Annual Report • Mar 11, 2009
Annual Report
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Annual Report 2008
Internet: www.Beiersdorf.com Successful with Skin and Beauty Care
(in € million)
| 2007 | 2008 | |
|---|---|---|
| Sales | 5,507 | 5,971 |
| Change in % (adjusted for currency translation effects) | 9.1 | 10.6 |
| Change in % (organic) | 9.1 | 7.5 |
| Change in % (nominal) | 7.6 | 8.4 |
| Consumer | 4,661 | 5,125 |
| tesa | 846 | 846 |
| EBITDA | 738 | 911 |
| Operating result (EBIT) | 616 | 797 |
| Operating result (EBIT, excluding special factors) | 684 | 696 |
| Profi t after tax | 442 | 567 |
| Return on sales after tax in % | 8.0 | 9.5 |
| Earnings per share in € | 1.93 | 2.48 |
| Total dividend | 159 | 204 |
| Dividend per share in € | 0.70 | 0.90 |
| Gross cash fl ow | 477 | 520 |
| Capital expenditure (including non-current investments) | 110 | 161 |
| Research and development expenses | 127 | 149 |
| Employees (as of December 31) | 21,101 | 21,766 |
*Excluding special factors.
We focus on innovative skin and beauty care with our leading international brands. We systematically align our business with the wishes and needs of our consumers. At the same time, we provide our consumers with compelling, innovative products and excellent product quality. This is the basis for our global competitive success and worldwide growth.
*Excluding special factors.
We develop, produce, and market self-adhesive system and product solutions for direct customers and our distribution business in the industrial segment, as well as for the consumer business. As one of the world's leading manufacturers, we have a comprehensive understanding of our customers' needs, offering them state-of-the-art products of the highest, reliable quality.
NIVEA is the best-known and most successful skin and beauty care brand in the world and enjoys a level of consumer trust that is unmatched by
SBT Skin Biology Therapy, with its biological mechanism of action gives sensitive skin a radiant, younger appearance.
almost any other brand.
8x4 is a highly effective deodorant that offers a broad range of products with longlasting protection.
Eucerin is one of the leading medical skin care brands in many countries.
SLEK is one of the leading local hair care brands in China and has been allowed to call itself "China Famous Brand" since 2003.
brand, is the market leader in a number of countries
worldwide.
tesa
La Prairie
anti-aging face care.
tesa is one of the world's leading manufacturers of self-adhesive product and system solutions for the industrial business, and consumers.
Florena stands for naturalness and uncomplicated skin care with select natural ingeredients
which are processed in a particularly gentle way.
La Prairie is among the leading international brands for exclusive, luxurious, state-of-the-art
NIVEA FOR MEN is the No. 1 in men's face care worldwide.
In many European countries, Labello is synonymous with lipcare itself, as well as being the market leader in this category.
The resounding success of the Company's range of products is based on branded consumer goods. These cover every area of skin and beauty care and have one thing in common:
They meet the highest quality standards. Above all NIVEA, NIVEA FOR MEN, La Prairie, and Eucerin. Four recent product examples:
NIVEA FOR MEN Revitalising Gel Q10 Supplies the skin cells with long-lasting energy.
NIVEA body Happy Time Body Lotion Intensive body care with bamboo essence, milk proteins, and orange blossom scent.
La Prairie Skin Caviar Luxe Cream Drenches skin with moisture and nourishment.
Eucerin DermoDENSIFYER Reduces even deep wrinkles and improves the skin's elasticity.
Skin and beauty care is our passion. In this segment Beiersdorf is among the four leading companies worldwide thanks to its core brands NIVEA, Eucerin, and La Prairie. Why? Because we take great care to identify consumer wishes and address them with pioneering products. In short: We understand what consumers are feeling.
Our Consumer Business Strategy focuses on consumers and on their individual skin and beauty care needs. By combining quality consumer orientation, and brand personality, we strengthen the appeal of our brands. In doing so, they occupy a firm place in our consumers' everyday lives as a result.
Our goal is to identify consumer wishes early on and meet them with appropriate skin and beauty care products. We seek personal contact with our consumers and thus gain insight into their wishes and needs. Thanks to these "Consumer Insights" we can launch outstanding product innovations on to the market. With great success: Our three global brands NIVEA, Eucerin, and La Prairie enjoy appeal and trust worldwide, allowing them to grow substantially faster than the market in recent years. NIVEA is the world's largest and most successful skin and beauty care brand and was voted the most trusted skin care brand in Europe by Reader's Digest for the eighth consecutive year in 2008 (Reader's Digest: Most Trusted Brands 2008). Yet more impressive proof that we are close to the consumers.
We want to make our brands an experience. One example of this approach are our NIVEA houses in which NIVEA's caring values can be felt up close. Following the enormous success of the NIVEA Haus in Hamburg, we have transferred the basic idea – being close to consumers – to a new location in Dubai. Since November 2008, we have offered our consumers there easy access to quick, relaxing wellness treatments, tailored to local needs and specifi c consumer wishes. The opening of a third NIVEA Haus is planned for April 2009 in Berlin. All NIVEA houses have exclusive addresses: The bustling "Jungfernstieg" in the Hamburg city center, the "Dubai Mall", the world's largest shopping center, and the boulevard "Unter den Linden" near the Brandenburg Gate.
Since most purchasing decisions today are made spontaneously in front of the shelves, we display our brands using high-profi le, promising store concepts that we realize by working together with our trade partners around the world. We also set great store by optimal shelf placement, generating competitive advantages right next to our competitors' products.
Most "older people" today are active and feel significantly younger than they really are. No wonder, then, that they do not want to look older than they feel and therefore invest more in skin and beauty care. In these times of demographic change, this target group is gaining in importance – a challenge that we can meet.
Our research and development has a leading position internationally: Not only did we invent the fi rst stable water-in-oil emulsion, our other successes include discovering the effectiveness of ingredients such as coenzyme Q10, alpha-glucosylrutin, creatine, and folic acid, as well as skin stimulation using oxygen. Our great experience in the area of face care has made our NIVEA VISAGE brand the number one in Europe. Internationally, too, we aim to continue building on our outstanding position. For example, in the high-growth anti-aging segment.
Our NIVEA VISAGE line offers the perfect anti-aging product for every age group: Q10 PLUS is our answer to the needs of the skin of the 30+ age group, while DNAge is designed to meet the special requirements of women between 40 and 50. The care system NIVEA VISAGE Expert Lift, which was launched in 2008, offers products with a lifting effect for women over the age of 50. This clear segmentation is designed to further increase our share of the face care market – and at the same time satisfy the different needs of our consumers. In the luxury segment, Beiersdorf's La Prairie range offers exclusive care products for demanding, more mature skin. We have also successfully launched products for older age groups in the medical skin care segment: Eucerin DermoDENSIFYER supports natural skin regeneration for women over the age of 55.
We are a top leader in the men's cosmetics market – not only are we pioneers in this sector with NIVEA FOR MEN, but we are also the world leader in men's face care. Compelling products that are clearly tailored to men's needs are the recipe for our success. In the anti-aging skin care segment, these include the launch of NIVEA FOR MEN DNAge, which has further expanded our position in the fast growing men's care market.
Hair care is one of the fastest-growing categories worldwide. Which is why we aim to continue our growth in this area. This applies throughout the world. With the acquisition of C-BONS Hair Care at the end of 2007, we took over one of the leading companies on the Chinese hair care market. In doing so, we expanded our business in China and strengthened our market position in one of the world's most important future markets. China is only one example of a region in which we are continously increasing our market share. As a matter of principle, we systematically pursue the same goal in all countries in which we are active: We want to
Beiersdorf has a global presence with more than 150 affiliates. With NIVEA we have captured over 130 market leader positions in different categories in various countries. We aim to increase our world market share in the area of skin and beauty care to 5.5% by 2010.
Our success is due to our focus on strong brands and regions with above-average growth potential. These primarily consist of Eastern Europe, Asia, and Latin America, and in particular of China, Brazil, Russia, and India. We have generated strong growth in Eastern Europe in recent years: Our NIVEA and Labello brands hold numerous leading positions in the body and lip care categories in a large number of Eastern Europe countries and our medical skin care brand Eucerin on its own recorded sales growth of 33% in this region. Western Europe and our German domestic market are also particularly important to Beiersdorf. We are optimally positioned to further expand our number 1 position here in the future: NIVEA and Eucerin are leading brands in the German cosmetics market.
We acquired a majority stake in the successful Chinese company C-BONS Hair Care Group at the end of 2007, expanding our hair and beauty care portfolio to include the extremely popular Chinese hair care brands SLEK, S-Dew, and Hair Song and the market leader among the styling brands, Maestro. By doing so, we strengthened our commitment in one of the most important key markets. With a population of 1.3 billion people, the fourth largest cosmetic market worldwide, and an average annual growth rate of the gross domestic product of 10%, China offers outstanding potential. As with all other markets, we see our role here as to act from a local perspective. In the process, we benefi t from our affi liates' expertise. They use their knowledge of local conditions and the people – what we call "Consumer Insights" – to provide ideas for new products.
The USA is another important market for Beiersdorf. We have reorganized our business here on the basis of the local strategy, and are concentrating on our core competencies in skin care with NIVEA body, NIVEA FOR MEN, Eucerin, and Aquaphor. This has laid the foundation for us to win over consumers in the land of opportunities and the world's most important skin and beauty care market. The fi gures prove this: Our American affi liate, Beiersdorf Inc., recorded double-digit sales growth for the second year in a row in 2008 in the important body care segment. Our change of strategy was accompanied by an emotional advertising campaign with the slogan "Touch and Be Touched", which sensitized American consumers for the NIVEA brand in an unusually personal way.
It is quite simple, really: The more a company uses its employees' potential, the more successful it will be. As one of the most attractive companies in the global skin and beauty care market, we do this by demanding and facilitating the best from our employees and by offering them a unique corporate culture. This strengthens their identifi cation with our Company and our brands.
Success has many faces. At Beiersdorf there are approximately 22,000 worldwide. This means that we have 22,000 opportuni ties to make our business even more successful on all levels. And we are doing everything we can to take advantage of these opportunities.
We convince consumers with strong brands. We need the right employees in order to achieve our ambitious growth targets. We encourage them to constantly examine their own actions, think internationally, continuously improve their work, and to review developments openly and critically. And we offer them the opportunity to actively help shape change and growth at Beiersdorf. With us, they can help develop and enhance the leading skin and beauty care brands.
We can only grow successfully if we work in a highly effective and professional manner. This is why everyone counts and contributes actively to meeting our goals. Beiersdorf employees take on responsibility in their individual jobs and projects early on and have the prospect of an international career. We do everything in our power to identify and develop talent and potential. We offer our employees an internationally comparable, indepth assessment of their performance and development opportunities using modern personnel management techniques. The combination of challenging, cross-functional tasks in an international company and clear prospects for personal and professional development that we offer is what makes Beiersdorf an attractive employer worldwide.
As a company we do not just grow through our challenges, but also and in particular through the people whom we recruit for these tasks. Our employees enjoy working at Beiersdorf and are proud of the Company, the brands, and their close relationships with each other – this is what makes our corporate culture so unique. We have a lean organization with fl at hierarchies and exciting tasks around the world that directly infl uence our business. We consistently encourage our employees to participate actively and to contribute ideas. Because for us, both things are important: Success and people. This is one of the foundations of Beiersdorf's successful development.
Further information can be found at www.Beiersdorf.com
The plaster and wound care brand Hansaplast gets a full makeover. The new slogan – "When life gets exciting." – addresses consumers living an active and exciting life and who do not want to think about any potential injuries or discomfort.
Among Europeans, NIVEA enjoys the highest level of consumer trust. Further proof of this comes from the Reader's Digest "Most Trusted Brands 2008" study, Europe's largest consumer survey. The result: Consumers voted NIVEA the most trusted skin care brand in Europe for the eighth year in a row.
Beiersdorf publishes its Sustainability Report in an online version. This comprehensively documents our responsibility towards our employees, society, and the environment and is based on the Global Reporting Initiative guidelines. It can be viewed and downloaded at www.Beiersdorf.com/Sustainability.
NIVEA FOR MEN expands its successful whitening range in India by launching NIVEA FOR MEN Whitening Oil Control for men with oily skin. The launch of the new skin-lightening product further strengthens NIVEA FOR MEN's market leadership.
Beiersdorf's Research and Development unit won an award for its technology management from the internationally renowned Fraunhofer Institute IPT. Beiersdorf is the only prizewinner in the consumer goods segment among the over 600 companies surveyed. The strong focus on consumers during product development received special mention.
Since 2006, Beiersdorf has focused in the USA on its core skin care brands NIVEA hand and body and Eucerin/Aquaphor. NIVEA Lip Care was launched in the fall of 2008 with the "Kiss and Be Kissed" campaign with the goal of becoming one of the leading companies in the lip care segment in the USA.
Following the resounding success of the NIVEA Haus in Hamburg, Beiersdorf is opening more NIVEA houses in Dubai (November 2008, in the world's largest shopping mall), and Berlin (April 2009). Each is tailored to individual consumer wishes and local requirements and offers uncomplicated and relaxing wellness treatments – close to the consumer.
Following a resolution by Deutsche Börse (German Stock Exchange), Beiersdorf was admitted to the DAX index, of the 30 leading German listed stock corporations on December 22, 2008. This is a good opportunity to present Beiersdorf to an even wider public – nationally and internationally.
In 2008, we again met the wishes of our consumers with new product lines such as the NIVEA Diamond Gloss range with its modern packaging design.
2008 was another very successful year for Beiersdorf. In a diffi cult economic environment, we generated sales of €5,971 million (previous year: €5,507 million) and EBIT (excluding special factors) of €696 million (previous year: €684 million). We therefore achieved growth of 7.5%, adjusted for currency translation effects and excluding the acquisitions we made at the end of 2007. Including these acquisitions, our growth amounted to 10.6%. We again grew substantially faster than the market and have further expanded our global market share as a result. Profi t after tax excluding special factors amounted to €490 million. The Executive Board and Supervisory Board will propose the following dividend to the Annual General Meeting: €0.70 (as in the previous year) and an extraordinary amount of €0.20, in total €0.90 for each share carrying dividend rights. This amount shall enable the shareholders to participate in the special gains from the divestments of the previous years in an appropriate way.
There are good reasons for these strong results: Our long-term Consumer Business Strategy "Passion for Success" and the associated focus on the growing market for skin and beauty care have proven to be correct in the past few years. This is also expressed in the title of this Annual Report: "Successful with Skin and Beauty Care." In this area we are among the four largest international companies with our three global brands NIVEA, Eucerin, and La Prairie. We focus consistently on consumers' wishes: With NIVEA, we have the world's leading and most successful skin and beauty care brand, which has enjoyed signifi cant consumer trust for decades. This trust is the critical factor for our future success – especially in diffi cult times. We understand how to react to our consumers' wishes and offer them tailored products based on our excellent research and product development. We achieve this through an in-depth, methodical examination of consumer behavior throughout the world.
In 2008, we again recorded particularly strong growth in China, Eastern Europe, and Latin America. In addition, we laid the foundations for a successful future in the USA. We also performed well in our strong domestic market, Germany. Another important element in the implementation of our Consumer Business Strategy is the realignment of our Supply Chain, which began in 2006. The reorganization of the Company's European production and logistics structure has now been largely and successfully completed.
The tesa business segment continued to grow faster than the market in 2008, maintaining its global lead in the market for self-adhesive system solutions. However, its direct customer and distribution business in the industrial segment was not quite immune to the extremely diffi cult market environment. Especially in the fourth quarter of last year, tesa's cyclically sensitive industrial business was impacted by economic developments – particularly in the automotive industry. Overall, tesa's business is extremely well positioned, both technologically and structurally, and is well equipped for the future.
Since December 22, 2008, Beiersdorf has been one of the 30 leading listed companies in Germany. Our inclusion in the DAX index is confi rmation of our business model, which focuses on long-term success, and will allow us to make an even broader international public aware of how attractive Beiersdorf is, as well as demonstrating our global success even more effectively on the international capital markets. Naturally, we will remain true to our successful strategy following our inclusion in the DAX. We will continue to concentrate on systematically expanding our market position through long-term profi table growth.
We take the turbulence in the fi nancial sector and on our sales markets very seriously. Dedicated teams of experts are permanently monitoring possible infl uences on our business on an ongoing basis, ensuring swift action. Going forward, we are confi dent that we will continue to outperform the international markets with our strong brands and their uncompromising consumer orientation, and with our innovative products. We are a solidly positioned company with a healthy fi nancial structure.
But there is another extremely important reason why I am looking forward to the coming fi scal year with confi dence: I am deeply impressed by the dedication of our employees, who make our success possible. On behalf of my colleagues on the Executive Board and myself, I would like to thank all of them for their identifi cation with the Company, for our positive dialog, and for the special corporate culture we experience every day. We would also like to thank our retail and business partners for their commitment and all shareholders and consumers for their trust in us. As one of the world's leading companies for skin and beauty care, we are well prepared and highly motivated to face the future.
Sincerely,
thoma s-b. qua a s chairman of the executive board
member of the executive board Born in 1950 in Rostock (Germany)
Member of the Executive Board since 2003
Responsible for Human Resources: – Human Resources
– Sustainability
member of the executive board Born in 1963 in Leverkusen (Germany)
Member of the Executive Board since 2005
Responsible for Supply Chain:
chairman of the executive board Born in 1952 in Glauchau (Germany)
Member of the Executive Board since 1999 Chairman of the Executive Board since 2005
Responsible for:
member of the e xecutive board Born in 1959 in Düsseldorf (Germany)
Member of the Executive Board since 2006
Responsible for Finance:
member of the executive board Born in 1964 in Wageningen (the Netherlands)
Member of the Executive Board since 2005
Responsible for Brands:
IR
Markets around the world were focused mainly on the international fi nancial crisis during 2008. Players' activities were dominated by collapses and rescue plans on a hitherto unprecedented scale, while extreme commodity price swings – especially for oil – led to highly volatile performances by almost all stocks on the equities markets. At the beginning of the year, investor appetite was hit by increases in the price of oil in particular. Brent crude broke through the USD 100 per barrel barrier for the fi rst time at the end of February. The euro's initial appreciation against the dollar temporarily curbed the effect on the German economy, although it did have a clearly negative effect on exports. Emerging markets were the main driving force behind global growth in the second quarter. At the same time, commodity prices continued to rocket, peaking in the middle of the year (Brent crude cost USD 145 per barrel for a time). Rising long-term interest rates also put pressure on the stock markets and led to a fall in the indices. This slump continued in the second half of the year with indices losing more than 10% per day in some cases during the height of the banking crisis in September and October. Bank stocks led to unusual price movements on the DAX, pushing the key German index down close to the 4,000-point mark. Then, in the fourth quarter, the rescue packages by the world's central banks led to the situation quietening down a little. In this environment, the DAX closed the year at 4,810 points.
The consumer goods manufacturers in the European HPC (Household and Personal Care) Index reported strong results in the fi rst and second quarters. However, investors remained cautious due to the uncertain economic outlook. As a result, the Index initially mirrored and then, in the third quarter, underperformed the DAX and other key indices. However, the sector recovered some ground during the turbulence in September and October – the crisis months – and closed the year on a positive note.
Beiersdorf's share price remained uncoupled from the German indices for relatively long periods in 2008. In the fi rst quarter this was due to the defensive character of our shares and related positive expectations by investors given the uncertain times. In the third quarter, the announcements regarding the Company's business performance and its integration of the Chinese hair care business of C-BONS Hair Care triggered independent price movements by Beiersdorf's shares in the third quarter. The planned investments in the Chinese hair care market were the subject of intense market discussion in the course of the third quarter, and it took some time for them to be recognized as a key element in the development of Beiersdorf's Chinese business. However, investor confi dence rose sharply in conjunction with the excellent growth fi gures for the fi rst nine months, with shares signifi cantly outperforming the markets in the fourth quarter. At the beginning of December, Deutsche Börse (German Stock Exchange) resolved to admit our shares to the DAX, Germany's bellwether stock market index; on December 22, Beiersdorf offi cially became one of the 30 leading listed companies in Germany. At the end of the year, Beiersdorf's shares remained fi rm and clearly outperformed the indices to close at €42.00.
| Company Name | Beiersdorf Aktiengesellschaft |
|---|---|
| WKN | 520000 |
| ISIN | DE 0005200000 |
| Stock Trading Venues |
Offi cial Market in Frankfurt and Hamburg; Open Market in Berlin-Bremen, Düsseldorf, Hanover, Munich, and Stuttgart |
| Number of Shares | 252,000,000 |
| Share Capital in € | 252,000,000 |
| Class | No-par value bearer shares |
| Market Segment/ Index |
Prime Standard/DAX |
IR
Beiersdorf's shares are a reliable and solid stock on the German market – something that also applies in diffi cult economic times. This performance is the refl ection at the level of the capital markets of key corporate characteristics. Since 2005, the continuous implementation of the Consumer Business Strategy has led to numerous structural improvements and a clear focus on high-priority business areas and regions. Explaining these changes to shareholders and, where possible, attracting the support of new shareholders is one of Investor Relations' most important tasks. The publication of the quarterly fi gures – both in the telephone conferences explaining the quarterly and half year results, and at the fi nancial analyst meetings after nine months and the annual report – played a key role in this in 2008. The conference calls, which we introduced last year as a regular feature of our reporting activities, have now become an essential fi rst-hand source of information for the capital markets. Recordings of the conferences can be downloaded as audio or video streams at www.Beiersdorf.com – an offering that was used intensively by shareholders and observers.
Continued strong sales growth by the Consumer business despite the diffi cult environment, coupled with an improvement in profi t margins, sparked interest in 2008 among many new investors, who demanded high standards from Beiersdorf both with regard to the quality of the fi gures themselves and to communication and the provision of information. Our inclusion in the DAX in December 2008 was good news for Beiersdorf in this respect, too, as this gives Investor Relations the opportunity to make an even broader international public aware of how attractive the Company is, as well as presenting our global success on an even larger scale to the international capital markets.
Beiersdorf's Executive Board again attended selected major investor conferences in London, Paris, and New York in the last fi scal year to talk to and inform investors about the Company's business performance and the status of implementation of its strategy. These events were anchor points in Beiersdorf's capital market communications calendar and were supplemented by numerous additional activities including roadshows and conferences in Stockholm, Edinburgh, and Frankfurt.
Beiersdorf's updated sustainability website again played an important role in the Company's fi nancial communications in 2008. The disclosures on and key performance indicators for our Company's ecological, economic, and social responsibilities are based on the Global Reporting Initiative standard. This clearly documented Beiersdorf's high level of commitment in the area of sustainability, and effi ciently satisfi ed the considerable interest shown by the markets in 2008.
In fi scal year 2008, the Supervisory Board performed its tasks in accordance with the law, the Articles of Association, the German Corporate Governance Code, and the bylaws. We advised and supervised the Executive Board in its management of the Company. The Executive Board informed us in a regular, timely, and comprehensive manner, orally and in writing, regarding the business strategy, corporate planning, the course of business, risk management, and the Company's situation and profi tability. It explained any deviations between actual and planned developments. The full Supervisory Board and the relevant committees discussed and examined in detail signifi cant business transactions on the basis of the reports submitted by the Executive Board. Between Supervisory Board meetings, the Chairman of the Executive Board and the Chairman of the Supervisory Board discussed all matters of importance to the Company, including the Company's strategy, business development, and risk management.
In the four regular Supervisory Board meetings, we regularly focused on current business developments, major individual business transactions, and measures by the Executive Board requiring Supervisory Board approval. We granted all necessary approvals after thorough examination and in-depth discussion. Three resolutions were taken in writing on the basis of detailed preparations and documents.
In the meeting on February 21, 2008, we elected a new Chairman of the Supervisory Board and a new additional Deputy Chairman of the Supervisory Board, and addressed the annual and consolidated fi nancial statements for 2007, the proposed resolutions for the Annual General Meeting on April 30, 2008, the Company's further strategic development, business developments, and the integration of C-BONS Hair Care, as well as business developments at the La Prairie Group.
We used the Supervisory Board meeting on April 30, 2008 to prepare for the Annual General Meeting, to discuss and examine the Group's interim fi nancial statements as of March 31, 2008, and to discuss current business developments.
In the September 4, 2008 meeting, we addressed the Group's interim fi nancial statements as of June 30, 2008, as well as business developments in Germany. Additional items discussed at the meeting included issues relating to the due and proper conduct of business operations (compliance) and the investigations by national antitrust authorities in Europe involving a number of companies,
including Group affi liates. In addition, we focused on changes to the German Corporate Governance Code and resolved to amend our bylaws. Finally, we discussed planned acquisitions and divestments and agreed to resolve these in writing should they be ready for resolution before the next Supervisory Board meeting. We approved the sale of Bode Chemie as well as the sale of the Futuro business in written procedures in October, as well as the acquisition of Labtec GmbH by tesa AG in a further written resolution procedure in November.
In the Supervisory Board meeting on November 20, 2008, we examined the Group's interim fi nancial statements as of September 30, 2008. In addition, we authorized the provisional corporate planning for fi scal year 2009 after an in-depth discussion and examination. The Executive Board will present its fi nalized corporate planning, which will take into account opportunities and risks of the fi nancial market crisis and their possible effects on the Group, for approval in spring 2009. In the meeting, we resolved the Declaration of Compliance regarding the recommendations of the German Corporate Governance Code and addressed the status of our realignment of production and logistics operations (Consumer Supply Chain), business developments in the USA, as well as business developments at, and the integration of, C-BONS Hair Care. We also discussed the remuneration of the Executive Board and the results of the effi ciency review of the Supervisory Board in October.
As in the past, the Supervisory Board has four committees. These prepare the resolutions to be taken by the full Supervisory Board and pass resolutions, insofar as this is permitted, in individual cases instead of the full Supervisory Board. The chairmen of all committees reported regularly and in detail to the Supervisory Board meetings about the work performed in the committees.
In its fi ve meetings, the Executive Committee prepared the Supervisory Board meetings and also addressed current business developments, preparations for the Annual General Meeting on April 30, 2008, the sale of Bode Chemie and of the Futuro business, as well as the acquisition of Labtec GmbH by tesa AG, the changes to the German Corporate Governance Code and to the Supervisory Board's bylaws, and the remuneration of the Executive Board.
The Audit and Finance Committee met six times, addressing its relevant Supervisory Board topics including the preliminary examination of Beiersdorf AG's annual fi nancial statements and the consolidated fi nancial statements, the preparation of the agreement with the auditors, and the review and enhancement of risk management in the Beiersdorf Group, including due and proper business operations (compliance). The Audit and Finance Committee examined in depth the opportunities and risks arising from the fi nancial market crisis and safeguards and monitoring measures taken by the Executive Board in this context. The Committee discussed the interim report for January to September 2008 with the Executive Board prior to its publication, in line with the German Corporate Governance Code's new recommendation. Furthermore, it evaluated the results of the internal audits performed in 2008 and the internal audit plan for fi scal year 2009.
The Nomination Committee, set up in 2007, prepared the proposals by the Supervisory Board for the election of shareholder representatives by the Annual General Meeting in September 2008 and in January 2009.
The Mediation Committee, set up in accordance with § 27 (3) Mitbestimmungsgesetz (German Co-Determination Act, MitbestG) did not meet.
The auditors, Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, audited Beiersdorf AG's annual fi nancial statements, prepared by the Executive Board, and the consolidated fi nancial statements as well as the management reports for Beiersdorf AG and the Group, and issued unqualifi ed audit opinions for them. In view of the majority interest held by maxingvest ag (formerly Tchibo Holding AG), Hamburg, the Executive Board also prepared a report regarding dealings among Group companies for 2008 as required by § 312 Aktiengesetz (German Stock Corporation Act, AktG), for which the auditors issued the following unqualifi ed audit opinion: "Following the completion of our audit, which was carried out in accordance with professional standards, we confi rm: 1. that the information contained in this report is correct; 2. that the Company's compensation with respect to the transactions listed in the report was not inappropriately high; and 3. that there are no circumstances which would justify, in relation to the measures specifi ed in the report, a materially different opinion than that held by the Executive Board."
The primary focus of the audit in 2008 was on the Group-wide risk early warning and monitoring system.
