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Beiersdorf earns record profit thanks to digital marketing

Hamburg-based, DAX listed company banking on digital sector - more, new innovative products planned

Beiersdorf, the personal-care giant based in Hamburg, has announced record 2016 profits, which grew 8.4 per cent to EUR 727 million – a sales increase of 1.0 per cent to EUR 6.75 billion. Sales in North America last year grew by 1.4 per cent to EUR 432 million while currency-adjusted sales in Latin America dropped 0.7 per cent to EUR 646 million. Commenting on future geopolitical risks, Stefan Heidenreich, CEO of Beiersdorf AG, said it remains to be seen what will happen in the United States under President Donald Trump. The company operates a production plant and centre of innovation in Mexico. Shareholders will propose dividends of 0.70 cent per share similar to those in previous years. Beiersdorf has paid the same amount in dividends since 2009.

Digital marketing increasingly important

The company’s systematic, digital positioning of all products is just one reason for Beiersdorf’s economic growth. The firm’s profile has been enhanced and the competitiveness of its brands improved without raising the marketing budget significantly. To do so, the marketing mix took account of changing users’ habits and through extended digital marketing. Beierdsdorf is investing 15 per cent to 20 per cent of the annual advertising budget in digital channels. Heidenreich has predicted another percentage increase in the digital segment.

Innovative sunscreen products

Beiersdorf is aiming for 3.0 per cent to 4.0 per cent growth in sales this year and is boosting other products as well as the dominant Nivea brand. Last month, Vincent Warnery was appointed to the Executive Board to oversee the brands Eucerin, Hansaplast and La Prairie, which should generate more growth in 2017. Other innovative products such as a new sunscreen with clothing protection are also being planned. Yellow stains normally caused by sunscreen with ultra-violet protection can then be washed out easily. The product is likely to change the market fundamentally, according to Heidenreich.

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