UPDATE 2-Beiersdorf sees 2012 profit improving after revamp

Thu Mar 1, 2012 6:31am EST

* Unchanged 2011 dividend 0.70 eur vs poll avg 0.68

* Sees growth in line with market in 2011, faster thereafter

* Sees 2012 consumer EBIT margin returning to growth

* CEO says Schlecker insolvency "bombshell"

* Shares up 0.2 pct

By Victoria Bryan

HAMBURG, March 1 (Reuters) - German consumer goods group Beiersdorf AG predicted a return to profit growth in 2012 after it axed unprofitable lines and focused investment on its key Nivea brand.

The Hamburg-based group, preparing for the arrival of a new chief executive next month, has been losing market share to rivals in recent years, and is revamping its product line under pressure from controlling shareholder, the Herz family.

Beiersdorf, which has slashed 20 percent of its product range in Europe to focus on Nivea, the world's largest skincare brand, should regain market share and start growing faster than rivals after 2012, it said on Thursday.

"We are confident," outgoing Chief Executive Officer Thomas Quaas told journalists. "We did in 2011 what we said we would do and that has brought us to a good position."

The group, which also makes La Prairie luxury skincare and Labello lip balm, in January reported better than expected 2011 earnings and profit margins, suggesting a slow recovery may be starting to gather pace.

Quaas said Beiersdorf expected its consumer business to grow in line with the market this year, at around 2-3 percent.

The group said that the EBIT margin - earnings before interest and tax as a percentage of sales - in its core consumer division should exceed that of 2011, when it dropped to 11.4 percent from 12.7 percent in 2010. The group margin, which includes results from its Tesa adhesives division, should also grow this year after falling in 2011.

PRESSURE ON NEW CEO

New chief executive Stefan Heidenreich takes over in April being plucked from Swiss babyfood and jams group Hero to drive change. If he fails it could lead to increased speculation over Beiersdorf becoming a takeover target.

The Herz family, which currently owns 50.5 percent of Beiersdorf, has said they are investors for the long term, but the surprise appointment of Heidenreich was seen by analysts as a sign the family may be getting impatient.

Talk the family may sell out to the likes of Procter & Gamble or Colgate Palmolive has supported the shares and put them on a premium to rivals.

Beiersdorf shares trade at 22.8 times estimated earnings according to Thomson Reuters Starmine, compared with a 13.7 multiple for Henkel, 18.2 for L'Oreal and 15.7 for Unilever .

Like P&G, Beiersdorf is currently cutting jobs, estimating that around 1,000 of its 18,000 workforce could be affected as it streamlines its structures.

Quaas said the insolvency of Germany's largest drugstore chain Schlecker, which is closing half its stores, was a bombshell and it was impossible to say what effect it would have on Beiersdorf at present.

The group proposed an unchanged dividend of 0.70 euros ($0.94), compared with expectations for a slight fall to 0.68 euros in a Reuters poll.

German rival Henkel is due to report 2011 results on Thursday, March 8.