Beiersdorf AG

Jens Geissler – Corporate Treasurer and Head of IR Thomas Quaas – CEO Bernhard Duttmann – CFO

Susanne Seibel – Barclays Capital Mark Christensen – Morgan Stanley Marco Gulpers – ING Financial Markets Philipp Frey – MM Warburg Eamonn Ferry – Exane BNP Paribas Harold Thompson – Deutsche Bank Matthias Eifert – MainFirst Rosie Edwards – Goldman Sachs Dirk Van Vlaanderen – Jefferies Alex Molloy – Credit Suisse Ian Simpson – RBS Chas Manso – Evolution Securities

Good morning. I would like to welcome you to Beiersdorf and to our conference call about the first three months of 2010.

This is Jens Geissler together with Beiersdorf’s CEO, Thomas Quaas; and our CFO, Bernhard Duttmann. We will start with a brief presentation by Thomas Quaas, and after that, we will be prepared to take your questions.

You can follow the presentation on the Internet. You can use the link that we have sent in the invitation or you can download the file from Beiersdorf's IR Website.

I would now like to hand over to Thomas Quaas and the results of the first three months.

Thank you Jens. Good morning and welcome all from my side.

I hope you all are well. Let me start with a very general statement when we talk about the results of first quarter in 2010.

From a Beiersdorf’s perspective, after three months into 2010, the picture from our point of view, as you can see the numbers here is much brighter that it has been for the last couple of quarters. So, this is of course good news, and you can see the related improved numbers on this key figures chart here on page number 3.

Sales growth has returned to our business and this is true for both the segments, consumer and tesa. Especially in tesa, we have seen a strong increase in sales compared to last year.

Yes, the basis in 2009 was soft, but the significant rebound in tesa sales is very convincing proof of what actually I have said repeatedly during the last year. As soon as there is an improvement in the underlying tesa business, which is the underlying area where tesa is supplying the business, we will see a gradual return to the revenue levels we used to have before the crisis.

This is what we really said in several occasions last year. I am happy to actually see the proof coming in the first quarter of 2010 exactly on the argumentation base.

On top, there is an important effect on our profit levels. During 2009, tesa took considerable efforts to adjust its structures to the slow environment in 2010.

This is now leaner and even more efficient structure now clearly helps tesa’s bottom line results. 12.1% EBIT margin is stated on page number 3.

It’s strongly supported by tesa’s contribution of 25 million Euros of EBIT, taking the individual margin of the tesa business to 11.9%. As we see there, a remarkable figure and certainly a very, very good start at the end of the year.

On the consumer side, Beiersdorf business also accelerated in the first three months compared to last year. Consumer sales grew by plus 4% on a like-for-like basis, and we will look at the regional split of this number in the mix.

Also in consumer, the bottom line improved significantly over last year’s first quarter. The consumer EBIT margin went up by 80 basis points now to 12.1% of sales, the same number as for the whole group.

Here we have seen important contributions coming from Germany and Western Europe as well as from both North and Latin America. This is a good trend.

It concerns the primary role of Europe as the profit-generating regions, and we are happy to see also the Americas grow into stable contribution positions regarding our overall operating costs. Profit after tax was 122 million Euros corresponding to 7.9% of Group sales.

This brings up our earnings per dividend carrying share to $0.53, an increase of $0.10 per share compared to one year ago. Now, let’s move to the next page, and let’s have a look at the regional split of our consumer business sales product.

Worldwide growth in our consumer business was as stated 4%, which means a solid increase over last year. Sales in Germany remained on track with Eucerin contributing nicely in the double-digit range.

Western Europe growing again, but performance differs from country-to-country. Some countries like the UK, for example, and France are back on the growth pattern, but certain places in the southern Europe are still lagging behind.

Moving to Eastern Europe, we are, I agree are certainly not happy with the current picture there. We are seeing satisfying growth in Russia and Poland, given the market conditions.

However, some minor countries in the region remain a source of concern but we see some positive signs going forward, in particular in the deodorant in men’s business specially dedicated to that region. The share of total sales for the European region by the way currently is at now only 64% of consumer sales.

This is lower than for the same period last year, and we recorded something close to 66%. And this again indicates that geographical shift of our business away from the historical costs into other global regions with different and typically better growth profiles.

Let’s look at these other regions now outside of Europe. The Americas, to start with the Americas, they had a very strong quarter with Latin America back to pre-crisis growth rates and is very good performance in the United States.

In the US, we made good progress. Very good progress with NIVEA Body, NIVEA for Men, and La Prairie registering double-digit growth rates again this year.

