The Adhesive Technologies business sector serves a wide range of user groups with a comprehensive range of technologies comprising adhesives, sealants and surface treatment products.

In the Adhesives for Craftsmen and Consumers business, we serve private households, schools, offices, do-it-yourselfers and professional tradespeople. We offer a wide range of adhesives and sealants for refurbishment and home construction applications, including our Pattex power adhesives, Sista sealants and Metylan home decoration products. For applications in home, school and office, we offer adhesives under our international Loctite and Pattex brands, also glue and correction products under the Pritt brand.

In the Building Adhesives business, we focus on products and system solutions for professional craftsmen working in construction-related trades. These include tiling, humidity protection and thermal insulation products, distributed under the Ceresit brand. Flooring adhesive systems are marketed internationally under the wellknown Thomsit brand.

Our business involving industrial customers from a wide range of different sectors is divided into three strategic business units.

Our Packaging, Consumer Goods and Construction Adhesives business has been permanently strengthened by the acquisition of the National Starch operations. Here, our customers can rely not only on our Technomelt adhesives but also hotmelt adhesives under the Dispomelt brand taken over from National Starch. We also offer high-performance laminating adhesives for the manufacture of composite films for food packaging under the Liofol brand. Our brands Adhesin for the paper industry and Dorus for the woodworking industry likewise offer the twin benefits of quality and outstanding product properties.

Our product portfolio in the Specialty Adhesives and Surface Treatment business encompasses our Loctite range for industrial maintenance, repair and overhaul, our Teroson sealants and also, for example, our industrial cleaners under the P3 brand. Our customers are manufacturers from a wide range of segments including the automotive, aircraft and household appliance industries. In the metal fabrication and processing field, we were able to expand our product range through the addition of the high-performance lubricants under the Acheson brand acquired with the National Starch businesses.

Our Electronics business has also been significantly strengthened and expanded through the merging of the Henkel and National Starch operations. Our customers from the electronics industry use our range of high-tech adhesives under the brands Hysol and Ablestik and also soldering pastes from Multicore in the manufacture of microchips and printed circuit boards.

The Adhesive Technologies business sector serves a broad range of different customer groups and industries around the world. Since we have at our disposal a wide technology portfolio, we can offer a tailored selection of services capable of creating optimized customer benefits. Our high level of diversification enables us both to participate immediately in new growth trends and to compensate for any downturns in activity encountered in individual markets. This provides us with a good basis for sustainable and stable growth.

The factors governing the success of the various operations that make up the business sector differ substantially, necessitating a diverse range of management and control instruments and strategies.

In the case of branded products for private consumers sold via the retail trade, particular emphasis is placed on distribution and brand management with the associated advertising and point-of-sale activities. With our leading brands and often high market shares, we occupy good positions right across the board.

In the case of our industrial customers, we distinguish between two major categories of business. In our volume operations (involving, for example, packaging adhesives), our primary aim is to further increase profitability through the effective use of economies of scale and strict cost management. As a leading supplier in the relevant segments, Henkel has a very good platform to work from. With respect to our specialty product businesses for industrial applications (for example, products for the electronics industry), the focus is on providing customer-specific solutions backed up by appropriate support and advisory services. Our many years of close contact with our customers, and our detailed knowledge of their requirements provide us with a viable basis for sustainable business success in this regard.

We intend to further expand our strong positions in the regions of Eastern Europe, Asia, Latin America and Africa/ Middle East in order to harness even more effectively the dynamics of these growth regions, and to selectively fill identified white spots in our regional structure. The acquisition of the National Starch businesses has substantially strengthened our position, particularly in Asia, and successful business models are now being transferred between the growth regions.

As part of our proactive portfolio management approach, we regularly scrutinize our businesses with the specific view of divesting any non-strategic marginal activities. In January 2008, for example, we sold our industrial water treatment business to BK Giulini, Ludwigshafen, a subsidiary of Israel Chemicals Limited (ICL).

We endeavor to maintain high innovation rates while gaining and retaining innovation leadership in all our business segments in order to achieve sustainable, profitable sales growth. Innovations serve to distinguish us from our competition and to increase our earning power. Identifying individual user requirements provides us with a solid basis for the development of new, market-aligned problem solutions. For this reason, forging close contacts with our customers at all levels of our organizations is one of our particular priorities. With reallocation of the Group’s Corporate Research activities, we have expanded the development capacities of all Henkel’s business sectors in order to enhance our ability to develop solutions focused on market and customer demands.

Following the rapid acquisition-led expansion of our business over the last few years, our priority going forward will be on achieving profitable organic growth. In order to achieve this, we intend to fully utilize the improvement in our position as a supplier in the various market segments and to fully utilize the synergies that derive from the acquisition of the National Starch businesses.