Beiersdorf AG (ETR:BEIG) (BEI.DE), the global skincare company, reported a strong financial performance in its third quarter conference call on October 25, 2024. CEO Vincent Warnery and CFO Astrid Hermann announced that the group achieved an organic sales increase of 6.5% for the first nine months of 2024, driven by a 7.3% rise in consumer sales and a 3.1% growth in tesa sales.
The NIVEA brand showed a notable 9.4% growth, while the Derma brands Eucerin and Aquaphor increased by 8.8%. Despite a 7.3% decline in La Prairie sales due to weakness in the Greater China market, the company remains confident in its full-year guidance and is optimistic about its innovation pipeline.
Key Takeaways
- Beiersdorf's organic sales increased by 6.5% at the group level, with consumer sales up 7.3% and tesa sales growing by 3.1%.
- NIVEA brand sales grew by 9.4%, and Derma brands Eucerin and Aquaphor saw an 8.8% increase.
- North America business rebounded with an 11.1% growth, supported by double-digit increases in Eucerin and Aquaphor.
- La Prairie sales declined by 7.3%, mainly due to the Greater China market affecting travel retail.
- The company is confident in achieving its full-year guidance, expecting Consumer Business organic growth between 6% and 8% and tesa's growth in the range of 2% to 5%.
Company Outlook
- Beiersdorf anticipates a consolidated EBIT margin slightly above the previous year.
- The company is optimistic about the performance of new products, including the anti-aging innovation Epicelline.
- Beiersdorf is focused on innovation and sustaining core business growth through strategic launches and marketing, aiming for a strong performance in 2025.
Bearish Highlights
- La Prairie faced a significant decline in sales, with a particularly challenging market in China.
- Brick-and-mortar sales in China were down 20%, and La Prairie's performance was minus 15%.
- In Hainan, the market saw a 35% drop, with La Prairie at minus 25%.
Bullish Highlights
- La Prairie is gaining market share and experiencing growth in e-commerce (up 30%) and regions like Japan (up 34%).
- Beiersdorf is actively combating parallel trading risks in China and has seen a reduction in the Daigou phenomenon.
- Chantecaille's successful launch in China positioned it as the 6th most influential international boutique brand in the country.
Misses
- The luxury brand La Prairie's sales decline in Greater China and travel retail sectors.
Q&A Highlights
- Beiersdorf will not limit marketing spend in Q4 2024, focusing on brand growth.
- CEO Vincent Warnery expressed confidence in outperforming the market in 2025, with stable inflation and improved supply chain conditions.
- The company is planning for significant growth opportunities for Eucerin and the expansion of La Prairie into new markets like India.
- Full-year figures for 2024 will be released on February 27, 2025.
Beiersdorf's commitment to innovation and strategic marketing, along with its focus on emerging markets and brand equity protection, demonstrates a proactive approach to overcoming current challenges and achieving long-term growth. Despite some regional setbacks, the company's overall positive performance and future plans indicate a strong outlook for the coming years.
Full transcript - None (BDRFF) Q3 2024:
Christopher Sheldon: Thank you, Sasha. Good morning, and welcome to Beiersdorf's third quarter conference call. Thank you for joining us at such an early hour. This is Christopher Sheldon, and I'm here with our CEO, Vincent Warnery, as well as our CFO, Astrid Hermann. We would like to share with you Beiersdorf's sales performance for the first 9 months of 2024. We will start with the presentation and the business review followed by a Q&A session. And with that, I'd like to hand over to Vincent.
