Beiersdorf to refocus and streamline
Emphasis on skin care and closeness to key markets
Nivea producer Beiersdorf AG is to refocus its business operation with a revamping of its consumer strategies, primarily an emphasis on skin care products and closeness to its key markets. The company's share price dropped 5.2% in Frankfurt following the approval of the move by the supervisory board and the announcement of the departure of its finance director Bernard Duettman at the start of next year. He will be succeeded by Ulrich Schmidt.
Thomas Quaas, the company's chairman, said the measures would make Beiersdorf more profitable and competitive. The package includes substantial investment in skin and body care brands, global streamlining of product portfolios and changes in regional structures. Extra investment will total some €270m in the period to 2012 with €120m of this being invested this year "in all probability". Given this extra investment, the return on sales before tax is expected to be about 9% in the current year with sales increasing in 2010 by between 1% and 2% at group level.
The "focus on skin care" strategy will involve streamlining of product lines and the abandoning of the company's German make-up products business – seen as no longer central to management strategy. Subsidiaries abroad will be left to decide whether to follow this move or not. Make-up products account for only 2% of total sales of €5.7bn (2009).
Meanwhile, new skin and body care products will be launched over the next few years.
