Beiersdorf AG (BEI.DE) Q3 2026 Earnings Call Transcript

Christopher Sheldon: Good morning, everyone, and thank you for joining us for our third quarter 2026 conference call. I'm here with our CEO, Vincent Warnery; and our CFO, Astrid Hermann. As always, we will start with a presentation of the quarterly results, followed by a Q&A session. And with that, over to you, Vincent.

Vincent Warnery: Thank you, Christopher, and good morning. Welcome to today's conference call. As expected, we completed the third quarter with an improved performance compared to the first half of the year across our entire consumer business. Our Derma business with Eucerin and Aquaphor once again outperformed the market. The expansion of Aquaphor into body care contributed to the strong growth trajectory. And Eucerin reached another important innovation milestone with the launch of our breakthrough solution for acne-prone skin. Our luxury business with La Prairie and Chantecaille also accelerated in the third quarter. La Prairie gained further momentum with China remaining the key growth driver. In addition, Chantecaille delivered double-digit growth. For NIVEA, our 18-month turnaround plan is progressing. Key launches such as FACE+ in Europe are off to a good start and the continued growth of NIVEA sell-out is further evidence that we are on the right track. Our third quarter performance reflects the strength of our business but also the continued challenges around NIVEA. NIVEA net sales declined by 4.9% organically. While net sales dynamics improved compared to the second quarter, several sell-in headwinds continue to weigh on performance. In addition, NIVEA's third quarter performance was affected by a commercial dispute involving our Russian subsidiary and a local business partner in Russia. The dispute has been resolved and proceedings have been settled. Normal business operations have resumed. With our H1 results, we announced a more comprehensive turnaround plan for NIVEA to restore sustainable growth. I will update you on the actions already underway later in the presentation. Our Derma business accelerated to double-digit organic sales growth of plus 10.6%. Growth was broad-based across regions and categories, supported by the rollout of breakthrough innovations and expansion into white spaces. Healthcare continued its positive trajectory with organic sales growth of plus 5.7%, supported by innovation in Wound Care. La Prairie gained further momentum, delivering organic growth of plus 8.5% in the third quarter. Overall, our Consumer business declined by 0.7% organically in the third quarter. Excluding Russia, Consumer delivered organic sales growth of plus 0.6%. As highlighted in our H1 call, tesa performance was affected by the semiconductor shortages impacting our electronics business. This resulted in an organic sales decline of 4.3% in the third quarter. At group level, this translates into an organic sales decline of 1.3% in the third quarter. Let's now look at the performance by brand in more detail, starting with our Derma business. Derma, Eucerin and Aquaphor delivered double-digit organic sales growth in the third quarter on top of a tough comparison base in the prior year. Over the first 9 months, the business grew by plus 8.7%. Consumers continue to look for efficacy, scientific credibility and dermatologist endorsements playing directly to our strengths. What gives us confidence is that Derma's growth is not driven by only one market or innovation. We continue to see strong growth across regions and categories, supported by our expansion into white spaces and the rollout of breakthrough innovations. In North America, Aquaphor Body, the largest U.S. launch in the brand's history, is off to a strong start and significantly expands the brand's potential beyond its traditional categories. In Latin America, Mexico and Brazil continue to drive growth. In Europe, a strong sun season as well as Thiamidol line extensions in body care supported organic growth of plus 8%. And across the AAA region, Eucerin continued to deliver double-digit growth of plus 25%, with particularly strong performance in Thailand and China. During my recent visit in China, where Eucerin is a leading anti-pigmentation brand, I saw firsthand how Thiamidol is bringing our deep skin care expertise to consumers around the world. With Thiamidol now also registered in Korea, we are opening up further opportunities in one of the world's most innovative skin care markets. In July, Aquaphor launched into body lotions and creams, thereby substantially expanding its growth potential in the category that represents 80% of the U.S. body care market. The launch is off to a very strong start. Within 6 weeks after launch, Aquaphor already secured the #3 position in the U.S. therapeutic skin care market and the #1 Derma body care position in the drugstore channel. The launch was supported by strong activation with leading U.S. retailers. In addition, feedback from dermatologists has been very positive. As a result, Aquaphor accelerated to an organic sales growth of plus 13% in the third quarter. The launch of Eucerin DERMOPURE CLINICAL PROBIOM8 is another strong example of how we turn our scientific expertise into clinically proven skin care solutions. At the heart of this breakthrough innovation is our patented active ingredient TopiC.A, which takes a new approach to acne-prone skin by helping to balance the skin microbiome. It builds on more than 20 years of microbiome research and the expertise gained through our acquisition of S-Biomedic. Feedback from dermatologists and consumers has been overwhelmingly positive. At EADV, Europe's leading dermatology congress, more than 1,400 health care professionals joined the largest scientific symposium in EADV's history to discuss the science behind this innovation. PROBIOM8 was launched in September across its first markets in Europe, Mexico and Thailand, opening new growth opportunities for Eucerin in one of the world's largest skin care categories. Let's continue with our luxury brand, La Prairie. After temporary retail disruptions earlier in the