Beiersdorf, the maker of Nivea skin care products and tesa glue, has cut the forecast for full-year 2022 sales at its adhesives unit due to extensive lockdowns in China and ongoing supply chain issues in the automotive industry.
The tesa adhesives unit, which serves the electronics and automotive markets and accounts for about a fifth of Beiersdorf sales, had been the group's fastest-growing business in 2021 thanks to growth in the Chinese electronics business.
China COVID-19 Surge Impact
However, the recent COVID-19 surge in China hurt the unit's growth in the first quarter, and Beiersdorf said it now expects tesa to grow sales in the low to mid single-digit range in 2022, compared to its previous target for mid-single-digit growth.
Commenting on the company's performance, Vincent Warnery, CEO, Beiersdorf said, “We have a very successful first quarter behind us – one in which we were able to grow despite a challenging market environment. In addition to the ongoing success of La Prairie, Nivea accelerated further in the first quarter, gaining market share in all regions. Our Derma business continued its growth momentum and significantly outperformed the market and the competition.
“Considering the war in Ukraine, the corona-related lockdowns in China and inflationary pressures on raw material and logistics costs, it is clear we are facing a period of particular economic uncertainty. We have already taken a number of measures to mitigate cost pressures and will proceed without hesitation with our planned investments in our C.A.R.E.+ strategy.”
'Challenging' Quarter Forecasted
"I think the second quarter will be a challenging quarter," Astrid Hermann, chief financial officer told a news conference.
"The electronics business in Asia, so much of it is centred around Shanghai. Reading the news, you will see a lot of the electronics business there is impacted. We have to see how we weather that and how we can rebound in the second half," she said.
Beiersdorf also confirmed its preliminary first-quarter results published on 8 April and targets for its consumer goods unit announced on 1 March.