BERLIN — Beiersdorf AG has announced further company realignment focused on its consumer business. The Hamburg-based maker of Nivea, Eucerin and La Prairie released the details Wednesday after meetings of the firm’s executive and supervisory boards. The measures will mean gradual job cuts for up to 1,000 Beiersdorf employees worldwide, including up to 230 in Germany, bringing its work force down to approximately 17,000.
Since disclosing restructuring plans in December 2010, the company has tightened its concentration on skin care, phased out its makeup line and sold some of the brands in its portfolio. Major activities and promotions were also focused on this year’s 100th anniversary of the Nivea brand. Additionally, the company’s business structure in China was redesigned, also to focus on skin care.
The goal of the changes is to strengthen regional focus for Beiersdorf’s business regions in Europe/North America, Asia and emerging markets. Beiersdorf headquarters in Hamburg are to be responsible for strategic global tasks, with staff reductions there to take place by mid-2012.
One-time costs of an estimated 265 million euros, or $353.4 million, are expected to be incurred, primarily this year.Included in the figure is 140 million euros, or $186.7 million, for value reduction of the company’s Chinese hair care business.
The realignment is expected to generate annual pretax cost savings of 25 million euros, or $33.3 million, in 2012; 75 million euros, or $100 million, in 2013, and approximately 90 million euros, or $120 million, in fiscal year 2014, according to the company.
All dollar figures are converted at current exchange.
Beiersdorf chief operating officer Thomas Quass stated, “a significant increase in the role played by the regions will give us greater freedom and flexibility in implementing our strategy, allowing us to react quickly to regional consumer and market requirements. To achieve this, we also have to realign our corporate structures and processes. This key decision for Beiersdorf will strengthen our future profitability and our competitiveness.” As previously reported, Quass will hand over the reins to Stefan F. Heidenreich in April 2012.
The company says projected operating earnings before interest and taxes margins for the current fiscal year for both the Beiersdorf Group and its consumer business will remain unchanged at 10 to 11 percent.
Beiersdorf’s Tesa adhesives business is not affected by the measures.
Beiersdorf stock closed up 3.42 percent at 42.53 euros, or $56.72, Wednesday on Xetra, the electronic trading platform of the Deutsche Boerse Group.
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