Beiersdorf AG
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Beiersdorf AG
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Ladies and gentlemen, thank you for standing by. My name is Emma, your Chorus Call operator. Welcome, and thanks for joining Beiersdorf Conference Call Half Year Report 2019. [Operator Instructions] And I would now like to turn the conference over to Mr. Jens Geißler, Head of Investor Relations of Beiersdorf. Please go ahead, sir.
Thank you. Good morning, everyone, and welcome to our quarterly statements conference call. This is Jens Geißler. Joining me this morning and here with me in our Hamburg offices is Beiersdorf CEO, Stefan De Loecker; and our CFO, Dessi Temperley. We would like to share with you Beiersdorf's business results for the first 9 months of 2019. As usual, we will first present our numbers and the business review. And afterwards, we'll have a Q&A with you. [Operator Instructions]And with that, I will now hand over to Stefan De Loecker.
Thank you, Jens, and good morning, ladies and gentlemen. Also, we'd like to welcome you to today's conference call on the third quarter results. I appreciate your interest in our company's performance. Dessi Temperley and I will give you an overview of Beiersdorf's performance during the first 9 months of 2019. We will also provide you with guidance for the coming months and answer your questions afterwards. Ladies and gentlemen, in February, we presented you our C.A.R.E.+ strategy, and we are making significant progress with its implementation. We have achieved good results in the first 9 months of 2019 in an economic and political environment marked by frequent disruptions and increasing uncertainty. The events in Hong Kong, the slowdown of the automotive industry, the looming Brexit and multiple trade disputes are just a few examples. The Consumer Business Segment has performed positively across all regions with organic sales growth of 5.1% until the end of September. This strong performance was driven by successful innovations like Thiamidol by Eucerin. We have further strengthened our skin care portfolio with various measures and tapped to new growth markets and business areas. With the acquisition of the iconic American brand, Coppertone, we have entered a major white spot for us and further expanded our position as a world-leading sun protection expert. Since September 1, Coppertone has officially been part of the Beiersdorf family and the integration is in full swing. We have formally welcomed our around 450 new colleagues at a number of events. As you're all aware, Beiersdorf has so far 2 different realities in China. While La Prairie and tesa have been successful there for years, the wider NIVEA consumer business and SLEK have not fulfilled our expectations. That is why we had to take decisive action. Following an in-depth strategic review, we decided in August to divest the Chinese hair care business, SLEK. We are pleased to have found the right partner in the main Mengxing Zhiyuan Group. Its successful sales channel strategy and extensive expertise in the Chinese personal care market will open up new growth opportunities for SLEK, benefiting SLEK customers and consumers alike. The divestment allows us to focus on our core expertise in skin care and in securing the long-term profitability of our Chinese business. In addition, as already announced in February, we'll also invest in a new innovation hub for skin care in Shanghai. It will become the headquarters of research and development for Eastern and Northeastern Asia and enable us to also develop locally relevant innovations for China. As I'm sure you all have seen, we established OSCAR&PAUL in early July. The new business initiative consolidates various approaches for innovation within the Beiersdorf world, focusing on specific skin care brands. The first big step was the introduction in September of Beiersdorf's new Skin Stories brand. Skin Stories unlocks a new mass market skin care category, caring for tattooed skin. More on this later. Furthermore, I'm pleased to present you another step of our C.A.R.E.+ strategy, our entry into natural cosmetics. We will be offering a range of certified natural cosmetic products under the name Florena Fermented Skincare, which allows us to tap into a promising business area. In addition, we are introducing a natural cosmetics range under the brand NIVEA based on 99 natural ingredients to our consumers, NIVEA NATURALLY GOOD. Considering the difficult market conditions, tesa achieved solid sales growth of 1.2% versus a strong prior year period. It recorded sales growth in both the direct industry segment, which handles the business directly with industrial customers; and the trade market segment, which includes the retail consumer business. However, in the automotive segment, which was impacted by economic uncertainty, sales were weaker than in the previous year. Our tesa business is built on solid fundamentals, though, supporting a strategy of sustainable growth. Hence, we are confident that we will continue to outperform the market overall. Ladies and gentlemen, 8 months ago, I introduced you to our new strategic program, C.A.R.E.