year, the brand returned to growth in Q2 and accelerated further in the third quarter, delivering strong organic sales growth of plus 8.5%. La Prairie's recent performance is a result of the strategic repositioning measures implemented over the last 2 years, which are paying off. China remained La Prairie's key growth driver with net sales up plus 28% in the third quarter and strong sell-out growth. Both outstanding e-commerce and impressive brick-and-mortar performance contributed to these results. Winning luxury skin care, especially in China, requires differentiated technology and science-based innovation, which plays directly to our strengths. Our ability to succeed in such an environment is demonstrated by the exceptionally strong performance of our White Caviar line, a key growth contributor in China. Based on our hero ingredient Thiamidol, White Caviar is the #1 luxury brightening collection in China. We have also made good progress in expanding La Prairie's price range. In September, we launched our new entry line Swiss Pristine, combining our scientific expertise with advanced biotechnology. The launch enables us to attract a new generation of consumers and selectively expand our distribution. The launch was accompanied by strong digital influence and retail activations across regions. Initial results are strong. Swiss Pristine is accelerating client recruitment, reaching significantly younger consumers and generating strong early demand across regions. At the same time, we are seeing increased engagement from existing clients and encouraging cross-selling into our core franchises, reinforcing its potential as an entry line into a broader La Prairie portfolio. Now let's turn to NIVEA. Net sales declined by 4.9% organically in the third quarter. Excluding Russia, NIVEA sales declined by 3.2% organically in the third quarter. While net sales dynamics improved compared to the second quarter, temporary selling headwinds continue to weigh on performance. Retailer disputes continued to negatively affect the third quarter, but have now been largely resolved with only a few remaining that will impact Q4. Q3 also continued to be impacted by phasing and destocking. While the fourth quarter will still be impacted, we expect this effect to gradually fade, leaving us with healthy stock level by the end of the year. NIVEA sell-out continued to grow globally in the third quarter, an early evidence that our rebalancing measures are starting to be effective. At the same time, our sell-out growth remains below market, which is why we started implementing the second phase of our rebalancing, a comprehensive turnaround plan for '26 and '27. Let me remind you of key pillars of our turnaround plan before highlighting some of the actions that are already underway. First, we are unlocking the full growth potential of NIVEA and size portfolio across all categories. We are accelerating our innovation pipeline to respond faster to changing consumer needs and market trends. Second, we are reinforcing NIVEA accessibility and value for money propositions to drive penetration and volume. Third, we are fully leveraging NIVEA's local relevance. While NIVEA remains a global brand, we are increasing our ability to respond to local consumer needs and market dynamics. This is already reflected in our innovation pipeline with a stronger focus on local insights and proven regional franchises. Fourth, we are stepping up consumer-facing investments and focusing our resources on where they can have the greatest impact. Let me now show you how we are putting these priorities into action. One example is the launch of FACE+ in Europe. Building on the success of Facial in emerging markets, we are bringing this proven consumer relevant concept to Europe as FACE+ adapted to local needs. This is where we can leverage NIVEA's robust strength and our fast-track approach to innovation, listening closely to local consumers, learning from what works in individual markets and scaling the strongest ideas across regions. With currently 4 SKUs, FACE+ delivers well-known ingredients such as vitamin C, niacinamide, panthenol and hyaluronic acid at an affordable price point of between EUR 5 and EUR 6. Early traction is very positive, particularly in recruiting new consumers to NIVEA. And while the initial launch focuses on moisturizing creams, our ambition is to build FACE+ into a broader Face Care franchise over time. Another example is the launch of our Sweet Treat Shower & Deo Limited Edition in Europe with Germany as a focused market. Designed to engage young consumers and drive penetration, the range adds fragrance-led experiences to our core portfolio and responds directly to emerging consumer preferences. In Germany, we are supporting the launch with a fully digital media campaign and strong consumer activations with very encouraging initial consumer and market feedback. India is already a strong market for NIVEA with continued double-digit growth and penetration gain. Over the last 12 months, we have added 10 million new consumers to the brand. Our ambition is to accelerate penetration through locally relevant innovation. One example is the expansion of NIVEA Soft into the fast-growing gel moisturizer segment. The new serum infused gel is tailored to local demand for lightweight, non-sticky hydration while adding skin care benefits through hyaluronic acid, niacinamide and vitamin C. Supported by flexible formats and integrated media and influencer activation, the launch is designed to drive trial, recruit new consumers and accelerate NIVEA's growth in India. We are also stepping up consumer-facing investments and focusing our resources on where they can have the greatest impact. Looking ahead, our recently signed 5-year partnership with Tour de France is a strong example. Starting in 2027, NIVEA SUN will become a partner of one of the world's best-known sporting events, giving us a major platform to connect with consumers across Europe. Astrid will now give an overview on tesa, our performance by segment and region as well as the outlook for the rest of the year. Over to you, Astrid.

