Beiersdorf AG

Jens Geissler – Head of Investor Relations Stefan Heidenreich – Chief Executive Officer

Javier Escalante – Consumer Edge Research Harold Thompson – Deutsche Bank Gael Colcombet – MainFirst Toby McCullagh – Citi Philipp Frey – Warburg Research Catherine Rolland – Kepler Cheuvreux Iain Simpson – Societe Generale Robert Waldschmidt – Liberum Chas Manso – Societe Generale

Thank you. Good morning, everybody.

Welcome to Beiersdorf’s conference call. This is Jens Geissler, together with Beiersdorf’s CEO, Stefan Heidenreich, and our CFO, Ulrich Schmidt.

We would like to share with you our business results for the first six months of 2015. We will start with a brief presentation which you can access through the link in your invitation followed by a Q&A session.

Please remember that this Q&A session will be limited to two questions per caller. Okay, I will now hand over to Stefan Heidenreich.

Good morning, ladies and gentlemen, and a warm welcome to Beiersdorf. Thank you for your interest in our Company’s performance.

My colleague Ulrich Schmidt, and I will report on business developments in the first-half of 2015, and we will also provide an outlook for the coming months. Ladies and gentlemen, the global economic environment in the past few months has been dominated by unpredictable events, unrest and volatility.

China is a source of concern for the global economy, and the markets in Europe are unsettled because of the never ending discussions about Greece. South America is suffering from an economic slowdown and lower oil prices, and the issue of Russia still remains unresolved at a political level.

All-in-all, a definite patch of rough sea. Considering this, we are particularly pleased that our successful innovations and increased presence in the emerging markets has significantly lifted not just sales, but also and particularly, our profitability.

Business performance was muted in the first quarter. But over the past few months we have continuously increased our effectiveness as planned.

And we have managed to exceed last year’s strong results. Particular growth drivers were our product innovations.

In summary, our business strategy has proved successful and robust in a more challenging market environment. Looking ahead, we are expecting further accelerating growth in the second-half of the year and we are confirming our forecast for 2015.

Turning to our figures, Beiersdorf recorded organic sales of 1.4% in the first six months of the year. In nominal terms, sales increased by 7.3% from €3.171 billion to €3.402 billion.

EBIT, excluding special factors, improved by 12.4% from €452 million to €508 million. The EBIT margin reached 14.9% compared with last year’s 14.3%; important here to note, this is Beiersdorf’s best ever result for first six months of the year.

Tesa, organic sales growth at tesa was up 0.1% on the high prior year figure in the first six months of 2015. In nominal terms, sales have increased by 7.7% from €534 million to €575 million.

EBIT excluding special factors improved from €85 million to €98 million in the reported period. The EBIT margin was up 17.1% compared with 15.9% in the previous year.

To the consumer sector; and consumer organic sales grew by 1.6% in the first-half of the year. This was due to a strong increase in sales in the second quarter, after sales growth of 0.7% in the first quarter.

In nominal terms, sales growth amounted to 7.2%, up from €2.637 billion to €2.827 billion. EBIT excluding special factors improved by 11.5% from €367 million to €410 million.

The EBIT margin increased to 14.5% compared with 13.9% in the previous year. Sales [ph] across the regions was mixed.

In Europe, the consumer business segment once again reached last year’s high level despite challenging marketing conditions. Sales in Western Europe were down 1.4% on the prior year figure.

In Germany and Switzerland we increased sales in the second quarter, also they were unable to match the high level seen last year. In France and Spain on the other hand, we generated significant sales increases.

We also recorded strong sales growth of 6.4% in Eastern Europe. Our performance in Russia and Poland was particularly positive.

In Russia, we generated high double-digit growth rates in the first six months. Our business in the Americas region was very dynamic.

We increased sales in these markets by 8.3%, sales growth by 4.5% in North America and by 10.7% in Latin America. Brazil was the main growth driver, generating again double-digit growth rate after strong increases in the previous year.

And the Africa, Asia, Australia region, we recorded sales growth of 0.6% in the first-half year, up from minus 2.5% at the end of the first quarter. Sales in India performed very well, generating double-digit sales growth in this key emerging market.

