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Last update on 2024-06-04

Beiersdorf (BEI.DE) - Piotroski F-Score Analysis for Year 2023 (Final Score: 8/9)

Beiersdorf (BEI.DE) scores 8/9 in the 2023 Piotroski F-Score analysis, showcasing strong financial health and investment potential.

Knowledge hint:
The Piotroski F-Score is a number between 0 to 9 which reflects the strength of a company's financial position. It is based on 9 criteria involving profitability, liquidity, and leverage. This model helps investors identify stocks that are strong, undervalued investments.
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Short Analysis - Piotroski Score: 8

We're running Beiersdorf (BEI.DE) against the Piotroski 9-criteria scoring system to assess profitability, liquidity, and operating efficiency:

Criteria
Company has a positive net income?
1
Company has a positive cash flow?
1
Return on Assets (ROA) are growing?
0
Operating Cashflow are higher than Netincome?
1
Leverage is declining?
1
Current Ratio is growing?
1
Number of shares not diluted?
1
Cross Margin is growing?
1
Asset Turnover Ratio is growing?
1

Beiersdorf (BEI.DE) was evaluated using the Piotroski F-Score, which measures a company’s financial health on a scale of 0 to 9. The company scored 8, reflecting a strong financial position. Key points include: 1. Positive net income, indicating profitability. 2. Positive cash flow from operations, demonstrating robust cash inflow. 3. Operating cash flow higher than net income, showing high earnings quality. 4. Effective liquidity management with an increasing current ratio. 5. Slight improvement in gross margin, indicating good cost management. 6. Improved asset turnover ratio, reflecting efficient use of assets for generating sales. However, some downsides include a declining ROA and concerns about the accuracy of shares outstanding data, along with no point added for leverage control.

Insights for Value Investors Seeking Stable Income

Based on the strong Piotroski F-Score of 8, Beiersdorf appears to be a robust, financially healthy company worthy of further investigation for investment. The company shows consistent profitability, strong cash flows, and effective asset management. However, potential investors should further investigate the issue with shares outstanding and analyze if the declining ROA and unchanged leverage ratio could affect future performance. Overall, Beiersdorf seems like a solid candidate for a stable investment.

For those who are interested in delving deeper into the specifics, the subsequent section provides a comprehensive exploration of the criteria.

Profitability of Beiersdorf (BEI.DE)

Company has a positive net income?

Explain the criterion for Beiersdorf (BEI.DE) and why it is important to consider

Historical Net Income of Beiersdorf (BEI.DE)

The criterion for Net Income is fundamental when evaluating a company’s profitability. A positive net income indicates profitability, which is crucial for business sustainability, investor confidence, and potential growth. In the Piotroski Analysis, a positive net income adds 1 point, reflecting financial health.

Company has a positive cash flow?

Cash flow from operations (CFO) measures the amount of cash generated by a firm's normal business operations. Positive CFO is vital as it signifies a company can maintain and expand operations based on internal funds.

Historical Operating Cash Flow of Beiersdorf (BEI.DE)

For Beiersdorf in 2023, the CFO stands at €941 million. This figure is positive, which signifies a robust cash inflow originating from core business activities. Over the last 20 years, the company’s CFO has consistently been positive, accentuating operational strength. For example, in 2017 the CFO was €911 million while in 2020 it surged to €984 million. This ongoing trend underscores Beiersdorf's solid financial health, contributing positively to its Piotroski score.

Return on Assets (ROA) are growing?

Change in Return on Assets (ROA) year over year. ROA is vital as it shows the effectiveness of the company's management in generating earnings from their assets.

Historical change in Return on Assets (ROA) of Beiersdorf (BEI.DE)

The Return on Assets (ROA) for Beiersdorf in 2023 stands at 0.0589, a decline from 0.0639 in 2022. This represents a drop and consequently does not add a point in Piotroski's scoring system. Evaluating ROA decline can signal potential inefficiencies. Although Beiersdorf's ROA is trailing compared to its past performance, industry median tracking over two decades reflects volatility and demonstrates that such fluctuations are periodic within the sector. Historical data shows that the industry median ROA fluctuates annually, indicating that Beiersdorf's current dip may eventually stabilize or rebound, depending on strategic improvements and market conditions.

