This content is only available within our institutional offering.
28 Oct 2020
Q320 sales and 15 questions for management
Sign in
This content is only available to commercial clients. Sign in if you have access or contact support@research-tree.com to set up a commercial account
This content is only available to commercial clients. Sign in if you have access or contact support@research-tree.com to set up a commercial account
Q320 sales and 15 questions for management
Beiersdorf AG (BEI:ETR) | 0 0 0.0%
- Published:
28 Oct 2020 -
Author:
Omanadze Mikheil MO | Stent Jeff JS | Lim Joan JL -
Pages:
14
Summary of Q320 sales
Beiersdorf''s group Q3 LFL at +0.2% came in materially ahead of Vara consensus at c.-4.0%, with the beat driven by both Consumer and Tesa. In Consumer, the main surprise relative to (Visible Alpha) consensus expectations was in Latin America with implied Q3 LFL at +11.5% vs. Visible Alpha consensus at -5.0%.
News
Beiersdorf commented that FY EBIT margin in Consumer is expected to decline broadly in line with what H1 YOY decline was (H1 was -210bp), having added that Beiersdorf is being prudent in its margin guidance.
Earnings
We reduce our EPS by c.(5)% in FY20e, c.(3)% in FY21e and c.(2)% in FY22e.
Investment thesis
While management confidence in delivery of the 2023 margin target is seemingly shaken, consensus is already there. Even assuming a material 2023 margin miss (we look for 15.0% in Consumer vs. the 16-17% target) we still derive high-single digit mid-term (FY22e/FY23e) EBIT growth courtesy of what should be relatively strong top-line growth and a relatively low absolute margin.
Rating/target price
We maintain our Outperform rating. Our target price moves from EUR109 to EUR106.
15 questions for management
Can you please roughly quantify each of the moving blocks behind your FY20 margin expectation (e.g. increased investment behind your brands, promotional pressures, transactional FX)?