Creating sustainable value Hans Van Bylen, Carsten Knobel, Kathrin - PowerPoint PPT Presentation

Henkel Annual Results Press Conference Creating sustainable value Hans Van Bylen, Carsten Knobel, Kathrin Menges Düsseldorf, February 23, 2017

Disclaimer This information contains forward-looking statements which are based on current estimates and assumptions made by the corporate management of Henkel AG & Co. KGaA. Statements with respect to the future are characterized by the use of words such as “expect”, “intend”, “plan”, “anticipate”, “believe”, “estimate”, and similar terms. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and results actually achieved by Henkel AG & Co. KGaA and its affiliated companies depend on a number of risks and uncertainties and may therefore differ materially from the forward-looking statements. Many of these factors are outside Henkel’s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and others involved in the marketplace. Henkel neither plans nor undertakes to update any forward-looking statements. This document has been issued for information purposes only and is not intended to constitute an investment advice or an offer to sell, or a solicitation of an offer to buy, any securities. Henkel Annual Results Press Conference February 23, 2017 2

Agenda Successful development 2016 1 2 Strong financial performance 3 Leading in sustainability Ambitious outlook 4 Henkel Annual Results Press Conference February 23, 2017 3

FY 2016: Strong performance in a challenging environment Sales Adj. EBIT Adj. EPS growth € 18.7 bn € 3.2 bn +9.8 % Dividend increase 1 Organic Growth Adj. EBIT margin +3.1 % 16.9 % +10.2 % 1 Proposal to shareholders for the Annual General Meeting on April 6, 2017 Henkel Annual Results Press Conference February 23, 2017 4

Strong profitable growth in 2016  Strong performance driven by all business units and regions  Solid organic sales growth: strong in emerging markets, positive in mature markets  Very strong increase in adjusted EBIT margin  High single-digit adjusted EPS growth  Acquisition of The Sun Products Corporation closed in Q3 2016, 10 weeks after signing  Launch of Henkel 2020 + ambition & strategic priorities Henkel Annual Results Press Conference February 23, 2017 5

Continued challenging environment  Geo-political instability and macro-economic volatility in some countries  Global GDP growth on a moderate level  Persistent FX headwinds in key currencies  Volatility in feedstock markets  Intensified promotional & pricing pressure in consumer goods businesses Henkel Annual Results Press Conference February 23, 2017 6

Adhesive Technologies Fostering profitable growth Adhesive Technologies Return Sales  Solid OSG  Adj. EBIT margin with excellent increase to  All business areas all-time high contributing  ROCE above the level  Emerging markets of prior year strong, mature markets 18.2% 11,000.00 17.2% 17.1% 20.0% 16.9% 15.1% on prior year level 13.9% 10,000.00 12.8% 15.0% 8,992 8,961 9,000.00 8,256 8,117 8,127 10.0% 7,746 8,000.00 7,306 5.0% 7,000.00 11.8% 8.3% 3.6% 2.7% 3.7% 2.4% 2.8% 6,000.00 0.0% 2010 2011 2012 2013 2014 2015 2016 Sales in m € Adj. EBIT margin OSG in % Henkel Annual Results Press Conference February 23, 2017 7

Adhesive Technologies Highlights Food Packaging Market share gains across all industry segments Successful innovations to foster convenience & food safety Automotive Sector Electronics Industry Very strong growth with OEMs Continued growth of Thermal and tier one suppliers Management solutions Superior innovations for improved High-impact solutions to facilitate light-weight and e-mobility performance of consumer devices and automotive electronics Henkel Annual Results Press Conference February 23, 2017 8

Beauty Care Fostering profitable growth Beauty Care Sales Return  Solid OSG  Adj. EBIT margin with excellent increase to  Both business areas all-time high contributing  ROCE below the level  Emerging markets very of prior year due to strong, mature markets 5,000.00 16.9% 15.9% 15.3% 15.0% 14.5% acquisitions 14.2% 4,500.00 13.3% slightly below prior year 15.0% 3,833 3,838 4,000.00 3,269 3,399 3,542 3,510 3,547 10.0% 3,500.00 3,000.00 5.0% 2,500.00 4.8% 5.4% 3.1% 3.0% 2.0% 2.1% 2.1% 2,000.00 0.0% 2010 2011 2012 2013 2014 2015 2016 Sales in m € Adj. EBIT margin OSG in % Henkel Annual Results Press Conference February 23, 2017 9

Beauty Care Highlights Body Care Successful concepts leveraged across brands and regions Fa and Dial with further market share gains North America Hair Professional Strong growth in Retail fueled Continued growth momentum by Hair & Body business Growth driven by innovations Further expansion of mega-brand under Schwarzkopf and Schwarzkopf in coloration successfully integrated US brands Henkel Annual Results Press Conference February 23, 2017 10