The annual fi nancial statements of Beiersdorf AG, the consolidated fi nancial statements, the management reports for Beiersdorf AG and the Group, the report regarding dealings among Group companies, and the auditors' reports were distributed to all members of the Supervisory Board immediately after preparation. The Audit and Finance Committee performed a preliminary examination of the fi nancial statements, the reports, and the Executive Board's proposal on the utilization of the net retained profi ts during its meeting on February 18, 2009. These fi nancial statements and reports as well as the Executive Board's proposal regarding the utilization of the net retained profi ts were discussed in detail and reviewed in the Supervisory Board meeting of February 19, 2009. The auditors reported on the key fi ndings of their audit both in committee as well as at the full Supervisory Board meeting, and were available to answer questions and provide supplemental information. Our own examination of the fi nancial statements, the management reports for Beiersdorf AG and the Group, the report regarding dealings among Group companies including the concluding declaration by the Executive Board, and the auditors' reports did not raise any objections. We concurred with the auditors' fi ndings and approved the annual fi nancial statements of Beiersdorf AG and the consolidated fi nancial statements prepared by the Executive Board for the year ending December 31, 2008. The annual fi nancial statements of Beiersdorf AG are thus adopted. We also endorsed the Executive Board's proposal on the utilization of the net retained profi ts.
Dieter Ammer stepped down as Chairman of the Supervisory Board with effect from the end of the Annual General Meeting on April 30, 2008. The Supervisory Board appointed the undersigned as Chairman and Dr. Arno Mahlert as an additional Deputy Chairman of the Supervisory Board. The Supervisory Board would like to thank Mr. Ammer for his almost four years of service as its Chairman.
Fiscal year 2008 was just as successful for the Company as the previous year, despite the recent diffi cult conditions on markets around the world. The successes achieved by the Beiersdorf Group companies are based on the outstanding achievements of their employees and of the Executive Board. Our warmest thanks and recognition are due to them all. This also applies to our customers and business partners. We are well prepared and are looking forward with confi dence to the major challenges facing us in 2009, thanks to our unchanged strong fundamentals.
Hamburg, February 19, 2009 On behalf of the Supervisory Board
prof. dr. reinhard pöllath chairman
Beiersdorf welcomes the German Corporate Governance Code last updated in June 2008. The Code creates transparency with regard to the legal framework for corporate management and supervision in Germany, and also establishes generally accepted standards for good and responsible company management.
Good corporate governance has always been a high priority at Beiersdorf. Close, effi cient cooperation between the Executive and Supervisory Boards, a focus on shareholder interests, open corporate communication, proper accounting and auditing, and responsible risk management are the basis of the Company's success. As a result, compliance with the Code and its amendments did not necessitate any fundamental changes at Beiersdorf. We consider corporate governance to be an ongoing process and will continue to track future developments carefully.
At the end of December 2008, the Executive Board and Supervisory Board issued the Declaration of Compliance with the recommendations of the Code for fi scal year 2008 in accordance with § 161 Aktiengesetz (German Stock Corporation Act, AktG). Beiersdorf AG fulfi lls all the recommendations as well as a large number of the suggestions made in the Code.
The following declaration was made permanently accessible to the shareholders on the Company's website at www.Beiersdorf.com:
Declaration by the Executive Board and the Supervisory Board of Beiersdorf Aktiengesellschaft on the Recommendations of the "Government Commission on the German Corporate Governance Code", in Accordance with § 161 of the German Stock Corporation Act (AktG)
In fi scal year 2008, Beiersdorf Aktiengesellschaft complied with, and continues to comply with, all recommendations of the "Government Commission on the German Corporate Governance Code" in the versions dated June 6, 2008 and June 14, 2007 respectively.
Hamburg, December 2008 For the Supervisory Board For the Executive Board
prof. dr. reinhard pöll ath chairman of the supervisory board
thomas-b. qua a s chairman of the executive board
dr. bernhard düttmann member of the executive board
As an international stock corporation domiciled in Hamburg, Germany, Beiersdorf AG is governed by the provisions of German stock corporation, capital market, and codetermination law, as well as by the provisions of its Articles of Association. Like all German stock corporations, Beiersdorf has a dual management and supervisory structure consisting of two bodies, the Executive Board and the Supervisory Board. In addition, the Annual General Meeting acts as the decision-making body for shareholders for fundamental decisions by the Company. These three bodies are all dedicated in equal measure to the interests of the shareholders and the good of the Company.
The Supervisory Board of Beiersdorf AG consists of twelve members, six of whom are elected by the Annual General Meeting in accordance with the provisions of the Aktiengesetz and six by the employees in accordance with the provisions of the Mitbestimmungsgesetz (German Co-Determination Act, MitbestG), each for a period of fi ve years. The term of offi ce of the current Supervisory Board ends with the conclusion of the Annual General Meeting resolving on the approval of their activities for fi scal year 2008.
The Supervisory Board advises the Executive Board on the management of the Company and supervises its conduct of the Company's business within the framework laid down by the law, the Articles of Association, and the bylaws. It works closely with the Executive Board for the benefi t of the Company and is involved in decisions of fundamental importance.
Supervisory Board members disclose potential confl icts of interest due to their activities as consultants to or offi cers of other companies to the Supervisory Board without delay; material confl icts of interest that are more than temporary in nature result in the termination of the mandate of the member concerned. In its report, the Supervisory Board informs the Annual General Meeting of any confl icts of interest that have occurred and of how these were handled. The D&O insurance policy taken out by the Company for the members of the Supervisory Board includes a suitable deductible. Supervisory Board members should not be older than 72 years.
The work of the Supervisory Board is performed within and outside of the full Board as well as in the committees. The Supervisory Board has formed the following four committees from among its members:
The Executive Committee prepares the Supervisory Board meetings and the Supervisory Board's human resources decisions, resolves on the contracts of service and pension agreements for members of the Executive Board and on other issues involving the Executive Board in the place of the Supervisory Board, and regularly reviews the effi ciency of the Supervisory Board's activities. In addition, it regularly discusses long-term succession planning for the Executive Board. Finally, the Executive Committee is authorized to make urgent decisions on transactions requiring Supervisory Board approval in those cases in which the Supervisory Board cannot pass a resolution in time.
The Audit and Finance Committee prepares the decisions of the Supervisory Board on the approval of the annual and consolidated fi nancial statements, the proposal to the Annual General Meeting on the election of the auditors, and the agreement with the auditors. It also advises and supervises the Executive Board on questions relating to accounting, controlling, risk management, and compliance as well as internal auditing. In addition, the Audit and Finance Committee monitors corporate policy in the areas of fi nance, tax, and insurance. It decides in place of the Supervisory Board on the raising and extension of loans, on the assumption of liability for third-party liabilities, and on investment transactions. Finally, the Audit and Finance Committee discusses the quarterly reports with the Executive Board prior to publication.
The Mediation Committee formed in accordance with the provisions of the MitbestG makes proposals to the Supervisory Board on the appointment of Executive Board members if the requisite two-thirds majority is not reached during the fi rst ballot.
In accordance with section 5.3.3 of the German Corporate Governance Code, a Nomination Committee was also formed. It is composed of shareholder representatives and proposes suitable candidates to the Supervisory Board for proposal to the Annual General Meeting.
The Executive Board manages the Company and conducts its business. It is obliged to act in the Company's best interests and to increase the Company's sustainable enterprise value. The members of the Executive Board are appointed by the Supervisory Board. The Company's Executive Board consists of fi ve members. The duties of the Executive Board are assigned by functions and regions.
The Executive Board develops the Company's strategy, agrees it with the Supervisory Board, and ensures its implementation. It is responsible for the Company's annual and multi-year planning and for preparing the quarterly, annual, and consolidated fi nancial statements. It is also responsible for ensuring adequate risk management and risk control and for regular, timely, and comprehensive reporting to the Supervisory Board. Certain measures and transactions performed by the Executive Board require the approval of the Supervisory Board.
Executive Board members disclose potential confl icts of interest to the Supervisory Board without delay and inform their colleagues on the Executive Board of them. Material transactions between the Company and members of the Executive Board and related parties require the approval of the Supervisory Board; such transactions must comply with the standards customary in the sector. Sideline activities also require the approval of the Supervisory Board. The Company has concluded a D&O insurance policy for the members of the Executive Board that provides for a suitable deductible.
Shareholders exercise their rights at the Annual General Meeting and vote there. Each share entitles the holder to one vote.
The ordinary Annual General Meeting takes place each fi scal year, generally during the fi rst six months. The agenda for the Annual General Meeting, including the reports and documents required for the Annual General Meeting, is also published on the Company's website; on request, the notice convening the Annual General Meeting together with the associated documents can also be dispatched electronically with the consent of the individual shareholder.
To assist shareholders in personally exercising their rights, Beiersdorf AG offers its shareholders a voting representative who votes in accordance with shareholders' instructions. The invitation explains how to issue instructions for exercising voting rights in the run-up to the Annual General Meeting. In addition, shareholders are free to appoint a proxy of their choice as their representative at the Annual General Meeting.
The Remuneration Report explains the structure and amount of the remuneration paid to the members of the Executive Board and the Supervisory Board. It takes into account the recommendations of the German Corporate Governance Code and the commercial law requirements as amended by the Gesetz über die Offenlegung der Vorstandsvergütungen (German Act on Disclosure of Executive Board Remuneration). The Remuneration Report forms part of the consolidated fi nancial statements and the group management report.
The Executive Committee of the Supervisory Board discusses and reviews the remuneration system for the Executive Board at regular intervals and resolves any necessary adjustments; in addition, it regularly presents the remuneration system, including the key contractual elements, to the Supervisory Board for review and resolution. For example, the remuneration system for the Executive Board, including the key contractual elements, was reviewed and approved by the Supervisory Board in November 2008.
The remuneration system focuses primarily on the tasks and performance of the individual members of the Executive Board, as well as on the entire Executive Board's performance and the Company's economic and fi nancial situation, performance, and future prospects, including in comparison with its peer group.
The remuneration of the Executive Board comprises the following key non-performance-related and performance-related components:
Where the target bonus for the variable remuneration specifi ed by the Executive Committee for each Executive Board member is reached, the ratio of fi xed to variable remuneration is generally 1:2.
The fi xed basic annual remuneration is paid in twelve equal monthly installments. It is reviewed regularly for appropriateness by the Executive Committee every two years.
To provide additional support for Beiersdorf's Consumer Business Strategy, "Passion for Success", the variable component of the Executive Board's remuneration was linked more closely to the Executive Board's performance, the development of the Company, and the rise in its sustained enterprise value. The variable remuneration – STI and LTI – depends on the extent to which predefi ned corporate targets and specifi c personal targets for individual Executive Board members are met; in line with the Company's strategic focus, these targets relate primarily to the Consumer business. The corporate targets relate to sales growth (adjusted for currency translation effects) and EVA® (Economic Value Added); these can be adjusted by the Executive Committee to take account of extraordinary factors. The Executive Committee lays down the corporate and personal targets before the fi scal year begins. After the end of the fi scal year, the Executive Committee establishes the basic variable remuneration for each Executive Board member depending on the extent to which the corporate targets have been reached, using consolidated profi t as a basis; this basic amount is then increased or reduced within predefi ned limits depending on the extent to which the Executive Board member's personal targets have been reached. The individual variable
remuneration determined in this way for each Executive Board member is subject to an upper limit (cap). For a period of three years (i.e., including fi scal year 2008) during the transition from the previous dividend-based to the new, performance-related, variable remuneration – which was introduced in fi scal year 2006 – an annually declining portion of the target bonus was guaranteed as a minimum amount (2006: 75% of the target bonus; 2007: 50% of the target bonus; 2008: 25% of the target bonus).
Part of the variable remuneration can be paid out annually in cash, as the STI. The amount of the annual payout is determined by the Executive Committee individually for each Executive Board member before the start of the fi scal year in question. The payout is limited to a maximum of 80% of the annual variable remuneration up to the amount of the target bonus and a maximum of 50% of the amount in excess of the target bonus.
The remaining amount counts towards the LTI; this is designed to cover a fi ve-year period and rewards the contribution made by individual Executive Board members to sustainably increasing the Company's enterprise value. A new LTI is produced each calendar year for each Executive Board member. The development of the LTI depends on the growth in the enterprise value (compound annual growth rate, or CAGR); this is calculated on the basis of sales and EBIT multiples that are kept constant throughout the duration of the LTI. The Executive Committee can adjust the development of the enterprise value as calculated to take extraordinary effects into account. The LTI provides for a cash payment to be made at the end of every fi ve years, provided that the enterprise value exceeds a predefi ned minimum threshold. If this minimum threshold is not reached, the entire LTI lapses.
The remuneration of the Executive Board does not contain any stock option program or comparable securities-based incentives. Equally, the members of the Executive Board do not receive any additional remuneration for their membership of supervisory bodies of Group companies and investees.
Each Executive Board member is also provided with a company car in addition to his fi xed and variable remuneration. In addition, Beiersdorf AG has taken out accident insurance for the Executive Board members. These non-cash remuneration components are taxed as non-cash benefi ts.
In addition, pension commitments have been made to the individual Executive Board members. The pension benefi ts are determined as a percentage of a fi xed amount that generally corresponds to the respective fi xed remuneration of the individual Executive Board members. The pension commitment is not linked to the performance-related remuneration components. The percentage increases in line with the length of service of the Executive Board member and is limited to 50% of this fi xed amount. Additions to pension provisions comprise current service cost and interest expense.
The contracts of service for the Executive Board members do not contain any change-of-control clauses. If the contract of the Chairman of the Executive Board is terminated early by mutual consent for reasons for which the Chairman is not responsible, he has been promised compensation in the amount of the fi xed remuneration due until the end of his contract plus a fi xed amount of €500 thousand per year representing the variable remuneration. No other commitments exist in relation to the termination of membership of the Executive Board.
Members of the Executive Board did not receive any loans from the Company.
(in €, fi gures for previous fi scal year in brackets)
| Basic fi xed | Variable remuneration1 | Additions to pension |
||||
|---|---|---|---|---|---|---|
| remuneration | STI 2 |
LTI3 | Other4 | Total | provisions | |
| Thomas-B. Quaas | 420,000 | 716,400 | 180,878 | 15,858 | 1,333,136 | 152,204 |
| (420,000) | (1,003,600) | (400,624) | (15,858) | (1,840,082) | (172,245) | |
| Dr. Bernhard Düttmann | 250,000 | 416,550 | 169,822 | 9,709 | 846,081 | 74,639 |
| (240,000) | (524,736) | (280,884) | (9,294) | (1,054,914) | (104,987) | |
| Peter Kleinschmidt | 260,000 | 473,980 | 123,936 | 14,262 | 872,178 | 93,143 |
| (250,000) | (593,500) | (224,567) | (12,804) | (1,080,871) | (103,216) | |
| Pieter Nota | 315,000 | 393,200 | 191,896 | 11,842 | 911,938 | 80,280 |
| (315,000) | (426,240) | (301,891) | (11,842) | (1,054,973) | (114,748) | |
| Markus Pinger | 250,000 | 423,500 | 94,494 | 11,352 | 779,346 | 70,824 |
| (250,000) | (631,500) | (253,642) | (12,681) | (1,147,823) | (103,107) | |
| Total | 1,495,000 | 2,423,630 | 761,026 | 63,023 | 4,742,679 | 471,090 |
| (1,475,000) | (3,179,576) | (1,461,608) | (62,479) | (6,178,663) | (598,303) |
The variable remuneration for fi scal year 2008 was adopted in the Executive Committee meeting on January 21, 2009.
The amount of the annual payout is determined individually for each Executive Board member by the Executive Committee before the start of the fi scal year in question. The payout is limited to a maximum of 80% of the annual variable remuneration up to the amount of the target bonus and a
maximum of 50% of the amount in excess of the target bonus. The LTI for fi scal year 2008 will not be paid out until after the end of fi scal year 2013, assuming that the specifi ed minimum threshold is reached. Until
this point the development of the LTI is dependent on the growth in the enterprise value (CAGR). The Other column refers to non-cash benefi ts arising from the provision of company cars and the payment of insurance contributions.
| (in €) | |||||
|---|---|---|---|---|---|
| LTI1 Fiscal year 20062 |
LTI1 Fiscal year 20073 |
LTI1 Fiscal year 20084 |
|||
| 2007 | 2008 | 2007 | 2008 | ||
| Thomas-B. Quaas | 936,950 | 1,108,629 | 400,624 | 497,047 | 180,878 |
| Dr. Bernhard Düttmann | - | - | 280,884 | 348,487 | 169,822 |
| Peter Kleinschmidt | 393,902 | 466,078 | 224,567 | 278,616 | 123,936 |
| Pieter Nota | 626,971 | 741,853 | 301,891 | 374,551 | 191,896 |
| Markus Pinger | 557,307 | 659,424 | 253,642 | 314,689 | 94,494 |
| Total | 2,515,130 | 2,975,984 | 1,461,608 | 1,813,390 | 761,026 |
The respective LTIs lapse if the enterprise value does not exceed a predefi ned minimum threshold after fi ve years.
To be paid after the end of fi scal year 2011.
To be paid after the end of fi scal year 2012. To be paid after the end of fi scal year 2013.
Payments to former members of the Executive Board and their dependants totaled €2,018 thousand (previous year: €1,952 thousand). Total provisions for pension commitments to former members of the Executive Board and their dependants amounted to €23,755 thousand (previous year: €24,576 thousand).
The basic principles governing the remuneration of the Supervisory Board were laid down by the Annual General Meeting in § 15 of the Articles of Association. The remuneration of the Supervisory Board takes into account the responsibilities and scope of tasks of the individual members of the Supervisory Board as well as the economic situation of the Company.
In addition to being reimbursed for cash expenses, Supervisory Board members receive a fi xed and a variable, dividend-based remuneration component. The ratio of the fi xed to the variable remuneration component is balanced.
Each Supervisory Board member receives fi xed remuneration in the amount of €25,000 for each full fi scal year and variable remuneration of €1,200 for each cent by which the dividend per share distributed exceeds the amount of 15 cents. No attendance fees are paid. In line with the recommendation of the German Corporate Governance Code that the remuneration should refl ect the responsibility assumed and the scope of the duties performed by the respective member of the Supervisory Board, and that the chairmanship of the Supervisory Board should be given special consideration, the Chairman of the Supervisory Board receives two-and-a-half times the standard Supervisory Board remuneration and his two deputies each receive one-and-a-half times the standard Supervisory Board remuneration. Members of the Executive Committee as well as the Audit and Finance Committee receive additional compensation for their work in these committees. If a member of the Supervisory Board simultaneously holds several offi ces for which increased remuneration is granted, he or she shall only receive the remuneration for the highest-paying offi ce.
Members of the Supervisory Board did not receive any loans from the Company. In addition, members of the Supervisory Board did not receive any compensation or benefi ts for services provided on a personal basis, such as advisory or agency services.
Subject to the resolution of the Annual General Meeting on April 30, 2009 on the dividend to be distributed for fi scal year 2008, the members of the Supervisory Board will receive the remuneration presented in the following table for their activities in fi scal year 2008:
| total remuneration of the supervisory board for activities in the fiscal year (in €) | |||||||
|---|---|---|---|---|---|---|---|
| Fixed1 | Variable | Total | |||||
| 2007 | 2008 | 2007 | 2008 | 2007 | 2008 | ||
| Prof. Dr. Reinhard Pöllath2 | 37,500 | 54,303 | 99,000 | 195,492 | 136,500 | 249,795 | |
| Thorsten Irtz | 37,500 | 37,500 | 99,000 | 135,000 | 136,500 | 172,500 | |
| Dr. Arno Mahlert3 | 55,000 | 43,320 | 66,000 | 120,246 | 121,000 | 163,566 | |
| Dieter Ammer4 | 62,500 | 47,439 | 165,000 | 134,631 | 227,500 | 182,070 | |
| Dr. Walter Diembeck | 40,000 | 40,000 | 66,000 | 90,000 | 106,000 | 130,000 | |
| Frank Ganschow | 25,000 | 25,000 | 66,000 | 90,000 | 91,000 | 115,000 | |
| Michael Herz | 50,000 | 50,000 | 66,000 | 90,000 | 116,000 | 140,000 | |
| Dr. Rolf Kunisch | 25,000 | 25,000 | 66,000 | 90,000 | 91,000 | 115,000 | |
| Tomas Nieber | 25,000 | 25,000 | 66,000 | 90,000 | 91,000 | 115,000 | |
| Stefan Pfander | 25,000 | 25,000 | 66,000 | 90,000 | 91,000 | 115,000 | |
| Ulrich Plechinger | 25,000 | 25,000 | 66,000 | 90,000 | 91,000 | 115,000 | |
| Prof. Manuela Rousseau | 25,000 | 25,000 | 66,000 | 90,000 | 91,000 | 115,000 | |
| Total | 432,500 | 422,562 | 957,000 | 1,305,369 | 1,389,500 | 1,727,931 |
This includes the fi xed remuneration component and the additional remuneration of membership of Supervisory Board committees and for the
chairmanship and deputy chairmanship of the Supervisory Board.
2 Prof. Dr. Reinhard Pöllath has been the Chairman of the Supervisory Board and of the Executive, Nomination, and Mediation Committees since the end of the Annual General Meeting on April 30, 2008; he was Deputy Chairman of the Supervisory Board until the end of the Annual General Meeting on April 30, 2008.
3 Dr. Arno Mahlert has been the Deputy Chairman of the Supervisory Board since the end of the Annual General Meeting on April 30, 2008.
Dieter Ammer was the Chairman of the Supervisory Board and of the Executive, Nomination, and Mediation Committees until the end of the Annual General Meeting on April 30, 2008.
In accordance with § 15a Wertpapierhandelsgesetz (German Securities Trading Act, WpHG), the members of the Company's Executive Board and Supervisory Board are legally obliged to promptly disclose the acquisition or disposal of shares in Beiersdorf AG to the Company. This also applies to related parties of such persons. Beiersdorf AG received the following notifi cations in the past fi scal year.
| Date and location of the transaction |
Name of the person subject to the dis closure requirement |
Position | Description of fi nancial instrument |
WKN/ISIN | Type of transac tion |
Number of shares |
Price per share € |
Total amount traded € |
|---|---|---|---|---|---|---|---|---|
| June 20, 2008 Xetra |
Cornelia Herz | Spouse of Supervisory Board member |
No-par value bearer shares |
DE0005200000 | buy | 500 | 48.679 | 24,560.06 |
| July 17, 2008 Xetra |
Cornelia Herz | Spouse of Supervisory Board member |
No-par value bearer shares |
DE0005200000 | buy | 250 | 41.879 | 10,469.75 |
| Aug. 6, 2008 Xetra |
Cornelia Herz | Spouse of Supervisory Board member |
No-par value bearer shares |
DE0005200000 | buy | 250 | 39.00 | 9,750.00 |
| Sept. 30, 2008 Xetra |
Stefan Pfander | Supervisory Board member |
No-par value bearer shares |
DE0005200000 | buy | 9,320 | 42.91 | 400,000.00 |
| Oct. 13, 2008 Hamburg |
Cornelia Herz | Spouse of Supervisory Board member |
No-par value bearer shares |
DE0005200000 | buy | 790 | 38.27 | 30,233.30 |
The members of the Executive Board of Beiersdorf AG hold no shares in the Company. The total shareholdings of the members of the Supervisory Board amount to 50.46% of the shares issued by the Company. Michael Herz, a member of the Supervisory Board of Beiersdorf AG, notifi ed the Company in accordance with § 21 (1) WpHG that his share of voting rights in the Company has amounted to 50.46% since March 30, 2004, and that these are fully attributable to him in accordance with § 22 (1) sentence 1 no. 1 in conjunction with sentence 3 WpHG (indirect ownership of shares). The other members of the Supervisory Board hold less than 1% of the shares issued by the Company.
More detailed information on the work of the Supervisory Board and its committees, as well as on the cooperation between the Supervisory Board and the Executive Board, can be found in the Report by the Supervisory Board on the previous pages.
Beiersdorf.com/ Corporate-Governance
Transparency and our goal of informing our shareholders and the public quickly, comprehensively, and simultaneously are top priorities for us. That is why current developments and key Company information are announced on our website (www.Beiersdorf.com) as soon as possible. In addition to detailed disclosures on corporate governance at Beiersdorf, additional information on the Executive Board, the Supervisory Board, and the Annual General Meeting, the Company's reports (annual fi nancial statements, management reports, and interim reports), as well as a fi nancial calendar with all key events and publications, ad hoc disclosures, and directors' dealings, are published there.
Hamburg, February 19, 2009
Beiersdorf Aktiengesellschaft
The Supervisory Board The Executive Board
sales growth in 2008 Eucerin
Perfection in medical cosmetics: Our Eucerin products comply with the highest dermatological standards, caring for sensitive skin in an especially gentle way.
Beiersdorf.com
Beiersdorf is a leading international branded consumer goods company with more than 150 affi liates and around 22,000 employees. We have been offering innovative products to meet consumer wishes for more than 125 years. Our Company is divided into two areas. The focus of our business is the Consumer business segment with its comprehensive range of skin and beauty care products. The tesa business segment is one of the world's leading manufacturers of self-adhesive product and system solutions for industry, craft businesses, and consumers.
Our Consumer business segment focuses on the development, manufacture, and marketing of innovative skin and beauty care products. We are excellently positioned thanks to our strong brands – above all NIVEA, the world's biggest skin and beauty care brand. Eucerin, one of the leading international dermo-cosmetic brands, and La Prairie, the high-quality cosmetics brand in the luxury segment, are other successful core brands. Our brands enjoy outstanding market positions in a large number of countries and segments.
Our goals are clearly defi ned: to continuously increase our market share in all areas through qualitative growth and to further improve our strong earnings situation. We are aiming for a global market share in the skin and beauty care segment of 5.5% by 2010. We intend to achieve these objectives by continuing to successfully implement our "Passion for Success" Consumer Business Strategy. This strategy is based on the following four key components:
see Chart 01
At the end of 2008 the realignment of our Consumer Supply Chain in Europe – which begun three years ago – was largely completed. With this the foundation for a globally-managed value creation chain with perfectly aligned processes was created. The desired increase in effi ciency and fl exibility has led to signifi cant savings and a reduction of capital employed by 13% within the past fi ve years.
After the reorganization of the production and logistics network, we now have a few large factories with high capacity utilization and effi ciencies at disposal. Through the specialization of production centers on dedicated product and process technologies, know-how has been optimally bundled and innovation capabilities have increased. The clear structuring of our entire assortment and the increased utilization of multilingual packaging also enable the cross-boundary fl ow of goods. While we increasingly concentrate ourselves on our core competencies, we also make use of the most modern technological advances of our new external logistics partners. This bundling strengthens the overall fl ow of goods from producers and enables the most effi cient use of transportation measures. As a result of the more effi cient transportation, we contribute to the reduction of CO2, energy use, and costs and have thus prepared our supply chain for the future.
The tesa business segment has been an independent subgroup within Beiersdorf since 2001. With over 3,900 employees and operations in more than 100 countries, tesa is the international no. 2 among the world's leading manufacturers of self-adhesive system and product solutions for industrial customers and consumers. It focuses on the electrical and electronics, automotive, as well as printing and paper industries. We are also developing new business areas with our forward-looking security solutions for protection against counterfeiting and manipulation, and for product traceability, as well as with special solutions for the health industry.
Our industrial distribution business offers technical dealers innovative products for industrial customers. In DIY centers, hypermarkets, and stationery shops consumers can fi nd more than 300 professional solutions under the tesa umbrella brand for improving their quality of life at home, in the garden, and in the offi ce.
Our activities are focused on our customers, for whom we develop effective solutions. We understand the needs of our industrial clients, distribution partners, and consumers and use this understanding to develop superior, market-driven products. The ongoing education of our employees and the continuous improvement of our business processes enable us to execute our solutions rapidly and effi ciently. Reliable quality, a strong track record for innovation, and the use of superior technology are core elements of our brand philosophy and our success.
tesa.com
Management of our business activities on an international level focuses on the following factors:
The Executive Board manages the Company and is dedicated to increasing its sustainable enterprise value. The areas of responsibility of the individual members of the Executive Board – brands, fi nance, human resources, and supply chain – refl ect the Group's functional organization. The Chairman of the Executive Board is responsible at an overarching level for corporate development and corporate communication. In addition, the members of the Executive Board are responsible for developments in their regions. This means they are closely involved with operations in the Beiersdorf affi liates. The tesa business segment is managed as an independent subgroup.
Information on the remuneration of the Executive Board and the Supervisory Board as well as incentive and bonus systems is provided in the section entitled "Corporate Governance" in the Remuneration Report, which forms part of the consolidated fi nancial statements and the group management report. Additional information regarding management and control, the Declaration of Compliance in accordance with § 161 Aktiengesetz (German Stock Corporation Act, AktG), and the general management structure is also provided in the "Corporate Governance" chapter.
