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Managing Change –Sustainably for People.

Front coverPeter Halbauer, Head of Group PurchasingManagement, and Dr. Iris Bauer, trainee inInternational Marketing, test the tear resistanceand grip of Peha-soft nitrile powderfree.The new, strong and durable disposableexamination and protective gloves made ofnitrile rubber are perfectly suited for all types ofuse where medical staff needs to be protectedfrom contamination.This is only one of the many HARTMANNproducts where maximum reliability in dailyuse is most important. A reliability whichis increasingly combined with aspects ofsustainability.Our commitment to balance economic,environmental and social aspects begins longbefore a product reaches the market, that is,during the development phase. Our suppliersalso undergo an assessment process which,in addition to quality criteria, includes a widerange of sustainability issues. In production,the most advanced technologies ensure that ourdisposable products are manufactured with theaim of using natural resources as sparingly aspossible. And when our products are being usedby the customers, we ensure that care efficiencyand cost effectiveness are well balanced.Our nearly 10,000 employees around the worldwant to help to sustainably manage the rapidchanges in the health markets for the people inmedicine and nursing who devote their time tothe care and comfort of patients.

HARTMANN GROUP 1Interview with CEO Dr. Rinaldo Riguzzi 2Changing health markets 6Changing working world 26Changing environmental needs 38Company profile 65

2 Interview with CEO Dr. Rinaldo Riguzzi

HARTMANN GROUP 3“We see ourselves asa sustainable company.”Dr. Rinaldo Riguzzi, CEO of the HARTMANN GROUP,in an interview about sustainability and responsibility“Managing Change – Sustainably for People.”Why did you choose this particular title for the brochure?Developments such as globalization, demographic shift insociety, or medical progress rapidly change the living andworking conditions of each one of us. Who would haveimagined 50 years ago that many procedures could be donein a minimally invasive way? Or that we will soon have alack of qualified nursing staff? Financing medical andnursing services is also an increasingly important issue.The development of HARTMANN is dynamic, too. Formore than 100 years, our success formula has been toidentify changes in the health markets as early as possibleand to proactively integrate them in our business activities.This is also significant in respect of the national healthsystems being very different in various countries.It is and will always be our intention to help people to takecare of their health in an easier and better way.To this end, we combine competencies and develop productsthat effectively support our customers in their dailylives and work. Therefore our development work is focusedon practice. We work closely with scientists, customers,and suppliers. And in this way we actively help facilitatemedical progress and provide impetus for the advancementof care and nursing standards.But international standards also play an important role inour business processes. We work according to recognizedindustry and management standards to, on the one hand,meet our quest for quality and environmental protectionwhile, on the other hand, we also regard it as our responsibilityto give future generations the chance of a healthy lifein an intact environment. With “Managing Change –Sustainably for People.” we have chosen a title thatexpresses the attitude of the HARTMANN GROUPregarding sustainability and humanity also in turbulenttimes.

4 Interview with CEO Dr. Rinaldo RiguzziWhat does sustainability mean for the HARTMANN GROUP,and how do you define sustainability?In conformity with the Brundtland report, we understandsustainability to be a form of conducting business whichboth meets the current requirements and, at the same time,allows future generations to meet their needs. In this sense,sustainability belongs to our basic orientation. Therefore, itis part of our daily work, leading us in our work and decisionmaking processes and in making a long-term, comprehensivecommitment.In life cycle assessments we look, for example, at the entirelife cycle of our products, from raw material sourcing touser training, including proper disposal. With long-termassessments we can precisely track our progress and effectivelyinitiate improvement measures, continuously makingour work more sustainable.Therefore, we decided to prepare a special publication onthis subject. In this context, we also intend to redesign ourinternal management and communications processes in thefield of sustainability.In 2005, our corporate strategy FOCUS was implemented.In addition to financial goals, it explicitly includes strivingfor a sustainable way of conducting our business activities.Since then, we have gradually established appropriatesustainable structures, working closely with relevant Groupfunctions.With this brochure we are taking the first step on the pathto comprehensive sustainability communications. Its mainpurpose is to present the HARTMANN GROUP’s commitmentto sustainability to our customers, but it is also aimedat our suppliers and employees, providing them with aglimpse behind the scenes.“At HARTMANN, we have a special social responsibilitybecause we are one of the leading European companies in thehealth industry.”We consider ourselves not only to be a leader in thedevelopment of superior products that meet the higheststandards and have the least possible impact on theenvironment. We see ourselves primarily as a partner andadviser to our customers. Together with them, we want tofacilitate cost-effective use of products in hospitals andnursing homes, ease the workload of doctors and nurses,and thus help improve the quality of life for patients.This brochure is the first HARTMANN publicationon this subject. What was the reason for the publicationat this time?There are many reasons for this. As noted above, we seeourselves as a sustainable company. This has been provenby many activities at our locations around the world. Bythe way, we have been reporting on our internationalcommitment to environmental protection and occupationalsafety for many years. In recent times, our customers andpartners have, however, increasingly made inquiries aboutthis. They want to know how sustainable our products areand also how we design processes in a sustainable manner.What are the next steps? What is your plan?We will continue to gradually further develop our sustainabilitystrategy and our sustainability management.The Sustainability Workgroup set up one year ago willassume responsibilities across functions. It has alreadyfocused on key areas of our commitment such as environmentand resources, product responsibility as well asemployees and society.It is important for us to address the issue at its roots. Weintend to create lasting and stable structures, to fully implementthem in the Group, and to incorporate them into thedaily activities of our nearly 10,000 employees. Thesechanges take time. And I will give this time to our company– but not without repeatedly pushing for changes andconcrete progress. I am personally endorsing this approach.

8 Changing health markets“Especially a company likeHARTMANN is in a position todevelop highly effective solutionswith minimal use of resources.”I see another problem in staff shortages: a growing number ofpeople with impairment need to be cared for by a decreasingnumber of caregivers – whether in institutions or at home.Yet a nursing career is not experienced as being very attractive.The additional shortage caused by these developmentswill further increase nursing service costs. Therefore, anursing career and, for example, the profession of a countrydoctor should again be made more attractive and flexible.As a physician, you yourself are affected by the changes inthe health system. As a politician, you can perhaps best seewhere this is heading. What fundamental changes do youexpect, and how can companies like HARTMANN preparefor them?Cost pressure will lead to continued standardization ofprocesses. This trend is also driven by systems such as diagnosis-relatedgroups, that is, flat fees. As a result, systemsolutions with customizable treatment modules will becomemore relevant. Medical progress could go in this direction.The necessary expertise already exists. However, the technologiesand competencies need to be combined. Doctors andhospitals will continue focusing on specialization, and therange of outpatient care services and the demand for themwill further increase. Basic care with hygiene and nursingproducts or health products taken for granted will becomean issue. Reimbursement of specific services must bereconsidered, and the patient’s responsibility and servicesfrom families will become increasingly significant. In addition,companies should further explore new options and, forexample, develop new markets in fast-growing emergingcountries. For companies like HARTMANN I see greatopportunities here.As a doctor living and working in the countryside, I find it amatter of vital importance to ensure high-quality, reliable,and comprehensive health care for patients particularly inrural and in structurally weak areas. It requires great effort.This begins with recruiting young doctors and includeseffective support for medical practices in such regions andinterdisciplinary demand planning.Can financing of health care for all insured also be securedin the future?Financing health care will be one of the most urgent tasks inthe future. Restructuring health insurances and the emphasison patients’ personal responsibility could be helpful. Weshould all abandon the idea of taking our health care forgranted and, at the same time, make the inevitable spendingcuts in a socially acceptable manner. The existing health andwelfare system must be revamped – but without relinquishingtheir social intentions. We politicians are the ones who haveto clearly communicate this.

HARTMANN GROUP 9Personal detailsDr. Thomas Ulmer is a member of the European People‘sParty (EVP) and a member of the European Parliament,and serves on various parliamentary committees.For example, he is a deputy member of the Committee onEnvironmental Issues, Public Health and Food Safety(ENVI). A practicing physician with his own office since1986, he has been focusing on general, sports andoccupational medicine, radiation protection, transportmedicine, and medical opinions.So, everyone involved should develop effective products andtherapies. I am very optimistic that together we will achievethese objectives. Germany has always been a model forresearch and development and has one of the best healthsystems in Europe. And many things are looking positivehere.Especially a company like HARTMANN is in a position todevelop highly effective solutions with minimal use ofresources.As a physician, what do you think of the concept of theHARTMANN GROUP to supplement sales of high-qualityproducts with solutions that improve processes? Does thisformula work in practice?There is great potential for streamlining health careprocesses. Quality has its price but also has significant benefitsthat can be increased even more by efficient delivery, use,and disposal. My experience with custom procedure traysand system solutions is very positive. I believe, however, thereare more opportunities in this field that should be used moreeffectively.Administrative and organizational tasks are increasing. As adoctor, I see this in my practice every day, and this is alsoconfirmed by my colleagues both in inpatient and outpatientcare. Together with cost pressures we physicians see a steadyincrease in documentation and accounting procedures whichwe definitely need solutions for – because not every doctor isalso a good accountant. If these solutions are providedtogether with integrated care concepts and products customizedto our needs, this is beneficial in every case. Highquality,customized products can effectively help reduce theburden of administrative duties in daily routine care. Thiswould give us more time for the actual work, that is,providing care to patients.

10 Changing health marketsOffering partnership,facilitating professional care.With increasing costs pressure in health care, medicaland nursing staff face a dilemma: on the one hand, theirprofessional ethics require putting the patient first, onthe other hand, their comprehensive duties leave themless and less time for individualized care. High-quality,reliable products can help reduce the daily workload innursing care. HARTMANN, however, offers its customersmore than that: with extensive system partnerships werelieve doctors and nurses of administrative and organizationaltasks in their daily work.HARTMANN offers system partnerships with professional solutions in woundcare, incontinence hygiene, and infection protection. The services associatedwith such a partnership include product management, warehousing andtransportation logistics, internal processes for customers as well as digitalorder processing, billing and work scheduling. The portfolio is supplementedby controlling tools for incontinence care and profitability control forsurgical procedures including benchmarking. There is also a range ofproducts and services in the field of quality management that specificallyaddresses the needs of medical care centers, surgeries, and nursing homes.Custom sets support standard processes, such as specific routine surgery.With application aids, the system partnerships also facilitate the introductorytraining of nurses.The web-based software for incontinence management HILMAS helps reducecosts by up to 30 percent. It controls all processes, from supply and demandplanning, ordering and billing to warehousing, including measurement ofconsumption based on cost centers. Presorted for each resident, the rightincontinence product is always ready for use. As a useful supplement, thecustomer can use an ordering module and electronically process prescriptionsin Germany with public health insurance companies in accordance withParagraph 302 SGB V (German Social Code). Since 2010, HARTMANN hasoffered HILMAS also for service providers, such as pharmacies and medicalstores which have agreed to provide products for incontinent patients undercontracts with public health insurers.

HARTMANN GROUP 11The web-based controlling software HILMAS 5 helps nursing homes to provide effective care with incontinenceproducts. By avoiding oversupply, the nursing home not only saves costs but also reduces its disposal volume.Under specific conditions, the individual modules of our system services canbe flexibly combined and customized to respective needs. Gerhard Egersdörfer,Head of Service & Business Process Management at HARTMANN,sums up: “Our system partnerships open up significant economic potentialfor many facilities by increasing their added value and by helping specialiststo focus on their core competencies.”“Our system partnerships openup significant economic potentialfor many facilities by increasingtheir added value and by helpingspecialists to focus on their corecompetencies.”Gerhard Egersdörfer, Head of Service & Business Process Management

12 Changing health marketsTraining of experts is a central aspect of HARTMANN’s system solutions. In external and externallycertified advanced training programs or training courses at customers’ sites, HARTMANN shares itsexperience with the users of its products worldwide.International quality drive in incontinence managementHow product quality influences nursing quality is shown by the example ofincontinence hygiene: in the market segment for elderly and nursing homes,the providers of incontinence products wage a fierce price war. This hasresulted in low-quality products requiring more nursing care. The incontinenceproducts have to be frequently changed, even at night; moisture oftencauses pressure sores or skin irritation. Especially changing products at nightcauses a significant burden on all those involved – let alone the environmentalimpact through increased material consumption.HARTMANN pursues a different path in its sales markets: under its systempartnerships with customers, HARTMANN focuses on superior quality with awide range of high-quality products in various sizes and with different absorbentcapacities. Product advice and application training are also provided.Compared to low-cost providers, the per-unit purchase price is at first higher,but this cost disadvantage can be more than compensated for by fewerchanges and longer wearing times.

HARTMANN GROUP 13Moreover, the environmental impact and the disposal costs are reduced bylower product consumption while, at the same time, it is possible to care forpatients in a more dignified manner. Since the products properly selectedand applied need not be changed during the night, the sleep-wake rhythmof those affected is not impaired, and their sphere of privacy is retained. Theconcept has, for example, been successfully used in the French market foryears. “Our employees in sales are delighted with the concept – and thisenthusiasm is conveyed to customers,” said Bruno Mercier, Sales Director ofHARTMANN in France, emphasizing the effect of the partnership philosophy.Building competency worldwideAs part of its system partnership, HARTMANN organizes training courses formedical and nursing experts in many countries. We customize our approachesto needs: in Germany, for example, we offer training programs tocounteract the shortage of specialists. In Spain, we seek to utilize theexisting academic infrastructure for our customers, working with universityhospitals, initiatives, and certification bodies.“Our employees in sales aredelighted with the concept – andthis enthusiasm is conveyed tocustomers.”Bruno Mercier, Sales Director HARTMANN FranceAlready in 1997, together with the Heidenheim University of CooperativeEducation (today Dual University Baden-Württemberg), HARTMANN initiatedthe Academy for Wound Management. It focuses on promoting teamorientedcooperation of nursing staff, doctors, patients, and family membersproviding care. Since 2006, medical experts can obtain the TÜV qualification“Certified Wound Advisor AWM”.Since 2003, PAUL HARTMANN AG has been offering “Advanced training indiagnostics, care, and chronic wound prevention”, working with the UniversityHospital of the Philipps University Marburg.This seminar was developed especially for health-care employees dealingwith chronic wounds in their daily routine. Since the advance training isconducted at the University Hospital Gießen and Marburg with local doctorsand nurses participating, highly practical relevance is ensured. Also, thesmall group size of up to 18 participants and the interactive training conceptcontribute to success. Since 2006, this advanced training has been certifiedby the Chronic Wounds Initiative (ICW e. V.).China: Certified wound experts5,000 beds and 10,000 outpatients a day: these are the dimensions of theHuaxi hospital in Chengdu, the capital of the West Chinese province ofSichuan. In cooperation with the ICW and TÜV Rheinland, HARTMANN hasdeveloped a wound expert course seeking to improve the situation inwound care by standardizing the training. This is done by integratedlearning material based on the nursing care standards for people withchronic wounds from the German Network for Quality Development inNursing (DNQP) and has now been well-received in China. Since January2010, the “ICW Wound Expert” final qualification has been an integralpart of the hospital’s training program.Spain: Ph.D. in wound careIn Spain, health care is a field of academic study. HARTMANN took thisopportunity to locally establish a chair for skin care together with theCatholic University of Valencia in November 2010, creating the onlymaster‘s degree and Ph.D. program in wound care offered in Spain.Teaching and research focus on wound care, hand disinfection, andincontinence management. Special study programs address our customersand sales employees.Hungary: “Wikipedia” for wound care and compression therapyTogether with the University Hospital Szeged in Hungary, HARTMANN setup a comprehensive online portal for doctors, nurses and consumers inJanuary 2011 to deepen their application knowledge. In addition to aforum and many publications and case studies, the website also presentsthe HARTMANN concept of CombiSensation, which comprises therapyapproaches that include combined products and interdisciplinary teams.Registered users also have the opportunity to publish their own contributionsafter a review by the University Hospital and HARTMANN. Allcontents can be discussed online in the forum.