Vincent Warnery: Thank you, Christopher, and good morning. Welcome to today's conference call, Astrid and I will now guide you through our financial figures at group and brand level regarding our 9 months and Q3 performance before we then share an outlook for the coming months. At the end, we'll open the floor for your questions. In the first 9 months of 2024, Beiersdorf continued to deliver strong growth and achieved an organic sales increase of plus 6.5% at group level. Given the current market dynamics, this steady performance is in line with our expectations and reaffirms our confidence in our guidance for the full year. Our consumer sales grew by 7.3%, while tesa delivered 3.1% of growth. Our icon NIVEA continued its outstanding performance around the globe throughout the year and grew by 9.4%. Our key categories performed well, and this broad-based success was further driven by growth in all key regions. Our Derma brands Eucerin and Aquaphor achieved very strong organic sales growth of 8.8% in the first 3 quarters despite a very high comparison base in 2023 and the unfavorable impact of Argentina. In the third quarter, this was powered by double-digit growth on a global level, an outstanding resurgence performance in North America and the successful launch of our breakthrough anti-aging innovation, Epicelline. The Healthcare business, which comprises the Hansaplast and Elastoplast plaster brands reported substantial sales growth of 5.1%. Sales of La Prairie declined by 7.3% in organic terms in the first 3 quarters. This decrease was mainly driven by the continued weakness of the Greater China ecosystem and its negative impact on the travel retail market. In this demanding environment, La Prairie again managed to outperform the market and gain significant market share. Now let us zoom on the third quarter performance of our consumer business. I will share an update on our reinvigorated North America business. The double-digit sales growth of Eucerin and Aquaphor and the ongoing strong performance of our global icon NIVEA. These positive results are even more noteworthy given the very high comparison base from last year. In the third quarter of 2023, we achieved outstanding sales growth with our NIVEA and our Derma businesses and recorded one of the strongest quarters ever for NIVEA in Europe. Our focus on skin care continues to pay off. All these guided by our Win with Care strategy and paired with a strong outlook and exciting innovation pipeline fuels our confidence in our full year guidance. In North America, like many of our peers, we experienced a challenging first half of the year. I'm delighted to now report that our North America business regained its strengths and achieved fantastic double-digit growth of 11.1% between July and September. Both our U.S. and Canadian businesses delivered a double-digit performance, especially our Derma brands contributed to these results with an impressive growth rate of 19.6% in the U.S. in the third quarter. NIVEA also further increased its growth momentum throughout the year. In North America, a key market in our Win with Care strategy, we continued to expand our brand presence, which is visible both in sales growth and market share. In the third quarter, Aquaphor continued its stellar performance and grew by 16% in organic terms. Eucerin contributed strongly as well with the recently launched face care range, further gaining momentum. It has already been successfully rolled out at major retailers such as Amazon (NASDAQ:AMZN), Walgreens, CVS, Target and Kroger (NYSE:KR). As we look ahead to the next year, we are excited about the upcoming launch of our Eucerin Thiamidol product range in North America, which has tremendous economic potential for this key region. Now to our icon. NIVEA delivered impressive growth of 9.4% year-to-date, outperforming key competitors in the market. This confirms that we are fully on track to reach our target for the full year. Sales in both the skin care and personal care categories increased significantly. In addition to the face care and sun businesses, the categories, body care and deo performed particularly well. This broad-based success was driven by continued double-digit sales growth in emerging markets with all other key regions growing as well. NIVEA continued its strong organic growth in Q3 with 5.9% compared to an exceptional Q3 in 2023. Last year's Q3 saw record growth in Western Europe on the back of a double-digit price increases in a high inflationary environment and a catch-up effect following customer sanctions. Looking ahead, we are very excited about our strong innovation pipeline for NIVEA. In addition to the ongoing sustainable product transformation, 2025 will be the year with the strongest launch and relaunch pipeline in the history of NIVEA. We'll further leverage the success of our LUMINOUS630 franchise, introduce our epigenetics innovation to NIVEA and enter the market with several other products. Over 45% of our NIVEA sales in 2025 will be impacted by these innovations and renovations. This pipeline and well-balanced growth via price and volume makes us confident that we will be able to continue our strong growth on NIVEA for the remainder of this year and beyond. Following the consistent strategic globalization and digitalization of our iconic brand in the recent years, NIVEA's power, it's global presence, trusted brand name and continued development form an extremely robust crisis-resistant and dependable pillar of our business. Moving on to our Derma business. I'm pleased to share that our Derma brands returned to double-digit growth of 10% in the third quarter, significantly ahead of competition. This increase was primarily driven by the success of the North America business where our Derma sales grew by 19.6%. From a global category perspective, particularly Eucerin face care and body care performed strongly. Looking at the first 3 quarters in total, we are very pleased with the organic sales growth of 8.8%, especially given the very high comparison base in 2023 and the unfavorable effect of Argentina. Our highly successful Thiamidol range remains a key driver here and is still showing fantastic growth rates 5 years after its launch. Face care as well as double-digit growth in sun care and Aquaphor contributed to this outstanding 9 months performance. Given our stronger Derma innovation pipeline and expansion plans, we remain confident for the full year in 2025. We launched Eucerin in India just last week. We'll further expand the Thiamidol product range around the globe. We'll continue our Eucerin face care rollout in the U.S., and we will further accelerate the rollout of our breakthrough anti-aging