+. Implementing our strategic priorities has been a clear focus of our work in recent months, and the first measures to be implemented in our strategy are already bearing fruit. With our strategy, we will achieve over -- above-average growth in skin care and outperform the market, create added value for our consumers with strong brands and products and continuous innovation and at the same time ensure our sustainable profitability. I'm pleased that the whole company is following through on implementing the strategic priorities, and the first results demonstrate that the needle is moving in the right direction. To win with skin care is our central commitment, and our Eucerin anti-pigment range is a great example how we are succeeding. As I described in the last conference call, our new Eucerin anti-pigment range is based on Thiamidol, the revolutionary active ingredient against hyperpigmentation that we have developed and patented [ with ] years of pioneering work. We can already say now that Eucerin anti-pigment is the most successful product launch in Eucerin's history. In just a few months, this product range has made the global #1 in the Even Skin category. Based on these efforts, we have succeeded with Eucerin in gaining important market share. We have taken pole position in the Derma cosmetic sector in many countries including Thailand, Germany and Mexico. In Brazil, too, the largest and most competitive market for Derma cosmetics, Eucerin anti-pigment has allowed us to position ourselves as an innovation driver. The initial repurchase rates reflect a high level of acceptance by our consumers. The interest in Thiamidol shown by internationally renowned dermatologists and scientists at symposiums and conferences has also far exceeded our expectations. In addition to the success we've had with Eucerin anti-pigment range, we've been able to strengthen the market share of NIVEA Face Care. A convincing innovation that has seen high consumer acceptance is our NIVEA Hyaluron Cellular Elasticity Filler, which I introduced to you in more detail at the beginning of the year. Its formula consists of a skin-compatible combination of hyaluronic acid, collagen booster and elastin booster, which helps reduce wrinkles and improve elasticity, especially in mature skin. The product range has developed successfully in recent months, especially in Germany, France and Italy, and has made a major contribution to our success in the Face Care segment. Ladies and gentlemen, as I already indicated, our C.A.R.E.+ strategy sets out to identify and explore new growth markets and business areas, which we call white spots. We have put special emphasis on this in recent months and have begun to make progress. By launching OSCAR&PAUL, we consolidated an additional innovation approach within the company. Driven by a start-up mentality, OSCAR&PAUL tests, analyzes and rates innovative brand profiles, marketing approaches and business models, tailoring them to the fast-changing demands of today's consumer. The founding fathers of Beiersdorf, Oscar Troplowitz and Paul Beiersdorf, have lent their names to the new business unit. With this name change, we are reflecting on our roots and placing their core strength at the heart of our activities: being consumer-centric, developing innovations with added value for our consumers and creating new brands that are broad and widely accessible on a global scale. Under the umbrella of OSCAR&PAUL, we're also putting a clear focus on new approaches to product development and digitalization for our traditional brands, HIDROFUGAL, 8x4 and Labello. HIDROFUGAL in particular has developed very successfully over the last 4 years, and it's now the fastest-growing brand in the antiperspirant deodorant segment in Germany. As I mentioned at the beginning, we have proven over the past 3 months that OSCAR&PAUL's goals and ambitions are not just visions for the future. Skin Stories is the first new Beiersdorf brand in over 30 years. Launched in September, the new skin care brand for tattooed skin has allowed us to enter a completely new business area. We researched intensely for almost 2 years, created an expert cycle -- circle and worked closely with external partners. The result is a completely new product range for a growing market with big potential. The special combination of active ingredients in the Skin Stories range helps to optimally care for tattoos. I'm pleased now to present to you another step in C.A.R.E.+, our market entry into natural cosmetics. For the first time, we will be offering a range of certified natural cosmetics products. The range is called Florena Fermented Skincare. This is a further investment in skin care in line with our C.A.R.E.+ strategy and will ensure competitive sustainable growth in an important market segment. Florena Fermented Skincare is based on an innovative concept and is the first brand to bring fermentation to the European mass market for cosmetics. Fermentation, the underlying mechanism, is a unique, natural transformation process that enhances the properties of the ingredients, concentrating them in a way that naturally nourishes the skin to maximum effect. Florena Fermented Skincare responds to consumers' desire for certified natural cosmetic products. We're launching this innovative product portfolio first in the test markets of Italy and France. At the same time, we are considering introducing it in other markets. Skin care products with natural ingredients enjoy high consumer acceptance. Expectations for the cosmetics industry in line with this trend have increased also in the mass market business. In response to consumer expectations, we're introducing a new NIVEA product range based on 99% natural ingredients with 1% of added ingredients designed to ensure the stability and safety