The Cosmetics/Toiletries business sector is active both in the branded consumer goods segments of hair cosmetics, body care, skin care and oral care, and in the professional hair salon business. Our intention is to further grow the branded consumer goods business with the emphasis on developing our strong market positions in Europe and North America, expanding our activities in Eastern Europe and driving forward our selectively focused operations in Asia and Latin America. We will also be resolutely pursuing the globalization strategy of our hair salon business.

We intend to achieve growth primarily through the organic expansion of our businesses, and especially through the development and speedy launch of innovative products. We will nevertheless continue to consider appropriate acquisitions to supplement our organic growth strategy in both our branded consumer goods and our hair salon business.

As proponents of the proactive portfolio management approach, we also regularly scrutinize our businesses, disposing of non-strategic marginal activities as appropriate. 2008 therefore saw us part with brands in the USA and the UK which were considered to no longer be compatible with our core.

In our branded consumer goods business, we are focusing on the international expansion of our core businesses of hair cosmetics, body care, oral care and skin care. The emphasis in our hair cosmetics strategy is on further developing our leading umbrella brand Schwarzkopf and driving consumer-led innovation in the key product categories of colorants, hair care and styling. In our body care business, we intend to continue building on the momentum generated by the latest market successes achieved in Europe through our innovation offensive; in North America we are concentrating on the expansion of our core brand Dial and our Right Guard brands portfolio. In growing our successful skin care brand Diadermine, we will be concentrating on Europe, as we will in the further development of our oral care business. Our hair salon business, currently the number three in the world, is to be further strengthened with product innovations. Here, we also want to develop new regional potential on a selective basis. Our strategy of expanding and further strengthening our core businesses and key competences is aligned to the objective of achieving further, continuous improvements in profitability.