In addition of our new categories, I told you last year as we were moving into the next skin care related categories, we have here new categories that are performing pretty well, especially NIVEA Bath Care and NIVEA Lip Care. As you can see in the bottom of the slide, the AAA region has not regained its full momentum yet.

A growth number of 4% is certainly below our expectations even though some categories are performing very nicely. Here I can mention NIVEA Sun, NIVEA for Men, and also our Chinese haircare business.

Okay, let’s now take a closer look at some important regional aspect. As always said these meeting here highlight always on or the other regions or one or the other categories or other special items.

So, let’s now move into that section of today’s presentation. So, I will briefly touch on our latest innovation and some regional aspects.

Let’s start with the regional point of view and let’s look at North America. As I mentioned in the previous slide, North America is developing very nice.

You can see an improvement over the substantial progress we made in the United States already last year. This is rooted, as we call it here in the strategical change which we have implemented in the US since actually couple of years ago, and I think we started that actually approach into a new dimension already in 2006.

And our continued and decided focus on just a few categories is increasingly now paying off. We keep concentrating on NIVEA Body, NIVEA for Men, NIVEA Bath and Lip Care launched last year in combination of course with the already very well-established business of Eucerin in the United States.

This is a very compact set of products now which helps us build brand equity by using our core competencies and the good news again this is something we decided four, five years ago. We are now moving into the first dimension of seeing real progress.

Skin and personal care are our core area of expertise and this is something that more often the North American market now is increasing the initiative and we will keep on moving on this track. But of the improved market share, we currently are in a good position to finally look also to some profit.

As said before on other occasions, we are confident that by the year 2011, backlog will be back to which was a breakeven after a long period of long and strong investments in this market. So far, few comments on the regional things of our business.

My next slide talks about categories, and here I take Sun. As you know, NIVEA Sun is the world’s Number 1 in sun care.

It is also one of our biggest product categories. For the current sun lotion season, we launched a completely new product line in January of this year, and it’s called NIVEA Sun Protect & Bronze and it helps the consumer to achieve both at the same time, protection and tanning in a safe way, How tough this world?

Well, here we have another example of Beiersdorf ‘s superior skin care expertise. A completely new formula stimulates the skin’s natural melanin production, which provides a nice natural tanning effect.

This innovation is an important addition to our product range in the profitable category. Sun care is a highly innovation-working category.

So, I am confident that NIVEA Sun Protect & Bronze will help us defend and extend NIVEA’s leading position in the sunscreen market. By the way, our global market share in sun protection is almost double its share of the next competing brand.

On our next slide, I would now like to talk about another aspect of our business, the luxury line. In line with the whole luxury market, La Prairie and its top-end product line had a difficult year in 2009 as we all shared when we met.

The first there months now in 2010 however seems to indicate a recovery of this market and actually the whole segment as a total. The La Prairie has seen a significant turnaround of its sales development in quarter one with double-digit sales growth in North America and in Asia.

And this is supported by some very attractive launches in this segment. There is a new range up there, new range of fragrances called Life Threads, which with its, Silver, Gold, and Platinum versions, and that had a very promising start and nicely complements with skin care and the aging products of the La Prairie brand.

So, we are confident in this luxury business to regain speed rapidly also in this luxury segment. Let’s now take also a look at our tesa segment.

I can actually keep this short because the figures speak of themselves. The sales increase of 20% in combination with a very strong EBIT development of the last three months in all regions make one thing very, very clear.

Tesa is a sound and solid business. It is structured, has been streamlined during 2009, streamlined again and sales potential has been installed.

And this business now is even more efficient and its push for technology innovation is impressive. Here on this slide on page number 8, we mentioned the new ACX coating technology as an important example, and I want to remind you that when we saw tesa last year, we always were talking that we were going through a lot of restructuring initiatives to further improve the efficiency of the tesa group as a whole.

But at the same time still having ongoing investments behind the technology basis for preparing for the future business development of tesa. So, this turnaround in tesa is one important reason for the update in our guidance for the year 2010, for the full-year 2010.

So, let’s move to the guidance on last slide. On page number 9, you see some changes compared to last quarter.

We confirmed our guidance for sales in both business segments to grow faster than market, first information. And like all sales growth projection, this is of course a like-for-like assumption.

We are upgrading our profit guidance where we now project consumer EBIT margin to be clearly above 11%. The tesa EBIT margin, we expect to be slightly above 8% and for the Beiersdorf Group, this results in an EBIT margin of above 11%.

Our guidance for the profit-after-tax margin consequently is raised to about 8%. This is based on unchanged tax rate assumption of 33%.