Business in China has further stabilized over the past few months as a result of the measures taken. Ladies and gentlemen, to sum up, Beiersdorf is on track, and importantly, gaining momentum.

With strong brands, innovative products, and increased presence in the emerging markets we have further increased our market share and successfully continued our profitable growth path. And we have demonstrated that we know how to deal with the many, many challenges impacting the global economy.

The strength of our brand plays a crucial part in this. First and foremost, NIVEA, our brand stands for trust, quality, reliability, matching our consumer’s outlook on live, even in times of political and economic uncertainty.

This can be seen among other things from the fact that NIVEA was once again voted German’s most trusted brand. The success of our brand is strengthened by our high innovation power.

We focus on innovation that promises strong growth for the long term. Our ongoing market support for major classicals still [ph] Black & White, Body In Shower, face Cellular Anti-Age and face Q10 Pearls has been very successful.

These products continue to generate double-digit growth rates. Our latest innovations in NIVEA Care and NIVEA Men Creme are just as successful.

Only a few months after the market launch these products are showing the potential to be further important growth drivers. Both are all purpose skin creams offering outstanding value for money.

They already achieved double-digit market shares in many markets shortly after their launch. Important here, our innovation pipeline to date and ahead is splendid.

In addition to the strength of our brand and our high innovation power, we are successfully increasing our presence in the emerging market. These activities play an important role in our Company’s continued growth.

Our stated aim is to become even more flexible and to develop products that reflect the needs of our local consumers. We are therefore looking to strengthen our geographic closeness to our consumers with more local product development and more local production.

To the outlook, ladies and gentlemen, allow me to conclude with an outlook for full-year 2015. We anticipate above market sales growth of 3% to 5%.

In the consumer business segment the EBIT margin from operations should slightly exceed the prior year’s figures in 2015. We expect tesa to generate sales growth of 1% to 3%, the EBIT margin from operations should be up slightly against the prior year.

Based on the forecast for the two business segments, we expect Group sales to grow by 3% to 5%. The consolidated EBIT margin from operations should slightly exceed the prior year figure.

Ladies and gentlemen, thank you for your attention.

Thank you. We will now start the Q&A session, and are happy to take your questions.

Maximum two for each participant please.

I have two questions. One, with regards to Western Europe on this second quarter.

If you can talk about market share trends in the places where you took prices, whether you had lost distribution and whether Europe plays an important role in the acceleration in the second half, considering that Brazil, China and Russia are decelerating? Thank you.

Yes, I mean it’s – first of all I think to note, you’re right, Javier, is that the emerging markets are doing extremely well. I’m extremely pleased that Brazil is further growing double-digit and we don’t see any trend otherwise.

We’re very happy with Russia, splendid growth, and also India is coming along and China is stabilizing. So overall, I mean, on the BRIC countries very, very positive at the moment.

On the Western Europe stuff, as we told you on the first quarter, we have taken price actions. That’s one of the reason why you also see a much increased profitability level of the Group overall.

This is impacting and it is true that we have seen reactions from our trade partners to what these actions are. I can confirm that all the negotiations are done and – in a good way, and business in most of the markets starts to accelerate, but we definitely had a dip.

We also had some empty shelves for some time, but we went through with that which we also forecasted and it’s another course of action. So bottom line, Western Europe will accelerate in the second half year.

Thank you very much.

Thank you.

Hey, good Morning. Two questions.

The first one is, I guess, is a specific one on the shape of the P&L. We’ve been used for the last three or four years of strong growth and more moderate margin improvement.

And kind of now we’re seeing the reverse. And I know you’ve given some details behind why sales growth is where it is.

But we’ve also seen gross margins increase, marketing spend at least as a proportion of sales drop. So it’s kind of quite a big change really.

So do you expect that to reverse or do you think the shape of the P&L, i.e. growth versus margin to be the new normal going forward?

My second question is on China. As you said, it’s stabilized, I think, you’re still looking for a breakeven this year.

But there also seems to be a lot of changes on the online landscape going on there. Could you maybe give us some insights also some views on what you think is going on online and what Beiersdorf Group is doing about it?

Thank you.

Hello Harold. Good questions both of them.

First of all, I’ll be very clear. My main indicator in the Group is the market share growth.