14 Changing health marketsInnovation is what is useful to customers.Medicine, the art of healing, hasthe mission to serve people. Thisprinciple also guides the thinkingand acting of the HARTMANNGROUP. Working closely withdoctors and nurses and in viewof the changing social, economic,and environmental conditions,we constantly work to improveour products, services, and solutions.The aim of our research and development work is to offer all our customersaround the world easy-to-use and cost-effective products and services.Therefore, we integrate our worldwide subsidiaries closely into the productdevelopment process, thus ensuring global success of our products.Close to the customer as regards incontinence productsThe number of persons with incontinence who receive care and those wholead an active life and want to be mobile is increasing. Wearing-comfort,flexibility, discretion, and odor control therefore play an increasingly importantrole in incontinence products. To help those affected to function in dailylife despite their problems and to help nurses work effectively, we areconstantly improving our products, interviewing not only physicians andnurses but also consumers on these topics.MoliCare und MoliForm – optimized for caregivers and patientsNursing facilities often have to balance efficiency and good care. Professionalquality, that is, incontinence products that protect against leakage andare gentle to the skin, are a basic requirement for successful work. Ourwell-known product lines MoliCare and MoliForm have therefore beenexpanded to include products that are even more effective: the incontinencebrief MoliCare Premium soft and the incontinence pad MoliForm Premiumsoft. “In this new generation of incontinence products, we wanted toimplement further progress for professional incontinence care while, at the

HARTMANN GROUP 15“The new generation of incontinenceproducts helps improvethe quality of life of thoseaffected, allows nursing homesto deliver professional care,and, finally, – and this is mostimportant – there is more timefor individualized care in dailynursing routine.”Dr. Dieter Feustel, Head of International Marketing Incontinence Managementsame time, providing noticeable relief to those affected,” said Dr. DieterFeustel, Head of International Marketing Incontinence Management.“It helps improve the quality of life of those affected, allows nursing homesto deliver professional care, and, finally, – and this is most important –there is more time for individualized care in daily nursing routine.“Skin protection has been improved by using a new absorbent core andthrough pH adjustment of product parts with direct skin contact to thenatural pH value of the skin. In MoliForm, the contour has also been properlyadapted to anatomic conditions. The new MoliCare briefs have a new type ofhook-and-loop tape. They can actually be removed and readjusted as oftenas necessary. Small application problems when using the products, assometimes occur in daily nursing practice, can thus be easily corrected. Skincream residues no longer inhibit fastening of the tapes. Another benefit isthat the products no longer rustle and therefore are more discreet.Above It is often the seemingly small things that have a great effect on patientsand caregivers. The constant improvement of the MoliCare incontinence brief isan example of the development potential for disposable cellulose-basedproducts. Product optimization also always includes streamlining of resources.Below With the aid of SkinArea, a software for tracking wound healing processesdeveloped by HARTMANN together with nurses, we provide our customers withexactly the tool that makes work easier.Measuring and assessing wounds accurately with SkinAreaTo effectively support doctors, nurses, and nursing experts in their duties isone of the key objectives of HARTMANN. SkinArea, the new HARTMANNsoftware for wound measurement and documentation, has been developedtogether with French nurses. The program allows the precise monitoring ofthe wound healing process, and the attending experts are effectively supportedwhen creating the required documentation. SkinArea also facilitatesdevelopment of statistics and digital examination reports. Professional userscan continue to share therapy-related patient data among themselves, withthe most advanced standards ensuring that the high requirements for privacyand data security are met.

16 Changing health marketsSkinArea is very easy to handle: the user sticks a ruler next to the wound andtakes a photo with a digital camera. The picture is then transferred to thecomputer where the shape of the wound is outlined using the mouse.SkinArea accurately determines the size of the wound. The data is thenautomatically stored in the patient’s file, and information on the patient’spain or exudate volume can be added as required. If this procedure isrepeated regularly, the software can provide a clear picture of the woundhealing process based on this data. It allows reliable assessment andadjustment of therapy if necessary. HARTMANN SkinArea is already beingactively used in four countries; the program is currently being tested in eightother countries.Disposable surgical instruments:hygienic, functional, and environmentally superiorWe not only optimize our products in just one dimension but analyze theratio between costs and benefits along the entire product life cycle usingconsistent value engineering (see page 43). In this way we often findsurprising solutions. For example, this allowed us to develop a new range ofdisposable products based on comprehensive demand and material flowanalysis in surgical instruments for standard procedures. These devices notonly meet the highest hygiene standards but are also cost-effective forcustomers.We have been offering our customers in hospitals and medical practicesthese disposable surgical instruments under the name Peha-instrument sinceApril 2009. Each of these instruments reaches its place of use brand newand sealed in sterile packaging. The risk of cross contamination frominadequately reprocessed reusable surgical instruments can be completelyexcluded for the benefit of the patients. “From a medical perspective, thisadvantage is decisive,” said Michael Krompholz, Head of Surgical Consultantsat HARTMANN in Germany. But the environmental performance of thedisposable products is also excellent: made of recyclable material theyachieve a recycle rate of 98 percent at the end of their life cycle by being fedback into the material cycle. Lean distribution logistics plays an importantrole here. Under the HARTMANN system partnership (see page 10) Pehainstrumentproducts also belong to the integrated solutions customized tothe specific needs of medical and surgical supplies in the field of medicaland hygiene products.

HARTMANN GROUP 17Disposable sets for operating rooms and wards:structured customer solutions for lean processesWith custom procedure trays and sets, HARTMANN effectively helps tostreamline many processes in hospitals. To this end, we customize, forexample, our disposable surgical drapes of the Foliodrape brand to customerneeds by adding dressing materials and various third-party products.These individually customized surgical sets ensure that the surgeon has allthese items ready to hand. Preparation and change times between operationsas well as process costs are significantly reduced. With MediSet –ready-to-use sets for standard minor procedures – we offer similar efficiencybenefits for treatment on the ward or in the outpatient department.Customer-focused innovations such as these were decisive for theHARTMANN GROUP on receiving the Growth Strategy Leadership Awardin July 2007 from Frost & Sullivan, an international market research andconsulting firm based in the U.S.A.Disposable customized sets help reduce process costs for operations. The componentsof the sets can be disposed of after use in an environmentally friendlyway – including the disposable instruments which can be recycled by melting.

18 Changing health marketsCustomizing solutionsto meet individual needs.The purpose of HARTMANN’s development activities is toconstantly provide better products that meet customer needs aswell as economic and environmental requirements. To this end,we address the changing needs in medical and nursing care aswell as the requirements of patients and those in need of care –with special focus on social issues. The environmental impact ofour products is also a key aspect of our development work.Schematic representation of the wound healing stagesDays1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21Inflammation, proliferation, differentiationWound healing has three stages overlapping in time that cannot be separated from each other: cleansing, granulation, and epithelization.Based on the concept of phase-specific wound care, HARTMANN products promote the wound healing process.

HARTMANN GROUP 19The development of new wound dressings, such asCosmopor Antibacterial for postoperative wound care, isbased on the insights from market research studies andthe customer needs identified in them.For the development of new products, HARTMANN alsouses experience from other product fields, for example,the absorbent and transfer properties of materials or theantiseptic effect of silver.To meet the complex requirements connected with our passion for innovation,we analyze the potential of new products, which needs to be exploitedin the interest of our customers and communicated to the payers. Weconduct extensive market research, develop innovative test methods tomodel customer needs, and participate in developing industry-widestandards.“A significant result of the studywas the need for a special woundplaster that absorbs exudaterapidly and reliably, thus inhibitingthe growth of bacteria.”Horst Schmid, Brand ManagerUndisturbed wound healing with new multilayer technologyGoing home directly after surgery – unthinkable years ago – is now commonpractice in many cases. Accordingly, the requirements for postoperativewound care have changed. To explore this in more detail, HARTMANNconducted an extensive qualitative study among doctors and nurses in 2006.“A significant result of the study was the need for a special wound plasterthat absorbs exudate rapidly and reliably, thus inhibiting the growth ofbacteria,” Brand Manager Horst Schmid summed up the results of the marketresearch.In a subsequent concept test of various designs, the so-called DryBarrierTechnology was given a good rating by doctors and caregivers. The interactionof wound contact, transfer, and absorbent layers ensures that evenlarge amounts of fluid are rapidly brought outside of the wound and retainedthere. This helps to promote optimal infection protection. Two productsemerging from this process, Cosmopor Antibacterial and Cosmopor Advance,have now been successfully introduced into the market.HARTMANN workshop of the futurefor better product solutions in compression therapyCompression therapy is not comfortable: for many patients compressionstockings and bandages are too warm, and their favorite shoes become tootight. It is therefore not easy for doctors and nurses to get the patient tocooperate. To help make their work easier and to inconvenience patients aslittle as possible, HARTMANN is working constantly to develop new productsfor compression therapy meeting patients’ needs.In the autumn of 2009, we initiated the so-called workshop of the future oncompression therapy together with interested customers. Its goal was toidentify the needs for new products together with the users, to get ideas forproduct innovations, and to enroll members for an expert group among theparticipants. The experts are to keep an eye on our new developmentprocesses and to review our progress with regard to customer requirements.The first workshops were held with nurses in Stuttgart, Dresden, and Duesseldorf,and a physicians workshop took place in Frankfurt am Main. Focusgroups with nursing staff followed in Strasbourg and Bordeaux and withdoctors in Lille. Taking into account the results of the work meetings, variousdevelopment projects were launched, and the formation an expert groupwas initiated.Reward for customer-focused productsOur sales partner BACE Comercio International was named best hospitalsupplier by the Brazilian Association for Health Marketing ABMS inNovember 2009. In particular, the high-quality custom products fromHARTMANN, such as the Atrauman Ag wound dressing and our hydroactivewound dressings, were honored. The award shows that our productsfully meet the expectations of our customers.Detailed study on the quality of customer relationsField service and products excellent; back-office and expert consultationgood; complaint management and product information need to improve;system partnership not very well-known: these are the main results of asurvey of about 600 decision makers among our customers in Germany.We extend our thanks for the frank opinions and take these as motivationto further improve our services. At the same time, the responses alsoreflect the success of our customer-focused product development.

20 Changing health marketsBetter effectand easier use.Infections pose a high risk in hospitals and nursinghomes. HARTMANN and the specialist for disinfection,hygiene, and skin protection, BODE,which has been part of the HARTMANN GROUPsince 2009, offer their customers practical systemsolutions for infection protection.

HARTMANN GROUP 21“This allows clinicians to rely ona simple mechanism of action intheir practices while we continueto optimize the product for theirwork.”Prof. Dr. Hans Smola, Head of the MedicalCompetence Center of HARTMANNOur high-performance products, consultation, and training programs helpusers to implement efficient and reliable hygiene management. With ourresearch we also participate in the development of international standards.Paradigm change in hand disinfectionBased on a study conducted by BODE, the contact time in surgical handdisinfection was reduced from 3 to 1.5 minutes in 2004. With the approvalof the German Federal Institute for Drugs and Medical Devices (Bundesinstitutfür Arzneimittel und Medizinprodukte, BfArM), the reduced contacttime was established as a new standard.A study on hygienic hand disinfection also set new standards. Tests showedthat proper use of hand disinfectants provides far better results than in thepreviously recommended practice. The latter is a procedure of six stepsbased on a European test method. The results of this BODE study wereincluded into the national Clean Hands Campaign promoted by the GermanFederal Ministry for Health, which paved the way for a new standard in handhygiene, improving staff and patient safety. “Nurses too regard the selfdependenttechnique as an improvement and are highly motivated,” stressedProf. Dr. Günter Kampf, Scientific Affairs.Mechanism of action of superabsorber identifiedThe superior effectiveness of the TenderWet active wound dressing fromHARTMANN in the moist therapy of chronic wounds has long been confirmedin clinical studies. Laboratory tests now show that the wound dressinginactivates up to 87 percent of specific endogenous enzymes that inhibitwound healing. Prof. Dr. Hans Smola, Head of our Medical CompetenceCenter in Heidenheim, identified the mechanism of action together withresearchers from the University of Cologne: the polyacrylate superabsorberembedded in the pad actively binds part of the endogenous matrix metalloproteinases(MMPs), enzymes whose pathological hyperactivity can retardthe formation of new tissue. At the same time, it reduces the activity of theremaining MMPs. “This allows clinicians to rely on a simple mechanism ofaction in their practices while we continue to optimize the product for theirwork,” said Hans Smola.Opposite page Staphylococcus aureus bacteria do not causeany problems on the skin of healthy people. But if they enterwounds they can cause life-threatening inflammation.Above The effectiveness of TenderWet, the pad with anabsorbent and rinsing effect, has long been confirmed in manystudies. HARTMANN has now also identified the precisemechanism of action.Below Hand disinfection is an important measure to protectpatients and medical staff from pathogens.

