DERMAPHARM 2012
The Year in Review
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DermaPharm 2012
The Year in Review
contents
DermaPharm 2012
The Year in Review
DermaPharm has been developing, producing and setting the standard for environment-friendly, mild and skinfriendly bodycare products for over 35 years. The company is environment and quality certified according to ISO
14001, ISO 9001 and ISO 22716. We are licensed to bear the Nordic Ecolabel and Ecocert label on our products,
and the Asthma Allergy Foundation declaration. Our own brand, Derma, was the first skincare range to be awarded
the official Nordic Ecolabel, the Swan, and Asthma Allergy Foundation’s declaration, and several Derma products now
bear the Ecocert label as well, indicating that our products are kind to the environment, allergy-friendly and organic.
5 A business in continued growth
7 Management and
Board of Directors
8 Management interview
– COO Peter Bogh Lindgaard
in the hot seat
10 Strategy and Visions
13 Results and development
14 Highlights of the year
16New projects – new potential
20 CSR: Personnel
22 CSR: The environment
25 Profits and losses statement
27 Company information
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DermaPharm 2012
The Year in Review
DermaPharm 2012
Året, der gik
DermaPharm
is leaner than
ever before.
Foreword
A business
in continued
growth
2012 was yet another successful year in the history of Derma­
Pharm. Turnover growth reached almost 5%, making 2012
a new record year for the company.
Pre-tax profit shows a bottom line surplus of DKK 1,071,636.
However, the summer season was not particularly sunny
and price reductions did lead to a lower contribution ratio.
The relaunch of the Derma range also had a negative
impact­on earnings for the year, along with extraordinary
depreciation on stock.
2012 was the year in which DermaPharm sought new
markets­for its own and private label products, primarily
abroad. This means that DermaPharm has entered into a
number of new business relationships, which are either
already­in place or will be in the near future.
Within the environmental field, we have once again been
able to reduce our consumption of water, electricity and
heat this year, and our highly-focused environmental
savings efforts have had a direct and measurable effect on
costs - to the benefit of DermaPharm and the environment.
Mikkel Egelund Jensen
CEO, DermaPharm A/S
With regard to our staff, we have upgraded the organisation
with the recruitment of several key individuals, including a
new COO, Peter Bogh Lindgaard, who will become a
member of the executive management team.
The company’s highly skilled employees also succeeded in
further optimising and improving sales, development and
production to meet the requirements of our customers for
flexibility, efficiency and high quality. In other words, Derma­
Pharm is leaner than ever before!
We therefore enter 2013 with enthusiasm and zeal – and
clear expectations of being able to service all our existing
and future customers even better.
Mikkel Egelund Jensen
CEO, DermaPharm A/S
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
Management
and Board
of Directors
Board of Directors 2012
Brian Mollerup
Chairman of the Board
Birger Kuntkes
Board Member and
owner of DermaPharm A/S
Michael Vinther
Board Member
A WORD FROM THE CHAIRMAN:
”2012 was another successful year for DermaPharm. We
introduced­a number of new initiatives on the domestic
market, including a new design for our own label and
strengthening the setup of Derma, plus a large number of
new, exciting customers for private label.
The management team was strengthened by the recruitment
of key skills within supply chain management as a natural
step in DermaPharm’s development. We are now looking
beyond Denmark’s borders, and already have several
exciting­projects under way abroad. The board of directors
is therefore convinced that DermaPharm is well equipped
to fulfil its export plans, and ready to achieve the ambitious
growth targets we have set.”
Kenneth Codam
Board Member
DIREKTION
Mikkel Egelund Jensen
CEO, DermaPharm A/S
Peter Bogh Lindgaard
COO, DermaPharm A/S
Brian Mollerup
Bestyrelsesformand
From left to right: Mikkel Egelund Jensen, Kenneth Codam, Michael
Vinther, Brian Mollerup, Birger Kuntkes and Peter Bogh Lindgaard
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
Management interview – COO Peter Bogh Lindgaard in the hot seat
We need to
be smarter at
what we do
DermaPharm is focusing on doing things more efficiently
whilst still providing high quality at the right price, servicing
our existing and future customers in the best way possible.
