Beiersdorf AG

XETRA:BEI

Q1-2025 Earnings Call

[Operator]

Ladies and gentlemen, welcome to the Q1 Beiersdorf 2025 Results Conference Call.

I am Yousef, the Chorus Call operator. [Operator Instructions] This conference is being recorded. [Operator Instructions] This conference must not be recorded for publication or for broadcast.

At this time, it's my pleasure to hand over to Christopher Sheldon, Head of Investor Relations. Please go ahead.

[Christopher Sheldon, executive]

Thank you, Yousef. Good morning and welcome to Beiersdorf's First Quarter Conference Call. Thank you for joining us today.

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 of the first 3 months of 2025. We will start with the presentation of our results, followed by a Q&A session.

And with that, I'd like to hand over to Vincent.

[Vincent Warnery, executive]

Thank you, Christopher. And good morning. Welcome to today's conference call. Astrid and I will now guide you through our sales figures for the first 3 months of 2025.

Following a very strong performance in 2024, Beiersdorf delivered against expectations in the first quarter of the new financial year. Our first quarter's results are influenced by a strong prior year base and support our outlook for the full year.

Our Derma business deserves again a special mention, as we continued to see a strong performance. Eucerin delivers not only in our established markets but also expands successfully into new countries. At the same time, we are setting the foundation for our future success in China. With proactive measures, we are refocusing our NIVEA business to win in skin care with strategic innovations in these key markets. Delivering breakthrough innovation across our brands and expanding into more white spaces remained the key driver of our growth of our first quarter results.

In the first quarter, we delivered plus 2.3% organic sales growth in our Consumer segment, against a high prior year baseline, despite destocking measures due to ongoing challenges in the travel retail market and in the face of a strategic repositioning in China. Excluding China, our consumers business grew by 4% organically, which is within the range of the full year guidance.

NIVEA sales increased by 2.5% compared to an exceptionally strong first quarter in 2024. Against the negative effect from the repositioning in China, this performance was primarily driven by strong skin care categories and outstanding double-digit sales growth in North America. Our Derma brands Eucerin and Aquaphor achieved strong double-digit organic sales growth of 11.4% in the first 3 months, fueled by the continued success of our face and body categories, the further rollout of our breakthrough innovations as well as the continued strength of Aquaphor.

The Health Care business, which comprises the Hansaplast and Elastoplast plaster brands -- reporting fantastic double-digit sales growth of 10.8%. This was supported by the launch of our next generation of plasters. Sales of La Prairie declined by 17.5% in organic terms in the first 3 months, on the back of our best-performing quarter in 2024. This decline was mainly driven by continued challenges in China and the travel retail market, which we addressed by destocking activities.

tesa sales grew by an impressive double-digit 10.7%. On the one hand, this needs to be viewed in the context of quarterly phasing and a very low prior year comparison base. On the other hand, organic growth was supported by a strong electronics business, while the changes in the automotive market continued to impact the business.

Overall, our group results are well in line with expectations.

At plus 2.5%, NIVEA delivered a robust organic sales growth in the first quarter of 2025, especially compared to the strong previous year period. In Q1 2024, NIVEA grew by an impressive 12.6%, which was largely driven by significant price increases and launches. And while pricing continues to play a role this year, its contribution to growth is substantially lower. In addition, we are putting our house in order in China, where we have decided to focus on what we do best at Beiersdorf, skin care. I will come back to that shortly. As mentioned in previous presentations, our NIVEA innovation pipeline for 2025 is impressive. With the planned launches and relaunches this year, we expect an acceleration of profitable growth in the quarters to come.

Our Derma business, with Eucerin and Aquaphor, continued its trajectory, showing excellent growth across regions. In our emerging market region, we achieved double-digit growth of 18.5%. This was supported by further white space expansion in countries like India and the successful launch of our breakthrough innovation Epicelline. The same applies to Europe, where we rolled out Epicelline last year. Overall, our Derma business in Europe grew by 7.9%. In North America, our biggest market for Derma, we achieved double-digit growth of 10.4%. Just 1 year after the successful launch of Eucerin face in U.S., we continued the momentum with the market entry of our hero ingredient Thiamidol. New products from Thiamidol-based Eucerin Radiant Tone collection hit the shelves in Q1 2025.

In China, we are taking a bold approach to put our house in order. On NIVEA, we are shifting our focus away from less-strategic and price-sensitive personal care categories and partners. Instead, we want to drive premiumization in skin care, expand through digital-first channels and accelerate innovation. Of course, these repositioning efforts in China have a negative impact on our NIVEA results, which is also visible in our Q1 performance, but we are convinced that our measures are setting the foundation for future growth in this key market.

On La Prairie, we continued to be challenged by the difficult situation in travel retail. Therefore, we significantly reduced our stock level, especially in Hainan, over the course of the first quarter. In addition, we continued to -- our efforts to modernize La Prairie by broadening the price range, driving innovation, putting more effort on e-commerce and consumer engagement and changing the look and feel of the brand. Exclusive -- excluding the negative effect of our repositioning Greater China, our Consumer business would have grown by 4%. China remains a strategic priority both mid- and long term.