innovation, Epicelline. Now let's take a closer look at the launch Epicelline, which we presented to you at the Capital Markets Day. In our H1 call, I stated that we aim to make this our biggest launch ever and already predicted that it will have a strong business impact. And I would like to say I did not exaggerate. Since the launch of Epicelline in September, we are now present across Europe in some emerging market countries, a total of 32 countries. We have already reached over 80% of our anticipated global sales forecast for 2024. These fantastic first results are above our ambitious plan. For instance, in our key market, Germany, the Eucerin Epigenetic Serum is already the #1 bestseller in the entire Derma-cosmetic market. It's also holds #1 anti-aging positions in countries such as the U.K., Belgium, Spain, Austria, and Chile. I cannot wait to talk to you again about the further launch of this groundbreaking innovation in our full year results call in February. Now to the sales of our luxury brand La Prairie. La Prairie sales declined by 8% in the third quarter. Throughout 2024, this decrease was mainly driven by the continued weakness of the Greater China ecosystem both in Mainland China and in Hainan and its subsequent negative impact on the travel retail market. This strongly impacts consumption and hence also affects the luxury skin care market and our La Prairie sales. With the Chinese luxury and travel retail market down in the third quarter, La Prairie managed to outperform in this challenging environment and gained market shares in most geographies namely China, brick-and-mortar and online, the U.S., Travel Retail and Japan. We remain cautious in the short-term outlook but continue to see China as a key opportunity for La Prairie to generate growth in the medium and long term. Having said this, I would also like to point out that Beiersdorf's exposure to luxury in China today is rather limited. Different to our competitors, we believe to generate between 10% and 30% of their sales with luxury in China, we are well below 5%. Our focus with La Prairie continues to be on gaining market shares as proven in previous quarters. The key for La Prairie success is a focus on breakthrough innovations such as the premium price La Prairie's new life matrix haute rejuvenation cream. This cream encapsulates the alliance with Clinique La Prairie, the legendary Swiss longevity clinic. It was launched in September and shows encouraging first sales results in China and other markets. At the same time, we bring entry-level products such as the Skin Caviar The Mist to the market, which we successfully introduced in the first half of 2024. These two products are only two examples of our expanding product range, thereby recruiting new and younger consumers with entry-level propositions into the brand, whilst also offering high-end innovations at a premium price to existing consumers. We're also changing the look of feel and feel of our point of sale, the way we communicate online and offline, and we are modernizing our brand image. Now to the performance of Chantecaille. I'm pleased to share that we have been able to continue the brand's growth trajectory and retain our momentum throughout the year. Following organic sales growth of 4.4% in the first half of 2024, we increased our sales by 4.9% in the third quarter. Key contributors were Chantecaille's expansion into retail and the launch in Mainland China. Our strategy for Chantecaille in China to focus on digital channels first paid off. The partnership with China leading e-commerce platform, Tmall, and our collaboration with the Chinese celebrity Bai Lu, created a perfect environment for the domestic launch. This was followed by a commercial pop-up experience in Shanghai involving the famous actress, singer and model. As a result, Chantecaille was ranked #6 most influential international boutique brand in China in September. The financial results of this orchestrated launch fill us with great confidence. After this summary across our brands portfolio, over to you Astrid.
Astrid Hermann: Thank you so much, Vincent. Let's begin with the sales development at the segment and group level. In the first 3 quarters, Beiersdorf's Consumer division recorded organic sales growth of plus 7.3%. Due to negative foreign exchange effects, nominal sales growth amounted to plus 4.4%. Our tesa division concluded the same period with organic sales growth of plus 3.1% or plus 2.2% in nominal terms. Together, this results in plus 6.5% organic sales growth for the Group or plus 4.0% nominal growth. Following an excellent first half in 2024, our consumer division has continued to deliver strong growth in the third quarter, further enhancing last year's remarkable achievements amidst the ongoing challenges in the luxury market. While our third quarter experienced a slight moderation due to the significant price increases in the third quarter last year, we are fully on track and confident to deliver our full year guidance. Let's review the performance of our brands within the Consumer segment. Vincent has already provided details on the year-to-date development, so I will focus on the performance for the third quarter. NIVEA continued to achieve strong growth of plus 5.9% even on the back of an exceptional performance in the third quarter last year. As Vincent alluded to earlier, it was a record quarter for NIVEA in Europe. The plus 5.9% growth this quarter is fully in line with our expectations for the full year. The growth was widespread across all key regions with a well-balanced contribution from both price and volume. Both our skin care and personal care categories contributed to the success. We are excited to announce that Derma returned to impressive double-digit growth of 10% in Q3, an outstanding achievement, especially in light of last year's exceptional performance. This strong growth rebound can be attributed to the remarkable progress of our Derma business in the U.S. as well as the successful introduction of our epigenetics line. Both Eucerin and Aquaphor have surpassed market performance in terms of both revenue and market share. Our Healthcare division achieved remarkable growth of plus 7.7%, significantly outpacing the market and strengthening our leading position. Key growth drivers included our top markets Germany, Australia, Indonesia and particularly the U.K., which delivered an exceptional quarter. Even though the situation for La Prairie and the luxury market in China continues to be difficult, the strong performance of our other brands helped to more than offset these temporary setbacks. As a result, our Consumer Business achieved growth of plus 5.7%, reinforcing our confidence in delivering