Henkel Central Eastern Europe (CEE) Further Expands Its Market Position * Utl.: Henkel CEE Revenues Surpass 1 Billion Euro =

VIENNA, Feb 25 (PROTEXT/ots) - Henkel Central Eastern Europe,Vienna-based regional headquarters for Germany's multinationalchemical company Henkel Group, surpassed the very favourablebusiness results posted in 2003, expanding its significant marketposition in Central and Eastern Europe in all business segments.For the first time in the company's history, total annualrevenues exceeded the 1 billion Euro mark, rising 25 per cent to1.027 billion Euro. Henkel CEE's core business excluding itsnewly-acquired operations on the Russian market climbed by 8.4per cent. The revenue increase amounts to a rise of 14 per centwhen adjusted to exclude the effects of exchange rates.

Henkel Central Eastern Europe (Henkel CEE) based in Vienna,one of the leading producers of brand-name consumer products inthe CEE region, once again posted record results in the year2003. Buoyed by its assuming overall responsibility for HenkelGroup's business operations in Russia, Henkel CEE achieved totalrevenues of 1.027 billion Euro in 2003 in 18 Central and EasternEuropean markets. This represents an increase of 25 per centcompared to total revenues of 818 million Euro posted in 2002, afigure which does not take account of revenues derived fromRussia. Henkel CEE's core business operations excluding Russiaamounted to 885 million Euro in 2003, an increase of 8.4 per centcompared to the previous year. The growth in annual revenuesactually amounts to 14 per cent when adjusted to exclude theimpact of exchange rates. "Our core business precisely fulfilled the expectations we hadfor the year. The negative impact resulting from prevailingexchange rates could be compensated by our acquisitions of HenkelMerima in Serbia and of Makroflex, the Finnish manufacturer ofinsulating materials," says Mr. Friedrich Stara, President ofHenkel CEE. The company's EBIT (including Russia) in 2003amounted to 111.6 million Euro, up 8.4 per cent compared to theyear before.New Responsibility for Russian Operations In May 2003, Henkel CEE assumed overall responsibility andmanagement for Henkel's detergents business in Russia. Thedetergents segment has now been successfully integrated intoHenkel CEE's organizational structure along with the adhesivesbusiness which has been coordinated from Vienna up until now."This represents responsibility for an additional 147 millionEuro in revenues," Mr. Stara adds. The new business activities inRussia have added 1,900 people to Henkel CEE's work force,pushing the total number of employees up to 7,700. Henkel operates three detergents and cleansers facilities inRussia: Henkel-Era in Tosno, located in the St. Petersburgregion, Henkel-South in Engels and Henkel-Pemos in Perm. Themanufacturing plants apply the most advanced Henkel productiontechnologies, producing international brands such as Persil andPril as well as well-known local brands such as Pemolux, Pemos,Losk, Deni and Laska.CEE Accounts for Revenue Growth The Central and Eastern European markets now account for 83.1per cent of Henkel CEE revenues. CEE further expanded itsposition as the most important region within Henkel CEE'sbusiness operations, achieving revenues of 854 million Euro in2003. Henkel CEE is the regional market leader for adhesives andhair care products in Central and Eastern Europe, and a closesecond in the detergents segment. Henkel is also positioned asthe leading regional provider in the technologies segment.Loctite, Pattex, Schwarzkopf, Poly, Fa, Silan and Persil rankamong the most well-known Henkel brands in the CEE region. Despite the unfavorable business environment prevailing on thePolish market, Henkel Polska remains the largest subsidiarywithin Henkel CEE, accounting for revenues of 188 million Euro.Austria ranks second, achieving annual revenues of 173 millionEuro. Henkel is the market leader in Austria in a number ofbusiness segments, including detergents, hair care products,adhesives and technologies. Hungary is the third largest market for Henkel CEE, accountingfor 125 million Euro in revenues, followed by Henkel CR locatedin Prague, Czech Republic, which posted revenues of 93 millionEuro in 2003.Successful Acquisitions The 2002 acquisition of a majority stake in Merima, Serbia'slargest detergent manufacturer, represents an important stepforward in Henkel CEE's ongoing expansion efforts. "Serbia andMontenegro with its 10 million inhabitants is a key market forHenkel CEE. Furthermore, the company is centrally located in aregion with 55 million people. For these reasons, we envisionlarge-scale opportunities for us to export into neighboringcountries," states Friedrich Stara in justifying the expansioninto the Serbian market. This corporate acquisition enablesHenkel to further boost its market position in Central andEastern Europe and ensure ongoing growth in the region.Henkel CEE's Business Segments in Detail The business segment for detergents and cleansers boosted its2003 revenues to 461 million Euro, up 35.6 per cent from the yearbefore. This includes the newly-acquired business operations onthe Russian market. Without taking account of Russia, Henkel CEE's detergents andcleansers business increased its revenues by 6.2 per cent in2003. This business segment accounts for 44.8 per cent of HenkelCEE's total revenues. Henkel CEE's cosmetics business segment further expanded itsmarket leadership position in the field of hair care products.Cosmetics accounted for 219 million Euro or a 21.3 per cent shareof total Henkel CEE revenues. The adhesives business segment increased its revenues to 172million Euro and its share of total Henkel CEE revenues to 16.8per cent. The adhesives segment succeeded in expanding its marketposition in the region primarily through the acquisition ofMakroflex, the Finnish manufacturer of insulating materials. The newly-structured technologies segment posted double-digitgrowth in 2003. Revenues increased to 160 million Euro,representing a 15.5 per cent share of total Henkel CEE revenues.Consequences of EU Expansion "With an annual economic growth of close to 4 per cent, theCEE region ranks among the very few growth areas in the world.Nevertheless, the process of integrating the region into theEuropean Union will last much longer. It is a long way to movefrom political and strategic integration to a economically andglobally strong Europe," Henkel CEE President Friedrich Staraconcludes in reflecting on the EU expansion process. Henkel CEEwill continue to operate as the regional headquarters for CEE onbehalf of the worldwide Henkel Group.Henkel Central Eastern Europe At A Glance Henkel CEE is responsible for business operations in 18countries: Austria, Belarus, Bosnia-Herzegovina, Bulgaria,Croatia, Czech Republic, Estonia, Hungary, Latvia, Lithuania,Moldova, Poland, Romania, Russia, Serbia and Montenegro,Slovakia, Slovenia and the Ukraine.Contact:Henkel Central Eastern EuropeMs. Sabine SchauerTelephone: +43 1 71104-2253Fax: +43 1 71104-2650E-Mail: sabine.schauer@henkel.athttp://www.henkel.at

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