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Q321 sales and 15 questions for management
Beiersdorf AG (BEI:ETR) | 0 0 0.0%
- Published:
28 Oct 2021 -
Author:
Omanadze Mikheil MO | Stent Jeff JS | Lim Joan JL | Karia Vyoma VK -
Pages:
15
Summary of Q321 sales
Beiersdorf''s Q321 LFL at +4.3% came in a touch below consensus expectations (VA cons at +4.4%) and group LFL guidance for FY21 at +8-10% was slightly below consensus (VA cons at +10.6%). Turning to margins, Beiersdorf reiterated FY21 guidance of group EBIT margin at the prior year level and commented that it is targeting slight EBIT margin growth in FY22.
News
Beiersdorf commented that next year''s slight EBIT margin growth is expected to be of high quality driven by pricing/mix/efficiencies and not by reduction in investment behind either its strategy or AandP.
Earnings
We reduce our EPS by c.-2% in FY21e/22e/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/target price
We maintain our Outperform rating. Our target price moves to EUR118 from EUR120 before.
15 questions for management
There are understandably a lot of moving parts behind recent performance of La Prairie (e.g. travel retail pressures, situation in Hainan, reduction of retail doors in Europe, refusing to promote). Against this backdrop, how should we think about the brand''s growth in FY22 and beyond?