The goal of our business activities is to sustainably increase our market share in terms of qualitative growth and at the same time to expand our earnings base. Our key performance indicators are derived from this.
We want to grow faster than the market. We measure this in terms of the growth rates in our regions, for which we have defi ned different growth targets. For example, the Consumer business segment in particular is expected to grow by more than the average in the strategic markets of China, Russia, Brazil, and India, but also in Eastern Europe. In addition to lifting sales, we want to increase the Group's earnings power at an even faster rate. This is measured using the operating result (EBIT) in conjunction with the EBIT margin (the ratio of EBIT to sales). We aim to generate internationally competitive returns through active cost management and the highly effi cient use of resources. In addition, we want to continuously optimize our net operating capital and hence improve our return on capital (the ratio of EBIT to net operating capital).
We have created an effi cient controlling system in order to meet our strategic goals. Management derives the parameters for planning business performance by the individual units in the Group
from our strategic goals in the coming year. This planning covers all segments and affi liates. Generally, the Executive Board and Supervisory Board formally adopt the Group's planning in the fall. Monthly comparisons of actual key performance indicators with planned values and current forecasts for the year as a whole are performed during the fi scal year. This allows an adequate management of the business.
The tesa business segment forms a separate, independent unit within the Group. It is also managed on the basis of the sales growth, EBIT, and EBIT margin performance indicators, as well as the return on capital.
The global economy initially appeared to be relatively resistant in 2008 to the continuing fears regarding the creditworthiness of fi nancial market products and institutions in the USA and Europe. However, rising commodity prices and the extremely weak dollar increased growth risks. Concerns regarding price stability prompted many central banks, including the European Central Bank, to increase interest rates in the summer.
In the late summer, increasing tensions on the fi nancial markets led to speculation regarding liquidity problems at some fi nancial market institutions in both the USA and Europe. To cap it all, the insolvency of a major American investment bank rocked the stability of the global fi nancial sector. Governments and central banks then immediately issued guarantees for fi nancial institutions and savings deposits running into the billions and provided the money markets with liquidity.
Nevertheless, the pronounced uncertainty as to how the crisis would play out quickly had a negative effect on investor and, to some extent, consumer activity in the real economy. This was exacerbated by restrictive lending policies on the part of the banks. The slowdown in growth led to a recession in almost all developed economies. The combination of a recession in the real economy, a growing fi nancial market crisis, and emerging fears of defl ation prompted central banks to make historically large interest rate cuts in the fi nal months of 2008.
Continental European economies were badly hit by these developments, recording signifi cantly lower growth rates in 2008. At the same time, infl ation increased, fuelled in particular by the rocketing oil and energy prices at the beginning of the year. The picture is similar in the USA, where economic growth continued to slow in 2008, while infl ation rose sharply. Even the rapid rate of expansion of the Chinese market declined signifi cantly to just under 10% in 2008, from approximately 12% in the previous year. Although Continental Asian countries recorded reduced, but still positive growth in 2008, Japan's economic output declined slightly. The pace of growth in Latin America and Eastern Europe remained essentially stable at approximately 5% and approximately 6% respectively.
see Chart 03 Chart 04 Chart 05
The cosmetics market saw global growth of just under 3% in 2008, slightly below the long-term trend. Once again, developments differed greatly by region: North America showed a signifi cant decline, whereas the major Western European markets recorded slightly positive growth. By contrast, the markets in Asia and, to an even greater extent, Eastern Europe and Latin America were able to continue their above-average growth.
Global growth in the adhesive tape markets slowed in 2008, due in particular to the global fi nancial crisis. Overall, the market remained fl at in comparison to the previous year, due to a strong decline in the fourth quarter, although there were regional and segment differences. Although the eurozone and North America turned in a worse than average performance, a number of Eastern European and Asian markets recorded in some cases substantial growth rates for the year as a whole. As in previous years, the electronics industry market segment proved to be a growth driver, with the majority of growth coming from Asia in the year under review. The important automotive market segment stagnated for the fi rst time in many years. Consumer business conducted via the sales channels for offi ce supplies picked up slightly in Germany and Europe.
Developments on the procurement market were dominated in 2008 by high volatility, especially in individual raw materials submarkets. Procurement was confronted with substantial demands for price rises in the fi rst half of the year in particular – the result of the enormous price increases for materials depending directly and indirectly on the crude oil market. Growing shortages in certain submarkets exacerbated this development. The trend towards rising commodities prices slowed in the last quarter of the year, but did not come to a complete stop.
Beiersdorf was also affected by these market developments; however, although the strategic procurement was optimized we were only able to slow down signifi cant increases in the cost of materials by systematically enhancing and applying the procurement strategies and tools that we have developed over the past few years.
income statement Jan. 1 to Dec. 31 (in € million)
| 2007 | 2008 | % change | |
|---|---|---|---|
| Sales | 5,507 | 5,971 | 8.4 |
| Cost of goods sold | –1,830 | –1,979 | 8.2 |
| Gross profi t | 3,677 | 3,992 | 8.6 |
| Marketing and selling expenses | –2,618 | –2,874 | 9.8 |
| Research and development expenses | –127 | –149 | 16.8 |
| General and administrative expenses | –260 | –292 | 12.6 |
| Other operating result | 12 | 19 | - |
| Operating result (EBIT, excluding special factors) | 684 | 696 | 1.7 |
| Special factors relating to divestments | - | 96 | - |
| Special factors relating to the realignment of the Consumer Supply Chain | –68 | 5 | - |
| Operating result (EBIT) | 616 | 797 | 29.3 |
| Financial result | 28 | 25 | –10.7 |
| Profi t before tax | 644 | 822 | 27.6 |
| Taxes on income | –202 | –255 | 26.0 |
| Profi t after tax | 442 | 567 | 28.3 |
The changes in percent are calculated based on thousands of euros.
Group sales rose by 10.6%, adjusted for currency translation effects. Consumer contributed with a rise of 12.3% and tesa with a rise of 1.3% to overall growth. Adjusted for our acquisitions made at the end of 2007 (C-BONS Hair Care, 50% Beiersdorf AG Switzerland), organic growth amounted to 7.5%. At current exchange rates, Group sales rose by 8.4% to €5,971 million.
In Europe, we lifted sales by 5.4% (adjusted for currency translation effects), due in particular to our successful innovations. At current exchange rates, we achieved growth of 4.6% to reach €4,090 million.
Strong double-digit growth in Latin America was the main driver behind the trend in the Americas. However, North America also achieved substantial sales growth again this year. Overall, sales in the Americas rose by 11.9% (adjusted for currency translation effects). At current exchange rates, sales increased by 6.3% to €832 million.
Sales growth in Africa/Asia/Australia again proved to be extremely dynamic. The fi gure of 34.2% growth (adjusted for currency translation effects) recorded for the region was extremely positive. The C-BONS Hair Care Group, which we acquired at the end of 2007, contributed 18.5 percentage points to growth in this region. At current exchange rates, we achieved growth of 28.7% to reach €1,049 million.
At +8.2%, the cost of goods sold increased more slowly than sales, meaning that gross profi t grew faster. The rise in marketing and selling expenses of +9.8% refl ects the increase in marketing expenses caused by greater marketing investments in the Chinese hair care business. Spending on advertising, trade marketing, and similar items included in this item amounted to €1,915 million (previous year: €1,748 million). The increase in research and development expenses to €149 million (previous year: €127 million) further strengthened our leading position in this area. General and administrative expenses rose to €292 million (previous year: €260 million). The other operating result reached €19 million (previous year: €12 million).
EBIT excluding special factors (divestments and Consumer Supply Chain) rose to €696 million (previous year: €684 million), while the EBIT margin was 11.7% (previous year: 12.4%). Excluding the acquisitions which took place at the end of 2007, the EBIT margin was 12.5%. EBIT for the Consumer business segment climbed from €596 million in 2007 to €615 million, with the EBIT margin amounting to 12.0% (previous year: 12.8%). For Consumer, the EBIT margin excluding our acquisitions was 13.0%. EBIT for the tesa business segment was €81 million (previous year: €88 million), while the EBIT margin was 9.6% (previous year: 10.4%).
In Europe we generated an operating result of €632 million (previous year: €590 million). The EBIT margin increased to 15.4% (previous year: 15.1%). The operating result in the Americas amounted to €37 million (previous year: €34 million). The EBIT margin was 4.5% (previous year: 4.4%). EBIT in Africa/Asia/Australia was €27 million (previous year: €60 million), with the EBIT margin being 2.6% (previous year: 7.3%).
The sale of the Futuro business and of the BODE Group generated a total income of €96 million.
With respect to the realignment of the Consumer Supply Chain, income from the sale of production and logistics locations that were no longer required exceeded restructuring expenses. This resulted in an income of €5 million. In the previous year, expenses of €68 million were recognized.
see Chart 08
* Excluding special factors.
EBIT amounted to €797 million (previous year: €616 million). The EBIT margin was 13.4% (previous year: 11.2%).
The fi nancial result amounted to €25 million (previous year: €28 million).
Taxes amounted to €255 million (previous year: €202 million). The tax rate was 31.0% (previous year: 31.4%).
Profi t after tax amounted to €567 million (previous year: €442 million). The return on sales after tax was 9.5% (previous year: 8.0%). Profi t after tax excluding special factors amounted to €490 million (previous year: €486 million). The corresponding return on sales after tax was 8.2% (previous year: 8.8%).
see Chart 09
Earnings per share amounted to €2.48 (previous year: €1.93). These fi gures were calculated on the basis of the weighted number of shares carrying dividend rights (226,818,984).
The Executive Board and Supervisory Board will propose the following dividend to the Annual General Meeting: €0.70 (as in the previous year) and an extraordinary amount of €0.20, in total €0.90 for each share carrying dividend rights. This amount shall enable the shareholders to participate in the special gains from the divestments of the previous years in an appropriate way.
| consumer (in € million) | ||||
|---|---|---|---|---|
| Africa/Asia/ | ||||
| Europe | Americas | Australia | Total | |
| Sales 2008 | 3,469 | 742 | 914 | 5,125 |
| Change (adjusted for currency translation effects) | 6.6% | 13.1% | 38.6% | 12.3% |
| Change (organic)* | 5.2% | 13.1% | 20.1% | 8.6% |
| Change (nominal) | 5.7% | 7.5% | 32.6% | 10.0% |
| EBIT 2008** | 580 | 29 | 6 | 615 |
| EBIT margin 2008** | 16.7% | 3.9% | 0.6% | 12.0% |
| EBIT 2007** | 529 | 25 | 42 | 596 |
| EBIT margin 2007** | 16.1% | 3.7% | 6.0% | 12.8 % |
** Excluding sales by our acquisitions made at the end of 2007 (C-BONS Hair Care, 50% Beiersdorf AG Switzerland).
** Excluding special factors due to divestments and the realignment of the Consumer Supply Chain.
see Chart 10 Chart 11 Chart 12 Chart 13 In 2008, the Consumer business segment lifted sales by 12.3%, adjusted for currency translation effects. At current exchange rates, we achieved growth of 10.0% to €5,125 million (previous year: €4,661 million). This means we grew substantially faster than the market and were able to increase our global market share. Excluding the acquisition of our Chinese hair care business at the end of 2007 and the increase in the interest in Beiersdorf AG (Switzerland) to 100%, organic sales growth was 8.6%. EBIT excluding special factors climbed to €615 million (previous year: €596 million), while the corresponding EBIT margin was 12.0% (previous year: 12.8%). At 13.0%, the EBIT margin excluding the effects of acquisitions was slightly above the previous year.
Successful innovations and international relaunches of existing products that have been modifi ed according to the latest fi ndings from our research activities, enabled us in some cases to generate extremely strong growth rates in our major markets.
In 2008, NIVEA recorded global growth of 10.0% (adjusted for currency translation effects). Sales rose in all regions. The key growth drivers were NIVEA DEODORANT – which was also boosted by the successful launch of NIVEA DEODORANT Double Effect –, NIVEA Hair Care, NIVEA Bath Care, and NIVEA FOR MEN. The launches of NIVEA body My Silhouette and the NIVEA FOR MEN Extreme Comfort range were extremely encouraging. NIVEA Hair Care continued its success following its relaunch in the previous year, and was extended to include the Diamond Gloss range of care products at the beginning of the year. However, NIVEA body recorded signifi cantly weaker growth compared with 2007.
We met our targets for our Eucerin brand with double-digit growth in 2008. The brand recorded an increase of 12.6% (adjusted for currency translation effects). Our anti-aging products performed especially well. In summer 2008, we successfully launched our Eucerin DermoDENSIFYER range in this segment.
In the area of exclusive cosmetics, La Prairie again recorded disproportionately strong growth of 12.3% (adjusted for currency translation effects). Key contributions were made by the launches of the innovative La Prairie Advanced Marine Biology series and Anti-Aging Stress Cream, as well as our existing La Prairie Caviar Collection.
The plaster brands, primarily Hansaplast and Elastoplast, recorded lower sales in a market showing a slight overall decline. This was due to a reduction in sales in the USA following the sale of the Curad brand plaster business in April 2007. Sales growth was achieved primarily in Germany and Greece, while business generated by the UK/Ireland Group and in Italy was weaker in particular.
| consumer sales in europe (in € million) | Western Europe (excluding |
|||
|---|---|---|---|---|
| Germany | Germany) | Eastern Europe | Total | |
| Sales 2008 | 985 | 1,831 | 653 | 3,469 |
| Change (adjusted for currency translation effects) | 1.7% | 5.5% | 18.5% | 6.6% |
| Change (nominal) | 1.7% | 4.0% | 18.2% | 5.7% |
In Europe, we lifted sales by 6.6% (adjusted for currency translation effects). At current exchange rates, sales increased by 5.7% to €3,469 million (previous year: €3,282 million). EBIT for the Consumer business segment (excluding special factors) climbed from €529 million in the previous year to €580 million, while the corresponding EBIT margin was 16.7% (previous year: 16.1%).
Sales in Germany were up 1.7% on the previous year, driven primarily by NIVEA Hair Care, NIVEA DEODORANT, and NIVEA make-up. Sales by Beierdsorf AG to customers within Germany increased by 3.0%. Our Florena brand performed extremely well after a complete relaunch, with a sales growth of 13.5% within Germany. Lower exports to third parties as well as structural effects reduced growth in Germany.
In Western Europe (excluding Germany), sales rose by 5.5%. This was due especially to Italy (+5.8%), the La Prairie Group (+4.0%), and the Benelux/France Group (+3.7%). In addition to the strong performance by NIVEA Bath Care and NIVEA DEODORANT, NIVEA Hair Care in particular made positive contributions to growth following its successful relaunch in the previous year. Eucerin achieved double-digit growth. Excluding the newly acquired share of sales in Switzerland, growth in Western Europe amounted to 3.0%.
We continued to record double-digit growth in Eastern Europe (18.5%). In Russia, NIVEA FOR MEN, NIVEA DEODORANT, and NIVEA VISAGE were the main growth drivers. In Poland, sales of NIVEA Hair Care, NIVEA Baby, and NIVEA DEODORANT rose in particular.
see Chart 14 Chart 15
| North America | Latin America | Total | |
|---|---|---|---|
| Sales 2008 | 304 | 438 | 742 |
| Change (adjusted for currency translation effects) | 3.8% | 20.9% | 13.1% |
| Change (nominal) | –2.9% | 16.2% | 7.5% |
see Chart 16 Chart 17
In the Americas, sales grew by 13.1% adjusted for currency translation effects (previous year: 12.5%). At current exchange rates, sales rose by 7.5% to €742 million (previous year: €690 million). EBIT excluding special factors was €29 million (previous year: €25 million), while the EBIT margin was 3.9% (previous year: 3.7%).
In North America, sales growth amounted to 3.8%. The positive development of the focus categories NIVEA body, NIVEA FOR MEN, and Eucerin continued. In addition, the launches of NIVEA Lip Care and the NIVEA FOR MEN shower products in the USA were extremely successful. These factors offset the decline in sales due to the sale of the plaster business in 2007, among other things.
In Latin America, we again recorded very strong growth (+20.9%). All major markets contributed with double-digit growth rates. NIVEA DEODORANT, NIVEA body, NIVEA soap, and our Eucerin brand reported the highest growth rates in this region.
consumer sales in africa/asia/australia (in € million)
| Africa/Asia/Australia | |
|---|---|
| Sales 2008 | 914 |
| Change (adjusted for currency translation effects) | 38.6% |
| Change (nominal) | 32.6% |
see Chart 18
At 38.6%, Africa/Asia/Australia achieved excellent sales growth (adjusted for currency translation effects). At current exchange rates, sales amounted to €914 million, up 32.6% on the previous year (€689 million). Not including sales generated by the Chinese hair care and styling brands acquired at the end of 2007, sales in this region increased by 20.1%. EBIT growth in this region has been impacted by expanded marketing investments in the Chinese hair care business. Consumer EBIT in this region excluding special factors amounted to €6 million (previous year: €42 million), while the EBIT margin was 0.6% (previous year: 6.0%). Excluding the Chinese hair care business, the EBIT margin was 6.4%.
see Chart 19
Our NIVEA affi liate in China maintained its growth at a high level of 40.7%. The main drivers of this impressive performance were NIVEA VISAGE, NIVEA FOR MEN, and NIVEA body. NIVEA FOR MEN and NIVEA DEODORANT in particular recorded signifi cant sales growth in Thailand (+19.3%). Our affi liates in Africa also substantially lifted their sales by a hefty 36.9% over the previous year. This excellent development was driven primarily by NIVEA DEODORANT, NIVEA body, and NIVEA VISAGE.
* Excluding special factors.
| Europe | Americas | Africa/Asia Australia |
Total |
|---|---|---|---|
| 621 | 90 | 135 | 846 |
| –0.6% | 2.4% | 9.9% | 1.3% |
| –0.6% | 2.4% | 9.9% | 1.3% |
| –0.9% | –3.1% | 7.1% | 0.0% |
| 52 | 8 | 21 | 81 |
| 8.3% | 9.0% | 15.8% | 9.6% |
| 61 | 9 | 18 | 88 |
| 9.7% | 10.1% | 14.2% | 10.4% |
tesa develops, manufactures, and markets self-adhesive system and product solutions for industrial customers and consumers. Its direct business with industrial customers mainly comprises solutions for optimizing products and production processes, tailored protection and packaging systems as well as permanent mounting solutions. The strategic focus is on establishing and expanding particularly profi table businesses in technically sophisticated application areas. Its major customers belong to the electrical and electronics, automotive, as well as printing and paper industries. Security solutions for protecting products against counterfeiting and manipulation as well as for product traceability are a further focus in developing new business areas. Health markets also represent a segment with future potential. In this area, tesa is developing and marketing innovative materials for producing high-precision, easy-to-use test strips for in vitro diagnostics, among other things, and is currently establishing another business area to manufacture medicated plasters known as transdermal systems. The company strengthened its expertise in this market segment by acquiring Labtec GmbH, which specializes in developing these applications. The industrial distribution business offers technical dealers self-adhesive product solutions for industrial customers in the construction and painting trades, among other things.
Sales rose slightly by 1.3%, adjusted for currency translation effects. At current exchange rates, sales stagnated at €846 million (previous year: €846 million). tesa's EBIT amounted to €81 million (previous year: €88 million). The EBIT margin was 9.6% (previous year: 10.4%).
In the industrial segment, which accounts for 74% of sales, both the direct customer and distribution business outperformed the market despite a much tougher economic environment in the second half of the year.
The launch of new double-sided foam tapes boosted tesa's direct business with the electronics industry. In contrast to fi lms, these products smooth out deformations and irregularities and are primarily used for mounting fl at screen frames. The launch of very thin foam tapes for mounting mobile phone components was highly successful. A new modular system enables the rapid development and production of tailored foam tapes for specifi c applications.
see Chart 20 Chart 21 Chart 22 Chart 23
Our system solutions for the automotive industry continued to focus on manufacturing applications in the area of vehicle production. We expanded our successful range of foam products for permanently mounting emblems and trimming elements on bodywork. To protect new automobiles from dirt and damage during transportation, we launched new adhesive tapes used to fi x surface protection elements to bodywork and windshields. Our new heat-resistant cloth tapes for bundling cables were very well received on the US market. They support the trend toward building new, extremely compact vehicle motors.
We expanded our successful range of splicing products for fl ying splices of paper and fi lm rolls in the printing and paper industry to include a new specialist product that is tailored to the extremely demanding requirements of rotogravure printing. In the area of fl exographic printing, we launched two new, particularly soft foam tapes for plate mounting that deliver excellent results with modern digital printing plates.
We again strengthened our market position in security technologies that protect products against manipulation and counterfeiting. In particular, we expanded the use of our Holospot® technology to new sectors, acquiring leading-name international manufacturers of electrotechnical components, among others, as new customers.
The distribution business received a major boost from a new product range for the painting segment, which was launched extremely successfully in Eastern Europe. The products and design are tailored specially to the traditional retailers that have a strong presence in this region and that sell to both private consumers and industrial customers. We launched a new range of spray glues and the related cleaning agents to meet the increasing demand for large-area adhesive bonding solutions in the industrial segment.
The consumer business remained on the previous year's level, with slight growth in earnings. In Germany, we increased the market share of all key product groups.
| (in%) | 24 • financing structure | ||
|---|---|---|---|
| 2007 | 53 | 15 | 32 |
| 2008 | 55 | 13 | 32 |
| Equity |
Non-current liabilities Current liabilities
balance sheet – group (in € million)
| assets | Dec. 31, 2007 | Dec. 31, 2008 |
|---|---|---|
| Non-current assets | 1,100 | 1,167 |
| Inventories | 598 | 634 |
| Other current assets | 1,086 | 2,045 |
| Cash and cash equivalents | 1,117 | 613 |
| 3,901 | 4,459 | |
| equity and liabilities | Dec. 31, 2007 | Dec. 31, 2008 |
| Equity | 2,070 | 2,460 |
| 407 | 366 | |
| Non-current provisions Non-current liabilities |
175 | 233 |
| 374 | 363 | |
| Current provisions | ||
| Current liabilities | 875 | 1,037 |
| 3,901 | 4,459 |
Non-current assets increased by €67 million to €1,167 million. Capital expenditure of €158 million was partially offset by depreciation, amortization, and impairment losses of €114 million (previous year: €122 million). €122 million of the capital expenditure was attributable to the Consumer business segment, and €36 million to tesa. Inventories increased to €634 million. Other current assets rose to €2,045 million mainly due to the shift from cash to securities. As a result, cash and cash equivalents decreased to €613 million. Net liquidity (cash, cash equivalents, and short-term securities less current fi nancial liabilities) amounted to €1,336 million (previous year: €957 million).
The equity ratio increased to 55% (previous year: 53%). The share of non-current liabilities amounted to 13% (previous year: 15%), and the share of current liabilities to 32% (previous year: 32%).
The change in non-current liabilities is mainly due to an increase in deferred tax liabilities. Additionally, the liability for the option to acquire the outstanding shares in C-BONS Hair Care increased due to interest and currency effects.
Current liabilities increased in particular due to higher trade payables.
cash flow statement – group (in € million)
| 2007 | 2008 |
|---|---|
| 477 | 520 |
| –75 | –52 |
| 402 | 468 |
| –319 | –795 |
| 83 | –327 |
| –186 | –175 |
| –10 | –2 |
| –113 | –504 |
| 1,230 | 1,117 |
| 1,117 | 613 |
Gross cash fl ow amounted to €520 million in the year under review, €43 million above the prior-year value. The strong increase in the operating result had a positive infl uence.
The change in working capital led to an outfl ow of €52 million (previous year: €75 million). The development shows the balance of increased trade receivables due to the strong sales development and of the rise in current liabilities and provisions. The net cash fl ow from operating activities reached €468 million, €66 million higher than the prior-year value.
The net cash outfl ow from investing activities amounted to €795 million. Included are payments of €897 million for the purchase of securities, payments of €19 million for the acquisition of shares in Labtec GmbH, as well as cash infl ows from divestments and the sale of non-current assets amounting to €224 million. In the previous year, expenses amounting to €302 million for the acquisition of a majority shareholding in C-BONS Hair Care, and the increase in the interest held in Beiersdorf AG (Switzerland) from 50% to 100% were included.
Free cash fl ow totaled –€327 million. The net cash outfl ow from fi nancing activities amounted to €175 million, €9 million below the prior-year value.
The primary goal of fi nancial management at Beiersdorf is to safeguard liquidity. The type and volume of transactions are in line with the Group's basic operating and fi nancial business. Scenarios and rolling 12-month cash fl ow planning are used to establish liquidity requirements.
* Research & Development.
The success of our products is based on many years of experience in research and development. In this key area of our company we develop pioneering product innovations offering outstanding quality and excellent tolerability. As a result Beiersdorf consistently sets new trends in the skin and beauty care market around the world. With tesa, too, we are setting global standards in the area of modern, self-adhesive system and product solutions.
In the year under review, we invested a total of €149 million in research and development and employed 926 people worldwide in this area.
By researching skin, discovering the active ingredients that occur naturally in it, and closely observing active ingredients' effect on skin, we are able to develop innovative and highly effective product formulations that are successful globally. Most of our research takes place at our Skin Research Center in Hamburg which, with more than 450 scientists, is one of the largest and most advanced research centers in Germany, and one of the most important in the world. Our fi elds of activity include both basic dermatological research and the development of new products on the basis of an in-depth understanding of our consumers' wishes and needs.
Our research uses a comprehensive range of state-of-the-art biotechnology methods to meet consumers' wishes for effective cosmetic solutions as optimally as possible. In face care, this allowed us to develop a new, effective face-lifting effect using biotechnologically produced plant peptides in the year under review, and to launch it on the market as the NIVEA VISAGE Expert Lift face care range for women over the age of 50. The product range achieved remarkable results in antiaging studies. In addition to our traditionally strong position in skin research, we achieved excellent results in the hair care segment. Our cell metabolism research, which has been ongoing for many years, demonstrated that a combination of creatine and carnitine stimulates hair growth. The men's product which is based on this, NIVEA FOR MEN Hair Recharge, has been on the shelves since the fall of 2008. We were also able to launch a series of other key innovations. Our high innovation rate was refl ected in 100 newly developed products in 2008, and our innovation quality in 87 patent applications. Some of the most successful new developments were:
Beiersdorf.com / Research
– Eucerin DermoDENSIFYER: The anti-aging innovation for women over the age of 55 renews and concentrates skin cells by stimulating the production of new collagen. The range consists of day and night creams, and an eye and lip contour cream.
La Prairie Group's research center in Zurich (Switzerland) carries out research for our exclusive La Prairie, JUVENA, Marlies Möller, and SBT Skin Biology Therapy brands. Restructuring of activities continued successfully in 2008, with the development of formulas and packaging being bundled to optimize synergy effects. Safety monitoring and quality management were also expanded and now actively drive registration processes worldwide. The most important innovations in 2008 were:
Around 6,000 cosmetic formulations were tested for tolerance, effectiveness, and sensory properties in 2008. The tests were performed both in Beiersdorf's own Test Center, which forms part of the Hamburg Research Center (900 studies, 27,000 test persons) as well as in 50 external test institutes around the world (approximately 950 studies, 30,000 test persons). The direct contact with the test persons also gives us information about specifi c consumer wishes that help in the product optimization process.
Beiersdorf does not test cosmetic products on animals. For 20 years we have been one of the leading and best-accepted research-driven companies around the world when it comes to developing in vitro alternatives to tests on animals – in some cases in cooperation with other international cosmetics manufacturers and professional bodies. A further success factor for Beiersdorf products around the world is our in-depth focus on the specifi cs of regional markets. Since 2005, Beiersdorf has had a special Asia Laboratory in which skin care products are developed to meet the needs of Asian consumers and the climatic requirements in this region. This facility was joined in 2007 by a LATAM Laboratory that develops products for Brazil and other Latin American countries. Research and development for our Chinese hair care and styling brands take place locally. The rapid knowledge gain and the fact that today know-how is to be found all around the world is refl ected in a wide range of open innovation activities. These cover the various forms of cooperation with an extremely wide range of external partners and experts throughout the world. Our Research & Development unit has established an effi cient international network of partners and experts over the years.
We further increased the number of cooperative projects with suppliers, universities, and research institutes in 2008 to a total of 550. This network enabled us to achieve the following results in the year under review, among others: The "Project House" initiative serves to intensify our cooperation with selected partners under one roof. For example, employees from two major perfume manufacturers have been working hand in hand with our development laboratory in our Research Center since January 2008. In addition, employees from major research-driven companies have been working together with our scientists in a specially established "Incubation Lab" since October 2008 to jointly solve questions relating to the formulation of beauty products.
