Business and Strategy¹

Consumer

Consumer

Our strategy

The Beiersdorf name has stood for innovative skin care since 1882. This is our core competency – and we want to deliver added value for our consumers in this area. Our goal: We want to ensure that people all around the world feel good in their skin.

In 2019, we formulated our C.A.R.E.+ business strategy. This describes our strategic priorities and is the means by which we want to secure our competitive, sustainable growth. The strategy focuses on the following areas:

• Fast forward digital transformation
• Win with skin care
• Unlock white spot potential
• Fuel the growth through increased productivity
• Build on strong foundations: Culture – Core Values – Capabilities – Care Beyond Skin

We continued to implement the strategy in the reporting year and once again made significant progress. Below, we briefly introduce the most important progress.

Fast forward digital transformation

Digitalization in our company and business plays a decisive role in tapping new growth potential. That is why we have long been systematically driving digitalization as part of our C.A.R.E.+ strategy. We are using digital technologies more extensively, for example, to engage in direct dialogue with our consumers and fulfill their individual wishes. In the reporting year, we once again made substantial investments in digital approaches, particularly in various social and media networks and precision marketing. This included influencer collaborations and partnerships with providers of digital technologies. Our e-commerce business has grown steadily in recent years and, with strong partner relationships, high-quality content and effective retail media, has become an increasing driver of our overall sales growth.

In addition to these measures, we have been using forward-looking digital technologies including artificial intelligence (AI) for many years to drive faster and more efficient development of innovations – for example in developing and optimizing formulas. Another example of the use of AI-based technologies is the skin study SKINLY, which we continued in 2023 and is one of the world’s largest skin care studies involving consumers. Further details on this and other approaches are presented in the “Research and Development” chapter.

In addition to marketing and research and development, we also invested last year in the digitalization of our production, in future-oriented workplaces, in new forms of work and changing approaches to the workplace (“New Work”), and in our employees’ digital skills. For us, our new production center in Leipzig sets standards in the automation and digitalization of all production steps as well as in terms of sustainability standards. The Beiersdorf Campus, the new Group headquarters in Hamburg we inaugurated in the reporting year, offers new opportunities for dialogue and working collaboratively and creatively thanks to state-of-the-art technology. With an area of 51,000 square meters, we have created the new global centerpiece of our organization here, which our employees have significantly shaped. Further information on our employees can be found in the “People at Beiersdorf” chapter.

Win with skin care

Our claim is to bring innovations to market that offer our consumers added value. A fine example of that is our first anti-aging care range with Q10: We launched it in 1998 and heralded in a new era in cosmetics for us using active ingredients already 25 years ago. Q10 remains one of the most important anti-aging ingredients to this day and we continue to develop it further. The NIVEA Q10 face care range, for example, is now available in over 60 countries and is the number 1 in the NIVEA face care segment. The latest product in the range is the NIVEA Q10 TARGETED WRINKLE FILLER. The serum’s formula combines pure Q10 with BIOXIFILL^® peptides – a skin-friendly and powerful combination that reduces wrinkles in sensitive areas of the face.

We successfully expanded our familiar face care range LUMINOUS 630^® under the NIVEA brand in the reporting year. With the NIVEA Men Anti-Age Power Serum, which combines the patented anti-pigment ingredient LUMINOUS 630^® with hyaluron in a 2-in–1 formula, we have successfully entered the market for anti-aging care for men.

The patented active ingredient Thiamidol from our dermocosmetic brand Eucerin also remains one of the company’s most successful innovations. Revision of our Eucerin Hyaluron-Filler + Elasticity product range with Thiamidol in the anti-age category reaped clearly perceptible successes in the fiscal year 2023. The relaunch enabled us to benefit from the growing market trend toward anti-aging products and further increase our market share. Following its success in face care, we have expanded use of our patented active ingredient Thiamidol to the body care segment in recent years. In the reporting year, for example, we launched the new Eucerin Hyaluron-Filler + Elasticity Anti-Age Body Cream, which has been specifically developed to counteract advanced signs of skin aging on the body.