With the bold repositioning of our China business, we are getting ready for the next big moment, the launch of Thiamidol in China in 2026. This follow the official approval of our patented ingredient Thiamidol in China last year, a major milestone for Beiersdorf. It is only the second hyperpigmentation ingredient to receive such approval in China and the first since the implementation of the Cosmetics Supervision and Administration Regulation. Thiamidol is already a game changer in China's cross-border e-commerce, with NIVEA Luminous630 growing 43% in 2024. And we are just getting started. In 2026, full market access will allow us to scale this breakthrough innovation even further. By launching Thiamidol across all our core brands, NIVEA, Eucerin, La Prairie and Chantecaille, we are setting a new standard in hyperpigmentation in the country.

Let us now have a look at the progress of our Win with Care growth drivers.

Our focus on expanding into white spaces, paired with breakthrough innovation, has proven to be the winning strategy. As mentioned on the Full Year Results Call, Chantecaille is expected to accelerate this year. Following the 4.5% growth in 2024, our luxury brand continued to build on its strong performance and delivered double-digit sales growth of 15.9% in the first 3 months of this year. After the launch of Chantecaille in China in record time last year, we are taking another step: the introduction of Thiamidol under the Chantecaille brand. We just launched the Blanc Peony collection in the first markets. And we are confident that this strategic launch will unlock new growth opportunities for our luxury portfolio and further strengthen Beiersdorf's overall market position.

In the first quarter, we further strengthened our global presence and commitment to key skin care markets like India and the U.S. In early 2025, we introduced 7 Thiamidol-based NIVEA Luminous face care products to the Indian market, marking a major step in bringing our innovation to a broader audience. Following the successful Eucerin launch in October 2024, the NIVEA rollout brings our hero ingredient to the mass market, supported by tailored formats with smaller, more affordable packaging to meet local consumer needs. In Q1, NIVEA recorded impressive growth of 31.9% in India.

In the U.S., we continued our strong momentum following the successful launch of Eucerin face last year. In the first quarter of this year, we expanded the portfolio with Thiamidol-based products under the Radiant Tone collection. We are directly addressing growing consumer demand for hyperpigmentation solutions and strengthening our footprint in the U.S. skin care market further. Driven by this successful launch, our Eucerin face category delivered outstanding 37.2% growth in the U.S.

I am also pleased to share that the global rollout of our epigenetic anti-aging lotion continues to be the best launch ever, and we are now present in more than 45 countries. Outstanding repurchase rates underline the product's relevance and consumer acceptance. In fact, the repurchase rate in our home market Germany remains at twice the level of the top-performing launch of key competitors. We are also seeing excellent repurchase rates in other country, for example, in Mexico.

Even in our long-standing and trusted consumer brands like Hansaplast or Elastoplast, we consistently deliver groundbreaking innovations. At the beginning of this year, we introduced the next generation of plasters, the Second Skin Protection plaster. With this innovation, we are setting a new benchmark in wound care. We're not just launching a product. Instead, we are challenging old myths like wounds heal best in fresh air. This advanced hydrocolloid innovation supports faster healing and strengthened our position in the category. Through digital in-store campaigns, we aim to shift mindsets and improve healing outcomes for millions of consumers; and it is paying off. Our Health Care business grew by 10.8% in Q1, supported by this strong innovation and our commitment to advancing everyday skin care.

Now over to you, Astrid, for the financial of the first quarter.

[Astrid Hermann, executive]

Thank you, Vincent. And good morning from my side as well. I am happy to walk you through our first quarter 2025 results in more detail.

Let's start by reviewing our sales performance at both segment and group levels. In the first quarter of 2025, Beiersdorf's Consumer division recorded organic sales growth of plus 2.3%. Due to negative foreign exchange impacts, nominal sales grew by plus 1.9%. Our tesa division achieved strong double-digit organic sales growth of plus 10.7% during the same period, resulting in nominal growth of plus 11.2%. Overall, the group delivered organic sales growth of plus 3.6% and nominal growth of plus 3.3%.

Now let's take a closer look at our regional performance for the first quarter of 2025. In Western Europe, we achieved organic sales growth of plus 2.1%, with particularly strong results in Northern and Southern Europe. It is important to note that our luxury travel retail business has negatively affected our overall growth in Europe, as it is reported in our Western Europe figures. The negative impact amounts to more than 200 basis points of growth. In Eastern Europe, our sales recorded a slight ease of plus 0.3% primarily due to a very high comparison base from the first quarter of 2024.

The Americas region concluded the first quarter of 2025 with an organic sales growth of plus 3.7%. North America achieved a growth rate of plus 3.0%, with NIVEA and Derma generating fantastic double-digit growth. Latin America experienced growth of plus 4.3% in the first 3 months of this year, building on a particularly strong performance in the same period last year.

The Africa/Asia/Australia region recorded an organic sales growth of plus 1.9%. The numbers are significantly affected by the repositioning measures we are taking on NIVEA in China. Excluding this impact, the growth rate would have been in the high single-digit range.

Now let us review the tesa business performance for the first quarter of 2025. During this period, tesa achieved a double-digit growth rate of plus 10.7%, primarily driven by the strong performance of the electronics segment. It is important to note that this exceptional growth is influenced by a low comparison base from the first quarter of the previous year as well as phasing effects related to the transition of manufacturing from China to India in the electronics industry.

At the same time, I would like to flag the ongoing challenges in the automotive market, particularly in Europe. Recent developments regarding tariffs are expected to further complicate conditions for this sector, adding to the existing pressures. While the first quarter has demonstrated strong growth, the overall market dynamics present a mixed outlook, leading us to maintain our guidance in light of the challenges ahead.