Astrid Hermann: Thank you, Vincent. Tesa recorded an organic sales decline of 4.3% in the third quarter and 2.1% in the first 9 months of the year, reflecting the soft performance of the electronics business. As outlined in our half year call, the market environment became increasingly challenging, particularly in Asia. Ongoing chip shortages have impacted production volumes across the consumer electronics industry and led to lower demand from key customers. In addition, we faced a particularly strong comparison base in electronics in the third quarter. As a result, the segment remained below the prior year level and more than offset the positive development across the rest of the portfolio. The decline in Electronics also weighed on profitability given that electronics is one of tesa's higher-margin business areas. Excluding Electronics, tesa delivered low single-digit growth in both Q3 and year-to-date. The broader industry portfolio outside electronics developed well. Electrical Systems continued its strong momentum, supported by project ramp-ups and new customer wins across regions. Automotive delivered a strong performance, accelerating in Q3, outperforming underlying industry trends and benefiting from new business wins in electric vehicles. Print and Packaging Solutions as well as Industrial Trade and converting also contributed positively, supported by project-driven growth. The Consumer business remained below the prior year level, reflecting softer demand outside of Europe. The European business recovered over the course of the year, supported by continued momentum in e-commerce. Let me now walk you through some further details of our sales performance in Q3 and the first 9 months of the year. Beiersdorf Consumer business generated net sales of EUR 1.94 billion in the third quarter of 2026 with an organic sales decline of 0.7%, representing a slight improvement compared to the first half of the year. Due to favorable foreign exchange effects, nominal sales increased by 1.0%. Year-to-date, Consumer generated net sales of EUR 6.052 billion with an organic sales decline of 2.9%, while nominal sales declined by 3.2%. Our tesa business recorded an organic net sales decline of 4.3% in the third quarter of 2026, closing the quarter with net sales of EUR 422 million. Due to favorable foreign exchange effects, nominal sales declined by 2.0%. As previously explained, sales development in the quarter was significantly impacted by the semiconductor shortage. Year-to-date, tesa generated net sales of EUR 1.262 billion at an organic and nominal sales decline of 2.1%. As a result, the group generated net sales of EUR 2.362 billion in the third quarter of 2026 at an organic sales decline of 1.3%. Due to favorable foreign exchange effects, nominal sales increased by 0.4%. Year-to-date, the group generated net sales of EUR 7.314 billion. Organic sales declined by 2.8%, while nominal sales declined by 3.0%. Looking at our consumer business across regions. While the consumer net sales development continued to be impacted by NIVEA's softer performance in the first 9 months of the year, the business showed a sequential improvement in the third quarter. At the same time, other parts of the portfolio continued to perform strongly, particularly our Derma brands and La Prairie. North America returned to mid-single-digit growth in the third quarter, driven by continued strength in Derma, particularly due to the Aquaphor body launch. Coppertone continued to weigh on the region's overall performance. Latin America also returned to low single-digit growth in the third quarter, benefiting from an improving NIVEA performance in Brazil and continued strong momentum in Derma, particularly in Brazil and Mexico. The crisis in the Middle East continued to weigh on Africa, Asia and Australia region. However, this impact was more than offset by continued strong growth in China, India and Thailand. Western Europe continued to decline, however, at a slower rate compared to the first half of the year, benefiting from Sun Care as well as the resolution of some customer conflicts that had affected NIVEA. Lastly, our net sales in Eastern Europe declined by 14.6%. A key factor behind this development was our remaining business in Russia, which is reported in our Eastern Europe region. Excluding Russia, net sales in Eastern Europe declined by 1.3% in the third quarter, representing a significant improvement compared to the first half of the year. Now let us turn to our outlook for the rest of the year. Consumer delivered an improvement in the third quarter compared to the first half of the year. Derma continued its strong performance, while La Prairie accelerated its growth. NIVEA remains challenging, but we are seeing encouraging early signs from the turnaround plan. Taking into account an organic net sales decline of 2.9% for Consumer year-to-date and a tougher prior year comparable in the fourth quarter, we continue to expect a low single-digit organic decline in net sales for the full year. We expect the consumer EBIT margin, excluding special factors of at least 11.0%. For tesa, we continue to expect net sales to remain flat to slightly growing organically and an EBIT margin, excluding special factors, slightly below the prior year's level. As pointed out, however, the semiconductor shortage may further negatively impact tesa's performance. Due to the corresponding negative mix effect on profitability, it also creates a risk to tesa, tesa's EBIT margin for the full year. At group level, we continue our guidance for a low single-digit organic sales decline and an EBIT margin, excluding special factors of at least 11.8%. And with that, we are happy to answer your questions. Over to you, Christopher, for the Q&A.