With this, we are done with my presentation. That concludes the set of my slides and I guess I will now hand over to Jens Geissler.

Yes, so this concludes the presentation. We are now ready to take your questions.

Good morning, Susanne Seibel here. I have got a question regarding the consumer business.

Could you give us an idea about the volume growth and the pricing? Obviously what we hear from competitors around the consumer space is that pricing is increasingly becoming an issue and we are wondering how that develops within your business.

Thank you.

There was some technical thing, excuse me, in your question. Was your question related to the consumer business growth in Western Europe and this in comparison to competitors or did we get that right here?

No. It was like we have heard a lot from the – throughout the consumer space about pricing in general, not only in Western Europe, but probably also in Western Europe.

And it was referring primarily to the consumer business where we have seen some negative pricing coming from. So, I was just curious how it played out for you and how you see that phenomenon going into 2010, also going forward into the next quarters.

What is your view on that?

Thank you very much for clarification. We did not pick up the word pricing here in this room, now we have it.

First of all, we had the most active and most varying response on the business status, business situation in 2009 and also actually ongoing in the first quarter in 2010 in Europe and especially in Western Europe where actually all companies are competing in that market, try this or that in order to somehow cope with the critical situation coming over from the crisis and the uncertainty that everybody felt was in the market and then actually I would say all the companies they try this and that in order to check what works best, with respect to stabilizing the business. So, one initiative was definitely to be seeing all over the European countries, and especially in I would say countries like Spain or UK and France and some Eastern European countries where price attractive offers moving into the markets appearing in a significant way to somehow connect consumers to the business and keep them interested in the various business franchises.

From our point of view, we actually had a pretty, let’s say pragmatic response to that. We did not dive into the deepest price to reaction activities.

So, we in Beiersdorf said we have to opportunities to respond to that and we follow those two roads. Road Number 1 and the most important one, and the most important answer to your question from our point of view is that especially the NIVEA brand, which is as you know by far the biggest piece of our business, is already and that’s not since only last year, that’s actually the historical development of the NIVEA brand, offering a variety of products that you can find in more or less every single individual price level and price shelf.

So, you can buy decent NIVEA product that is offering and carrying features at the level of 1 Euro starting with a piece of soap or going up to 2 Euros with a basic moisturizing, going up to 20 Euros for a very, very technically well-featured face care products, anti-age or anti-wrinkle whatever you want. So, therefore we will always actually able to offer to consumers the various price level interesting products.

So, those looking for cheaper prices, lower prices could always grab to a very good established NIVEA product, which was not a new offer then, it was just on the shelf offering basic features at acceptable lower prices. So, therefore we thought we are actually already there when it comes to the question of being attractive for consumers, number one.

Number two, from a technical point of view, we increased the energy behind our promotion activities and in various countries, especially all over Europe, we started few we think pretty smart activities on the promotion side. Just one example that I explained on various other occasions.

Now, we always tried not to just decrease price, I think which only helps short term, but really that will deliver the benefits in the development of a brand. So, we always try to connect that to a marketing initiative, which again increases trust or information of consumers versus our brand.

So, the idea for one big promotion, Germany for example was to offer consumers, yes, a significant price reduction. But on this basis, we implemented a technique which brought consumers to buying more than one NIVEA product.

So, the promotion architecture was to have them buying three products from various segments, and that worked quite well. So, we guess we are offering cheaper things, but with a marketing initiative connected to that and from that point of view, we always try to cope with this pricing.

And this all happened especially in Europe.

We should just quickly mention that we do not split into volume and pricing as you know due to the heterogeneity of our product assortment. So, there's no detail on that side.

That’s fine. Thank you very much for the answer.

It's really getting a grip about the trend and about the competitive intensity in various markets. And given that you are very strong in Western Europe, we thought it probably would be extremely helpful to get your view on this.

Thanks.

Okay, thank you.

Good morning. I just have a couple of questions, first on Eastern Europe, to just to get an idea again where the difficulties are.

I think you mentioned deodorants. Is that a category in particular where you are seeing increased competition and perhaps might be reflected in the quarter's numbers?

The second question I have is on the enlarged investment in C-BONS in Asia. I think my previous understanding was this was due to peak in 2009 and perhaps begin to normalize.

I know you haven't quantified it, but begin to normalize in 2010. Is this still expected to be the case?

Are you seeing pressure perhaps to maintain this enlarged investment at high levels, or maybe if I have got that understanding wrong, if you could just give us an update there?

Okay. Let me start with the first one, with Eastern Europe and the activities of certain categories.

