China, supply chain issues hurt Beiersdorf adhesives unit's outlook

FRANKFURT (Reuters) -Beiersdorf, the maker of Nivea skin care products and Tesa glue, cut the forecast for full-year sales at its adhesives unit on Thursday due to extensive lockdowns in China and ongoing supply chain issues in the automotive industry.

The Tesa adhesives unit, which serves the electronics and automotive markets and accounts for about a fifth of Beiersdorf sales, had been the group's fastest-growing business in 2021 thanks to growth in the Chinese electronics business.

However, the recent COVID-19 surge in China hurt the unit's growth in the first quarter, and Beiersdorf said it now expects Tesa to grow sales in the low to mid single-digit range in 2022, compared to its previous target for mid single-digit growth.

"I think the second quarter will be a challenging quarter," Chief Financial Officer Astrid Hermann told a news conference.

"The electronics business in Asia, so much of it is centered around Shanghai. Reading the news, you will see a lot of the electronics business there is impacted. We have to see how we weather that and how we can rebound in the second half," she said.

Beiersdorf also confirmed its preliminary first-quarter results published on April 8 and targets for its consumer goods unit announced on March 1.

(Reporting by Zuzanna Szymanska, Editing by Miranda Murray)

Copyright © Reuters 2008. All rights reserved. Republication or redistribution of Reuters content, including by caching, framing or similar means, is expressly prohibited without the prior written consent of Reuters. Reuters and the Reuters sphere logo are registered trademarks and trademarks of the Reuters group of companies around the world.

News, commentary and research reports are from third-party sources unaffiliated with Fidelity. Fidelity does not endorse or adopt their content. Fidelity makes no guarantees that information supplied is accurate, complete, or timely, and does not provide any warranties regarding results obtained from their use.