In 2023, we further developed some of our skin care products and also made good progress in implementing our Climate Care strategy. Our goal is to achieve an absolute reduction in CO₂e emissions along the entire value chain (Scopes 1, 2, and 3) of 30% by 2025 (vs. 2018). Key product transformation measures in 2023 included changes to the NIVEA Sun, Labello, and Eucerin ranges: In the case of NIVEA Sun, the bottles, caps, and trigger pumps are now partly made of recycled plastic. The revised formulas also have a lower environmental footprint. In the case of Labello, the formulas and packaging have also been developed further, thereby reducing CO₂e emissions. Eucerin has introduced a special innovation: The Hyaluron Filler Day and Night creams come in particularly sustainable refill packaging. This refill concept for the anti-age bestseller, in which only the inner jar is replaced and the outer packaging is reused, enables a reduction in the use of plastic.

We also want to make a major contribution to protecting the climate and establishing a circular economy with our new aerosol cans. Since the last fiscal year, we started to produce our deodorant spray cans for the European market at least 50% from recycled aluminum. At the same time, they have also become lighter thanks to a reduction in material. In this way, we aim to cut CO₂e emissions in the value chain.

Unlock white spot potential

Another element of Beiersdorf’s C.A.R.E.+ strategy is tapping into new potential for growth. We are concentrating on tapping “white spots” – markets and business areas where we are not yet present or would like to further expand our presence. The most attractive regions for us are in Latin America (especially Brazil and Mexico), Asia (especially China, South Korea, Thailand, and Indonesia), and Africa (especially South Africa and Nigeria). However, the market conditions in the individual countries differ greatly; therefore, we are focusing on different aspects as part of our market development strategies. The demand for our Derma products in Latin America is very dynamic, while we see significant growth potential for our NIVEA range in African countries. In China, premiumization is the key to success. As a global brand that aims to be successful in this strategically important market, securing our premium positioning is our top priority in order to create sustainable growth.

Our strategic focus with NIVEA is on the Face Care category and strengthening our efforts in e-commerce business. In the reporting year, we recorded successes in particular with the high-quality face care range NIVEA LUMINOUS 630^®, which we sell via cross-border e-commerce. Our global research and development network makes a key contribution to tapping into this growth potential. It enables us to address local cultural, aesthetic, and climatic conditions and develop products that correspond to individual local or regional needs and preferences. At the same time, it allows us to learn from each other, pursue different research focuses that reflect local expertise, participate in global innovation, and have access to local talent and partners who provide valuable ideas and insights for our research and development work.

Our skin research center in Hamburg is at the heart of this network. At this center, we carry out application-oriented research, in particular, in order to gain a better understanding of the skin’s metabolic processes. The Beiersdorf Study Center was modernized in 2023 and is part of the skin research center. As a complement to tests performed externally, it is mainly tasked with intensively testing and ensuring the quality, safety, and tolerability of newly developed products prior to their market launch. The second largest research location is our innovation center in Shanghai. The main focus of research activities there is on the use of AI tools to optimize formulations, developing sustainable formulations, and gathering new insights into Chinese consumers in relation to anti-aging and sensitive or oily skin. In contrast, our innovation center in Florham Park, USA, focuses on clinical research and developing local product innovations for the dermocosmetic ranges of Eucerin and Aquaphor as well as for the sun protection brands Coppertone and Eucerin Sun. More information on this subject can be found in the “Research and Development” chapter.

Fuel the growth through increased productivity

In order to grow faster, we are committed to efficiency, strict cost discipline, and a focused, lean organization. We continuously invest in increasing our productivity, for example through investments in new production technologies or in expanding our production capacities.

An event of special importance in the reporting year was the inauguration of our new facility in Leipzig. The ultra-modern production center is one of the largest investments (almost €300 million) in a single location in Beiersdorf’s history, where a high degree of automation and extensive digitalization of all production steps, for us, will ensure above-average efficiency and productivity in the future. The facility has a modular and flexible design so that new innovations, trends, consumer wishes, or production processes can be implemented quickly.