Yes, actually, lots of energy since two, three, four, five years ago actually everybody has covered that in Eastern Europe as a big potential market and consumers coming into the picture, new trade formats picking up, retail active, so there was a big dynamics in all the Eastern European countries. So, everybody moved in with new product features, and there was pretty, pretty tough activity and pretty competitive activity.

So, you are very right with the first statement in general, number one. Number two, on certain categories, actually I don’t see one single category being activated in Eastern Europe especially, I would say there is a lot of energy in almost all the categories.

In a certain way, you are right, the deodorant category is becoming more and more interesting place to be, and many companies moving in since actually all the major companies are discovering this is an interesting segment worldwide giving wonderful opportunities to grab additional consumers. Now, Beiersdorf’s response to that is first of all, in Eastern Europe, we benefit from the fact that the NIVEA brand has already pretty good established brand image since 50 years or so from very good export and import business in the past.

And so, on that basis, we are continuing to gradually build our brand in a very consistent way, which is always our major attempt to make sure whatever happens in one year or so, that we don’t lose track on building brand equity according to quality features and product features and brand features. Now, in the deodorant category, I am very happy to respond to your question now with the last comment.

Also we are pushing and fighting, and the good thing is we are fighting very successfully and leveraging the NIVEA brand value on being the care company or being the skin care expert and the perfect combination of skin care features that are inherent in the NIVEA brand in combination with perfect deodorization works well. This year, we are launching NIVEA Deodorant Calm & Care is the name of the new product.

So, that expresses this combination of skin care plus deodorant features. So, therefore, yes, we are participating heavily in that competition, but definitely not price, we do this on quality and innovation and interesting features for the consumer.

That’s your first question and the second one related to C-BONS and our plan there, and you asked for the hierarchies, here I can only confirm that things are going according to our business plan. That’s good news.

I think we know many examples of acquisitions in the Asian markets and this acquisition is going well. As you stated, peak investment was in 2009.

In 2010, as you said, we begin the trend towards a normalizing offer support before the brand and this is ongoing and nothing new on that. Yes, of course, competition is there, but that’s the plan to support those brand from the initial point for the right and we will continue to do so.

Thank you. I guess in that business, on that basis, I might have expected some evidence of margin progression in Asia, Africa and Australia in Q1.

I know there are many factors, but that's just a number of regions there, but can we expect perhaps see on the basis of normalized investment in C-BONS, margins to perhaps improve throughout the year from that region?

In general, let me quickly confirm again that breakeven in the Chinese haircare business, we expect by 2012, and on the path to 2012 of course, we are going to see gradual positive impact coming from that. Just for the single year 2010, we would not like to provide a specific guidance for EBIT in Asia.

Okay. Sure.

I understand. Thanks for answering the questions.

Thank you.

Yes, good morning all. Can you hear me?

Yes, perfect, loud and clear.

I had two questions. The first is on market growth trends.

Maybe you can highlight what you are seeing as the market growth rate, both in tesa and in consumer. And the second question I have is a bit more on tesa.

Good rebound in performance there, and especially the rebound in Asia is very promising. Maybe you can highlight a bit more in detail what is behind this strong rebound in this particular area?

The third question is on the rebound in European margins, and especially in light with further sustainable A&P spending, could you provide us with more detail on what the media rate spending has been in the first quarter compared to the last year? Thank you very much.

Yes, I will answer, this is Bernhard Duttmann. Good morning.

And number one, the market growth trend in tesa and consumer, we see a positive growth trend in tesa, although we see there is the market demand is still volatile. For that reason, our forecast is still, let’s say the careful forecast.

What we see in the tesa business picking up quite well as consumer electronics business. We see also in the first quarter automotive business picking up again.

The distribution business is still a lot lower. We expect that the European automotive business will be still very volatile whereas in the Asian region, it seems to stabilize, the whole business seems to stabilize a lot faster.

And that’s the reason, also the main reason why the business in general, Asia is rebounding very strongly. On the consumer market, we also see some recovery in the market demand, but also there.

The picture is quite different. There are some markets, which are basically going down, but right now where we see very soft market and other markets rebounding.

To give you an example, the Italian market for the time being is very, very speak. The same is valid for various Eastern European market where the market demand is going down at this current point in time.

On European, the margins, to your third question, yes, there is some recovery on the margins. You asked whether is this coming from or basically from A&P, no it’s not.

Our A&P spending in the consumer business is in previous year’s level, it’s flat. When you look at the statement in the report, it looks like it’s slightly decreasing, that’s basically because now the – that’s coming from the strong rebound of the tesa business and that is a mixed impact what you see.

On the consumer side, it’s absolutely – the development is absolutely flat.

Okay. Thank you very much.

