Beiersdorf AG (ETR:BEIG) (BEI.DE), the global skincare company, reported robust financial results for the first half of 2024, with significant organic sales growth and increased market share across its brands. The company delivered a 7.1% increase in organic sales, with its consumer business, including the NIVEA and Derma brands, growing by 8%.
Tesa business also saw substantial organic sales growth. Beiersdorf confirmed its sales and EBIT guidance for the full year and emphasized its commitment to innovation and expansion in key markets such as India and China.
Despite challenges in the luxury segment in China due to a weakened economy, the company's La Prairie brand outperformed the market, especially in e-commerce. Profit after tax margin stood at 11.4%, with earnings per share slightly up from EUR2.56 to EUR2.57.
Key Takeaways
- Beiersdorf AG experienced strong organic sales growth of 7.1% in H1 2024.
- The consumer business segment grew by 8%, with NIVEA and Derma brands performing strongly.
- Tesa business segment reported double-digit organic sales growth.
- The company confirmed its full-year sales and EBIT guidance.
- Strategic initiatives focus on being the leading skin care company worldwide.
- La Prairie faced challenges in China but saw positive results, and Chantecaille grew by 4.8%.
- The company plans to expand the Luminous630 range and launch Epicelline in key markets.
- Profit after tax margin was 11.4%, with a minor increase in earnings per share.
Company Outlook
- Beiersdorf anticipates continued strong performance with a focus on skin care innovation and global expansion.
- Full-year 2024 sales guidance remains at 6% to 8% organic growth for the consumer segment and 2% to 5% for Tesa.
- The company expects a slightly higher consolidated EBIT margin compared to the previous year.
Bearish Highlights
- La Prairie's growth in China slowed due to the economic downturn and decreased luxury spending.
- The Derma segment experienced slower growth in Q2 but is expected to improve with new product rollouts.
- Argentina's economic situation led to significant declines in organic and nominal growth for the company.
Bullish Highlights
- La Prairie is outperforming the market in China and experiencing strong retail growth outside of Greater China.
- The company is seeing positive signs in the North American market, with a strong performance in July.
- Beiersdorf remains confident in its ability to manage market share against private labels and is optimistic about the second half of the year.
Misses
- The consumer division in North America reported negative mid-single-digit organic sales growth in Q2.
- The company faced challenges due to price increases and customer retaliation in Europe, although it has subsided in 2024.
- La Prairie's performance and the North American market are key factors affecting the company's ability to meet its top-line growth guidance.
Q&A Highlights
- Beiersdorf expects growth from NIVEA and Eucerin in China and high purchase intent for Epicelline.
- The company completed its share buyback program and may announce future plans at the next AGM.
- There has been no significant customer retaliation to price increases in 2024, except for the delisting of the Lip Care line.
Beiersdorf AG continues to navigate a complex global market with strategic initiatives aimed at reinforcing its position as a leader in skin care. The company's focus on innovation, sustainability, and market expansion, coupled with its robust financial performance in the first half of 2024, sets a positive tone for the remainder of the year. Beiersdorf remains committed to meeting its sales and EBIT guidance despite facing challenges in certain markets. The next investor relations event will be the release of their nine-month sales figures on October 24.
Full transcript - None (BDRFF) Q2 2024:
Operator: Ladies and gentlemen, thank you for standing by. Welcome and thank you for joining the H1 Results 2024 Conference Call of Beiersdorf's AG. Throughout today's recorded presentation, all participants will be in a listen-only mode. The presentation will be followed by a question-and-answer session. [Operator Instructions] Please note that there is a limit of two questions per caller. I would now like to turn the conference over to Christopher Sheldon, Head of Investor Relations. Please go ahead, sir.
Christopher Sheldon: Thank you, Moritz. Good morning, and welcome to Beiersdorf's half-year one conference call. This is Christopher Sheldon. It's a pleasure to be with you this morning. I'm here with our CEO, Vincent Warnery and our CFO, Astrid Hermann. We would like to share with you Beiersdorf's financial results of the first six months of 2024. And with that, I'd like to hand it over to Vincent.
Vincent Warnery: Thank you, Christopher, and good morning everyone, and thank you for joining us today. I'm pleased to welcome you to our conference call. In the next 30 minutes, I will provide you with an overview of our financial results and key developments of the first six months of 2024. I will then focus on the strategic initiatives that will continue to drive our performance in the future, enable us to be the best skin care company in the world. Following my remarks, Astrid will provide a detailed analysis of our financial statements. We'll then open the floor for your questions. Thank you for being with us this morning. Let's get started. First of all, I'd like to take this opportunity to express my gratitude to my Beiersdorf colleagues around the globe. Over the past six months, our team has again demonstrated remarkable dedication and resilience in the face of challenging market conditions, and the result speaks for itself. We delivered a strong performance in the first-half of the year, achieved significant sales growth, and outperformed the market, and we gained substantial market shares across brands and categories. As we look ahead to the second-half of the year, we balanced this outstanding performance and our full innovation pipeline against the ongoing macroeconomic volatility around the world. Based on this, we confirm our sales and EBIT guidance. Now we come to the top line figures for the first six months of the year. We grew our consumer business organically by 8%. This was in particular driven by broad-based double-digit growth at NIVEA across key categories and regions. NIVEA also again delivered balanced growth in terms of price and volume. A strong performance of our Derma brands fuels this consumer success as well. As predicted and promised in the first quarter, the tesa business picked up significantly in the second quarter with double-digit organic sales growth. This results in overall growth of 2.9% for the first six months for tesa. At Group level, we kept our successful course and delivered strong growth of 7.1% in the first-half of 2024. At the Capital Markets Day in June, we shared with you our vision to be the best skin care company in the world and introduce you to our corporate strategy Win with Care, which will guide us towards this vision. Therefore, let's zoom in on some top-line care performance indicators of the Consumer business overall before I take you through the performance at brand level. Looking at the overall market growth and our peers performance in terms of organic sales growth in the first-half of the year, I am particularly pleased to see us at the top of the list. We have clearly outperformed the market. It proves that we have a winning formula with our strong brands and our strategic direction and it gives us confidence as we look to the future. The ongoing global success of NIVEA was the main driver for our strong performance in the Consumer segment. Our icon delivered excellent double-digit organic sales growth of 11.1% in the first-half of the year. Significant growth across all regions fueled this positive development. All key categories post impressive double-digit growth rates with a healthy balance between price and volume. The Derma business delivered strong growth of 8.3% on top of the high comparison base from last year. Excluding Argentina, the performance continued on a double-digit level with strong growth across most regions. We also gained significant market shares with our Derma brands in every region and every category. The Healthcare business, which comprises the plasters business of Hansaplast and Elastoplast, contributed with solid sales growth of 4%. The economic situation in China remains highly volatile and challenging, which was the main reason for the 7% decline in organic sales at La Prairie for the first six months of 2024. Noteworthly, we outperformed the Chinese market with La Prairie in this declining environment. Our business is strong, resilient and based on a broad, successful global portfolio of brands, allowing us to compensate the headwinds in the luxury market with only limited impact to our overall results. This leads to substantial sales growth at Group level and confirms that we are well on track to deliver our sales guidance of 6% to 8% organic growth for the full year. We are particularly pleased with the performance of our two biggest regions, Europe and Emerging markets. These regions are