The success of these activities won us a prize from the Fraunhofer Institute IPT in the fall of 2008. Over 600 European companies were surveyed, with Beiersdorf being the only consumer goods company to receive an award for its research and development activities – for "Best Practice in Technology Management".
The focus of activities continues to be on the development and optimization of environmentally friendly, solvent-free adhesive substances and coating processes. We have developed innovative products for sophisticated applications in the area of assembly bonding with highly shearresistant compounds that are the equal of – and in many cases superior to – established solventbased systems.
We worked on a series of innovations for different sectors in the year under review: We developed new solvent-free products for the automotive industry for bundling and affi xing cables, which also protect wire harnesses against the effects of heat. We also completed the development of a solvent-free process for manufacturing masking tapes capable of withstanding high temperatures for use in painting and repairs. We are continuing to work on new adhesive systems for assembling printed fl exible electric circuit boards for laptops, cell phones, and digital cameras in the electronics industry. The fi rst products are heat-activated, double-sided adhesive tapes with very strong adhesive properties that can withstand the extreme stresses of soldering processes. We are developing new, very thin foam tapes with particularly strong adhesive qualities for the fast, clean, and stable assembly of casings, windows, and operating interfaces. To expand our successful range of splicing tapes for fl ying splices of paper rolls in the printing and paper industry, we developed new products that also offer secure adhesion of paper with sensitive surfaces. The emphasis of our development work for the establishment of our new medical technology focus market is on coatings and processes for manufacturing extremely thin, functional layers. This enables pioneering new products for manufacturing diagnostic test strips to be developed that can be used not only for affi xing and strengthening, but also for conducting test liquids to where they are required. In the consumer business, we developed a new, more stable aluminum fl y screen frame construction that is easier to mount, including a version that closes automatically.
Beiersdorf.com / Sustainability Corporate responsibility has been one of Beiersdorf's core values ever since the Company was founded. Our responsibility extends beyond our employees and our economic success. Our actions are also determined by our active approach to environmental protection and occupational safety, and by our commitment to society. Economic, ecological, and social responsibility are therefore always on an equal footing at Beiersdorf.
The Sustainability Advisory Board (SAB) – a special steering committee which was initiated by the Executive Board – ensures the global coordination of all sustainability activities in the consumer segment. This committee compiled our new Sustainability Guidelines that were formally adopted in 2008. These include our economic, ecological, and social responsibility, and serve as a basis for a worldwide uniform understanding of responsible conduct at Beiersdorf.
One important aspect for us when aligning our sustainability activities is an in-depth and continuous dialog with our stakeholders – employees, consumers, business partners, nongovernmental organizations (NGOs), capital markets, and representatives of academia, politics, and the media. In order to achieve the greatest level of transparency we publish our sustainability activities on an annual basis. The latest Sustainability Report, "Our Responsibility", is available on the Internet at www.Beiersdorf.com/Sustainability. As in the previous year, this publication is oriented on the international "Global Reporting Initiative" guidelines, and presents all of the activities relating to products, environmental protection and occupational safety, employees, society, and the economy in detail. It also gives an outlook on future sustainability activities.
Our consumers expect a sustainable approach from us. Our products in particular should be well tolerated – by people and the environment alike. To retain their trust in our brands we satisfy this aim every day. With this awareness, we are working systematically to reduce the use of resources and to cut waste volumes and disposal costs in production. At the same time, we arrange an ongoing global exchange of experience to guarantee an internationally uniform and high standard. Twenty-fi ve environmental protection and occupational safety experts from 13 Beiersdorf production affi liates met at the second international CEOS conference (Corporate Environmental Protection, Occupational Safety and Security) in 2008 to develop a uniform understanding of, and consistent goals for, sustainable action in the areas of environmental protection and occupational safety.
Our proven, trusted three-tier environmental protection and occupational safety concept is integrated in all business processes from product development through production to environmentally friendly disposal management. It complies with the principles of the international "Responsible Care" initiative and is the basis for implementing our vision of "zero accidents". A program to prevent behavior-related accidents at work was launched in 2008 at our location in Hamburg. Under the concept, all employees use a standard checklist when inspecting their areas of work, thus improving their behavior in regard to the safety, orderliness, and cleanliness of their workplaces. Beiersdorf also supports the "ArbeitsschutzPartnerschaft Hamburg"
("Partnership for Occupational Safety in Hamburg") at its location in Hamburg – spreading the idea of safer and healthier workplaces to small and medium-sized companies via a partnershipbased network. This encourages the safety and health of employees within companies and strengthens competitiveness and Hamburg as an economic location – a place that Beiersdorf identifi es very closely with.
Our database-driven global CEOS management system enabled us to collect environmental protection and occupational safety performance indicators for all our production affi liates during the year under review. The establishment of a contact network between the responsible people in the international production companies was an important precondition for the coordination of future goals in environmental protection and occupational safety. The CEOS goals are an essential element of sustainability at Beiersdorf, and will in future include measurable, locationspecifi c goals for reducing energy and water usage, CO2 emissions, wastewater and waste volumes, as well as the number of accidents within a certain period of time. In addition, the system documents our Company's guidelines and minimum standards, and provides a discussion forum for exchanging technical information on important aspects of environmental protection and occupational safety. In parallel, we enhanced our internal ESMAS program (Environmental Protection and Safety Management Audit Scheme) for environmental protection and occupational safety audits. The program has been validated by the DQS, the German Association for the Certifi cation of Management Systems, according to the internationally recognized ISO 14001 and OHSAS 18001 standards. The fi nal production location for our exclusive cosmetics brands La Prairie and JUVENA in Baden-Baden (Germany) and the production affi liate for our Hansaplast and Elastoplast plaster brands in Argentona (Spain) were audited for the second time. The positive result: high standards in practice and effi cient management of environmental protection and occupational health and safety. Our Florena production facility in Waldheim (Germany) was also classed as having these high standards. Particular mention should be made of the exemplary training, fi re prevention measures, and the entire warehouse equipment. This brings the number of Beiersdorf Group's production locations that are ESMAS-certifi ed to 14.
A method to analyze qualifi cation requirements for employees in the Group was developed in preparation for pending changes to the international regulations of dangerous goods for sea transport. As part of the changes, employee training must be carried out and documented worldwide as of 2010.
Beiersdorf's social commitment goes back to when the Company was founded. We are active in this area everywhere in the world where we do business on the basis of an effective strategy. Our activities focus on education, family, and culture. These areas are essential for a life that is truly worth living – both now and in the future. This clear focus allows us to concentrate and hone our social commitment. In addition, we defi ned a key project for each fi eld. These key projects – which have all been adapted to local requirements – are designed to be implemented around the world with the help of affi liates. When implementing our projects, we orient ourselves on the criteria of a long–term approach, local relevance, measurability, and continuous improvement. In order to
act in a truly sustainable manner, we only enter into long-term cooperations that also benefi t both parties. We regularly review the relevance of projects and continuously adapt and improve our goals and the measures taken in an ongoing dialog with our stakeholders.
Some of the most important examples of our social commitment are:
October 2008 signaled the start of MUS-E in France, an arts and culture program developed for schools by the international Yehudi Menuhin Foundation. This represents the inter national rollout of the fi rst key project, which began as a pilot project in Hamburg in 2007, as part of the new strategic focus of Beiersdorf's social commitment. Thanks to the support of Beiersdorf France, the foundation's activities in Strasbourg could be expanded and new MUS-E classes were organized in Paris and Lyon. A total of 150 schoolchildren will have the opportunity to work on a range of projects together with artists for one and a half hours each week. MUS-E's goal is to strengthen the children's creativity, initiative, and social skills. The project is to be continued in other countries in the coming years.
The NIVEA Family Festivals have been among Austria's most popular summer events since 1997. Every year, this show and leisure tour attracts some 200,000 people to a total of ten weekend events. Entry is free, with around 30 stands in the tented city offering young and old a range of attractions. Record total donations of €290,715 were raised by this campaign in 2008, which will be used in the renovation and construction project in East Tyrol's Children's Village.
In a weeklong volunteering program for potential management staff, Beiersdorf's affi liates in Belgium and the Netherlands support the West African "Reliance" organization in the Gambia, which specializes in awarding small loans and giving coaching to small businessmen such as welders, fi shermen, butchers, mechanics, and farmers. The goal is to enable these people to take the fi rst steps in the direction of independence and hence to combat poverty in the country in the long term. Every year, two eight-man Beiersdorf teams offer their assistance in the areas of marketing and brand building. Both sides profi t from the project, as the interchange with local people leads staff to refl ect on their own behavior and abilities. In addition, the impressions gained benefi t day-to-day cooperation and improve the way in which change processes are handled.
Responsibility – for both people and the environment – has also always been one of tesa's guiding principles. We have defi ned and consolidated binding guidelines in a global "tesa Code of Conduct" with the goal of embeding responsible action with our values in our day-to-day business. The "tesa Code of Conduct" was presented to all governing bodies in the Company and is available to all employees, both in a printed version and online in the Intranet. All senior managers have completed a compulsory electronic training program regarding the "tesa Code of Conduct" and have passed this on to their teams.
Our own values also form the basis for our partnership with our suppliers. This is why a globally binding "tesa Purchasing Charter" was developed for all our suppliers during the year under review. Based on this purchasing and procurement charter, two successive and interrelated audit processes ensure that our suppliers are chosen in accordance with these guidelines for responsible action, and that their compliance with them is then reviewed again.
Ensuring a balance between economic and ecological issues is an important principle underlying tesa's business operations. We have defi ned the goals we want to achieve by 2012 in our globally binding environmental program, which was formally resolved in 2007. For the fi rst time, our catalog of goals also takes into account emissions of volatile organic compounds (VOCs). In the year under review we continued working on its implementation. Our global environmental management system was expanded with the certifi cation of our Asian production affi liates in China and Singapore in accordance with the global ISO 14001 standard. In the area of occupational health and safety we have driven forward our goal of establishing a uniform high standard around the world. The associated measures focus on regular, comprehensive local analyses at the international affi liates. These are now based on the global OHSAS 18001 standard, and were a major contributing factor in stabilizing the number of accidents at the extremely low level recorded in 2007.
tesa's high level of commitment to social responsibility can also be seen from the numerous new projects set up in line with the sponsoring strategy that we formulated in 2007. During the year under review, we focused on measures that are supported not just through material contributions by tesa but also through the personal commitment of tesa employees (corporate volunteering). Two examples among many are the "Mittagskinder" foundation in Hamburg (Germany) supported by the tesa plant in Hamburg and the help given to children of migrant workers at the Suzhou Sunshine School in China. All of our activities are documented in an annual report which, as of recently, is available in electronic form at www.tesa.com/responsibility.
tesa.com/ responsibilty
Total: 21,766 employees as of December 31, 2008.
Beiersdorf.com / career
see Chart 26
Personal commitment, professional expertise, and a high degree of identifi cation are the key to our employees' professional success and the basis of our Company's positive development. In order to ensure this for the long term, we challenge and encourage our employees by providing a range of measures and offers. As of December 31, 2008, we employed 21,766 staff (previous year: 21,101) – 17,865 in the Consumer business segment and 3,901 in the tesa business segment. The number of vocational training positions and trainees worldwide was 528 (previous year: 539).
The target of our Human Resources activities is to assist the implementation of the Consumer Business Strategy within the Company by providing advisory, organizational, and process-oriented support. Over and above the development and training of all employees Human Resources focuses on investing in a targeted manner in the identifi cation of managerial talent as well as in the development and promotion of leadership skills. We lay the foundations for increasing employee commitment and motivation even further via a transparent compensation and bonus system. In order to fulfi ll this task as optimally as possible in the future, too, we realigned the Human Resources department during the past fi scal year. The new organization systematically refl ects our corporate structure and symbolizes the changes taking place throughout the Company. It enables Human Resources managers to be closer to operations in the business segments and supports them in their changed task profi les and structures better, faster, and more effi ciently. Since April 2008, all functions have been assigned "Business Partners" who will be involved in key processes from the outset. They will also ensure a closer cooperation between local HR managers and Group headquarters. In cooperation with the Business Partners, the "Centers of Excellence" will devise and implement the strategic global Human Resources topics.
To continue on our course for success, we depend on qualifi ed employees and applicants who will continue to drive forward the implementation of our Consumer Business Strategy with their expertise, good ideas, and a winner's mentality. Since the end of 2008, Beiersdorf has been meeting the fi erce competition for qualifi ed staff with a global strategy to set ourselves apart from our competitors and to strengthen our image as an attractive global employer. We have taken the following measures as part of our "Employer Branding" project:
In addition to the systematic alignment of all internal Human Resources processes with the newly defi ned employer brand, one of the main goals of the "Employer Branding Strategy" is to expand university recruiting activities.
Top universities both in Germany and abroad were selected and cooperative activities such as guest lectures and case studies were agreed. The international rollout of our "CLOSE2B" outreach program, which enables Beiersdorf to remain in close contact with particularly talented students until they fi nish their studies and start their careers, is another of the tools we use. Our support of SIFE (Students In Free Enterprise), an international, socially committed initiative comprising students and business leaders from the private sector and universities, is another example of how we get to know highly qualifi ed students with a global mindset early on.
All of these activities are supported by an international communication concept which allows all countries involved to strengthen their local Human Resources marketing. The focus of this concept is the systematic expansion of our career websites – both in Germany and in the affi liates – and the targeted use of the opportunities the Internet offers to position Beiersdorf as an employer. The online activities are supplemented by templates for uniform global advertisements, posters, presentations, and giveaways, which can be locally adapted. This uniform global framework strengthens the recognition value of Beiersdorf as an international employer. The implementation of these measures at our affi liates will take place in 2009.
Intensive employee qualifi cation was another Human Resources focus in 2008. Practically oriented measures ensured targeted initial training and further education for specialists and managers. The most important measures in 2008 included:
For managers there are especially coordinated programs for training activities and further education. Beiersdorf has introduced an additional global program for experienced managers in addition to the "Learn to Lead" program for young managers, which has been running successfully for many years. The Senior Leaders Development Program, "Courage to Lead", builds on a workshop lasting several days that systematically analyzes the key aspects of the further development of all participants. As a part of this program, the participants are given the opportunity, in the form of numerous goal-driven exercises, to extend their individual leadership abilities and to increase their personal contribution to the Company's success.
The focus of our Human Resources measures in 2008 was on the recruitment, training, and development of our employees who will start production at our new manufacturing line in Hamburg-Hausbruch (Germany) in 2009. The goal of this investment is to tap into new markets and to further increase our innovative capability. We also continued to expand our sales force in the growth regions of Eastern Europe and Asia.
The rapid globalization of our business increasingly requires employees who have extensive intercultural experience and are used to quickly understanding business processes in other regions. During the year under review, more employees than ever before took up the challenge of spending three to fi ve years in another country. Our repatriation process makes their return easier and allows us to use the experiences they have gained in the countries to optimize international business processes.
The sales employee qualifi cation program that was successfully launched in 2007 has now been expanded to cover all regions. This program includes all aspects of the sales process, from the technical basis – such as the structure of our products as well as customer applications and production processes – through business topics down to sales negotiation techniques. One key expansion are the new modules that emphasize the role of managers as coaches and help them to support their employees in implementing what they have learned in everyday sales situations. Another of the program's goals is to transfer improvements that have been developed in one country to other countries.
tesa's Offenburg (Germany) facility was honored twice during the year under review: In January 2008, the "Handelsblatt Junge Karriere" magazine listed it as a top employer, and in October 2008, "Produktion" magazine's "Fabrik des Jahres" (factory of the year) competition named it the best process manufacturer. Important criteria for both awards were innovative measures to encourage individual responsibility and motivation among employees.
Entrepreneurial success cannot be achieved without consciously taking risks. Risk management helps us to control the risks associated with the strategic objectives of the business and to maximize our strategic potential. Regular strategy reviews ensure that opportunities and risks are well balanced. We incur risks only if there is a corresponding opportunity for an appropriate increase in value and if they can be managed using established methods and measures within our organization.
Risk management is an integral part of central and local planning, management, and control processes, and conforms to consistent standards across the Group. Our open communications policy, the risk inventory carried out at regular intervals, and the planning and management system ensure that our risk situation is presented transparently. Risk management is coordinated at Group headquarters.
Our Internal Audit department monitors compliance with the internal control system by means of systematic audits. The department is independent of the Group's operating activities, thus guaranteeing the integrity of our business processes and the effectiveness of the systems and controls we have put in place. In addition, the external auditors audit the risk early warning and monitoring systems. They report their audit fi ndings to the Group Executive Board and to the Audit and Finance Committee of the Supervisory Board, which regularly focuses on the topic of risk management.
Maintaining and increasing the value of our major consumer brands with their broad appeal are of central importance for Beiersdorf's business development. We have geared our risk management system towards protecting the value of our brands. Our compliance with high standards of product quality and safety is the basis for our customers' continued trust in our brands. We therefore perform in-depth safety assessments when developing new products. Our products are subject to the strict criteria of our quality assurance system throughout the entire procurement, production, and distribution process.
Innovations based on strong research and development are a precondition for consumer acceptance of our products, and for the latters' appeal. Prudent brand management captures consumer trends as well as the results of in-depth market and competitive analyses, and at the same time ensures that the brand's core remains intact and is carefully enhanced.
Strong brands that balance innovation and continuity are our response to fi erce global competition on price, quality, and innovation. By developing and implementing the "Consumer Insights" process we have laid the groundwork for ensuring that we are able to identify consumer wishes even faster and to refl ect them in the products we develop. Strong brands also counteract the growing retail concentration and the regional emergence of private label products.
Expertise-based brands require a high degree of upfront investment in innovation and marketing. The continuous expansion of our patent and trademark portfolio therefore plays a key role.
In particular, the systematic registration and enforcement of our intellectual property rights prevents the imitation and counterfeiting of our products, and thus helps safeguard and further increase the earnings potential previously created.
We counter procurement risks relating to the availability and price of raw materials, merchandise, and services by continuously monitoring our markets and ensuring active management of our supplier portfolio, as well as appropriate contract management. The project launched in 2006 to bundle Beiersdorf's procurement activities more intensively worldwide, and to further improve their quality and costs, was completed ahead of schedule in 2008.
We counter compliance risks by providing clear management structures and through effi cient organizational measures. Occupational safety, environmental, and business interruption risks in our production and logistics activities are minimized by process control checks and location-specifi c audits. We minimize risks relating to the availability, reliability, and effi ciency of our IT systems through continuous monitoring and process improvements, as well as emergency training. We transfer selected risks to insurance companies, when economically appropriate.
Along with other companies, affi liates of the Beiersdorf Group are involved in antitrust proceedings relating to cosmetic products on a national level in Europe. Due to the early stage of the preliminary investigations, at present no reliable assessment of the overall risk is possible from the Group's perspective.
Currency, interest rate, and liquidity risks are subject to active treasury management based on global guidelines. In most cases they are managed and hedged centrally. In this context, the specifi c requirements for the organizational separation of the trading, settlement, and controlling functions are taken into account. Derivative fi nancial instruments serve solely to hedge operational activities and fi nancial transactions essential to the business. They do not expose the Group to any additional risks.
We limit currency risks from intragroup deliveries of goods and services using currency forwards. About 75% of forecasted annual net cash fl ows are hedged (cash fl ow hedges of forecasted transactions). Currency risks from cross-border intragroup fi nancing are fully hedged in the market by the central treasury department using currency forwards.
The Company limits potential default risks relating to the investment of the Group's liquid funds by only making short-term investments with prime-rated counterparties. Counterparty risk is monitored on the basis of credit ratings and the counterparties' liable capital as well as our own riskbearing capacity. In addition, we monitor counterparties' relative credit ratings using methods that provide up-to-the-minute assessments of market participants. With the help of these parameters, maximum amounts are determined for investments with each partner bank (counterparty limits) and are regularly compared with investments actually made across the Group. Given the developments in the capital markets, we invested more than half of our liquidity in low-risk liquid investments (such as government and corporate bonds) during the second half of the year.
In order to optimally manage our investments, we made increased use of stronger methods and instruments for concentrating our affi liates' liquidity. Organizational measures ensure we have transparency concerning our affi liates' remaining funds. Positive balances are registered with central counterparty risk management.
Our fi nancial risk management is characterized by the clear allocation of responsibilities, central rules for limiting fi nancial risks as a matter of principle, the conscious alignment of the instruments deployed with the requirements of our business activities, and separate monitoring by a Treasury Committee that includes international members.
We counter the risk of bad debts through detailed monitoring of our customer relationships, active receivables management, and the selective use of trade credit insurance.
We maintain contacts with universities to recruit qualifi ed specialists and management personnel. We develop management trainees and employees internally using special international training programs and continuing education measures.
In view of the general economic uncertainty in our markets resulting from the global fi nancial crisis, no reliable assessment can be given from today's perspective of the extent to which the associated risks may impact the net assets, fi nancial position, and results of operations of the Beiersdorf Group.
In accordance with § 312 Aktiengesetz (German Stock Corporation Act, AktG), the Executive Board has issued a report regarding dealings among group companies which contains the following concluding declaration: "According to the circumstances known to us at the time the transactions were executed, or measures were implemented or omitted, Beiersdorf Aktiengesellschaft received appropriate consideration for every transaction and has not been disadvantaged by the implementation or omission of any measures."
No signifi cant events occurred after the end of the fi scal year that would have a material effect on the Beiersdorf Group's business development.
The Company's share capital amounts to €252 million and is composed of 252 million no-par value bearer shares. Since the settlement of the share buyback program on February 3, 2004, and following implementation of the share split in 2006, Beiersdorf AG has held 25,181,016 no-par value bearer shares, corresponding to 9.99% of the Company's share capital.
To the Executive Board's knowledge, Tchibo Beteiligungsgesellschaft mbH, Hamburg, Germany, has directly held 50.46% of the voting rights of Beiersdorf AG since August 9, 2005. These voting rights are attributable in full to maxingvest ag (formerly: Tchibo Holding AG), Hamburg, Germany, in accordance with § 22 (1) sentence 1 no. 1, sentence 3, (3) Wertpapierhandelsgesetz (German Securities Trading Act, WpHG).
These voting rights are also attributable in full to the following persons and companies in accordance with § 22 (1) sentence 1 no. 1, sentence 3, (3) WpHG:
The appointment and removal from offi ce of members of the Executive Board are governed by §§ 84 and 85 Aktiengesetz (German Stock Corporation Act, AktG), § 31 Mitbestimmungsgesetz (German Co-Determination Act, MitbestG), and § 7 of the Articles of Association. In accordance with § 7 of the Articles of Association, the Executive Board consists of at least three persons; apart from this provision, the Supervisory Board determines the number of members of the Executive Board. The Articles of Association may be amended in accordance with §§ 179 and 133 AktG and with § 16 of the Articles of Association. Under § 16 of the Articles of Association, the Supervisory Board is authorized to resolve amendments and additions to the Articles of Association that concern the latter's wording only. Under § 5 (6) of the Articles of Association, the Supervisory Board is authorized in particular to amend and reformulate § 5 of the Articles of Association (Share Capital) correspondingly following each utilization of authorized or contingent capital.
The Annual General Meeting on May 18, 2005 authorized the Executive Board, with the approval of the Supervisory Board, to increase the share capital in the period until May 17, 2010 by up to a total of €87 million (Authorized Capital I: €45 million; Authorized Capital II: €21 million; Authorized Capital III: €21 million) by issuing new bearer shares on one or several occasions. In this context, the dividend rights for new shares may be determined by a different method than that set out in § 60 (2) AktG.
Shareholders shall be granted preemptive rights. However, the Executive Board is authorized, with the approval of the Supervisory Board, to disapply shareholders' preemptive rights in the following cases:
The Executive Board was also authorized, with the approval of the Supervisory Board, to determine the further details of the capital increase and its implementation.
The Annual General Meeting on May 18, 2005 also resolved to contingently increase the share capital by up to a total of €40 million. In addition, the Annual General Meeting on May 17, 2006 resolved a capital increase from retained earnings. In accordance with § 218 sentence 1 AktG, contingent capital is increased by the same proportion. It therefore now amounts to €46,875,000. In accordance with the resolution by the Annual General Meeting, the contingent capital increase will be implemented only if
The new shares carry dividend rights from the beginning of the fi scal year in which they are created via the exercise of conversion or options rights, or as a result of compliance with a conversion obligation.
By way of a resolution of the Annual General Meeting on April 30, 2008, Beiersdorf AG was authorized in accordance with § 71 (1) no. 8 AktG to purchase own shares in the total amount of up to 10% of the existing share capital in the period up to October 29, 2009. The shares shall be purchased via the stock exchange or via a public purchase offer addressed to all shareholders. By way of a resolution dated April 30, 2008, the Annual General Meeting also authorized the Executive Board, with the approval of the Supervisory Board, to sell in whole or in part the own shares purchased on the basis of the above-mentioned or a prior authorization while disapplying the shareholders' preemptive rights in a way other than via the stock exchange or via a purchase offer to all shareholders, to the extent that these shares are sold for cash at a price that does not fall materially below the market price of the same class of shares of the Company at the time of the sale. The Executive Board is also authorized, with the approval of the Supervisory Board, to utilize the above-mentioned own shares in whole or in part as consideration or partial consideration in the context of a merger or the acquisition of companies, equity interests in companies (including increases in equity interests), or business units of companies, while disapplying the preemptive rights of shareholders. Moreover, the Executive Board is authorized, with the approval of the Supervisory Board, to utilize the above-mentioned own shares in whole or in part, while disapplying the preemptive rights of shareholders, in order to satisfy the subscription and/or conversion rights from convertible bonds and/or bonds with warrants issued by the Company or companies in which it holds a direct or indirect majority interest. Furthermore, the Executive Board is also authorized, with the approval of the Supervisory Board, to retire the above-mentioned own shares without requiring an additional resolution by the Annual General Meeting.
The creation of the authorized and contingent capital is intended to put the Company in the position of being able to react to growth opportunities and capital market situations quickly and fl exibly. The authorization to purchase and utilize own shares enables the Company in particular to also offer shares of the Company to institutional or other investors and/or to expand the shareholder base of the Company, as well as to utilize the purchased own shares as consideration or partial consideration for the acquisition of companies or equity interests in companies (including increases in equity interests), or as part of a merger, i.e. against non-cash consideration.
Assessing economic developments in the coming years is subject to considerable uncertainty. There are no reliable, generally accepted forecasts as to the future course of economic developments. Our planning is based on a signifi cant decline in global economic growth. However, we are not currently able to predict the scale, duration, and regional breakdown of the crisis.
The following scenario appears probable to us: We expect very low levels of growth in 2009 for the USA, Western Europe, and Germany. A decline in economic output is also possible in individual countries. With respect to the growth regions – Eastern Europe, Asia (excluding Japan), and Latin America – we expect an interruption to the relatively long phase of stable, strong growth and a clear drop in the pace of growth over the short term.
We expect that the economic slump will only start impacting consumer spending after a delay. The effects are already being felt in key industrial segments, such as the automotive industry.
In our opinion, growth on the global cosmetics market will be slightly below the long-term trend as a result of the current economic situation. We are anticipating very low levels of growth, possibly even market contraction, in the major, saturated markets in Western Europe and the USA. In the growth regions of Eastern Europe, Asia (excluding Japan), and Latin America growth will probably be slower.
Global development of the adhesive tape markets will continue to be dominated by the trends already seen in the year under review. We expect negative growth in Western Europe and North America. In Asia and Eastern Europe, we are anticipating a gradual increase in growth – although not at the levels of previous years.
Despite the economic situation described above, Beiersdorf still has opportunities for business development. These are based on our internationally oriented strategic positioning, and particularly on our increased focus on our brands and our increasing presence in growth markets. This process combines sales growth, long-term earnings power, a solid fi nancing structure, and the stabilization of our innovation lead through our extensive research and development activities. We are continuing to build on our stock of powerful innovations. The careful and sustainable development of our brands plays a crucial role in establishing consumer trust in our products: NIVEA was again voted the "Most Trusted Brand" by Reader's Digest in 2008 – a competitive advantage that offers particular opportunities given current sector developments. This, together with the dedication and excellence of our employees, forms the basis for our ability to identify and exploit potential opportunities.
Our assessment of business developments in the coming years is based on the above assumptions. The organic growth of the Group is expected to continue to exceed the market growth in the future. We remain committed to our strategic goal of further increasing our EBIT margin. In the case of a signifi cant slowdown in the economy, we will maintain our current earnings power in the best case.