Christopher Sheldon: Thank you, Astrid. Let's start with the Q&A. Please note that we have a maximum 2 per caller. And the first question comes from Jeremy Fialko from HSBC.

Jeremy Fialko: So perhaps you could just talk a bit more about the NIVEA performance in the quarter, maybe a bit more detail on what the sell-out was? And just if you could break down some of the sort of technical factors that led to the sell-in being below that? And then secondly, maybe you could talk about a bit more in detail about your consumer expectations for Q4 and what you think the prospects of that getting back into positive territory are?

Vincent Warnery: Jeremy, on NIVEA, so as we said, we are experiencing -- we had the complexity with Russia, so which has impacted strongly our sell-in. Now as I said, we are out of that. We are back to normal business. What we see clearly is an improvement of the sell-out. We are growing in sell-out. We are not yet gaining market share, which means we are not yet growing in line with the market, but we are overall growing with some very good results in emerging markets where we are gaining market share over the last 3 months, which is a pretty good news. In Europe, we are still struggling because of some consumer customer conflict, which are almost over now, but which impacted Q3. So all in all, we are getting closer to having the same level of sell-in and sell-out. We are destocking also in order to finish the year, and that was your second question, with a strong in sell-out with very healthy stocks in each and every country being able to attack to embark into a much better 2027.

Christopher Sheldon: And the next question comes from Celine Pannuti of JPMorgan.

Celine Pannuti: Sorry I just want to come back on some of the key points you mentioned on Europe. So first of all, on Russia, is this ongoing? Do we still expect Eastern Europe to be down massively in the coming quarters? Or did you say you resolved it? And then on Europe, can you talk about your sell-out data? I mean, I presume there was a benefit from Sun Care in the summer. But if you look at the maybe last 6 weeks, how do you feel the sell-out has improved? And yes, just trying to understand how much of a destock impact we should expect for Europe and disconnect between sell-in and sell-out in the fourth quarter?

Vincent Warnery: So, thank you Celine, for your question. On the first question, Russia, we are absolutely back to business. So we had a commercial issue with our manufacturer in Russia. We have solved this issue, and we are back to business. So Q4 will be a normal business for Russia, and we go back to what we have been doing over the last years. It means also that overall, the Eastern Europe is positive, will be positive. We are seeing a strong improvement in Eastern Europe. As we said, we are almost flat in Q3 in Eastern Europe, excluding Russia. We are gaining market share on both NIVEA and Eucerin. So we are expecting a good quarter in Q4 in Eastern Europe. In Western Europe, this is where obviously we struggle with some customer conflict. Those consumer conflicts are almost all solved. We still have one remaining issue that should be solved. We had, in fact, the sell-out, which is slightly positive. I think over the last -- the first months of 2026 and year-to-date, August, -- we are growing at around plus 1%, which is not yet at the level of the market, which is much better than what we experienced in last year. We gained indeed market share in Sun Care. We are by far the best performing global brand in Sun Care. We grew 6% the sell-out. We are back to growth also in deodorants, where we are struggling more is Face Care, and this is why the launch of FACE+ that just started a few weeks ago is a good news. So I'm expecting also better news in sell-out in Europe. So all in all, Q4 in Europe, which should be better having solved the issue with retailers, having solved the problem with Russia and having also reduced strongly the level of stocks that was coming from the launch we did last year in the Q4 2025.