the two main drivers for our growth. They account for roughly three quarters of our sales and they keep on growing with continued strong performances across brands and categories. And this growth trajectory is far from over. In the Emerging markets, we are also fueling this development via strategic focus on conquering several white spot opportunities. I will share more on that in a moment. In Europe, we see a lot of further growth potential in the years to come based on the anticipated impact of our strong innovation pipeline. Our E-commerce business continues to expand at a double-digit rate with an increase of 16% in the first six months of 2024. Even more significant in this context is the strong growth of our E-commerce share. With impressive growth trajectory this year and in the last three years, we are outperforming the competition and narrowing the gap to the industry leader. Now to a part of our business that continues to deliver extraordinary results, the Sun business. We delivered strong double-digit growth in the first-half driven by NIVEA and Eucerin. While our brands NIVEA and Eucerin performed strongly in the Sun category, the predominantly bad weather in North America led to a Sun market decline and a negative impact on Coppertone and sales results in North America. However, it is important to point out that Coppertone accounts for less than 20% of our overall Sun business. Additionally, we are seeing some positive momentum there since June. I also would like to give a bit of color on our home country on Deutschland. In terms of absolute net sales, Germany represents our largest market. We are currently on track to reach EUR1 billion in annual sales which is a fantastic development. It is even more impressive that we achieved 9% organic growth for NIVEA, 8% for Eucerin in the first-half of the year, given our long-standing strong position in Germany. Our pioneering spirit has its roots in Germany. We power our global success from here. This is the place where most of our innovations are created, enter the market and start to develop into global success stories. We'll have our new Epicelline product under the Eucerin brand on the shelves in Germany in a couple of weeks from now. We are also particularly proud of our gross margin expansion in the first-half of the year. We managed to grow plus 110 base points in comparison to the first-half year of 2023. This excellent overall figure is attributable to significant gross margin gains across key regions all over the world. For instance, we managed to increase our gross margin significantly in our largest region, Europe, as well as in North America and in the volatile Chinese market environment. This amount of growth is extraordinary, especially given the fact that La Prairie sales declined in the first six months of 2024. Let us look at our icon in more detail. NIVEA led our brand portfolio in the first-half of the year with outstanding double-digit organic sales growth of 11.7%. We are excluding Argentina here, where macroeconomic factors such as extremely high foreign exchange devaluation and inflation distort the performance. We've also managed to keep an excellent balance between price and volume growth. Despite market volatility our efforts to modernize, digitalize and globalize, NIVEA continue to pay off. We look to the future with confidence and have further ambitious plans for global icon. This double-digit growth for NIVEA is driven by growth in all regions of the world, in particular, the regions LATAM, Eastern Europe and Africa, Asia, Australia posted outstanding double-digit sales growth. Furthermore, the 9% organic sales increase in the Northeast Asia region highlights a robust and successful market presence in that area with NIVEA, despite the well-known volatility of the Chinese ecosystem. Now we come to the NIVEA categories. First of all, we grew significantly across all major categories of NIVEA in the first six months of the year. Our strategic focus on Face Care continues to pay off led by the success of our Luminous630 product range. In the first-half of 2024, we grew by 49% organically with our NIVEA products containing the most effective anti-spot ingredient in the world. The body category also grew by double-digit in the first-half of the year. Personal Care complement the strong overall performance of NIVEA with Deo increasing by 19% in organic sales. The Lip category also posted strong sales growth of 17%. Japan is also of great importance for us and Japan delivers fantastic results. Having worked myself there for several years, I know how difficult it is to grow and deliver against the skin care expectations of the most demanding consumers in the world. In this context, I am even more delighted to report the strong sales growth of 10% in the first-half of the year. Let me move to an outlook for the next months and quarters for NIVEA. We stated at the Capital Markets Day that our NIVEA Face products are only present in 40% of the global Face market. We see one of the largest potentials in the Face category in India, a key geographical white spot for us in our Win with Care strategy. We have already established a strong bond with Indian consumers voting NIVEA the most trusted skin care brand for several consecutive years. We aim to leverage this trust and are now preparing the launch of NIVEA Face in the first quarter of 2025. In order to become the best skin care company in the world, we also continue to lead in climate care. As a certified Triple-A-company, we established ambitious net zero target for 2045 this year, which received SBTI validation and with which we continue to lead the industry. An integral factor in achieving this objective is a sustainable product transformation. The NIVEA Body relaunch follows exactly this pathway. It is the biggest relaunch of our body portfolio to date and perfectly combines improved performance of the product with an increased sustainability profile. The sustainability aspect is first. The revamped yet recognizable packaging will help Beiersdorf reach its total target for fossil based virgin plastic reduction and reduce its CO2 impact by approximately 5000 tonnes by 2025, and the product performance improved as well. The NIVEA Body Milk formula is now newly enhanced with 100% pure hyaluron and deep nourish serum, which ensures healthy-looking skin and deep long lasting moisturization. By incorporating the powerful moisturizer hyaluronic acid, we reached the next level of superiority in NIVEA Body Care. An integral part of the global success of NIVEA is our Luminous630 product range. We plan to further seize its potential and extend its influence across important markets and category. Adding innovation and enhancing the success of our hero ingredient, Thiamidol, under the NIVEA Luminous range is a focal point of our innovation strategy at NIVEA, as well as outside of NIVEA. In China, we continue to work with patience on regulatory approval to introduce Luminous to the domestic market. This has been a long-standing topic, which we prioritize constantly due to the tremendous upside potential of launching Luminous in this market. Earlier on, I mentioned the launch of NIVEA Face in India in Q1 2025. On the back of this launch, we also plan to introduce an affordable Luminous product range to the Indian market throughout 2025, thereby widening the appeal of our Luminous franchise across Emerging markets. We are also cascading the Luminous success into additional categories on the global scale most recently, for example, into the Body category. In the USA, we'll add Luminous to the skin care portfolio under NIVEA Men. Now leaving the world of NIVEA and moving to our Derma brands, Eucerin and Aquaphor. Excluding Argentina, the Derma business continued to grow double digit in the first-half of 2024. We are very delighted with these results, especially given the high comparison base from last year and the well-known overall slowdown of the U.S. market. Exploiting the potential of the global Face Care market is an integral part of Beiersdorf's strategic plans not only with NIVEA but also with our Derma brands. And these efforts are starting to pay off as we grew by 11% in sales organically with Derma Face Care in the first six months. Our strong innovation pipeline for Eucerin further increasing our confidence in the continued success of our Derma business. The regional perspective on Derma truly delights us with so many success stories around the globe. Germany keeps growing at 8% in sales as I mentioned earlier, and China is growing at 15%, which is extraordinary given the economic circumstances there. Another key growth driver for this success of Derma is our Emerging markets business, which increased its organic sales by 18% in the first six months. In addition to the markets of Mexico, Brazil and Thailand shown here, the list goes on, for example, with Chile at 13% organic growth and Peru with an increase of 26%. The wait is over. More than 15 years of research in the field of epigenetics. We invested a significant double-digit million amount in this research. We discovered our now patented ingredient Epicelline. We developed a game-changing innovation