This concludes our review of the first quarter 2025. I will now hand over to Vincent, who will give you an update on our outlook for the full year.

[Vincent Warnery, executive]

Thank you, Astrid.

Let's conclude with our guidance for 2025. We maintain our expectation for organic sales growth in the Consumer Business Segment to be in the range of 4% to 6%. We anticipated a slower start to the year, which is fully factored into our guidance. The strategic refocus in China will continue to affect net sales, but we expect growth to pick up as the year progresses, particularly in the second half of the year.

We confirm our guidance for the EBIT margin, excluding special factors, in the Consumer segment to be 50 basis points above last year's level. In the tesa Business Segment, we maintain our guidance for organic sales growth of 1% to 3%, with the development of the automotive sector playing a key role in determining whether we expect to reach the upper or lower end of this range. Additionally, we reaffirm our guidance for the EBIT margin, excluding special factors, which is expected to be around 16%.

Overall, our group organic sales growth is expected to be in the range of 4% to 6%, with the EBIT margin, excluding special factors, projected to be slightly above last year's level.

We remain confident in the outlook for our business and have strong plans to grow across our portfolio with a great innovation pipeline and further white space expansion potential. However, it is currently difficult to predict how the overall uncertainties in the global economy may affect consumer confidence and our business, especially in the short term. With persistent geopolitical tensions, the unpredictable impact of tariff policies and general economic volatility, there is a risk of potential scenarios that can adversely affect our performance.

Over to you, Christopher, for the Q&A.

[Christopher Sheldon, executive]

Thank you, Vincent. [Operator Instructions] And I see the first one in line is Jeremy Fialko from HSBC.

[Jeremy Fialko, analyst]

So a couple from me. I guess the first one is, as you have kind of exited the quarter and we've gone through all of these issues with the tariffs, to what extent do you see that affecting consumers? And is there any greater degree of hesitancy that you saw as the quarter went on, or is that not really something that you would kind of characterize? And then the second thing is whether you could just reiterate the expectations for La Prairie. I think that you've spoken about this achieving low single-digit growth for the year, being back in positive growth in Q2. So is that still something that you would be expecting?

[Vincent Warnery, executive]

Jeremy, on your first question, as you might have seen, we are really slightly hit by the U.S. tariffs because, in fact, we have 2/3 of our production, what we sold in the U.S. -- which is coming either from the U.S. or from Mexico. And Mexico is covered by the free trade agreement, so we have only a small part of the business which is coming from Europe. So, so far, so good. The question we have is more on the consumer confidence, on the consumption. We are lucky enough to have a market which is growing low single digit in the U.S. And you have seen that we are overperforming this market, so obviously the big question would be the -- if we see some kind of consumer dissatisfaction or some consumer lack of confidence in the U.S. which might affect our business, but I will say, on terms of U.S. tariffs, we are in a good situation.

On La Prairie, you're absolutely right to say that we are expecting better figures. What we have done clearly in the first quarter, it's really to be sure that we end the quarter with clean stocks. You know that, La Prairie being a brand which is not promoting, the only way to reduce stock is to stop [ selling ]. This is why we definitely decided to reduce the sell-in in the first quarter of 2025 in China. And we have destocked strongly Hainan. We are not expecting a strong growth in Q2. Hopefully, it will be flat, but we are expecting a much better performance in Q3 and Q4, together with also the launch of the new products, the new look and feel; and also the continuous support of e-commerce. We are growing extremely strongly on e-commerce. We are growing 20% and particularly strong also in China, so this is why we are pretty optimistic with La Prairie, starting next quarter but even more in Q3 and Q4.

[Christopher Sheldon, executive]

So the next one in line is Celine Pannuti from JPMorgan.

[Celine Pannuti, analyst]

So I would like to come back on -- Vincent, on the outlook for the year. You seem quite confident because of the pipeline, but in the short term, could you say whether you think you will be within the 4% to 6%? You said that, ex China, you would be already at 4% for Consumer. That was in Q1, so -- and then you said that, the travel retail drag, probably it's not there anymore because you're happy with inventory, so I just try to understand. Like, it seems that some of the headwind for Q1 are not going to repeat in Q2. I understand maybe the comment you just made about the U.S. low consumer confidence. But just trying to understand how your business could not be sequentially improving given that you have less of the headwind from Q1. That's my first question.

And then my second question, on the innovation. Is it possible to get the size of the Epicelline business or as a percentage of the total Derma in the first quarter? And how do you see the repeat purchase in Western Europe? I mean Derma was up 7%, you said, in Western Europe. How much of that was driven by the Epicelline, please?

[Vincent Warnery, executive]

Thank you, Celine. On your first question: As you know, one of the big difference versus last year is the timing of Easter. So -- which has a huge influence on sun care. So I will say the answer to your question, are we going to be at the lower part of the guidance or slightly ahead, will be more depending on sun care. So far, we have planned to be more at the low end of the guidance in the second quarter, yes, also because most of the big launches are coming more in Q3 and Q4, the question being obviously the U.S.