our full year guidance. Similarly, our tesa business reported solid growth of plus 3.5% in the third quarter despite the increasing headwinds across its key sectors. At the group level, we are pleased to report sales growth of plus 5.3%. I will now move on to the consumer sales performance by region. At the regional level, all regions and subregions were on a growth trajectory in the first 9 months. Europe experienced a growth of plus 5.2% in the first 9 months, aligning well with our expectations. Following an exceptional performance and notable price increases in Western Europe during the third quarter of the previous year, we are very pleased with these results. It's important to note that these figures also account for the ongoing slower performance in China's travel retail sector, which is reflected in Western Europe's results. Meanwhile, Eastern Europe continues to demonstrate ongoing double-digit growth. After a brief slowdown in our North American business, we returned to double-digit growth in the third quarter, turning our year-to-date performance positive once again. Latin America remains robust despite the well-known challenges in Argentina with NIVEA gaining momentum and Derma achieving outstanding results in Brazil, consistently accelerating quarter after quarter from a strong base. The Africa/Asia/Australia region also achieved impressive double-digit growth in the first 9 months despite the ongoing challenges in the Asian luxury market. NIVEA was the key driver of this growth in Africa and the Middle East. I'm pleased to share that tesa has achieved an organic revenue growth of plus 3.1% in the first 9 months and plus 3.5% in Q3. This growth was primarily driven by Asia and positive developments in our Electronics and Printing and Packaging (NYSE:PKG) Solutions sectors. tesa is facing a challenging environment in both the industry and consumer segments. The automotive industry has been suffering lately, especially in Europe and in the area of e-mobility. As already announced at our H1 results in August, the Electronics Business saw exceptional growth in Q2 which was mainly driven by a positive phasing effect of sales shifting from Q3 and Q4 to Q2. Tesa consumer business is experiencing lower traffic in DIY stores driven by cautious consumer sentiment across Europe. Nevertheless, tesa has been able to demonstrate solid growth figures despite these headwinds and continues to gain market share. As a result, we remain cautiously optimistic for tesa's growth in a challenging market environment for Q4 and confirm our guidance. Over to you, Vincent.
Vincent Warnery: Thank you, Astrid. So given the dynamic market environment, Beiersdorf's performance and sales results in the first 9 months of the year are fully in line with our expectations. Therefore, we once again confirm our sales and EBIT guidance for the full year 2024. We expect organic sales growth in the range of 6% to 8% in the Consumer Business segment. The EBIT margin, excluding special factors in the Consumer Business segment is expected to be 50 basis points above the previous year's level. We expect sales growth above the market in the tesa business segment, which translates into anticipated organic sales growth in the range of 2% to 5%. The EBIT margin, excluding special factors, is expected to be at the level of the previous years. Based on the forecast of the 2 business segments, Group organic sales growth is expected to be in the range of 6% to 8%. Beiersdorf anticipates the consolidated EBIT margin, excluding special factors, to be slightly above the previous year level. Thank you very much for your interest in Beiersdorf financial performance from January to September 2024. Astrid and I are now looking forward to your questions. To start the Q&A session. I will now hand over to Christopher.
A - Christopher Sheldon: [Operator Instructions] The first one on line is Iain Simpson from Barclays.
Iain Simpson: A couple of questions from me, please. I wondered if you could talk a little bit more about what sun care did in the Q3 and whether that was a tailwind or a headwind to NIVEA and Derma and just give us a little bit more color as to both market and your performance in that category. And then my second question is that you called out a few times that you had a very tough comp in Q3. It looks like the comp gets a fair bit easier in Q4 and I noticed the sort of references to a strong Q4. I just wondered how we should think about the phasing of your overall growth in consumer as we go into the end of the year.
Vincent Warnery: Yes, on your first question, we, as you know, the sun care, in fact, evolved positively in the first semester. If you remember, we grew double digit. And because also the sun season was not so good in the summer, we had a negative quarter. The good news that we were able to manage extremely well our stocks. They are taken into account in both Q2 and Q3. And at the end of the 9 months, we are growing double-digit on Eucerin Sun we are growing high single digits on NIVEA Sun. So it will be a good year for us despite third quarter below expectation. On the comparatives, I mean, you're right to mention that. Just to remind you what happened last year. And last year, we had something like a 12% price increase in Europe. We grew in countries like France and Germany by 24% because of the price increase and also because we are back on shelf in some major retailers we had delisted us because of price increase. So this kind of comparative was obviously very strong in Q2, Q3. And you are right to mention that normally, the Q4 is more favorable in terms of comparative. This is why we are optimistic for the fourth quarter.
Christopher Sheldon: And the next one in line is Celine Pannuti from JPMorgan.
Celine Pannuti: I'm sorry, I may have missed your previous question. But I first start with the strong growth that you have had in the U.S., and you mentioned Derma growing double digit. Obviously, one of your competitors has been seeing some destocking in the U.S. in Derma. So I just want to understand what has driven that strong double digit? Was it really you widening your distribution? Can you talk about what the sellout growth is? And what should we -- I mean whether you're happy with your level of inventory and what should we expect in terms of run rate as we look in the fourth quarter and your view on the growth for the Derma market globally as we look into maybe 2025. And then I think you were just answering the question about Q4 reacceleration. I think you said strong -- easy comparative. I mean -- could you -- unless you've done it, but could you give us whether you're still very happy to be at the top end of that 6% to 8% bracket.