Our strategic focus is directed towards international ex­
pansion, and Peter Bogh Lindgaard was recruited in 2012
as COO to gear DermaPharm up for more export, and to
bolster the business for the future.
Peter is in the hot seat to tell us about his role, the
opportunities­and prospects facing DermaPharm.
5 quick questions:
1
What are your primary tasks
as COO of DermaPharm?
The main responsibility of the COO is to strengthen the
management team, working closely with the rest of the
executive management. My job is to take responsibility for
– and management of – the ’internal’ dealings of the business.
DermaPharm’s size and complexity mean that it needs more
skills development and reinforcement of the management
team, with particular focus on production, logistics and
distribution­. I have no doubt that I can bring my experience
and skills to bear here for the benefit of everyone concerned,
allowing us to work smarter in the future!
We will work
smarter,
not harder.
2
What do you consider to be your strengths
in relation to DermaPharm?
My skills and strengths are within the internal management
of the company, particularly Purchasing, Production and
Logistics – better known as the Supply Chain. Throughout
my professional career I have worked a lot with structures
and processes within Supply Chain, and with the interfaces
between Supply Chain, Accounts/Finance, R&D and the
commercial aspects of the companies I have worked for, which
has also been on an international level. Given my back­
ground, I have also built up considerable understanding of
export in an international perspective, in which networks and
cultural understanding are vital parameters for success.
3
What exactly is
DermaPharm good at?
DermaPharm is a well-run, healthy business, with a wide
range of skills – especially within developing, building up and
managing a brand. I’m thinking particularly here of our own
Derma range, but also other brands such as Rudolph Care,
Gold and Zenz, for which we have been the supplier for
several­years. The Derma brand and the brand management
skills DermaPharm possesses make us proud to work for a
production-based company with such unique abilities. That’s
why it really was no problem to leave a top brand name such
as Bang & Olufsen, when I can continue working for a business
in which I can be proud of the product it produces and sells.
4
What must DermaPharm
be better at?
The new strategy and development program DermaPharm
has to pursue within export means that we will have to be
even more structured, process-oriented and focused at an
international level to succeed. That’s why it’s not just a question­
of whether we need to improve anything, but the fact that
the strategy will shift focus from national to international
means that we need to invest, develop and cultivate the
skills we need throughout the company.
5
What are your ambitions
for the business?
My ambitions for DermaPharm are that we succeed in im­
plementing our international growth strategy, whilst retaining
our position and reputation as the innovative market leader
within skincare products in the Nordic Region. Our aim is to
build a company that has doubled its top line within 3-5
years­, with growth on the bottom line and workforce with a
minimum 10% increase in profit for the future. We will
work smarter, not harder.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
Strategy
and Visions
DermaPharm focuses on quality.
Our products are developed
from pure, environment-friendly
ingredients subject to strict
requirements­and controls.
The board of directors and executive management met in
the autumn of 2012 to decide strategy for the years to come.
Luckily, this was not a complicated exercise, as there was
already a consensus. DermaPharm will move forward on a
global scale. That’s why it was decided to put more focus on
internationalising DermaPharm, which means that we want
more large foreign customers within private and own label.
We also decided to enhance our skills within what we are
already good at, and ensure that we continue to focus on
consistent, on-time delivery of high quality products in
partnership with our existing customers and suppliers, to
the benefit of everyone in the value chain.
As part of that process, we revised our vision/mission
statement­as follows:
VISION
DermaPharm wants to be market leader within
innovative­skincare that protects the family.
MISSION
DermaPharm will through sharp focus on
earnings, development­and customer insight
create the foundation for increased distribution
and sales of DermaPharm’s products.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
Results and
development
Profit for the year
DermaPharm was in profit again in 2012. We achieved a
profit of DKK 1.1 million despite a year in which we made
significant investments and depreciation as a result of the
relaunch of Derma products.
All-in-all, a satisfactory result.
DermaPharm once again succeeded in increasing turnover
– the 8th year in succession. This was attributable in particular
Net turnover in millions
to our customers within private label, almost all of whom
increased sales of their products. It’s a delight to see that
our customers and suppliers are growing with us, which
also confirms that we can go far together.