On your second question. I mean Epicelline is, as I said, the best launch ever of Beiersdorf, so far. It is still a small part of business, of Derma business, which is doing EUR 1.4 billion, so it's difficult to give you a percentage, especially knowing that we did the sell-in in Europe in the last quarter, Q4. And we did the sell-in in emerging market in Q1. What I can tell you is that the figures are absolutely impressive in terms of repurchase. You remember I gave you the figures of 20% repurchase after 6 months in Germany, which is the best ever, which is 2x the average of the best performance in the market. I just got the figures of Mexico that we launched in January. Already after 5 months, we have a 15% repurchase level, which is also the best ever we had in the history in Mexico. And I also got the figures of Thailand. Well, it's interesting to have 3 different geographies. In Thailand, we have a very strong position with Thiamidol. We have a 50% market share. Despite this enormous presence of Eucerin, we grow in anti-age by 29%. So we have today an 80% market share in anti-age in Derma in Thailand because of the launch of Epicelline. So we are not only very optimistic with the weight of Epicelline on the Eucerin sales, but as you might remember, we are launching in the Q3 2025 NIVEA Epicelline. And the expectations are even bigger because of the size of the brand, because of -- also of the number of countries in which we can launch NIVEA Epicelline. So by the end of the year, clearly the combination of NIVEA and Eucerin Epicelline will be a big part of the growth of our brands and will start to be a big part of the business in total.

[Celine Pannuti, analyst]

Can I just clarify on my first question? So you said that you expect Q2 to be at the low end of the 4% to 6%, and it's dependent on sun care. What kind of assumption for sun care have you made there? Because I presume that, sun care, you should have the sell-in more in Q2, while it was in Q1 last year.

[Vincent Warnery, executive]

We have taken the normal season of sun in the sense that we look at the last 5 years. We look at what we sold and we look at what -- the sell-out. And we consider that, with a normal season, which means that there is sun in Europe, there is sun in Emerging Markets, this is how we would deliver the 4% of the quarter.

[Christopher Sheldon, executive]

And the next one in line is David Hayes from Jefferies.

[David Hayes, analyst]

So my 2 -- I start in the U.S. So just in terms of the U.S. performance, obviously very strong NIVEA, Derma, at over 10% for both of those, but 3% overall. So just to understand. Is that the Coppertone weakness that's offsetting that strong performance on those 2 categories? And I guess, beyond Easter that you just kind of mentioned, is there anything specifically going on in Coppertone, destocking, innovation changes, that means that, that might pick up through into the second quarter?

And then the second question, just in terms of the China headwind impact with the repositioning of the portfolio. Is that sort of circa 6 percentage points of impact that you called out in the A/A/A region going to diminish through the quarters? Or is that now constant all the way through until we lap the effect of that? But -- or is there kind of a first quarter higher level of impact?

[Vincent Warnery, executive]

So on your first question, David, you're absolutely right. This is Coppertone. Coppertone is decreasing slightly market share in a market which is declining. And in fact, there are 2 phenomenon which are impacting Coppertone as well as all the sun mass market brand. First, the beginning of the season was not so good. The weather was not so good in the U.S., so the market is down, but also what is happening is that the Derma brands are progressing at the expense of the mass brands. So we are lucky enough because we are gaining with Eucerin Sun what we are losing with Coppertone, but overall, the perspective is not that good on Coppertone. The good news for Coppertone is that we have been reprioritizing the sport business with a new rugby player, female rugby player, which is extremely well known in the U.S. So we see our sell-out in sport going up for the first time since years. And we are also pretty successful with the face care that we launched 2 years ago, but it is compensated by the loss on general protection and baby. So Coppertone is negative.

La Prairie is slightly negative also because the market is down. And we -- you might remember I told you we would launch La Prairie in -- on Amazon, with Saks Fifth Avenue by Amazon. The launch has been slightly delayed by Amazon. And we will be hitting the online shelves by the 29th of April, so obviously the figures are more in April than they are in March. So that's a reason why the U.S. figures are below what I shared about NIVEA and Eucerin.

On your second question. What we have been doing since Q4 is to -- really to clean totally the old and the unsuccessful business of NIVEA. This is something -- we could not do it in the past because we didn't know if we had the chance to launch one day Thiamidol. Now that we have done -- we got this decision in October. We have immediately started to put our house in order. It means that we are stopping some categories where we have no right to win. It could be face cleansing. It could be shaving for men. It could be deodorants. It could be shower gels. So all of that, we are stopping. We are also revisiting our trade partners. We are decreasing the number of distributor by 70% because we have a lot of small distributors which are absolutely not the right one when we start to go domestic online. So that also has an impact, sell-in, sell-out, because we are also -- we're absorbing the stocks. And we are also renegotiating with a few offline retailers with whom we never made money in order to be sure that we have better conditions. So this has strongly affected Q4. This has extremely strongly affected Q1.

And you're right. This is exactly the reason why the A/A/A is at this level. We will start to have a much better performance in Q2 and even more in Q3 and Q4 being the best quarter in the year. So we are pretty optimistic, but we had to go through this cleaning in order to be sure that, when we have the chance to launch Thiamidol, we have a clean portfolio, we have the right partners and we are working with people with whom we can make money.

[Christopher Sheldon, executive]

And next one in line is Callum Elliott from Bernstein.

