Back to the roots, Nivea resumes growth and pleases investors

Even after having thrown Rihanna as "face" of the Nivea, Stefan Heidenreich, CEO of the company Beiersdorf, German brand manufacturer of creams, still attracting investors.
The Executive, who in August had rejected her for considering it too sensual for Nivea, saw shares rise 41% on its first year in business. In the four years prior to his arrival, coming from the Swiss food company Hero, had barely managed to keep afloat. Under the command of Heidenreich, the Hamburg-based company raised on two occasions the sales projections, which were stalled since 2008.
Give up Rihanna, that Nivea was using ads from 2011, was part of the Executive's plan to bring the brand back to the roots. Create a logo and a pack inspired in traditional cans of Nivea was also another part. Still, Heidenreich has a long way to go to justify the value of action, currently has the third highest price on multiple profit designed, among the members of the DAX index, benchmark German market.
"Investors were pleased to see this year [2012] that focus on major brand Nivea gave result", says the analyst Daniel Lucht, of ResearchFarm, a London research company retail and consumer goods. The next 12 months, however, will be "much harder."
Among those who will be watching closely, are the billionaire German Herz family, owner of about 51% of the company, and the American & Gamble Proctor, whose CEO, Robert McDonald, sparked speculation about a possible takeover, saying in September 2010 that Nivea was a "tremendous international brand".
"If they are satisfied with the new impetus that Heidenreich brought, that's great. If not, know very well that there are other external interested parties "says Chas Manso de Zuniga, an analyst at Societe Generale, in London. "Many people consider this a situation where you win anyway".
Not everyone is so optimistic. "He has probably three or four years to take that out [to reinvigorate the company]", said the analyst Sebastian Frericks, Bankhaus Metzler in Frankfurt, which since 2009 classifies stock recommendation to "sell". Heidenreich won't necessarily be judged this year "because some measures, such as innovations, can take 12 to 18 months to be implemented, although the Beiersdorf probably will get in trouble if the growth slow down again".
At the moment, this is not something that analysts contemplate. The average projection for revenue in 2013 is € 6.3 billion, according to data compiled by Bloomberg, 4.9 percent more than the total estimated for 2012. The last time the Beiersdorf had expansion than it was in 2008.
The valuation of shares of Beiersdorf in 2012 overcame the high of 29% of the DAX index, comprised of 30 companies. The role of the company closed the year at € 61,88. When Heidenreich joined Beiersdorf, the price was € 44,23 and at the end of 2007, € 53.
Heidenreich, who joined the company in January 2012 and became CEO in April, said in his first conference call in May that the company "will only play where you can win", which he identified as the area of skin care. The 50-year Executive said that Nivea skin care products should signify confidence, security and family values. Leave Rihanna out of hand was his way of showing what I wanted to say.
"It was an example, public good, a decision coming directly from him," said the Director of strategy of FutureBrand, Charles Skinner. "With this action, the Nivea, who had left a little of his track with Rihanna, returned to their core values. He is surfing a wave of goodwill from investors at the moment. The challenge will be to make it continue. "
Analysts estimate that about 60% represents Nivea sales of Beiersdorf, to promote growth of trademark 102 years is key to the plans of Chief Executive.
Rehabilitate the familiar round blue logo of the product and the packaging change was the first step of the plan called "Blue Book", which helped raise sales of Nivea at 5.4% in the first nine months of 2012.
To keep pace, Heidenreich comes putting into practice a program of product innovation, especially in emerging countries. A new research and Development Center was opened in may in China and another is under construction in Mexico, to operate in 2014.
The ambition of the CEO in emerging markets can be noted by the team that rode. In may, hired Stefan De Loecker, former head of Nestlé 's operations in Russia, to occupy the Council responsible for Russia, Turkey, Middle East, Africa and India. Patrick Kaminski came from Henkel to take care of China, Thailand, Viet Nam, Indonesia and Australia. "He has been investing more aggressively in people," says Frericks.
In addition to raise sales, Heidenreich undertook to combat costs "persistently", to improve profitability. The promise includes reducing the company's marketing budget in a Europe plagued by crisis and cut investment in advertising in China, where the Beiersdorf aims to match expenses and revenues in 2014.