03 Henkel AG & Co. KGaA
Düsseldorf, Germany
www.henkel.com

PUBLIC COMPANY
YEAR ESTABLISHED: 1876
HEADCOUNT:  51,361 t  (2008: 55,142)
coatings REVENUEs: $8.680 billion t (2008: $9.849)
TotaL REVENUEs: $18.929 billion t  (2008: $20.791)
net income: $875 million t  (2008: $1.814)
R&D Budget: $552 million t  (2008: $631)
Segment breakdown
• Adhesives Technologies:  46%
• Laundry & Home Care:  30%
• Cosmetics/Toiletries:  22%
• Corporate:  2%

KEY People
Kasper Rorsted, CEO and chairman of the management board; Thomas Geitner, executive vice president, adhesive technologies.

Henkel’s Adhesive Technologies business sector, which posted sales of $8.6 billion in 2009, down from $9.8 billion the year before, offers decoration and renovation products, adhesive and correction products for home and office, building adhesives and industrial and structural adhesives, sealants and surface treatment products.

The Adhesive Technologies business sector leads the market in over 30 emerging economies, according to the company. Henkel generates 38 percent of total sales in growth regions. In 2004, the overall share of these emerging markets was just 26 percent.

Adhesive Technologies was fairly quiet on the acquisition and divestiture front after the purchase of National Starch in 2008. However, the business sector increased its shareholding in joint venture companies in Turkey and China during the year. The major disposal in the year under review was of the North American consumer adhesives business operated under the Duck brand.

The financial crisis exerted a negative impact on all the sales markets of the Adhesive Technologies business sector. There was a significant decline in production, particularly in the steel, automotive and electronics industries. The capital goods sector and the construction industry likewise registered heavy contraction. Private consumption also suffered from the consequences of the economic crisis.   
   
Henkel’s Craftsmen, Consumers and Building business (28 percent of Adhesive Technologies’ sales) produces a wide range of adhesives, sealants, correction products and system solutions for home, school and office as well as for refurbishment, home construction applications and for the building industry. In 2009, performance was affected not only by consumer reluctance and destocking by Henkel’s customers but also the continuing recession affecting the building industry. Even against this background, Henkel continued to pursue the launch of innovative products such as the new building adhesive under the Pattex brand.
   
The effects of the global economic and financial crisis were particularly noticeable in the Transport and Metal business (17 percent of Adhesive Technologies’ sales), which supplies adhesives, sealants, cleaners, lubricants and surface treatment products for major international customers in the automotive and metal processing industries.
   
The General Industry business (14 percent of Adhesive Technologies’ sales) provides adhesives, sealants, cleaners, lubricants and surface treatment products for industrial maintenance, repair and overhaul as well as for a multitude of industries ranging from household appliance producers to wind power sector. The business suffered from the decline in industrial production and a low level of propensity to invest, particularly in the case of durable goods. Sales overall were well below the prior-year levels for this segment. Henkel’s operations involving products for industrial maintenance, repair and overhaul under the Loctite brand performed at a more stable level and even posted a small degree of growth in the region of North America.
   
The Packaging, Consumer Goods and Construction Adhesives business (34 percent of Adhesive Technologies’ sales), which provides adhesives and coatings for consumer goods packaging, paper and woodworking industry, remained somewhat more robust in a market environment characterized by falling demand for consumer goods. Henkel’s adhesives for flexible packaging continued to perform well. As a result of the integration of the National Starch businesses, Henkel is now able to offer an even more comprehensive product portfolio.
   
Lastly, Henkel’s Electronics business (seven percent of Adhesive Technologies’ sales), which offers a broad range of high-tech adhesives and soldering pastes used in the manufacture of microchips and printed circuit boards, was heavily affected by developments in the semiconductor market, with significant shrinkage during the first half of the year being followed by a degree of recovery in the second half.

Top Innovations 2009

Loctite 5188
Loctite 5188 flange sealant is particularly suitable for use in engines, gear units and pumps. It remains super-flexible yet adheres very well to metallic substrates even after long exposure to high temperatures and chemical attack.

Technomelt Supra Cool 130
A newly developed hotmelt adhesive for packaging that works at a significantly lower application temperature to reduce energy consumption. It also offers extremely high adhesive strength, outstanding flowability and a wider range of application suitability.