of the products. NIVEA NATURALLY GOOD cares for the skin gently and regenerates it with natural ingredients like organic aloe vera, chamomile and argan oil. NIVEA NATURALLY GOOD is based on more than 100 years of expertise and trust and simple precise formulations that regenerate and nourish our skin naturally. The product range will initially be launched with 5 products in France in November. We're likewise considering introducing it in other markets, and we'll keep you posted accordingly. Ladies and gentlemen, consumer centricity is a key factor for us to ensure long-term competitive sustainable growth. Rapidly increasing digitalization across all business segments is a major contributor to this. It is essential to the success of our company. We're therefore investing systematically in our digital capabilities. We want to accompany consumers as closely as possible on their consumer journey. This is a central element of our digital strategy. We have therefore significantly increased our digital marketing budget so as to boost the visibility of our brands, products and services across all relevant channels. Our consumers should be able to purchase our products at any time and on all relevant platforms, not just in conventional online shops but also on social media platforms. Strong e-commerce sales show that we are on the right path here. We want to be our consumers' favorite brand. Direct interaction with our consumers, termed the engagement rate, is the main KPI that helps us to assess that, and you can see that we've made considerable progress. Ladies and gentlemen, we are satisfied with the results we can present to you after 8 months of C.A.R.E.+. We are growing, and the quality of our sales has improved. As you can see, we've made significant progress with the realignment of our business strategy and have consistently driven forward our strategic priorities. The measures we have taken are having an impact and finding a high degree of acceptance among consumers. However, we also know that there is still a lot to do. This also applies to our Chinese business. China has still enormous potential, particularly for brands like NIVEA and Eucerin. In saying that, there are no quick solutions. It will take patience, expertise, a clear focus and great resources. I'd now like to hand over to Dessi Temperley, who will present the financial results. Thank you very much for your attention.
Thank you, Stefan, and good morning from my side as well. In the first 9 months of the year, we delivered good growth results despite the challenging market environment, which Stefan just talked about. Group sales increased organically by 4.3%. Nominal growth was 6%, with foreign exchange movements contributing positive 1.6% and structural effects such as acquisitions and divestments with a net positive impact of 0.1%. [indiscernible] basis, consumer sales increased organically by 5.1% with a nominal growth rate of 6.6% due to positive foreign exchange movement of 1.7% and a negative impact of divestments of 0.2%. tesa sales in a difficult market increased organically by 1.2%. Both the acquisitions in 2018 and the positive foreign exchange impact led to a nominal growth rate of 3.4%. Moving now to our Consumer Business and its growth components. Consumer growth of 5.1% remains strong with positive contribution from all business units. As a reminder, the sales growth of Argentina is calculated based on current year's average exchange rates, and therefore reported organic growth is impacted negatively by the continued material devaluation of the Argentine peso. Had the sales growth of Argentina been reported as constant currency rates like the rest of the countries' growth in our portfolio, consumer organic sales growth would have been at 4.9% for the third quarter and 5.5% for the 9 months. Moreover, we are pleased with our balanced growth, having managed to deliver both positive pricing and good volume mix growth. This is despite the subdued pricing environment for the mass market brands, especially in Europe. Before going to the regional sales performance, some highlights on the growth performance of our brands. Our core brand, NIVEA, grew at 3% in the 9 months. The growth rate in the third quarter was 2.7%. We consider this a solid performance given that our respective skin and personal care markets in which we are active have slowed down to around 2% growth in recent months. With continued excellent performance in our key Derma markets such as Thailand, Germany and the U.S., our Derma business accelerated sequentially to 10.7% in the third quarter, bringing the growth rate to 7.5% for the 9 months. As Stefan already mentioned, our very successful anti-pigment innovation, Thiamidol, made a meaningful contribution to the Derma growth rates. In addition, our Aquaphor brand continues to record double-digit growth. In the health care business, we improved our performance on the first half with growth of 5.2% in the third quarter and 4.2% in the 9 months. We recorded a strong performance in the wound care and pain categories. Notwithstanding the adverse market conditions in Hong Kong and a weak regional landscape in the U.S., La Prairie again grew double digits with a growth rate of 14% in the third quarter, resulting in 22.7% for the 9 months, well above the underlying selective skin care market. Travel retail in Asia remained the main drivers of growth, underpinned by a strong core assortment as well as [ decent ] previous years of successful