Core Viewpoint - The international beauty industry, particularly for Beiersdorf, is facing significant challenges including conservative consumer behavior in Europe and the US, intensified competition in China, and fluctuations in high-end skincare demand. The traditional growth model of "big products + global distribution" is becoming ineffective, necessitating a reassessment of brand portfolio quality and growth stability [3]. Group 1: Performance Overview - Beiersdorf's performance trajectory over the past five years can be divided into two phases: from 2021 to 2023, the company achieved rapid growth through strong brands and market expansion, culminating in record performance in 2023. In 2024, despite global skincare market pressures, the company still achieved approximately 6.5% organic growth [4]. - In 2025, the global skincare market growth is expected to slow further to about 1.5% to 2%. However, Beiersdorf's results reflect a repositioning of growth quality rather than merely a decline in growth rate, with a sales figure of €9.9 billion and an organic growth of 2.4% [4][12]. Group 2: Brand Performance - The flagship brand Nivea maintained its scale but experienced a slight growth slowdown, with 2025 sales increasing by 0.9% to €5.5 billion. The CEO expressed higher expectations for Nivea, which is undergoing a critical adjustment phase aimed at balancing innovation and market depth [7][17]. - The Derma segment, driven by brands like Eucerin and Aquaphor, achieved sales of €1.5 billion in 2025, marking an 11.7% growth and demonstrating stable growth over five consecutive years [8]. - The high-end brand La Prairie faced market volatility, with organic sales declining by 4.5% to €478 million. However, there was a marginal improvement in the fourth quarter, indicating potential for long-term value [11]. Group 3: Strategic Adjustments - Beiersdorf's strategy in China for 2025 focuses on "deepening" and "investing," emphasizing localized operations and the introduction of key active ingredients like Thiamidol, which has completed its localization process [14][16]. - Nivea's strategic adjustment in China aims to shift focus from price-sensitive personal care to high-end skincare, utilizing digital channels for accelerated growth. This includes streamlining product offerings and optimizing distribution processes [17][19]. - Eucerin's brand in China also launched successful new products and marketing initiatives, resulting in a 29.35% increase in e-commerce sales in 2025 [21][23]. Group 4: Innovation and Research - Beiersdorf's sustained performance can be attributed to its long-term commitment to foundational scientific research and innovative technologies. The company has focused on three high-value research areas: pigmentation mechanisms, anti-aging solutions, and skin microbiome science [28][29]. - The company has developed a groundbreaking technology utilizing skin-derived probiotics aimed at treating acne-prone skin, with plans to launch a new product line in 2026 [29][30]. Group 5: Future Outlook - Despite a challenging market environment in 2026, Beiersdorf anticipates stable or slightly organic growth in net sales, with a focus on leveraging its strong brand matrix and deep skincare expertise [30].

Summary of Conference Call Records Industry Overview - The high-end beauty market in mainland China is showing signs of recovery, with several foreign beauty brands such as La Perla, L'Oréal, and Estée Lauder reporting performance growth, reversing previous declines. This recovery is primarily driven by high-end consumer demand rather than currency fluctuations [1][2][4]. Key Insights and Arguments - **Market Recovery**: LVMH achieved mid-single-digit growth in mainland China for the first time in the third quarter, exceeding market expectations. La Perla reported double-digit growth, a performance not seen in years [2][3]. - **Long-term Trends**: Despite short-term uncertainties, companies like Shiseido and L'Oréal expect the trend of high-end beauty market recovery to continue. Shiseido has adjusted its business metrics to reflect double-digit growth when combining travel retail and domestic sales [1][4]. - **Consumer Demand**: The demand for beauty and health remains strong, with companies like L'Oréal and Puig seeing significant performance in medical-grade skincare and fragrance categories [1][5][6]. - **E-commerce Growth**: Online channels are crucial for sales growth, with L'Oréal's e-commerce channel in China experiencing double-digit growth. Offline sales in high-end malls are also showing signs of recovery [8]. Additional Important Points - **Promotional Strategies**: During the recent Double Eleven shopping festival, foreign brands like Lancôme and Helena Rubinstein achieved significant online growth, primarily through discount strategies, which impacted profit margins [9]. - **Local Brand Advantage**: Chinese local brands have advantages in supply chain responsiveness and understanding rapidly changing consumer demands. This positions them well for long-term market share growth [13][15]. - **Market Sentiment**: The overall market sentiment in 2024 is low, but the beauty sector shows resilience. Companies like L'Oréal have begun to recover after experiencing negative growth in previous quarters [5][11]. - **Competitive Landscape**: The competition between foreign and local brands is characterized by foreign brands leveraging online discounts while local brands focus on supply chain agility and consumer responsiveness. This dynamic is expected to continue without significantly hindering local brands' growth [15]. Conclusion - The high-end beauty market in China is on a recovery path, driven by strong consumer demand and effective sales strategies across various channels. While the overall market sentiment remains cautious, the resilience of the beauty sector and the competitive advantages of local brands suggest a promising outlook for future growth.

Investment Rating - The report maintains an "Overweight" rating for the consumer discretionary and commercial trade sectors [7]. Core Insights - Several leading overseas beauty and luxury brands are experiencing a recovery in their business in China, with notable growth in Q3 2025 [1][2]. - The overall consumption in mainland China is expected to continue its gradual recovery, supported by positive macroeconomic signals [1]. Summary by Sections Company Performance - LVMH's revenue in the Asia-Pacific region, excluding Japan, returned to positive growth after six consecutive quarters of decline, with Q3 2025 showing a recovery [1]. - L'Oréal's revenue in mainland China grew by approximately 3% year-on-year in Q3 2025, driven by a 4.7% increase in North Asia [2]. - Hermès reported strong growth in the Greater China region, while Estée Lauder achieved a 9% year-on-year increase in its China business [1][2]. - Unilever's business segments in China, excluding ice cream, also showed signs of recovery [1]. Channel Insights - Online channels have seen significant growth, with L'Oréal and Beiersdorf reporting year-on-year increases of 12% and 19.2% respectively in Q3 [3]. - Travel retail remains under pressure but has shown marginal improvements, with L'Oréal and Kering noting slight revenue recovery [3]. Category Insights - The medical aesthetics segment, particularly high-demand products like Sculptra, has seen a year-on-year revenue increase of 11.8% in Q3 2025 [4]. - Skin science skincare products, including brands like Cetaphil and Alastin, reported double-digit growth, contributing to a 9.3% year-on-year increase in the skincare segment [4]. - Fragrance categories also performed well, benefiting from new product launches by L'Oréal and LVMH [4]. Performance Guidance - Galderma has raised its full-year revenue growth guidance for FY25 to 17.0%-17.7%, up from a previous estimate of 10%-12% [5]. - Procter & Gamble expects a revenue growth rate of 1%-5% for FY26, maintaining its guidance for Q4 2025 [5]. - Unilever anticipates a potential sales growth rate of 3%-5% for FY25, with Q2 revenue growth expected to exceed that of H1 2025 [5].