Operating Cashflow are higher than Netincome?

When the operating cash flow is higher than net income, it generally means the company's earnings are of high quality, supported by strong cash flow rather than accounting adjustments.

Historical accruals of Beiersdorf (BEI.DE)

In 2023, Beiersdorf has an Operating Cash Flow of €941 million compared to Net Income of €736 million. This trend is significantly positive and indicates high earnings quality. Historically, from the data spanning 2003 to 2023, Beiersdorf's Operating Cash Flow has recurrently exceeded its Net Income, such as in 2015 when it was €800 million versus €660 million or in 2020 at €984 million versus €560 million. Maintaining a higher Operating Cash Flow than Net Income over two decades reflects robust financial health and operational efficiency, adding 1 point in the Piotroski F-Score for the company.

Liquidity of Beiersdorf (BEI.DE)

Leverage is declining?

Change in leverage measures the company's financial risk by comparing the leverage over two periods. Lower leverage is often seen as less risky.

Historical leverage of Beiersdorf (BEI.DE)

In 2022, Beiersdorf had a leverage ratio of 0, which increased to 0 in 2023, reflecting a higher financial risk. This trend is not favorable, resulting in 0 points. Over the last 20 years, except for certain years, leverage remained 0, partially alleviating concerns.

Current Ratio is growing?

The current ratio essentially measures a company's capability to meet short-term liabilities with short-term assets. It is vital as it reflects the liquidity health of the company.

Historical Current Ratio of Beiersdorf (BEI.DE)

The Current Ratio for Beiersdorf has indeed increased from 1.4735 in 2022 to 1.7443 in 2023, thus warranting a score of 1 point. Historically, Beiersdorf had better liquidity numbers, with figures exceeding 2.0 in the late 2000s. Importantly, the Current Ratio now also surpasses the industry median, which stands at 1.5029 for 2023. Such improvement signals stronger liquidity and, thereby, a more robust financial position. Overall, with the increase in Current Ratio and exceeding the industry median, this trend is positive, which bodes well for stakeholders.

Number of shares not diluted?

Changes in shares outstanding are vital for understanding potential dilution or concentration.

Historical outstanding shares of Beiersdorf (BEI.DE)

Analyzing the data, it is evident that Beiersdorf's outstanding shares have increased dramatically from 226,818,984 in 2022 to 0 in 2023. Contrary to financial norms where shares outstanding are often greater than zero, the dataset provided must be re-examined for accuracy, as a zero value might indicate a data entry or reporting error. Given the general interpretation, if it were purely an increase, this would warrant a concern for potential dilution. Still, under these circumstances, unconventional results like zero warrant closer scrutiny. As the shares increased, we set the point to 0.

Operating of Beiersdorf (BEI.DE)

Cross Margin is growing?

Gross Margin measures a company's financial health by revealing the portion of revenue that exceeds the cost of goods sold.

Historical gross margin of Beiersdorf (BEI.DE)

In 2023, Beiersdorf demonstrated a slight improvement in Gross Margin, moving from 56.34% in 2022 to 57.33% in 2023. This upward trend is favorable for the company's profitability, warranting a Piotroski score of 1 point for this criterion. Historically, the company's Gross Margin has fluctuated but remains significantly above the industry median of 44.11% in 2023, indicating relative robustness in cost management and operational efficiency compared to peers.

Asset Turnover Ratio is growing?

The Asset Turnover Ratio (ATR) measures a firm's efficiency in using its assets to generate sales. A higher ATR indicates better performance.

Historical asset turnover ratio of Beiersdorf (BEI.DE)

From the data provided, Beiersdorf's Asset Turnover has increased from 0.7442 in 2022 to 0.7565 in 2023. This is a positive sign, as it indicates that the company has become more efficient in generating sales from its asset base. Historically, the company had an ATR as high as 1.7033 in 2005, but this has been declining. The recent uptick is noteworthy amid this broader trend, marking a potential reversal or stabilization. Thus, 1 point is added for this criteria.


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