unlike anything the market has seen before. This breakthrough innovation allowed us to turn back the skin's age clock. The test results were exceptional to a level I've never seen before in my life. Our first product containing Epicelline, the Eucerin Hyaluron-Filler Epigenetic Youth Serum, is now hitting the shelves first in the U.K., then Germany and from there to the rest of Europe and eventually the world. Our other brands will follow in '25 and '26. This is a proud moment for us as the company that invented modern skin care and now is leading the industry again with this significant milestone. We may aim to make this our biggest ever launch with a clear focus on digital excellence, a tremendous point-of-sale impact and in close collaboration with dermatologists and the further medical world. With the world population aging, the anti-aging skin care market is huge and has enormous potential and the business impact will be strong as well. To provide a comparison, you can see the level of net sales we achieved with Thiamidol in its first year on the market. Right next to it, you'll see an anticipated forecast for the first year of Epicelline on the market. This gives us a lot of confidence for the future of this amazing innovation. Staying with innovation power under Eucerin, let me highlight the next steps for Eucerin Thiamidol, for which the journey is far from over by any means. Two important big steps for the remainder of 2024 are the launch of Eucerin Thiamidol in the us market and the brand launch of Eucerin in India. Again, these decisions follow our strategic goal of conquering highly relevant geographical white spaces. Eucerin has the power to achieve high exposure in these markets, as does NIVEA and our further brand portfolio. Let me now talk about luxury, starting with La Prairie. The weakened Chinese economy and the headwinds in travel retail are the main cause for the decline in sales for La Prairie. In the past, the success of luxury brands in China was largely driven by the high consumer confidence pre-Covid. As the economy has continued to falter since then, large sections of the population have cut back on luxury spending. As a consequence, the Chinese luxury skin care market faces a continued slowdown. But despite these developments, we continue to see China as a key opportunity to generate growth in the mid and long term. Looking at the results for La Prairie in the first-half of the year, we see positive signs. In China, the luxury skin care market was down 12% in the first six months, but La Prairie strongly outperformed this market in terms of sell out and only fell by 6%. In Hainan, the performance was similar. The market declined by 34% and La Prairie delivered a significant market outperformance here by 20%. Looking at E-commerce in China, the power of La Prairie becomes even more evident. Fueled by an excellent launch on TikTok, we achieved double-digit growth of 17% in a market that declined by 13%. To further put this into perspective, our retail sales, excluding retail China grew by over 20% in the second quarter. Looking ahead, we are modernizing the brand image. We are increasing our on and offline presence and communication, while we are focusing even stronger on topics of innovation technology and science. And we are expanding our product range with attractive innovations targeting new and younger consumers with entry level propositions. We successfully introduced the Skin Caviar Mist in the first-half of 2024 and have already beaten our sales target since launch by a factor of 1.5. At EUR170, it is a perfect product to recruit more new clients while also enhancing the skin care routine. Around 70% of new consumers bought Skin Caviar Mist with at least one additional product, and Skin Caviar Mist has already gained a very high penetration amongst the existing customers. Another innovation with a strong link to La Prairie's birthplace, the Clinique La Prairie will follow the second-half of the year. Moreover, our sales figure for July to December will benefit from the extensive destocking in Travel Retail in the second-half of 2023. Staying in a luxury and premium part of our brand portfolio, I'm pleased to share an update on the performance of Chantecaille. Following organic sales growth of 4% in the first quarter of the year, we're able to strengthen the growth to a 4.8% increase in the second quarter. This growth accelerated at the end of the quarter as we relaunch our hero product Just Skin in May 2024. The all-in-one complexion icon now comes with a more sustainable formula and enhanced performance, providing even more hydration and skin care benefits. And we will be expanding Chantecaille to mainland China in the coming days after already being present cross-border. This marks a significant milestone for Chantecaille and the expansion follows a clear strategy with the objective of bringing this beautiful brand to a broader audience while solidifying its presence in the Chinese market. The focus here lies first on the digital presence, which is powered by a comprehensive partnership with Tmall, China's leading E-commerce platform. Over the course of the year, Chantecaille will, among several other activation measures, also host a commercial pop-up experience in Shanghai to immerse consumers in the brand's luxury experience. Before I hand over to Astrid for a detailed look at the financial figures for the first-half of the year, let me summarize. Beiersdorf is performing strongly and the future is even brighter. And of course we will win with skin care. We are a skin care company. Skin comes first at Beiersdorf and is our heritage, our present and our future. And we plan to continue bringing strong innovations to the market in the coming years. Beiersdorf is focusing on three key areas of innovation, which are also our global growth drivers. First, hyperpigmentation, with products based on our highly effective active ingredient Thiamidol. Second, epigenetics, now entering the anti-aging market for the first time with the Eucerin product. Third, Skin Microbiome Research, where Beiersdorf is currently working on a very effective treatment for acne based on living skin bacteria. To ensure our continued growth, we are also focusing on conquering additional white spaces and gaps in our global product presence, not only in 2024, but also in 2025 and beyond, we'll be expanding our activities in countries and large skin care markets such as India, China, and the United States. We look confidently into the future. Now, over to you, dear Astrid.
Astrid Hermann: Thank you, Vincent and welcome to everyone. I am delighted to present our performance for the first-half of 2024. Let's begin with the figures at Group level. We are very happy to report strong organic sales growth of plus 7.1% or plus 4.8% in nominal terms. Our EBIT margin, excluding special factors is 16.2%, which reflects a more balanced approach in our investment phasing. This results in a more harmonized EBIT for the first and second-half of the year. The profit after tax margin is 11.4% and was impacted by a higher first-half tax rate, which will benefit our tax rate in the mid-term. Our earnings per share increased from EUR2.56 to EUR2.57. Let's continue with the development at segment level. During the first six months, our consumer business reported strong organic sales growth of plus 8.0%, thereby outperforming key competitors. Due to unfavorable foreign exchange effects, our nominal growth was lower at plus 5.4%. Our consumer business has continued its impressive growth trajectory on top of an outstanding performance of the first-half of the previous year. This is largely driven by the exceptional performance of our core brands and regions. The first-half of this year also demonstrated the continuation of well-balanced growth in volume and pricing. Our Tesa division achieved plus 2.9% organic sales growth with nominal sales slightly lower. This was primarily driven by the outstanding performance of our electronics division in the second quarter. Our first-half year sales growth is in line with the full year guidance for the Tesa business segment. We're pleased to report that our consumer business division has delivered strong organic sales growth of plus 8.0% for the first-half of the year, with Q1 growth at plus 10.0% and Q2 growth at plus 6.1%. This is in line with our guidance. Let's take a closer look at the regional breakdown within our consumer business. In the first-half of the year, almost all regions showed strong growth. Europe grew by plus 6.8% like-for-like, accelerated by the successful performance of our Derma and NIVEA business. Within Europe, Western Europe grew by plus 5.1%, driven by strong performances in Germany, Italy, the U.K. and Spain, significantly offsetting the unfavorable performances of the La Prairie Travel Retail business which is accounted for in Western Europe. Eastern Europe achieved an impressive double-digit organic sales growth of plus 13.8%. Sales across all countries of Eastern Europe showed a remarkable increase. The brands and categories contributing the most were NIVEA Face Care, Body Care and Deo along with Eucerin Sun and Face. In the