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Beiersdorf Withdraws 2020 Guidance, Invests in Sustainable Aerosol Firm

The German skin-care maker’s sales declined 1.9 percent in reported terms and 3.6 percent on an organic basis in the first quarter.

PARIS — Beiersdorf AG has taken an equity stake in sustainable aerosol company Salford Valve Co. Ltd., it said Tuesday, just after releasing first-quarter numbers dampened by the coronavirus, forcing it to withdraw guidance for 2020.

The Hamburg, Germany-based skin-care maker said the undisclosed stake in the technology firm, also known as Salvalco, is in line with Beiersdorf’s new sustainability agenda, called Care Beyond Skin.

“This investment by recently established Oscar&Paul Beiersdorf Venture Capital further underlines the company’s ambition in driving disruptive initiatives and innovations under its C.A.R.E.+ strategy and new sustainability agenda,” Beiersdorf said in a statement.

“The partnership will strengthen Beiersdorf’s footprint in sustainable packaging solutions. It also supports Salvalco’s further research and the commercialization of the patented Eco-Valve technology, aiming to jointly bolster its global outreach,” Beiersdorf continued.

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Salvalco was founded in 2013 in the U.K. and develops aerosol valve systems called Eco-Valve, which spring from research by Salford University’s Spray Research Group.

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“The Eco-Valve technology allows eco-friendly, inert gases, such as nitrogen or simple fresh air, to be used as propellants in aerosol sprays, thus providing a more sustainable alternative to conventional aerosol propellants,” Beiersdorf explained.

”Salvalco is an exciting investment and fits with our recently extended corporate sustainability ambitions for a carbon-positive future,” stated Ascan Voswinckel, head of Oscar&Paul Beiersdorf Venture Capital. “In these very challenging times, we are particularly committed to investing in visionary and innovative companies. We are looking forward to supporting Salvalco in its progress and applying Beiersdorf’s industry expertise in order to make a positive impact.”

An Eco-Valve can
An Eco-Valve can. Courtesy Photo

Also on Tuesday, Beiersdorf reported first-quarter sales eased 1.9 percent in reported terms and 3.6 percent on an organic basis to 1.91 billion in the three months ended March 31. Beiersdorf also retracted its guidance for 2020.

“For 2020 as a whole, the company is unable to currently project the future development or the economic impact of the coronavirus crisis,” Beiersdorf said in a separate statement. “The targets set in the company’s guidance issued on March 3, 2020, are unlikely to be achieved. The company has withdrawn this guidance as a result.”

At the time, Beiersdorf said it expected group organic sales growth to be between 3 percent to 5 percent for full-year 2020, and for the consolidated underlying earnings before interest and taxes and underlying profit after tax margins to remain on the same level as in 2019.

“The global COVID-19 crisis is changing our life and work radically,” said Stefan De Loecker, chief executive officer of Beiersdorf. “From the very beginning, we have focused on ensuring the health and safety of our employees, continuing to serve our consumers and supporting communities in their fight against the coronavirus.

“As expected, the ongoing COVID-19 pandemic has affected the company’s results for the first quarter. Our selective cosmetics brand La Prairie has been particularly hit by the drop in international travel,” he continued. “At the same time, our core brand Nivea remained steady with only a slight fall in sales, while our Derma and Healthcare brands achieved strong, double-digit sales growth.

“Beiersdorf’s foundations are strong enough to enable us to master and overcome this unprecedented crisis together — and emerge from it stronger in the long term,” said De Loecker. “Despite today’s major economic challenges, we will stay the course with our strategy and will maintain investing in our initiatives under C.A.R.E.+.”