Vincent Warnery: Celine, I think the -- as you heard a few days ago, obviously, the U.S. market has slowed down over the last 3 months and both in the mask market and the Derma market. This did not prevent us from achieving the 19.6% growth that you saw in the quarter. What is, I think, very positive for us, it's not only we have our legacy business Aquaphor growing 60%, but when you look at Eucerin, we grew 26%. And this is not only driven by the very good health of the body business, we are gaining market share, by the way, on both Aquaphor and Eucerin in the body market, and this is extremely positive. But also the success, this is a second year of Eucerin Sun that we launched 2 years ago. And the last -- the new kid on the block, the launch of Eucerin Face. We managed not to have also target listing Eucerin Face in the third quarter, and this is extremely important for us. So if you put all three businesses, we are not only growing very strongly in selling, but we are also gaining market share in both NIVEA, Eucerin and Aquaphor. So this is making us optimistic not only for the Derma U.S. business in the fourth quarter, but also overall for the Derma global business because on top of that, we benefit from the effect of Epicelline, which will be fully, fully leveraged in the fourth quarter. Regarding your question about the Q4, as mentioned, as I answered to Iain, it's true that on Europe, we have an easier comparative because again, in Q3 2023, we had an exceptional growth due to price increase and the fact that we are back on shelf in France and Germany with many retailers. So we are optimistic for Q4. This is why, as I said last time, and I said, I think even 6 months ago, I would be disappointed if we are not reaching the upper level of the guidance for consumers in 2024.
Celine Pannuti: All right. Can I just ask a follow-up on Epicelline? Any indication you can give us in terms of sales that you expect for this year? And I think you did say in previous calls that you are expecting Epicelline launch to be 4x to 5x as successful as Thiamidol in the first year. Do you still track there? Or do you think it could be even better?
Vincent Warnery: We take the first step of this launch, which we sell in, and we will clearly oversell Epicelline versus Thiamidol and even versus the figure I gave you last time. So very happy with Epicelline. Obviously, what is important in the sellout, I gave you the figures of Germany and a few European countries, even I heard this morning that in France, this is the highest ever sellout level we had on the brand new store in France. So all sellout figures are pretty optimistic. That second tick, I would say, is, I would say, positive. The third tick will be obviously the repurchase which will happen in the first quarter. We had extraordinary test results when we tested the product. So we are pretty confident that it will be, I would say, really the moment of truth in the first quarter of 2025. Are all those people who bought the product once willing to rebuy the product, and that will be the moment when we can be even more clear on the fact that this is really a breakthrough innovation, and I hope you know the best ever launch of Beiersdorf.
Christopher Sheldon: The next question comes from Karel Zoete at Kepler.
Karel Zoete: I have a question on the La Prairie business. Can you tell a bit more on the innovations you're launching here at lower price points? Is it already addressing different consumers? Or yes, is that a tempting offer for new ones? And the other thing is in general, it feels that your innovation agenda for the portfolio NIVEA and Eucerin is very, very healthy going into 2025. Can you tell a bit more how you plan to face and support this all? Thank you.
Vincent Warnery: First question, I think we are really trying to have a much wider approach. And I think the two launches I'm mentioning are good examples of that. On the one hand, you have the La Prairie matrix . The matrix haute rejuvenation cream. We are selling the product at EUR 2,000. So obviously, the most expensive product we ever launched at La Prairie. And it's very interesting when you look at the first results, you see that we are able to have 20% of the consumers in China are in fact either new or they used to be consumers and coming back, 20%, which is very good figures. But on top of that, you have 70% of the people buying this product while also buying another product. And that's really good because this is exactly what we want to do with the VVIP what we call the millionaires willing to be loyal to the brand and to benefit from the best innovation. On the other hand, we're coming with The Mist, which is sold at EUR 170. So obviously, an entry price for La Prairie, which is allowing us to recruit. We had 80% of the people buying the product which are new to the brand. We made a huge success on Tmall, TikTok, Douyin and JD (NASDAQ:JD). And that's obviously the way we want to develop the brand. So I think every time this combination of extremely ambitious and high price innovation and also being able to have consumers trying the product for the cheaper price, so far so good, and we hope to see some also good launches in the year to come. On your second question, we are extremely happy with the plan for 2025 on all brands. The interesting thing is that we used to be relying only on launches, and that's great to have launches, but we have also a core business which needs to be animated. And we have transformed dramatically the way we look at our core portfolio, we are able, for example, next year to relaunch our body line and NIVEA Body is one of the biggest business in the -- for NIVEA. We are launching our Black & White deodorant line. So we are really animating, as I said, 45% of the portfolio in order to be sure that we are bringing new news to the consumers on each and every category. We have faced the plan in a way that we are able to have every quarter the right support plan, and we are going more and more into digital into influencer marketing. So not only to be able to support every quarter the right number of products, but also to be able to have a much more sustainability of the launch plan and not launching something and then moving to something else. This is why you see some kind of optimism on our brands.