[Callum Elliott, analyst]

I just want to follow on this theme of the China portfolio actions, if I can. Firstly, maybe just to sort of bounce back what you just said, Vincent, can you maybe explain to us why it should get better in Q2, Q3? Like, if these are portfolio actions, do we not need to annualize the actions you've taken before things should start to accelerate? So if you can just sort of flesh out for us why you are expecting this immediate improvement in Q2, Q3. And then maybe more broadly, where are we globally on this personal care deemphasis, if I can put it that way? Obviously a meaningful impact from China this year, but are there other big markets where there still remains a significant amount of pruning to do?

[Vincent Warnery, executive]

Callum, on your first question, what is happening is that there is one big success story in China, which is Luminous. You know that Luminous has been launched on cross-border e-commerce despite the fact that cross-border e-commerce is only a small part of the e-commerce footprint in the -- in China. It's 8%. China is our #1 country in the world. It's 2x bigger than Germany. So we have this business which is doing extremely well which grew 40% last year; and which will be the growth driver of NIVEA China in Q2, Q3 before being even bigger when we start to launch it in domestic e-commerce at the end of Q4, beginning of Q1 2026. So we will benefit, in fact, from Q2, from the always maintained dynamics of Luminous while no longer suffering from the returns, from the destocking, from the stop of TP partners that we experienced in Q4 and Q1. This is why things will start to improve strongly in Q2 and even more in Q3 and Q4.

A big thank you for your question on personal care. It's very important to understand that we see a big difference, within personal care, between deo and the rest of personal care. We are obviously not interested in developing our business in shower, in soap, in men's shaving, in hair in this kind of category, but deo is not only the biggest category of NIVEA, one of the most profitable but also where we are clearly bringing a lot of innovation in 2025. We are relaunching our historical Black & White franchise. We are launching also a very interesting derma control franchise which is for the first time combining the deo expertise of Beiersdorf together with the skin care expertise of Beiersdorf. So we have a pretty big ambition on deodorants. And this is starting to happen in Q2 and even more in the second semester of the year, so more to come on deo, big priority, big category and also big penetration tool for us many part of the world, not only in Europe but also in Emerging Markets.

[Christopher Sheldon, executive]

And we have Nicolai, Olivier from Goldman Sachs as the next one in line.

[Jean-Olivier Nicolai, analyst]

Vincent and Astrid and Chris, just there was -- a couple of questions for me. First of all, there was a few negative press reports in Germany in -- I think it was a few weeks ago, pointing out to share losses for NIVEA. Could you please comment on NIVEA's ability to grow share in Europe and in Germany? I guess that was where it was referring to. And secondly, just going back to the phasing for the rest of the year. So for Consumer, you're expecting to -- the changed route to market in China to affect Q2. Should we also expect a bit of a shipment phasing in Q4 ahead of the 2026 launch?

And then also, on tesa, for Astrid. Since Q1 was very strong, how much of it was driven by the [ trade load effect ] in electronics?

[Vincent Warnery, executive]

Olivier, thank you so much for the question. I will take the first 2. And Astrid will take the third one, on tesa. The -- on the -- you are mentioning, you're alluding to an article of a German magazine called Manager Magazin, which rightly shared a slide that we shared with the commercial organization which was looking at the market share of NIVEA in our priority countries. And we were -- and I will come back to that. We are losing 0.36% market share. So it's not huge but 0.36% market shares -- market share on NIVEA in those countries, while globally, when you look at the total perimeter in which we are acting, we are flat. And we are gaining 9 basis points, which is not good enough. I want to do better than that, but we are not losing market share. The reality what we are facing and which is true also for all our global competitors, we are facing not only the strength of private labels. And it's true that we had, all of us, to increase prices because of the increased cost of goods. It has obviously made private labels even more competitive and particularly in categories like [ face cleansing ], like sun care, where they come with prices which are 3x lower than us, but also we have these new dynamics of local brands which are ingredient-based, which are coming with a very simple proposal as cheaper than the global brands. And we have to find a way to counterattack. And this is what something we are doing with influencers; with a much, much stronger digital activity. And we hope to see some turnaround.

What is true also, that we've seen clearly that the positioning of NIVEA as a value-for-money brand has to be kept. This is why you've seen that the price increase we have anticipated for 2025 is much, much lower than what we had in the years before. And also it's a price increase which is focusing on the product and categories where we are coming with new news. So when we are coming with a relaunch, when we are coming with a launch, this is where we take the opportunity of increasing prices. We are no longer increasing prices over the board like we used to do, like we had to do in '24 and '23, so I'm optimistic. I think we will -- this small market share increase that we saw in the total perimeter should improve in the months to come.

On your question about the phasing. We are indeed working to get the registration of each and every Thiamidol SKU in China. Some of them are already registered, but we will decide to launch both NIVEA and Eucerin Thiamidol on the domestic channel only when we have a sufficient number of SKUs. So to have really not one-by-one launch but having a range launch, so it might happen indeed sooner than expected, but for the time being, we anticipate to launch beginning of 2026 to be on the safe side. tesa?

[Astrid Hermann, executive]

In terms of your question on tesa. So look. The significant growth in Q1 of this year is primarily related to the comparison to the prior year. If you might remember, Q1, tesa was down, declining, while then we had a very, very strong rebound in Q2, double-digit growth in Q2 of last year. This was related to phasing and some shifts in manufacturing and so on for key electronics manufacturers. And we now are seeing again this comparison versus a prior year that was quite a big shift. We're seeing a normal quarter. Maybe some customers might have ordered a bit more given tariff challenges and so on that could happen, but we think the biggest difference is really the comparison that we had to the prior year.

