Nivea skin cream maker Beiersdorf will make an additional investment of up to €80 million 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 1 January, last month promised strategic steps to deliver sustainable growth after reporting slower sales in the fourth quarter of 2018.
Push For Profits
"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 a year from 2019 in the consumer segment, which accounts for 80% of group sales.
It said that it expects sales at the division to growth between 3% and 5% this year, against 5% in 2018.
For the group, Beiersdorf also expects sales growth of 3-5% in 2019, compared with 5.4% in 2018.
The company's EBIT margin will decline this year as a result of the additional investment, the company added.