innovations. Our La Prairie business continues to execute its strategy of exclusivity and high-end luxury. We grow strong double-digit numbers despite our very selective distribution approach. We're exiting the less exclusive points of sale while investing in improving the customer experience in all other outlets. Now I would like to give you more color on our performance by region, starting with Europe where we increased sales by 2.7%. Western Europe grew also by 2.7% in the 9 months. Germany and Austria reported very good growth, while France and the U.K. remained challenging markets for us. La Prairie's travel retail business continued to be a meaningful growth contributor in this region. Eastern Europe improved significantly on the first half and was up by 2.6% in the 9 months with a high single-digit growth rate in the quarter driven by a much better performance in Poland against the challenging retail environment there. Next is the Americas region with 5.3% organic sales growth. Adjusted for Argentina at constant foreign exchange rate, the growth rate is 8.1%. Our business in North America reported 2.1% organic growth with mid-single-digit rate in the first quarter and with the strong performance of Aquaphor. Latin America reached organic growth of 7.6% for the 9 months. Adjusted for Argentina at constant currency rate, the growth would have been at 12.4%. Within Latin America, we are particularly pleased with the performance of our business in Brazil, where we continued to record strong growth driven by excellent share gains in a market which is also back to growth. Our performance in Mexico in the second -- is the second pillar for the strong growth in this region in the first 9 months of the year. Finally, in the Africa, Asia and Australia region, we report organic sales growth of 8.8% with growth from almost all markets. La Prairie again delivered a strong performance in Asia despite the disruptions in Hong Kong. We also reported a very good performance in a number of markets such as India, Japan, Thailand, Malaysia, Turkey and South Africa. In China, as Stefan already mentioned, we divested the SLEK hair care business, which is another step in the implementation of our C.A.R.E.+ strategy. Our NIVEA portfolio in China continues to underperform the market, and we see the turnaround of this brand as a key priority for us going forward. Finally, I would like to give you some more details on tesa's sales performance. In the 9 months of the year, tesa achieved sales growth of 1.2% with a deceleration in the third quarter. In light of the overall softer macroeconomic conditions and a weak end-market demand, our Direct Industries segment recorded slight growth at the rate of 0.4% for the 9 months of the year. With regards to the electronics business, while we achieved double-digit growth in the first half, we saw a slowdown in the third quarter as the new season for electronic devices got off to a softer start compared to last year. At the regional level, the weakened demand in automotive impacted all regions, but particularly our performance in North America. On a positive note, we saw an improvement [ in growing rate ] scale in the third quarter. We also see more resilient growth in the trade market segment with 2.8% organic growth in the 9 months with good competitive performance and also slightly accelerating in the third quarter. To conclude, we confirm guidance for 2019 at group level, with changes for both consumer and tesa sales. The Consumer Business Segment is now expected to achieve organic growth of 4% to 5%. The EBIT margin is still expected to be between 14% and 14.5% from ongoing operations. Given the headwinds in the sector, the tesa business segment is now expected to grow organically between 1% and 2%. tesa's EBIT margin for full year 2019 is expected to be slightly below previous year from ongoing operations. At group level, organic sales growth forecast is still 3% to 5%, and the EBIT margin on ongoing corporations is [ still ] at around 14.5%. The profit after-tax margin will be slightly below previous year. Thank you. And now back over to Jens for your questions.
Thank you. We will now start the Q&A session, and we are happy to take your questions. [Operator Instructions]
[Operator Instructions] First question comes from the line of Guillaume Delmas with Bank of America.
A couple of questions from me. The first one is on tesa. You've revised down your FY '19 organic sales growth outlook to 1% to 2%. Now given that you've achieved 1.2% in the first 9 months of the year, it seems your guidance implies a return to a slight positive organic sales growth in Q4. So just wondering what underpins your confidence in tesa's ability to return to positive growth. Is it down to a pickup in market growth? Or do you expect some share gains in the fourth quarter? And then my second question is on NIVEA. You're now 9 months into your new strategy of emphasizing white space development, reaccelerating in skin so it can grow as fast or even faster. Then personal care is also about improving price mix. The brand achieved 3% organic sales in the first 9 months against a challenging backdrop. I think you mentioned a slowdown in recent months. So my question here is what do you think -- or where do you think you're ahead of plan relative to your strategy you laid out in early March? And what are the areas where you feel you're slightly behind and you're finding may be more challenging than initially anticipated?