The Consumer business segment is planning organic growth that is signifi cantly in excess of the market in the coming years. We continue to see China, Russia, Brazil, and India as particular growth regions. In China in particular, we will continue to promote sales growth by our new Chinese hair care and styling brands with increased investments in marketing. We are aiming to maintain the level of EBIT margin.
Despite the uncertain economic situation, tesa expects to increase its market share in the forecast period although markets may contract for economic reasons in some cases. Sales growth depends to a large extent on trends in demand at our industrial customers. Due to a possible further drop in demand for some ranges of goods, applications have been made in good time for short-time working at individual facilities. In order to continue strengthening our market position, we shall continue to pursue our investment projects intensively. The continued establishment of associated development and marketing structures and the expected impact of the economy in the coming year will lead to a lower EBIT margin.
We fi rmly believe that we are extremely well positioned to meet the challenges facing us, thanks to our strong brands, innovative products, process optimizations, and strategic focus.
Hamburg, February 4, 2009
Beiersdorf AG
The Executive Board
Pure luxury for mature skin: La Prairie's exclusive anti-aging products offer a rejuvenating effect based on exclusive, concentrated caviar extracts, for example.
(in € million)
| Notes | 2007 | 2008 | |
|---|---|---|---|
| Sales | 01 | 5,507 | 5,971 |
| Costs of goods sold | –1,830 | –1,979 | |
| Gross profi t | 3,677 | 3,992 | |
| Marketing and selling expenses | 02 | –2,618 | –2,874 |
| Research and development expenses | –127 | –149 | |
| General and administrative expenses | 03 | –260 | –292 |
| Other operating income | 04 | 103 | 108 |
| Other operating expenses | 05 | –91 | –89 |
| Special factors relating to divestments | 06 | - | 96 |
| Special factors relating to the realignment of the Consumer Supply Chain | 06 | –68 | 5 |
| Operating result (EBIT) | 616 | 797 | |
| Interest income | 07 | 47 | 55 |
| Interest expense | 07 | –11 | –14 |
| Other fi nancial result | 07 | –8 | –16 |
| Financial result | 07 | 28 | 25 |
| Profi t before tax | 644 | 822 | |
| Taxes on income | 08 | –202 | –255 |
| Profi t after tax | 442 | 567 | |
| Profi t attributable to equity holders of Beiersdorf AG | 437 | 562 | |
| Profi t attributable to minority interests | 09 | 5 | 5 |
| Basic/diluted earnings per share (in €) | 10 | 1.93 | 2.48 |
(in € million)
| assets | Notes | Dec. 31, 2007 | Dec. 31, 2008 |
|---|---|---|---|
| Intangible assets | 12 | 357 | 389 |
| Property, plant, and equipment | 13 | 699 | 727 |
| Non-current fi nancial assets | 7 | 11 | |
| Other non-current assets | 3 | 4 | |
| Deferred tax assets | 34 | 36 | |
| Non-current assets | 1,100 | 1,167 | |
| Inventories | 14 | 598 | 634 |
| Trade receivables | 15 | 823 | 894 |
| Other current fi nancial assets | 99 | 128 | |
| Income tax receivables | 38 | 45 | |
| Other current assets | 69 | 81 | |
| Securities | 16 | - | 897 |
| Cash and cash equivalents | 17 | 1,117 | 613 |
| Non-current assets and disposal groups held for sale | 18 | 57 | - |
| Current assets | 2,801 | 3,292 | |
| 3,901 | 4,459 | ||
| equity and liabilities | Notes | Dec. 31, 2007 | Dec. 31, 2008 |
| Share capital | 21 | 252 | 252 |
| Additional paid-in capital | 24 | 47 | 47 |
| Retained earnings | 25 | 1,879 | 2,280 |
| Other equity | 26/27 | –117 | –129 |
| Equity attributable to equity holders of Beiersdorf AG | 2,061 | 2,450 | |
| Minority interests | 28 | 9 | 10 |
| Equity | 2,070 | 2,460 | |
| Provisions for pensions and other post-employment benefi ts | 29 | 275 | 235 |
| Other non-current provisions | 30 | 132 | 131 |
| Non-current fi nancial liabilities | 31 | 60 | 72 |
| Other non-current liabilities | 31 | 7 | 6 |
| Deferred tax liabilities | 108 | 155 | |
| Non-current liabilities | 582 | 599 | |
| Other current provisions | 30 | 374 | 363 |
| Income tax liabilities | 82 | 99 | |
| Trade payables | 31 | 573 | 690 |
| Other current fi nancial liabilities | 31 | 160 | 174 |
| Other current liabilities | 31 | 60 | 74 |
Current liabilities 1,249 1,400
Prior-year fi gures adjusted.
3,901 4,459
(in € million)
| 2007 | 2008 | |
|---|---|---|
| Operating result (EBIT) | 616 | 797 |
| Income taxes paid | –237 | –215 |
| Depreciation and amortization | 122 | 114 |
| Change in non-current provisions (excluding interest) | –14 | –32 |
| Gain/loss on disposal of property, plant, and equipment, and intangible assets | –10 | –144 |
| Gross cash flow | 477 | 520 |
| Change in inventories | –35 | –36 |
| Change in receivables and other assets | –81 | –121 |
| Change in liabilities and current provisions | 41 | 105 |
| Net cash flow from operating activities | 402 | 468 |
| Investments | –110 | –161 |
| Cash outflows for acquisitions (less acquired cash) | –302 | –19 |
| Proceeds from divestments and the sale of non-current assets | 21 | 224 |
| Payments for the purchase of securities | - | –897 |
| Interest received | 47 | 47 |
| Proceeds from dividends and other fi nancing activities | 25 | 11 |
| Net cash flow from investing activities | –319 | –795 |
| Free cash flow | 83 | –327 |
| Proceeds from loans | 66 | 110 |
| Loan repayments | –68 | –82 |
| Interest paid | –10 | –11 |
| Other financing expenses paid | –38 | –33 |
| Cash dividends paid (Beiersdorf AG) | –136 | –159 |
| Net cash flow from financing activities | –186 | –175 |
| Effect of exchange rate fluctuations on cash held | –10 | –3 |
| Effect of changes in Group structure and other changes on cash held | - | 1 |
| Net change in cash and cash equivalents | –113 | –504 |
| Cash and cash equivalents as of Jan. 1 | 1,230 | 1,117 |
| Cash and cash equivalents as of Dec. 31 | 1,117 | 613 |
| 2007 | 2008 | |
|---|---|---|
| Fair value measurement of fi nancial instruments | 9 | 28 |
| Exchange differences | –28 | –29 |
| Deferred taxes on measurement gains and losses recognized directly in equity | –3 | –9 |
| Other income and expense recognized directly in equity | 1 | 4 |
| Total income and expense recognized directly in equity | –21 | –6 |
| Profit after tax | 442 | 567 |
| Total recognized income and expense | 421 | 561 |
| Of which attributable to | ||
| – Equity holders of Beiersdorf AG | 416 | 554 |
| – Minority interests | 5 | 7 |
(in € million)
(in € million)
| business segments 2008 | Consumer | tesa | Group |
|---|---|---|---|
| Net sales | 5,125 | 846 | 5,971 |
| Change in % (nominal) | 10.0% | 0.0% | 8.4% |
| Change in % (adjusted for currency translation effects) | 12.3% | 1.3% | 10.6% |
| Share of Group sales | 85.8% | 14.2% | 100.0% |
| EBITDA | 805 | 106 | 911 |
| Operating result (EBIT) | 716 | 81 | 797 |
| As % of sales | 14.0% | 9.6% | 13.4% |
| Operating result (EBIT, excluding special factors)* | 615 | 81 | 696 |
| As % of sales | 12.0% | 9.6% | 11.7% |
| Gross operating capital | 2,355 | 471 | 2,826 |
| Operating liabilities | 1,211 | 128 | 1,339 |
| EBIT return on net operating capital | 62.6% | 23.6% | 53.6% |
| Gross cash fl ow | 450 | 70 | 520 |
| Capital expenditure | 122 | 36 | 158 |
| Depreciation, amortization, and impairment losses | 89 | 25 | 114 |
| Research and development expenses | 123 | 26 | 149 |
| Employees (as of Dec. 31, 2008) | 17,865 | 3,901 | 21,766 |
| business segments 2007 | Consumer | tesa | Group |
| Net sales | 4,661 | 846 | 5,507 |
| Change in % (nominal) | 7.7% | 6.7% | 7.6% |
| Change in % (adjusted for currency translation effects) | 9.3% | 8.1% | 9.1% |
| Share of Group sales | 84.6% | 15.4% | 100.0% |
|---|---|---|---|
| EBITDA | 624 | 114 | 738 |
| Operating result (EBIT) | 528 | 88 | 616 |
| As % of sales | 11.3% | 10.4% | 11.2% |
| Operating result (EBIT, excluding special factors)* | 596 | 88 | 684 |
| As % of sales | 12.8% | 10.4% | 12.4% |
| Gross operating capital** | 1,745 | 450 | 2,195 |
| Operating liabilities** | 1,009 | 148 | 1,157 |
| EBIT return on net operating capital | 71.8% | 29.1% | 59.4% |
| Gross cash fl ow | 395 | 82 | 477 |
| Capital expenditure | 82 | 24 | 106 |
| Depreciation, amortization, and impairment losses | 96 | 26 | 122 |
| Research and development expenses | 102 | 25 | 127 |
| Employees (as of Dec. 31, 2007) | 17,246 | 3,855 | 21,101 |
** The special factors relate to income from divestments and to income and expenses for the realignment of the Consumer Supply Chain.
** Excluding acquisitions.
| regions 2008 | Europe | Americas | Africa/Asia/ Australia |
Group |
|---|---|---|---|---|
| Net sales | 4,090 | 832 | 1,049 | 5,971 |
| Change in % (nominal) | 4.6% | 6.3% | 28.7% | 8.4% |
| Change in % (adjusted for currency translation effects) | 5.4% | 11.9% | 34.2% | 10.6% |
| Share of Group sales | 68.5% | 13.9% | 17.6% | 100.0% |
| EBITDA | 795 | 64 | 52 | 911 |
| Operating result (EBIT) | 711 | 53 | 33 | 797 |
| As % of sales | 17.4% | 6.4% | 3.1% | 13.4% |
| Operating result (EBIT, excluding special factors)* | 632 | 37 | 27 | 696 |
| As % of sales | 15.4% | 4.5% | 2.6% | 11.7% |
| Gross operating capital | 1,934 | 331 | 561 | 2,826 |
| Operating liabilities | 901 | 122 | 316 | 1,339 |
| EBIT return on net operating capital | 68.8% | 25.6% | 13.4% | 53.6% |
| Gross cash fl ow | 462 | 36 | 22 | 520 |
| Capital expenditure | 116 | 13 | 29 | 158 |
| Depreciation, amortization, and impairment losses | 84 | 10 | 20 | 114 |
| Research and development expenses | 144 | 2 | 3 | 149 |
| Employees (as of Dec. 31, 2008) | 11,194 | 2,431 | 8,141 | 21,766 |
| regions 2007 | Europe | Americas | Africa/Asia/ Australia |
Group |
|---|---|---|---|---|
| Net sales | 3,909 | 782 | 816 | 5,507 |
| Change in % (nominal) | 5.2% | 6.0% | 22.7% | 7.6% |
| Change in % (adjusted for currency translation effects) | 5.2% | 11.8% | 27.9% | 9.1% |
| Share of Group sales | 71.0% | 14.2% | 14.8% | 100.0% |
| EBITDA | 623 | 45 | 70 | 738 |
| Operating result (EBIT) | 522 | 34 | 60 | 616 |
| As % of sales | 13.4% | 4.4% | 7.3% | 11.2% |
| Operating result (EBIT, excluding special factors)* | 590 | 34 | 60 | 684 |
| As % of sales | 15.1% | 4.4% | 7.3% | 12.4% |
| Gross operating capital** | 1,581 | 316 | 298 | 2,195 |
| Operating liabilities** | 870 | 115 | 172 | 1,157 |
| EBIT return on net operating capital | 73.5% | 17.3% | 47.0% | 59.4% |
| Gross cash fl ow | 389 | 33 | 55 | 477 |
| Capital expenditure | 83 | 7 | 16 | 106 |
| Depreciation, amortization, and impairment losses | 101 | 11 | 10 | 122 |
| Research and development expenses | 124 | 1 | 2 | 127 |
| Employees (as of Dec. 31, 2007) | 11,189 | 2,341 | 7,571 | 21,101 |
** The special factors relate to income from and expenses for the realignment of the Consumer Supply Chain and income from divestments.
** Excluding acquisitions.
The registered offi ce of Beiersdorf AG is at Unnastrasse 48 in Hamburg (Germany) and the Company is registered with the commercial register of the Hamburg Local Court under the number HRB 1787. The ultimate parent of the Company is maxingvest ag (formerly: Tchibo Holding AG).
The activities of Beiersdorf AG and its affi liates ("Beiersdorf Group") consist primarily of the manufacture and distribution of branded consumer goods in the areas of skin and beauty care, and of the manufacture and distribution of technical adhesive tapes.
The consolidated fi nancial statements of Beiersdorf AG for the fi scal year from January 1 to December 31, 2008, were prepared by the Exe cutive Board on February 4, 2009, and subsequently submitted to the Super visory Board for examination and approval.
The consolidated fi nancial statements of Beiersdorf AG have been prepared in accordance with the International Financial Reporting Standards (IFRSs) issued by the International Accounting Standards Board (IASB), including the IFRS Interpretations issued by the International Financial Reporting Interpretations Committee (IFRIC) and the supplementary provisions of German commercial law required to be applied under § 315a (1) Handelsgesetzbuch (German Commercial Code, HGB). All IFRSs and IFRICs endorsed by the European Commission and required to be applied as of December 31, 2008 were applied.
The consolidated fi nancial statements were generally prepared using the historical cost convention. Exceptions to this rule relate to fi nancial instruments assigned to the "available for sale" category and derivative fi nancial instruments, which are measured at fair value where such fair value can be reliably determined.
The consolidated income statement was prepared using the cost of sales method. Individual line items have been summarized in the income statement and the balance sheet to aid clarity of presentation. These items are disclosed and explained separately in the notes.
Preparation of the consolidated fi nancial statements requires management to make estimates and assumptions to a limited extent that affect the amount and presentation of recognized assets and liabilities, income and
expenses, and contingent liabilities. Such estimates and assumptions refl ect all currently available information. Signifi cant estimates and assumptions relate in particular to the defi nition of uniform Group depreciation periods, impairment, write-downs of receivables and inventories, parameters applied to the measurement of pension provisions, the expected return on plan assets, other provisions, and the parameters for purchase price allocation, for impairment tests of goodwill, and for the trademarks. Actual amounts may differ from these estimates. Changes are recognized in profi t or loss when more recent knowledge becomes available.
We also refer to our explanations to the single positions.
Acquisition accounting uses the purchase method, under which the cost of the business combination is allocated to the identifi able assets acquired and identifi able liabilities and contingent liabilities assumed, measured at their fair values at the acquisition date. Any excess of the cost of the business combination over the acquirer's interest in the net fair values of identifi able assets, liabilities, and contingent liabilities is recognized as goodwill.
Profi t and equity of subsidiaries attributable to minority interests are presented separately in the consolidated income statement and as a component of equity in the consolidated balance sheet. In the case of successive purchases of the shares of subsidiaries, the difference between the cost of the new shares and the minority interests previously recognized in the Group for these shares is recognized directly in equity.
All intercompany balances, transactions, income, and expenses, and gains and losses on intragroup transactions that are contained in the carrying amounts of assets, are eliminated in full. Deferred taxes are recognized for the tax effects of consolidation adjustments.
The consolidated fi nancial statements have been prepared in euros. The euro is Beiersdorf AG's functional and presentation currency. Unless otherwise indicated, all amounts are rounded to millions of euros (€ million).
Each company in the Group defi nes its own functional currency. The items contained in the fi nancial statements of the company concerned are measured using this functional currency. Foreign currency transactions are initially translated from the foreign currency into the functional currency at the spot rate at the transaction
date. Monetary assets and liabilities in foreign currency are translated into the functional currency at the closing rate. Non-monetary items that are measured at cost in a foreign currency are translated at the exchange rate at the transaction date.
As the foreign subsidiaries operate as fi nancially, economically, and organizationally independent entities, their functional currency is always the local currency.
At the balance sheet date, the assets and liabilities of foreign subsidiaries whose functional currency is not the euro are translated into euros at the closing rate. Income and expenses are translated at average exchange rates for the fi scal year.
Exchange differences arising on this are recognized as a separate component of equity.
The following tables show the development of the exchange rates of the currencies material to the consolidated fi nancial statements:
| exchange rate changes (€ 1 =) | ||||
|---|---|---|---|---|
| Average rates | ||||
| ISO code | 2007 | 2008 | ||
| Swiss franc | CHF | 1.6461 | 1.5786 | |
| Chinese yuan | CNY | 10.4424 | 10.2301 | |
| Pound sterling | GBP | 0.6873 | 0.8038 | |
| Japanese yen | JPY | 162.0433 | 151.4825 | |
| Polish zloty | PLN | 3.7834 | 3.5383 | |
| US dollar | USD | 1.3790 | 1.4741 | |
exchange rate changes (€ 1 =)
| Closing rates | ||
|---|---|---|
| ISO code | 2007 | 2008 |
| CHF | 1.6557 | 1.4860 |
| CNY | 10.7400 | 9.6090 |
| GBP | 0.7346 | 0.9600 |
| JPY | 165.0000 | 126.4000 |
| PLN | 3.5928 | 4.1823 |
| USD | 1.4716 | 1.3977 |
The accounting policies correspond generally to those applied in the previous year, with the following primary exceptions:
We applied IFRS 8, "Operating Segments", which is required to be applied for the fi rst time for annual periods beginning on or after January 1, 2009, in fi scal year 2008, prior to the effective date. The comparative fi gures for the previous year were adjusted accordingly. Since the operating segments previously presented under IAS 14 "Segment Reporting" on the basis of the risks and returns approach already refl ected the internal reporting structures, fi rst-time application had no material effects on the consolidated fi nancial statements apart from the modifi ed disclosures in the Notes.
We applied the clarifi cation of the accounting treatment of advertising expenditures resulting from revision of IAS 38 as part of the Improvement Project in fi scal year 2008, prior to the effective date. The revised standard is effective for fi scal years beginning on or after January 1, 2009. As a result of the revision, advertising and promotional expenditures are now recognized at the point when the entity obtains the right to access these products, and not when they are delivered to the customer. Since it was no longer possible to determine the relevant materials with suffi cient accuracy as of January 1, 2007, the accounting policies were adjusted retrospectively as of January 1, 2008.
We are reporting the income tax provisions and the expenses for revenue-based deferred customer bonuses contained in our marketing and selling provisions as income tax liabilities and trade payables respectively for the fi rst time. In addition, a distinction was made in the year under review between fi nancial and non-fi nancial items in the balance sheet presentation of assets and liabilities. The prior-year fi gures were adjusted accordingly.
There were no material effects on the consolidated financial statements from the fi rst time adoption of IFRIC 14 "IAS 19 – The Limit on a Defined Benefit Asset Minimum Funding Requirements and Their Interaction".
The following Standards and Interpretations relevant for the Beiersdorf Group's business operations have been issued as of December 31, 2008, but are not yet required to be applied for the fi scal year then ended:
These Standards and Interpretations will be implemented in the year in which they are fi rst required to be applied. Apart from additional or modifi ed disclosure requirements, no material effects on the consolidated fi nancial statements are expected on fi rst-time adoption.
Sales are recognized when goods and products are delivered and the signifi cant risks and rewards incidental to ownership have been transferred to the buyer. Discounts, customer bonuses, and rebates are deducted from sales. The existence of return rights is refl ected in the recognition and measurement of sales.
Cost of goods sold comprises the cost of internally produced goods and the purchase price of merchandise sold. The cost of internally produced goods includes directly attributable costs such as the cost of direct materials, direct labor, and energy costs, as well as production overheads, including depreciation of production facilities. The cost of goods sold includes write-downs of inventories.
Marketing and selling expenses comprise the cost of marketing, the sales organization, and distribution logistics. This item also includes write-downs of trade receivables.
Research and development expenses comprise the cost of research and of product and process development, including expenses for third-party services. In the case of development projects, a review is conducted to establish whether the criteria for capitalizing internally generated intangible assets laid down in IAS 38 are met. Development costs that do not meet these criteria are recognized in full as expenses of the period.
Purchased intangible assets such as patents, trademarks, and software are measured at cost. The carrying amounts of fi nite-lived intangible assets are generally reduced by straight-line amortization over fi ve years. The useful lives, residual values, and amortization methods are reviewed regularly. Goodwill and indefi nite-lived intangible assets are not amortized.
Property, plant, and equipment is carried at cost and reduced by straight-line depreciation over the assets' expected useful lives. The useful lives, residual values, and depreciation methods are reviewed annually. The following useful lives are generally applied to the depreciation of items of property, plant, and equipment:
useful lives of property, plant, and equipment
| Residential and production buildings | 25 to 33 years |
|---|---|
| Other buildings | 10 to 25 years |
| Technical equipment and machinery | 5 to 15 years |
| Vehicles | 4 years |
| Offi ce and other equipment | 3 to 15 years |
Production costs of internally manufactured items of property, plant, and equipment are calculated on the basis of attributable direct costs plus an appropriate share of production-related overheads. Interest on borrowings is recognized as current expense in accordance with IAS 23 "Borrowing Costs." Repair and maintenance costs for property, plant, and equipment are also expensed as incurred. Substantial renewals or enhancements that materially increase production capacity or signifi cantly extend the economic life of an asset are capitalized. Correspondingly, components that were previously capitalized and have been replaced by new expenditures to be capitalized are accounted for as disposals. Government grants and subsidies reduce historical cost.
Goodwill and indefi nite-lived intangible assets are tested for impairment at least once a year; such impairment tests are only conducted for fi nite-lived intangible assets, property, plant, and equipment, and other assets if there are indications of impairment. An impairment loss is recognized in profi t or loss if the recoverable amount of the asset is lower than its carrying amount. Recoverable amount is generally identifi ed separately for each asset. If an asset does not generate cash infl ows independent from other assets, recoverable amount is identifi ed on the basis of a group of assets designated as the cash- generating unit. Recoverable amount is the higher of net realizable value and value in use. Net realizable value is the amount obtainable from the sale of an asset in an arm's length transaction, less the costs of disposal. Value in use is generally calculated on the basis of estimated future cash fl ows expected to arise from the continuing use of an asset and its disposal at the end of its useful life, using the discounted cash fl ow method. Cash fl ows are derived from the business plans and refl ect current developments. They are discounted to the date of the impairment test using capitalization rates for equivalent risks.
If the reasons for an impairment test recognized in previous years no longer apply, the impairment loss (except for goodwill) is reversed up to a maximum of amortized cost.
Inventories are carried at the lower of cost or net realizable value in accordance with IAS 2 "Inventories". Net realizable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and the estimated costs necessary to make the sale. The cost of inventories is measured using the average cost method. Production cost is calculated as the direct costs plus an appropriate allocation of materials and production overheads, as well as production-related depreciation. It also includes the proportionate costs of company pension arrangements and voluntary social benefi ts, as well as production-related administrative expenses.
Financial instruments are contracts that give rise to a fi nancial asset of one entity and a fi nancial liability of another entity. Financial assets and fi nancial liabilities are measured at fair value on initial recognition. At Beiersdorf, the fi nancial instruments are solely allocated to the "Loans and Receivables" (LaR), "Available for Sale" (AfS), "Held to Maturity" (HtM), and "Other Financial Liabilities" (OFL) categories. In accordance with IAS 39, derivative fi nancial instruments used for hedges are not
assigned to a separate category; within the Beiersdorf Group, they are subsumed under "Derivative Financial Instruments" (DFI).
Loans and receivables are non-derivative fi nancial instruments with fi xed or determinable payments that are not quoted in an active market. Following initial recognition they are generally carried at amortized cost using the effective interest method.
Financial assets available for sale are those nonderivative fi nancial assets that do not fall under other categories and that were classifi ed as "Available for Sale". They are generally measured at fair value. The resulting gains and losses are recognized directly in equity. When these fi nancial assets are sold or written down for impairment, the cumulative gains and losses recognized in equity are recognized in the income statement. They are measured on the basis of corresponding market prices or by applying appropriate valuation methods. Financial investments in equity instruments for which there is no active market and whose fair value cannot be reliably determined are measured at historical cost.
Held-to-maturity fi nancial investments are nonderivative fi nancial assets with fi xed or determinable payments and fi xed maturities. They are carried at amortized cost using the effective interest method.
The Beiersdorf Group uses derivative fi nancial instruments to manage current and future currency risks. Derivative fi nancial instruments are recognized at fair value. Derivative fi nancial instruments are recognized in the balance sheet in other fi nancial assets or other fi nancial liabilities.
The recognition of changes in the fair values of derivative fi nancial instruments depends on whether these instruments are used as hedging instruments and meet the criteria for hedge accounting under IAS 39. If the criteria are not met, despite the existence of an economic hedge, changes in the fair values of derivative fi nancial instruments are recognized immediately in profi t or loss. The effective portion of the change in the fair value of a derivative fi nancial instrument designated as a hedging instrument that qualifi es for hedging accounting as a cash fl ow hedge is recognized directly in equity, net of the related tax effect. The ineffective portion is recognized in profi t or loss. When the hedged item (underlying) is settled, the effective portion is also recognized in the income statement.
The fair value of fi nancial instruments is determined on the basis of corresponding market prices or the application of suitable valuation techniques. The fair value of fi nancial instruments carried at amortized cost is determined on the basis of the expected future cash fl ows, using the benchmark interest rates for matching risk and maturities at the balance sheet date. The fair value of derivative fi nancial instruments is determined on the basis of the forward exchange rates, using the benchmark interest rates for matching risk and maturities at the balance sheet date.
Financial assets are tested for impairment as of each reporting date. Any impairment established is recognized immediately in profi t or loss. In the case of fi nancial assets available for sale, any loss previously taken to equity is also expensed. Appropriate valuation allowances are charged for identifi able risks relating to trade receivables and other fi nancial assets that are classifi ed as "loans and receivables." The estimated valuation allowance on receivables is based primarily on the results of previous payment behavior and refl ects the aging structure, any substantial deterioration in creditworthiness, or a high probability of debtor insolvency, as well as changes in the political and macro economic environment.
Non-current assets and disposal groups held for sale and directly associated provisions and liabilities are presented as separate items in the balance sheet if their sale is probable and they are available for immediate sale in their present condition. Non-current assets held for sale are recognized at the lower of their carrying amount and fair value less costs to sell.
In accordance with IAS 19 "Employee Benefi ts", pension obligations under defi ned benefi t plans are calculated using the projected unit credit method. The expected benefi ts are spread over the entire length of service of the employees.
The actuarial computation of pension obligations is based on market rates of interest as well as projected wage/salary and pension increases, and staff turnover trends.
Measurement is governed by the country-specifi c conditions. The amount recognized as provision for pensions contains the sum of the present values of defi ned benefi t obligations and the net cumulative unrecognized actuarial gains and losses less not yet recognized past service cost and the fair value of plan assets available for immediate settlement of obligations.
Actuarial gains and losses are recognized if they exceed the greater of 10% of the present value of the obligations or of the fair value of plan assets. The amounts exceeding 10% are amortized over the average remaining working lives of the employees beginning in the following year.
Past service cost is recognized as an expense on a straight-line basis over the average period until the benefi ts become vested.
Other provisions take account of all identifi able future payment obligations, risks, and uncertain obligations of the Group resulting from current legal or constructive obligations arising from past events where the amount of the obligation can be measured reliably. Such other provisions are mainly due within one year. Non-current provisions expected to be settled after more than one year are discounted as far as the interest effect is material.
Provisions for partial retirement arrangements are accounted for as obligations arising from termination benefi ts in the consolidated fi nancial statements. They are recognized at the present value of the expected future additional payments. Measurement of the provisions refl ects both the partial retirement arrangements agreed with the employees and potential partial retirement arrangements that, at the balance sheet date, are expected to be agreed on the basis of existing collective bargaining agreements.
Provisions are recognized for restructurings if there is a detailed formal restructuring plan and there is a valid expectation on the part of those affected that the restructurings will be implemented. Measurement of restructuring provisions only includes expenses that are necessarily entailed by the restructuring and are not associated with the ongoing activities of the entity.
