Beiersdorf AG has announced that it’s planning measures and investments to further improve the company’s competitiveness through an increased focus on the skin care market. A comprehensive package of measures and investments has been drawn up to implement its new consumer business strategy: “Focus on Skin Care. Closer to Markets.”

Beiersdorf’s Supervisory Board has approved the package of measures and investments. “Implementing the package of measures and investments will make Beiersdorf even more competitive and more profitable. Today we have laid key foundations to safeguard the company’s long-term future,” said Thomas-B. Quaas, chairman of the executive board of Beiersdorf AG.

The package comprises substantial investments in the company’s skin and body care brands, the global streamlining and harmonization of the product portfolio, and the realignment of regional structures. Additional costs of approximately €270 million are expected up to fiscal year 2012, with roughly €120 million of this amount probably being incurred in fiscal year 2010. The additional costs also include write-downs of intangible assets relating to the Chinese business.

As a result of the additional costs, the Beiersdorf Group’s EBIT margin for fiscal year 2010 will be approximately 9% (the figure from operations will be approximately 11%), while sales growth will be 2 to 3%. The consumer business segment is forecasting sales growth of 1 to 2% and an EBIT margin of 8 to 9% (the figure from operations will be approximately 11%). The tesa business segment is expecting sales growth of 10 to 11% and is aiming for an EBIT margin of above 10%.

The entire skin and body care range has been analyzed in the light of the strategic direction “Focus on Skin Care.” In this context, the company will streamline its product range. Moreover, in Germany, Beiersdorf will withdraw from decorative cosmetics, which is no longer in the strategic focus. All other local affiliates will decide independently about their decorative cosmetics business. The sales affected by the streamlining of the product portfolio will be offset in the medium term by the launch of product innovations.

“In the coming years we will launch a large number of new products for our skin and body care brands that represent innovations for the consumer,” said Quaas. By merging the Brands and Supply Chain areas, Beiersdorf has created the ideal conditions for a seamless, fast and effective innovation process, he continued. This has allowed Beiersdorf to gain valuable competitive advantages.