Africa, Asia, Australia region, we delivered a remarkable double-digit growth of plus 13.9%, driven by the outstanding performance of our core brands NIVEA and Eucerin and exceptional results in Indonesia, Japan and Saudi Arabia. The Americas region continued its positive growth trajectory with Latin America achieving organic sales growth of plus 9.3%. This growth has been mainly driven by the double-digit growth in the dynamic countries of Brazil and Mexico, which offset the challenges in Argentina. Without Argentina, the growth in Latin America would be double digit. In North America, we faced a challenging market environment in the overall skin care market resulting in a minus 1.8% organic sales growth for the first-half of this year. A key driver was the softness of the Sun Care market due to bad weather conditions, which affected our Sun Care brand, Coppertone in particular. We are however winning market share for our largest brands NIVEA, Eucerin and Aquaphor. We remain confident for the full year and are already seeing signs of recovery in July. In addition, our Derma Face launch in the US is starting off well with Eucerin outperforming key competitors and significant distribution gains, namely target are still to come in the second-half of 2024. Overall, we are happy with the strong and balanced performance across our regions. Let's turn our attention to gross margin in our consumer business. On the back of significant pricing measures over the past 12-months, we managed to more than offset the increase in input costs in the first-half of the year, which also demonstrates the pricing power of our brands. The cost increase is driven by unfavorable foreign exchange, while true underlying cost of sales are declining year-on-year. Together with a positive mix effect, this led to an impressive gross margin improvement of plus 110 basis points despite the challenges we faced in the Luxury segment. Let me provide you with some insights on the development of our Marketing Budget. As we outlined during the Capital Markets day, our priority is to increase the working media budget with a strong emphasis on digital channels. As you can see from this graph, we continue to make significant progress in this area. We have increased our marketing spend as a percentage sales by 200 basis points, 190 of which are due to increased working media spend, a clear proof of our commitment to accelerate the investments behind our brands. We have also placed a greater focus on digital media and have increased our share in this area. I would like to give you some color around our EBIT development. Although we reported a lower EBIT margin compared to the first-half of the previous year, we are still on track to deliver our plan and guidance. As already mentioned earlier, we have shifted our investment phasing to achieve a more balanced profitability in the first and second-half of the year. We are committed to our full-year guidance of plus 50 basis points EBIT margin expansion. And overall, we are confident in our mid-term EBIT guidance of at least plus 50 basis points and remain focused on delivering profitable growth. On working capital, we are pleased to report a significant improvement in the first-half of the year. With the working capital ratio to net sales of 5.6%, we are fully on track to get closer to the 5% target. This achievement is largely due to our constant focus on optimizing our payment terms and overall payment process. We continue to see further potential as there was a slight increase in trade receivables driven by mix. We also had a temporary inventory build-up to maintain an optimal service level, to secure the supply of materials with limited availability and to avoid bottlenecks in uncertain times. Let us now move to the Tesa business in more detail. We are delighted to report that our Tesa business achieved remarkable organic sales growth of plus 11.4% in the second quarter, resulting in a solid first-half of 2024 with organic sales growth of plus 2.9%. This was largely driven by the exceptional performance of our electronics business and a positive development of our Print and Packaging (NYSE:PKG) Solutions and our Automotive Business. However, it is important to note that the outstanding performance of our electronics business is supported by phasing effects as key smartphone manufacturers have moved parts of their production capacities from China to India. Despite this extraordinary effect, we are thrilled with the results and remain fully in line with our expectations for the full-year. With tesa, we invest a significant part of our annual sales in the development of new products and technologies. Collaboration with customers is key to a future-proof business, listening to customers' needs, influencing their solutions, and performing tests are essential in the collaboration to gain projects and drive our sales. Current innovative technologies are, for example, debonding on demand, which is a new generation of intelligent and innovative adhesive tapes that can be removed as required. They have the potential to reduce the amount of waste, facilitate recycling, and enable product repairs. Other examples include human-machine interfaces, EV battery solutions, and structural bonding. Let me conclude the financial overview with our group income statement. We are particularly proud that we have reached the EUR5 billion threshold in the first-half of this year. As already explained, we shifted our investments across the semesters to balance our profitability. Therefore, our EBIT margin, excluding special factors decreased compared to the first-half of 2023. However, we are very pleased with our strong gross margin progression. Additionally, in relative terms, our expenses are still below the full year 2023 and we are fully in line with our forecasts and guidance. As pointed out in our capital markets day, we are committed to delivering profitable growth and to staying disciplined in our cost. This is an essential part of our Win with Care strategy. The income statement for the first-half of 2024 clearly confirms this. Over to you, Vincent.
Vincent Warnery: Thank you, Astrid. If we look at our above-market growth in the first-half of the year, in contrast to the ongoing macroeconomic volatility around the globe, we confirm our sales guidance for full-year 2024, as well as our ambition for profitable growth. Beiersdorf expects organic sales growth in a range of 6% to 8% in the consumer business segment. The EBIT margin, excluding special factors in the consumer business segment, will be 50 basis points above the previous year level. Beiersdorf also expects sales growth above the market in the Tesa business segment, which translates to expected organic sales growth in the range of 2% to 5%. The EBIT margin from ongoing operations, excluding special factors will be at the level of the previous year. Based on the forecast of the two 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's level. Thank you very much for your attention and interest. Astrid and I are now eager to hear your questions. And I will hand back over to Christopher who will kick off the Q&A session.
Operator: Thank you, Vincent and Astrid. You will now have the opportunity to ask questions. [Operator Instructions] And the first question today comes from Jeremy Fialko from HSBC. Please go ahead.
Jeremy Fialko: Okay, hi. Hi, good morning. Thanks for taking the questions. So the first one is on Western Europe. Obviously, when we look at that Q2 versus Q1, the numbers you report show a big slowdown. But can you perhaps just sort of split that out between, let's say, the underlying growth of the kind of core Western European markets, how that was in Q1, Q2 versus just purely the impact of La Prairie? And following up on the last part of that, just give us your thoughts on where La Prairie might end up in the second-half. Clearly, you have very easy comparatives, but at the same time, the markets, the underlying sellout is quite slow. Thanks.
Vincent Warnery: Thank you. Jeremy. As you pointed out, obviously Western Europe is impacted by La Prairie Travel Retail. And this is obviously a strong negative in double-digit. We are growing, in fact, in the second quarter. If you exclude La Prairie, we are growing high-single-digits in Western Europe, and it is driven by, in fact, we have the same growth on NIVEA, Derma and Healthcare, which is mid-single-digit, and giving us first semester, which is going, including La Prairie at plus 5%. On your question on La Prairie, obviously, we show you that we are doing well outside Greater China. We are growing retail sales 20%. And within China, we are doing better than the market. The big question is obviously the evolution of the Chinese market. For the timing, as you mentioned, we have a good historical comparative data because last year in Q3 and Q4 we destocked both Hainan and the overall Travel Retail market. But we are very cautious. We want to see the way the market is developing, and we believe that it will be obviously a better performance than what we have achieved over Q1 and Q2.
Operator: And the next question comes from Fulvio Cazzol from Berenberg. Please go ahead.
