Beiersdorf raises profit guidance on strong consumer business
* Says now sees significant rise in 2016 EBIT margin
* Previously saw slight improvement
* Sticks with sales guidance
* Shares (Berlin: DI6.BE - news) up 6.2 percent in flat market (Adds details on new guidance, CEO comment on M&A, share price)
FRANKFURT, Nov 3 (Reuters) - German Beiersdorf, the maker of Nivea cream and Tesa adhesives, raised its guidance for 2016 earnings, citing a strong consumer business, sending its shares more than 6 percent higher.
Beiersdorf (LSE: 0DQ7.L - news) said it now expected its margin on earnings before interest and taxes (EBIT) in 2016 to significantly exceed the year-earlier figure of 14.4 percent. That is better than a previous forecast for a slight improvement.
The new guidance meant an increase by more than 0.5 percentage points, finance chief Jesper Andersen told analysts, without being more specific.
Margins were boosted by more efficient procurement and logisitcs as well as lower marketing expenses, he said.
Beiersdorf stuck with its forecast for 3 to 4 percent sales growth this year with its consumer business, which includes cosmetics brands Nivea, Eucerin and La Prairie, bouncing back after a slow first half of the year.
But its margins continue to be lower than those of consumer goods competitors, such as Unilever (NYSE: UL - news) , Procter & Gamble (Swiss: PG-USD.SW - news) and L'Oreal, which in recent months have been snatching up smaller companies and niche brands to build scale and enter new consumer markets.
Pressed by analysts on whether Beiersdorf intended to follow a similar path, Chief Executive Stefan Heidenreich said the company's main priority remained organic growth.
"It's true that we have cash and that we are looking at things," Heidenreich said. "But we will follow our strategy which is organic, organic and then, if something comes, we will look at it."
Organic sales across all business segments rose by 2.9 percent to 5.03 billion euros ($5.60 billion) in the first nine months of 2016. The group did not publish earnings figures for the period.
Shares in Beiersdorf were up 4 percent at 81.52 euros by 1040 GMT, outperforming a flat German blue-chip index. They earlier rose more than 6 percent. ($1 = 0.8994 euros) (Reporting by Tina Bellon; Editing by Maria Sheahan/Keith Weir)