Our objective for 2013 is continued growth on all fronts,
and we expect the positive indications of the first few
months to continue unchanged.
Net turnover in millions
2009
59,6
2010
65,5
2011
79,5
2012
83,3
B2013
84,8
Gross profit in millions
Net turnover rose from DKK 79.5 million to DKK 83.3 million in 2012, an increase of 5%. When compared to the budget, which
was DKK 82.9 million, we have once again fulfilled our own expectations. We have budgeted another increase for 2013, which
we expect will be primarily realised by the international activities we have launched.
Gross profit in millions
2009
33,6
2010
39,3
2011
46,2
2012
45,0
B2013
47,0
Production costs as a share of turnover
DermaPharm’s growth in gross profit declined slightly due to profit and earnings being under pressure. However, we expect
that sharp focus on purchasing and logistics will enable us to fulfil our expectations for 2013.
Production costs as a share of turnover
2009
10,4%
2010
9,9%
2011
9,8%
2012
8,6%
B2013
8,2%
Our highly-skilled production team once again managed to cut costs to increase cost-effectiveness compared to last year.
As such, we have shown consistently falling costs per unit produced since 2006, and expect to be able to show further
improvement­in 2013.
Profit before tax in millions
Profit before tax in millions
2009
-4,7
2010
1,6
2011
2,5
2012
1,1
B2013
3,1
We made a profit once more in 2012. We expect to continue this trend in 2013 given current indications.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
Highlights of the year
Record turnover
DermaPharm set a turnover record
for the second year running in March.
Net turnover for the month was
DKK 14.483 million, 33% higher
than last year’s highest net turnover
for a single month.
march
Conference in Istanbul
Together with our Iraqi partner Derma­
Pharm held a conference in Istanbul
for 33 doctors and dermatologists
interested in DermaPharm products
in early March. The objective was to
increase awareness of the company’s
products in the Middle East, and to
give delegates more insight into our
products and their use.
Production record for
Derma Family Shampoo
Constant improvements in
efficiency­are always the order
of the day, and in October, a new
record for production of the
popular­Derma Family Shampoo
was achieved. Naturally, such a
milestone had to be celebrated
with a delicious ’blue’ cake.
Relaunch of the Derma range
The Derma range was relaunched on 1 April with a new design, which gave the
visual appearance of the range a facelift and created more cohesiveness and
visibility­in the shops. The Derma Baby and Woman range also won yet another
certification – the organic ’Ecocert’.
april
may
PLMA in Amsterdam
DermaPharm was represented for the
fourth year running at the PLMA
2012 – World of Private Label – trade
fair in Amsterdam. There was a lot of
interest in DermaPharm and what we
have to offer, and we were delighted
to see that the company remains in
the forefront of environment-friendly,
allergy-friendly and organic products.
june
july
Family event at DermaPharm
DermaPharm invited its employees
and their families to an open house
event in June. Popular items with the
youngest visitors at least were a
bouncing­castle and ’make your own
shampoo’, whilst the adults took a
guided tour around the premises.
august
september
Support for export and
internationalisation­
DermaPharm was selected to take
part in the Export Council’s elite pro­
gramme, ’Vitus Vækst’. The programme
is designed for Danish export enter­
prises with ambition and potential to
create an export success on attractive
yet demanding markets. In Derma­
Pharm’s case, the Middle East.
october
Middle East visit
As part of the Export Council’s Vitus Vækst programme,
DermaPharm took part in a visit to the Middle East in
December­, arranged by the Danish General Consult in Dubai.
Meetings were arranged with possible business partners
including advertising bureaux, distributors and dealers.
november
New COO joins management
DermaPharm’s executive management
team was strengthened in November
when Peter Bogh Lindgaard joined
as Chief Operating Officer. Peter’s
primary task is to ensure cost-effective
operations at DermaPharm, along with
rational external and internal logistics.
december
Extended collaboration
with Valora Trade
DermaPharm extended its collabora­
tion with Valora Trade in December,
to further boost the market position
of Derma. Valora Trade acts as retail
consultant for the Derma brand, and
now handles responsibility for its
sales­and distribution.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
Året, der gik
New projects
– new potential
New projects in Denmark
2012 generated a number of serious enquiries, most of
which will be brought to fruition. We therefore look forward
to the summer of 2013, when our new customers launch
their first products from DermaPharm.