That means we are on absolute terms spending more.

Sure, sure.

Okay. Does that cover your questions?

Marco? Okay.

Hello gentlemen. First one, congratulations on your strong rebound in North America.

Can you just also shed a bit more light on the margin development, in particular in North America? Is it only due, this strong increase in the Americas margin, to basically the leverage that you are seeing on – due to this strong sales rebound, or are there any special factors that we should bear in mind?

And probably, second one, could you split out a bit the growth differentials in China, between NIVEA and the C-BONS brands?

Your question related to North America and the margins development, it is always actually in the North American situation, or are you referring to the North America number?

Actually, I guess the most – that you had the most leverage out of the North American rebound, or am I wrong?

Let me explain it to you. Number one, we have the selected business a better situation than last year, because last year, the selective business was under pressure in North America, so that has had a positive trend.

All right.

Two, our North American business is growing very nicely. As you know, we had a gross plan in North America, which tends to be – which was intended to have a breakeven situation in 2011.

We are well on track to achieve this target in North America. Number three, also in Latin America, we have a positive growth trend and also a positive EBIT profit trend in that region.

So, basically, it’s numerous effect out of from it, which we see in quarter one.

Right. But it's a very promising trend and I just wanted to make sure that there's nothing extraordinary that we – it's distorting a bit?

Yes, we had a fantastic first quarter in North America. That’s absolutely true which can you see from the sales development.

Still I think we should not project the 22% growth to the full year.

But still if I am right, you are still – you are already 12% above the sales level you had in 2008, which I think is quite strong?

Yes it is. Your second question –?

China? China, you said can we split up our business in China?

Our haircare business in China is a double-digit growth ratio. In NIVEA Shanghai, our skin care business started weak because activities basically started on a little bit later this year.

Since March, we again have also in the NIVEA business again on double-digit growth.

Okay, thank you very much.

You are welcome.

Hi guys. A few questions, if I may.

The first is on restocking. Have you seen any in Q1 across your business, I guess particularly in Western Europe?

That's the first one. And qualitatively, your outlook on Eastern Europe and the AAA region, how would you feel about that, now that Q1 has passed and you have probably got April numbers in front of you at least on the sales line?

And the last question is on the balance sheet. Have you any sort of up-to-date thoughts on that one?

I guess we are in a situation here where you have got close to 2 billion sitting on your balance sheet and we have got negative interest. Any thoughts on that would be appreciated.

Thanks.

That was the first question, restocking in Western Europe, the issue there. From my point of view, there is not such an effect as a restocking in general.

Since all the retailers absolutely took 2009 as the year to do this destocking. We all were surprised at least I was pretty much surprised that it took so long all over – all of 2009 year to finally come to a conclusion on this, and they will now keep the very, very efficient inventory levels also I think, a heavy destocking effect nobody can expect, and I don’t see it.

With respect to the outlook into Eastern Europe and AAA, in Eastern Europe, I do still see some ongoing uncertainty in 2010. The good news from our point of view is that especially the two big countries like Poland and Russia are doing well in the first quarter already.

So, I don’t see a big trend in this other direction also there. So, therefore, yes, a, okay, outlook for Eastern Europe with some uncertainty for other Eastern European countries, which we have to see in the second quarter.

And your last question was a question on the balance sheet situation and yes, the same answer. Actually, we keep this strong balance sheet and we feel well with the strong balance sheet since it keeps our tier management absolutely flexibility and freedom to think in different strategic directions.

We are looking for potential acquisition opportunities. We do this absolutely.

Are we doing this with a hectic approach, are we in need of adding acquired sales opportunities to our company’s profile? No.

Since we have wonderful growth opportunities of our own, so therefore, yes we do look, but we are not doing this hectic and we want to keep the flexibility for a certain while as we have it right now.

I mean, just to add to that, of course there is positive interest coming out of that, but it is overlaid and offset by FX effect on non-operating items.

Okay. Thanks.

Yes, good morning gentlemen. Just two sort of questions, on La Prairie, can you just give us an idea of what the like-for-like was in first quarter 2009 and what it is in first quarter 2010?

On North America, clearly 22% for the full year would be pretty much incredible, but I just seem to interpret from Bernhard's comments that he thinks a high growth rate is conceivable to continue through 2010. Is that what you meant to say?

And on products, product launches, should we expect a big step-up through 2010, or is this just going to be a fairly normal year in terms of pattern of new products and therefore the advertising spend as well? Thank you.

Maybe the first part of your question, Harold, La Prairie, last year I don’t have the number here.

16, 16.8.

It’s something like 20. I would have said about 16.8.

