Beiersdorf poised for organic growth

By Simon Pitman

- Last updated on GMT

Related tags Personal care Beiersdorf

German cosmetics giant and marketer of the Nivea brand, Beiersdorf,
says it is poised to grow organically, with the Asian and men's
personal care market likely areas for investment.

Chief executive Thomas-Bernd Quaas mentioned his ambitions in an article published in today's WirstchaftsWoche magazine, when he also said that he was not ruling out the idea of strategic acquisitions.

Quaas said that acquisitions would be carefully considered, as the wrong buy could weaken the company's position, particularly if it was a smaller player, adding that any acquisitions would have to endorse the company's leading market position.

"No one is putting pressure on us to make acquisitions,"​ he said.

The company says that its investment partner, German coffee company Tchibo, was backing its strategy to grow organically. Tchibo is currently a 50.5 per cent shareholder in the company, having purchased the majority of the shares back in October 2003 for an estimated €4.4 billion.

Beiersdorf is chasing significant growth in developing markets, with China proving to be a major driving force because of phenomenal economic and retail growth in the country, combined with a strong positioning built mainly from organic development.

The company has already said that in China, as well as other sizeable markets, it will be introducing dedicated solutions for specific product categories.

Huge growth in the China skin care market is likely to fuel a series of new product launches in the course of the next few years. Last year the country's cosmetics and toiletries market grew by 10 per cent, edging its value of towards the $8 billion mark, growth that Beiersdorf was able to capitalise on, increasing its market share by 53 per cent.

Although the men's skin care segment is still comparatively small in China, phenomenal growth is likely to fuel a number of new launches from the company, with the Nivea For Men brand likely to prove a major driving force for the company.

Already the brand is a leader in some 24 countries, and the company has just announced that it will further segment the brand with the worldwide launch of four new lines targeting different skin types; namely normal to dry, tired, sensitive and greasy, sensitive skin types.

Despite tough market conditions, particularly in the all-important German market, Beiersdorf says its preliminary year-end results indicate sales growth of 5.1 per cent, while profit after tax rose by 7 per cent, with sales coming in at €4.77 billion, while profit before tax stood at €330 million.

Looking ahead Beiersdorf has already mentioned earlier this year that it wants to achieve a 5.5 per cent of the global market for personal care products by the year 2010. As well as China, it also said it will be targeting India, Brazil and Russia to help it achieve this goal.

Related topics Business & Financial

Related news

Show more