This new production center also helps us achieve the goals of our CARE BEYOND SKIN sustainability agenda: Thanks to the use of renewable energies and biogas to generate heat, the facility is virtually CO₂e-neutral. Valuable resources such as heat, wastewater, and ethanol are recovered and treated on a large scale. Moving ahead, we plan to operate the facility as an “Energy+” location and produce more electricity than we consume by generating our own renewable energy.

In addition, in 2023, we have once again globally invested in new production lines, state-of-the-art technology, and our IT infrastructure. In 2024, we will complete the expansion of our facility in Mexico, which is one of Beiersdorf’s three largest production sites. We are also expanding our production site in Poland extensively. The investments will total almost €200 million. Our objective for all production sites is to further increase the efficiency, agility, and resilience of our supply chain, allowing us to respond even better to constantly changing circumstances.

We will again invest in growth and innovation in 2024. For the Consumer Business Segment, investments will be at a similar level to those in 2023. Notable projects for the expansion of production and storage capacities relate to the locations in Poland, Mexico, and Leipzig.

Building on our strong foundations: Culture – Core Values – Capabilities – Care Beyond Skin²

We believe that our special culture is the key to Beiersdorf’s DNA. Based on trust, collaboration, respect, openness, and mutual appreciation, it centers on our Core Values – Care, Simplicity, Courage, and Trust – and sense of togetherness. This culture of “we” rather than “I” makes us strong and agile and is key to our strong cohesion and sustainable success.

The goal in all we do is to fulfill our consumers’ needs and wishes to the best of our ability and meet our responsibility toward society and the environment.

Our purpose “Care Beyond Skin” is an expression of what Beiersdorf stands for and what defines us as a company – because our care and concern go far beyond our core competence, skin. We want to make a positive contribution to our society and our planet. In the past fiscal year, for example, we demonstrated that with Beiersdorf’s first global volunteer day. At the CARE BEYOND SKIN DAY, all Beiersdorf employees had the chance to spend an entire working day supporting non-profit organizations. The activities varied greatly: from collecting garbage to renovating playgrounds, sports facilities, and children’s homes to planting trees. The wide range of support not only helped strengthen an inclusive society and environmental protection, but also increased employees’ sense of togetherness and identification with Beiersdorf.

We are committed to embracing diversity, equity, and inclusion (DE&I). Because we firmly believe that people are more motivated, more productive, and more satisfied when their different backgrounds, experience, and skills are valued and when they can truly be their unique selves. Therefore, alongside equal opportunities, we aim to encourage an inclusive corporate culture where everyone feels they belong – whatever their age, ethnicity, nationality, sex and gender identity, physical and mental abilities, religion and belief, sexual orientation, and socioeconomic background. In our goal to promote gender diversity in leadership positions, we have reached a significant milestone: By 2023, leadership positions below the executive board are intended to be equally filled by men and women worldwide – some 18 months earlier than planned. Further information on our sustainability agenda and the topic of diversity, equity, and inclusion can be found in the “Non-financial Statement” and in the “People at Beiersdorf” chapter.

With the Beiersdorf Campus, our new Group headquarters, we also laid the foundations for further growth and innovation in the past fiscal year. The investment of €250 million not only demonstrates our commitment to the Hamburg location. It is also the foundation for a highly attractive working environment with an extensive range of services. In designing the campus, we incorporated the needs and wishes of the employees at an early stage and translated their specific requirements into the new working environments. For instance, the floor plan and the concept for the various room modules were geared rigorously toward New Work and agile working methods. We also created numerous collaboration and communication spaces to promote dialogue between colleagues and use forward-looking technologies. The new Group headquarter was built in accordance with the WELL standard, which focuses on the health and well-being of employees – from planning to daily use of the building and the new working environments – and taking into account criteria such as office design, retreats, air quality, outdoor facilities, and food quality. Beiersdorf is also aiming to gain LEED certification, an internationally recognized seal of quality for sustainability in building planning, for the new Group headquarters.