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Beiersdorf Releases 2010 Financials, Strongly Promotes Nivea Brand in 2011

Beiersdorf AG released its financial figures for 2010, which noted how the company’s group sales rose by 7.8% to €6,194 million as compared to the previous year’s €5,748 million. Organic sales rose by 3.1%, and the operating result (EBIT) excluding special factors amounted to €699 million, up from €587 million the previous year, while the corresponding EBIT margin was 11.3%. The previous year’s was 10.2%.

“In December last year, we laid key foundations for Beiersdorf’s future success by resolving to introduce a package of measures and investments. In 2011, we will be concentrating on their systematic implementation, with the focus being on Beiersdorf’s core competencies, skin and body care. As part of this, Beiersdorf is investing an additional high double-digit million amount in the Nivea brand during the latter’s centennial year. This will strengthen Nivea in the long term,” said Thomas-B. Quaas, chairman of the executive board of Beiersdorf AG.

In the consumer business segment, Beiersdorf increased its organic sales by 1.6% last year. EBIT excluding special factors amounted to €599 million (previous year: €558 million), while the corresponding EBIT margin was 11.3% (previous year: 11.1%).

The company’s three global skin care brands—Nivea in the mass market, Eucerin for dermocosmetics, and La Prairie in the luxury segment—performed positively in 2010, albeit to different degrees. Nivea achieved organic growth of 1.8% worldwide, Eucerin recorded global growth of 9.0% and La Prairie recorded a 7.5% increase in sales.

Performance in the global consumer markets differed substantially. Business in the United Kingdom and Russia did extremely well, while developments in the other European countries were mixed. The consumer segment recorded a slight decline in sales in Germany. Growth in North and Latin America was particularly strong. Sales in the Africa/Asia/Australia region were up slightly on the previous year.

In 2011, the group aims to match its 2010 sales, while in 2012 it expects to see renewed sales growth. Sales growth in the consumer business segment will be significantly affected by the plans to streamline the product range. However, sales growth in the core areas is expected to more or less offset the effects caused by the streamlining of our product range. As a result, sales in the business segment should be on a par with 2010 levels.

As mentioned above, one way Beiersdorf is preparing for future growth is realigning the Nivea brand during 2011, which also marks the brand’s its 100th anniversary year. With the business strategy “Focus on Skin Care. Closer to Markets.” the company will concentrate on its core competence skin care, placing Nivea in its center. A comprehensive activation package supporting the Nivea realignment will begin the implementation phase in May.

“Skin care is the strongest growing segment of the global cosmetics market. By 2015, 45% of the total growth in the cosmetics market is expected to come from this area. With Nivea as the largest skin care brand in the world we will profit from this strong growth,” said Markus Pinger, Beiersdorf board member responsible for brands.

The realignment will feature the Nivea brand campaign “100 Years Skincare for Life.” With this motto, the brand’s campaign will start in May, center staging skin care and the Nivea core values. This will help to bring this brand in the ideal position for sustainable, profitable growth that expands from the company’s core. To support this initiative, Beiersdorf is launching a Nivea skin advisory tour in retail segments, citing that approximately two-thirds of all purchase decisions are made standing in front of the retail shelf. The tour will be at over 75,000 promotional stands in retail stores, offering an anticipated more than 13 million consumer contacts and around 1.7 million consultations.

Also, to reach new target groups Nivea will launch its largest-ever digital mobilization campaign in social media, expected to generate over one billion page views in one week. A collaboration with the pop star Rihanna will make a significant contribution to this endeavor. This effort will incorporate music from Rihanna into the different campaign elements. Together with Rihanna, Nivea will be able to target new generations of young consumers. This will occur in more than 120 million commentaries in various social media.

The company plans to invest more than €1 billion in marketing and other efforts for this brand realignment. Through this global activation package consumers will be brought closer to the world of Nivea through all possible media channels. As a result, Nivea will have a more intense dialogue with existing consumers and will be able to fascinate new and especially young target groups. “With significant investments in the high double-digit millions that we are making available for this year’s Nivea marketing budget, we will strengthen Nivea for the long term with worldwide activities in the 100th anniversary year. Thereby we will stabilize and expand the worldwide number one position in skin care,” said Pinger.

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