Laundry & Home Care Fostering profitable growth Laundry & Home Care Sales Return  Solid OSG  Adj. EBIT margin with solid increase to  Both business areas all-time high contributing  ROCE below the level  Emerging markets very of prior year due to strong, mature markets 7000 16.2% 17.1% 17.3% 15.6% 14.5% acquisitions 13.2% 13.0% solid 5,795 15.0% 6000 5,137 4,626 10.0% 4,556 4,580 5000 4,319 4,304 5.0% 4000 1.5% 2.9% 4.7% 5.7% 4.6% 4.7% 4.9% 3000 0.0% 2010 2011 2012 2013 2014 2015 2016 Sales in m € Adj. EBIT margin OSG in % Henkel Annual Results Press Conference February 23, 2017 11

Laundry & Home Care Highlights Somat Phosphate-free ةفاظن رثكأ قابطأ ،ليرب Sustainable innovation: 100% performance without phosphates Very strong category growth thanks to launch in 30 countries North America Africa/Middle East Sustained momentum driven by Very strong growth in MEA region excellent performance of laundry driven by hand dishwashing Successful further expansion of “ Pril 100 Lemons Power” relaunch Persil ProClean driving double digit brand growth Henkel Annual Results Press Conference February 23, 2017 12

Acquisition of The Sun Products Corporation Second- largest acquisition in Henkel’s history  Milestone for Henkel North America  No. 2 in the laundry care market in North America  Portfolio of well-established & successful brands  Leverage strength of a combined team  Integration well on track Henkel Annual Results Press Conference February 23, 2017 13

Delivering on Guidance 2016 Guidance Actual FY 2016 * FY 2016 2 - 4% 3.1%  Organic Sales All Business Units All Business Units Growth within this range within or above guidance EM Sales Share Slight decrease Slight decrease >16.5% 16.9%  Adjusted EBIT All Business Units All Business Units margin above PY level above PY level  Adjusted EPS 8 - 11% 9.8% growth * Updated on August 11, 2016 Henkel Annual Results Press Conference February 23, 2017 14

Agenda Successful development 2016 1 2 Strong financial performance 3 Leading in sustainability Ambitious outlook 4 Henkel Annual Results Press Conference February 23, 2017 15

High quality of earnings Key financials 2016 – FY Sales in m € , OSG in % Gross margin adj. in % EBIT margin adj. in % EPS pref. adj. in € +3.1% +10bp +70bp +9.8% 48.4 16.9 5.36 48.3 18,714 4.88 16.2 18,089 2015 2016 2015 2016 2015 2016 2015 2016 Record levels of sales, profitability and earnings per share Henkel Annual Results Press Conference February 23, 2017 16

High quality of earnings Key financials 2016 – Q4 Sales in m € , OSG in % Gross margin adj. in % EBIT margin adj. in % EPS pref. adj. in € +3.5% -30bp +50bp +14.4% 47.1 1.27 4,856 15.8 46.8 15.3 4,374 1.11 Q4/15 Q4/16 Q4/15 Q4/16 Q4/15 Q4/16 Q4/15 Q4/16 Q4 2016 with strong contribution to FY results Henkel Annual Results Press Conference February 23, 2017 17

Disciplined NWC management & strong cash generation Key financials 2016 – FY NWC in % of sales Free cash flow in m € Net financial position in m € -30bp +30.5% - € 2.6bn 2,205 3.8 3.5 335 1,690 2015 2015 2016 2015 2016 2015 2016 -2,301 Henkel Annual Results Press Conference February 23, 2017 18

Very strong organic & inorganic sales growth in m € , changes in % +3.5 % Organic & inorganic +7.1% -3.6% 4.0% 18,714 0.2% 2.9% 18,089 Sales 2015 Volume Price M&A FX Sales 2016 Henkel Annual Results Press Conference February 23, 2017 19

Strong organic sales growth in emerging markets in m € , OSG in % Emerging markets Mature markets +6.8% +0.4% 10,779 10,164 7,797 7,814 2015 2016 2015 2016 Emerging markets sales share at 42 percent Henkel Annual Results Press Conference February 23, 2017 20

Good growth development across the world in m € , OSG in % Eastern Europe Africa/Middle East Western Europe -0.1% +7.0% +5.6% 6,045 5,999 2,695 2,713 1,329 1,378 2015 2016 2015 2016 2015 2016 North America Latin America Asia-Pacific +1.7% +13.8% +3.2% 3,648 4,202 3,134 3,246 1,110 1,055 2015 2016 2015 2016 2015 2016 Henkel Annual Results Press Conference February 23, 2017 21