[Christopher Sheldon, executive]

And the next one in line is Fulvio Cazzol from Berenberg.

[Fulvio Cazzol, analyst]

So I have a couple. The first one is on stock levels, whether they're in the right place now in Hainan and travel retail or whether we should expect more destocking in Q2. And then my second question is are there any comments you can share on the timing of investments and the impact this can have on the margin phasing this year. I'm just trying to get a sense if the margin improvement you anticipate is going to be more skewed to the first half or the second half or whether it's going to be relatively balanced this year.

[Vincent Warnery, executive]

Thank you, Fulvio. I'll take the first question. Astrid will talk about investment. We look at stock level looking at the consumptions to come. This is why we might have, from time to time, to do again destocking if the market is not growing the way we expected. At this time, we have absolutely the right level of stocks not only in China brick-and-mortar, in China travel retail, in Hainan, so we have exactly the number of weeks we're expecting. And this is why I'm more optimistic regarding China and in particular La Prairie for the quarters to come.

[Astrid Hermann, executive]

Your question in terms of timing on investments; and obviously the profit first half, second half. Look. Given that we are saying that our growth will be much more so in the second half of the year, certainly we will see a stronger EBIT profile in the second half of the year. We also have significant investments obviously in the second half of the year given that we are doing a lot of launches, but we also started the year with some strong investments. As we mentioned, we are launching in the U.S. or have launched in the U.S. Thiamidol. That's being supported very strongly, the same in India, so -- Epicelline, obviously, in Emerging Markets, so even in the first quarter, we have already started with some strong investments. Given the growth profile, I would expect the second half to be the stronger delivery.

[Christopher Sheldon, executive]

And then we have Guillaume Delmas from UBS as the next one.

[Guillaume Gerard Delmas, analyst]

Vincent and Astrid, my first question is on the beauty industry uncertain outlook for this year. I guess, Vincent, should we see a deterioration in consumers' mood and confidence? I mean, does Beiersdorf have a plan B, as in measures to contain costs, maybe some investments, also maybe emphasize more affordable offering and innovation? Or no need for a plan B at Beiersdorf because you view your categories and your brands as resilient and almost quasi-recession proof. And I guess another way to ask the question is how bad the macro would have to become to prevent you from delivering on your current 2025 guidance.

And then my second question, just on 2 regions in Q1. So Eastern Europe and Latin America, a bit of a soft start for both regions. Wondering, above and beyond a challenging basis of comparison for Eastern Europe, if there were any reasons for that slow start. And are you confident we will see both regions accelerating from the second quarter, onwards?

[Astrid Hermann, executive]

I will take your first couple of questions. Look. Related to the beauty outlook, we still feel like we are in very, very strong categories. They've really shown over the long term, even looking back at previous recessions and difficult times, that our categories are quite resilient. There might be always, obviously, hiccups, but we do think we're in good categories. That said, we are absolutely managing our profitability, our investments with agility. We're watching where everything is going. We are making sure that we manage that with the right approach in very uncertain times. Certainly the COVID times have taught us how to do that and manage multiple scenarios and then react as well.

In terms of how bad would it have to be, I think, in these very uncertain times, it's really hard to make predictions, but of course, if we have very bad macroeconomic situation where we have recessions not just in the U.S. but in other parts of the world, regardless of how strongly we feel obviously of our plans, we have very strong brands. We have great innovation. We'll have to see what kind of impact that has obviously on consumer confidence. Are we worried that, that happens? Let's see. It's really hard to predict. We will do our best to be prepared for that, but it's really, really hard to give you a really strong prognosis of what's going to happen in the future.

[Vincent Warnery, executive]

And Guillaume, if you allow me to add something to what Astrid said. We don't have a plan B. We have a plan N. When you have a brand like NIVEA which is obviously the biggest part of your business and which has this value-for-money positioning where you can find the best skin care product at EUR 2 but also at EUR 20; when the biggest category is selling deodorants at [ EUR 2, EUR 20 ]; when you have the NIVEA soap that we just relaunched with UV protection which is around EUR 3, EUR 4, this is also the best way also to -- I mean, in fact, to compensate any consumption decline or any issue with prices. And this is why also we are -- we have been able to overperform the market with this brand over the last 3 years despite the strength and the weight of this brand on the market.

[Astrid Hermann, executive]

On Eastern Europe and Lat Am. We have had in the first quarter a very, very challenging comparison to strong, strong growth in the prior year's, so that is the bulk of what we're seeing here. That said, in Eastern Europe, we have had also some challenges with one or the other customer. These challenges now -- these are pricing negotiations primarily. These challenges are behind us, so we're looking into a brighter future.

[Christopher Sheldon, executive]

And then we have Tom Sykes from Deutsche Bank, the next one in line.

[Tom Sykes, analyst]

Just, firstly, on FX, could you outline [ at spot ] the translation impact, the transaction impact? And how much of your product do you export from euro-denominated [ costs ] to non-euro-denominated countries, please? And then just on China and again this H2 improvement: You said, I think, China is sort of a 200 basis points drag on Consumer growth in Q1. Do you or are you modeling in the 4% to 6% that China is a drag for the full year? Because you were obviously going to -- or it sounds like you're going to be restocking and stocking in more than just Thiamidol but a lot of other products as well. So built into the 4% to 6%, are you neutral, growing or declining in China? Obviously ex La Prairie in that comment, please.