2012 was also the year when we forged even closer links to
Valora Trade, with whom we have dealt for many years,
with a common objective: successful sales of Derma in the
Nordic Region. Working with such a professional partner is
always a delight, and we look forward to joint success.
Exports to Europe
DermaPharm’s eternal curiosity and pursuit of results led to
a number of new opportunities in 2012. We travelled a lot,
and visited a large number of potential customers. The results
can be seen in a significant expansion of DermaPharm’s
customer portfolio within both private and own label.
With regard to the former, we joined forces with major
European companies to jointly develop products which
meet the toughest environmental requirements. Derma­
Pharm has a justified reputation within this field, and we are
delighted to work with businesses which share the same
consideration for the environment as we do.
Sales of Derma products
have increased­five fold in
Denmark­in just six years. Export
is now high on the agenda.
With regard to the latter, DermaPharm signed a deal with a
large European manufacturer for the joint launch of our
own Derma range in 2013. We have high expectations for
this project, and are working hard on a launch strategy to
achieve success and broad distribution of Derma products
throughout Europe.
Export to the Middle East
We succeeded in finding several strong, visionary partners
in the Middle East after several visits there. As a result, Derma
products will be launched in selected Middle Eastern countries
in 2013. Once again, a lot of hard work is being put into a
launch strategy, as the region differs from Scandinavia in
some ways but not in others - we all want the best for our
families at least.
The company’s significant export potential has led to us
working closely with the Ministry of Foreign Affairs under
the Vitus Vækst programme for the start-up phase of Derma­
Pharm products to the Middle East. So far, we have enjoyed
considerable success, not only thanks to the ability of the
Danish Embassy to open doors, but also thanks to their
skilled, enthusiastic staff.
(continued)
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
(continued)
DermaPharm consistently
aims to do things more efficiently
to continue to supply safe
products­of a uniformly high
quality­– and on time.
Innovation drives growth
As always, a new approach is needed to compete success­
fully in the beauty industry. That’s why we are delighted
that our existing and new customers support and encourage
us to be smarter, better and more agile than ever before.
When the accepted way of doing things is challenged, new
inventions are brought to light. We are therefore proud of
all the new products launched in 2012, not to mention the
initiatives we and our customers have to show the world in
2013. We also look forward to be able to introduce a
strengthened R&D department in 2013.
Focus on Supply Chain
The arrival of COO Peter Bogh Lindgaard brings new
resources­to the company in the form of purchasing,
logistics­, warehousing, production, quality and finances.
Peter has already found his feet, and his recruitment means
that the executive management is stronger, faster and
better­resourced to realise­the ambitious plans the
owners­have for growth.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
CSR: PERSONNEL
Corporate value set
Everyone at DermaPharm shares a common belief for­
mulated in a value set which matches the company’s DNA.
Our values are: Reliable, Result-oriented, Innovative, Curious
and Dedicated – the characteristics of our business and which
reflect the way we work. To symbolise our values at work,
all the production personnel wear a T-shirt each day with
the values they feel suit them best printed on the back.
This is an excellent way of making our values visible and a
generic part of the company’s identity and self-awareness.
Reliable
Result-oriented
Innovative
Curious
Dedicated
Health and safety
Capacity
Safety at work is a major factor in job satisfaction. First aid
courses are held regularly for the personnel, to ensure any
emergency can be tackled. DermaPharm personnel have also
requested that the company invests in a defibrillator as part
of the first aid kit. The defibrillator has been registered with
www.hjertestarter.dk, so that local residents have access to it
if necessary. DermaPharm has been awarded the Labour In­
spection Authority’s green ’smiley’ to acknowledge fulfilment
of the authority’s rules for health and safety at work.