And last year was strongly negative. We were around minus 20.

Same negative development actually as the one that we have right now here. So, it’s totally the opposite.

And so, therefore I think this is the comparables.

So are you saying it was down 20 in Q1 last year and up –?

Something like that, between 15 and 20.

Okay.

But in that dimension. So, with respect to North America and the growth rate, well, this is something which we would have to see all over the whole year.

We are now benefiting from just the launched activities Lip Care and Bath Care, they are doing well. And they will have incremental effects in the rest of the year.

So, that’s part of our plan, and we see ongoing strong product development in the key categories like Body Care, both on NIVEA and Eucerin, and we increased our market share significantly. As you know, increased in market share is now a bigger basis of consumers being top users of those categories.

So, we see a very stable development on the strategic plan in the United States. So, this is for me one of the most pleasant stories that we have read now on the recent development according to a strategic plan and the investment and everything behind that will definitely be done and executed according our plan.

So, do you think double-digit like-for-like in US in 2010 is achievable?

Which like-for-like? Absolutely.

Okay.

Yes. And new products, you know, there is no such a thing now.

It’s a normal year when it comes to – launch of innovation. We always have wonderful features and the ones ahead of us, we never talk about, but I guess you can hear from my language that this is again a year where we will continue to do things.

Maybe there is a new element in our product activity plan, which is of course ongoing pressure on high innovative stuff like the one that I presented in NIVEA Sun, which is a wonderful thing reflecting a global trend of having this safe, but still tanning effect and really bring that right into the season as we speak right now, number one. Number two, this is more marketing but very good NIVEA, and only NIVEA by the way can do this in a very meaningful way combining the key benefit of a brand, which is the skin care thing and bringing that to a different category.

And this NIVEA Deodorant Calm & Care as we are launching in these days as we speak is a perfect example, then you can be absolutely sure that we will continue with new features in the back end of the year again. And last comment, that the new element that I wanted to emphasize again, we decided to not forget the existing heroes, the existing top performers in our assortment like NIVEA Visage Q10.

I think that’s the best-selling single item in anti-wrinkle face care worldwide. And this blockbuster product gets as you can see on NIVEA in the magazines all over the world gets increasing support in a way which we never did that way.

So, we are pulling also lot of additional support behind the existing blockbusters. We feature a re-launch story around Q10 and this is on air right now and we see good promising results from that.

It is supported by new campaign, which is much better aligned to the reality of the market where the beauty aspect right now is lesser of importance than the care aspect. People in the crisis changed their behavior and are looking a lot more for different perspectives.

Okay. Thank you.

Thank you.

Yes, hello. Good morning.

Matthias Eifert from MainFirst. I have a question regarding input costs.

I have seen that your gross margin was just up 20 basis points year-over-year in the first quarter. And I would assume you have a strong recovery in gross margin on the tesa side.

So, I am wondering what are the effects here. You are already seeing declining gross margins in the consumer division because of input cost pressure.

And could you give us an idea how this is going to develop over the next several quarters, what you see from the raw material price development? Thank you.

I would like to start on the tesa end. As you can see, tesa has very high EBIT return rate.

We can see that also in the gross margin of the tesa business. This has to impact, the first impact is that tesa had a very strong volume load in the first quarter.

And secondly, tesa also could benefit from lower material costs. Over the long end, we expect tesa prices not to remain at this low level.

For that reason, our guidance for tesa is a different one than the actual results we see in the first quarter. On the consumer side, there is also material costs, the effect on material costs on the consumer part is a lot less important than in tesa, because the margin or the share of material on the consumer side is a lot less than in tesa.

Still we expect also in the consumer – the market, the raw material market, we expect an increasing trend of material prices. We have partly longer-term contracts, which protect us for some time.

For that reason, we think we have a fairly stable material price base for this year.

Just to confirm that also in the consumer business, the margin went up. So, you are referring to what tesa is improving strongly, the gross margin, consumer is improving it and on a group basis again with a mixed effect because tesa tends to have a lower gross margin in general.

So, the higher proportion of sales also here leads to not the big extension in gross margin that you had anticipated.

Okay, thank you.

Good morning. Yes.

I just wondered whether you could give us any color on the weak performance in Australia, whether that was a general feature of the overall market demand or –?

Excuse us, we didn’t get the beginning of your question, sorry.

Yes, sorry. I just wondered if you could give us any color on the weakness seen in Australia, whether that's kind of a feature of the market or whether you are losing share, or which specific categories you are seeing weakness in?

That’s a good question. To be honest, I don’t have the precise answer for that.

And you are referring to the development of something like, I think I have minus 10% in my mind behind previous year. Minus 8%, okay.