Other fi nancial liabilities are carried at amortized cost using the effective interest method. Non-current liabilities are discounted if the effect of the time value of money is material. Liabilities with remaining contractual maturities of more than one year are classifi ed as noncurrent.
Current income tax assets and liabilities for current and future periods are recognized at the expected amount. The tax rates and tax legislation enacted at the reporting date are used to calculate the amount.
Deferred taxes result from temporary differences between the tax base of assets and liabilities and their carrying amounts in the balance sheets of the Group companies, and from tax loss carryforwards. Deferred taxes are measured using the balance sheet liability method on the basis of the tax rates expected to be enacted in the individual countries when the temporary differences reverse. These rates are based on the legislation in force at the balance sheet date. No deferred taxes are recognized for differences arising on the initial recognition of assets and liabilities that do not affect either accounting or taxable profi t. Deferred taxes on temporary differences, tax loss carryforwards, and tax credits are recognized where it is probable that suffi cient taxable profi t will be available in future periods against which they can be utilized. Recognized deferred taxes are tested for recoverability every year. Income taxes relating to items recognized directly in equity are also recognized directly in equity, and not in the income statement. Deferred tax assets and deferred tax liabilities are offset if they relate to the same tax authorities and are expected to be realized and settled in the same period.
Substantially all the risks and rewards incidental to ownership of the assets for which leases have been entered into and the Group is the lessee remain with the lessor. The leases are therefore classed as operating leases. Lease payments for operating leases are recognized as expenses for the period in the consolidated income statement.
In addition to Beiersdorf AG, the consolidated fi nancial statements include 20 German and 144 international companies whose fi nancial and business policies Beiersdorf AG is able to control either directly or indirectly, and from whose activities it can derive economic benefi ts.
In the year under review, the BODE Group was sold, two companies were newly established, and one company was acquired. Please refer to the sections
entitled "Signifi cant Acquisitions" and "Signifi cant Divestments". Except for as described there, there was no material effect on the net assets, fi nancial position, and results of operations.
The signifi cant subsidiaries included in the consolidated fi nancial statements are listed below. A complete list of Beiersdorf AG's shareholdings is issued separately.
| Name and registered offi ce | Location | Equity interest |
|---|---|---|
| germany | ||
| Beiersdorf Manufacturing Hamburg GmbH | Hamburg | 100.0 |
| Beiersdorf Customer Supply GmbH | Hamburg | 100.0 |
| Juvena Produits de Beauté GmbH | Baden-Baden | 100.0 |
| Cosmed-Produktions GmbH | Berlin | 100.0 |
| tesa AG | Hamburg | 100.0 |
| tesa Werk Hamburg GmbH | Hamburg | 100.0 |
| tesa Werk Offenburg GmbH | Offenburg | 100.0 |
| Florena Cosmetic GmbH | Waldheim | 100.0 |
| rest of europe | ||
| Beiersdorf Ges. mbH | AT, Vienna | 100.0 |
| SA Beiersdorf NV | BE, Brussels | 100.0 |
| tesa Bandfi x AG | CH, Bergdietikon | 100.0 |
| Beiersdorf AG | CH, Münchenstein | 100.0 |
| Juvena (International) AG | CH, Volketswil, Zurich | 100.0 |
| Beiersdorf spol. s r.o. | CZ, Prague | 100.0 |
| Beiersdorf S.A. | ES, Argentona (Barcelona) | 100.0 |
| BDF Nivea S.A. | ES, Tres Cantos (Madrid) | 100.0 |
| Beiersdorf s.a. | FR, Paris | 99.9 |
| Beiersdorf UK Ltd. | GB, Birmingham | 100.0 |
| Beiersdorf Hellas AE | GR, Gerakas, Attikis | 100.0 |
| Beiersdorf d.o.o. | HR, Zagreb | 100.0 |
| Beiersdorf Kft. | HU, Budapest | 100.0 |
| Beiersdorf SpA | IT, Milan | 100.0 |
| Comet SpA | IT, Solbiate-Concagno | 100.0 |
| Beiersdorf NV | NL, Almere | 100.0 |
| NIVEA Polska sp. z o.o. | PL, Poznan | 100.0 |
| Beiersdorf Portuguesa, Limitada | PT, Queluz de Baixo | 100.0 |
| Beiersdorf Romania SRL | RO, Bucharest | 100.0 |
| Beiersdorf d.o.o. Beograd | RS, Belgrade | 100.0 |
| Beiersdorf OOO | RU, Moscow | 100.0 |
| Beiersdorf Aktiebolag | SE, Gothenburg | 100.0 |
| Beiersdorf Ukraine LLC | UA, Kiev | 99.0 |
| (in %) | ||
|---|---|---|
| Name and registered offi ce | Location | Equity interest |
| americas | ||
| Beiersdorf S.A. | AR, Buenos Aires | 100.0 |
| BDF NIVEA LTDA. | BR, São Paulo | 100.0 |
| Beiersdorf Industria e Comercio Ltda. | BR, São Paulo | 100.0 |
| Beiersdorf Canada Inc. | CA, Quebec | 100.0 |
| Beiersdorf S.A. | CL, Santiago de Chile | 100.0 |
| Beiersdorf S.A. | CO, Bogotá | 100.0 |
| BDF México, S.A. de C.V. | MX, Mexico City | 100.0 |
| tesa tape inc. | US, Charlotte, NC | 100.0 |
| La Prairie, Inc. | US, New York, NY | 100.0 |
| Beiersdorf North America Inc. | US, Wilton, CT | 100.0 |
| Beiersdorf S.A. | VE, Caracas | 100.0 |
| africa/asia/australia | ||
| Beiersdorf Middle East FZCO | AE, Dubai | 100.0 |
| Beiersdorf Australia Ltd. | AU, North Ryde, NSW | 100.0 |
| C-BONS Hair Care Group | CN, Wuhan | 85.0 |
| Nivea (Shanghai) Company Limited | CN, Shanghai | 100.0 |
| Nivea-Kao Co., Ltd. | JP, Tokyo | 60.0 |
| Nivea Seoul Ltd. | KR, Seoul | 100.0 |
| Beiersdorf Singapore Pte. Ltd. | SG, Singapore | 100.0 |
| Beiersdorf (Thailand) Co., Ltd. | TH, Bangkok | 100.0 |
| Beiersdorf Consumer Products (Pty.) Ltd. | ZA, Westville | 100.0 |
On December 17, 2008, tesa AG acquired 100% of the shares in Labtec GmbH, Langenfeld (Germany). The company has been consolidated as from this date. Because the acquisition took place close to the balance sheet date, the purchase price was only allocated on a provisional basis as of December 31, 2008. The fi nal identifi cation and determination of the fair values of the acquired assets and the liabilities assumed will be made within 12 months of the acquisition in accordance with IFRS 3 "Business Combinations."
The acquisition cost for Labtec GmbH including transactions costs was €19 million, of which €18 million had been paid by December 31, 2008. Cash acquired amounted to €1 million.
Non-current and current assets of €3 million and €6 million respectively, as well as non-current and current provisions and liabilities of €2 million and €7 million, were recognized as part of the provisional purchase price allocation on initial consolidation. This results in provisional goodwill from the acquisition of
Labtec GmbH of €19 million at the acquisition date. In fi scal year 2008, Labtec GmbH generated sales of around €3 million and a result of less than €1 million. Because the acquisition took place close to the balance sheet date, Labtec GmbH did not make any signifi cant contributions to the Group's sales and earnings.
On December 5, 2007, Beiersdorf – through the Group company Beiersdorf CEE Holding GmbH, Vienna (Austria) – acquired an 85% interest in and the corresponding voting rights of C-BONS Hair Care, Wuhan (China). After transitional periods of two and three years respectively, the outstanding 10% / 5% minority interest can be acquired for at least €48 million (fl oor) or a higher price that is linked to business performance. Conversely, the seller has the right, under the same conditions, to dispose of this remaining 10% / 5% of the investment to Beiersdorf.
Due to these options, which regulate the acquisition of the outstanding shares by Beiersdorf in the coming years, C-BONS Hair Care has already been fully consolidated in Beiersdorf AG's consolidated fi nancial statements and the part of the purchase price related to the option has been recognized as a fi nancial liability. In 2007, C-BONS Hair Care generated sales of €122 million and earnings of €8 million.
The purchase price for C-BONS Hair Care was only allocated on a provisional basis as of December 31, 2007. Within the scope of the fi nal purchase price allocation, the following fair values of the assets acquired and the liabilities and contingent liabilities assumed were recognized:
| (in € million) | ||
|---|---|---|
| Previous carrying amounts |
Fair value at the date of acquisition |
|
| Intangible assets | 140 | 164 |
| Property, plant, and equipment | 22 | 34 |
| Trade receivables | 22 | 23 |
| Other current assets | 24 | 22 |
| Assets | 208 | 243 |
| Deferred taxes | 1 | 9 |
| Current fi nancial liabilities | 15 | 15 |
| Trade payables | 12 | 12 |
| Other current liabilities | 8 | 9 |
| Liabilities | 36 | 45 |
Intangible assets include trademarks and customer relationships. Acquired trademarks have been assigned an indefi nite useful life due to their market positioning and expected long-term profi tability. Customer relationships are amortized over four years using the straight-line method in keeping with their expected useful lives. In the property, plant, and equipment item, the aggregate fair values of leasehold interests and buildings were €12 million higher than the relevant carrying amounts. The realization of the hidden reserves led to deferred tax liabilities of €8 million. The contingent purchase price component of the purchase options was reviewed, based on the
business planning data. This resulted in an increase of €8 million, which was taken directly to goodwill. Goodwill amounted to €129 million on December 31, 2007. It contains the fair value of expected synergies as a result of the business combination.
The acquisition cost as of December 5, 2007 therefore amounted to €329 million for 100% of the shares including transaction costs. €274 million was paid in cash for the 85% acquired in December 2007. The cash acquired as a result of the acquisition amounted to €12 million.
| (in € million) | Final carrying amounts | ||
|---|---|---|---|
| Original carrying amounts as of Dec. 31, 2007 |
Final purchase price allocation adjustments |
as of Dec. 31, 2007 after allocation adjustments |
|
| Intangible assets | 350 | 7 | 357 |
| Property, plant, and equipment | 687 | 12 | 699 |
| Other non-current assets | 44 | - | 44 |
| Inventories | 598 | - | 598 |
| Trade receivables | 823 | - | 823 |
| Other current assets | 265 | –2 | 263 |
| Cash and cash equivalents | 1,117 | - | 1,117 |
| assets | 3,884 | 17 | 3,901 |
| Equity | 2,070 | - | 2,070 |
| Non-current provisions | 407 | - | 407 |
| Non-current liabilities | 59 | 8 | 67 |
| Deferred taxes | 100 | 8 | 108 |
| Current provisions | 374 | - | 374 |
| Income tax liabilities | 82 | - | 82 |
| Trade payables | 573 | - | 573 |
| Other current liabilities | 219 | 1 | 220 |
| equity and liabilities | 3,884 | 17 | 3,901 |
On December 12, 2007, Beiersdorf took over the remaining 50% interest in and voting rights of Beiersdorf AG, Münchenstein (Switzerland), which until then had been consolidated proportionately under IAS 31. Goodwill deriving from this purchase amounted to €35 million, and is primarily based on expected synergies which are directly connected with Beiersdorf AG's business and cannot be recognized as a separate asset. The purchase was accounted for a business combination achieved in stages. In 2007, the Swiss company generated sales of €107 million and earnings of €18 million.
Beiersdorf signed an agreement to sell the Futuro business to 3M Company, St. Paul (USA) on November 20, 2008; the agreement was executed on December 16, 2008. The Futuro business comprises the sale of health supports and compression hosiery. Most of its sales are generated in the USA. Futuro was previously part of the Consumer business segment and generated sales of around €41 million in 2008. As part of the sale, noncurrent and current assets of €1 million and €8 million respectively were transferred to the buyer.
On October 20, 2008, Beiersdorf sold the BODE Group with effect from December 31, 2008, to Paul Hartmann AG, Heidenheim (Germany). The BODE Group produces and sells disinfectants for hands, skin, instruments, and surfaces. The BODE Group was allocated to the Consumer business segment. It generated sales of around €63 million in 2008 and a result of around €3 million. As part of the sale, non-current and current assets of €14 million and €23 million respectively, as well as noncurrent and current provisions and liabilities of €12 million and €15 million, were transferred to the buyer.
Sales increased from €5,507 million in the previous year to €5,971 million in 2008. A breakdown of sales and their development by business segment and region can be found in the segment reporting.
Marketing and selling expenses increased by 9.8% to €2,874 million (previous year: €2,618 million). The expenditure on advertising, retail marketing, and similar items included in marketing and selling expenses amounts to €1,915 million (previous year: €1,748 million).
General and administrative expenses amounted to €292 million in fi scal 2008, up 12.6% compared with the previous year. This item comprises personnel expenses and other administrative costs, as well as the cost of external services that are not allocated internally to other functions.
(in € million)
| 2007 | 2008 | |
|---|---|---|
| Income from the reversal of provisions | 39 | 46 |
| Gains on disposal of non-current assets | 13 | 11 |
| Miscellaneous other income | 51 | 51 |
| 103 | 108 |
Miscellaneous other income includes income from license agreements, prior-period income, income from the reversal of valuation allowances on receivables, and miscellaneous other operating income.
(in € million)
| 2007 | 2008 | |
|---|---|---|
| Exchange losses on operating activities | 5 | 2 |
| Losses on disposal of non-current assets | 3 | 6 |
| Amortization of intangible assets | 1 | 5 |
| Miscellaneous other expenses | 82 | 76 |
| 91 | 89 |
Miscellaneous other expenses include additions to provisions for litigation and other risks, as well as miscellaneous other operating expenses.
The special factors include gains from the sales of Futuro and of the BODE Group of €96 million in total as well as expenses and income relating to the realignment of the Consumer Supply Chain in Europe. Proceeds from the disposal of production and logistics facilities relating to the realignment of the Consumer Supply Chain, especially Beiersdorf AG's production site in Hamburg-Hausbruch (Germany), exceeded the expenses incurred in 2008, resulting in income of €5 million (previous year: expense of €68 million). Expenses in the previous year primarily included personnel expenses in the amount of €20 million, IT costs in the amount of €11 million, and impairment losses on non-current assets in the amount of €8 million.
(in € million)
| 2007 | 2008 | |
|---|---|---|
| Interest income | 47 | 55 |
| Interest expense | –11 | –14 |
| Other net fi nance cost | –8 | –16 |
| 28 | 25 |
Interest income primarily results from the positions "cash and cash equivalents" and "securities". The interest expense on pension and other entitlements acquired in previous years is netted against any return on plan assets and the amortization of unrecognized actuarial gains and losses. This resulted in interest income of €8 million (previous year: expense of €1 million).
Interest expense primarily results from fi nancial liabilities.
The other net fi nance cost relates in particular to currency gains and losses. In addition, the item includes income of €9 million (previous year: €0 million) representing the net income from the fair value measurement of fi nancial instruments that were previously recognized directly in equity.
Gains and losses of €6 million (previous year: €0 million) from the fair value measurement of fi nancial instruments classifi ed as belonging to the "available for sale" category were directly recognized in equity during the fi scal year.
Income tax expense including deferred taxes can be broken down as follows:
| (in € million) | ||
|---|---|---|
| 2007 | 2008 | |
| Current income taxes | ||
| Germany | 92 | 78 |
| International | 133 | 147 |
| 225 | 225 | |
| Deferred taxes | –23 | 30 |
| 202 | 255 |
€12 million (previous year: €3 million) of deferred taxes shown in the balance sheet were directly recognized in equity.
Deferred taxes in 2007 included a positive effect of €19 million due to their recalculation as a result of the 2008 business tax reform in Germany.
No deferred tax assets have been recognized for tax loss carryforwards and unused tax credits of €64 million (previous year: €43 million). Of this amount, €45 million (previous year: €42 million) can be carried forward without restriction; the remaining amount can be carried forward over a period of up to fi ve years.
Deferred taxes are generally not recognized for temporary differences relating to earnings of foreign subsidiaries, as these profi ts are intended to be reinvested indefi nitely in those operations from today's perspective. Where distributions are planned, the tax consequences are deferred accordingly. The liability is calculated based on the respective withholding tax rates, taking into account the German tax rate applicable to distributed corporate dividends where applicable. Deferred tax liabilities of €7 million (previous year: €5 million) were recognized in the year under review.
Deferred taxes relate to the following balance sheet items and matters:
| allocation of deferred taxes (in € million) | |||||
|---|---|---|---|---|---|
| Deferred tax assets | Deferred tax liabilities | ||||
| Dec. 31, 2007 | Dec. 31, 2008 | Dec. 31, 2007 | Dec. 31, 2008 | ||
| Non-current assets | 21 | 20 | 51 | 63 | |
| Inventories | 14 | 18 | - | - | |
| Receivables and other current assets | 6 | 4 | 24 | 24 | |
| Provisions for pensions and other post-employment benefi ts | 3 | 3 | 78 | 94 | |
| Other provisions | 34 | 19 | - | 6 | |
| Liabilities | 8 | 27 | 2 | 4 | |
| Retained earnings | - | - | 7 | 22 | |
| Loss carryforwards | 2 | 3 | - | - | |
| 88 | 94 | 162 | 213 | ||
| Offset deferred taxes | –54 | –58 | –54 | –58 | |
| Deferred taxes recognized in the balance sheet | 34 | 36 | 108 | 155 |
For an effective tax rate of 31.0%, the actual tax ex pense is €19 million higher than the expected tax ex pense. The expected tax rate is calculated as the weighted average of the tax rates of the individual Group companies and amounts to 28.7% (previous year: 31.4%). The following table shows the reconciliation of expected to actual tax expense:
actual tax expense (in € million)
| 2007 | 2008 | |
|---|---|---|
| Expected tax expense at a tax rate of 28.7% (previous year: 31.4%) |
202 | 236 |
| Tax deductions due to tax-free income | –6 | –15 |
| Tax increases due to non-deductible expenses | 15 | 34 |
| Changes in corporate tax rates | –20 | –1 |
| Other tax effects | 11 | 1 |
| Actual tax expense | 202 | 255 |
€5 million of profi t after tax is attributable to minority interests (previous year: €5 million). As of the reporting date, other shareholders primarily hold interests in Nivea-Kao Co., Ltd., Japan, PT. Beiersdorf Indonesia, and Beiersdorf India Limited.
Earnings per share for 2008 amounted to €2.48 (previous year: €1.93). The basis for the calculation is the profi t after tax excluding profi t attributable to minority interests.
Beiersdorf AG holds 25,181,016 treasury shares (unchanged). These were deducted from the total of 252,000,000 shares when calculating earnings per share, which resulted in earnings being calculated on the unchanged basis of 226,818,984 shares. As there are no outstanding fi nancial instruments that can be exchanged for shares, there is no difference between diluted and basic earnings per share.
The cost of raw materials, consumables, and supplies, and of purchased goods and services, amounted to €1,447 million (previous year: €1,285 million).
personnel expenses (in € million)
| 2007 | 2008 | |
|---|---|---|
| Wages and salaries | 718 | 751 |
| Social security contributions and other benefi ts |
102 | 106 |
| Pension expenses | 69 | 65 |
| 889 | 922 |
The breakdown of employees by function is as follows:
(number as of December 31)
| 2007 | 2008 | |
|---|---|---|
| Production | 6,839 | 7,191 |
| Sales and marketing | 9,900 | 10,173 |
| Other functions | 4,362 | 4,402 |
| 21,101 | 21,766 |
(average during the year)
| 2007 | 2008 | |
|---|---|---|
| Production | 6,225 | 7,250 |
| Sales and marketing | 7,855 | 10,286 |
| Other functions | 4,075 | 4,345 |
| 18,155 | 21,881 |
A breakdown of employees by Beiersdorf Group segment can be found in the segment reporting.
| (in € million) | Patents, licenses, trademarks, software, and similar rights and assets |
Goodwill | Total |
|---|---|---|---|
| Cost | |||
| Opening balance Jan. 1, 2007 | 427 | 7 | 434 |
| Currency translation adjustment | –2 | - | –2 |
| Changes in consolidated Group/acquisitions | 168 | 164 | 332 |
| Additions | 5 | - | 5 |
| Disposals/transfers | –46 | - | –46 |
| Closing balance Dec. 31, 2007 | 552 | 171 | 723 |
| Amortization Opening balance Jan. 1, 2007 |
400 | 4 | 404 |
| Currency translation adjustment | –2 | - | –2 |
| Additions | 11 | - | 11 |
| Disposals/transfers | –47 | - | –47 |
| Closing balance Dec. 31, 2007 | 362 | 4 | 366 |
| Carrying amount Dec. 31, 2007 | 190 | 167 | 357 |
| Cost Opening balance Jan. 1, 2008 |
552 | 171 | 723 |
| Currency translation adjustment | –3 | 21 | 18 |
| Changes in consolidated Group/acquisitions | - | 19 | 19 |
| Additions | 8 | - | 8 |
| Disposals/transfers | –57 | - | –57 |
| Closing balance Dec. 31, 2008 | 500 | 211 | 711 |
| Amortization Opening balance Jan. 1, 2008 |
362 | 4 | 366 |
| Currency translation adjustment | –4 | - | –4 |
| Additions | 16 | - | 16 |
| Disposals/transfers | –56 | - | –56 |
| Closing balance Dec. 31, 2008 | 318 | 4 | 322 |
| Carrying amount Dec. 31, 2008 | 182 | 207 | 389 |
Prior-year fi gure adjusted.
The carrying amount of intangible assets increased by €32 million compared with the previous year to €389 million (previous year: €357 million). The adjustment of the prior-year fi gures is due to the fi nal purchase price allocation for C-BONS Hair Care. Hidden reserves of €8 million were realized in connection with the trademarks acquired, and customer relationships amounting to €16 million were identifi ed. Customer relationships were amortized in the amount of €4 million in the year under review.
The trademarks have been recognized with an indefi nite useful life since it is planned to continue using them
for an unlimited period. An impairment test did not reveal any need for write-downs as of December 31, 2008. The impairment test uses the royalty method, and is based on an extrapolation outside the planning horizon of 2.5% and a pre-tax discount rate of 10.9%.
As in the previous year, no internally generated intangible assets were recognized in the fi scal year under review, since the conditions for recognition under IAS 38 "Intangible Assets" were not met for the development projects.
The goodwill from the purchase of C-BONS Hair Care increased to €144 million (previous year: €129 million) as a result of currency translation effects, the goodwill for Beiersdorf AG (Switzerland) was €39 million (previous year: €35 million).
For the purpose of impairment testing, goodwill resulting from business combinations is allocated to the cash generating units of the Group that are to profi t from the business combination, starting at acquisition date. In the Beiersdorf Group these are the China Group (NIVEA Shanghai and C-BONS Hair Care) and Beiersdorf AG (Switzerland).
The recoverable amounts of the cash generating units were determined based on the calculation of the value in use (Beiersdorf AG Schweiz) and the net realizable value (China Group) using cash fl ow projections. These estimated future cash fl ows used for impairment testing are based on the fi nancial planning, which has a planning horizon of at least three years. Cash fl ows outside the planning period are extra polated using individual growth rates, taking relevant market information into account.
A growth rate of 2.5% was used for the China Group, while the fi gure for Beiersdorf AG (Switzer land) was 1.0%. The pre-tax discount rates used to discount the estimated cash fl ows were 11.2% for the China Group and 11.1% for Beiersdorf AG (Switzer land). The impairment tests did not result in any impairment losses on goodwill or trademarks in the year under review.
Planning is based on a variety of assumptions regarding the signifi cant estimation parameters. The estimation parameters included gross margins, discount rates, commodity price trends, market share, and growth rates.
(in € million)
| Land, land rights, and buildings |
Technical equipment and machinery |
Offi ce and other equipment |
Advance payments and assets under construction |
Total | |
|---|---|---|---|---|---|
| Cost Opening balance Jan. 1, 2007 |
718 | 789 | 505 | 30 | 2,042 |
| Currency translation adjustment | –4 | –6 | –5 | - | –15 |
| Changes in consolidated Group/acquisitions | 21 | 19 | 3 | 1 | 44 |
| Additions | 8 | 26 | 36 | 31 | 101 |
| Disposals/transfers | –124 | –95 | –82 | –23 | –324 |
| Closing balance Dec. 31, 2007 | 619 | 733 | 457 | 39 | 1,848 |
| Depreciation Opening balance Jan. 1, 2007 |
395 | 537 | 368 | 2 | 1,302 |
| Currency translation adjustment | –2 | –5 | –4 | - | –11 |
| Additions | 18 | 46 | 47 | - | 111 |
| Disposals/transfers | –92 | –90 | –69 | –2 | –253 |
| Closing balance Dec. 31, 2007 | 319 | 488 | 342 | - | 1,149 |
| Carrying amount Dec. 31, 2007 | 300 | 245 | 115 | 39 | 699 |
| Cost Opening balance Jan. 1, 2008 |
619 | 733 | 457 | 39 | 1,848 |
| Currency translation adjustment | –3 | 6 | –5 | –1 | –3 |
| Changes in consolidated Group/acquisitions | 3 | - | - | - | 3 |
| Additions | 11 | 34 | 52 | 53 | 150 |
| Disposals/transfers | –3 | –38 | –30 | –32 | –103 |
| Closing balance Dec. 31, 2008 | 627 | 735 | 474 | 59 | 1,895 |
| Depreciation Opening balance Jan. 1, 2008 |
319 | 488 | 342 | - | 1,149 |
| Currency translation adjustment | - | 5 | –2 | - | 3 |
| Additions | 17 | 42 | 39 | - | 98 |
| Disposals/transfers | –17 | –33 | –32 | - | –82 |
| Closing balance Dec. 31, 2008 | 319 | 502 | 347 | - | 1,168 |
| Carrying amount Dec. 31, 2008 | 308 | 233 | 127 | 59 | 727 |
Prior-year fi gures adjusted.
Property, plant, and equipment increased by €28 million compared with the previous year to €727 million. Investments in property, plant, and equipment amounted to €150 million.
Depreciation amounted to €98 million (previous year: €111 million). The prior-year fi gure contained impairment losses due to the realignment of the Consumer Supply Chain of €8 million. These impairment losses primarily related to the production center in Italy, which was closed in 2007. No impairment losses were reversed in the year under review.
For the background to the adjustments to the prioryear fi gures, please see the information provided in the section entitled "Signifi cant Acquisitions in 2007" under "Consolidated Group, Acquisitions, and Divestments".
| (in € million) | ||
|---|---|---|
| 2007 | 2008 | |
| Raw materials, consumables, and supplies | 126 | 126 |
| Work in progress | 35 | 35 |
| Finished goods and merchandise | 434 | 468 |
| Advance payments | 3 | 5 |
| 598 | 634 |
Inventories increased by €36 million compared with the previous year to €634 million, €128 million of which was carried at net realizable value. Write-downs of inventories amounted to €63 million as of the reporting date (previous year: €73 million).
| (in € million) | |||||||
|---|---|---|---|---|---|---|---|
| Of which neither individually |
Of which not individually impaired and past due in the following time buckets | ||||||
| 2007 | Carrying amount | impaired nor past due |
Less than 30 days |
Between 30 and 60 days |
Between 61 and 90 days |
Between 91 and 120 days |
More than 120 days |
| Trade receivables | 823 | 658 | 67 | 14 | 7 | 2 | 6 |
| 2008 | |||||||
| Trade receivables | 894 | 708 | 76 | 16 | 10 | 7 | 6 |
The trade receivables are classifi ed as "loans and receivables" in accordance with IAS 39. The following changes in write-downs of trade receivables were re corded:
(in € million)
(in € million)
| 2007 | 2008 | |
|---|---|---|
| January 1 | 10 | 11 |
| Additions | 5 | 4 |
| Utilized | –1 | –1 |
| Reversals | –2 | –3 |
| Currency translation adjustment | –1 | –1 |
| December 31 | 11 | 10 |
Due to the fi nancial crisis since the fall of 2008, Beiersdorf switched a large proportion of its bank deposits into securities in order to diversify its risk. In total, €897 million was invested in government and corporate bonds, commercial paper, and near-money market retail funds. All bonds are listed and have a residual maturity of up to two years. Government and corporate bonds and commercial paper are assigned to the "Held to Maturity" (HtM) category, while the nearmoney market retail funds are assigned to the "Available for Sale" (AfS) category.