Thank you for the questions. I will take the tesa one. Yes, indeed, we are guiding for a positive -- slightly positive growth in the last quarter of the year and specifically due to the fact that, first, we have a good competitive performance in the market indeed. Second, our fourth quarter of last year has a fairly, I would say, easy comp. And thirdly, already what we're seeing so far in the fourth quarter is that we have a good order pipeline from the Direct Industries. So we're still fairly confident on the fact that we will have a positive growth. On top of that, we are seeing the second segment, which is the trade market, which is also a large segment within tesa, [ to date ] we have had a rather good growth, resilient growth and performing better than market. So that is what is underpinning our confidence in a positive fourth quarter.
Thank you, Dessi. Regarding the strategy and the traction we get, I think the 3 things that we're doing well, first one is the refocus and the consequence of investment shows that we are gaining share in the face care market and in the skin care market in total, notwithstanding a weak sell season as such in Europe. I think that just shows that with the focus and the investment, we are able to attract more consumers. And that's not only for NIVEA, but, as we said, also for Eucerin has shown the same result. Secondly is the quality of the mix and the quality of the growth. We see a good focus in balancing out, keeping the growth momentum, but increasing the quality of the portfolio there as such. And the third one, I think we made considerable progress on the management of the portfolio in the consequence. The acquisition of entry in the U.S. is obviously the opportunity that we've grabbed in order to get into major white space for us, but also the consequence of taking the decisions and solutions in China on our ailing hair care business with SLEK and to find a solution there in order to make progress and invest further. If we need -- that are areas we need further acceleration, and we're focusing on is clear. I think that we've seen stepping up in digitalization but certainly the digital connections and further digitalization will be an ongoing focus point. The same is the development of how to [ tackle ] and how we can deliver more on the sustainability part and the sustainability axis. We've done a lot over the last couple of years, and we are in the development, the last phases of stepping that strategy up.
The next question comes from the line of Celine Pannuti with JPMorgan.
My first question is on La Prairie. So we saw a slowdown, you mentioned Hong Kong and the U.S. Would it be possible to tell us how big these markets represent for La Prairie and what has been the performance? And what should we expect as we look into the fourth quarter? Likewise, is Japan important for La Prairie? And did you see a benefit from the change in the tax that is going to happen in Japan? My second question is on the growth rates. You said that you saw a deceleration in the last month. Could you tell us where exactly you saw a deceleration? And I was a bit surprised that given all the positive innovation that you are showing that we didn't see a bit more of a life in NIVEA growth rate. So is there any phasing of innovation that we should be aware of in the quarters to come?
Thank you for the questions. I will take the first one and then Stefan will take the second one. On La Prairie, we do not disclose our sales allocation by country. However, what we can say that all of these 3 markets clearly have [ their own ] portfolio. Specifically, country by country, the growth in the U.S. is still positive, but it's certainly not at the level where it used to be in the past, specifically the growth in department stores. In Hong Kong, we have seen a negative growth in the last quarter, and this is clearly driven by the significantly reduced number of tourists coming through Hong Kong. Japan for us had a solid performance. It is a market where we also focus on. Given that the La Prairie brand is not that price-sensitive, we do not see a significant impact from the tax changes in Japan.
Okay. And just to follow up on this. Did you see any buy-in on La Prairie? Do you think there's been a bit of a positive benefit? And the second point, La Prairie continued to be good and you -- 15% despite what you mentioned on Hong Kong and the U.S. What has been the growth momentum in China, please?
On Japan, no, there's no significant impact for La Prairie in Japan due to the VAT situation. So we do not expect that there will be a phasing effect in the quarter. On China, the same thing this year or is that we do not disclose as such, the allocation. But we see in the inland, Mainland China, demand is minimum at the same level, if not further increasing.
With innovations in NIVEA?
Yes. On the NIVEA question, I didn't -- there was a small interruption in the beginning. So the first question, I didn't really get. But I think on the wide -- on the impact on the innovations, you see the innovation is impacting very positively. But also in the mix as you already mentioned, obviously, there's a partly offset of this in what's happening in China for us. That's one of the challenges we continuously have. Going forward, Q4 sees a good pipeline coming up further, specifically in skin care, and also new initiative in the U.S. is coming. So I think the innovation pipeline we expect to contribute and continue to contribute positively. We have the launch of NATURALLY GOOD as announced as well. So I think that is looking good as such to underpin the growth rate going forward.
Okay. Just to follow up on La Prairie. So is a mid-teens growth rate you think sustainable as we look into the fourth quarter?
