(Bloomberg) --
Nivea hand-cream maker Beiersdorf AG said its sales growth slowed as a comparative lack of sunshine restricted the German company's sales of sunscreen in Europe.
Beiersdorf said organic sales growth slipped to 4.8% for the six months through June 30th, down from the 6% rate recorded in the first three months of the year. The company stuck to its 2019 guidance despite saying that its profit margin narrowed, weighed down by a multi-million euro investment plan.
“Our entire business model needs timely adaptation due to new market realities and fast-changing technology developments,” said Chief Executive Officer Stefan De Loecker.
The German consumer-goods firm, which also makes Labello and La Prairie products, is increasing spending on marketing and technology as it strives to catch up with more profitable rivals like L'Oreal SA.
Brexit Jitters
While Europe has seen two record-breaking heatwaves in recent months, summer 2019 has been less sunny than the previous year, restricting sunscreen and after-sun sales. Uncertainty over Brexit and a weakening pound have also pushed U.K. consumers to spurn foreign holidays, airlines and travel companies have said, likely further curbing demand for sun-care products. The U.K. was a weak spot, Beiersdorf said.
The company's profitability has trailed that of rivals such as L'Oreal, Unilever and Procter & Gamble Co., and analysts have criticized the company for hoarding cash rather than making acquisitions to add strength in areas where it lacks scale.
To contact the reporter on this story: William Wilkes in Frankfurt at wwilkes1@bloomberg.net
To contact the editors responsible for this story: Eric Pfanner at epfanner1@bloomberg.net, Iain Rogers, Andrew Blackman
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