Fulvio Cazzol: Yes, good morning and thank you for taking my questions. I was a little bit surprised with the slowdown in the Derma, from about 10.2% in Q1 to around 6.5% in Q2. I was just wondering if you can put some context on the rollout of the Face Care products in the U.S. market and whether there's going to be a more meaningful contribution from this in the second-half of this year? And then, of course, Epicelline, you know, that could also contribute. So could you maybe just give some comments on how you see the Derma growth evolving in the second-half versus what we've seen so far this year? And then my second question is on the margin weakness, which you highlighted, it reflects quite a meaningful step-up in investments behind the brand. I was just, again, sort of trying to understand why it kind of falls so much more into H1 when it sounds like a lot of the big launches are happening in the second-half? Why is this timing difference that we're seeing in the P&L? Is it to do with, say, retailer listing fees in the U.S., or are there other factors that can explain that? Thank you.
Vincent Warnery: I will take the first question on Derma and Astrid will answer on the margin. On Derma, you're right as you pointed out that in fact the big things are coming in the second semester. We just introduced Eucerin Face in the U.S. only in three customers. It was at the end of the second quarter. So in those customers, which are CVS, which are Amazon (NASDAQ:AMZN), we are doing pretty well. We are growing double-digits and doing an extremely good job in comparison with the market. But the big part of Eucerin Face U.S. is coming right now. We are introducing right now Eucerin Fancy's target. So this is obviously a big game changer for us. And also even more, you know, in January 2025, we're coming with Eucerin Thiamidol, which is the biggest growth driver Derma across the world. And we're happy to be able to give access to American consumers to Thiamidol. On Epicelline, you understand the excitement of the team. I just was looking at the first figures in the U.K. because you can find Epicelline at booths, you know, today in the U.K., we are overperforming the market, but also overperforming our best SKUs. I was looking also at the ratings of consumers and the sales forecast. I mean, you look at the slide four times more than what we achieved with the TMA done on the first year. We are launching Epicelline in all countries of Europe and most of Emerging markets in the coming six months. So obviously, it would be a huge game changer for Derma. This is why we're pretty optimistic for the year to go in Derma. You have also to keep in mind that we are also looking at the performance of partly Q2, but also Q1 compared to last year, 26% growth. So which is obviously something which is not easy to match or plus 10% versus a plus 26% is a pretty good performance for Derma. Astrid, question on La Prairie.
Astrid Hermann: On margin. Yes. So you speak about margin weakness. We do not consider our performance margin weakness. If you might remember, if you attended the Capital Markets day. I even got a question related to the very strong EBIT first-half versus second-half, and I did mention that we will attempt to balance that much moreso. And here the investment is really to continue to drive our business. And it's actually related to a bit to your question, your set -- your third question in terms of second-half launches, we have a much more balanced portfolio than in the prior year in terms of launches. We've already quite significantly supported the U.S. Face Care launch in terms of media, as well as we've tried to support our Sun Care business much more strongly and have achieved very great results in the first-half related to that business. And additionally, we did have some pullback in terms of support last year in the first-half given some negotiations with customers. And that is quite a different picture this year. So our strong investment in media is purposeful. We planned that also in our other investments, digital and swan -- their plan, they're really investment phasing to a great extent. We've really still feel very, very strongly about our margin to go. And it's also built on strong performance, as you've seen of gross margin there. Despite the weight of La Prairie, clearly not helping gross margin, we've performed very, very well. So we're quite confident about our performance in that regard. Thank you so much.
Fulvio Cazzol: Very good. Thank you for that.
Operator: And the next question comes from Celine Pannuti from JP Morgan. Please go ahead. Celine Pannuti, your line is open.
Celine Pannuti: Yes, thank you. Good morning. Thank you for the questions. So my first question is on the deceleration. So, yes, deceleration in Europe, excluding La Prairie how do you expect the market performance in the second-half? Because I presume you still have some benefit from pricing that is going to normalize in the second-half of the year. And I think, Vincent, you were talking about high single digits in Western Europe, excluding La Prairie. I wonder whether this is, if you could give us the impact of Sun Care and excluding Sun Care, how competitive your performance is in terms of market share? And then maybe my second question relating to that is on the 6% to 8% organic growth for the year. Obviously you did face in Consumer for the first-half that needs some bandwidth, some speed to deliver for the second-half of the year. I was wondering what kind of expectations you have for the, I mean, the impact of those launches, if any, meaningful impact for the second-half of the year? And whether, given the deceleration we see in the business, you would expect to deliver more at the bottom end of the 6% to 8% range. Yes. And then maybe just one last question on Latin America, Argentina, could you please provide the impact on Q1 and Q2? Was there any difference in Q2 in terms of the impact it had on the business? Thank you.
Vincent Warnery: Celine, I will take the first question, and Astrid will take the second one and third question. In Europe, you have to remember that in Q1 2023, this is where we came with an extremely strong price increase. So we faced some retaliation from some key customers, particularly in Germany and France. While Q2, I would say, is more normalized because last year, we had a normal business and this year we are also not facing any big issue with customers, despite the fact that we run again the price increase. When you look at the market share, we are going in market share in all skin care category, with one exception, which is in fact the Lip Care. In Lip Care, you know, we had to change -- we changed the full line of Lip Care and we increased also strongly the prices. And we had some -- we have some customers which are clearly using this Labello at the Lip as a kind of retaliation against us because of the price increase. So we are losing market share on U.K., but we are growing in Face Care, we are growing in Body, we are growing in Men, and also we are maintaining our market share in Deodorant, which is also an achievement because we are investing less on Deodorant that we used to do, focusing on investment on skin care. On Derma, we are doing a fantastic first semester in Europe. We are clearly leveraging not only Sun, where we are gaining market share every year since three years, but we are also continuing to expand the Thiamidol range. We are still growing 40% on Thiamidol despite the fact we are still on the -- we are on the fifth year of growth and we have not yet fully leveraged the brand. So all in all, this explains the fact that the Q2 is below the Q1 in terms of growth, simply due also to the fact that we are entering into a more normalized time in terms of relationship with customer. Astrid, question two and three?
Operator: The next question comes from…
Astrid Hermann: Sorry, we have not finished answering Celine's question.
Operator: My apologies.
Astrid Hermann: Sorry.
Operator: Please go ahead.
Astrid Hermann: On your second question related to guidance -- top-line guidance of 6% to 8% and our expectations there, I think we are in a very similar place to how we were at the end of Q1, highlighting that the two areas of concern, certainly, as we just mentioned, and also North America, [Technical Difficulty] we're winning market share. We are seeing a recovery at the beginning of this quarter now. So we feel good about that. It should help us, you know, within the 6% to 8% range. In terms of La Prairie, that is obviously the big question. And based on these two regions, we'll have to see whether that ends up being at the higher or the lower end of that range. But we feel quite confident about our plans. In terms of...
Celine Pannuti: Astrid, excuse me, I think you cut off for most of the first part of your answer. Could you please repeat, please?
Astrid Hermann: I had repeated again what I had said, so it's my apologies that I was cut up, but I said again the same things again. Yes, and then in terms of LATAM, the impact was quite similar, Q2 and half year. So similar impact, obviously quite significant declines. You know, that we report organic and nominal growth the same way. So we take a quiet, you know, strong approach to let -- to Argentina and obviously having an impact, we have a very sizable Derma business there, also sizable NIVEA business, and it's having an impact. We've already shown quite a few of the numbers without. And, you know, let me just call out Derma, you know, Derma without Argentina again double-digit growth. If for one minute, you also allow me to just exclude North America, given the market softness for Derma, we continue to have very nice performance there, and it's very broad based. Many, many different countries, Germany, we mentioned 15% growth, Emerging markets, many countries that are top countries for Derma performing very well. So again, really good performance there, impacted by a couple of countries.