Cash comprises bank balances, cash-on-hand, and checks. Cash equivalents are short-term liquid investments, such as overnight funds, that can be converted into cash at any time and are exposed to no more than insignifi cant fl uctuations in value. In accordance with IAS 39, cash and cash equivalents are classifi ed as "loans and receivables."
Cash 1,031 598 Cash equivalents 86 15
2007 2008
1,117 613
In the previous year, as part of the realignment of the Consumer Supply Chain, the production centers in Almere (the Netherlands) and Brembate (Italy), the logistics centers in Almere and Brussels (Belgium), and the logistics center in Hamburg (Germany) were classifi ed as "Non-current Assets and Disposal Groups Held for Sale" in the amount of €57 million. The sales of property and buildings were fi nalized in 2008. The assets held for sale in the previous year were attributable to the Consumer segment and did not represent discontinued operations of the Beiersdorf Group.
Beiersdorf pursues the goal of sustainably securing its capital base and generating an appropriate return on invested capital. As of December 31, 2008, the equity
ratio was 55% (previous year: 53%), while the return on equity was 25% (previous year: 23%). The total dividend distributed in fi scal year 2008 amounted to €165 million (previous year: €141 million).
The table below details the individual equity components and the changes in them:
consolidated statement of changes in equity (in € million)
| Share capital | Additional paid-in capital |
Retained earnings* |
Currency translation adjustment |
Fair value measurement fi nancial instruments |
Total equity attributable to equity holders |
Minority interests |
Total | |
|---|---|---|---|---|---|---|---|---|
| Jan. 1, 2007 | 252 | 47 | 1,587 | –93 | –12 | 1,781 | 9 | 1,790 |
| Financial instruments | - | - | - | - | 6 | 6 | - | 6 |
| Currency translation adjustment |
- | - | - | –28 | - | –28 | - | –28 |
| Other changes | - | - | –9 | –2 | 12 | 1 | - | –4 |
| Total income and expense recognized directly in equity |
- | - | –9 | –30 | 18 | –21 | - | –21 |
| Profi t after tax | - | - | 437 | - | - | 437 | 5 | 442 |
| Total earnings for the period |
- | - | 428 | –30 | 18 | 416 | 5 | 421 |
| Dividend of Beiersdorf AG for previous year |
- | - | –136 | - | - | –136 | - | –136 |
| Dividend of minority inte rests for previous year |
- | - | - | - | - | - | –5 | –5 |
| Dec. 31, 2007 (as previously presented) |
252 | 47 | 1,879 | –123 | 6 | 2,061 | 9 | 2,070 |
| Change in accounting treatment of advertising expenses |
- | - | –6 | - | - | –6 | - | –6 |
| Jan. 1, 2008 (adjusted opening balance) |
252 | 47 | 1,873 | –123 | 6 | 2,055 | 9 | 2,064 |
| Financial instruments | - | - | - | - | 19 | 19 | - | 19 |
| Currency translation adjustment |
- | - | - | –31 | - | –31 | 2 | –29 |
| Other changes | - | - | 4 | - | - | 4 | - | 4 |
| Total income and expense recognized directly in equity |
- | - | 4 | –31 | 19 | –8 | 2 | –6 |
| Profi t after tax | - | - | 562 | - | - | 562 | 5 | 567 |
| Total earnings for the period |
- | - | 566 | –31 | 19 | 554 | 7 | 561 |
| Dividend of Beiersdorf AG for previous year |
- | - | –159 | - | - | –159 | - | –159 |
| Dividend of minority inte rests for previous year |
- | - | - | - | - | - | –6 | –6 |
| Dec. 31, 2008 | 252 | 47 | 2,280 | –154 | 25 | 2,450 | 10 | 2,460 |
* The cost of treasury shares amounting to €955 million has been deducted from retained earnings.
The share capital amounts to €252 million and is composed of 252 million no-par value bearer shares.
Since the settlement of the share buyback program on February 3, 2004, and following implementation of the share split in 2006, Beiersdorf AG has held 25,181,016 no-par value bearer shares, corresponding to 9.99% of the Company's share capital.
The Annual General Meeting on May 18, 2005 authorized the Executive Board, with the approval of the Supervisory Board, to increase the share capital in the period until May 17, 2010 by up to a total of €87 million (Authorized Capital I: €45 million; Authorized Capital II: €21 million; Authorized Capital III: €21 million) by issuing new bearer shares on one or several occasions. In this context, the dividend rights for new shares may be determined by a different method than that set out in § 60 (2) Aktiengesetz (German Stock Corporation Act, AktG).
Shareholders shall be granted preemptive rights. However, the Executive Board is authorized, with the approval of the Supervisory Board, to disapply shareholders' preemptive rights in the following cases:
convertible bonds and/or bonds with warrants is utilized (Authorized Capital II);
The Executive Board was also authorized, with the approval of the Supervisory Board, to determine the further details of the capital increase and its implementation.
The Annual General Meeting on May 18, 2005 also resolved to contingently increase the share capital by up to a total of €40 million. In addition, the Annual General Meeting on May 17, 2006 resolved a capital increase from retained earnings. In accordance with § 218 sentence 1 AktG, contingent capital is increased by the same proportion. It therefore now amounts to €46,875,000. In accordance with the resolution by the Annual General Meeting, the contingent capital increase will be implemented only if
The new shares carry dividend rights from the beginning of the fi scal year in which they are created via the exercise of conversion rights or options, or as a result of compliance with a conversion obligation.
Additional paid-in capital comprises the premium arising from the issue of shares by Beiersdorf AG.
Retained earnings comprise the net profi t for the fi scal year and undistributed profi ts generated in prior periods by companies included in the consolidated fi nancial statements. The retained earnings are reduced by the cost of the 25,181,016 treasury shares held by Beiersdorf AG amounting to €955 million. The opening balance of the retained earnings was adjusted in accordance with IAS 8 as a result of the application of the revised IAS 38 prior to the effective date. The reduction in the amount of €6 million is due to the advertising expenditures of €9million contained in the inventories as of December 31, 2007, net of deferred taxes in the amount of €3 million.
The currency translation adjustment equity account serves to recognize differences resulting from the translation of the fi nancial statements of subsidiaries that do not prepare their fi nancial statements in euros.
The equity account for the fair value measurement of fi nancial instruments contains the changes in the fair value of fi nancial instruments held for sale of €4 million (previous year: €0 million) and fi nancial derivatives designated as hedging instruments of €21 million (previous year: €6 million) that are recognized directly in equity.
Minority interests contain adjustments for the interests of non-Group shareholders in the equity of fully consolidated affi liates. Other shareholders hold interests primarily in Nivea-Kao Co., Ltd., Japan, PT. Beiersdorf Indonesia, and Beiersdorf India Limited.
The Group provides post-employment benefi ts for entitled employees either directly or through legally independent pension and welfare funds. Group companies provide retirement benefi ts under defi ned contribution and defi ned benefi t plans. The structure of the plans varies depending on the legal, economic, and tax situation in the country in question, and the plans are generally based on length of service, salary, and the position held within the Company, as well as the employees' own contributions. The direct and indirect obligations comprise obligations arising from existing pensions as well as future pension and retirement obligations.
In Germany, calculations are based on Heubeck's 2005 mortality tables, and internationally they are based on locally recognized mortality tables. The discount rate for Germany of 6.25% was determined at the year-end on the basis of the information available then. The use of a discount rate 0.5 percentage points lower (higher) would not have an impact on the consolidated balance sheet as of December 31, 2008, and would have only a minor impact on the income statement for the following year due to the application of the limit method. There was no extraordinary income or expense from the termination of pension plans or the curtailment and transfer of pension benefi ts in the year under review.
Measurement is based on the following assumptions:
| 2007 | 2008 | |||
|---|---|---|---|---|
| Germany | Other countries | Germany | Other countries | |
| Discount rates | 5.50 | 2.00–10.00 | 6.25 | 2.00–12.00 |
| Expected return on plan assets | 5.50 | 2.00–9.20 | 4.75–5.00 | 4.00–9.50 |
| Projected wage and salary growth | 3.00–3.50 | 1.25–8.00 | 3.00–3.50 | 2.00–10.00 |
| Projected pension growth | 1.75 | 0.50–3.00 | 2.00 | 0.50–3.00 |
| Projected staff turnover | 2.00–4.50 | 0.50–8.00 | 2.00–4.50 | 0.30–8.00 |
These parameters also apply to each following year when calculating the costs of the obligations acquired in the year under review, the interest expense on obligations acquired in previous years, and the calculation of the expected return on plan assets.
The expected return on plan assets was derived from historical long-term returns on the plan assets and from projected long-term returns.
| 2007 | 2008 | |||||
|---|---|---|---|---|---|---|
| Germany | Other countries | Group | Germany | Other countries | Group | |
| Current service cost | 18 | 7 | 25 | 14 | 6 | 20 |
| Past service cost | 2 | - | 2 | - | - | - |
| Effects on curtailments and settlements | - | –2 | –2 | - | 1 | 1 |
| Defi ned benefi t expense (EBIT) | 20 | 5 | 25 | 14 | 7 | 21 |
| Interest expense | 31 | 8 | 39 | 35 | 9 | 44 |
| Expected return on plan assets | –26 | –8 | –34 | –34 | –9 | –43 |
| Amortization of actuarial gains (–) and losses (+) |
–5 | 1 | –4 | –11 | 2 | –9 |
| Net interest income for defi ned benefi t plans |
- | 1 | 1 | –10 | 2 | –8 |
| Total expenses for defi ned benefi t plans | 20 | 6 | 26 | 4 | 9 | 13 |
| Defi ned contribution expense (EBIT) | 29 | 15 | 44 | 28 | 16 | 44 |
| Total pension benefi t expense | 49 | 21 | 70 | 32 | 25 | 57 |
The defi ned benefi t and defi ned contribution expenses are included in the costs of the respective functions. Defi ned contribution expenses primarily contain contributions to statutory or state pension insurance funds.
change in the present value of defined benefit obligations (in € million)
Interest expense on obligations acquired in previous years, the return on plan assets, and the amortization of unrealized actuarial gains and losses are reported in the income statement under interest income/expense.
2007 2008 Germany Other countries Group Germany Other countries Group Present value of defi ned benefi t obligations, opening balance 755 185 940 657 178 835 Current service cost 18 7 25 14 6 20 Interest expense 31 8 39 35 9 44 Actuarial gains (–) and losses (+) –119 –9 –128 –37 –14 –51 Contributions by plan participants 2 2 4 3 1 4 Pension benefi ts paid –32 –8 –40 –34 - –34 Currency translation adjustment - –8 –8 - –2 –2 Other changes 2 1 3 –8 –6 –14 Present value of defi ned benefi t obligations, closing balance 657 178 835 630 172 802
| 2007 | 2008 | ||||||
|---|---|---|---|---|---|---|---|
| Germany | Other countries | Group | Germany | Other countries | Group | ||
| Partly or wholly funded defi ned benefi t obligations |
643 | 157 | 800 | 625 | 152 | 777 | |
| Unfunded defi ned benefi t obligations | 14 | 21 | 35 | 5 | 20 | 25 | |
| Present value of defi ned benefi t obligations |
657 | 178 | 835 | 630 | 172 | 802 |
classification of plan asset fair value (in € million)
| 2008 | |||||
|---|---|---|---|---|---|
| Germany | Other countries | Group | Germany | Other countries | Group |
| 614 | 153 | 767 | 629 | 164 | 793 |
| 26 | 8 | 34 | 34 | 9 | 43 |
| –7 | –3 | –10 | –60 | –26 | –86 |
| 19 | 5 | 24 | –26 | –17 | –43 |
| 2 | 9 | 11 | 3 | 11 | 14 |
| - | 1 | 1 | - | 3 | 3 |
| –6 | –5 | –11 | –6 | –1 | –7 |
| - | –7 | –7 | - | –1 | –1 |
| - | 8 | 8 | - | –4 | –4 |
| 629 | 164 | 793 | 600 | 155 | 755 |
| 2007 |
| 2007 | 2008 | ||||||
|---|---|---|---|---|---|---|---|
| Germany | Other countries | Group | Germany | Other countries | Group | ||
| Equity instruments | 234 | 91 | 325 | 163 | 73 | 236 | |
| Debt instruments | 350 | 58 | 408 | 393 | 64 | 457 | |
| Real estate | 33 | - | 33 | 34 | - | 34 | |
| Cash and cash equivalents | 11 | 8 | 19 | 10 | 12 | 22 | |
| Other | 1 | 7 | 8 | - | 6 | 6 | |
| Fair value of plan assets | 629 | 164 | 793 | 600 | 155 | 755 |
| 2005 | 2006 | 2007 | 2008 | |
|---|---|---|---|---|
| Present value of defi ned benefi t obligations | 867 | 940 | 835 | 802 |
| Fair value of plan assets | –626 | –767 | –793 | –755 |
| Net obligation | 241 | 173 | 42 | 47 |
| Net cumulative unrecognized actuarial gains (+) and losses (–) | 61 | 107 | 222 | 178 |
| Other recognized amounts | 1 | 8 | 11 | 10 |
| Recognized provisions for pensions and other employee benefi ts | 303 | 288 | 275 | 235 |
| (in € million) | Personnel | Marketing and selling |
|||
|---|---|---|---|---|---|
| expenses | expenses | Restructuring | Miscellaneous | Total | |
| Opening balance Jan. 1, 2008 | 186 | 118 | 18 | 184 | 506 |
| Of which non-current | 74 | 2 | - | 56 | 132 |
| Currency translation adjustment | –1 | –4 | - | 1 | –4 |
| Change in consolidated Group | - | - | - | 2 | 2 |
| Additions | 94 | 120 | 17 | 84 | 315 |
| Utilized | –89 | –93 | –11 | –87 | –280 |
| Reversals | –11 | –11 | - | –23 | –45 |
| Closing balance Dec. 31, 2008 | 179 | 130 | 24 | 161 | 494 |
| Of which non-current | 66 | 2 | - | 63 | 131 |
Provisions for personnel expenses primarily comprise provisions for partial retirement arrangements, annual bonuses, vacation pay, severance agreements, and anniversary payments. The provisions for marketing and selling expenses relate in particular to cooperative advertising allowances, rebates, and returns. The restructuring provisions relate primarily to provisions in connection with the realignment of the Consumer Supply Chain.
The miscellaneous provisions include provisions for litigation risks, among other things.
Taxes on planned dividends, which were previously recognized in the income tax provisions, were reported for the fi rst time as deferred tax liabilities. The remaining income tax provisions were shown for the fi rst time as income tax liabilities. The prior-year fi gure of €82 million was adjusted accordingly. The expenses for revenue-based deferred customer bonuses included in the provisions for marketing and selling expenses were reported as trade payables for the fi rst time. The prioryear fi gure of €44 million was adjusted accordingly.
The contractually agreed undiscounted interest payments on and repayments of non-current liabilities (not including deferred taxes) are as follows:
| (in € million) | ||||||
|---|---|---|---|---|---|---|
| 2007 | 2008 | |||||
| Contractual maturities | Contractual maturities | |||||
| Carrying amount Dec., 31 |
2009–2012 | After 2012 | Carrying amount Dec., 31 |
2010–2013 | After 2013 | |
| Non-current fi nancial liabilities | 60 | 74 | 2 | 72 | 76 | 2 |
| Other non-current liabilities | 7 | 3 | 4 | 6 | 3 | 3 |
| 67 | 77 | 6 | 78 | 79 | 5 |
Non-current fi nancial liabilities include fi nancial instruments of €71 million (previous year: €60 million) assigned to the "Other Financial Liabilities" category and of €1 million (previous year: €0 million) assigned to the "Derivative Financial Instruments" category. The non-current fi nancial liabilities primarily comprise the liabilities from the option to purchase the remaining interest in C-BONS Hair Care amounting to €66 million.
The following table gives a breakdown of current liabilities:
| (in € million) | ||
|---|---|---|
| 2007 | 2008 | |
| Trade payables (OFL) | 573 | 690 |
| Other current fi nancial liabilities | 160 | 174 |
| Other fi nancial liabilities (OFL) | 156 | 160 |
| Negative fair value of derivatives (DFI) | 4 | 14 |
| Other current liabilities | 60 | 74 |
| Other tax liabilities | 44 | 59 |
| Social security liabilities | 11 | 11 |
| Advance payments received | 5 | 4 |
| 793 | 938 |
Other fi nancial liabilities (OFL) primarily relate to overdrafts and short-term bank loans amounting to €109 million (previous year: €82 million), as well as to other fi nancial obligations in the amount of €50 million (previous year: €70 million).
(in € million)
| Measurement category under IAS 39 | |||||
|---|---|---|---|---|---|
| 2008 | Carrying amount Dec. 31 |
Amortized cost | Fair value recognized di rectly in equity |
Fair value through profi t or loss |
Fair value Dec. 31 |
| assets | |||||
| Loans and receivables (LaR) | 1,592 | 1,592 | - | - | 1,592 |
| Non-current fi nancial assets | 6 | 6 | - | - | 6 |
| Trade receivables | 894 | 894 | - | - | 894 |
| Other current fi nancial assets | 79 | 79 | - | - | 79 |
| Cash and cash equivalents | 613 | 613 | - | - | 613 |
| Available-for-sale fi nancial assets (AfS) | 248 | 4 | 244 | - | 248 |
| Non-current fi nancial assets | 4 | 4 | - | - | 4 |
| Securities | 244 | - | 244 | - | 244 |
| Held-to-maturity fi nancial investments (HtM) | 653 | 653 | - | - | 653 |
| Securities | 653 | 653 | - | - | 653 |
| Derivative fi nancial instruments used for hedges (DFI) | 50 | - | 50 | - | 50 |
| equity and liabilities | |||||
| Other fi nancial liabilities (OFL) | 921 | 921 | - | - | 921 |
| Non-current fi nancial liabilities | 71 | 71 | - | - | 71 |
| Trade payables | 690 | 690 | - | - | 690 |
| Other current fi nancial liabilities | 160 | 160 | - | - | 160 |
| Derivative fi nancial instruments used for hedges (DFI) | 14 | - | 14 | - | 14 |
| 2007 | |||||
| assets | |||||
| Loans and receivables (LaR) | 2,027 | 2,027 | - | - | 2,027 |
| Non-current fi nancial assets | 2 | 2 | - | - | 2 |
| Trade receivables | 823 | 823 | - | - | 823 |
| Other current fi nancial assets | 85 | 85 | - | - | 85 |
| Cash and cash equivalents | 1,117 | 1,117 | - | - | 1,117 |
| Available-for-sale fi nancial assets (AfS) | 5 | 5 | - | - | 5 |
| Non-current fi nancial liabilities | 5 | 5 | - | - | 5 |
| Derivative fi nancial instruments used for hedges (DFI) | 14 | - | 14 | - | 14 |
| equity and liabilities | |||||
| Other fi nancial liabilities (OFL) | 789 | 789 | - | - | 789 |
| Non-current fi nancial liabilities | 60 | 60 | - | - | 60 |
| Trade payables | 573 | 573 | - | - | 573 |
| Other current fi nancial liabilities | 156 | 156 | - | - | 156 |
| Derivative fi nancial instruments used for hedges (DFI) | 4 | - | 4 | - | 4 |
The existing fi nancial instruments predominantly have remaining contractual maturities of less than twelve months as of the reporting date. Therefore, their carrying amounts at the balance sheet date correspond approximately to their fair value. Non-current liabilities amounting to €71 million (previous year: €60 million) primarily relate to the variable-interest liability for the
purchase price option for the remaining interest in C-BONS Hair Care. Therefore, the carrying amount of the non-current liabilities corresponds approximately to their fair value. Net gains and losses from held-tomaturity fi nancial investments amounted to €1 million (previous year: €0 million).
(in € million)
| 2007 | 2008 | |
|---|---|---|
| Contingent liabilities | ||
| Liabilities under bills | 1 | - |
| Liabilities under guarantees | - | 1 |
| Other fi nancial obligations | ||
| Obligations under rental and lease agreements: |
46 | 40 |
| Due within the next year | 21 | 17 |
| Due in 2 to 5 years | 23 | 23 |
| Due after more than 5 years | 2 | - |
| Obligations under purchase commitments: |
20 | 17 |
| Due within the next year | 20 | 13 |
| Due in 2 to 5 years | - | 4 |
Beiersdorf has potential obligations arising from legal actions (including antitrust proceedings relating to cosmetics products) and from claims brought against the Company. Due to the early stage of the preliminary investigations, a reliable assessment of the risk arising from the antitrust proceedings is not currently possible.
As a result of its operations, the Beiersdorf Group is exposed to various risks such as currency, interest rate, and default risk.
Derivative fi nancial instruments are used to hedge the core operational business and material fi nancial transactions. These do not expose the Group to any further risk. The transactions are conducted exclusively with marketable instruments.
IFRS 7 requires sensitivity analyses, which show the effects of hypothetical changes in relevant risk variables on profi t or loss and equity, to be used in presenting market risk. For the Beiersdorf Group, this mainly relates to currency risk. The effects are ascertained by applying the hypothetical changes in risk variables to the portfolio of fi nancial instruments as of the balance sheet date. It is assumed that the balance at the reporting date is representative for the year as a whole.
Currency risk is the risk of fl uctuations in the fair value or future cash fl ows of a fi nancial instrument as a result of changes in exchange rates.
Currency risk within the meaning of IFRS 7 arises through monetary fi nancial instruments that are reported in a currency other than the functional currency. Exchange rate differences arising from the translation of fi nancial statements of subsidiaries into the Group currency are not included. Relevant risk variables are therefore basically all non-functional currencies in which fi nancial instruments are held by the Beiersdorf Group. As a result of the Beiersdorf Group's international orientation and emphasis on the euro zone, the euro serves as the key currency. Hence, Beiersdorf is exposed to risks through fi nancing measures and operational activities when other currencies fl uctuate against the euro.
As a matter of principle, currency risks relating to cross-border intragroup fi nancing are hedged centrally in full and at matching maturities using currency forwards. Owing to these hedging activities, Beiersdorf is not exposed to any signifi cant currency risks in its fi nancing activities as of the balance sheet date.
With regard to operations, cash fl ows in nonfunctional currencies in the Beiersdorf Group are hedged up to 36 months in advance using standard currency forwards. All these transactions are centrally recorded, measured, and managed in the treasury management system. As a result, Beiersdorf is not exposed to any signifi cant currency risks in its operations as of the balance sheet date.
Since material primary monetary fi nancial instruments are either denominated directly in the functional currency or transformed into the functional currency through the use of derivatives, changes in the exchange rate do not have any material effects on profi t and loss or equity.
Thus, the Beiersdorf Group is primarily only exposed to currency risk arising from currency forwards which are used as hedging instruments and which meet the criteria for recognition as cash fl ow hedges on forecasted transactions. Changes in market prices mainly affect the hedging reserve in equity and the fair values of the hedging transactions.
The fair value of currency forwards as of the balance sheet date was €36 million (previous year: €10 million), and their notional value was €799 million (previous year: €525 million). €746 million (previous year: €520 million) of the forward contracts have a remaining maturity of up to one year, €53 million (previous year: €5 million) have a remaining maturity of between one and fi ve years, and none (previous year: none) have a remaining maturity exceeding fi ve years. The notional values represent the aggregate of all purchase and selling amounts for derivatives. The notional values shown are not offset.
If the euro had appreciated (depreciated) by 10% against all currencies as of the balance sheet date, the hedging reserves in equity and the fair values of the currency forwards would have increased (decreased) by €29 million (previous year: €7 million).
Interest rate risk is the risk that the fair value or future cash fl ows of a fi nancial instrument may fl uctuate as a result of changes in market interest rates.
Because of the small volume of non-current fi nancial instruments and the absence of derivative interest rate contracts, changes of fair values are of no more than minor signifi cance for the Beiersdorf Group. At present, fi nancial instruments with maturities of up to two years are held. These are subject to interest rate risk within the meaning of IFRS 7 for the entire fi scal year.
If the interest rates at the quarter ends of the fi scal year had been 100 base points higher (lower) in each case than the yield curve, the fi nancial result would have been €11 million higher (lower) (previous year: €12 million).
Beiersdorf is exposed to default risk within the scope of its fi nancing activities and in its operations. In order to minimize this risk as much as possible, fi nancing transactions are only entered into with counterparties with
prime credit ratings. Receivables relating to operating activities are monitored continuously; potential defaults are accounted for using specifi c and collective valuation allowances. The maximum default risk can be seen from the carrying amount of each fi nancial asset recognized in the balance sheet. The total carrying amount of the fi nancial assets was €2,543 million as of December 31, 2008 (previous year: €2,046 million). In the area of trade receivables, risks are partly covered by corresponding insurance policies.
Liquidity risk is the risk that an entity will encounter diffi culties in meeting the obligations associated with its fi nancial liabilities. As a result of the large amount of cash and cash equivalents held as of the balance sheet date, Beiersdorf is not currently exposed to any liquidity risk. Additionally, in order to ensure the liquidity and fi nancial fl exibility of the Beiersdorf Group at all times, liquidity reserves are maintained in the form of credit lines.
The cash fl ow statement has been prepared in accordance with IAS 7 and is classifi ed into net cash fl ows from operating, investing, and fi nancing activities.
Net cash fl ow from operating activities is presented using the indirect method, while net cash fl ows from investing and fi nancing activities are presented using the direct method.
The total proceeds received from the divestments made in the fi scal year amounted to €139 million, and were paid completely in cash. Cash transferred with the divestments amounted to €2 million. Proceeds from the sale of non-current assets amounted to €85 million.
Cash funds are composed of cash and cash equivalents that can be converted into cash at any time and that are exposed to no more than insignifi cant fl uctuations in value.
Segment reporting in the Beiersdorf Group is based primarily on the products manufactured and sold by the business segments. The breakdown of the Group into the Consumer and tesa business segments also refl ects the internal organizational structure. The classifi cation by region shows the global breakdown of business activities in the Beiersdorf Group.
The net sales shown for the regions are based on the domiciles of the respective companies.
Consolidated companies domiciled in Germany generated sales in 2008 of €1,506 million (previous year: €1,469 million) and reported non-current assets (not including fi nancial instruments, deferred taxes, and plan assets) of €515 million (previous year: €499 million).
EBIT excluding special factors represents the operating result, adjusted for income from and expenses for the realignment of the Consumer Supply Chain as well as income from divestments.
EBITDA represents the operating result (EBIT) before depreciation and amortization/impairment.
The EBIT return on net operating capital is the ratio of the operating result (EBIT) to net operating capital.
Gross cash fl ow is the excess of operating income over operating expenses before any further appropriation of funds.
Net operating capital of €1,487 million (previous year: €1,038 million) consists of gross operating capital less operating liabilities. In the previous year net operating capital as at the year-end did not include the fi gures for the acquisitions made towards the end of 2007, since the results of the acquired entities were not included in consolidation in 2007 due to the fact that the acquisitions took place extremely close to the reporting date. As a result, the acquired assets did not contribute to the operating result for that year.
The following tables show the reconciliation of net operating capital to the balance sheet items:
| (in € million) | |||
|---|---|---|---|
| assets | 2007 | 2008 |
|---|---|---|
| Intangible assets | 357 | 389 |
| Property, plant, and equipment | 699 | 727 |
| Inventories | 598 | 634 |
| Trade receivables | 823 | 894 |
| Other receivables and other assets (operating portion)1 | 133 | 182 |
| Gross operating capital attributable to acquisitions | –415 | - |
| Gross operating capital | 2,195 | 2,826 |
| Gross non-operating assets | 1,706 | 1,633 |
| Total balance sheet assets | 3,901 | 4,459 |
| equity and liabilities | 2007 | 2008 |
| Other provisions (operating portion)2 | 506 | 494 |
|---|---|---|
| Trade payables | 573 | 690 |
| Other liabilities (operating portion)3 | 159 | 155 |
| Operating liabilities attributable to acquisitions | –81 | - |
| Operating liabilities | 1,157 | 1,339 |
| Equity | 2,070 | 2,460 |
| Non-operating liabilities | 674 | 660 |
| Total balance sheet equity and liabilities | 3,901 | 4,459 |
Not including tax receivables. Not including tax provisions.
Not including tax liabilities.
Please refer to the Remuneration Report, which is a component of the consolidated fi nancial statements and the Group Management Report, for the disclosures required by § 314 (1) No. 6 of the Handelsgesetzbuch (German Commercial Code, HGB) and IAS 24.16.