[Astrid Hermann, executive]

So I will take your first question, related to the transaction impact. Look. We have over the last 5 years or so really expanded our manufacturing footprint to create a much more global approach than we've had in the past, so certainly our transaction impact has reduced over time. It is in -- it is still the fact, though, that we are obviously having some very big production sites Europe that are delivering [ to ] many parts of the world, for example, Africa, Middle East and so on. So that is still an impact there in the short term. And we will need to obviously deal with that, but it is much lower than it used to be in the past.

[Vincent Warnery, executive]

On your question, Tom, on China, 3 different situations. We are expecting the extremely good year on Eucerin because we have done, in fact, the house cleaning of Eucerin last year already. So from the second quarter of '25, we are expecting big growth on Eucerin. And Eucerin will be the first brand also launched on domestic e-commerce with Thiamidol. We are expecting in total a flat year on NIVEA. I understand that the Q3, Q4 will compensate the Q1, Q2 perhaps better, but this is what we have. La Prairie, it's more question. We have a -- obviously a negative first quarter. Let's see the way the market evolved. We are clean in terms of stocks. We will clearly benefit also from any kind of recovery, so let's see what happen. And last but not least, Chantecaille, extremely successful. We did a plus 60% in the first quarter. We are clearly leading a very strong growth in China. We are opening new stores today, in fact, in Shanghai. We are online, so that will be also a very good addition to our business. So all in all, I would expect a slightly decline in China, Greater China, taking all the plus and minuses that I just described.

[Christopher Sheldon, executive]

Then we have Paolo Laudani from Reuters, the next one in line.

[Paolo Laudani]

I had a couple. First one was regarding moving production to the States. I was wondering if you are planning to open more factories there. I understand that the situation is changing day by day, but that was my first question. And staying in the States: Correct me if I'm wrong, but in February, you said that you would not change your DEI targets in the country, but now we're seeing that the administration is pressing U.S. -- sorry, foreign companies to do more on that side. And I wonder if you could share something on your targets there.

And my last question is on China. And I wanted to ask if you're seeing any movement in customer sentiment in the country.

[Astrid Hermann, executive]

Thank you, Paolo. I'll take your first question, related to production in the U.S. So we have about 1/3 of our U.S. sales also produced in the U.S., so that is good. Now it's really hard to make decisions around production and so on in this uncertain environment. We will take our time to do that. We will obviously always review to see where does it most make sense to produce, ship to and so on, but in the very short term, to make changes there, I don't think, makes sense. We will watch that space and continue to think about the future.

[Vincent Warnery, executive]

On your second question, DE&I. We are clearly convinced that the inclusion of the diverse perspective backgrounds is absolutely crucial for the growth and the competitiveness of the company. We want to look like our consumers. We are not talking about quotas. We are not talking about positive discrimination. We are just saying that we believe that diversity is a driving force for Beiersdorf. You might remember that one of the first diversity we developed was a female diversity. We have today a 50-50 female-male leadership not only in the Board but in every part of the company, including in the U.S. We believe also that we need to make also the -- Beiersdorf more open to a lot of communities. And we have a fantastic program called [ African talent ]. So that's what we are doing, nothing more, nothing less. And we will continue to do that.

China, honestly, no big evolution of the consumer feeling, which mean that it's not better, but it's not worse. What we've seen for our brands is that, when you come with a new proposal like Chantecaille, you can seduce Chinese consumers. I said I was really impressed, I was there 2 weeks ago, to see the people queuing to try this brand and the story that support the brand. We have seen also some good -- the very strong figures in e-commerce. We -- as I said, we are growing in -- strong double digit in e-commerce since last year, not only benefiting from Tmall, JD, but also TikTok, but I will not talk about the change in the consumer feeling in China. Too early to say.

[Christopher Sheldon, executive]

Okay, thank you. Then the next one in line is Ulrike Dauer from Dow Jones.

[Ulrike Dauer]

Amid all uncertainty, I'd ask you a question about the full year margin target. You said that you expect the margin to be slightly above the year-earlier figure of 13.9%. Are you able to quantify [ the slice ] in terms of percentage? You say that you expect a range. Maybe 14% to 14.3% or even higher would be a realistic target range. And also another one on tariffs: Can you give a little bit more flavor and quantify to what you said about U.S. tariffs at the start of the call? Why do you think you're in a good situation on U.S. tariffs, with the 1/3 sold in the U.S. is produced in the U.S.? The rest 1/3 is imported. [ How will this stand ] margins this year?

And the final question has already been asked of do you plan to shift more production to the U.S. I think my colleague already asked and answered that.

[Astrid Hermann, executive]

Ulrike, I will take your 2 questions. So related to the full year margin target, as we mentioned, in the Consumer business, we commit to the 50 basis points increase. On tesa, given also the volatility we see there in the business, we are committing to be at around 16%. Given that, we can also not give you at the group level an exact number, but you can do some math and probably go a few basis points up and down on tesa, either way, to get a bit of a range.