That’s the key indicator and it is also clear that if you ask me, what do I rate higher, I rate growth higher than margin, also that is clear. And we are putting our focus in a much better way back to growth for the second-half year.

That’s what we planned. However, and as that’s also sensible we took deliberate steps to increase our profitability level and that we have done.

Again, we delivered on that and I’m very, very proud of the teams because it’s tough to increase prices, to increase net sales prices, et cetera, et cetera, and they’ve done it, in a very tough environment across the line and that’s – that is [indiscernible] credit for the guys in our teams. But clearly growth will come, innovations are in place.

We see this and it’s accelerating, so that’s what I can say to this. So growth and market share, if we’re not turned the other way around – I guess, what we will see in general is probably a better balance.

And what we’re seeing is over time that growth and margin and that’s what we’re learning, more growth and margin. Not necessarily the one you kick and the other doesn’t go.

I think we will see a much more balanced rate. But I stay with my philosophy with growth and market shares.

But there are times where you have a chance, we use the chance and you see the profitability level. And look, take the outlook.

If in the outlook we deliver on the 3% to 5% will be much higher level of profitability potentially, then everybody will be extremely happy.

Yes, I agree. I mean you did mention that a lot of your new products and your definition of new products is effectively what sells.

You gave lots of names and basically said they’re all growing double-digit. Something therefore in the portfolio must be really struggling.

Can you maybe give us an idea what is struggling therefore in terms of that growth profile? And as you said yourself, if you deliver your outlook, basic growth will need to at least double in the second half, but as I sit here in a gray day in London, I just – it just feels quite ambitious.

Yes, what you obviously – I obviously have a little bit more news and you have [indiscernible] the meetings, and it did – I guess, without any doubt, the business was soft and expected soft in Jan, Feb, March. I would have hoped that with some of the negotiations, actually, with all major customers in Europe we would have further finished.

As you all know, it was in the press, we had some issues here and there. And also April was still soft.

Now, we saw an acceleration in May, we saw a splendid growth in June, and I just showed July, and you [indiscernible]. So I’m pretty happy on what is going on.

And that will also leave me to the point of 3% to 5%, which you will see, quarter three has to be very good and that’s what we’re expecting will happen.

And on the underperformance on –

Harold, now we have already five questions, shall I do underperformance or China?

China [multiple speakers].

China pending or you want – we’ll leave the underperformance to the others, I’ll talk to this later. Let’s do China.

China is an interesting case. I think the measures we take in leads me to the belief that we have first of all a much, much better grip on the business.

I can say finally, we’re finally, finally – yes. And I can also confirm that we will not lose money this year.

I’m pretty confident on the guys there. So we are around the breakeven line at the moment.

And what we are seeing, which is interesting, and I know a lot of our competitors, counterparts talking about which we also can confirm is there’s an extremely change of the business and the mixes. And as I said in my last call, it probably will always change dramatically.

Every time I go in next week – basically on Sunday back to China for a visit – every time I go, it’s changing. What is dramatically changing is the composition of the tenants.

The hypermarkets are definitely struggling at the moment to a big extent. Still pretty good growth in the general trade and the lower trade, and absolutely booming e-commerce business.

I always hear the numbers of my colleagues, we don’t brag about it, but also to send some color to you in the skin care business we are making more than 15% of our sales nowadays in e-commerce and growing at phenomenal rates. So it’s a phenomenon [ph] which I understand.

We are meeting next week by the way again, with JD and Alibaba to see how we further accelerate our partnerships. It’s a phenomenon, so which we’re still understanding.

And the good news is also – I shouldn’t say that loud, but the profitability in these channels is a lot better than in the other channels. So net, this could be a rise.

I’m warning a little bit on the rise because the same height we had a couple of years ago on certain channels which also became more costly for us, et cetera, et cetera. So we have to see how that all turns out.

It’s a phenomenon. By the way, we don’t see that phenomenon anywhere else in that magnitude in the world.

China is – they’re very special. Hard to take these learnings also from China to other markets to see that acceleration.

And – but it’s an interesting trend which we have to watch here.

Okay.

Thanks, Harold

Thanks.