Christopher Sheldon: The next one in line is Victoria Petrova from Bank of America.
Victoria Petrova: When you were providing guidance in the beginning of the year, I assume your expectations on La Prairie were very different from what we are seeing in the 9 months and in the third quarter, yet you're keeping your margin targets unchanged. What are the offsetting factors? Why you're still in line despite the dilutive impact on La Prairie? And my second question is a little bit of a follow-up on Celine's question on Derma. How is your underlying market growing? Because we see very different results on dermatological beauty from various players and everyone is saying they're gaining market share. What is different? How do you define this market for you? Is it outside of moisturizing? Is there anything specific apart from Eucerin Face launch in the U.S?
Vincent Warnery: Victoria, Astrid will take the first question. I will take the second one.
Astrid Hermann: Yes. Thank you so much for your question. In terms of margin targets, you are right. Obviously, our La Prairie business is a profitable business, adding significant lead to our delivery. That said, we also have other businesses that are very, very profitable. We are particularly happy with a very, very strong delivery of our European business, which has been able to really help us offset the significant headwinds in luxury. Additionally, we've really worked on managing our cost through value engineering initiatives, obviously, through buying at the best cost we can. And we've managed our overheads very, very tightly while continuing to invest quite heavily in marketing budget. So we've been able to really compensate the headwinds through all these activities I just mentioned.
Vincent Warnery: On the second question, Victoria, what we are seeing, obviously, is normalized Derma market, which I think we're expecting. So if you look at North America, the market is growing at 3%. If you look at Europe, you are more into the 7%. So healthy market, but no more the 10%, 15% we had in the past. I think what is happening, and it's obviously a great opportunity for a company like us. You have this magic triangle. On the one hand, you have the pharmacies or the drug stores, and this is clearly a retail environment, which is extremely favorable for Derma brands. On the second part, you have the dermatologist, could be also the derma influencers. This is really a trend which is developing and which is -- so the prescription, the recommendation is important. And the third thing, which is the most important one, there's a premium for companies coming with innovation. When you come with Thiamidol, there is no anti-spot market, but you create a market. When you come with epigenetics, you might enter a red ocean market, but you have a great opportunity to come with a new offer on those by dermatologists. We saw that in the Big Derma Conference in Amsterdam that we can sell at a nice price. So the good thing in this market is see, it's clearly a market where you need to have not only the strength of dermatologists network or a strong retail network but also to be endorsed as innovators. And this is why a company like Beiersdorf has been the first company entering Derma more than 80 years ago, as a strong asset, and this is what you see today. So innovation is coming. Epicelline is spreading across the world. Thiamidol is coming already to the U.S. And as you know, I'm working also on expanding that to China. So all of that is making us believe that more than ever Derma will be a growth driver for 2025 and onwards.
Victoria Petrova: Maybe just on that very quick follow-up. On the China licensing on Thiamidol, where do we stand? When should we expect the first kind of sales launch in China outside of cross-border online?
Vincent Warnery: Victoria, we are progressing. I'm even myself flying to China in 1 week. We are progressing. We have some questions. We answered the plan we have, that the hope we have that we'll get regulatory approval in the coming weeks. And then we have 1 year to develop the formula and get the regulatory approval of the formula, which should be easier as soon as the ingredient is approved, so which means the launch for 2026. And when we get -- if and when we get the regulatory approval, we of course, cascade the ingredients, not only on NIVEA, Eucerin, but also La Prairie and Chantecaille.
Christopher Sheldon: And the next question is from Rogerio Fujimori from Stifel.
Rogerio Fujimori: I have a follow-up on La Prairie. I was wondering if you could break down your minus 8% like-for-like in Q3 in the Chinese ecosystem and outside China and also help us to think how should we think about Q4 in China and Asia travel retail considering trade stock levels at the end of Q3 and go then weak trading? And then finally, a final one on La Prairie. Just curious to hear how you're protecting the brand against the kind of parallel trading risks in China flagged by one of your luxury peers.
