After a further decline in the stock markets in the first two months of 2003, prices picked up across the board beginning in March, due to the start of the economic recovery.

Beiersdorf's share price performance last year was fuelled to a large extent by repeated takeover rumors. Following the agreement on October 23, 2003 on the sale of a large proportion of the Beiersdorf shares previously held by Allianz to Tchibo Holding AG, HGV Hamburger Grundstücks- und Vermögensverwaltungsgesellschaft mbH, and TROMA Alters- und Hinterbliebenenstiftung, these issues stopped influencing the Company’s share price. At the end of 2003 the Beiersdorf share price was about four and a half times the price at the end of 1993, clearly outperforming both the DAX and MDAX.

However, the short-term volatility of Beiersdorf’s share price in 2003 should not detract from the record highs that were achieved again this year. For example, earnings per share rose by 3.7 % to €3.50. The proposed dividend amount – in other words the proportion of profit after tax earmarked for distribution – even increased to a new high of €121 million.

The number of shares entitled to a dividend declined as a result of Beiersdorf AG’s share buyback program, which is described in more detail below, since shares held by the Company itself do not carry dividend rights. This represents an additional direct increase in value for individual shareholders, and results in a new record dividend per share of €1.60 (+14.3 %) overall.

On December 23, 2003, a share buyback program for a total of up to 10 % of Beiersdorf AG’s share capital was launched on the basis of the Annual General Meeting’s resolution of June 11, 2003 and the approval obtained from the Bundesanstalt für Finanzdienstleistungsaufsicht (BaFin – German Financial Supervisory Authority). Beiersdorf had been examining the idea of a share buyback program in detail for some time already. The aim of the program was to ensure the continuation of Beiersdorf’s successful growth model by contributing to the stabilization of the shareholder structure and to obtain an additional acquisition currency through own shares.

The offer period for the share buyback program ended on January 23, 2004. Following this, Beiersdorf AG reacquired a total of 9.99 % of the share capital. The diagram on the left shows the Beiersdorf shareholder structure after the share buyback program was concluded. Given this structure and the expressed intentions of various shareholders, we expect a more balanced distribution between free-float and non-free-float for the medium-term.