22 Changing health marketsLiving together, learning from each other.People and their health are at theforefront of thinking and actingin the HARTMANN GROUP.We apply this principle not onlyin our innovations but also inproduction as well as in dealingwith employees and suppliersaround the world.As an international company, we also operate manufacturing plants incountries where people and their health are not always valued. We thereforework with our suppliers and are involved – closely aligned to our corebusiness – in a number of education and training projects and humanitarianendeavors.Training and earning instead of child laborThe project Learn and Earn in Sialkot, Pakistan, is an example of this commitment.The HARTMANN GROUP has its disposable surgical products of thePeha-instrument brand manufactured here (see page 16). Child labor is verycommon in Pakistan – a situation we do not want to accept. HARTMANNtherefore has set itself the goal of banning child labor in the entire productionprocess. Together with a local development aid organization, we havelaunched the following support project in Sialkot: children under the age of15 working at subcontractors of our suppliers are withdrawn from work,receive a scholarship, free health care, and can attend private schools. Schoolattendance, books, and uniforms are financed by the project. In addition, thestudents receive material and financial support compensating for lost wages.To make sure that not only the children directly affected are protected, theirsiblings can also participate in the Learn and Earn project. This helps preventsending another child in the family to work.Residential home and training center for young women in IndiaIn the Indian city of Coimbatore, the HARTMANN subsidiary Karl Otto Braun(KOB) has been helping young women from the countryside to participate ineducation and training for 11 years, enhancing, among other things, theirsocial position. The women receive free room and board as well as healthcare on the company’s premises. After three years of vocational training, theyusually return to their families. Some of them get married at the end of theirtraining. A portion of their wages is paid into a government controled fund,accrues interest, and is given to them at the end of their training. After theexpansion of the plant in 2009, about 210 young female workers are nowliving in the company‘s residential quarters.

24 Changing health marketsNursing care is devotion,and so is supporting nursing care.Nursing care faces turbulent times:while the number of persons needing care is on the rise, thenumber of young people and therefore potential nursesdecreases. At HARTMANN, we often hear the worryingquestion: what role will people play in the nursing careof the future? Christine Bloch, Medical Trainer atHARTMANN, has a clear position on this.

HARTMANN GROUP 25“By relieving nursing staff anddoctors of technical and administrativeburdens, we help themto focus on individualized carewithout which recovery or ameaningful life would not bepossible.”“Our answer to the question regarding the position of people in nursing careis clear: by relieving nursing staff and doctors of technical and administrativeburdens, we help them to focus on individualized care without whichrecovery or a meaningful life would not be possible. However, this situationwill continue to deteriorate. Therefore, we have to continue talking withdoctors and caregivers, precisely monitor changes, and find solutions forfuture nursing care.As a partner in nursing care, we pursue another important mission with ourtraining concepts: through constant specialist training, we seek to helpnursing gain the recognition that would make this profession attractive alsoin the future. And we want to support those working in this field to receiveadequate payment for their work.”It is also important that we provide medical staff with techniques and skillsthat ease their workload – as well as promoting awareness and respect forpatients‘ needs. Under the HARTMANN FORUM series of events, we havetherefore developed a wide variety of in-house seminars, for example, fornursing and administrative experts, which can be tailored to the specificneeds of organizations. The focus here is on joint problem-oriented work.The level of knowledge of participants and any open questions are identifiedfirst, with the teaching content then being adapted to their experiences.Content can, for example, include exemplary management practices fromother countries, new treatment concepts, expert standards, or applicationtechniques from our own product development. Our goal is to make employeesof our customers multipliers for new ways of dealing with importanthealth issues.Personal details:Christine Bloch started her career as a Medical Trainer atHARTMANN in 1998 after 20 years’ experience as a registerednurse and a teacher of nursing. Since then she has primarilyadvised nursing staff – from 2001 also worldwide – on theproper use of our products. Together with customers shedevelops training concepts based on the latest medical andnursing knowledge and helps to implement them worldwide.She regularly represents HARTMANN at internationalcongresses.

26 Changing working worldChangingworking worldPromoting flexibility,offering perspectives.Interview with Dr. Iris Bauerand Wolfgang Schwarz 27Developing talents,strengthening competencies.Education and advanced training 30Staying flexible,ensuring long-term employment.Demographic change 32Taking precautions,working safely.Health management 34We are inspiredby what helps people advance.Employee statement 36

HARTMANN GROUP 27Promoting flexibility,offering perspectives.Interview with Dr. Iris Bauer, Trainee,and Wolfgang Schwarz, Head ofthe European Works Council of theHARTMANN GROUPMr. Schwarz, Dr. Bauer, what are the most importantchanges in the working world you have experiencedor observed, and how would you describe the currentsituation?Schwarz: At HARTMANN, we very much feel theincreasing internationalization of markets. In the last fewyears, working conditions have therefore undergone fundamentalchanges. In this context, pressure for success alsoincreased. Additionally, more work is now done in projectgroups. This requires much more flexibility and mobility ofthe employees. Online communication and more digitallystored data also have consequences: employees and companiesare now much more transparent than previously.

28 Changing working worldFrom my perspective, this provides both advantages anddisadvantages. On the one hand, it allows us to present ourperformance as a company much more effectively in internationalmarkets thanks to transparent, computer-aidedtender processes. On the other hand, I believe that theurgency of effective data protection is still underestimatedby many people. We also see changes required by newEU laws, for example on leased labor, to which we atHARTMANN have to respond.Dr. Bauer: Just starting my career, I notice that a highdegree of flexibility is expected from employees today –both geographically and in terms of time and also withregard to topics. Couples living in different places onlymeeting on weekends is considered almost normal today.Those who serve customers around the world should ideallybe constantly reachable. Today, companies are oftenlooking for generalists who are familiar with many issues.There are a growing number of fixed-term work contracts.However, frequent job changes make it difficult to planlong term. By the way, I have noticed that mothers nowreturn to work very early after child birth – sometimes evenafter a few weeks or months. In my opinion, companiesshould focus more intensively on this development.So the requirements for employees become more and morecomplex – yet, at the same time, the work force is agingmore rapidly. How does HARTMANN face these challenges,and what does this mean for the employees?Schwarz: This is clearly an important subject. Technology isadvancing rapidly, and especially older people often haveproblems with this. Years ago, it was possible for HART-MANN to employ almost anyone in production; today,pre-qualification and constant advanced training are absolutelynecessary. While younger staff interact with newtechnology in a more natural way, older people often haveto overcome their resistance first. HARTMANN provides awide range of advanced training programs for free, butmore private commitment will also be required in this areain the future. In production we work in four or five shifts,but this is only possible until a certain age. Also here, thequestion is: how do companies address this issue, and howcan individuals properly deal with it, for example, withlifetime working accounts.Dr. Bauer, what do you think companies should doto make themselves more attractive as an employer tohigh-potential workers of your generation?Dr. Bauer: I find it very important that companies offerlong-term prospects to help employees with their planning.Why is it, for example, that trainee contracts are oftenlimited to one or two years? I would like to see a change inthis. Other expectations of mine, such as future-orientedinternational and interdisciplinary careers that help employeesto remain competitive, are already well met atHARTMANN. In particular, the culture of appreciationpracticed in the company and the excellent individualdevelopment opportunities make HARTMANN veryattractive in my opinion.“There are a growing number offixed-term work contracts.However, frequent job changesmake it difficult to plan longterm. By the way, I have noticedthat mothers now return to workvery early after child birth –sometimes even after a few weeksor months. In my opinion,companies should focus moreintensively on this development.”

HARTMANN GROUP 29“Companies should also ask themselves whathuman resource potential is available incompanies, and how can it be best used.”Keyword knowledge transfer: how does HARTMANN ensurethat the know-how of older employees leaving the companyremains in the company? What experiences do you havewith mentoring and knowledge management?Schwarz: At HARTMANN, knowledge management isbeing practiced on all levels. In production, for example,we make sure that machine operators frequently switchbetween machines to maintain flexibility in their work. Inadministration, cross-generation workgroups are formed toensure the transfer of experience and values. Beforebooking external seminars, we pre-check with a qualificationmatrix as to whether the relevant knowledge cannot beshared between employees too.Dr. Bauer: Under the trainee program, each trainee isassigned a personal mentor. This is an experienced managerwho supports us in personal and professional issues andwhose experience is of benefit.And what do you consider the key staff managementissues of the future?Dr. Bauer: Flexible work-time models are an importantissue, including support for families, long-term perspectivesas well as good health management and attractive elderlybenefitmodels. Furthermore, I would like companies tobecome more flexible in selecting job applicants.Schwarz: I see a great challenge in taking on managementroles. For example, managers should be encouraged toprovide regular feedback. Companies should also askthemselves what human resource potential is available incompanies, and how can it be best used. The individualstrengths of employees could then be combined moreeffectively for specific projects.Personal detailsDr. Iris Bauer joined the Corporate Trainee Program atHARTMANN in 2009. Within this framework, the environmentalscientist with a Ph.D. has already addressedproduct development issues and developed communicationtools related to environmental sustainability of disposablesurgical products for International Marketing.Working with an external consultant, she is currentlyassessing the environmental performance of variousHARTMANN products.Wolfgang Schwarz has been with HARTMANN for morethan 40 years. He began his career as a maintenance fitterand afterwards worked as a full-time Works CouncilMember before becoming Chairman of the Works Councilin April 1990 and also Chairman of the European WorksCouncil in 1995. Wolfgang Schwarz has also been amember of the Supervisory Board of PAUL HARTMANN AGsince 1993.

30 Changing working worldDeveloping talents, strengthening competencies.Building competencies for sustainable companydevelopment is the focus of the HARTMANNGROUP’s personnel work. Therefore, we not onlyinvest in vocational and academic training fromthe beginning but also intensively in the personalcompetencies of our employees. Under the talentmanagement program, we offer them the opportunityto qualify for senior positions in the companyand to assume more responsibility, based on theirdevelopment and performance.Higher customer demands as well as the increasing complexity and rapidchange of social processes are the framework conditions of personnel workat HARTMANN. Competence areas such as ability to change, innovation andcreativity are at the forefront of our human resources development. HART-MANN provides a wide range of opportunities for strengthening these skills,from individual training courses to studies while working. We also offerindividual competence development programs for our young professionalpeople to effectively prepare them for their future roles.We provide a broad range of business, industrial, and technical trainingopportunities for school leavers. We offer study opportunities to high schoolgraduates under the Dual University program; university graduates can enterthe program directly through our international trainee programs. In addition,we provide internships, propose practical topics for theses to students, andactively work with universities.International training under the Corporate Trainee ProgramThe internationality of our employees’ careers is shown by the example ofVáclav Kroupa. After graduating he first worked as an Assistant toProduction Management at our Czech subsidiary in Veverská Bítýška. Hejoined our Corporate Trainee Program in 2008. Under this program, heinitially worked on a sales project in the Czech Republic. He then participatedin two international projects at Corporate Headquarters in Heidenheim:a concept for a manufacturing site in Asia and the introduction of acontrolling tool for subsidiaries. “I felt I was well supported in these excitingprojects,” reported the industrial engineer who is now working as a GroupSupply Controller. “This not only applies to my project mentors but also tothe Board Members who met with us, for example, on fireside chats todiscuss exciting topics directly with us. This is true appreciation.”Systematic competence management and succession planning atHARTMANN SpainHARTMANN Spain is systematically and effectively developing the skills of itsemployees with a new competence management system. The system defines19 competence areas which are assigned to the respective job descriptions,indicating potential employee development fields. These provide the basisfor individual development meetings. Under the related talent managementprogram, the results of these meetings are used to find appropriate internal

HARTMANN GROUP 31Training rate at German locationsof the HARTMANN GROUP on December 31, respectively.54.5Training at PAUL HARTMANN AGOur comprehensive training portfolio includes 12 differentskilled jobs and areas in administrative and technical fields aswell as four dual study courses. In 2010, 85 trainees worked atPAUL HARTMANN AG; this is a training rate of 4.2 percent.We want to gradually increase it to five percent by 2014.42007 2008 2009 20104.0 4.4 4.5 4.3Left In kindergarten, small children are made familiar in a playful way with aspects of naturalscience under the Heidenheim project Technolino. Participating in a social internship, traineesfrom HARTMANN learn how to deal with other people.Right The goal of the training partnership between a Heidenheim junior high school andtrainees at HARTMANN is to help students identify the right career.“Through the social internship in the workshop for the handicappedI have learned to reduce my fear of interacting with people. Toleranceand team spirit were also very important. This will be of great helpto me in my future work with customers and colleagues.”Janine Weinhofer, student in industrial studies at the Dual University Baden-Württembergcandidates for open positions in the company. In total, HARTMANN uses avery sophisticated and integrated system to increase the qualification levelof its employees as a whole, to identify high potential individuals within thecompany, and to effectively prepare them for advanced positions.Looking beyond the usual borders: social internship19 trainees and students at the Heidenheim head office participated in afive-month social internship in 2010. The trainees and students had theopportunity to choose between working in workshops for the handicappedand elderly care facilities of the Samaritan foundation for one week, orparticipating in an educational project for preschoolers. As part of theirtraining in our departments, the participants developed events for kindergartensand preschoolers and prepared and followed up on their socialinternship. “The experiences from such an internship are very positive:through the social internship in the workshop for the handicapped, I havelearned to reduce my fear of interacting with people. Tolerance and teamspirit were also very important. This will be of great help to me in my futurework with customers and colleagues,“ said Janine Weinhofer, a student inindustrial studies.

HARTMANN GROUP 33Staying flexible,ensuring long-term employment.We meet the challenges of demographic change at HARTMANNby providing extensive training, flexibly supporting our employeesin various life stages and offering long-term prospects.The demographic change will further increase the already existing shortageof skilled labor. The HARTMANN GROUP has recognized this and is committedto systematically training and preparing young as well as older peoplefor work at the company over a sustained period of time and to offer themattractive working conditions. It is of great value for HARTMANN as anemployer that our products benefit people and are produced under environmentallysustainable conditions. As an international company with flathierarchies, we promote personal responsibility and support our employeesin meeting professional and private challenges.Parents and children welcomeHARTMANN knows that parents of small children need a great deal ofsupport and family-centered solutions. We therefore help them with flexiblework time models and the opportunity to telework, where employees share ajob, working alternatively either in the company or at home. We also helpparents organize supervision of their children, for example, by reservingplaces in nearby day-care centers and kindergartens and by giving them theopportunity to participate in holiday programs organized by the city ofHeidenheim. “As a last resort and in an emergency that cannot be resolvedin the family, parents can even bring their children to the office,” said theHead of Human Resources Management, Gabriele Müller. “For this purposewe have set up a parent-child work room with a play corner.”Lifelong learning with PEPAt HARTMANN France, lifelong learning is supported by Parcoursd‘Excellence Professionnelle (PEP). Here, a team of our employees andexternal experts defines the requirements for the wide range of careers atHARTMANN France for the next three to five years. Based on this, strengthsand weaknesses of the participating employees are identified and propertraining discussed with them. HARTMANN has introduced this program,which especially addresses older employees, in a first step for employees infield service organizations and back office departments. It will also includeother career fields. “This helps employees to better understand why changesin their daily work are necessary. At the same time we support the employeesso that they can meet the challenges of their jobs also in the future,” saidBernard Grass, Head of Human Resources in France.