Celine Pannuti: I'm sorry to insist, but we didn't hear your answer when you answered my question on the 6% to 8% guide.
Astrid Hermann: Okay, so I'll repeat it again. So what I mentioned there is that in terms of our top-line guidance, 6% to 8%, we feel quite the same way as we had been at the end of Q1 when we had mentioned that obviously that range will be impacted upper or lower end based on the performance of La Prairie clearly, and Vincent had spoken about the challenges there. We'll have to see where the market is. Our performance, certainly in terms of what we're trying to do, is prepared for a good back half. And then the second one is North America again there. The market slowdown that we've seen, at least for the first-half, again, we feel very strongly about our three major brands there, and the plans we have for the back half were growing share there. And we are seeing positive signs there in the first part of Q3, at least with very good performance. So -- but those two really are our major drivers in terms of where in that range of 6% to 8%, we will land.
Celine Pannuti: Excellent. Thank you so much.
Operator: And the next question comes from Guillaume Delmas from UBS. Please go ahead.
Guillaume Delmas: Thank you very much, Christopher. And good morning, Vincent, Astrid. Two questions for me as well, please. The first one more of a follow up on La Prairie. Vincent, you mentioned that the brand managed to outperform the market in the first-half of the year. Just to be clear, is the comment China-specific or are you talking about the global luxury beauty market? Because if it's the latter, that would mean that the luxury market you think declined by more than 7% in the first-half unless you're talking about sell-out versus sell-in? And looking ahead for La Prairie, I mean, would you still expect La Prairie to achieve positive organic sales growth for the year 2024 as a whole? And maybe some words on the most recent development of the brand, I don't know, late June, July, to maybe give us confidence. We'll see that immediate uptick. And then my second question.
Christopher Sheldon: Guillaume, sorry to interrupt you. Would you mind repeating the beginning of your first question? We had difficulties hearing it. If you just wouldn't mind repeating it. Thank you so much.
Guillaume Delmas: No, no, of course. So it was about the comment around outperformance of La Prairie versus the market, and simply wondering whether this comment was China-specific or it was for the global luxury beauty market. Because with minus 7% organic sales growth, that would imply a very significant contraction for the luxury market in the first-half. So any color on that would be helpful? And then my second question going back to North America, I think the consumer division here achieved a negative mid-single-digit organic sales growth in Q2. Could you may be shed some light on the softness in the skin care category you are seeing at the moment there? What do you think it is driven by? Is it just Sun Care or is it more reflective of a change in consumer behavior? And again, am I right to read into your comments around July or the start of the quarter being good, the number of new product launches, am I right to read into this that you would expect, at least for your organic sales growth, an immediate uptick from Q3 for North America? Thank you. very much.
Vincent Warnery: I will answer the first question on La Prairie luxury globally. The figures I was showing were China, the Chinese market, the Chinese ecosystem, which includes brick and mortar, which includes Hainan, which includes E-commerce [Technical Difficulty]
Operator: Ladies and gentlemen. Yes, the operator. We currently cannot hear the speaker line. Please stay connected while we try to reconnect the speaker, please. Ladies and gentlemen, speakers now reconnected. Please resume the conference.
Vincent Warnery: Guillaume, I will repeat the -- I'm sorry, we have some issues. Maybe, it's here or there. So back on the market, luxury market, declining market in China ecosystem which includes brick and mortar, Hainan and e-commerce, we are overperforming this market in the sense that we are declining less than the market which is this difference of 8 points I was giving before. In the rest of the world, the market is flattish and we are overperforming the market particularly in countries like Japan, countries also like France, Germany, U.K. and also in the U.S. where we are gaining market share. On your question about North America, clearly the beginning of the year was strongly negative on Sun Care the first time we had a little hiccup in April and you might remember I mentioned that in the Capital Market day, a small increase of market and then declining. And particularly the two big events, you know, for the Sun season in the U.S. which are the Memorial Day and eastern, the market was very negative because of the weather. Since June things are getting better. They are also getting better for us. We have done very strong months of July at first 20%. We also gaining market share on Eucerin, on Aquaphor, on NIVEA. And as I mentioned, the fact that now we are expanding the distribution of Eucerin Face to big customers like Target is also obviously making us more optimistic regarding the US.
Guillaume Delmas: Thank you very much for that. And Vincent, just so I understood properly, it was plus 20% for consumer in North America in the month of July. Is that what you said?
Vincent Warnery: Absolutely. Absolutely. The combination of NIVEA, Eucerin, Aquaphor, Copper tone we did plus 20% in July and this seems pretty positive.
Guillaume Delmas: Thank you very much.
Operator: And the next question comes from Rashad Kawan from Morgan Stanley. Please go ahead.
Rashad Kawan: Hey, good morning and thanks for taking my questions. Two from me, please. So the first one you talked about consumer A&P spend up 200 basis points year-over-year. I know you talked about more balanced kind of phasing through the year, but curious if you think we're entering a phase where you'd need a higher step-up in A&P to drive growth given the weak macro and increased competitiveness in the States, particularly in markets like the U.S. and China. And then just a technical question. Tax rate in the first-half was about 32%, I think. Should we assume a similar level in the second-half? And what's really driving that versus the mid-term guide of about 28%? Thank you.
Astrid Hermann: Rashad, I would take both of your questions here. So the consumer spend is really driven by us and our strategic initiatives, less about competitive pressure to spend, and again, it's taking a more balanced approach and really looking also where we have the most effective spend throughout the year. We continue to measure that and obviously looking to ensure that we put our dollars where it makes the most impact. So it's not something where we see really the pressure from competition. It's more so in really support of our key initiatives, our key drivers of growth. In terms of your question on second-half tax rate, yes, we did have an impact in the first-half related to some withholding taxes, which should reverse in a year to go. There are some other one-time impacts, though, that impact this first-half, such as, for example, a smaller impairment write down on the tesa business, which has no tax correlation. And obviously what we have also reflected a bit of a step-up, but it's really small related to pillar two taxation. So we should see an overall picture for the year that is better than certainly what we've seen it in the first-half.
Rashad Kawan: Thank you.
Operator: And the next question comes from Simpson Iain from Barclays. Please go ahead.
Simpson Iain: Thank you very much. Good morning. A couple of questions from me, please. Firstly, can we talk a little bit about the phasing of Sun Care sell-in, sell-out so you called out double-digit Sun Care growth for NIVEA and Eucerin in H1. But I would have thought that sell-out was a bit weaker than that given the poor weather. So is there any risk we see some Sun destock in Q3 or is that not something we need to worry about? And secondly, a little bit of help on the phasing of margin, if I could. So if I just take your margin guidance for consumer that implies circa 200 bps EBIT margin expansion in the H2. I'm guessing given that you've talked so much about how hopeful you are for the Epicelline launch, that A&P will be up in H2 to support that Epicelline launch. So that implies gross margins really up in H2. And I'm sort of intrigued by your comment about how raw materials XFx are coming down year-on-year, but any sort of sense checking of my math’s there greatly appreciated in particular A&P and gross margin phasing? Thank you.