I think a single quarter guidance is very difficult.
Yes, that's extremely difficult. And also, obviously, as said, the number of the disruptions is very hard to predict on what's going to go forward. So I think it's very hard to predict now where it's exactly by quarter is going to be.
The next question comes from the line of Iain Simpson with Barclays.
A couple of questions from me, if I may. If I heard you correctly, you talked about the personal care market having slowed to 2%. Were there any sort of particular countries you'd call out as having slowed in the third quarter? Secondly, can we talk about what's driven the acceleration in Eastern Europe in the Q3? You flagged Kazakhstan and Ukraine. But is there any -- what in particular in those countries has really caused them to pick up? And then just finally, your innovation range this quarter seems more impressive than anything we've seen for a while. Have you made a conscious decision to step up R&D? Or is it just coincidence that we've get a number of launches aligning at the moment?
On the personal care market development. The -- in total, the European market remains softer in terms of growth. We see some developments also partly facing Japan, that was already mentioned, due to the VAT situation. Also, Russia is relatively weak as such. And this is obviously the markets in which we operate that one. On Eastern Europe, Dessi?
Yes. On Eastern Europe, indeed, we had a very solid strong single-digit performance in the quarter in Eastern Europe, and this is driven by very good growth in Poland despite the tough market conditions, which I mentioned. We are gaining shares there as well as Russia was particularly good as well as Ukraine. Very strong growth in Ukraine, in Russia, in Kazakhstan and generally also within the other Central European markets. So we are very pleased with the performance in Eastern Europe in this quarter. It is accelerating there.
As far as the pipeline coming to the market, it lines up. I would say not that particularly different from the previous years because at the end of -- there was a lot of seasonality and seasonal impact there. But what is definitely coming together is that there is more focus and alignment on supporting the big initiatives in order to drive them to success. This is what we've seen with the support behind the initiatives that we have, and the alignment on the quality of the execution has brought the -- the impact has increased over the -- this year.
The next question comes from the line of Karel Zoete with Kepler Cheuvreux.
Two questions, please, on -- first one is on China. You mentioned a couple of times that NIVEA continues to have a difficult performance here. Can you remind us what's the issue specifically for the NIVEA brand and how you aim to restore growth here? The second one is on the Lat Am performance. Year-to-date, good performance. But in the third quarter, growth in Lat Am seem to have slowed down to around 3.5%. What are you seeing in the market in Latin America more recently?
Coming on China, in simple terms, we have, over the last -- years in fact, with the hair care business which was ailing has obviously had unavoidably an impact on the development of the NIVEA business. And hence, one of the reasons why focus is an important one. Compared to the very positive development we had in a number of other emerging markets, in China, the brand has insufficiently been locally relevant or driven to lower increasing local relevance as such with specific innovations for the Chinese consumer. The success model we've had in countries like India, South Africa, Japan is that we've been extremely well and able to position the brand, supported by local relevant assortment and local relevant communication and driven it to success. And that is -- these elements have not been able or have not been applied to the NIVEA brand in the same rigorous way as we've done in the other markets. So if the question is how to drive to success, is basically with a focus, getting this local relevance and positioning the brand to an added value brand in China.
The question on Lat Am. So when we exclude the Argentinian devaluation impact in the third quarter, Lat Am still performed overall above mid-single-digit growth. We've had a very strong performance in Brazil and Mexico in the first quarter, double-digit growth -- sorry, in the first half of the year, double-digit growth due to a strong launching pipeline. So we've had the pipeline filling as well, which is not the case in the third quarter. However, in those markets, which are the biggest -- our biggest -- 2 biggest markets in Lat Am, we are still outperforming the market growth.
The next question comes from the line of Jeremy Fialko with HSBC.
A couple from me as well. I would say first one is on Coppertone. So now you've got your hands on the brand, and so I wondered whether you could just share any initial impressions of that, the work that you'll need to do to get that brand in better shape and some of the timescales to achieve that? And then second question is just on white space from a geographic standpoint. I remember at the full year results, you talked about some of the new affiliates you've founded, Pakistan, Bangladesh, to name a couple. Just some impressions of those launches, how those are going, any learnings from those.