Yes, good afternoon, gentlemen. Congratulations on the good work on profitability.

My first question is on emerging markets and specifically Brazil and Russia. It seemed to me that the trend for most of your competitors was pretty negative, especially in Brazil in Q2 after the tax increase.

So just wondering how come you continue to have such a good performance in Brazil despite the very weak markets there? And also Russia, you seem to be feel pretty confident.

What is ? how do you explain your out performance in Russia?

And secondly, on tesa. Can you explain a bit what’s going on there?

It seems that growth is not coming as strong as you might have expected at this time of the year. And if you look at the Q2 breakdown it seems that Asia is negative.

So any particular impact there going on at tesa? Thank you.

Yes, let’s start to comment on Brazil. First of all, the Brazilian market continued to grow at least on inflation level, which is about 8% and we are above that.

It’s rightly been commented that there has been some special taxes on cosmetics, that doesn’t affect all of the assortment, but in our case about 20% of the assortment might be hit more. And you haven’t had a chance to put it on top of prices, now demand is low.

We profit from our ability to further build on distribution and have a strong brand in Brazil. So for our sales, the environment is still intact even if it’s tougher.

In Russia, especially beginning of the year, you are aware that the ruble had been very weak. And a number of parties had done substantial price increases.

Also we had done very reasonable price increases and now we are profiting from those. First of all, the demand is still intact in volume and at the same time we have done all price increases, so it’s adding up.

We don’t see an adverse trend up to now. In tesa, we have special situation last year.

We were profiting a lot from a very strong growth in Asia, especially China and Korea. Now that has been changed and you could also follow that in use in different industries.

So we were especially suffering a bit from Korean market. And that we had especially certain – depending on certain projects.

I had commented on that in the last years that we think a number of project might not be sustainable because that is in electronic and electronic has very short life cycle, and we can be back very soon, so that’s very cyclical.

Okay.

Hope this is answers your question. Obviously it does.

Can we move onto the next caller please?

Hey, Heidon Good morning. Two questions please.

First I think, if I go back to Harold’s 17th question which I’m not sure if you answered, which was if many of the new products are growing double digit, and if we look at NIVEA and Eucerin, both growing faster than the divisional growth, La Prairie a bit of a drag. Does this suggest – and the other brands including China, but the other brands in aggregate are still declining at a high single-digit to low double-digit percentage rate.

Is that the right maths? And if it is, what prospect is there of stemming that flow in the relatively near term?

And then secondly, just on margins, very strong delivery obviously. Just to give up the sources of it.

Now clearly you’ve talked about the pricing actions that were taken and that being beneficial in the second quarter. But also with the last set of results you talked much more openly and freely about having a specific focus on procurement costs, having a general effort on more wide spread costs.

They’re also benefiting, I presume, from the expanded or more localized factory production footprint. What I’m getting to is, should we expect this rate to continue or how much of the low hanging fruit if you like has already been captured with this uplift?

Thanks very much.

Okay, I’ll do the growth question and then Ulrich does the margin question. On growth indeed, Toby, you hit it on the nail.

The core is extremely strong, where as the tail is more involved being vetted out. And this goes by the way, segment by segment.

I’ll give you a color of it. On face, for example, we operated on many collections before 2012, and over time now certain collections we don’t play anymore.

These collections had a certain level of sales and these collections are now basically more abolished. And I think that operation, most of the core categories is coming now to an end.

The second point is don’t forget, and we also have at over the top six categories quite a lot of other categories we entertained. There is hair care, there is baby, there’s intimate and many other categories and including also the pearl brands.

In these categories, we also have made now our choices and it’s such that business which we will continue and business which we will not entertain in the future. And I can say here very loud, for example, lip, we have revitalized now in a very nice way.

And in other categories we’re coming with new innovations. Now, this will also be done in some categories, but I will not tell you which categories at the moment.

You will see that in the second half year. And we were coming surprisingly back in certain categories, and we’re also opening up new fields which we have not entertained so far in our history.

So also that is also happening in the second half. Yes, also that makes me believe should contribute to the growth there.

On terms of the progress, very interesting phenomenon. Some have – are revitalizing and we started the revitalization process one or two years ago.