So, that’s the percentage number for the first quarter. I would not put this now into a very important piece of your information.

Australia is number one. Unfortunately, a wonderful big – the good news, a wonderful big beautiful continent, but unfortunately not enough consumers out there.

So, therefore we have not the biggest piece of business, but obviously having a wonderful share in that market as far as it’s there. So, I would relate to this first quarter results to something which is related to activity.

As you know, the training business is in the hand of only a few retailers. The one retailer coming up to more than 30%, almost 40% of the total market.

All this is then when you have a quarterly sales development, you should be related to – is the promotion one year in quarter one or in next year in quarter three. So, in general, I have no information about the significant difficult development of Australia.

I would see this going forward more being in the normal. So, nothing particular from them.

Okay, thank you.

Good morning. Hi.

It's Dirk Van Vlaanderen from Jefferies. Just want to come back, I think you touched on it, just on the financial line, in the financial result line in the income statement.

The minus 4 million is similar to the minus 4 million in Q4 last year. I was just wanting to know whether that's a run rate we should be looking at for the full year or what your thoughts were on that line.

Thanks.

I mean, interest income is about lower compared to previous year. We are in the first quarter.

We still have really, really good interest rate. That has come down, the market rates of interest you know, (inaudible) securities, we are basically looking at slightly less than a percentage point.

On the other hand, we have some pension – negative pension effect in the first quarter which could see already last year coming in the first quarter. And thirdly, we have the forex effect on non-operating income.

As you know, we do hedge 75% of our business, part of it goes into margin in other income, other expenses. The non-operational items like dividends go into the financial income side.

We can expect with the current result of Euro some continued development of these effects.

Right.

I mean, this is not really predictable depending of course on market movement. Safest assumption would be to just extend last year’s number, and then we have something to work on.

Okay, thanks very much.

Good morning. A quick question on tesa, how do you see pricing in that business for you going forward this year?

Really, really short answer to that, tesa changed the scope of the whole approach in relationship to the customers over the last 10 years [ph]. Actually to really answer that with that dimension from a – let’s say commodity-driven connection towards customers of tesa to a high-end technologically-based relationship delivering sophisticated features in the electronics, consumer electronics, automotive industry etcetera.

And this business is not in this price and promotion-sensitive world. It is connected to delivering solid features on the technology side for the price development and price activities are here in a pretty stable position.

So, that is not in this what we knowing and due to in the consumer business. The tesa, so therefore from this point, there will be no irritation of the business, and it’s only a question of volume, it’s a question of the market, how the markets develop if the markets going fine, then this tesa I think is actually in a stable and very optimistic perspective.

The consumer piece of tesa is only a smaller piece of that and also here we don’t see this kind of hectic price activities when it comes to future offers in do-it-yourself etcetera. So, from that point of view, from tesa side, I have no difficult information.

Thank you very much.

Yes.

Good morning. Just a quick question on China, if I could.

I heard you saying that hair care was double-digit growth, but I wasn't quite sure what you said about NIVEA. Looking at your overall China figure, which I think you reported about 5%, should we assume that NIVEA was flat?

And the sort of second question would be, are you able to give any sort of more of a timeline or sense to where you are in putting NIVEA through your C-BONS sales force in China? Thanks very much.

Short answer. Sorry to pick up from what Bernhard said just a minute ago, hair care business double digits, that’s in line with our plan.

Nothing else to say, we are absolutely fine with that. Skin care, the situation is related to when do you have in a year your promotion and launch activities, in this case, this is more towards the back end of the year.

So, therefore, the first quarter is not showing that big number in development, but in general, we are happy and fine with the product plans and going forward, our expectations are – actually also in skin care, according to our plan. In general, we are making good progress in China with our NIVEA for Men business and NIVEA Body business and third element is NIVEA Visage business.

So, those categories are moving into the Chinese world and competition is there, yes. Actually all these categories, we are grabbing share and so therefore we are moving on.

Distribution platform was something –

This is something which we will develop gradually. As you know, you don’t change that in one year, because you don’t want to have a difficult relationship with your customers and especially with the Chinese world and people also here sometimes forget that China is a continent.

So, you have to talk long distances, you have to talk big cities that nobody even heard about and still have people 5 million of consumers there. And so, we are moving gradually city-by-city, region-by-region in to identifying the best ways of combining our efforts and this is on a road and we will occupy as for the next two years I would say, but we are still absolutely on track in going for that, because this was one of the major purposes of acquiring C-BONS, which was not only a hair category acquisition, it was also an infrastructure and system acquisition.