Vincent Warnery: Thank you, Rogerio. I mean, if you look at the performance of La Prairie, obviously, China is impacting us and not only China, brick-and-mortar, but also China travel retail. We are gaining market share. But when you are in, for example, brick-and-mortar China, the market is at minus 20%. We are gaining market share, but we are at minus 15%. So it's remained negative. When you look at Hainan, the market is at minus 35%. We are doing minus 25%. We are better, but still losing business and not growing in this market. What is positive, I would say, regarding La Prairie is that we are not only growing strongly, for example, on e-commerce. If you look at e-commerce, China, it's flattish. We are expecting Double Eleven that it's flattish we are growing at plus 30%. We opened Douyin, TikTok last year. We see also a fantastic growth in Japan. We are growing to 34%, so really moving well. And we have also good performance in the U.S. So if you look outside the China, the ecosystem, the core ecosystem, we are doing pretty well. Are we expecting a recovery in Q4? No, not really. We have anticipated that travel retail will not go back to growth. We are anticipating that brick-and-mortar will be also negative. But we saw good things happening in the rest of the world, particularly for example, in the U.S. or in Japan. This is why we're expecting to do slightly better, but absolutely no miracle on La Prairie in the last third quarter. On your question about parallel, we are pretty solid on that. We are attacking. We are suing everybody, which is trying to copy us. We have a team on the ground being extremely aggressive against any kind of copy and parallel trade. We also, as you might remember, we were happy to see the Daigou being reduced. We consider that the Daigou phenomenon was harming the brand equity. And so we -- it was, of course, a hit for our figures, but we welcome the fact that there was much more control. So all in all, we are pretty happy with the way we support the brand and we protect the brand. You've also to remember, Rogerio, that La Prairie is one of the only luxury skin care brand, which is not promoted. So we are not also playing with Double Eleven like some of our competitors with 80% price discount. You find La Prairie every day, everywhere at the same price, which is also limiting the game you could see with some of my competitors' brands.
Christopher Sheldon: And the next question is from Molly Wylenzek from Jefferies.
Molly Wylenzek: Given your comments on Western Europe, could you talk about the volume value split for NIVEA in the third quarter? And also just coming back on U.S. Derma, when will we see Epicelline launch in the U.S.? And maybe more broadly, how does the launch of Eucerin Face and Sun help you work with like dermfluencers to the benefit of the global business?
Astrid Hermann: Molly, I'll take your first question. We see a very balanced picture in terms of pricing and volume in the third quarter. So that's very, very promising. Obviously, we see nice volume growth, which we want to see. You know that also in previous years, we had nice volume growth. Clearly, pricing is not as high as it was in the previous period, but it's very, very balanced picture.
Vincent Warnery: On your second question, Molly, in fact, we have a history with Aquaphor of relying a lot. I mean they were not called Derma influencer, but they are, in fact, Derma influencer. We're adding a lot on this brand and this spokesperson for the brand, and we are expanding the model to the rest of the portfolio. We are, in fact, something like 80% of our media investment is in precision marketing and influencer marketing. We have not yet initiated a strong campaign on Eucerin Face because we are waiting to get the target listing. We are very strong on Amazon, but not yet on the rest of the portfolio. So we are starting right now. The fact also that we signed a global deal with OMD or a media agency with a strong expertise in this area is helping us because we are not best-in-class before. So this will be also the way we will drive the brand in 2025. And hopefully, obviously, the launch of Thiamidol, which is a great unique proposition with much more, I would say, original that happens -- what exists in the market today will give us a lot of opportunities to mobilize the Derma influencers.
Christopher Sheldon: And the next question is from Elizabeth [Cullifor] from Reuters.
Unidentified Analyst: My question is also a follow-up on La Prairie. Are you planning to adjust the strategy for La Prairie to mitigate the China luxury impact? And are there other regions where La Prairie is actually performing better and that would compensate for the weakness in China?
Vincent Warnery: Obviously, I mean, China is so important for La Prairie as well as for other brands -- luxury brands. So when you have such a business expanding double digit, it's difficult to compensate it. What I think is making us more optimistic for 2025 is not only the fact that we have clean stocks everywhere, which is so we are now really in a position where sellout equal sell-in. The fact also that we have some geographies that was mentioned in Japan, which is really good news for us. We dramatically small in Japan, we are growing extremely strongly, 35%, as I said, is also helping us because we are also recruiting very interesting VIP in this country. But also, we have some nice plan in the U.S. with online. For example, we have some very nice opportunities. We are not selling today La Prairie online in the U.S. except on laprairie.com, which is really a minor e-retailer. So big opportunities there. And also -- we have also some good prospects in Europe. We are opening new doors. We have some good deals also with department stores. We are reopening some stores that we left a few years ago because now we are in a better position to negotiate the placement. So again, we are not expecting a miracle on La Prairie, but we are more optimistic now than we were 6 months ago because we are moving out of this dramatic ups and downs, destocking, restocking, Hainan, COVID and everything. So again, no over optimism, but a good feeling about 2024 and 2025 and also the fact that Chantecaille is doing well. That's also for us important in luxury business. So we are reasonably optimistic regarding luxury next year for Beiersdorf.
Christopher Sheldon: The next question is from [Alica Dala] at Dow Jones.
Unidentified Analyst: I had a follow-up question on your remarks. You'll be disappointed if now reaching the upper end consumer that refers to the organic growth target like the target range of 6% to 8%. And I have a second question.