Vincent Warnery: Thank you for your question. On Sun Care, you know, the healthiness of the business model of Sun Care is that we are no longer into a game of overstocking and destocking after in the sense that the retailer are no longer returning the products. So what the sell-in we are doing is in fact is taking into account the anticipation of the sell-out, which means that in fact we are not expecting any destocking or returns in the second semester and we are pretty safe on the forecast for Sun Care. What is happening? You are absolutely right. In fact, most of the sell-in is happening in the second quarter and most of the sell-out is happening in the third quarter. In fact, you don't do any sell-in in the third quarter and the fourth quarter. Of course, I'm talking the north part of the world in South America, in Chile and Brazil, this is a little bit different. So we feel safe about Sun Care. We have some challenge in some market because obviously the private labels are gaining market share, but we are able to manage our market share and particularly, as I said with Eucerin, which is gaining market share every year since three years. On the second question, Astrid?
Astrid Hermann: Yes, so let me take your question related to phasing. Just to be very clear, we will not be increasing A&P 200 basis points for the full-year. That is not going to happen. A bulk of our increase in the first-half of the year is phasing related also to the launches in support of that and again to really drive effective spending of our A&P budget. That said, we do have more spend in year two go in percent to sales in absolute. So we are really supporting the business adequately in to go. In terms of gross margin, if you look at our business regularly, so not just this year, but it tends to have a higher gross margin. Maybe outside of hiccups when we had really big cost increases the last couple of years, higher gross margin the first-half driven by obviously also the very strong Sun Care business we have in the first-half. Regardless of that, though, our gross margin improvement is very strong. We feel strong about that and we should continue to see a good performance in that area. Thank you so much.
Operator: And the next question comes from Tom Sykes from DB. Please go ahead.
Tom Sykes: Yes, morning. Thank you. Would you be able to clarify how much of your business now, is it category average price points or above? And then if you look at the growth rate of the business split between those above category average price and those below, how would the growth differ? And I suppose I'm quite curious, particularly those which are perhaps the least premium or the most mass, how the growth of those is performing relative to the rest of the group, and your expectations for those into H2? And then, just to clarify, you're saying you still expect the A&P to sales to be up year on year in H2? Please.
Vincent Warnery: We'll take the first question. Astrid will take second one. In fact, the good news is that both categories are growing the same way. In the first, I think you have in mind NIVEA. Obviously, if you look at NIVEA, if you look at the growth of Thiamidol which obviously the most premium product of NIVEA, as I said, we are growing 24%. So we are clearly growing very fast. But if you look at Deodorants, if you look at Lip Care, if you look at Sun, which are products below EUR10, we are also growing strongly double digit. The only categories on which we are not growing as fast are the products which are no longer a priority for us. Products like, for example, shower gels or shaving foams, which are priced below EUR2, which are absolutely none of the part of the strategy. So very, very homogeneous growth between the two categories. But obviously, the investment, we put it on premium product and particularly on Face Care. Second question?
Astrid Hermann: So, Tom, your question related to A&P for the full-year, we absolutely plan to have more A&P spend in absolute and also slightly in percentage sales. You will need to remember, though, that that is also an equation of our weight of the business, depending on how the various, let's say, brands and regions perform, and that mix impact could always swing one way or another. But the intent, certainly, in our plans for right now, is for having more A&P spend overall for the year.
Tom Sykes: Right. Thank you.
Operator: And the next question comes from Bruno Monteyne from Bernstein. Please go ahead.
Bruno Monteyne: Hi, good morning. I'd like to come back on the phasing shift between H1 and H2. I'm sort of -- you didn't really mention it before definitely not the same size. I sort of noticed the downgrade to 50 basis points margin increase rather than at least you're talking about the effect drag on those margin. So all these are quite negative. And I'm thinking was this really a defensive necessity? Was it simply that everybody is putting a lot more A&P in the market? And you had the drag from back, did that really forced you to re-shift profitability? Would it be a better characterization rather than a proactive move where you decide to move it? And the second one, have you seen any increase in the level of promotional intensity in your NIVEA brand, particularly in the U.S.? Is it harder to hold on to your net pricing there? Yes or no? Thank you.
Astrid Hermann: Bruno. I will take your first question related to phasing. It is really our proactive decision to balance that much more between first and second-half. One, as I mentioned, because of the timing of launches and so on, versus the previous year, there's also been a bit of a difference in terms of how we've supported the business last 2023 first-half, given also some disruption with customers. So there are, this is really truly a purposeful shift. It's not being forced to spend more to keep up with competition, but it's really our intent. And I did mention this at the Capital Markets day also in the challenge from mostly all the analysts, why we are making so much profit in the first-half and so little in the second-half, but it's really a purposeful shift, so not pressure from external to make that happen.
Vincent Warnery: Second question. No, there is no increase of promotional spendings in the U.S. It's also a market which is pretty positive for brands because private labels have a pretty low market shares, much lower than what you find in Europe. So, so far no change, neither regarding Beiersdorf nor our competitors, and which is also why, as I mentioned in the beginning, we're able to improve dramatically our gross margin in the U.S. on both NIVEA and Coppertone, knowing that Eucerin and Aquaphor already very high.
Bruno Monteyne: Thank you.
Operator: And the next question comes from Olivier Nicolai from Goldman Sachs. Please go ahead.
Olivier Nicolai: Hi. Good morning. Vincent, Astrid and Christopher. Very quick question on my side, actually, some of your peers in the U.S. have been calling out a slowdown in the U.S. category, the U.S. skin care category mostly. Do you see a similar dynamic and are you concerned it could become potentially structural? And then secondly, just you mentioned Coppertone very briefly. Obviously you flagged that there was some softness in the brand, more the Sun Care category really than anything else. But what is the strategy for the Coppertone brand ultimately? I know it's probably less exciting in terms of innovation, but Eucerin or NIVEA, but what is the, the plan for this brand, which you bought a few years ago? Thank you.
Vincent Warnery: On your first question. So there was indeed clearly a slowdown. The good news, and I think was mentioned also in the course done by my peers, June is much better. So we see clearly June getting better in terms of sell-out, not only in Sun Care, but also in skin care. So we used to be, we were negative, I would say, on a year to day May basis, but June has been positive. And this is why we are more optimistic regarding the U.S. business. On your question about Coppertone, if you allow me an image, you know, we used to try to fix, you know, the issue of Copertone with OTC medicines. We have to move to prescription medicine in the sense that we have to make more dramatic changes. We are too much dependent on sport and sport is a business which is highly competitive. Neutrogena is very strong and where as soon as there is a little bit of rain, you're not using the product. So we have to refocus. And this is what we are starting to do on Face Care. And as a matter of fact, on the Face Care product we have launched this year, we have the best performance of the market. We have to change also the image of the brand. We have to move away from this kind of old, traditional American way of life to something which is much more talking about innovation. And we have, as you know, pretty good innovation in the area of Sun Care. So we're going to be much more daring in the way we promote the technology innovation of our brand and we'll continue really to over invest in Face Care with new initiatives, new product, new advertising campaigns in order really to transform the brand and to get, you know, on Coppertone the kind of success we are having on both NIVEA and Eucerin, because it's very important to see that on both brands we are overperforming the market and there is no other competitor globally which is able to perform the way we are performing on Eucerin and NIVEA. So more to come on the Coppertone. And clearly we have some pretty good ideas what we have to do to turn around the brand.