Some do act very well, so we’ve found some ways. This is particularly true for Hansaplast in some markets that we see with our innovations, with our play, that looks positive.

It’s at the right scenario. We also seen on some of the deals in the right direction.

But on the other hand we’ve also seen things like Florena, which today are sinking like a stone where we haven’t found it. So that’s a mixed deck what we are having.

But overall, the core is getting stronger and stronger, and we’ll be now added by revitalization of certain categories and entering into new fields.

Commenting on that second question of margins. First of all, and follow the raw material prices and oil prices and of course we’re profiting from that.

The Company prices have been gone down for this year. And the distribution companies are profiting and you’ll see it in the margin.

Second point, as we have mainly European production base, we depend in our ?- the Company prices on the euro. But the euro is weak means that the other companies are also profiting from that.

Now we’re limited in this fact because we have hedging to the extent of about 70%. And it means that we don’t fully profit from that this year, but as a net good trend for next year.

And finally, we have commented already that we have done our price increases in a number of markets, especially – also there we have tough environments. So that’s a result of all factors.

And that we think that will continue also because of ongoing procurement activities.

Okay.

That’s great. Can I just follow up perhaps on the growth question, in particular, with regard to the interesting reference to new fields.

And just wonder if you could perhaps comment on how the blades test marketing is going and whether that is something you’d be looking to expand in the second half?

I knew that was coming. Why did I knew that, no, okay.

Well, the blades market, from what we’ve seen in the – our test market have been extremely promising. I think not only promising for us, but also in general for the market.

Markets are up tremendously, and yes, that could be a field which we entertain more in the future.

Fair enough. Thanks very much.

So that’s what we can say. Okay, so we move on to the next caller please.

Hello Gentlemen, Just – well, as it’s summer, could you comment a bit about sun care and your innovation pipeline in sun care? And could you also comment a bit on – well, differences between sell-in and sell-out in Europe – in Western Europe.

Did you experience particularly a slow sell-in in the first half?

Okay. First in sell-in, sell-out no, nothing, which I can comment on, regular patterns.

Your first question is very interesting, it’s a sun question. We, as I said, if there’s one area where we haven’t shown the innovation depth, then it’s definitely the sun category.

It’s also probably the most difficult to innovate and is also the most difficult to get and win the consumer’s heart. At the moment, we’re facing in sun – the issue is that the currency for sun is really the sun factor.

And there is the only category, not in every market but in some markets in Europe, particularly in Germany, but also the UK to cite where the private labels have done a great job, so. And obviously at much lower prices than what we offer.

So that category which – where we have to do more innovation. I think as I mentioned there is things in the pipeline.

It will come, and we’re looking a little bit more confident. But the overall issue of sun and the private labels is something, which I believe will continue for all our branded friends.

In terms of the weather, yes, I can only say it’s splendid. It’s fantastic weather at the moment in Northern Europe compared to extremely shitty weather last year in July.

And if this continues in August, there’s another level of confidence that we hit our growth numbers. So, so far July was great.

You can experience by yourself and we hope that we have another good August. So let’s cross fingers.

But the overall issue in sun is not going to go away with that.

I just looked up my conference call notes from last year and we had a horrible summer to quote you.

Yes. Just to clarify, innovations are for 2016, so it’s not going to be for this season.

No, that season is gone. Literally, northern sun is very interesting, probably give some color on that one.

The sun season in 2016 already starts in October-November. So the –it’s very long cycles which you play there.

And – but we also have markets where we don’t have privately. When you look at Brazil, how strong we are now coming to the number one in Brazil, that’s good and that’s the biggest sun market in the world.

So there are also ways to overcome that. But it’s still a category where we are having to work particularly in Europe, very, very hard.

And indeed what you say July, August last year was bad, this year is good, impacting probably also the day one showers, so we have to see how that all goes. So, so far, I think we all crossed fingers that the trend continues.

So, good luck.

Yes, thank you. Yes, for all of us, I guess we all want nice weather.

And – yes, but it’s good this year, yes.

Next question?

Good morning everyone, I have two questions actually. First of all, just to come back on the Eucerin and La Prairie performances in Q2.