34 Changing working worldTaking precautions, working safely.For the HARTMANN GROUP it is a key concernto promote the safety and health of its employees.Therefore, we have implemented an excellent healthand safety management system and, in addition tothis, offer our employees a wide range of healthpromotion programs.At the German locations of Brück, Heidenheim, and Herbrechtingen, we havealready obtained certification according to the internationally recognizedcriteria of the Occupational Health and Safety Assessment Series (OHSAS) forhealth and safety management (see page 54). Worldwide, 50 percent of oursites with integrated production and logistics are scheduled to be certifiedby 2015 under OHSAS 18001. At more than 20 European locations, we havealso conducted workplace assessments and implemented site-specific safetymeasures based on these results. These also include workplace risk assessments,which are continuously updated by local safety specialists.Development of accidentscompared to consolidated salesof the HARTMANN GROUP*, 1,000 men index;index basis : December 31, 200713012011010090Under our program “zero-tolerance regarding occupational safety”,we give experts and employees proper safety training and call for its fullimplementation.Sports – having fun togetherExercise is fun and promotes a feeling of togetherness. We therefore supportour employees in doing sport together in their spare time. At the Heidenheimlocation, for example, we pay for rooms to hold fitness and back injuryprevention courses as well as covering costs for various self-organizedtraining groups. Once a year, there is a special feeling of togethernessamong the HARTMANN sports teams: the City Marathon in Heidenheim.126 employees from HARTMANN participated in the event in 2010; someeven came from Spain.Occupational safety programs show resultsThe HARTMANN GROUP systematically analyzes accidents worldwide andadopts effective prevention measures based on these results. To covermore than just the reportable cases, each incident in the HARTMANNGROUP that causes an interruption of work for more than eight hoursand/or requires consultation with a physician is considered an accident.Due to the rise in accidents in 2009 we have stepped up our health andsafety programs.802007 2008 2009 2010100 183.7 115.2 103.1100 107.5 121.8 127.41,000 men indexconsolidated sales* 32 production, logistics and administration sites; within Europe in: Germany, Belgium, France, Great Britain,Italy, Austria, Poland, Russia, Sweden, Switzerland, Spain, the Czech Republic, Hungary; of these outside Europe:China, India, South Africa, USA

HARTMANN GROUP 35Right The City Marathon in Heidenheim,with more than 100 employees fromcorporate head office and other companylocations as well as foreign countriesparticipating on a regular basis, providesboth a sports experience and a sense oftogetherness.Below In training courses for safetyexperts, like here at our location in Lièpvre,employees learn the proper behavior in anemergency under the direction of externalexperts. Pictured here is the rescue practiceof an injured employee at an elevation of20 meters. The experiences in such trainingare directly incorporated into the on-siteemergency management system.“Stay cool – drive safely”Driver training for sales representatives conducted as partof our fleet management, in which about 80 colleagues hadparticipated until the end of 2010, has proved especiallysuccessful. Under the motto “stay cool – drive safely” theparticipants analyzed their driving behavior, eliminated stressfactors, and practiced a way of relaxed, fuel-saving driving.On October 12, 2010, HARTMANN received the Green FleetAward for its environmentally friendly fleet management,with our successful driver training being particularly honored.

36 Changing working worldWe are inspired by what helpspeople to advance.Demographic change increasingly becomes a major concernfor human-resources managers in the company. A shortageof specialists and managers can be seen even today. GabrieleMüller, Head of Human Resources since October 2010,explains how HARTMANN meets these challenges and whather mission is.“Ensuring an efficient workforce in the long term means that we have toincreasingly focus on occupational health management, offering basic andadvanced training, combining work and family as well as flexible work timemodels. Establishing a strong employer brand that allows us to recruit topcandidates in a more international work market and inducing them to staywith our company are basic requirements for our success.In addition to developing technical skills, we at HARTMANN attach specialvalue to the personal and social skills of our employees. Partnership, pragmatism,passion – these are our recognized company values. Therefore, ourculture is guided by respect and appreciation both in dealing with customersand with each other in the company. When managers make it clear to theiremployees that they value their work, when employees do what they can dobest, and when they work in an environment that suits them, maximumperformance can be achieved. Most people want to identify with what theyare doing every day. This will then automatically help provide a clear ‘yes’ toeveryday tasks and taking responsibility.

HARTMANN GROUP 37Personal detailsAfter obtaining a university degree in social sciences,Gabriele Müller went directly into business. She firstjoined Milkana Deutsche Unilever and the Bavarianvocational training center for commerce (BeruflicheFortbildungszentren der Bayerischen Wirtschaft). SinceNovember 2000, Gabriele Müller has worked in HumanResources at PAUL HARTMANN AG. In October 2010,she was appointed Head of Human Resources.Work is then more than just a paycheck, and going the extra mile becomes achallenge one is willing to face as one can grow with it and because accomplishingsomething with colleagues, for example, through one‘s owninitiative, is a great delight.We, in Human Resources, consider it our duty to enable employees todevelop and achieve their full potential. HARTMANN has continuouslyadvanced in the last few years. Not least, is this development to be attributedto those who were committed to personal improvement and development,who devise and implement their ideas, and who are actively involvedin shaping the future of our company. We do this with a good deal ofpassion, operating in a professional and international environment. Formost of us working for HARTMANN is much more than just working fora paycheck!”“We, in Human Resources,consider it our duty to enableemployees to develop and achievetheir full potential.”

38 Changing environmental needsChangingenvironmental needsImproving efficiency,implementing strategic processes.Interview with Dr. Christian Herzig 39Continuously improving efficiencyand environmental protection.Resource and material efficiency 42Constructive cooperationfor maximum quality.Purchase and supplier management 46Shortening paths, increasing utilization.Logistics and vehicle fleet 48Group-wide responsibilityclearly defined.Environmental Management (HSE)based on international industry standards 52— Protecting the climate,reducing costs.Energy use 56— Clean water for healthy lifeand healthy business.Water consumption 58— The most valuable waste is thatwhich can be avoided.Preventing and recycling waste 60Environmental and cost efficiencygo hand in hand.Employee statements 62

HARTMANN GROUP 39Improving efficiency,implementing strategic processes.Interview with Dr. Christian Herzig, Lecturer at theInternational Center for Corporate Social Responsibilityof the Nottingham University Business SchoolClimate change is one of the most important issues of ourtime. Politics and business are called on to develop effectivesolutions. What contribution do you expect from theindustry?I also expect the business community to make substantialcontributions to effective climate protection. During thelast few years, there has been a change in thinking at Germancompanies. Climate protection is increasingly seen as animpetus for innovation and competitiveness. However, thepotential for the reduction of greenhouse gases, energy, andmaterial flows, as well as the related environmental costs,have so far not been adequately identified and exploited byall companies.

40 Changing environmental needsActually, many measures are already economically feasibleunder current conditions. However, to recognize and betterdetermine their environmental and economic effectiveness,special management instruments for environmental andcarbon accounting, that is, assessing the CO 2 emissions,are required.Fields of work in climate protection for which carbonaccounting is important can be identified throughout thesupply chain. Their individual process or production stepscan, however, have a different relevance for the climatedepending on the product or service. These have to besystematically identified, analyzed, and managed.“Especially in countries wherethere is still a lack of incentivesfor environmental programs,environmental accounting instrumentscan help local companiesreduce both environmental impactand costs through voluntarymeasures.”Environmental accounting is one of the focuses in yourwork. What is, in fact, exactly meant by this?Corporate environmental accounting provides a basis fordecision-making in corporate environmental protection.This means it collects environmental data and combines itwith economic information for decision-making within thecompany. Instruments that identify optimization potentialand help control environmental risks in the companyinclude, for example, energy and material flow analysis aswell as the evaluation of environmental costs or environmentalinvestments.Our case studies in South East Asia have shown that environmentalaccounting has a huge potential with suppliersthat use a large amount of material and are often notparticularly efficient. Especially in countries where there isstill a lack of incentives for environmental programs, environmentalaccounting instruments can help local companiesreduce both environmental impact and costs throughvoluntary measures. The resulting gains in efficiency andthe reduction of risk along the supply chain are, of course,also beneficial to customers.And where do you see the benefits of environmentalaccounting, for example, with regard to the centralHARTMANN issue of material efficiency?In environmental accounting, often also called environmentalmanagement accounting or EMA, material flow canbe systematically analyzed both at the product or servicelevel and across the company. In this way, it is possible toreliably identify environmentally and cost-relevant activitiesand process steps, and the cost reduction potential ofenvironmental measures can be determined in the entiresupply chain. This increases material efficiency and thereforecompetitiveness. Dependence on specific raw materialmarkets can thus also be reduced.What must a company do to implement EMA?What efforts have to be made?Above all, it is important to set up accounting and reportingprocesses based on indicators. This can be done by usingenergy and material flow accounting, CO 2 or water footprints,or more comprehensive environmental performanceand life cycle assessments of processes and products.In addition, the company must have data from supplyand disposal chains in partner companies to analyze thebehavior of suppliers and consumers, to include changeprocesses, and to evaluate discontinuities. The great challengein implementing EMA is to integrate environmentalor sustainability indicators into accounting and companymanagement to make them relevant for decisions.

HARTMANN GROUP 41What challenges do you see for HARTMANN’scommitment to health, safety, and environmentalprotection? What could be the company‘s strategy?From a purely organizational perspective, the overallresponsibility for health, safety, and environmental protectionclearly provides synergies in the management of corporatesustainability aspects. But the benefits of integrationgo beyond this. The most far-reaching effects are achievedby integrating environmental and social aspects into thecore business and combining them with the company’sconventional management.For this objective, the acceptance regarding integratinghealth, safety, and environmental protection data intoconventional accounting or information managementshould be increased first.In this area I see challenges for HARTMANN, especiallyin controlling these activities at Group level. Differentnational standards and rules worldwide have to be integratedfor processing and circulating environmental andsocial information. Expanding reporting to include localmanufacturing, logistics, and administration sites is verydemanding.For continuous improvement of environmental and sustainabilityaccounting in companies such as HARTMANN,I see a clear trend: conventional and sustainability-orientedmanagement control systems are being increasingly used tosupport the strategic integration of sustainability into thecompany. A study recently conducted by our chair in cooperationwith British companies shows how an organizationalchange and learning process can be supported in thecompanies by integrating environmental and social aspectsinto the company’s planning, controlling, and monitoringsystems including their use for strategic processes. Theexciting thing here is that, in the end, environmentalprotection and social aspects are a natural component ofthe company’s structure and culture.Personal detailsDr. Christian Herzig has worked at the InternationalCenter for Corporate Social Responsibility of the NottinghamUniversity Business School, Great Britain, sinceApril 2009. He is a lecturer and course coordinator of theMSc program in CSR. The economist and environmentalscientist (MBA and MS), born in Wuppertal in 1974,obtained a PhD with empirical studies on the integrationof sustainability management in companies and hasworked on various research projects including sustainabilityaccounting and reporting, strategic companycontrol as well as environmental management and CSRactivities in developing countries.

42 Changing environmental needsContinuously improving efficiencyand environmental protection.In product optimization, our main focus is on hygienicand efficient work processes at our customers as well ason the quality of life for patients and those in need ofcare. At the same time, we want to reduce the environmentaland economic impact associated with ourproducts. It is part of our business model to developoptimized solutions for these tasks. To this end, wecontinuously improve the material efficiency as wellas the functionality of our products.

HARTMANN GROUP 43One of the key objectives of our development is to continuously monitor rawmaterial consumption related to production and to reduce it whereverpossible without compromising product performance and quality. Rawmaterials are the largest cost for us, and these have the greatest impact onthe environmental performance of our products. By systematically avoidingsquandering and error rates at the individual stages of production, wereduce both the demand for raw materials and the environmental impact.In addition, our sales staff have the task of showing our customers how toeffectively use the saving potential of our products and, for example, reducetheir disposal volume while, at the same time, saving costs by reducing rawmaterial use.More practical methods for product testsTo directly integrate the practical requirements for our products into ourdevelopment processes, we regularly conduct customer surveys and productrelatedmarket research studies. In this way, we identify, among other things,new saving potentials that benefit the life and work of our customers andpromote the environmental compatibility of our products. For productdevelopment, we use modern practical test methods. Since outdatedstandards for product performance tests often impede progress, we developnew methods in-house. We also work constantly in industry associations onadapting test methods to new technologies and changed applicationconditions. Development results are continuously verified by practical testsright through to market tests.Life cycle assessments helpmanage complex requirement profilesTo provide our developers with a solid data base for product optimization,we also conduct, among other things, life cycle assessments (LCA) analyzingall environmental impact under ISO 14040 and ISO 14044. These LCAsrequire a considerable amount of data and involve substantial costs, but ithas been shown in the past that environmental efficiency often also meanscost efficiency. At the same time, LCAs help us deal with complex tenderrequirements and product standards which, for example, are important forreimbursement of services by insurers. It is our declared goal to design ourproducts in such a way that all requirements, including environmental needs,are met at competitive costs.ObtainingrawmaterialsProduct life cycleProduction of semifinishedproductsManufacturingRecyclingIndicators for a sustainable product life cycleLife Cycle Assessment (LCA), also known as resource andenvironmental profile analysis, is a comprehensive evaluationof all environmental impacts of products during the entireproduct life cycle, from production and use of the product toits disposal. LCA also quantifies the carbon footprint relatingto CO 2 emissions.DisposalApplication phase

44 Changing environmental needs“We are proud that our investmentsin advanced and environmentallyfriendly technologies arebeneficial in multiple ways.”Krzysztof-Daniel Malowaniec, Head of Research and DevelopmentMoliCare: impressive progress in 10 yearsLCAs conducted over many years have shown significant improvement in theenvironmental impact of our products. For example, an LCA on two differentincontinence slips from our MoliCare brand in the period between 1998 and2008 showed a significant reduction in negative environmental impact. Theimpact on water bodies leading to eutrophication, for example, was reducedby 35 percent. Consumption of fossil energy decreased by the same percentage.Material consumption was reduced by 30 percent. “The results fromproduct development not only improve our environmental performance. Theyalso provide substantial benefits to customers and patients, whilst achievingcost savings at the same time,” Krzysztof-Daniel Malowaniec, responsible forResearch and Development and Sustainability Management, said of thedevelopment of the new MoliCare. “We are proud that our investments inadvanced and environmentally friendly technologies are beneficial inmultiple ways.”Ensuring comparability of data in the innovation processTo collect the data for the MoliCare LCA over a period of 10 years, complexapproximation methods were used. Despite significant changes in theproduct composition, the measured values had to remain comparable.Exclusively focusing on the Herbrechtingen site, as well as complete datafrom production and logistics processes in the period under consideration,allowed us to meet this challenge. Energy consumption and raw materialuses as well as environmental data on packaging and product disposal werealso incorporated into the LCA. Environmental impact assessments areplanned for key product groups in all areas of the company.New product generation based on LCA resultsIn the summer of 2009, HARTMANN launched a new generation of MoliCareMobile incontinence pants in whose development the insights from the LCAwere already used. The market launch was also prepared by carrying outacceptance and functional tests in various national markets and throughintense international cooperation. By intelligent use of material, the developersof the new MoliCare Mobile were able to significantly reduce environmentalimpact. In addition, they focused on providing ease of use forcaregivers and improving wearing comfort for patients by optimizing, amongother things, the fit of the pants. The result: leakage protection increased bysix percent and absorbent capacity by 15 percent along with a reduction inmaterial use.This page Over the years, the MoliCare Mobile incontinence pants haveundergone many changes: functions and properties of the inner andouter layer, fastening systems, the finish of the leg cuffs, and the elasticthreads attached to the fabric. These changes benefit patients, nursesand, ultimately, help protect the environment because appropriateincontinence care prevents unnecessary waste caused by usinglow-quality products or oversupply.Opposite page Specially treated cellulose (curled fiber), cellulose fluff,and superabsorbers (SAP) are the components of the absorbent core ofan incontinence product. Their combination and distribution on thesurface significantly influence product quality.

