Manufacturer Beiersdorf wants to continue to hold on to the Russian business for the time being.
(Photo: dpa)
Dusseldorf Beiersdorf CEO Vincent Warnery began his speech at the Annual General Meeting on Thursday with his regret about the “shocking events in Ukraine”. Nevertheless, the Nivea manufacturer wants to stick to its Russian business. Since the beginning of March, the consumer goods group has at least reduced its activities there and only sells basic skin and body care products such as shower gel, deodorant or shampoo, said the Frenchman at the virtual shareholder meeting.
Beiersdorf employs 320 people in Russia and does not have its own production facilities there. The group achieves two percent of its sales and 0.2 percent of earnings before interest and taxes (EBIT) in the country.
This means that the Hamburg company is less heavily invested than its competitor Henkel, which also wants to continue producing in Russia for the time being. The Persil manufacturer employs 2,500 people in eleven Russian plants and generates five percent of its sales there.
Like Henkel, Beiersdorf is under pressure because of its involvement in Russia. Shareholders criticized on Thursday that Beiersdorf had to stop doing business out of solidarity. Reputation experts also warn that business in Russia could have a negative impact on the brand’s image in other markets.
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Warnery defended the move, citing “the welfare of the people.” They take care of their own employees and support the basic needs of Russian households with products for basic supplies.
>>> Also read: The Henkel boss wants to hold on to the Russian business for the time being – and is coming under more pressure
Beiersdorf has suspended sales of premium skin care products and those of the Tesa adhesive division. According to the group, it no longer advertises in the country. Warnery did not rule out further measures, and the situation was continuously monitored.
The CEO assesses the direct financial effects of the Russian war of aggression in Ukraine for Beiersdorf as “not significant” because of the small share of sales. However, he expects rising raw material and energy costs. At the moment he sees no reason to change the prognosis because of the war. Beiersdorf expects mid-single-digit sales growth in 2022.
Beiersdorf is growing faster than expected
In business terms, Beiersdorf seems to have overcome the consequences of the corona pandemic. The group started the first quarter better than expected by the capital market, as the group announced in an ad hoc announcement last week.
According to preliminary figures, Beiersdorf generated sales of EUR 2.2 billion during this period – an organic increase in sales of 10.3 percent. The business with cosmetics, shampoos and deodorants in particular grew organically by 11.6 percent faster than expected.
The Beiersdorf boss initially wants to continue to deliver to Russia.
(Photo: Beiersdorf)
Beiersdorf, which was relegated to the MDax in March and employs 20,000 people, plans to further expand its e-commerce business in the current year. Like its competitors, the group wants to increasingly sell its products directly via its own online channels. Customers also have the option of personalizing the products. However, the online main care brand Own, launched last spring, is “below our expectations”, Warnery had to admit. “The total volume is low so far.”
Warnery wants to make the core brand Nivea, with which Beiersdorf makes a large part of its sales, “more global, more digital and more sustainable” in the future. To this end, Beiersdorf plans to control product launches and marketing campaigns more globally. In order to achieve these goals, the consumer goods group has created a dedicated board position for the brand. Grita Loebsack joined the committee in December.
In any case, there have been a lot of personnel changes in the management team lately. The departure of CEO Stefan de Loecker at the end of April 2021 was particularly surprising. Warnery replaced him.
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