DermaPharm believes that the ethnic diversity of its personnel
is a strength. We endeavour to create a secure, welcoming
working environment for everyone. One of the initiatives
we have taken in this direction is to join forces with Jobcenter
Randers to provide practical experience and ’introduction
to the workplace’ facilities for the unemployed. We also
actively­take part in school projects, and welcome seekers
of practical experience placings whenever possible.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
Året, der gik
CSR: THE ENVIRONMENT
More organic
products
Reduced
environmental impact
Ecolabels
The demand for organic skincare pro­
ducts is increasing, which also means
that the amount of organic raw materials
has grown considerably. Not only pro­
duction of DermaPharm’s own organic
products is on the increase, but also
organic private label products. Mean­
while, the mandatory minimum amount
of organic elements in products is rising,
to a minimum of 20% for products
certified­by Ecocert/Cosmos – a re­
quirement DermaPharm already fulfils.
We maintain consistent focus on environ­
mental improvements, and met our
declared objectives for 2012. These
included reducing our consumption of
water, electricity and heat, plus cutting
costs - to the benefit of the company
and the environment. Our ambition is
to continuously reduce environmental
impact to contribute to sustainable
development, which means we have
set a new objective: We will reduce
our CO2 emissions by 3% by 2015.
A growing number of consumers con­
sciously buy certified products which
carry a guarantee of being organic,
environment-friendly and healthy. Derma­
Pharm is a strong believer in the Nordic
Ecolabel and Ecocert labelled products,
with over 200 ecolabelled skincare pro­
ducts now in production. That means
in turn that the environmental require­
ments we set for the ingredients and
packaging our suppliers provide us
with are constantly tightened, to keep
us ahead of external environmental
requirements­from our stakeholders.
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
Profits and
losses statement
for 1 january 2012
- 31 december 2012
2012
2011
2009/10
(12 mdr.)
(12 mdr.)
(15 mdr.)
83.374.348
79.523.391
76.941.747
Production expenses
-45.630.304
-41.378.977
-38.706.242
Contribution Margin I
37.744.044
38.144.414
38.235.505
-2.086.332
-2.370.044
-2.882.674
Net turnover
Production and warehouse expenses
Contribution Margin II
35.657.712
35.774.370
35.352.831
Capacity expenses
-16.253.811
-18.070.109
-17.839.555
Gross profits
19.403.901
17.704.261
17.513.276
Staff expenses
-14.567.206
-13.701.082
-13.376.075
Earnings contribution
4.836.695
4.003.179
4.137.201
Write-offs
-2.318.977
-157.117
-2.514.057
Profits and losses before financial entries
2.517.718
3.846.062
1.623.144
187.954
364.526
3.992
Profits and losses from subsidiaries
Financial receipts
125.512
18.039
55.388
Financial expenditures
-1.759.548
-1.709.963
-1.421.659
Profits and losses before taxes
1.071.636
2.518.664
260.865
0
0
0
1.071.636
2.518.664
260.865
Taxes on profits and losses for the year
Profits and losses for the year
The entire accounting statement may be requested from DermaPharm’s accounting manager Lars Jensen [email protected]
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DermaPharm 2012
The Year in Review
DermaPharm 2012
The Year in Review
As always, DermaPharm strives to develop
the best and most environmental-friendly
sun protection products on the market.
A discipline we have become experts in.
Consequently, we supply sun protection
products to an ever growing geographical
area, in the form of many different brands
and are proud of our position as the biggest
supplier of sun creams to Danish retailers.
We keep raising the bar as to what we want
to achieve, to the benefit of our customers,
ourselves and of course millions of consumers.
Company
information
DermaPharm A/S
Europavej 10
8990 FAARUP
Telephone: +45 8647 7744
Fax: +45 8647 7748
Headquarters: Fårup
Central business registry number: 8945 3119
E-mail: [email protected]
Website: www.dermapharm.dk
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DermaPharm 2012
Året, der gik
DermaPharm A/S l Europavej 10 l 8990 Fårup l Tel. + 45 8647 7744 l [email protected] l www.dermapharm.dk
This printed material bears the Nordic environmental seal, the Swan, with license number 541-444