Astrid Hermann: Yes, it's related to our organic growth guidance, yes, which is 6% to 8%, and we hope to be towards the upper end of that.
Unidentified Analyst: Okay. Cool. One more question on Chantecaille. Now you have two luxury cosmetic brands in China despite a weaker economic environment and the sluggish demand, do you think that's strategically wise and why don't you think Chantecaille as a new brand competitor could prevent La Prairie from taking stronger recovery or delay it.
Vincent Warnery: Market is big enough in China to have at least two brands, finding their way in China. We -- there is the situation of La Prairie that we have to fix. And you can imagine also that with the level of gross margin we have, we can really finance the turnaround of La Prairie within the P&L of La Prairie. And we have a nice story starting from zero, which is Chantecaille. We have seen that the equity of the brand, the story of the way Chantecaille was built, the philanthropy, the [animals] is something which resonates extremely well in China. When I look at the sales year-to-date, I can tell you it's pretty surprising. It's already offered biggest brand in China now. So let's see what happens. But we launched it online. We are opening now -- we will open in '25 in the Q1, some department store, but we'll do that in a very reasonable way in order to be sure that we don't run too fast, and we don't burn money for nothing. So no issue having two brands on such a big market. And again, as I said, it's a small market for us and it's less than 5% of our sales, but we still believe there are some great opportunities for luxury brands and particularly for La Prairie and Chantecaille.
Unidentified Analyst: Okay. So no competition in the same sector, although there's two both luxury brands.
Vincent Warnery: You know, La Prairie, the average price is around EUR 1,000. The average price of Chantecaille is around EUR 120. So we are not really fighting in the same channel. It's very different. And which is why we don't see any risk of cannibalism. And I must admit also we are not that big. So we still have a big part of the market, which can be conquered by both brands.
Unidentified Analyst: Okay. Great. Can I ask one more question?
Christopher Sheldon: Go ahead.
Unidentified Analyst: You have time for one. Okay. There was some speculation that you would probably need to cut some marketing spend in order to reach the margin goal in consumer. You confirmed that goal. You think it's reachable without capping marketing spend in relation to sales or will you limit marketing spend somewhat in the fourth quarter?
Astrid Hermann: No, there is no such intent at all. We absolutely have already all through the year, always committed that we want to support our brands and our growth, and we are doing that.
Christopher Sheldon: And then we have the last question coming from Mikheil Omanadze from BNP Paribas (OTC:BNPQY).
Mikheil Omanadze: Vincent, you commented on your expectation for luxury in 2025. But speaking more broadly from an overall consumer segment perspective, how confident are you in your ability to outperform the market next year? And thinking through the prism of your brands, how would you rank them in terms of the major drivers of growth next year?
Vincent Warnery: I think, Mikheil, we are entering into, obviously, more normal years. We are not expecting big inflation, of course. So there is no reason why we're going to do big price increases. We don't see any risk in terms of supply. We had a much better year in 2024 in terms of supply, we didn't have bottlenecks. So we are pretty safe there. So we -- I mean, we are back to the level of growth we had before COVID, which is a pretty nice growth for beauty. I clearly see today, I'm absolutely confident with the fact that NIVEA and Eucerin will continue to overperform the market. I mean we mentioned NIVEA would have expecting the mass market brand to grow 9%. And you see that it's not the same for other big mass market brands. We have 45% of the portfolio new or innovative. We have big, big innovations coming. We're also changing the look and feel of our campaigns while investing more in digital marketing. So NIVEA will stay more than ever the pillar of Beiersdorf. But when you see Derma, the huge opportunities we have for Derma, not only where we are and obviously, the launch of Epicelline, but also the continuous support of Thiamidol is helping us but also new countries, India, it's just the first one. India, it's a pleasure for me. I used to launch Eucerin always 10 to 15 years after my main competitor. This time, we are the first one, which is a pretty good news. And we have an ambition on Eucerin, so we'll continue to grow and we'll continue to overperform the market. I am also very comfortable with Chantecaille also because we're starting from a low base, and we have also a huge opportunity in terms of wide spaces. We have today -- we are today in three countries. And we have La Prairie, we are seeing some good signs. We are not overoptimistic, but the job, which is done by the new leadership, by the team, the fact that we are moving away from these ups and downs of the past. The fact that we have some new projects in online in the U.S. that we have some new countries. I'm forgot to mention, we are also launching La Prairie in India which is also an interesting market. All of that is confirming that we will overperform the market in 2025, like we have done in '24, '23, '22 and '21. So I'm pretty optimistic for the year to come.
Christopher Sheldon: Thank you for all your questions. This concludes our third quarter conference call. Beiersdorf's next Investor Relations event will be the release of our 2024 full year figures on February 27, 2025. We appreciate your interest in Beiersdorf. Thank you, and goodbye.
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