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Notes to the Income Statement

01 • Sales

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.

02 • Marketing and Selling Expenses

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).

03 • General and Administrative Expenses

General and administrative expenses amounted to €292 million in fiscal 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.

04 • Other Operating Income

(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.

05 • Other Operating Expenses

(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.

06 • Special Factors

(Divestments and Consumer Supply Chain)

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.

07 • Financial Result

(in € million)

Interest income

Interest expense

–11

–14

Other net finance cost

–8

–16

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 financial liabilities.

The other net finance 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 financial instruments that were previously recognized directly in equity.

Gains and losses of €6 million (previous year: €0 million) from the fair value measurement of financial instruments classified as belonging to the “available for sale” category were directly recognized in equity during the fiscal year.

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