Celine Pannuti: Can I just ask a follow-up? So super helpful what you just said on Europe and Eastern Europe. I know that Q4 has a tougher comp on the rest of the world. So net-net, do you expect Q4 to be at the same level or even better than Q3 at a group level for consumer?

Vincent Warnery: You've seen that we are maintaining the guidance. So which means that we should have a Q4, which should be slightly negative, still impacted by some customer conflict, but even more by the fact that we want absolutely to finish the year with healthy stocks on each and every product category in each and every country. So we have also to -- as you remember, the Q4 '25 was strongly impacted by the launches of Derma Control and Epicelline -- that will not happen again. So all in all, slightly negative quarter at the sell-out, which should be even better than what we have seen year-to-date August.

Christopher Sheldon: And the next question comes from Guillaume Delmas of UBS.

Guillaume Gerard Delmas: A couple of questions for me, please. The first one is on the tesa guidance because based on the first 9 months performance, I mean, the guidance seems to require a very meaningful acceleration in the fourth quarter. I mean I'm getting to 7% plus organic sales growth in Q4 to get to flat for the year. So my question here is, what visibility do you have on this potential shortage of semiconductors in the last 2 months of the year? And in a scenario whereby electronics would remain a drag as in they would not improve relative to Q3 would tesa remain negative in the fourth quarter? And then my second question is a question on gross margin. I mean mostly about the back half of '26 and maybe early days, but also on '27 because we are seeing a continued increase in commodity costs and logistics costs. And at the same time, you're making it very clear you're trying to reinforce NIVEA's value for money proposition, which correct me if I'm wrong, but that seems to signal limited to very modest pricing actions going forward for NIVEA. So question here is, I mean, would it be fair to assume that gross margin is likely to decline over the next 18 months? Or are there some levers you've identified that could help you maintain your gross margin at current levels?

Astrid Hermann: Guillaume, I will take both of your questions. Related to the tesa guidance. So we have had quite different quarters in the prior year. So comparison is quite different in the fourth quarter with much, much lower electronics business in the prior year and therefore, a much easier comparison than, for example, in the third quarter of this year. So it's just not an apples-for-apples comparison. And we are seeing, again, the remainder of business, excluding electronics, really accelerating a very, very good performance, and that's going to also contribute in the fourth quarter. And on top of that, while we do not expect the shortage to meaningfully ease, again, we do see that we will still have some electronics business and that should be less of a drag on the fourth quarter impact. That said, I do want to highlight, and obviously, this is why we've also spoken about a risk. There is a lot of uncertainty, and it's a bit difficult completely to have complete visibility of what's to happen in the months to come. We're obviously, again, working on certain scenarios and expectations from orders from our customers. On your gross margin question, we have talked about the fact that both the rebalancing in NIVEA is obviously putting some pressure on our gross margin. We are investing more in consumer-facing for NIVEA and beyond that, obviously, the rebalancing, less Face Care, more personal care is obviously having an impact here as well. And the back half will be similar. There will be pressure on gross margin downwards. And into next year, similarly, obviously, less of an impact because we are already making significant changes this year, and we should start to be able to benefit, obviously, from some positive mix impact by our Derma business and our La Prairie luxury business growing stronger.

Christopher Sheldon: The next question comes from Karel Zoete at Kepler.

Karel Zoete: I have 2 questions. Maybe a follow-up one on -- in relation to pricing. Can you share what's been the volume component in the third quarter, but also how you think about pricing going into next year? What kind of price increases do you require to protect gross margins? And particularly, of course, the situation in Europe is interesting. And the second thing is I noticed that on the slides, you mentioned quite frequently growth rates, excluding Russia. Are you now considering to exit your Russian business? Or is that something you'd like to hold on to for the time being?