HARTMANN GROUP 45“We have translated customers’expectations and needs intonew product features. We haverefrained from implementingfeatures that are not needed,offering customers added valueat optimal costs.”Krzysztof-Daniel Malowaniec, Head of Research and DevelopmentA soft, skin-friendly and breathable material has been used for the outerlayer of the pants. This makes MoliCare Mobile even more comfortable towear: skin irritation is avoided, patients have more mobility, and enjoy abetter quality of life. The longer wearing time also reduces product consumptionand the related purchase and disposal costs; increased skinfriendliness helps reduce the need for skin care. In this way, the environmentalperformance of daily patient care can be improved even further.Product with added value for customersRegarding value engineering, the development of MoliCare Mobile is a realsuccess story. Krzysztof-Daniel Malowaniec explains: “We have translatedcustomers’ expectations and needs into new product features. We refrainedfrom implementing features that are not needed, offering customers addedvalue at optimal costs.”Disposable products on par with reusable onesAn independent LCA study on baby diapers published by the BritishEnvironment Ministry in 2008 has shown that a disposable absorbenthygiene product, such as MoliCare Mobile, can readily be compared withthe supposedly more environmentally friendly reusable diapers. Approximately50 percent of MoliCare Mobile is made of renewable materials.Most advanced manufacturing technology and intelligent product designreduce waste from oil-based polypropylene by 70 percent. Reduction ofpackaging means fewer truck trips and thus less CO 2 . The study concludesthat neither the disposable nor the reusable product is environmentallysuperior. In comparison to the reusable versions, however, user benefitsare clearly provided by disposable products such as MoliCare Mobile.Optimizing consumption with the support of HARTMANNEconomic and environmental benefits can be gained with HILMAS, thecontrolling software for incontinence management. HILMAS is part ofHARTMANN’s system partnership with elderly and nursing homes (seepage 10), offering customized nursing care plans as well as easy costcomparison, order management, and accounting. HILMAS helps customersto use the products even more efficiently and to further reduceconsumption.Commitment to renewable raw materialsCellulose represents a large part of the raw materials used in the productionprocesses of the HARTMANN GROUP. To encourage sustainableproduction, we also work with suppliers who use certified timber stocks.Following detailed external audits, these certificates confirm thesustainability of their forestry and plantation practices to manufacturers.

46 Changing environmental needsHARTMANN sells high-quality products for high-levelmedical and nursing services worldwide, purchasing fromqualified suppliers to meet these requirements. Currently,we work with about 1,500 suppliers throughout the world.Strong relationships with suppliers based on partnership,that is, good supplier relations, are therefore a majorcriterion for our success around the world.Constructive cooperationfor maximum quality.Many of our suppliers produce raw and intermediate products that havegreat relevance for assessing the environmental impact of our products: theproduction of cotton and pulp, which represents a significant part of the rawmaterials we process, is associated with intensive land use and consumes alarge amount of energy. Other semi-finished products are based on mineraloil, a raw material that is not renewable. Although we do not produce thesesemi-finished products ourselves, we take responsibility for the supply chain.Therefore, we began to conduct comprehensive Life Cycle Assessments (LCA)for our products, taking into account the environmental impact of oursuppliers (see page 43). Because our goal is not only to continuouslyimprove our own processes, we also encourage environmentally friendly,energy efficient, and socially conscious production at suppliers.Sustainable value creation through joint innovation objectivesWorking closely on a partnership basis with our suppliers is also an importantrequirement for the high quality and cost effectiveness of our products.Only when we constantly continue to improve together with our supplierpartners, can we sustainably improve our value creation.We therefore regularly look at total procurement costs as part of our developmentstrategy, including selection, qualification, and management of oursuppliers. Working closely and cooperatively with our suppliers, we settargets for innovation and process optimization and rigorously implementthem. Our supplier partners also give us impetus for customer-centricimprovements of our products. What is important here is the personalcontact of our purchasers and product developers with suppliers.“In general, sanctions arepossible, however, so far wehave always found a mutuallyacceptable solution in adirect dialog.”Peter Halbauer, Head of Group Purchasing Management

HARTMANN GROUP 47Clear guidelines for a strong partnershipWe often work with our suppliers on site, while evaluation and qualificationare conducted centrally at HARTMANN using a uniform structure. As part ofan evaluation and qualification process, we analyze the performance of oursuppliers based on defined criteria that include all aspects regarding Health,Safety, and Environment (HSE) and all corporate responsibility issues. Therequirements for our suppliers are part of the agreements and are covered inthe Code of Conduct of the HARTMANN GROUP.Systematic supplier evaluationBecause our purchasers usually establish initial contact with our suppliers,they are to be involved in the assessment of issues regarding HSE and thesocial responsibility of companies (Corporate Social Responsibility, CSR). InMarch 2010, HARTMANN therefore launched the “HSE/CSR supplier qualification”pilot project with five gauze suppliers in India. The goal was todevelop a Supplier Evaluation Tool (SET) for purchasers.The information for the SET is obtained by our purchasers during theirroutine visits at a location and a final meeting with the supplier. Prior to this,our employees are appropriately trained. The tool provides a method forquantifying supplier information to adapt the supplier qualification programsto specific needs. 80 percent of the questions posed under SET canalready be answered during the tour of a plant. This saves time and alsoincreases the readiness of suppliers to use the tool.SET is based on 16 questions about corporate responsibility. These questions,for example, deal with the conformity of work conditions and environmentalprotection with international standards ISO 14001 and OHSAS 18001 aswell as the 10 principles of the Global Compact of the United Nations (UNGlobal Compact) on human rights. Other questions relate to emergencyprevention and organization and to social and legal conformity. The focus ison business approaches and thus company activities such as production anddelivery.The SET data is centrally collected, evaluated, and used to compare performanceamong suppliers. Together with additional business criteria such assales, unique market position, product features, and country of production,we are provided with comprehensive documentation on our top suppliers.Based on the SET results, we decide whether a supplier is to be audited or asite assessment is to be made. If deficiencies are revealed, the purchasersfirst have to address them in a personal meeting and to present concretesuggestions for improvement. If significant deficiencies cannot be correctedwithin a defined period of time, we take appropriate steps. “In general,sanctions are possible, however, so far we have always found a mutuallyacceptable solution in a direct dialog,” said Peter Halbauer, Head of GroupPurchasing Management of the HARTMANN GROUP, summing up the resultsobtained so far.Supplier pyramidCurrentsupplierQualified supplierCertified supplierProvider poolQualification on the path upwardsThe path from being a provider to a qualified supplier for the HARTMANNGROUP is a clearly defined process. Our procedural guidelines define arange of integrated criteria for this purpose:— The base of the so-called supplier pyramid is a pool that accommodatesall applicants who complete our supplier questionnaire.— In the next step, we expect them to provide proof of a managementsystem certified under ISO 9001 or ISO 13485 (for medical devices).— The actual qualification is made by the Quality Control, Development,and Purchasing Departments. In case of doubt, the assessment issupplemented by internal or external audits, for example, by TÜV SÜDfor medical products.— If the supplier successfully completes the evaluation, he moves to thetop of the pyramid. Then we share our knowledge with the supplier,working together on improving processes and products.

48 Changing environmental needsShortening paths, increasing utilization.Transportation is essential for the business activities ofthe HARTMANN GROUP. To effectively supply ourcustomers and, at the same time, minimize the associatedCO 2 emissions, we continuously improve our logistics.Wherever possible, we choose the most environmentallyfriendly mode of transport, such as rail or ship, andoptimize utilization of transport capacity together withour logistics partners. By establishing production sitesclose to important markets, we also shorten our distributionchannels.To make our logistics processes as efficient, resource- and climate-friendly aspossible, we work with selected strategic service providers. Together withthem, we analyze the processes, correct deficiencies, and optimize thetransportation network of the HARTMANN GROUP. In addition, we continuouslyimprove our logistics network for supplying our distribution warehouses.In Europe, more than 85 percent of these shipments are thereforemade directly from point of origin to destination. Generally, we have anapproximately 80 percent capacity gross utilization rate for trucks, whichcan only be achieved by the efficient loading of pallets. With additionaloptimization steps, we will continue to gradually improve this value duringthe coming years.Green light for environmentally friendly means of transportBy giving priority to sea and river vessels for shipments as well as usingcombined ways of transportation, we save significant amounts of CO 2 . In allareas where we can use the infrastructure and services of railway companies,we focus on rail transportation. In general, we seek to set up railway sidingswhen we add new production and distribution facilities to make our logisticseven more sustainable.Carbon dioxide accounting for logisticsWe pursue the goal of precisely identifying and regularly disclosing the CO 2emissions of our logistics processes. Consolidated collection of the data has,however, not been possible so far. Now we have started to implement areporting system in our distribution centers under the HSE Management(see page 52) and to include environmental performance in the identificationand selection process for our distribution partners.Investment for environmental protection and reliable deliveryMost advanced computer-aided warehouse management, 44,500 palletplaces on 48,000 square meters of space as well as 124 employees forprocessing up to 480,000 freight orders a year: these are the figures withwhich the new HARTMANN Logistics Center in Belleville, France, started onJune 22, 2010.At the opening ceremony, Michel Kuehn, Managing Director of HARTMANNFrance and Member of the Management Board of PAUL HARTMANN AG,emphasized the contribution of the new warehouse to more sustainability inhis speech to the attending politicians, media representatives, and managersof the Group: “Digital control of all warehouse and distribution processesallows us to not only meet our obligations for timely and accurate deliveryof our products to customers even more effectively. We have also devisedvarious solutions to fulfill our responsibility to future generations evenbetter.” Jean-Marc Rohlmann, Head of Logistics of HARTMANN France, said,stressing the reduction of the environmental impact of traffic: “By usingdouble-decker trucks, we can reduce departing transports by 20 percent.Since the establishment of a rail siding early in 2011, we have been able toshift another 20 percent of freight traffic from road to rail.”

HARTMANN GROUP 49Above Whenever possible, we give priorityto rail over road, or we combine modes oftransportation. Thus, our new logistics centerin Belleville, France, also has its own railsiding. An additional contribution toenvironmental protection is made byrefraining from using outer cardboardpackaging for palletized incontinenceproducts. This facilitates handling and reduceswaste.Left New warehouse and picking technologies,IT capabilities, and loading/unloadingequipment in the logistics center in Belleville,France, ensure optimal transport managementin terms of sustainability.

50 Changing environmental needs“If the car is the only option, it should be anenvironmentally friendly one. 120 of the 400vehicles are now environmentally friendly.”Ralf Kienzle, Head of Health, Safety, and Environment Management (HSE)Wide range of other environmental protection measuresIn addition to an optimized control of product flow, HARTMANN France hasimplemented other environmental measures in connection with setting upthe logistics center. These include using solar energy for hot water production,establishing facilities for rainwater utilization, and wastewater treatmentas well as creating a natural reserve to protect endangered species.Modern fleet, fuel-efficient drivingThe business trips of our sales representatives also have high potential forthe reduction of climate-damaging emissions. We have improved thissystematically: automatic start/stop function, low-resistance tires, aerodynamiccar bodies, and gear ratios for less RPMs – compared to conventionalvehicles, our company cars save up to 15 percent of fuel, provided that thefocus is on fuel-efficient driving. The sales representatives of HARTMANN30 percent sales growth requires presence in RussiaMeeting rapidly increasing demands in Russia with proximity to the marketand a reduction in environmentally unfriendly transportation: these arethe goals HARTMANN wants to achieve by building a manufacturing anddistribution center in Gus-Khrustalny, 200 kilometers southeast of Moscow.In December 2009, we therefore purchased 6.5 hectares of land andinitiated planning. In the approval procedure, the expertise of HARTMANNas an environmentally clean industrial company played a major rolebecause of a nearby nature reserve. Production is set to start early 2012;many of the transports to Russia will then no longer be necessary.practice this in the “Stay cool – drive safely” driver training, which earnedus the Green Fleet Award in 2010 (see page 35). Already in the first half of2010, more than 57 tons of CO 2 were saved in this way. Another 20 percentof CO 2 emissions can be saved by converting the vehicle fleet to natural gas.HARTMANN is planning appropriate pilot projects in metropolitan areaswith many natural gas stations. “Everyone can drive in an environmentallyfriendly way. To me, a smart combination of train and car together with carsharing at train stations is a future-oriented approach. This not only protectsthe environment but is also more cost-effective for the company becauseone can work on a train. If the car is the only option, it should be an environmentallyfriendly one. For example, the company car I use does not emitmore than 99 g CO 2 per kilometer. After all, 120 of 400 vehicles of PAULHARTMANN AG are now environmentally friendly,” Ralf Kienzle, Head ofHealth, Safety, and Environment Management, said of the fleet policy ofHARTMANN.Video conferencing instead of business travelAvoiding unnecessary travel is even more effective than converting tofuel-efficient vehicles. Video conferencing provides an enormous CO 2 savingpotential. Regarding applications for business trips, we have been askingour employees since 2008 to provide a good explanation if they do not wantto use an environmentally friendly alternative as, for example, video conferencing.In the course of integrating BODE into the HARTMANN GROUP, weconducted 90 video conferences with four participants on average. Flightsto Hamburg, on the other hand, would instead have created almost 65 tonsof CO 2 emissions.

