due to price increases and...