Vincent Warnery: Thank you, Karel, for your question. I will take both of them. If you look at the performance of the quarter -- the third quarter, it's clearly there is no price effect. Most of the growth or the decline is volume. Next year, we are coming with an extremely, extremely reasonable pricing policy. We are not willing to increase price because clearly, the value for money positioning of NIVEA is essential. This is why we are betting on the fact, as Astrid said, that we are delivering more units and that we'll be able to compensate the increased cost of goods by more units in our factories. So clearly, minimizing any kind of price impact will have price discussion and price impact on our consumers next year. On Russia, no, we are in Russia. We stayed in Russia. In 2022, we said that we will exit La Prairie and tesa. We did it. We said that we'll reduce our assortment by 65%. We did it. And we said that we'll not do any advertising. We did it. We are still in the same strategy in the same mindset. We are there to stay in Russia with our brand, protecting the brand, paying the salary of our people, but there is no change in our strategy regarding Russia.

Christopher Sheldon: And the next question comes from Tilly Eno at Morgan Stanley.

Tilly Eno: Just on La Prairie, clearly, a very significant acceleration in the quarter. And you obviously mentioned that you launched the entry line SKU in September. Could you just clarify if there's any sell-in benefit related to that entry line launch? And then also on China specifically, you called out 28% growth in La Prairie there. Could you quantify the sell-out in China La Prairie for us?

Vincent Warnery: Swiss Pristine is really a great event for La Prairie. We used to have in the past this kind of entry line, but we stopped it, and we came back with the line. So it's sold between EUR 180 and EUR 300. This is a line which is allowing us to recruit younger consumers. They are, on average, 4 to 10 years younger than the La Prairie consumers. 80% of them are new to the brand. So there are people who were not buying La Prairie before. What is even more interesting is that we can also open new retail channels. For example, we are selling La Prairie on Amazon U.S. since last month. We have also been able to enter Sephora and Bluemercury in Canada with a Swiss Pristine line, something we could not do with a more expensive line. So clearly an opportunity to enlarge the penetration of the brand and to be sure that we can recruit people who want to deliver -- want to discover La Prairie, but not, of course, at a very high price. In China, we are benefiting from the launch of Swiss Pristine, but also from the success of White Caviar. White Caviar is a franchise we have in China since a long time, but we decided last year to put Thiamidol, our hero ingredient into the franchise, and we became instantly #1 brightening luxury franchise in China. So complementing the strength of the brand, but the true efficacy. So it gave us over the last 6 quarters, we have been growing in sell-out double digit. And it's really a continuous success we are having in China, not only in e-commerce, but also in brick-and-mortar. And this is why we had this month, this quarter, the best ever performance of La Prairie with a plus 28% in China. So really a combination of more efficacy with our legacy franchises, a younger target group touched by Swiss Pristine and the fact that we are leveraging also not only the department store, which are core to La Prairie, but also e-commerce and also a new distribution channel, which until now we were not selling La Prairie.

Christopher Sheldon: And the next question comes from Warren Ackerman at Barclays.

Warren Ackerman: Warren here at Barclays. I've got one housekeeping and 2 questions. The housekeeping is, did you confirm that the NIVEA sell-in, sell-out gap will completely close in Q4? Or do you expect that gap to close at the exit of Q4, if you can just clarify that. And then my main questions are, firstly, Vincent, how are you feeling about the NIVEA reset? Obviously, you went all in on facial skin care. You're now pivoting back to core. What's the organization reaction? Does the organization feel that you can grow the core in categories like deodorants despite the fact that some launches have been below expectations while still capturing some of the opportunity in facial skin care when organizations do like a 180-degree pivot, there's also risks on the other side. Just interested to understand your kind of more strategic view on that and how the organization feels about that, both good and bad. And then secondly, on the EUR 100 million investment that you're making in H2, now more time has elapsed. Are you able to kind of give a bit more color exactly where that spend is going and the balance of it between in-store activation influencers, local innovation changes, the returns that you expect to see on that? And then how that sort of feeds into kind of next year's margins because I think a few people are still kind of a bit unclear about the cadence of margins H1, H2, just given the kind of size of the investment that you're making.

