FRANKFURT (Reuters) - Nivea skin cream maker Beiersdorf will make additional investment of up to 80 million euros (69 million pounds) a year in its consumer business to counter a forecast drop in sales growth, the German company said on Tuesday.
New CEO Stefan De Loecker, who took the reins on Jan. 1, last month promised strategic steps to deliver sustainable growth after reporting slower sales in the fourth quarter of 2018.
“Our entire business model needs timely adaptation due to new market realities and fast-changing technology developments,” De Loecker said ahead of 2018 results to be published on Wednesday.
“This requires, first and foremost, higher investments.”
Beiersdorf said it would invest between 70 million and 80 million euros a year from 2019 in the consumer segment, which accounts for 80 percent of group sales.
It said that it expects sales at the division to growth between 3 percent and 5 percent this year, against 5 percent in 2018.
For the group, Beiersdorf also expects sales growth of 3-5 percent in 2019, compared with 5.4 percent in 2018.
The company’s EBIT margin will decline this year as a result of the additional investment, the company added.
Reporting by Tom Sims; Editing by David Goodman