HARTMANN GROUP 51Above In the centrally located distributioncenter in Belleville, France, between 1,000and 1,800 pallets are processed each day.Right Smaller models, fuel-efficient engines,and a fuel-efficient way of driving as conveyedat HARTMANN in special training courses forsales representatives – this is our fleet policyfor the future. For its innovative mobilityconcept, PAUL HARTMANN AG received theGreen Fleet Award of the TÜV SÜD subsidiaryFleetCompany GmbH in Autumn 2010.

52 Changing environmental needsGroup-wide responsibilityclearly defined.To us, sustainability meanscommitment on all hierarchylevels in the company. Because inone’s work everyone can make anactive contribution to environmentalprotection, occupationalsafety, and health as well as tofire protection. To make thiscomplex task more relevant inthe management processes of theHARTMANN GROUP, we setup a Health, Safety, and EnvironmentManagement System (HSE)in 2002.The goal of our HSE management is to contribute to maintaining companyvalues as well as enhancing efficiency of company processes. To achieve this,we systematically and continuously avoid or reduce the impact of ourbusiness activities on the environment, our employees, or the community. Weconstantly monitor, evaluate, and improve all relevant aspects on Group orsite level, using a comprehensive network of indicators. Based on the dataobtained in this way, which is centrally collected, we introduce site-specificmeasures to effectively minimize HSE risks, responsibly deal with residualrisks while, at the same time, making use of the opportunity associatedwith the HSE management, for example, through greater resource efficiency.To monitor success, we use internationally proven control indicatorsand standards. Potential for improvement is communicated within theHARTMANN GROUP in a timely manner and integrated into decisionprocesses. In addition, we also regularly inform our stakeholders of theprogress of our HSE activities.Clear responsibilities and rules for Group-wide HSE managementFrom top management to local-level management, the HSE responsibility atHARTMANN is clearly defined and implemented across the Group. Responsibilities,actions, and procedures have been laid down in a Group-wide Codeof Practice. On site level, these requirements are included in a Security andEnvironment guide in accordance with local conditions and legal provisions.Comprehensive communication of principlesTo communicate its Code of Practice, HARTMANN conducts training coursesacross the Group and uses the large variety of opportunities provided by theIntranet or Internet at Group and site level to inform employees of currentprograms, industry standards, and concrete measures.

HARTMANN GROUP 53HSE structureManagement Board of PAUL HARTMANN AGRegional DirectorsHSE Steering TeamFire ProtectionFire Protection ExpertFire Protection AssistantSprinkler ManagerCompany Fire DepartmentOccupational Healthand SafetySafety SpecialistSafety StaffFirst AiderRadiation Protection OfficerRailroad OfficerLocal ManagementEnvironmentEnvironmental ExpertWater Protection OfficerImmission Protection OfficerWaste OfficerHazardous MaterialsManagerEnergy ContactSecuritySecurity StaffHSEHSE Expert Team + External SupportEmergency ManagementMonitoringCommunication, ReportingClear HSE structure for complex tasksAll environmental and safety issues related to the business activities of the company are theresponsibility of the Management Board of the HARTMANN GROUP. The Management Boarddefines the HSE principles, goals, and minimal requirements. Corporate HSE-Management providescomprehensive and regular advice to the Management Board. The department establishes therequirements for the environment and safety organization, develops training programs, andprovides training and seminars on all HSE issues. In addition, Corporate HSE Management helpsthe locations identify and evaluate legal provisions and analyzes the implementation andeffectiveness of regional and local HSE programs. The site-specific activities of the HARTMANNGROUP are controled locally by a special committee, the HSE Steering Team. It includes, forexample, Plant Management Members and HSE experts. The Steering Team meets at least fourtimes a year, especially to plan and coordinate preventive measures.

54 Changing environmental needsWe grow with the standards we are settingThe HSE Management of the HARTMANN GROUP is certified by independentauditors under international industry standards. In the environmental areaas well as in occupational safety and health, we work in accordance withinternational industry standards EN ISO 14001 and OHSAS 18001. So farwe have established an environmental management system certified underISO 14001 at 70 percent of our production sites. More than 90 percentare scheduled to be set up by 2012. With regard to occupational safetyand health, we started with certification of our production sites underOHSAS 18001 in 2010.Regular site assessments ensure the highest standardsTo reliably control the HSE processes in the various companies of theHARTMANN GROUP and to make success measurable, we regularly conductHSE site assessments and have implemented monitoring programs.With HSE site assessments, we assess and evaluate safety and environmentalcompliance, that is, to what extent international industry standards andsite-specific legal and company requirements are implemented at ourproduction, warehouse, and administration locations on a national and locallevel. HSE site assessments are currently conducted alternately at more than50 production and logistics sites internationally in the HARTMANN GROUP.As an acquisition decision aid for managers, we have also established HSEDue Diligence, whereby HSE key indicators of the respective locationare identified and evaluated. In this way we can, on the one hand, identifysafety and environmental compliance, and, on the other, better assessconsequential costs incurred, for example, by upgrading HSE relevantfacilities.

HARTMANN GROUP 55More than 70 percent of ourproduction sites are alreadyworking in accordance withan environmental managementsystem certified underISO 14001. More than 90percent are expected to becertified by 2012.Partner of Responsible Care initiativeBODE and Kneipp, both subsidiaries of the HARTMANN GROUP, participatein Responsible Care, an initiative of the International Council of ChemicalAssociations (ICCA), to improve HSE performance and stakeholder communicationsof chemical companies. The participants – representing almost90 percent of global chemical production – are committed to a managementsystem approach based on the Plan-Do-Check-Act principle (forexample ISO 9001) and are committed to ensuring safe and environmentallyfriendly technologies or methods and external certification of theirmanagement systems.More information is available at: www.responsiblecare.org.HSE goals of the HARTMANN GROUP until 2015— Certification of 80 percent of all locations with integrated productionand logistics under ISO 14001 and 50 percent under OHSAS 18001— Installation of power, compressed air, gas and water meters toseparately measure consumption at production sites, warehouses,and administrative offices— Half-yearly collection and analysis of HSE data (energy, water, waste,accident) and environmental performance regarding consolidatedHSE data for the HARTMANN GROUP— Gradual supplier qualification based on HSE or CSR criteria incooperation with Central Purchasing– Training of all senior purchasing managers– Implementation of a HSE/CSR legal database for suppliers– Assessment of new suppliers with the Supplier Evaluation Tool(SET) (see page 47) by 2011– Launching qualification programs for suppliers

56 Changing environmental needsProtecting the climate, reducing costs.Shifting to environmentally friendly forms of energy andusing energy more efficiently are major activities in theHSE management of the HARTMANN GROUP. To helpprotect the climate and save valuable resources, we useintegrated energy management.Energy consumption or energy efficiency of our plants and processes areimportant success indicators for our energy management. Therefore, wehave started to collect these indicators throughout the Group and presentthem in a coherent way. The goal is to monitor the development of consumptionindependently of changes in our Group of companies. In 2010, energyconsumption in the HARTMANN GROUP* was about 160 million kilowatthours.Related to sales, we have gradually reduced energy consumptionsince 2007. This development shows the effectiveness of our measures toimprove energy efficiency and reduce CO 2 emissions from our plants andprocesses.Development of energy consumptionrelated to consolidated salesin the HARTMANN GROUP*, in kilowatt hours;index basis : December 31, 200713012011010090802007 2008 2009 2010100 192.1 182.9 82100 107.5 121.8 127.4kilowatt hours/consolidated sales consolidated sales* 32 production, logistics and administrative sites; of these in Europe: Germany, Belgium, France, Great Britain,Italy, Austria, Poland, Russia, Sweden, Switzerland, Spain, Czech Republic, Hungary; of these outside Europe:China, India, South Africa, USASaving potential grows with state-of-the-art technology –and we use itWhether lighting, heating, hot water, air-conditioning or cooling, compressedair, motors, or office equipment and facility management – innovativeconcepts and technologies provide great energy saving and efficiencypotential in all these areas. To assess this, HARTMANN has conductedcomprehensive analyses since 2008 and launched a Group-wide energysaving program including carbon dioxide balance. Ralf Kienzle, Head ofHealth, Safety, and Environment Management, emphasizes the necessity of asystematic approach: “The various locations have already launched effectiveenergy-saving projects in the last few years. What we need now is a methodologicalapproach. Therefore, we seek to combine all energy programs in theHARTMANN GROUP and provide a Group-wide carbon dioxide accounting.This also provides the basis for Group-wide controlling to control themeasures and evaluate their effectiveness.”“Year of Energy” opens new energy chapter at KOBAt our subsidiary KOB, the world’s largest manufacturer of elastic medicaltextiles, the Year of Energy 2009 was a great success: “In our yarn dyeingplant, we were able to reduce energy consumption by half compared to theprevious year,” Heiko Wehner, Managing Director of KOB Medical Devices(Germany) GmbH, said happily.To counteract the increased world market prices for energy, KOB declared2009 the Year of Energy and put into place a comprehensive series ofmeasures to further systemize the various energy-saving measures. The focushas been on implementing the new European standard DIN EN 16001 forenergy management systems. From evaluating the situation through potentialand detailed analyses to energy controlling, all processes were reviewedand new concepts realized.

HARTMANN GROUP 57Efficiency – competitive edge for energy-intensive plants36 percent reduction in power consumption per kilogram of cellulosewadding production: this remarkable increase in energy efficiency wasachieved by our Austrian subsidiary, PAUL HARTMANN Ges.m.b.H., inGrimmenstein, Lower Austria, between 2003 and 2009. During the sametime frame, it also realized a reduction in the two-digit percentage range forthe remaining energy consumption values. The related 14 percent reductionof specific CO 2 emissions at the location is also remarkable.“In our yarn dyeing plant,we were able to reduce energyconsumption by half comparedto the previous year.”Heiko Wehner, Managing Director of KOB Medical Devices (Germany)Consumption of energy in the manufacturing and processing of cellulosewadding is a major production and competitive factor. In view of the highenergy prices and environmentally harmful CO 2 emissions, it is particularlyimportant for our subsidiary, which produces high-value cellulose productswith about 70 employees, to improve its energy balance. This task has beencontinually addressed in the last few years and has met with great success:waste heat from machines was used to heat rooms, loss by leakage fromcompressed air systems was systematically prevented by regularly carryingout ultrasonic measurements. In addition, the plant‘s internal steam generationfor paper production was optimized. In Grimmenstein, a central elementof energy management is also to raise employee awareness in dealing withvaluable resources. The Environmental Manager at the location, JohannesWiederkum, pointed out that efforts in energy management will becontinued: “Above all, we intend to further improve our environmentalperformance in the future. To this end, we are currently examining the costefficiency of restarting the turbine plant, which would allow us to use localwater power for generating electricity.”Networking solution for sustainable use of energyDepending on the availability of sun, wind, or biomass, renewable energiesrequire different concepts of utilization. IVF HARTMANN AG, Switzerland,saves up to 1,550 liters of heating oil each day by using biogas from aneighboring waste treatment plant to operate their thermal power station.Today, biogas therefore supplies 30 percent of their electric power andabout 45 percent of the process heat.For cost-effective production of biogas, it is important to ensure continuouspurchase of the amount produced. To this end, IVF HARTMANN AG hasbegun to work with the waste water treatment plant ARA Röti in Neuhausenat the Rheinfall. With its constantly high energy demand, IVF is anideal purchaser of quantities of biogas from the treatment plant. It usesthe biogas in its new thermal power station to generate electricity andheat. Since 2001, the cycle has been completed in the form of a biogasand heating network: using a district heating pipe, part of the heat energyproduced can now be returned from the power plant to the ARA, whichuses it for room and sludge heating. IVF further increased its energy efficiencyby establishing a new steam boiler plant with significantlyincreased efficiency that can also be operated with biogas. The result isthat most of the sterile products from IVF HARTMANN AG are now sterilizedwith environmentally friendly steam generated using biogas.Left Using ThermoFly, a flying imaging camera, we have scanned the thermalinsulation of building facades and roofs to take appropriate improvementmeasures.Right In 1999, at the Grimmenstein location a boiler was converted to naturalgas. The change from heating oil to natural gas led to significantly loweremissions.