Vincent Warnery: Thank you for your question. I will take the first one, and Astrid will take the second one on the EUR 100 million consumer-facing investment. On the first one, we will exit the year with sell-in exactly in line with sell-out. That's clearly the commitment and the commitment we have in each and every country. We want to start 1st of Jan 2027 with an extremely healthy situation in terms of stock and being driven by sell-out. So that's why we are coming with a quarter which will still be slightly negative. I think your question on the NIVEA reset is a very good question. I mean we tried to transform in a way NIVEA into a premium Face Care brand with LUMINOUS and Epicelline. We succeeded to some extent, but it was done at the expense of the other categories. This is why we are coming back to something which is much larger. We are not only focusing on Face Care is still the #1 priority, but we are clearly seeing the other categories and an opportunity to improve penetration. I was giving the example of the shower which is one of the best product in terms of penetration in countries like Germany. We are also acknowledging the fact that our consumers are really attached to the value for money positioning of the brand. This is why I'm extremely happy with the success of FACE+ to see FACE+ able to recruit 80% of people who have not used NIVEA Face product in the last 12 months is something remarkable. The fact that we are also taking away market share from private label is something that we didn't have in the past. So value for money is essential. And last but not least, also this acknowledging also the fact that NIVEA has not been built in the same way in each and every country that in some countries, we are more body/deo brand in other countries, we are clearly stronger in Face Care. So we acknowledge also the fact that there is not one single NIVEA identity across the world, and that's something which we respect and FACE+ is a good example. How is the organization reacting very positively in the sense that nobody is regret that we tried to really push the Thiamidol and the Epicelline option strongly because there was an opportunity that has made the success of Eucerin and was really -- would have been a pity not to try. But I think everybody is very comfortable with this rebalancing, which is leveraging also local talent. I was showing the example of the Tour de France, which is coming from a strong recommendation from the French GM and also many other things we have done in the country. So overall, an opportunity to try new things to be bolder, to also accept the idea that some things will work, some things will not work, so more agility. And I think the recent good news, the recent green shoots we see in many different countries is giving us some hope that we have found our way more to do. We have still some work to do, but we have found our way to make NIVEA growing again.

Astrid Hermann: On your question related to the incremental spend, about 1/3 has gone to in-store, the remainder primarily into digital marketing, including, of course, influencer marketing as well, particularly with some of the launches we discussed FACE+ and so on. The spend really started towards the end of the third quarter as we were also launching some of these initiatives, and we should see quite a bit of the spend also in this quarter. In terms of next year, it will be a different pattern in that, obviously, early this year, we were still spending behind some of the innovation from the prior year. That's going to look obviously quite different and much more aligned with the new picture of rebalancing to really now support all these initiatives we spoke about.

Christopher Sheldon: The next question comes from Tom Sykes at Deutsche Bank.

Tom Sykes: Just firstly, on your comments on price, into next year. You obviously also take the view that you're looking to grow volumes to grow your sales next year, and that's going to be the main driver. So do you think about pricing next year as an absolute price and the value which you're going to get from that and your perception of what that's going to lead into in terms of volume? Or are you looking at relative pricing against your peers? And do you have any feeling for where that relative pricing dynamic is going to be next year through your retailer discussions and how they're negotiating with others because -- it does feel like you're kind of going to be perhaps moving that bar on price depending on where others may come out. Just any views on that. And then just on La Prairie, you've obviously seen an improvement. How much of that improvement would have come through FX? I think you sell in U.S. dollars in part and then you're calculating some of the travel retail obviously in euros. So would you be able to give the benefit of that FX to the organic growth of La Prairie at all, please?

Vincent Warnery: The first question and Astrid will tell you about the FX. On your first question, you're absolutely right to mention that the pricing has 2 dimensions. This is the negotiations with retailers, which is always complicated, particularly in Europe and also the consumer, the effect on consumer prices. On the first one, obviously, we are trying to minimize any disruption next year. This is why also some of the deals we have made this year are covering also next year, which is a good news. So we are not -- we are clearly willing to minimize this aspect. On the consumer, as you know, our competitors are not the usual suspects. We are not losing market share against the other big companies that you are following. We are losing market share against local brands, against Korean brands, local private labels, which are cheaper than us. So it is true that every additional cents, every additional euro consumer price is impacted the value for money positioning of NIVEA. This is why we are extremely cautious, and we clearly see the opportunity to do price increase if and only there's a real consumer benefit that we are able to explain, could be a new technology, could be a new claim, could be a new galenic. So both, I would say, aspects, retailer element and consumer element will be extremely cautiously managed next year. We clearly want to give more products to more consumers. And it means we need to have the support of retailers, and we have also to offer product at the right price. On your second question?