Since March 30, 2004, maxingvest ag (formerly Tchibo Holding AG) has held 50.46% of Beiersdorf AG's share capital. Accordingly, Beiersdorf AG is a dependent company within the meaning of § 312 (1) sentence 1 in conjunction with § 17 (2) Aktiengesetz (German Stock Corporation Act, AktG). Since no control agreement exists between Beiersdorf AG and maxingvest ag, the Executive Board of Beiersdorf AG prepares a report regarding dealings among Group companies in accord ance with § 312 (1) sentence 1 AktG. In fi scal year 2008, Beiersdorf AG and its affi liated companies and maxingvest ag and its affi liated companies pooled purchase quotas to cut costs, as well as sourcing products from each other on a very small scale at standard market terms, as in the previous year. There was also limited collaboration with respect to marketing campaigns and in the area of market research and product testing.
The following German affi liates included in the consolidated fi nancial statements of Beiersdorf AG exercised the exemption option under § 264 (3) Handels gesetzbuch (German Commercial Code, HGB) in fi scal year 2008:
| – Beiersdorf Manufacturing | ||
|---|---|---|
| Hamburg GmbH | Hamburg | |
| – Cosmed-Produktions GmbH | Berlin | |
| – Florena Cosmetic GmbH | Waldheim | |
| – La Prairie GmbH | Baden-Baden | |
| – Juvena Produits de Beauté GmbH | Baden-Baden | |
| – Juvena La Prairie GmbH | Baden-Baden | |
| – Beiersdorf Shared Services GmbH | Hamburg | |
| – Allgemeine Immobilien- und | ||
| Verwaltungsgesellschaft m.b.H. | Baden-Baden | |
| – Prof. Steinkraus Research | ||
| Laboratories Produkte GmbH | Baden-Baden | |
The Executive Board and Supervisory Board of Beiersdorf AG submitted their Declaration of Compliance with the recommendations of the Government Com mission on the German Corporate Governance Code in accordance with § 161 Aktiengesetz (German Stock Corporation Act, AktG) at the end of December 2008, and made this declaration permanently accessible to shareholders on the Company's website at www.Beiersdorf.com/Corporate-Governance.
The Annual General Meeting on April 30, 2008 elected Ernst & Young AG Wirtschafts prüfungs gesellschaft Steuerberatungsgesellschaft as the auditors of Beiersdorf AG and the Beiersdorf Group for fi scal year 2008.
The following table gives an overview of the fees paid to the Group auditors, Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft, and recognized as expenses in the fi scal year:
fees paid to the group auditors (in € thousand)
| 2007 | 2008 | |
|---|---|---|
| Audit services | 644 | 776 |
| Other assurance services | - | 109 |
| Tax advisory services | 101 | 184 |
| Other services | 13 | - |
| Total | 758 | 1,069 |
A complete list of Beiersdorf AG's shareholdings is issued separately.
In accordance with the provisions of the Wertpapierhandelsgesetz (German Securities Trading Act, WpHG), Beiersdorf AG received the following notifi cations by shareholders of the Company by the preparation date of the balance sheet (February 4, 2009):
Allianz SE, Munich, Germany, informed us in accordance with § 21 (1) WpHG that Allianz Aktiengesellschaft, Munich, Germany, had revealed on February 3, 2004, that its share of voting rights in our Company had fallen below the threshold of 10% and that it amounted to 7.85% as of this date (this corresponds to 6,593,491 voting rights out of the total of 84,000,000 voting rights at that time). The transformation of Allianz Aktiengesellschaft into Allianz SE was entered in the commercial register on October 13, 2006. Consequently, Allianz SE's share of voting rights in our Company continued to amount to more than 5% on October 13, 2006 and totaled 7.20% (corresponding to 18,133,974 voting rights) as of this date. 1.09% (2,736,357 voting rights) of these were attributable to Allianz SE, in accordance with § 22 (1) sentence 1 no. 1, (3) WpHG.
Allianz SE, Munich, Germany, also informed us in accordance with § 21 (1) WpHG in conjunction with § 24 WpHG that, due to an intra-Group share transfer, the share of voting rights held by AZ-Arges Vermögensverwaltungsgesellschaft mbH, Munich, Germany, in our Company exceeded the thresholds of 3% and 5% on June 13, 2008, and that it amounted to 5.65% (14,246,917 voting rights) as of this date. There have been no changes to Allianz SE's share of the voting rights in our Company that are subject to mandatory reporting.
Capital Research and Management Company, Los Angeles, USA, informed us in accordance with § 21 (1) WpHG that its share of voting rights in our Company exceeded the threshold of 3% on November 3, 2008. As of this date, Capital Research and Management Company held 3.11% of the voting rights in Beiersdorf AG (voting rights from 7,849,457 ordinary shares). These 3.11% of the voting rights (voting rights from 7,849,457 ordinary shares) were attributed to Capital Research and Management Company in accordance with § 22 (1) sentence 1 no. 6 WpHG.
maxingvest ag, Hamburg, Germany, informed us in accordance with § 21 (1) WpHG that Tchibo Holding AG's Annual General Meeting held on July 5, 2007 resolved to change the company's name to "maxingvest ag" and that the new name was entered in the commercial register on September 12, 2007. Consequently, maxingvest ag's share of voting rights in our Company continued to amount to more than 50% on September 12, 2007 and totals 50.46% (corresponding to 127,154,415 voting rights). As before, 50.46% (corresponding to 127,154,415 voting rights) is attributable to maxingvest ag via Tchibo Beteiligungsgesellschaft mbH in accordance with § 22 (1) sentence 1 no. 1 WpHG.
In addition, the following persons and companies listed below informed us in accordance with § 21 (1) WpHG that their share of voting rights had each exceeded the threshold of 50% on March 30, 2004, and that they were each entitled to 50.46% of voting rights, which are fully attributable to each of them in accordance with § 22 (1) sentence 1 no. 1, sentence 3, (3) WpHG:
Agneta Peleback-Herz, Germany, E.H. Real Grundstücks gesell schaft mbH & Co. KG, Norderstedt, Germany, and E.H. Real Grundstücksgesellschaft mbH, Norderstedt, Germany, all informed us on March 11, 2008 in accordance with § 21 (1) sentence 1 WpHG that their share of the voting rights in our Company fell below the thresholds of 50%, 30%, 25%, 20%, 15%, 10%, 5%, and 3% as of January 15, 2007, and amounts to 0% (corresponding to 0 votes).
In accordance with § 25 (1) sentence 3 in conjunction with § 21 (1) sentence 1 WpHG (former version), Beiersdorf AG also announced that it had exceeded the threshold of 5% of the voting rights in its own Company on February 3, 2004, and that a share of 9.99% has been attributable to it since then. The treasury shares held by the Company do not carry voting or dividend rights in accordance with § 71b Aktiengesetz (German Stock Corporation Act, AktG).
(in € million)
| Net retained profi ts of Beiersdorf AG | 227 |
|---|---|
| Transfer to retained earnings | –66 |
| Profi t after tax of Beiersdorf AG | 293 |
| 2008 |
At the Annual General Meeting, the Executive Board and Supervisory Board will propose that the net re tained profi ts for fi scal 2008 of €227 million will be utilized as follows:
| (in € million) | |
|---|---|
| 2008 | |
| Distribution of a dividend of €0.90 (€0.70 plus €0.20) per no-par value share carrying dividend rights (226,818,984 no-par value shares) |
204 |
| Transfer to other retained earnings | 23 |
| Net retained profi ts of Beiersdorf AG | 227 |
The amounts specifi ed for the total dividend and for the transfer to other retained earnings refl ect the shares carrying dividend rights at the time of the Executive Board's proposal on the utilization of the net retained profi ts. The treasury shares held by the Company do not carry dividend rights in accordance with § 71b Aktiengesetz (German Stock Corporation Act, AktG).
If the number of treasury shares held by the Company at the time of the resolution by the Annual General Meeting on the utilization of the net retained profi ts is higher or lower than at the time of the Executive Board's proposal on the utilization of the net retained profi ts, the total amount to be distributed to the shareholders shall be reduced or increased by the portion of the dividend attributable to the difference in the number of shares. The amount to be appropriated to the other retained earnings shall be adjusted inversely by the same amount. In contrast, the dividend to be distributed per no-par value share carrying dividend rights remains unchanged. If necessary, an appropriately modifi ed draft resolution will be presented to the Annual General Meeting.
Hamburg, February 4, 2009
Beiersdorf AG
The Executive Board
Georg W. Claussen
previously Deputy Chairman)
Deputy Chairman
Member of the Supervisory Board – maxingvest ag
Deputy Chairman (since April 30, 2008)
Head of Biocompatibility, Research & Development of Beiersdorf AG
Member of the Supervisory Board – maxingvest ag (since April 4, 2008)
Chairman of the Works Council of tesa AG
Member of the Supervisory Board – tesa AG (in the future: tesa SE; intragroup)
Merchant
Former Chairman of the Executive
Head of the Division Economic Policy – Industry Groups of Industriege-
Head of Corporate Pension and Insurance Management of Beiersdorf AG
Head of Corporate Social Responsibility of Beiersdorf AG
– Professor at the Academy of Music and Theater, Hamburg
Prof. Dr. Reinhard Pöllath (Chairman since April 30, 2008) Michael Herz Thorsten Irtz Dr. Arno Mahlert (since April 30, 2008) Dieter Ammer (until April 30, 2008, previously Chairman)
Dr. Arno Mahlert (Chairman) Dieter Ammer Dr. Walter Diembeck Prof. Dr. Reinhard Pöllath
Prof. Dr. Reinhard Pöllath (since April 30, 2008, Chairman) Dr. Rolf Kunisch Dr. Arno Mahlert Stefan Pfander Dieter Ammer (until April 30, 2008, previously Chairman)
Mediation Committee Prof. Dr. Reinhard Pöllath (Chairman since April 30, 2008) Thorsten Irtz Dr. Arno Mahlert (since April 30, 2008) Ulrich Plechinger Dieter Ammer (until April 30, 2008, previously Chairman)
Finance – Finance/Controlling/ Legal/IT
Deputy Chairman of the Supervisory Board – tesa AG (in the future: tesa SE; intragroup)
Human Resources – Human Resources/Sustainability – Labor Director
Brands – Marketing/ Research & Development/Sales Member of the Board of Directors – GfK e.V.
Markus Pinger
Supply Chain – Procurement/ Production/Logistics/ Quality Management
* In connection with their Group management and supervisory duties, the members of the Executive Board of Beiersdorf AG also hold offi ces in comparable supervisory bodies at Group companies and investees.
We have audited the consolidated fi nancial statements prepared by Beiersdorf Aktiengesellschaft, Hamburg, comprising the balance sheet, the income statement, cash fl ow statement, statement of recognized income and expense, and the notes to the consolidated fi nancial statements, together with the group management report for the fi scal year from January 1 to December 31, 2008. The preparation of the consolidated fi nancial statements and the group management report in accord ance with IFRSs as adopted by the EU, and the additional requirements of German commercial law under § 315a (1) of the Handelsgesetzbuch (German Commercial Code, HGB) are the responsibility of the parent company's management. Our responsibility is to express an opinion on the consolidated fi nancial statements and on the group management report based on our audit.
We conducted our audit of the consolidated fi nancial statements in accordance with § 317 of the HGB and German generally accepted standards for the audit of fi nancial statements promulgated by the Institut der Wirtschaftsprüfer (Institute of Public Auditors in Germany, IDW). Those standards require that we plan and perform the audit such that misstatements materially affecting the presentation of the net assets, fi nancial position, and results of operations in the consolidated fi nancial statements in accordance with the applicable fi nancial reporting framework and in the group management report are detected with reasonable assurance. Knowledge of the business activities and the economic and legal environment of the Group and expectations as to possible misstatements are taken into account in the determination of audit procedures. The effectiveness of the accounting-related internal control system and the evidence supporting the disclosures in the consolidated
fi nancial statements and the group management report are examined primarily on a test basis within the framework of the audit. The audit includes assessing the annual fi nancial statements of those entities included in the consolidated fi nancial statements, the determination of entities to be included in consolidation, the accounting and consolidation principles used, and signifi cant estimates made by management, as well as evaluating the overall presentation of the consolidated fi nancial statements and the group management report. We believe that our audit provides a reasonable basis for our opinion.
Our audit has not led to any reservations.
In our opinion, based on the fi ndings of our audit, the consolidated fi nancial statements comply with IFRSs as adopted by the EU and the additional requirements of German commercial law under § 315a (1) of the HGB, and give a true and fair view of the net assets, fi nancial position, and results of operations of the Group in accordance with these requirements. The group management report is consistent with the consolidated fi nancial statements and as a whole provides a suitable view of the Group's position and suitably presents the opportunities and risks of future development.
Hamburg, February 5, 2009
Ernst & Young AG Wirtschaftsprüfungsgesellschaft Steuerberatungsgesellschaft
ludwig german public auditor opaschowski german public auditor
To the best of our knowledge, and in accordance with the applicable reporting principles, the consolidated fi nancial statements give a true and fair view of the assets, liabilities, fi nancial position, and profi t or loss of the Group, and the group management report includes a fair review of the development and performance of the business and the position of the Group, together with a description of the principal opportunities and risks associated with the expected development of the Group.
Hamburg, February 4, 2009
The Executive Board
| 2007 | 2008 |
|---|---|
| 1,447 | 1,050 |
| –5 | - |
| 74 | 121 |
| –547 | –228 |
| –246 | –213 |
| –28 | –46 |
| –550 | –578 |
| –23 | 35 |
| 122 | 141 |
| 162 | 213 |
| 284 | 354 |
| –72 | –61 |
| 212 | 293 |
balance sheet – beiersdorf ag (in € million)
| assets | Dec. 31, 2007 | Dec. 31, 2008 |
|---|---|---|
| Intangible assets | 142 | 115 |
| Property, plant, and equipment | 116 | 66 |
| Financial assets | 1,538 | 1,201 |
| Non-current assets | 1,796 | 1,382 |
| Inventories | 76 | 1 |
| Trade receivables | 88 | 88 |
| Other receivables and other assets | 244 | 251 |
| Cash and cash equivalents | 1,061 | 2,051 |
| Current assets | 1,469 | 2,391 |
| 3,265 | 3,773 |
| equity and liabilities | Dec. 31, 2007 | Dec. 31, 2008 |
|---|---|---|
| Equity | 1,922 | 2,056 |
| Special reserve with an equity portion | - | 40 |
| Provisions for pensions and other employee benefi ts | 511 | 519 |
| Other provisions | 276 | 255 |
| Provisions | 787 | 774 |
| Trade payables | 37 | 26 |
| Other liabilities | 519 | 877 |
| Liabilities | 556 | 903 |
| 3,265 | 3,773 |
* The full version of Beiersdorf AG's annual financial statements and management report, together with an unqualified audit opinion by the auditors, is published in the Bundesanzeiger (Federal Gazette) and is filed with the companies register. The annual financial statements and management report of Beiersdorf AG are also available online at www.beiersdorf.com.
beiersdorf annual report 2008 105
| Affi liates Annual General Meeting |
6, 32, 52, 71, 99 12, 24, 109 |
|---|---|
| Articles of Association | 19, 23, 28, 60 |
| Asia | 6, 32, 35, 40, 48, |
| 56, 63, 70, 78 | |
| Assets | 45, 67, 72, 85, 87, |
| 90, 95, 97, 108 | |
| Audit and Finance Commitees | 20, 25, 28 |
| Auditors' Report | 103 |
| Boards of Beiersdorf AG | 20, 24, 102 |
|---|---|
| BODE Group | 38, 77, 80, 81 |
| Brands | 10, 12, 32, 48, 50, |
| 57, 63 | |
| Business Developments | 19, 20, 64 |
| Capital Expenditure | 45, 69 |
|---|---|
| Cash and Cash Equivalents | 45, 78, 87, 108 |
| Cash Flow | 46, 68, 97 |
| C-BONS Hair Care | 16, 37, 78, 84, 94 |
| Consolidated Financial Statements | 65, 103 |
| Consolidated Group | 77, 84, 93, 103 |
| Consolidation Principles | 71, 103 |
| Consumer Business Strategy | 10, 12, 18, 25 |
| Consumer Supply Chain | 20, 32, 38, 66, 81, |
| 86, 93, 98, 104 | |
| Consumers | 10, 32, 43, 47, 50, |
| 57, 63 | |
| Contact Information | 109 |
| Contingent Capital | 61, 89 |
| Corporate Governance | 19, 22, 99 |
| Declaration of Compliance | 22, 99 |
|---|---|
| Depreciation, Amortization and | 45, 68, 73, 84, 86, |
| Impairment Losses | 98, 104 |
| Divestments | 77 |
| Dividend | 12, 28, 29, 39, 68, |
| 88, 101, 108 |
Currency Translation 37, 40, 42, 84, 90
| Earnings by Share | 39, 66, 83, 108 |
|---|---|
| EBIT | 12, 26, 34, 37, 64, |
| 66, 68, 91, 98 | |
| EBITDA | 69, 70, 98 |
| Employees | 8, 13, 32, 50, 54, |
| 69, 83, 108 | |
| Environmental Protection | 50 |
| Equity | 45, 67, 74, 80, 88, |
| 104 | |
| Eucerin | 10, 31, 40, 48 |
| Executive Board | 12, 14, 18, 19, 22, |
| 24, 27, 30, 35 | |
| Executive Committee | 20, 25, 28 |
| Expected Development | 63 |
| Fair Value | 71, 75, 78, 90, |
|---|---|
| 94, 97 | |
| Financial Calendar | 109 |
| Financial Instruments | 74, 75, 88, 90, 95 |
| Financial Result | 39, 66, 81, 97, 104 |
| Florena | 41, 51, 77, 99 |
| Futuro | 20, 38, 80, 81 |
| General and Administrative | |
|---|---|
| Expenses | 37, 66, 81 |
| Group Companies | 32, 52, 71, 99 |
| Group Management Report | 31 |
| Impairment | 74, 84 |
|---|---|
| Income Statement | 66, 71, 81 |
| Innovations | 37, 40, 47, 48, 57, |
| 63 | |
| Intangible Assets | 73, 84, 108 |
| Inventories | 45, 86, 104, 108 |
| Investments | 64, 68, 74, 86, 95 |
| Investor Relations | 18, 108 |
| La Prairie | 12, 41, 48, 65 |
|---|---|
| Labello | 6 |
| Labtec | 20, 43, 46, 78 |
| Liabilities | 45, 67, 94, 104, |
| 108 |
| Market Share | 12, 32, 64 |
|---|---|
| Measurement Category | 95 |
| Mediation Commitee | 24, 102 |
| Net Interest Income | 91 |
|---|---|
| NIVEA | 10, 12, 32, 40, 52, 63, |
| 77, 78, 83, 90 | |
| NIVEA DEODORANT | 40 |
| NIVEA FOR MEN | 10, 40, 105 |
| NIVEA Hair Care | 11, 40, 41 |
| NIVEA VISAGE | 41, 43, 47 |
| Non-current Assets and Disposal | |
| Groups Held for Sale | 67, 75, 87 |
| Notes to the Balance Sheet | 45 |
| Notes to the Income Statement | 66 |
| Occupational Safety | 50, 51, 53 |
|---|---|
| Operating Result (EBIT) | 12, 26, 34, 37, 64, |
| 66, 68, 91, 98 | |
| Opportunities | 57, 63, 103 |
| Passion for Success | 12, 25, 32 |
|---|---|
| Pension Benefi ts | 75, 90 |
| Pensions | 67, 90, 93, 104 |
| Profi t after Tax | 39, 68 |
| Property, Plant, and Equipment | 67, 73, 86 |
| Provisions | 23, 46, 90, 93, |
| 104, 108 |
| Renumeration Renumeration of the Executive |
20, 25, 34, 99 |
|---|---|
| Board and Supervisory Board | 20, 25, 28 |
| Research and Development | 10, 15, 38, 47, 73, |
| 102 | |
| Reserves | 67, 88, 101, 104 |
| Results of Operations | 37 |
| Retained Earnings | 90 |
| Return on Equity | 88 |
| Return on Sales | 108 |
| Risk Management | 19, 23, 57, 59, 96 |
| Sales | 37, 66, 70, 81, |
|---|---|
| 104, 108 | |
| Sales Growth | 37, 63 |
| Security | 33, 43, 44, 48, 51, |
| 57, 94 | |
| Segment Reporting | 69 |
| Share Buyback | 60, 89 |
| Share Capital | 60, 89 |
| Shareholdings | 77, 99 |
| Shares | 12, 16, 30, 39, 60, |
| 83, 89, 100, 109 | |
| Strategy | 2, 12, 18, 32, 33, |
| 53, 57 | |
| Supervisory Board | 60, 89, 99, 102 |
| Supply Chain | see also Consumer Supply Chain |
| Sustainability | 10, 18, 50, 102 |
Taxes 48, 50, 70, 72, 81, 83, 94, 104, 113 Ten-year Overview 108 tesa 12, 20, 32, 34, 37, 43, 45, 47, 49, 53, 64, 69, 77, 98, 102, 108
ten-year overview (in € million, unless otherwise stated)
| 1999 | 2000 | 2001 | 2002 | 20031 | 2004 | 2005 | 20062 | 2007 2 | 2008 2 | |
|---|---|---|---|---|---|---|---|---|---|---|
| Sales | 3,638 | 4,116 | 4,542 | 4,742 | 4,435 | 4,546 | 4,776 | 5,120 | 5,507 | 5,971 |
| Change against prior year in % | 8.7 | 13.1 | 10.3 | 4.4 | –1.3 | 2.5 | 5.1 | 7.2 | 7.6 | 8.4 |
| Consumer7 | 3,010 | 3,448 | 3,870 | 4,049 | 3,739 | 3,840 | 4,041 | 4,327 | 4,661 | 5,125 |
| tesa | 628 | 668 | 672 | 693 | 969 | 706 | 735 | 793 | 846 | 846 |
| Europe | 2,687 | 2,855 | 3,183 | 3,410 | 3,329 | 3,388 | 3,498 | 3,717 | 3,909 | 4,090 |
| Americas | 630 | 832 | 903 | 819 | 638 | 635 | 687 | 738 | 782 | 832 |
| Africa/Asia/Australia | 321 | 429 | 456 | 513 | 468 | 523 | 591 | 665 | 816 | 1,049 |
| EBITDA | 468 | 538 | 620 | 633 | 614 | 656 | 693 | 660 | 738 | 911 |
| Operating result (EBIT) | 339 | 389 | 466 | 472 | 455 | 483 | 531 | 477 | 616 | 797 |
| Profi t before tax | 323 | 382 | 468 | 478 | 491 | 492 | 535 | 851 | 644 | 822 |
| Profi t after tax | 175 | 226 | 285 | 290 | 301 | 302 | 335 | 668 | 442 | 567 |
| Return on sales (after tax) in % | 4.8 | 5.5 | 6.3 | 6.1 | 6.4 | 6.6 | 7.0 | 13.0 | 8.0 | 9.5 |
| Earnings per share in € | 0.68 | 0.87 | 1.11 | 1.12 | 1.17 | 1.29 | 1.45 | 2.93 | 1.93 | 2.48 |
| Total dividend equity holders | 60 | 84 | 109 | 118 | 121 | 121 | 129 | 136 | 159 | 204 |
| Dividend per share in € | 0.24 | 0.33 | 0.43 | 0.47 | 0.53 | 0.53 | 0.57 | 0.60 | 0.70 | 0.90 |
| Beiersdorf share year-end closing price6 |
22.22 | 37.17 | 42.5 | 35.37 | 32.07 | 28.53 | 34.64 | 49.12 | 53.00 | 42.00 |
| Market capitalization as of Dec. 317 |
5,599 | 9,366 | 10,710 | 8,912 | 8,081 | 7,190 | 8,736 | 12,378 | 13,356 | 10,584 |
| Cost of materials | 995 | 1,112 | 1,196 | 1,205 | 1,149 | 1,113 | 1,147 | 1,229 | 1,285 | 1,453 |
| Personnel expenses | 713 | 786 | 817 | 863 | 808 | 804 | 840 | 889 | 889 | 922 |
| Research and development expenses |
79 | 88 | 92 | 93 | 97 | 101 | 109 | 118 | 127 | 149 |
| In % of sales | 2.2 | 2.1 | 2.0 | 2.0 | 2.2 | 2.2 | 2.3 | 2.3 | 2.3 | 2.5 |
| Employees as of Dec. 31 | 16,065 | 16,590 | 17,749 | 18,183 | 18,664 | 16,492 | 16,769 | 17,172 | 21,101 | 21,766 |
| Intangible assets | 56 | 118 | 138 | 128 | 94 | 58 | 34 | 30 | 357 | 389 |
| Property, plant, and equipment | 782 | 808 | 871 | 917 | 876 | 887 | 882 | 740 | 699 | 727 |
| Non-current fi nancial assets | 26 | 24 | 18 | 22 | 94 | 93 | 5 | 8 | 7 | 11 |
| Inventories | 515 | 595 | 695 | 677 | 629 | 558 | 536 | 548 | 598 | 634 |
| Receivables and other assets4 | 701 | 804 | 811 | 832 | 789 | 815 | 967 | 940 | 1,123 | 2,085 |
| Cash and cash equivalents | 622 | 632 | 714 | 722 | 828 | 290 | 483 | 1,230 | 1,117 | 613 |
| Equity | 1,289 | 1,458 | 1,636 | 1,727 | 1,831 | 1,033 | 1,293 | 1,790 | 2,070 | 2,460 |
| Liabilities | 1,413 | 1,523 | 1,611 | 1,571 | 1,479 | 1,668 | 1,614 | 1,706 | 1,831 | 1,999 |
| Provisions | 690 | 752 | 761 | 808 | 790 | 776 | 752 | 809 | 781 | 729 |
| Trade payables | 322 | 356 | 337 | 293 | 293 | 308 | 369 | 485 | 573 | 690 |
| Other fi nancial liabilities | 174 | 180 | 237 | 191 | 157 | 300 | 197 | 137 | 220 | 246 |
| Other liabilities5 | 227 | 235 | 276 | 279 | 239 | 284 | 296 | 275 | 257 | 334 |
| Total equity and liabilities | 2,702 | 2,981 | 3,247 | 3,298 | 3,310 | 2,701 | 2,907 | 3,496 | 3,901 | 4,459 |
Restated to refl ect the new reporting structure (BSN medical at equity).
Figures include special factors. For details please refer to the notes on page 81.
Excluding changes in carrying amounts resulting from measurement using the equity method.
Including non-current assets and disposal groups held for sale.
Including liabilities held for sale. Figures 1999 to 2005 adjusted to the number of shares after the share split.
Consumer fi gures 1999 to 2002 include sales of the former segments cosmed and medical.
| April 30, 2009 | Annual General Meeting | |||
|---|---|---|---|---|
| May 4, 2009 | Dividend Payment | |||
| May 5, 2009 | Interim Report January to March 2009 | |||
| August 4, 2009 | Interim Report January to June 2009 | |||
| November 3, 2009 | Interim Report January to September 2009, Financial Analyst Meeting |
|||
| January 2010 | Publication of Preliminary Group Results | |||
| February / March 2010 | Publication of Annual Report 2009, Annual Accounts Press Conference, Financial Analyst Meeting |
|||
| April 29, 2010 | Annual General Meeting | |||
| May 2010 | Interim Report January to March 2010 | |||
| August 2010 | Interim Report January to June 2010 | |||
| Interim Report January to September 2010, November 2010 Financial Analyst Meeting |
Beiersdorf Aktiengesellschaft Unnastrasse 48, 20245 Hamburg, Germany
Global Corporate Identity & Information: Telephone: +49 40 4909-2102, E-mail: [email protected]
Corporate Media Relations: Telephone +49 40 4909-3077, E-mail: [email protected] Investor Relations: Telephone +49 40 4909-5000 E-mail: [email protected] Beiersdorf on the Internet: www.Beiersdorf.com
Design / Realization: Strichpunkt, Stuttgart Lithography/Printing: repro 68, Hamburg PRINT-64, Norderstedt
Photography: Andreas Hofweber, New York Steffen Jänicke, Berlin Boris Rostami-Rabet, Hamburg Götz Wrage, Hamburg
This Annual Report is also available in German. The online version of the Annual Report as well as the Annual Financial Statements and the Management Report of Beiersdorf AG are available at www.Beiersdorf.com/ Annual_Report. The Interim Reports can be found at www.Beiersdorf.com/Interim_Report.
Beiersdorf Aktiengesellschaft, Unnastrasse 48, 20245 Hamburg Telephone: +49 40 4909-0, Fax: +49 40 4909-3434 Internet: www.Beiersdorf.com Successful with Skin and Beauty Care
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