It seems that you had a deceleration at Eucerin, and even a slight decline at La Prairie in Q2. So I just wanted to know if ever this trend is going to go on for the next quarters or if they were only some one-off events?

And if ever you think that we could have a better performance for the next quarters to come from these two brands? And my second question was about the overall current business trends in Western Europe on top of the good weather conditions.

Last year, the Western European market was weak also because of maybe some micro trends. So what is your view about the evolution of the Western European market in Q3 this year?

Do you think that we could have quite good recovery of role? Thank you.

So I do the first two question, market growth Ulrich will do. First question on La Prairie.

La Prairie is a selective business, depends a lot on the innovations. We have seen double-digit growth rates in the last two months there, innovations are now coming.

So we’re quite confident on La Prairie that we see a completely different picture in the second-half year than the first-half here. And that’s entirely due to splendid innovations which are coming, which is pipeline full et cetera, as you know from the selective thing.

On Eucerin, the business is okay. But you have to admit competition, especially one competitor brand is doing extremely well there.

Here we have to speed up. We did quite a lot of changes in the organization, particularly in Europe at the moment.

We brought a couple of guys in from outside and we’re working extremely hard to get to a better trend on pharmacy. Pharmacy business overall is, I think, a great channel for the future.

And I think we have to do more there. We’re good in some areas.

As you know we’re good in body, but we have to accelerate in face in certain areas and also in sun there I see potential. But in Europe it’s mixed, it’s not as I wanted.

And that’s an area where we have to put focus on though. To your question, will the picture dramatically change in the second half year, no.

Okay.

Coming to the Western European markets. So development overall is slightly negative, it’s the worst in Switzerland and Netherlands.

Switzerland depends on the currency as you know and Netherlands we continue to have big price war, so that the development is negative, even more in value than in volume. The big countries; Spain is negative, Italy is negative, and since a number of months also UK is negative and France is flat.

But the only exception there for the big countries is Germany, with slight grow of the market, so that’s the overall situation in our categories. There might be other categories from other competitors.

So whether the situation look like differently. But obviously the consumer is shy to invest a lot of money into skin care in this environment.

Again, this was done to market. It’s not our performance.

Sure. But this was for H1 if I’m correct.

So what is your view about Q3 or the second half as a whole?

But I think that the general trends as also the other competitors have indicated, I think generally it looks more – it looks better I think, that’s what we believe. Not dramatically, but looking better.

I think the Southern Europe hemisphere is coming better to grip and also the Northern European hemisphere is coming better to grip. That ought to be seen in the context, I think, still the – in the context of Greece and the euro and things what happens there.

But we hope for slightly better views on the second half year.

Okay. Thank you very much.

Thank you very much. Apologies if these have already been answered.

But firstly are you able to give any color on what happened in Eastern Europe in the second quarter? Are there any countries that were measurably weak there and any breakdown you can give as to what pricing is doing in Russia, where obviously it’s a fairly volatile environment?

And then just secondly if I may, you talked about market share being the key metric for the Group. Are you able to give any numbers on that in terms of, quantify it at all to give us a sense of trend.

I mean I know that many years ago you used to give us global market share figure. I’m not sure what you do these days in terms of internal numbers.

Thank you very much.

Well, second point as you know we don’t give that out. We also don’t intend to give that out.

But to be very clear the number one, number two was what you’re referring there it’s still one of the key measures, actually, a key measure. I know exactly how many positions number one and number two I have in my six categories in my top 25 countries.

And I can tell you if something goes up or down this will be also an area of emotional positive or negative. So that continues, but we’re not giving color to that one in detail.

Second point, first one was on Russia. I think we already answer it; I’ll make it short because we said it already.

Russia is doing extremely well. It has to do with the ruble movements in the beginning of the year, which we anticipated in the right way.

Competitors that did to a certain extend good, some did bad, and we just found the right way with that. On top, we had good innovations.

We have a much better team that led to a much better business and market shares. I think also Poland is interesting.

Liberia, we – both interesting. Two, three years ago we had big debate on the phone about how was Russia going, how is Poland doing.

We had our issues. But that also gives me confidence with new teams, new compositions.

It shows that we’re putting a good base in there. And on that base business starts to grow in a much better rate than it used to be.

Thank you very much.