58 Changing environmental needsClean waterfor healthy life and healthy business.In the production plants of the HARTMANNGROUP, water is used for bleaching processes,as a coolant for compressors, for steam generation,and for humidifying air. Especially in countrieswith great water shortage, we therefore beara special responsibility.In 2010, about 1.6 million cubic meters of fresh water were used in theHARTMANN GROUP*, with 62.6 percent coming from wells at our locationsand 37.4 percent being taken from public water supplies. The correspondingamount of waste was about 1.1 million cubic meters. Related to sales, wehave been reducing the consumption of fresh and waste water since 2007.The slight increase in 2010 was due to a major capacity expansion inQingdao, China. All waste water was discharged to receiving water coursesvia three-stage sewage treatment plants or re-used as process water.Water management as part of materials managementThe amount of production water used at HARTMANN is very small comparedto the water consumption for manufacturing semi-finished products used byHARTMANN. Consistently improving use of materials is our contribution tosaving water (see also page 44). Incidentally, life cycle assessments showthat our disposable products are clearly superior to many reusable productsin terms of water consumption.Development of fresh water consumptionrelated to consolidated salesin the HARTMANN GROUP*, in cubic meters from public systems;index basis : December 31, 200713012011010090802007 2008 2009 2010100 196.6 81.7 86.8100 107.5 121.8 127.4cubic meters/consolidated sales consolidated sales* 32 production, logistics and administrative sites; of these in Europe: Germany, Belgium, France, Great Britain,Italy, Austria, Poland, Russia, Sweden, Switzerland, Spain, Czech Republic, Hungary; of these outside Europe:China, India, South Africa, USADevelopment of waste water consumptionrelated to consolidated salesin the HARTMANN GROUP*, in cubic meters;index basis : December 31, 200713012011010090802007 2008 2009 2010100 189.7 77.6 82.9100 107.5 121.8 127.4cubic meters/consolidated sales consolidated sales* 32 production, logistics and administrative sites; of these in Europe: Germany, Belgium, France, Great Britain,Italy, Austria, Poland, Russia, Sweden, Switzerland, Spain, Czech Republic, Hungary; of these outside Europe:China, India, South Africa, USA

Left After a new water management system was set up at our subsidiary KOB Medical Textiles inCoimbatore, India, the location has turned into a green oasis in an otherwise mostly barrenlandscape.Right At the Grimmenstein location in Austria, the HARTMANN production plant uses thetreatment facility together with the Grimmenstein community. Production waste water isbiologically cleaned – a joint contribution to the environment.Quantum leap in the water managementat the Coimbatore location, IndiaIt is green everywhere, and mango trees provide refreshing shade. Thefactory premises of KOB Medical Textiles, lying in a dry swath of land on theperiphery of the town of Coimbatore in the south Indian state of Tamil Nadu,is much greener today than it was a couple of years ago. Since a biologicalwaste-water treatment system has been installed, the sewage from theworkers’ housing is no longer pumped into tank trucks and disposed ofexternally for a fee. Instead, there are 40,000 liters of purified water availabledaily to irrigate the company premises. “We are hitting three birds withone stone”, sums up Aravamudhan Shanmugavasan, General Manager ofthe manufacturing site. “We consume less drinking water per employee, theground water is protected and replenished, and we do not spend money forsewage disposal.” Moreover, the water contains nutrients and minerals thatbestow an additional, positive effect on the green areas.“We are hitting three birds withone stone: we consume lessdrinking water per employee, theground water is protected andreplenished, and we do not spendmoney for sewage disposal.”Aravamudhan Shanmugavasan, General Manager KOB Medical Textiles,Coimbatore/IndiaWith about 500 millimeters per square meter of rain a year, the area resemblesa semi-desert. The plant was established in an area that was no longerused agriculturally and which, with regard to water supply, depends onground water wells or the additional purchase of water. The water situationhas been greatly improved by treating and using municipal waste water toirrigate the green areas on the plant premises and by collecting rainwatervia soak pits, which then passes into natural wells on the premises.New era in the productionof medical textiles in Qingdao/ChinaWith its location in Qingdao, China, HARTMANN joins the environmentallyminded manufacturers in the province of Shandong. “Our employeesmade the main contribution to the innovative project,” said JohannesMetzger, Managing Director of the plant since August 2009, explainingthe success of its transformation. “Thanks to their great personal commitment,the former Spinning Mill No. 15 has become a hyper-modern facilityfor the production of medical textiles within 11 years.” But not only wasthe competitiveness of the plant substantially increased, a positive contributionto the environment was also made. The focus here was on improvingthe use and treatment of water for the energy- and water-intensivecotton bleaching facilities. By adding an intermediate storage for rinsewater, the plant can re-utilize used water for subsequent processes. Ionexchangers for softening water help reduce the consumption of chemicals.75 percent of the heating energy used is recovered by heat exchangers.The old coal-operated steam boilers were removed; instead, the watersteam required is taken from a neighboring thermal power plant withsignificantly higher efficiency.

60 Changing environmental needsA large part of HARTMANN sales are disposable products.By preventing and recycling waste and packaging, we helpto make the life cycle of our products as sustainable aspossible. Manufacturing, packaging, and distribution playan important role here.The most valuable waste is that which can be avoided.Development of waste amountrelated to consolidated salesin the HARTMANN GROUP*, in tons;index basis : December 31, 200713012011010090802007 2008 2009 2010100 197.1 88.8 87.3100 107.5 121.8 127.4tons/consolidated salesconsolidated sales* 32 production, logistics and administrative sites; of these in Europe: Germany, Belgium, France, Great Britain,Italy, Austria, Poland, Russia, Sweden, Switzerland, Spain, Czech Republic, Hungary; of these outside Europe:China, India, South Africa, USATo avoid waste from the beginning, we continually increase material efficiency(see page 44) of our products and our production. One significantoperational measure is to reduce the reject rate in our production. Wherewaste cannot be prevented, it is recycled or used to generate energy.Consolidated waste statistics from central production regionsThe total amount of waste in the HARTMANN GROUP* was about 27,000 tonsin 2010. Related to sales revenues, we have continuously reduced this quantitysince 2007. We have sent about 22,000 tons to recycling, a recyclingrate of 80 percent. The remaining waste was disposed of in accordance withregulations.More than 95 percent separation of cellulose and superabsorbersAt the Herbrechtingen location in Germany, we process about 2,000 tons ofproduction waste with a high degree of purity for recycling each year. Toachieve this, cellulose and superabsorber (SAP), the main components of theabsorbent core of HARTMANN incontinence products, have to be separatedfrom each other in a complex process. For this purpose, we operate a plantin Herbrechtingen, in which the compressed mass of cellulose pulp andSAP are completely separated. The process was jointly developed with atechnology partner. The purity of the processed SAP is equivalent to thestandard of new goods.

HARTMANN GROUP 61Our contribution to a recycling economyResponsible disposal at the end of product life and compatibilitywith common disposal concepts are major focuses of our productdevelopment. Both the users and the waste disposal industry benefitfrom this. The same applies to packaging. For example, in thedevelopment of the packaging concept for the Pur-Zellin celluloseswab, we included recycling in our plan from the outset.Providers of products sold to consumers are obliged to have theseproducts licensed for environmentally friendly disposal. Disposalsystems, such as the Dual System Germany (DSD), which define theGreen Dot, are financed through a license fee. Therefore, we transmitecological data for more than 2,100 items to the system, that is, thenet weight of individual packaging and their type of material.In return, the DSD provides us with relevant information as to whatextent we were able to save CO 2 emissions by using the Dual System.In 2009, the savings amounted to 1,127 tons of CO 2 equivalents.At the Grimmenstein location in Austria (above), specificenvironmental risks of the paper processing industry need to beaddressed. The products manufactured there, such as Pur-Zellin,are based on cellular wadding. Multilayer cellulose, as shownhere, is produced in a highly bleached way from unbleachedcellulose made from 100 percent waste paper. There is practicallyno waste in the manufacturing process as it is recycled to100 percent in the production process.

62 Changing environmental needsEnvironmental and cost efficiencygo hand in handEnvironmental protection,sustainable products, and efficientprocesses are given highpriority in the HARTMANNGROUP. The various departmentswork in close cooperationon these issues. Magnus Bodmer,Senior Manager Life CycleAssessment and Chemicals, RalfKienzle, Head of Health, Safety,and Environment Management,and Alexander Schneider, Headof Group Logistics Management,provide answers to questionsabout the sustainability in theirfields of work.Responsibility for sustainability only works with passion.How is this shown in your daily work?Bodmer: I am enthusiastic about continuously optimizing our products –both with respect to environmental effects and with their use for customersand patients.Schneider: My motivation is to align our logistics with long-term goals andvariable customer needs, win strategic partners, and integrate them into ourdevelopment processes.Kienzle: I‘m motivated anew every day to raise HSE awareness in theHARTMANN GROUP and to implement it through concrete programs andmeasures.

HARTMANN GROUP 63Personal detailsRalf Kienzle (left page) has been Group Safety and Environment Officersince 1997. He holds a Master of Engineering in International AgriculturalEconomics and Environmental Chemistry, and a Master of Sciencein Safety and Security. His focus is on fire protection, occupational safetyand health, and environmental protection.Magnus Bodmer (above) holds a Master of Engineering in PharmaceuticalChemistry and a Master of Business Administration. He joinedHARTMANN in 1998, initially working in product development. Today,his area of responsibility includes chemical law and environmental issuesas well as environmental assessment of various product groups.Alexander Schneider (below) has been with HARTMANN since 2008.He holds a Master of Engineering in Mechanical Engineering and has15 years of work experience with leading international logistics companies.In the HARTMANN GROUP he combines this with the strategic andtactical direction of the Group’s logistics activities.How do you manage to realize sustainable logistics, products,and sustainable HSE management across the Groupand therefore worldwide under vastly different conditions?Kienzle: We have learned to think and act beyond traditional models. InHSE, we have therefore established a close-knit network to share informationand experiences and to establish Group-wide HSE projects.Schneider: Exactly. Seeing regional differences and working together aspartners – this is part of our success formula in the design and managementof the supply chain.You have been operating HSE management in accordancewith international standards since 2002. What is its contributionto the sustainability efforts of the HARTMANN GROUP?Kienzle: Using local assessments and indicators, we provide our colleagueswith decision-making support to help identify economic and environmentalpotential for improvement.Bodmer: HSE data, as components of environmental assessment, are alsoessential for our product improvements.Schneider: Logistics benefits from our sound HSE management becauseenvironmental and cost efficiency often go hand in hand. HSE managementgives us further indications as to how we can effectively optimize our valuecreation process.Where do you see the greatest potential in your field ofwork to make products and services from HARTMANN evenmore sustainable?Bodmer: We can – and this is the fascinating thing – become even moreefficient. Not only in product design and use of raw materials but also byhelping our customers to use products correctly. And this is also for thewell-being of patients.Kienzle: Yes, and therefore we have to gradually bring our HSE activities toan international level – for our production, logistics, and administrative sitesand for our suppliers.Schneider: The market environment in procurement and distributionlogistics is continuously changing. Sustainability data helps us to constantlyredesign our processes in a customer-focused and environmentally andcost-effective manner.

64 Company profile

HARTMANN GROUP 65Company profileCommitted to health,helping the helpers.The HARTMANN GROUP at a glance 66Values we practice:partnership, pragmatism, passion.Company culture and values 68Always focusingon customer needs.FOCUS Strategy 69Complying with rules,practicing values.Compliance 70A story about people andtheir ideas.From early times to the present 72Contact, Imprint 76LocationsCover

66 Company profileCommitted to health, helping the helpers.The HARTMANN GROUP is an international companyin the field of individual solutions for professionalcustomers in medicine and nursing. As a result of thedevelopment of medical competence and continuousdialog with customers over many years, HARTMANNhas become an internationally leading provider in woundcare, incontinence hygiene, and infection protection.With its subsidiaries, the HARTMANN GROUP has positioned itself close toits customers in strategically important sales markets. The Group has 9,982employees worldwide (as at December 31, 2010) and achieved sales revenuesof 1,633 billion euros in 2010. The main market of the HARTMANNGROUP is Europe. In addition, HARTMANN has operations in America and inAfrica, Asia, and Oceania.At the core of the HARTMANN GROUP’s portfolio are solutions for professionalusers in the medical segments of Wound Management, IncontinenceManagement, and Infection Management. Other Group activities includeproducts for consumers as well as the medical product trading business.The HARTMANN GROUP in figuresin million euros 2010 2009 2008 2007 2006Sales revenues 1) 1,633.0 1,560.5 1,377.0 1,281.4 1,216.9Foreign share in % 65.5 64.8 66.1 65.4 64.6Sales growth in % 4.6 13.3 7.5 5.3 0.2Consolidated operating profit 69.8 59.1 42.0 38.8 34.1Net return on sales in % 2) 4.3 3.8 3.0 3.0 2.8Operating EBIT 103.4 97.0 70.2 64.1 55.5Return on EBIT in % 2) 6.3 6.2 5.1 5.0 4.6Number of employees on December 31 3) 9,982 9,515 9,582 8,935 8,7521) Currency translation was effected at the average exchange rate for the year. 2) Return based on operating profit without extraordinary effects. 3) Excluding staff on parental leave and PAUL HARTMANN AG Management Board members.

HARTMANN GROUP 67Shares of business segmentsin total salesin million euros and percent; fiscal year 2010Wound Management 441.5 / 27.0Incontinence Management 599.9 / 36.7Infection Management 337.4 / 20.7Other Group Activities 254.2 / 15.6User-oriented wound careThe Wound Management segment includes traditional and modern wounddressings as well as bandages and dressings for compression and functionaltherapy or immobilization. The portfolio also consists of ready-to-use customprocedure sets. They are part of a therapy concept carefully tailored to userneeds for indication and phase compliant wound treatment. Over-thecounterconsumer products for pharmacies, including diagnostic devices,such as clinical thermometers and blood pressure monitors, complete therange in this segment.Sales revenues of the Wound Management segment increased by 6.0 percentto 441.5 million euros in 2010. Despite the intense price competition insales markets, HARTMANN is the leading provider of wound dressings inEurope, with a market share of about 14 percent.Comprehensive solutions for incontinence hygieneThe range in the Incontinence Management segment comprises absorbentincontinence products such as briefs, pads, and underpads. It also includespatient care products such as washcloths and bibs and a special care rangefor elderly skin affected by incontinence. HARTMANN offers users a widerange of services to complement these products, from training throughcontrolling software, logistics, and disposal to integrated solutions forelderly and nursing homes.With its strategy to provide high-quality products with cost-effective integratedsolutions, this segment grew in sales by 6.3 percent to 599.9 millioneuros in 2010. In Europe, HARTMANN continued to strengthen its positionas the number two, with a market share of 24 percent. With manufacturingfacilities in the USA (since 2008) and Russia (planned for 2012) HARTMANNalso wants to be close to the market in these countries.Infection protection from a single sourceThe Infection Management segment comprises all products that serve toprotect patients and staff from infections. It includes disposable surgicaldrapes, surgical clothing, surgical dressing materials as well as disposablesurgical instruments. Here, too, HARTMANN complements its products withadvanced integrated solutions such as the HARTMANN operating roomdelivery service or surgical sets. The segment also focuses on disinfectantsfor hands, skin, and body, and for instruments, surfaces and equipment,reflecting the growing importance of infection protection in the surgicalfield and in inpatient and outpatient care.In October 2008, we acquired the disinfection specialist BODE. This led tostrong growth in segment sales in 2009, with 337.4 million euros in 2010.Operating globally with subsidiaries and sales partnersThe HARTMANN GROUP has its geographic business focus in Europe. Toensure proximity to customers, the Group also has subsidiaries in importantmarkets in America, Africa, Asia, and Oceania, including not only sales butincreasingly also manufacturing companies. With operations around theworld, we pursue a specific expansion strategy with production facilitiesclose to the market, particularly in the BRIC countries of Brazil, Russia, India,and China. In this way we want to minimize the impact of transportation andalso support local social development by providing high quality medical andnursing products.Firmly rooted in GermanyIn Germany, where we generate more than one-third of our sales revenues,HARTMANN operates central production, development, and administrativesites. The HARTMANN GROUP includes, among others, BODE Chemie inHamburg, Karl Otto Braun in Wolfstein, SANIMED in Ibbenbüren, andKneipp in Würzburg.Shares of regions in total salesin million euros and percent; fiscal year 2010Germany 563.3 / 34.5Europe excluding Germany 888.1 / 54.4America 68.8 / 4.2Africa, Asia, Oceania 112.8 / 6.9

68 Company profileValues we practice:partnership, pragmatism, passion.With its strong competence in wound care, incontinencehygiene, and infection prevention, HARTMANNhas assumed a key social role in all areas where healing,hygiene, and humane patient care are the focus.Our special social responsibility – the mission of the HARTMANN GROUP – isbased on the trust doctors and nurses place in us, which is as follows:We help people to manage theirhealth more efficiently and effectively.Both in professional andprivate life. Through partnership,pragmatism, passion.Partnership, pragmatism, passion – these are the three central companyvalues of the HARTMANN GROUP. We focus on these values every day in allGroup functions and internationally at the sales, manufacturing, andlogistics sites.The well-being of people at the center of the company‘s strategyOur company‘s strategy, too, is based on value-oriented action. This emphasison value can be summed up in three sentences:— We focus on our customers’ needs in thinking and acting.— We work in a target and process oriented way and take responsibility forour actions.— And we work closely and trustfully with business partners and colleagues.Customer focus, efficiency and team spiritTo support our corporate strategy FOCUS, we have defined a number ofprinciples which apply to all our employees and highlight our companyculture values:I meet the needs of my partners better than others.— I thoroughly know and understand the needs and processes ofmy customers, and consistently consider them in my work.— I offer my customers optimal solutions.— I base the success of my activities on a long-lastingcustomer relationship that is beneficial for both sides.I take responsibility for the outcome.— I do my utmost to reach the agreed targets.— I make well-informed and collaborative decisions,and I stick to them.— I fully implement the decisionsand make sure they work.— I strive for continuous improvement,and I solve problems actively.We work together for success.— I treat all colleagues and business partnerswith respect and appreciation.— I work closely with othersto reach mutually acceptable solutions.— I always provide honest and constructive feedbackand accept criticism.