On the Coppertone brand, as such, first, we are very pleased with the fact that we've taken over the brand and operationally have seamlessly taken over the operations. Obviously, as a sun care brand, and that's jumping over to your last question before answering on what needs to be done, it is also clear that for the 2020 season of the [ depth ] with retailers, the plan has been presented, has been good welcomed, focusing on where the success is and what we've seen for 2020. So timing and how far when we will start seeing the impact of what we're going to do realistically is only going to start in the 2021 season obviously for that point of view. I think what we see is that we see that the innovation pipeline that was presented this year has found quite some success in a number of initiatives and a couple of other ones. The market has been a lot more intense than what was anticipated. So that, certainly for 2020, gives us a number of axes to further development on what has been introduced in 2019, which found success. Still, that is not different from what we said and expected. The brand needs rejuvenation, needs actualization and needs a much stronger relevant innovation pipeline. And that is what we are now working on and focusing on massively in order to bring that and start bringing that to the market in the 2021 season. I think that is, I would say, the top line view of what we've seen and where the challenges is going forward.
On the white spots, speaking on Pakistan and Bangladesh, what I can say is that, first, our performance there is on plan. We clearly track all of our new affiliates, and we follow them very closely and with a very good market share development in both of these markets. And in terms of learning, locally, the NIVEA brand is very relevant and becomes very relevant very quickly. So we continue to believe that addressing this white spot for us is an excellent growth opportunity. And based on that also, this year, just as a reminder, we also opened new affiliates both in Myanmar and Israel, and we will continue with this strategy.
The next question comes from the line of Chris Pitcher with Redburn.
Two questions, please. Firstly on China and NIVEA. You point out the fact that making it locally relevant is an important step in improving performance. If we look at the Indian model, that sort of localization phase seemed to take about 3 years. Do you expect a similar sort of timescale for local innovations to come through and make a difference? Or is your learnings elsewhere meant that that could perhaps be done a bit quicker? And then secondly on La Prairie, you mentioned that you were being selective in your distribution. In the third quarter, can you give us a feel for whether that sort of low-teens, mid-teens growth rate is on an equal distribution basis or whether you have net distribution gains or losses in the period?
Thanks for the question. On China and NIVEA, I think it took, yes, 3 years to really bring it through. I think it's very difficult now to have an estimation on that one. I think the only thing I would say is that doing it faster, I think, is very unlikely. It will take to really understand where to position it and certainly, in a market that's so dynamic and so fast-changing as the Chinese one. So now to [ commit ] is going to -- we will have the same time, almost difficult -- faster I don't see really as realistic.
Chris, thank you for the questions. We, on La Prairie, specifically, we have a net reduction of points of sales. So we have closed more points of sales both in the third quarter and this year than we have opened, and this is aligned with our strategy of exclusivity. However, clearly, with this strong double-digit growth, we continue to increase the revenue per point of sale of the points which we either open, is new ones, and we see those with a significant potential or the existing points.
Are you able to give us a feel for what the net reduction distribution did to revenue to give us an underlying growth rate for La Prairie on a sort of like-for-like basis?
No. We do not disclose this number.
[Operator Instructions] The next question comes from the line of Fulvio Cazzol with Berenberg.
I was wondering, given that you've disclosed that your e-com sales grew 23%, if you could just give us a sense of how big the e-commerce channel is for your business -- for your Consumer Business? And then my second question was on the Consumer Business again, the 4.5% organic growth in Q3. Can you give us your thoughts on what impact the unfavorable weather has had, i.e., if you had the same or similar weather to last year, what do you think growth may have been? I guess I'm just trying to understand, more on a like-for-like, innovations and so forth, how much they would have contributed.
On e-commerce, we specifically do not give a number. However, what we can say that the number this year is higher than the number of last year, the percentage proportion of the sales in e-commerce. Plus, the fact that it is still a single-digit number, but it is a high single-digit number.
Thank you for your question. I think the weather effect as such, it's slightly too early to really be able to see that because we have, as we know, in the sun -- also the returns to take into the consideration. So it's not only a true -- the real throughput, we will only know at the end of the year. So to really give an estimate, it's slightly premature now.
Understood. But as far as you do have internal models tracking things like sunlight hours and all the rest, so there's nothing that you can say in terms of -- based on the weather patterns, how much of an impact that might have had on the summer irrespective of the returns?
It is -- we can speculate, obviously, and my people tell me more or less rough estimates. But I do not really believe these numbers until I've really seen the end of the season.
Next question comes from the line of [ John Marcovero ] with [ Mindfest ].