And regarding the – you asked about the slowdown and in the second quarter in Eastern Europe. Well, there are some countries which are doing little, which are running somewhat slower; among them countries like Kazakhstan, which has not performed in the second quarter.

So this is why we’re seeing a drag and this is why the number you refer to is slower than we had in the first quarter.

Thank you.

Next caller, please.

Good morning. Two questions.

One in AAA, if we exclude China, and we think about the development of the markets there, can you give us some color, in particular in Southeast Asia, et cetera? And if there’s been any change Q2 versus Q1?

And second question with respect to profitability, probably see good gross margin improvement. We’ve also appeared to be seeing some leverage to the selling and marketing lines as well.

And I was wondering if you could give some more color on that whether it’s personnel being more effective, fewer personnel, if it’s a better buying of marketing or maybe some total of the whole lot? Thank you.

I think the second question I do, the first, Ulrich does. As Ulrich already referred FX, oil pricing and procurement are the main drivers there.

But we also have done a lot better on the effectiveness in marketing and trade spend. Here I think we have a significant advantage over many other companies that we are more and more learning.

I think you experienced as I said, as a consumer that we more, more play our umbrella brand in a better way, which means whenever we put NIVEA up, the halo effects for the other sectors are getting bigger and bigger. That has to do with a very consistent handwriting on the copies, consistent look, consistent color, consistent actor group.

And I think this is paying more, more out. The second thing is that what everybody refers to, it’s also for us true.

There are shifts from the classical media to the digital world, which we’re also experiencing, which also gives us quite some positive momentum. And it’s such that NIVEA is able also transform from the more classical media to the digital media and find new consumers, especially younger consumers in this channel as well.

But sometimes pretty different or let’s say slightly different approaches there, and that seems to work well. All-in-all, that is clearly a higher marketing and trade efficiency that mix with the margin.

And as already indicated, we’re not going to get loose on that one. We will further move on that profitable growth path.

Yes, regarding the reporting on AAA, you have seen growth, organic growth in first half of 6% of Q2, had been 4%, so accelerated. In Q1 we had soft, especially from China, as you are already saying.

That was sell-in, sell-out phasing issue. Now, China is back to normal, rather flat.

Means that overall we had reasonable growth. There are some countries that are difficult in Asia, that’s thought to be Thailand that used to grow double-digit in the market.

Now, this is very difficult and then environment in Thailand is worse. I think it’s true for other industries as well.

And also the other countries like Vietnam and Myanmar have increased of course, competition and price competition. All that seems to also in economic issue that we are affected.

We’ll see when we come out of that.

Thank you very much.

I don’t see any other callers with new questions.

Yes, Good morning. My two questions.

Firstly, you’ve talked a lot about portfolio choices and your core being very strong. Could you give us a bit more color perhaps on the core performance on your top six categories, how they’re forming, what percentage of sales they now represent and what kind of growth you’re getting from the top six categories?

And perhaps also maybe you’ve talked about getting good growth from your innovations, even ones that are few years old. So are they still growing double digit?

And the second question would be on pricing. You’ve mentioned pricing few times being an important driver of the top and bottom line this time.

I know you don’t normally do it, but perhaps you could breakout the organic sales growth this time between price and volume to give us a better idea of the importance of price in the current sets of numbers? Thank you.

That has to be a brief answer, I’m sorry. As you know, Chas, we don’t provide details on that, on the pricing and volume one.

Regarding the top six categories, well, over the last years we have increasingly seen excellent performance in deodorants, this is still true. So it’s the fastest growing category of ours.

And then there is definitely coming body in second place, and also a very important one is shower. So in shower, which adds also frequency to the shelves as we say, is an important addition to our portfolio.

That’s what we can say. You know that we’re sharing with you this matrix that Stefan Heidenreich referred to regarding the positions, number one, number two positions.

That’s what we can share. Everything else, we have to stick to the detail we have provided so far.

Okay. Thank you.

Thank you.

Good, done.

So then you hand over to me. Thank you for having joined our conference call.

Beiersdorf’s next Investor Relations event will be the conference call for our nine months results on the 4th of November. We appreciate your interest in Beiersdorf.

Thank you and goodbye.