In a year when many companies have faced serious difficulties, Beiersdorf Middle East, brand owners of the renowned NIVEA brand, has posted another excellent year in the region.
Commenting on the results, Robert Taylor-Hughes, Managing Director and CEO of the Middle East, West Asian and North African Markets said: “A recession is all about lack of consumer confidence; therefore it’s important to have brands that consumers trust and offer good value for money. Similarly, if you can’t afford large luxuries, then smaller luxuries experienced more often can bring back the feel-good factor to the consumer. It is also important to keep innovating during difficult times. If you can offer more consumer benefits driven by science and technology, for a similar outlay, then you can win important market share and this is the key: Top-line sales during times of de-growth and stagnation must be replaced with stronger market positions and growth in profit; these were our main objectives for 2009.”
He continued: ““In order to accurately measure our growth in 2009 we need to look at figures including and excluding KSA, as we did not renew our local agency agreement in Saudi Arabia this year in favour of setting up new operations in 2010 with a planned improvement in service and coverage. This effectively reduced our sales volumes in KSA by approximately 40%. It is also prudent to look at currency shifts as Euro-Dollar Forex rates have been very volatile during the year and 98% of our assortment is produced and sourced from Europe, therefore currency hedging was necessary.”
“The Cosmetics & Toiletries markets in our regions contracted from double digit growth in 2008 to around 4% in 2009. Excluding KSA, we grew at 12%, achieving 3 x the market rate. Even if we include KSA our net sales still grew by 5.6% and 11.5% if we exclude currency effects. This is a tremendous result considering all the extraneous factors affecting business in our regions. Key highlights from the region include Jordan with +36% growth, Egypt +33%, Lebanon & Iraq + 23%, and most of our other thirteen markets witnessing double digit growth”.
“Critically, market share is key. If you can increase market share in shrinking markets, you are effectively taking it from your competitors. Across the 9 markets audited by Nielsen we occupy 41 number one, two or three market share positions. In 2009 we added 4 new number two positions and 1 new number one position, so we can be very proud about increasing our dominance in the skin and beauty categories in which we operate.”
With regards to new business, Taylor-Hughes cited the Duty Free channel as a good growth driver.
“Our Travel Retail (TR) sales in the region in 2009 showed a 19.5% increase versus 2008, which, again, is almost more than double the regional TR market growth of around 8%, on top of an equally impressive 22.3% NIVEA growth in 2008. During 2009 the brand expanded TR operations into Iraq and Cyprus – namely Baghdad International, Arrival and Departure areas of Terminal C & D, and Cyprus in the new Larnaca Zenon Terminal, which officially opened on November 17. TR innovations were driven by new assortments: Lift and Contour Program pack with Expert Lift Day Cream, Night Cream and Eye Cream and NIVEA Make-Up offerings such as Dynamic Duo/ Perfect Couple Lipstick and Nail Polish Combos and Party Princess & Party Rebel Lipstick, Mascara and Nail Polish Trios.”
“We would like to personally thank Colm McLaughlin and his team at Dubai Duty Free for their excellent cooperation during 2009. It is vitally important that strong alliances are further forged during tough periods for win-win results and DDF itself has shown remarkable achievements during the year,” added Taylor-Hughes.
Commenting on what was new for 2010 and what advice he could give to other CEOs in the region Taylor-Hughes said: “We have many new exciting product roll-outs in 2010 to continue with a vital innovation pipeline, and to take over further new market responsibility in North Africa, with Libya being a new market with great growth opportunity. In 2010 we will continue to recruit talented people increasing our headcount by some +28%. You can always operate with a lean structure, provided you have superior talent, and companies only notice they have got seriously out of shape when the market dynamics change significantly downwards.
“Perhaps the best advice I could give to other leaders is be ‘strategically agile’ – don’t make plans and hope they will simply deliver, and be prepared to adapt and adjust quickly to change,” concluded Taylor-Hughes.
