BEIERSDORF 
BERLIN (Reuters) - Beiersdorf, the maker of Nivea and other skin care products, gave a cautious outlook for 2018 on Thursday as it expects growth to slow in its adhesives business, while its consumer business should continue to outperform the market.
Beiersdorf forecast its Tesa adhesives unit will record sales growth of 3 to 4 percent in 2018, down from 10.6 percent in 2017, while its margin on earnings before interest and taxation (EBIT) should be slightly below the 2017 level.
It expects its consumer business, which makes Nivea and other skin brands such as Eucerin and La Praire to outperform the market in 2018 with sales growth of 4 to 5 percent and a slight increase in the EBIT margin from operations.
Overall, it forecast sales growth of around 4 percent and its operating profit margin to stay at a similar level.
"We read this guidance as disappointing considering the strong momentum relative to peers in 2017 and generally positive sentiment on the stock," said Investec analysts, who rate the stock "hold".
Beiersdorf shares were down 4.4 percent by 0947 GMT, the biggest decliner on the German blue-chip index <.GDAXI>.
Chief Executive Stefan Heidenreich told a news conference he was confident the company can exceed its guidance, adding that business was very good in January and February. Beiersdorf traditionally gives conservative targets that it beats.
It highlighted a strong fourth quarter for its consumer business, bucking sector trends, with analysts saying Nivea sales accelerated to an implied 6.9 percent in the period.
German rival Henkel last week reported a strong fourth-quarter performance in its adhesives business, although the producer of Schwarzkopf haircare products saw falling beauty sales and gave a muted outlook for 2018.
Beiersdorf, which had already reported that it beat its 2017 forecast with a 5.7 percent rise in organic group sales, said its operating profit margin for 2017 rose to 15.4 percent from 15 percent in 2016, slightly below average analyst forecasts.
Earnings per share of 2.96 euros missed the 3.15 euros forecast by analysts, according to Thomson Reuters Eikon, which the company blamed on one-off gains in 2016, negative exchange rate effects and losses from financial investments.
"Acceleration in Nivea is a bright spot, though we think the miss on Tesa margins and 2018 outlook for the division will disappoint. Negative readacross to Henkel," Jefferies analysts wrote, rating the stock "hold".
Rival Unilever, which reported a bigger-than-expected acceleration in fourth-quarter sales growth, helped by the launch of new brands, has forecast underlying sales growth of 3 to 5 percent for 2018.
(Additional reporting by Jan Schwartz in Hamburg; Editing by Keith Weir/David Evans)
By Emma Thomasson
