German consumer goods firm Beiersdorf reported slower sales growth in the third quarter on Tuesday, citing a "challenging and very competitive market environment", with its adhesives unit dented by a fall in sales to the auto industry.
The Tesa business, which makes adhesives for the automotive and electronics industries, reported sales growth of just 1.2% in the first nine months of the year, after stripping out currency effects and acquisitions, down from 2.4% in the first half.
Beiersdorf cut its forecast for Tesa's 2019 sales growth to 1-2% from 3-4% previously but confirmed its overall 2019 guidance for group sales growth of 3-5% and a consolidated operating margin from ongoing operations of around 14.5%.
Shares in Beiersdorf were indicated 1.5% lower in early Frankfurt floor trading.
Beiersdorf said Tesa, which accounts for about 20% of sales, saw growth in its retail consumer business and the electronics sector but a fall in the automotive business.
Overall, the company reported organic sales growth of 4.3% for the first nine months, compared to 4.8% in the first half, with organic growth for its core Nivea brand at 3% after 3.2% in the first half.
Under new Chief Executive Stefan De Loecker, Beiersdorf has set up an innovation unit to develop new "indie" brands, including a new line of body creams for tattooed skin, as consumers move away from mass-market labels like Nivea towards niche brands.
"In times of a challenging and very competitive market environment, it is more important than ever to adapt our business model to new economic and technological conditions," De Loecker said. "The needle is moving in the right direction."
Third-quarter sales came in at €1.89 billion, versus average analyst forecasts for €1.91 billion.