29 November 2018 - Deborah Wilkes
Bayer plans to "exit" the Coppertone and Dr. Scholl's brands, allowing it to focus on "driving profitable growth in its core Consumer Health categories".
The German company said it would "review its strategic options in the coming months with a view to exiting the Coppertone suncare and Dr. Scholl's foot care product lines".
The product categories had "more favourable development potential outside of Bayer", commented the company.
Bayer gained Coppertone and Dr. Scholl's as part of the USD14.2 billion acquisition of Merck's Consumer Care business on 1 October 2014. The deal also included the Claritin range of antihistamines.
The company owns the rights to Dr. Scholl's in the Americas, with RB and Aurelius having the rights elsewhere in the world.
Financial performance has suffered
Since the acquisition, Bayer Consumer Health's financial performance has suffered.
The business returned to growth in the third quarter of 2018, reporting worldwide sales up by 3.0% on a currency- and portfolio-adjusted basis to EUR1.30 billion (USD1.48 billion). Sales as reported were down by 1.7% (click here to read the News story).
It was the first time since the first quarter of 2017 that Bayer Consumer Health had reported a rise in sales on a currency- and portfolio-adjusted basis.
Worldwide sales of Coppertone dropped by 31.3% on a currency- and portfolio-adjusted basis to EUR10 million, while sales of Dr. Scholl's were down by 4.6% to EUR49 million.
The two brands accounted for 4.5% of Bayer Consumer Health's total sales in the third quarter of 2018 and 7.7% in the first nine months of 2018.
Catch up to market growth
Bayer said the Consumer Health business would initiate measures to "catch up to market growth in the coming years and improve profitability". "Beyond the planned portfolio measures, the organisational structure will be adapted to succeed in a rapidly-changing market environment," commented the company.
In addition to the strategic review of Coppertone and Dr Scholl's, Bayer intends to exit the Animal Health business. The company said it would "allocate the investment resources necessary to support Animal Health to Bayer's core businesses of Pharmaceuticals, Consumer Health and Crop Science".
Bayer is also in discussions regarding the divestment of its 60% stake in German site service provider Currenta.
Job cuts on the way
On top of the planned portfolio changes, Bayer intends "to significantly improve its cost structure".
The company plans to reduce its 118,200 jobs worldwide by around 12,000. A significant number of the job losses would be in Germany, said Bayer.
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