Just 2 questions also on from my side. For the NIVEA natural line, so please, can you elaborate on your communication strategy to ensure that the consumers will not somehow start questioning the standard NIVEA brand so that there's no conflict between the standard NIVEA to natural line, please? And then the second question, just referring also to an interview of Dessi with the [ Berlin Zeitung ] in June 2019, where she just mentioned that Beiersdorf is looking at further M&A opportunities. So can you give us just also like a probability of an M&A in 2020 also?
Good. On the NIVEA natural line, we see that in the market, people, even on the same brands, different target groups look for different products. While there is obviously an expectation total on sustainable performance of the brand itself, most specific targets are absolutely accepted by different target groups as such. There are people looking for certified and noncertified natural products and that a brand like NIVEA offers that. Obviously, we've tested. This is a nonissue for consumers, both consumers of these lines as consumers of the NIVEA brand as such. In fact, it feels an extremely natural thing to do. The same reaction we have with our customers. So the communication emphasizes specifically of that range to the specific consumers of that range, and is -- we do not expect any confusion there or any questioning on the total position of the NIVEA brand.
I cannot, at the moment, quantify a probability for another sizable acquisition in 2020, and I'm sure that you understand why. However, what I can say is that we do believe in the opportunities in nonorganic growth, just as much now as when we spelled them out in February during the full year results announcement. We are indeed looking at any assets we saw on the market or might come on the market. We will continue, however, to be very selective in terms of the portfolio fit for some of these assets and also very conscious on what we buy and at what price and how we can expect maximum value.
Our question comes from the line of Philipp Frey with Warburg Research.
Well, just 2 questions. Firstly, can you remind us a bit of the financial impact of the SLEK disposal, your purchase price, sales levels and the level of the losses which you had in the last full year? And then secondly, can you elaborate a bit on the differences in approach regarding the natural launch, which you have this time. And I remember some time ago, you had Pure & Natural as your natural brand basically. What's the difference of the launch this time and product positioning and communication? Just what have you basically learned from the past?
Yes. I will take the first question on SLEK. Yes, this was a loss-making business. We do not quantify specifically the losses, but clearly, that's going to have, taking this business out, that will have a positive -- limited positive impact given that we still need to deal obviously with the reduced top line in the overall Chinese business. In terms of the purchase price value, which I guess you mean the sales value of the business?
Exactly, sorry.
Yes. In view of the fact that this was a loss-making business with significant market share losses as well, I would now guide you not to be too optimistic on the purchase -- on the sales price there.
On the natural launch, yes indeed, a couple of years ago with Pure & Natural NIVEA went into the direction, I think, a couple of changes. First, as far as I can comment on that with this, I think 2010 or something. So quite a while ago. Definitely, we see that the market has changed quite radically compared to that moment. That won't -- Pure & Natural was certainly for a mass brand, quite unusual initiative to take. I think now, obviously, it taps into a by far broader market possibility and potential that we had at that moment. That's one. I think you're certainly also looking into the honesty and the clarity of what we offer is concerned is much more precise than what we had at that moment. We are very, very clear, 99% natural and 1% needed in order to assure the quality and the delivery of the product. And this transparency, I would say, and this honesty is something that helps, in my opinion, to satisfy the consumers of the past. And the last one is that obviously also technology has continued to evolve, and therefore I feel that the products are NATURALLY GOOD are, from a quality point of view, superior products to what the market was at that moment.
Are the price points also higher? Or is there any difference?
The price was slightly more premium than the average.
The last caller is from the line of Molly Wylenzek from Jefferies.
I have a question on tesa. It sounded like the big difference in Q3 versus the first half was really the change in electronics and the slower handset season there. Or is there also underlying deterioration in the autos market, Q3 versus the first half?
Yes. I can confirm, indeed, this is the case. The slowdown in the third quarter was primarily driven by the negative growth in the third quarter in the electronics and specifically in Asia. On a more positive note, what we are seeing in the automotive sector while the first half of the year was a single-digit negative, we see -- some positive signs in the third quarter was slightly positive in automotives and specifically in North America. So that is -- and that's why also we believe that we will have some recovery in the fourth quarter.
Okay. I don't see any further callers.
There are no further questions at this time. I hand back to Mr. Jens Geißler for closing comments.
Thank you. Thank you, everyone, for having joined our conference call today, and we appreciate your interest in Beiersdorf. Thank you, and goodbye.
Ladies and gentlemen, the conference is now concluded and you may disconnect your telephone. Thank you for joining, and have a pleasant day. Goodbye.