Astrid Hermann: Yes, Tom. So in La Prairie, year-to-date, the impact from the U.S. dollar has actually been negative a couple of points. Only in the third quarter, it started to obviously move into positive territory. It's about a 1% point improvement.

Christopher Sheldon: And the next question is from Cian Muenster at Reuters.

Cian Muenster: Yes. Two questions for you. First, a general one. What are your observations in terms of customer demand? Do you see customers preferring cheaper options over premium products? And the second question about the Middle East. So are elevated oil prices and the supply chain disruptions in the Middle East still creating operational challenges with costs and deliveries?

Vincent Warnery: The first question, the second one. In fact, the very complicated or interesting phenomenon in the market is that you have both. You have indeed, particularly in mass market, consumer willing to have, I would not say cheaper, but really value for money proposals. And this is why NIVEA has to fight, and we have to maintain what has always been a key dynamic of NIVEA. We are a value for money brand. But in other channels, and for example, drugstore, pharmacies, perfumery department store, you have clearly premium skin care developing, but a premium skin care, which is supported by the strong scientific efficacy. This is why we are doing extremely well with Eucerin, and we've been able really to transform Eucerin into an extremely strong Derma brand combining the R&D expertise of Beiersdorf and the equity of Eucerin towards dermatologists. But also more recently with La Prairie, able to sell products, not only at between EUR 180 and EUR 300 like Swiss Pristine, but also around EUR 2,000 for the core franchises of La Prairie. So we have to manage both. We have clearly to have a differentiated approach between NIVEA, which is clearly value for money and La Prairie, Eucerin, Aquaphor and Chantecaille, where we are clearly offering consumers products which are more into this premium skin care category. The good news that we have the tools to do that. We have not only the scientific expertise of Beiersdorf, but also we have been able over the last years to develop strongly the equity of the brands, and they can support these premium prices. And this is why we are coming with pretty good results, especially in the third quarter.

Astrid Hermann: In terms of your question related to the Middle East, I would certainly suggest that it's caused quite a bit of headache to our teams, particularly in the supply chain. But I would say, first of all, that we are not seeing significant impacts in terms of disruption of our supply chains. We have found ways around them. This has led though to the most immediate impact being higher logistics costs for sure. In terms of the remainder impact from higher oil price, we have so far been able to manage that quite well. I have to say, but obviously, an oil price at above $100 for a longer period of time could cause obviously significant pressure upwards in terms of our cost. But so far, that's been managed quite well by our teams.

Christopher Sheldon: And the next question comes from Ulrike Dauer at Dow Jones.

Ulrike Dauer: Two small questions in terms of the U.S. import tax, I haven't heard anything whether there was a net-net effect maybe a tax receipt or a tax burden in the 3Q figures. And another question on Russia. Correct me if I'm wrong, Beiersdorf doesn't have any own production in Russia. It's just the import as far as I understand. And the reason for protecting the brand is the reason for staying in Russia is protecting the brand rights. Is that still up to date? Or what's the reason for staying in Russia at this point?

Astrid Hermann: Ulrike, I'll take your first question. So yes, we have received refunds of all the previously paid tariffs for all of our brands. So that's benefiting our year-to-date P&L for sure. We are obviously paying also tariffs ongoing based on the new tariff environment. So that's happening as well. It's not all in Q3, we even had some of those refunds happening earlier in the year.

Vincent Warnery: Question. We are in Russia...

Ulrike Dauer: Can you quantify that a little bit?

Astrid Hermann: It was not a material impact to begin with, Ulrike. We had all along said because a lot of our production, to be honest, for our U.S. business is either happening in the U.S. or in our Mexican site, which is still part of USMCA, we've had a pretty insubstantial impact compared to many others.

Vincent Warnery: Dauer, you're right. We have no factory. We are -- we stayed in Russia to protect the brand. We are in Russia since 1906. We know that if we had left Russia, somebody else would have produced NIVEA without us. So we are there to protect the brand and to pay the salaries of our employees. Nothing more, nothing less.

Christopher Sheldon: Thank you. That was the last question. This concludes our conference call. Our Q4 and full year results 2026 will be released after market close on March 1, 2027. We appreciate your interest in Beiersdorf and look forward to seeing you again in early March. Thank you very much.