Olivier Nicolai: Thank you very much.
Operator: And the next question comes from Molly Valenciek from Jefferies. Please go ahead.
Molly Valenciek: Good morning, everyone. I just have one question. In your outlook statement, you say you expect further improvement in the global skin care market in the second-half of '24. Obviously, sounds like some of that's coming from the U.S. Just, you know, could you tell me where else you think that that's going to happen and if the 6% to 8% guidance is reliant on that? Thank you.
Vincent Warnery: Clearly, we are very optimistic regarding the U.S., as I said, not only because the market is waking up, also because we're coming with a few big things I was mentioning Thiamidol and Thiamidol will be a game changer for Eucerin and Thiamidol is also launched by the way on NIVEA Men U.S. also. We are clearly also optimistic regarding the year to go because of the innovation we are bringing to the market. You know, skin care is a market which is driven by innovation. So if we are and we will be able to deliver the kind of sales forecast we have on Epicelline, we will clearly, clearly grow. And as I mentioned in my -- in my speech, it start with Eucerin, but of course you will not be surprised if I tell you, that in ‘26 we'll see it also on NIVEA and La Prairie and Chantecaille. The question mark still remains China, not so much the mass market business. As a matter of fact, we are growing with NIVEA at plus 24% in Greater China. We are growing even at 50% on Eucerin in Q2. So I would say on NIVEA, Eucerin in China, we're pretty good. The question will be more the evolution of the Chinese market, and particularly the brick and mortar market and the Travel Retail. So all of that doing that, China, as you know, is not a big part of our business today makes us more optimistic regarding the evolution of the market in the months to come.
Operator: And the next question comes from Victoria Petrova from Bank of America. Please go ahead.
Victoria Petrova: Thank you very much. I have two questions. One is on your innovation on Epicelline. When we look at PME dual launch year and the year after, it generated between EUR40 million and EUR50 million a year in launch year and slightly over EUR100 million in the next year. How should we think about Epicelline in this context? And also considering your slide on a much higher contribution to sales overall? And my second question is on ongoing negotiation with, in particular, Western European retailers. Are you getting any pushback on pricing? Is there any potential negotiating -- negotiations ongoing regarding price increase from your side or price decrease from their side? And how should we think about it into the second-half of the year? Thank you so much.
Vincent Warnery: On your first question, the [jury] (ph) is out. You know, we are now in the field. We are now on shelf. You know, I saw myself in booths, you know, the product. And again, the fact that, you know, booths gave us the, the highest ever distribution level for a new product is showing that we are not the only one trusting this launch. I gave you at the Capital Market day, the level of purchase intent, 87% people saying, I will surely buy the product. I've never seen that in my life. And also what is very important, that the anti-age market is much, much bigger than the hyperpigmentation category. So by going into what is perhaps more red ocean and the blue ocean with such on Epicelline proposal, which is really a game changer, we are expecting, you know, really to overperform versus Thiamidol. But I don't want to be over promising. Let's see what happens. We have done, I would say, much better launch than what we did, what I did myself six years ago with Thiamidol, because we are launching everywhere at the same time with the same product. And we also cascading it down to other brands, much quicker than what used to do on Thiamidol. So I think we will see. But as I said, the first figures in the U.K., and U.K. is a very interesting market. You see immediately if innovation is picking up or not is making me extremely optimistic. On your second question, we are into a business-as-usual moment in the sense that yes, we came with a price increase. In Europe, it was around 3%, 4% depending on the categories. We had the usual irritations with retailers, but we had no daily sting, no stop of sales, no banning from promotional events. So we are pretty good. But it's never a walk in the park and we know that we will come with the next price increase. We will have also this kind of conversation, but nothing compared with versus what we had last year when we came with it is true with an extremely strong price increase.
Victoria Petrova: Thank you very much.
Operator: And the next question comes from Mikheil Omanadze from BNP Paribas (OTC:BNPQY). Please go ahead.
Mikheil Omanadze: Morning all. Thanks for taking my questions. I have two please. One follow-up. Really again on your outlook. If I think about your comments at the Capital Markets day, if I remember correctly, you said that plus six would clearly be a disappointment and I think the market interpreted it as well. Maybe you are expecting actually to achieve growth in the upper end of this range. Have your thoughts changed at all since the Capital Markets day on this year's growth outlook for consumer? And the second one is on the share buyback. I think that looking at what you've done already in terms of your share buyback activity, the 500 million is almost completed now. Can we expect another share buyback to be announced anytime soon, or is it rather a matter to be discussed at the next AGM? Thank you.
Vincent Warnery: To share about the question, I would repeat exactly what I said in a Capital Market day. I would be disappointed if we were at the bottom, you know, part of the six to eight guidance. So clearly we are absolutely maintaining the guidance we provided. And this is true not only for sales, this is also true for EBIT. We will deliver what we promised.
Astrid Hermann: In terms of the share buyback, we are also very excited that it's gone very well. And you are right, we're nearly at the end of the share buyback. Look, we're extremely excited, obviously this year that we've made progress on both the dividend and the share buyback. But we are not ready right now to announce anything new. That said, you can be sure that these are topics we discuss regularly with our supervisory board, and we'll figure out what will happen come next spring when we announce, obviously, our next year's results or this year's results. Thank you.
Mikheil Omanadze: Very clear. Thank you very much.
Operator: And the next question comes from Marleen Kaesabier from Reuters. Please go ahead.
Marleen Kaesabier: Thank you very much. I was curious, you mentioned in the beginning or at an earlier question, that you faced customer retaliation after hiking your prices in Europe. Could you specify a little bit more what you mean by that and what you saw? That would be great. Thank you.
Vincent Warnery: Last year, you know, when we came with a double-digit price increase, obviously it was a premiere for Beiersdorf. And we had a good rationale behind that, because the cost of goods was increasing the same level. But customers were not used to that. So we had indeed some retaliation from key customers in Germany and France, which means, for example, we're banned from big promotional events where they listed, you know, on some categories and the consumers could not find the product. So we had that. And obviously it impacted strongly the first quarter in 2023. In 2024, the situation is totally different. There is no retaliation except in some cases. As I mentioned, our Lip Care line, which has been delisted because, you know, we came with a pretty good price increase. But we are just into the normal negotiation on price increases. And so far, no burning issue. Just as I said, the normal tense discussions we are having with retailers. At least it is not impacting our business and we don't see why it will impact in the coming months.
Marleen Kaesabier: Okay. Thank you.
Operator: And today's last question comes from Ulrike Dauer from Joe Jones. Please go ahead. And Ms. Dauer, your line is open. Ms. Dauer, we cannot hear you.
Christopher Sheldon: There are no further questions. I think that we can. So this would conclude our half year one earnings call. Thank you for your participation. Beiersdorf next investor relations event will be the release of our nine month sales figures on October 24. We appreciate very much your interest in Beiersdorf. Thank you very much and have a nice day everyone.
Operator: Ladies and gentlemen, the conference is now concluded and you may disconnect. Thank you for joining and have a pleasant day. Goodbye.
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