In terms of the U.S., yes, as just mentioned also by me, about 1/3 of the production is in the U.S. and therefore obviously not impacted by tariffs. The other good news, at least at any point in time because it's obviously quite volatile, is that our production in Mexico, which produces a very large part of our in -- products sold in the U.S., is not impacted; is covered by the current agreement, USMCA. So that's fantastic news at least in the short term. Hopefully, that doesn't change. And then a much, much smaller portion of our U.S.-sold products are produced in Europe. Yes, they would be, at the moment, impacted by some tariffs, 10%. Obviously it's been going anywhere from 20% to 10% and so on. Let's see where it ends up. It is not a substantial impact, though, on our profitability. And we think we can manage also through what we've done to date, which is to, in the end, build a bit of inventory both on our, let's say, mass business, Derma, but also on the luxury business.

[Ulrike Dauer]

Okay, can I ask a follow-up [ to it ]?

[Astrid Hermann, executive]

Sure. Go ahead.

[Ulrike Dauer]

The margin question, say, to the group level. Are you able to give anything more than a slight increase? Or at this time, you prefer not to.

[Astrid Hermann, executive]

We prefer not to. As mentioned, we're quite clear on the Consumer guidance. On the tesa guidance, we give essentially a range which is around 16%. You can go up and down a bit from there. And that in the end adds to a number at group level that is slightly [ below ]. We have a definition for that, that we are slightly [ below ] prior year, but we don't give an exact figure.

[Christopher Sheldon, executive]

And then the next one in line is Fon Udomsilpa from RBC.

[Wassachon Fon Udomsilpa, analyst]

Regarding your strategic repositioning in China. You have already provided a lot of colors, but if you have, could you share with us if there's any plan to adopt the same strategy in other regions as well, please?

[Vincent Warnery, executive]

No, we don't need to do that. In fact, China is a bit special. We tried a lot of things in the past since we sold our first blue tin in the beginning of the 20th century, but we have a business which is [ made with ] bits and pieces of personal care, [ cheap ], offline. So the only big, big success story we had was Luminous in cross-border e-commerce. And the good news is that we can extend it to the rest of the world. If you look at the story of Beiersdorf in big countries like the U.S., like India, we have done the right things at the right time, i.e., starting always with skin care then enlarging the product to body, to sun, to deodorants, to face care. So we just continue the journey with a strong ambition on face care which is driven by Thiamidol today and by Epicelline tomorrow, so no need to reposition anybody else. Just China was the headache, but now we see the light at the end of the tunnel.

[Astrid Hermann, executive]

I would like to correct a statement I made. I just misspoke. I meant slightly above prior year, not slightly below prior year. My apologies.

[Christopher Sheldon, executive]

Thank you, Astrid. And then the next one and also the last one in line is Karel Zoete from Kepler.

[Karel Zoete, analyst]

I have 2 questions. One is on NIVEA and some of the core innovations you were launching in European, yes, core ranges. Have those innovations hit the market, or is that more something for the second quarter? And the other question is coming back to La Prairie. If you zoom out, the brand has been flat or down for 2.5 years, very much based by the impact, yes, of China. And we still have destocking, so my question is the following. If you take these products out of the Chinese markets, are your -- able to sell them in other regions? And what's the potential to broaden the shoulders of the brand, so to speak, outside China?

[Vincent Warnery, executive]

Good question, Karel. On the first one: Most of the launches of NIVEA are coming more in the second semester. We are -- in the first semester, we are leveraging the launches we did at the end of the year. This is why all the big things I'm talking about like the launch of Epicelline, the relaunch of Black & White, the launch of Derma control deodorants -- this is coming from Q3, which is also why we are pretty optimistic about the second semester.

Your second question is very good, on La Prairie. We used, like everybody, to be very dependent on China, not only the China market but also travel retail. Today, it has been reduced. Today, China represents less than 40% of La Prairie. And we have been able to develop the business not only in U.S., not only in Europe, but also we are just launching this month La Prairie in India. We have a good expectation from India. We are also developing travel retail in some countries where we do not have the presence of the brand.

So we will always be betting on China. And as I said, there are a few good signals, one of them being e-commerce, the other one being also the success of our 30 ml liquid lift at EUR 500, but clearly we want to be more diverse. And I could also mention Japan. We had the best performance last year. We're starting also very, very strongly. So China, always, but other countries are also places where we want to invest and we want to grow our brand.

[Christopher Sheldon, executive]

And we just had one additional question coming in, from Misha Omanadze from BNP.

[Mikheil Omanadze, analyst]

I have just one. If I look at consensus expectation for Consumer organic growth this year, it is around plus 5.5%, 5.6% at the moment. Now I understand it's very difficult to be -- to comment on outlook right now, but given what was delivered in Q1 and your expectation for the lower end of guidance range in Q2, how likely do you think this upper end of the range expectation is for the full year?

[Vincent Warnery, executive]

What I can tell you is, over the last 4 years, we have always delivered our guidance. We hope to be at the upper end. We can be at the lower end. I mean a lot of question marks are still happening. We mentioned China. We have also La Prairie turnaround. We have the U.S. market, so allow us to keep our guidance as it is today. We will deliver net sales between 4% and 6% and we will deliver an EBIT growth of 50 basis points. This is what we want to do and this is what we will deliver.

[Christopher Sheldon, executive]

Thank you for all your questions. This concludes our First Quarter Conference Call. Beiersdorf's next investor relations event will be the release of our half year results on August 6, 2025.

We appreciate your interest in Beiersdorf. Thank you very much and goodbye.

[Operator]

Ladies and gentlemen, the conference is now over. Thank you for choosing Chorus Call and thank you for participating in the conference. You may now disconnect your lines. Goodbye.