HARTMANN GROUP 69With the FOCUS strategy, HARTMANN ensurescontinuous streamlining of its business processesand their focus on customer needs. In this way,we help our customers to concentrate on the essential:the well-being of patients and those in need of care.Always focusing on customer needs.Early in 2005, we launched a new course with the FOCUS strategy in face ofan increasingly difficult market environment. This strategy is the foundationon which sustainable action is still based in the HARTMANN GROUP today.The FOCUS strategy creates a long-term and balanced focus on the needs ofour stakeholders, the maxim of our activities. With this intensified concentrationon the work and life situation of our customers, we are committed toour social responsibility for sustainable nursing and health care. Krzysztof-Daniel Malowaniec, Head of Research and Development and responsible forsustainability management, stresses the sustainability of this approach.“In the process of meeting currentcustomer needs even more effectively,we continuously ensure thatthese do not place a burden onfuture generations. In this way, wewant to responsibly help improvefuture life and work conditions.”Emphasis on core competenciesWith the FOCUS strategy we have concentrated our activities moreintensely on our long-standing core competencies in the three medicalbusiness segments of Wound Management, Incontinence Management,and Infection Management. But above all, changing from product-centricto integrated, solution-oriented activities is a fundamental re-orientationof our company.At the center of the FOCUS strategy is the overall responsibility for thetasks of our products’ professional users in hospitals, medical practices,elderly and nursing homes, or in at-home care. With system solutions,today we provide our customers with the opportunity to save time andreduce costs in areas not part of their actual medical or nursing role sothey can concentrate on their core competencies. Our mission is to helpcustomers as preferred solution partners by providing easy-to-use productsand customized services under system partnerships (see page 10).So, with the FOCUS strategy, we intend to expand our position as thenumber one or number two in the European core markets and to increaseour activities in growing health markets such as the BRIC countries.Krzysztof-Daniel Malowaniec, Head of Research and Development

70 Company profile

HARTMANN GROUP 71Complying with rules, practicing values.In medicine, the term compliance describes cooperativeconduct of a patient in therapy. In the sphere of business,it refers to complying with rules. This includes both thelegal obligations of a company and the standards it haslaid down for itself.In the HARTMANN GROUP, compliance is a key element in risk reductionmanagement. Implementing the adopted compliance requirements throughoutthe Group is the responsibility of Andrea Berneis, Chief ComplianceOfficer: “Compliance is not an alibi exercise. What we need to continueworking on is a globally consistent understanding.”To offer all employees clear orientation and to motivate them to takeresponsibility, HARTMANN has issued a Code of Conduct that is effectivethroughout the Group. It is applicable to all employees of the HARTMANNGROUP’s organizations and to persons with roles that are functionallyequivalent, for example, temporary workers. Easy to understand and clearlyillustrated, the Code of Conduct explains the central rules of our Group.To apply it confidently in their daily work, the employees receive additionaltraining from the Chief Compliance Officer as well as written recommendationsfor action.Compliance in our reportingOur annual Corporate Governance reports also include, among otherthings, information on compliance objectives, measures, and theirimplementation.The Code of Conduct is available for download on the HARTMANN website.“Compliance is not analibi exercise.”Andrea Berneis, Chief Compliance Officer

72 Company profileA story about people and their ideas.The history of the HARTMANN GROUP begins withthe cotton spinning mill of Ludwig von Hartmann.His son, Paul Hartmann Sr., later founded the “PaulHartmann Bleaching, Dyeing, and Textile FinishingCompany” and then expanded it into the first factoryfor dressing materials in Germany. Committed partnersfrom medicine and science helped to develop productsand to test them in practice. Two of these were SirJoseph Lister and Victor von Bruns. Their inventionssignificantly contributed to improving wound care.1818 It all began with spinning and bleachingTextile companies suffer heavy sales losses after Napoleon‘s continentalblockade is ended. Yet, Ludwig Hartmann, the company’s founding father,purchases a Heidenheim textile factory and expands it into the largestcotton-spinning mill in Württemberg.1874 Revolution in wound careIn a letter to Paul Hartmann Sr., Scottish surgeon Joseph Lister describes indetail the production process for the first antiseptic wound dressings andgrants Hartmann a licence for industrial production. Lister’s carbolatedgauze represents a breakthrough in antiseptic wound treatment.1867 Beginnings in HeidenheimPaul Hartmann Sr., son of Ludwig Hartmann, buys the “Scheckenbleiche”bleaching plant and establishes his own company, “Paul HartmannBleaching, Dyeing, and Textile Finishing Company”.1870 Necessity is the mother of inventionFascinated by the advances in medicine, Paul Hartmann Sr. devotes hisenergies to an emerging industry: the production of dressing materials.1873 Cotton wadding becomes dressing materialPaul Hartmann Sr. starts industrial production of absorbent cotton wool,establishing the first medical dressing materials factory in Germany.Production is based on the latest findings of surgeon Prof. Dr. Victor vonBruns in Tübingen, who had just developed a process for removing greasefrom cotton wool.1882 International expansionWith the establishment of the first foreign subsidiary in Pavia/Italy, thecompany’s international expansion begins. Paul Hartmann Jr. continuallybuilds a network of branches: manufacturing sites in Hohenelbe/Bohemia(1883) and Barcelona (1888), sales offices in Paris (1884), London (1887),New York (1889), and Brussels (1891).1883 Hygiene exhibition in BerlinAt the General German Exhibition for Hygiene and Emergency MedicalServices in Berlin, the company presents itself as Germany’s oldest dressingmaterials factory and receives a government award.1912 Conversion to a corporationWalther Hartmann converts the expanding company into a corporation.

HARTMANN GROUP 73“Despite the demand for low-priced dressing materials, which, it mustbe said, are rarely dependable or of high quality, I refuse to abandonmy principle of delivering the best there is to offer, time after time.”Paul Hartmann

74 Company profile1919 Start of plaster productionThe foreign business lost as a result of the First World War is compensatedfor by building new production areas. In Heidenheim, plasters and ointmentsdeveloped in the newly established pharmaceutical department are now alsoproduced.1929 World exhibition in BarcelonaHARTMANN presents itself in its own pavilion. The close relations with theCatalan metropolis have existed since the World Exhibition of 1888 and ledto the establishment of the branch in Barcelona.1936 A slogan helps strengthen the brandWith the easily remembered slogan „HARTMANN helps healing“, thecompany begins to establish the HARTMANN brand at end users andconsumers. The slogan still enjoys a high degree of popularity today.1938 Painless dressing changesHARTMANN develops its first ointment dressing. Branolind does not stick tothe wound, thus allowing painless dressing change. The product is primarilyused to treat burns.1945 Zero hour and a new beginningAt the end of World War II, the company loses all its foreign plants and salesoperations. HARTMANN starts anew and is soon back on an expansioncourse.1964 Used in all doctors‘ officesPur-Zellin is a perforated cellulose swab that retains its shape, ready to usein a dispenser box. It has been used in almost every doctor‘s office since the1960s.1965 Safety in the operating room redefinedHARTMANN develops the interwoven barium sulfate x-ray detectable threadTelatrast and includes it in all swabs and sponges used in the operatingroom. The usual counting procedures can thus be supplemented by x-raymonitoring.1967 Swab with a fold “that does the trick”The gauze swab with its cut edges folded in and without frayed edges isdeveloped. Highly absorbent and yet breathable, the folded-edge swab hasbecome a classic in wound care.1972 Start in FranceHARTMANN establishes its first foreign subsidiary since World War II inChâtenois/France. It is still the strongest sales subsidiary in the HARTMANNGROUP today.1974 Incontinence discovered as a growth marketMolinea Plus D, a pad made of cellulose fluff, is the first incontinenceproduct worn close to the body, making it a success story.1976 Operating room risk management becomes new pillarWith the development of disposable surgical drapes under the Folioplastbrand, the foundation is laid for a new product range. Today, the surgicalrange includes disposable clothing, disposable drapes, and surgical dressingmaterials available as customized sets.1991 Entry into the Eastern European marketAfter the fall of the Iron Curtain, HARTMANN enters the Eastern Europeanmarket and establishes new subsidiaries.1995 First subsidiary outside EuropeWith offices in Hong Kong, the Group opens its first wholly owned subsidiaryoutside Europe.1996 Systematic environmental protectionHARTMANN has an environmental management system certified underISO 14001 at a location for the first time.

HARTMANN GROUP 751997 The A-B-C of moist therapyHARTMANN develops an integrated therapy concept for moist woundtreatment, based on three hydroactive wound dressings.2007 Wound gel from a syringeThe range of moist wound care products is expanded to include a new formof administration: application of Hydrosorb gel using a dosing syringe.1999 Plant for all stages of production in ChinaHARTMANN builds a state-of-the-art plant for all stages of wound dressingproduction in Qingdao.2000 Plasters for all needsWith DermaPlast, an innovative plaster range for consumers and end-usersis placed on the market. In addition to the standard range, there is theHydro product line with hydroactive dressings for burns, abrasions, blisters,and corns.2003 Flexible foam dressingPermaFoam completes the diverse range for chronic wound care. The foamdressing with the practical porous structure is especially well suited fortreating deep wounds in the final wound cleansing phase as well as forhelping to build tissue. Exudate is effectively drained away.2004 20 years of incontinence care with MoliCareMoliCare incontinence briefs can look back on a 20-year success story andare still a leading product today through many innovative improvements.2005 New company strategyThe corporate strategy FOCUS is adopted. HARTMANN continues focusingon the long-term and balanced needs of its stakeholders, making these themaxim of its activities.2006 Combine the old and the newThe hydrocolloid wound dressing Hydrotul combines the positive propertiesof classic ointment dressings with those of hydroactive dressings. FoliodrapeProtect surgical drapes and Foliodress Protect surgical gowns are particularlycost-effective product solutions for outpatient surgery.2007 Excellent performanceThe HARTMANN GROUP wins the Growth Strategy Leadership Award for itsgrowth strategy in the disposable surgical drapes and gowns market. Theaward from Frost & Sullivan, an international market research and consultingcompany based in the U.S.A., is presented each year to companies thatdemonstrate an exceptional growth strategy within their industry.2007 Web-based controlling softwareTransparent cost management is one of the prerequisites for successfulelderly and nursing home practice. With HILMAS 5, HARTMANN provides aweb-based software that helps ensure effective incontinence care andoptimal cost management.2008/2009 Portfolio expandedIn the U.S.A., HARTMANN acquires Whitestone, a manufacturer of incontinenceproducts. With BODE, HARTMANN also purchases one of the leadingdisinfection specialists in Europe.2009 A clinical cutWith Peha-instrument, HARTMANN addresses the trend in hospitals ofchanging from re-usable to disposable instruments.2010 New office in BerlinThe office serves as a forum to promote open dialog and an exchange ofideas on health issues with decision makers from politics, governmentagencies, and associations. The opening is in line with an old traditionbecause, already in 1884, HARTMANN established a branch office in Berlin.

76 Company profileYour contactat HARTMANNImprintSustainability ManagementKrzysztof-Daniel MalowaniecTelephone +49-7321-36-1910Telefax +49-7321-36-2910E-Mail: k-d.malowaniec@hartmann.infoCorporate CommunicationsMatthias MietkaTelephone +49-7321-36-1380Telefax +49-7321-36-2380E-Mail: matthias.mietka@hartmann.infoPublic RelationsMargarete KrämerTelephone +49-7321-36-1312Telefax +49-7321-36-3678E-Mail: margarete.kraemer@hartmann.infoInvestor RelationsMonika FaberTelephone +49-7321-36-1105Telefax +49-7321-36-3606E-Mail: ir@hartmann.infoPublished byPAUL HARTMANN AG, HeidenheimConception and editingStakeholder Reporting GmbH, HamburgDesignInterbrand Zintzmeyer & Lux AG, ZürichTextStakeholder Reporting GmbH, HamburgMargarete Krämer, Matthias Mietka, Stefanie Rall, PAUL HARTMANN AGPhotosSilke Schulze-Gattermann, HamburgMichael Danner, BerlinJens Kramer, UlmStephan Liebl, DillingenPicture library of the HARTMANN GROUPPrinted byHermann Frey Druck + Medien GmbH, UlmThe Sustainability Brochure is printed on heaven 42 from Scheufelen.heaven 42 is certified according to the rules of theForest Stewardship Council (FSC).Status: March 2011

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PAUL HARTMANN AGPaul-Hartmann-Straße 1289522 HeidenheimP.O. Box 142089504 HeidenheimGermanyTelephone +49-7321-36-0Telefax +49-7321-3636info@hartmann.infowww.hartmann.infohelps healing.(411) 087 203/1