April 2024
Beiersdorf - From Hamburg pharmacy to global market leader in skin care

When pharmacist Paul C. Beiersdorf applied for his first patent for his ‘Guttapercha Pflastermulle’ in 1882, he certainly could not have dreamt that he would lay the foundations for an entrepreneurial success story. 142 years later, the Beiersdorf Group not only employs almost 22,000 people worldwide, the company's values (Care, Simplicity, Courage, Trust) also embody guidelines that could be associated with the courage to take responsibility, focus on the essentials and reliability.

Some financial analysts and investors may have underestimated Beiersdorf AG's potential in recent years: Despite a first-class balance sheet and an ample liquidity position, there was no dividend increase for shareholders for years. In addition, there were several changes to the Executive Board that were not comprehensible to every shareholder. Stefan De Loecker, who took over as Chairman of the Executive Board in January 2019, handed over the reins to Vincent Warnery on 1 May 2021.

In addition to Mr Warnery, the current Executive Board team is made up of an equal number of six men and women. Five of them took up their Executive Board mandates in 2021 and 2022. Against the backdrop of an almost completely new management team, the record figures achieved in the 2023 financial year are remarkable: organic sales growth of 12.5% in the Consumer business segment (including Nivea, Eucerin, La Prairie and Hansaplast), driven by double-digit growth for the Nivea brand in all regions. This resulted in an organic sales increase of 10.8% for the Beiersdorf Group combined with a slightly higher operating profit margin of 13.4%. The fact that the growth of the Nivea brand was driven by both volume growth and higher prices emphasises Beiersdorf's pricing power.

There are also risks in Beiersdorf's business model: for example, investments in new products may not generate the hoped-for growth. There is also a risk that non-financial risks may arise due to a breach of due diligence obligations. Non-financial risks are regularly evaluated by management. In fiscal year 2023, Beiersdorf introduced a Group-wide risk management tool that can be used to assess non-financial risks in even greater detail.

Far-sighted entrepreneurs and managers make the right investment decisions. In 2017, Beiersdorf decided to build a new company headquarters in Hamburg for €230 million, which was completed on schedule in 2023. This marked a turnaround from working in individual offices to an open and communicative working environment. Beiersdorf is thus not only positioning itself as an attractive employer for talented young professionals, but also proving that change can be aesthetic as well as productive and functional. Investments in research and development (fiscal year 2023: €320 million) as well as marketing and sales (fiscal year 2023: €3.25 billion) create the basis for long-term growth.

In our view, the tailwind for structural growth in the Consumer business segment has increased in recent years: preventive skin care is not just a question of beauty, but also a question of well-being. In addition to care, protecting the skin from dangerous sunlight is also becoming increasingly important.

Investments in factories and manufacturing processes ensure that deliveries can also be made in times of strong demand. The expansion of production capacities in Leipzig in 2023 and the planned capacity expansions in Mexico and Poland form a solid foundation for future business development. The newly formed Executive Board team is pursuing a clear strategy: Beiersdorf should not only tap into growth potential and gain market share, but also accelerate the digital transformation and establish a presence in the so-called ‘white spots’: Countries and regions in which Beiersdorf is not yet represented with its skin care brands.

An attractive and ambitious mission.

Author: Jochen Kurz

Quelle: Morningstar

The contents of this page are marketing communications and not financial analyses. It does not constitute investment advice or an investment recommendation, nor does it constitute an offer or a recommendation or invitation to make an offer to buy or sell the financial products mentioned. Insofar as we have presented performance and/or sample calculations in the aforementioned information, these do not allow any reliable conclusions to be drawn about future performance. References to past performance do not necessarily guarantee positive developments in the future, and reference is also made to the risk associated with transactions in financial products. The information mentioned reflects the author's judgement at the time of publication. The company discussed may or may not be part of the portfolio of our equity fund. Any investment decision should always be based on an individual analysis of the personal financial situation and risk tolerance.