Sorry, just very quickly, if I interpret you correctly when saying you are going city-by-city, should I read that as saying that you have already started to put some NIVEA through your C-BONS sales force in some cities, but it's a very gradual and extended rollout?

No, to be very clear with you, we did not start that yet. We are elaborating.

We are trying to see it there, to get the best idea for the best approach. Usually you do first things first and we are still in the project work with that.

Okay. Thank you very much.

Yes, good morning. A couple of market share questions.

Could you give us, at a global level, an update on your NIVEA for Men development? Obviously, there's been a major competitive entry in that category.

And also, on your target of outpacing the market, obviously Europe is sluggish and you mentioned declines in Body Care, which is an important category for you. Could you update us on which categories you are taking share, and do you see your Body Care momentum picking up and so you can gain share in that again?

Thank you.

Maybe we can share the answer a little bit here in the room in Hamburg. My first initial answer is on 2009 in general as I said in the last meeting when we were awarded together, that was as we all know, because hearing them, actually happy to just state that 2009 was a year where we kept our global market share stable.

So, we did not lose in 2009 given all the turbulences that were out there in the market. So, stability of our market share was the clear result of 2009.

Was that what I am happy with, no it was not because the ambition in our company here is a different one. As you know, we usually have the plant and this is also the plan going forward.

This was also what we said in our guidance. We want to outperform market, and we usually we achieve that and 2009 was a particular for 2010, I am optimistic again.

Second answer I want to give you and not dig into too many individual categories, because this stable development that I talked about 2009 is of course a mixed picture of some countries and some countries gaining share and some countries and some countries losing slightly. Was there the significant change versus something before?

No, not really. This is a very tight race and so therefore I want to keep this in the level of stability in 2009 and for 2010 again approaching with the attempt to outperform the market, which is part of our guidance in 2010.

The second element I want to give from a qualitative point of view. Market share in general is one target, but the specific ones, we look at and I think you know my favorite slide was the Number 1 position in certain markets, in certain categories that we are counting.

This is what we call quality of sales and this quality of sales viewpoint, we improved also in 2009, we were able to read to add Number 1 position from the global perspective. So, therefore in this respect, I think we are still on track.

Again, 2009 stability was not my favorite results, but it was where it was. Going forward, we think we have enough ammunition to justify the guidance coming from the attempt and the target to be first in the market.

Could you say how NIVEA for Men performed in Q1?

Perfect, very good. And if you are referring to competitive activities, yes that is out there and I regard this activity, from my point of view, if I could say so, stimulating actually the whole market, brining more men into the franchise, but I see a lot of very, very positive thinking process, and this is something which Beiersdorf started the men’s business with NIVEA for Men.

That was the first one really addressing men to use more cosmetics just made for themselves. And this is supported by individual activities.

I don’t know when you travel to Germany and when you would follow here German TV and see the preparation for the global soccer world championship, we achieve to be able to connect German national coach, the head coach of the German soccer team, Mr. Loew.

We call him Joachim Loew here. And this guy is our ambassador of NIVEA.

He is the chair ambassador of the NIVEA brand, and this guy is showing up on TV shows etcetera, etcetera, and he does that in such a credible and wonderful way. So, all this is stimulating and also competition, activity is stimulating that market bringing people and men into the franchise, and therefore we are actually very happy in 2010 with the development of NIVEA for Men.

The first quarter NIVEA for Men had a double-digit growth. You were also asking about general good categories, I think globally we see a very good share development on our Deo category, very successful since a couple of years.

On the body category, which is our core, we have a mixed picture here, some regions which are increasing, and some regions which are still suffering and were suffering basically in the crisis. The performance products and the products in the body segment, the whole segment did fall, it did not only reduce, it did fall and we had a very major share in this market.

So, we did fall in this category, the specific sub category of the performance product for the consumers shifted a little bit more to the basic products, which we can also see in the market share of the basic products. We now see apparently some kind of bottoming out of the performance products and maybe there will be also some rebounding in that category as well.

Thank you.

Quick follow-up on China, if I may. In the past, you have given quite specific guidance on China, I think 45 million in '08 and 60 million loss in '09.

You expect that to get better. Can you be more specific?

Is that loss better than 60 million or –?

I think the safest assumption is that coming from the 55 million last year minus 55 million negative EBIT, going into breakeven 2012 would be to make linear assumption and say that, well, we are getting there more specific than that, we actually have never been.

Perfect, thank you.

Thank you for all your questions of course, and for having joined our conference call. Beiersdorf’s next Investor Relations event will be the conference call about our second quarter results on the 5th of August.

Thank you for your interest in Beiersdorf and good-bye.