Letter from the Chairman

2008 was another very successful year for Beiersdorf. In a difficult 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. Profit 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 significant consumer trust for decades. This trust is the critical factor for our future success – especially in difficult 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 difficult 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 confirmation 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 profitable growth. 

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