Annual Report of the HARTMANN GROUP

In the Company’s 190th year, the HARTMANN GROUP continued to grow dynamically. In economically very turbulent times, HARTMANN is very healthy and can boast very stable finances and organizational structures. Moreover, in business 2008, on the sound foundations of appreciably higher operating profitability, we embarked on the next phase in the Company’s development. The primary objective: to enhance profitability still further.

First and foremost by consistently expanding our systems offerings we succeeded in boosting sales by 7.5% on the year to EUR 1.38 billion. After adjusting for exchange-rate and acquisition effects, organic growth in sales ran at 7.0%. We again achieved the strongest growth in sales, namely a full 14.3%, in the Operating Theatre Management segment. In our Wound Treatment and Incontinence Management segments, we also significantly raised sales, by 8.0% and 6.0% respectively. Growth in sales for other Group activities ran at 4.1%.

Alongside the clear increase in sales and consistent cost management, the HARTMANN GROUP saw even greater improvements in operating EBIT and Group operating profits by 9.5% to EUR 70.2 million and by 8.1% to EUR 42.0 million respectively. The key driver behind this favorable trend is the Company’s successful positioning as a provider of customized systems solutions for hospitals and nursing homes, out-patient surgical centers and home care.

Our strategic acquisitions in business 2008 demonstrate just how we have increased the pace of growth. In the year under review, HARTMANN acquired its distribution partner in Siberia with retroactive effect from Jan. 1. Russia is a pronounced growth market for medical products and we have been achieving double-digit growth rates there.

In the United States, as at December 1, 2008, we took over Whitestone Acquisition Corp. In the US market, the company offers a complete range of supplies for the incontinent. We discern great opportunities in the United States to establish comprehensive systems offerings for in-ward and out-patient care.

At the beginning of 2009, we bought out Bode Chemie GmbH & Co KG, one of Europe’s specialists for disinfectants, hygiene and skin protection. Bode Chemie products, such as its Sterillium hand disinfectant, are a perfect fit when it comes to preventing infection in operating theatres – rounding out the HARTMANN lines, be it surgical gloves or drapes.

At present, no one can say with any accuracy whether and how the current financial and economic crisis may impact on our business. However, we are optimistic that the healthcare business is more resistant to the economic cycle than other sectors and will stay on course for growth. Together, we aspire to keeping the HARTMANN GROUP successful in 2009. And we will work pragmatically and passionately to this end, in a spirit of strong partnership, as is exemplified by our three brand values.

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