Q2 2014 Kasper Rorsted Carsten Knobel Dsseldorf Aug. 12, 2014 - PowerPoint PPT Presentation

Henkel Q2 2014 Kasper Rorsted Carsten Knobel Düsseldorf Aug. 12, 2014

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. Q2 2014 – Henkel Analyst & Investor Call 2 August 12, 2014

Agenda 1 Key developments Q2 2014 2 Financials Q2 2014 3 Summary & outlook FY 2014 Q2 2014 – Henkel Analyst & Investor Call 3 August 12, 2014

Q2 2014 - Good performance in a challenging environment OSG Adj. EBIT margin Adj. EPS growth +3.3% 16.3% +8.4% Sales Share in EM NWC in % of sales Net financial pos. 156m € 45% 6.0% Q2 2014 – Henkel Analyst & Investor Call 4 August 12, 2014

Continued profitable growth in all business units • Solid organic sales growth driven by all business units • Emerging Markets with strong OSG, Western Europe solid • Very strong improvement in adj. EBIT margin, supported by all business units • High single-digit adj. EPS growth • Progress in acquisitions: • Western Europe: Spotless Group • North America: Alterna, Kenra & Sexy Hair • Latin America: Pert Q2 2014 – Henkel Analyst & Investor Call 5 August 12, 2014

Increasingly challenging environment • Continued high pressure from FX • Concerning & negative developments in Russian / Ukrainian crisis • Significant increase in geo-political tensions in Middle East • Intensified promotional & pricing pressure in HPC • North America improved, OSG still slightly negative Q2 2014 – Henkel Analyst & Investor Call 6 August 12, 2014

Laundry & Home Care Solid OSG & excellent margin improvement in Q2 2014 Sales Return • • Solid OSG Adj. EBIT margin showing excellent increase • Laundry solid, • Home Care strong ROCE below level of previous year • Emerging Markets OSG double-digit • Mature Markets OSG negative Q2 2014 – Henkel Analyst & Investor Call 7 August 12, 2014

Laundry & Home Care Strengthening innovation leadership across categories Perwoll Re-New + Somat Gold Bref Blue Aktiv • Smoothens roughened fibers and • Hygienic blue water for active • Extra-power against starch crusts refreshes faded colors cleaning, even between flushes without pre-washing • Improved anti-greying • New formula with four active • New enriched formula with an performance agents innovative enzyme combination Q2 2014 – Henkel Analyst & Investor Call 8 August 12, 2014

Q2 2014 – Henkel Analyst & Investor Call 9 August 12, 2014

Beauty Care Solid OSG & excellent margin improvement in Q2 2014 Sales Return • • Solid OSG Adj. EBIT margin showing excellent increase • Retail solid, • Hair Salon negative ROCE below level of previous year • Emerging Markets OSG strong • Mature Markets OSG flat Q2 2014 – Henkel Analyst & Investor Call 10 August 12, 2014

Beauty Care Strengthening innovation leadership across categories Fa Floral Protect Syoss Keratin BC Bonacure • 1 st deodorant from Fa with • 1 st Keratin Care from Syoss for • 1 st Professional Hair Care with salon-like hair perfection Scent Release Technology patented Cell Perfector Technology • 80% more Keratin for 100% • Effective protection against • Replenishes damaged hair cells sweat & body odor structure repair, suppleness& shine for 100% strength & resilience Q2 2014 – Henkel Analyst & Investor Call 11 August 12, 2014

Q2 2014 – Henkel Analyst & Investor Call 12 August 12, 2014

Adhesive Technologies Solid OSG & very strong margin improvement in Q2 2014 Sales Return • • Solid OSG Adj. EBIT margin showing very strong increase • Emerging Markets OSG • solid ROCE further increased • Mature Markets OSG solid • General industry very strong Q2 2014 – Henkel Analyst & Investor Call 13 August 12, 2014

Adhesive Technologies Fostering technology leadership with strong innovations Sprayable Sound Damping Foils for Flexible Displays Hybrid Adhesive • 1 st technology combining • Sprayable damping technology • Start-up investment for first cost structural & instant bonding based on renewable material competitive flexible displays • New industrial applications incl. • Weight reduction up to 30% and • Meets the future need of flexible metal, plastics and rubber higher acoustical performance mobile devices for mass-market Q2 2014 – Henkel Analyst & Investor Call 14 August 12, 2014

Q2 2014 – Henkel Analyst & Investor Call 15 August 12, 2014

Agenda 1 Key developments Q2 2014 2 Financials Q2 2014 3 Summary & outlook FY 2014 Q2 2014 – Henkel Analyst & Investor Call 16 August 12, 2014

Continuous commitment to profitable growth Sales in m € , OSG in % EPS Pref. Adj. in € Gross Margin Adj. in % EBIT Margin Adj. in % +3.3% -70bp +90bp +8.4% 1.16 4,286 4,137 1.07 16.3 48.3 15.4 47.6 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 Q2 2014 – Henkel Analyst & Investor Call 17 August 12, 2014

Strong financial position despite higher dividend & acquisitions Free Cash Flow in m € Net Financial Position in m € NWC in % of Sales +286m € -56.2% +80bp 156 6.0 203 5.2 89 -130 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 Q2 2014 – Henkel Analyst & Investor Call 18 August 12, 2014

Solid organic sales growth in a challenging environment in m € , OSG: +3.3 % changes in % +3.4% -6.7% 4,286 4,137 -0.1% -0.1% Sales Q2/13 Price Volume FX M&A Sales Q2/14 • Strong FX headwind mainly from Emerging Market currencies and US Dollar Q2 2014 – Henkel Analyst & Investor Call 19 August 12, 2014

Emerging Markets strong, Mature Markets positive in m € , OSG in % Emerging Markets Mature Markets +6.5% +0.9% 2,304 2,261 1,943 1,844 Q2/13 Q2/14 Q2/13 Q2/14 • Emerging Market sales share of 45% Q2 2014 – Henkel Analyst & Investor Call 20 August 12, 2014

Balanced growth across regions in m € , OSG in % Western Europe Eastern Europe Africa/Middle East +2.2% +2.8% +17.5% 1,450 1,423 799 739 307 287 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 Latin America North America Asia-Pacific -0.7% +3.8% +5.5% 760 703 675 666 282 259 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 • BRIC with very strong OSG, driven by double-digit China & strong Russia • North America with negative OSG in HPC, Adhesive Technologies positive Q2 2014 – Henkel Analyst & Investor Call 21 August 12, 2014

Laundry & Home Care Fostering profitable growth path in Q2 2014 Sales in m € , OSG in % EBIT Margin Adj. in % NWC in % of Sales +4.2% +130bp +60bp 16.6 1,186 1,139 15.3 -3.6 -4.2 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 • OSG driven by 5.9% in volume, price -1.7% Q2 2014 – Henkel Analyst & Investor Call 22 August 12, 2014

Beauty Care Fostering profitable growth path in Q2 2014 Sales in m € , OSG in % EBIT Margin Adj. in % NWC in % of Sales +2.1% +130bp +160bp 16.2 923 897 14.9 4.0 2.4 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 • OSG driven by 2.7% in volume, price -0.6% Q2 2014 – Henkel Analyst & Investor Call 23 August 12, 2014

Adhesive Technologies Fostering profitable growth path in Q2 2014 Sales in m € , OSG in % EBIT Margin Adj. in % NWC in % of Sales +3.7% +60bp +30bp 17.5 16.9 2,138 2,069 12.5 12.2 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 • OSG driven by 2.7% in volume and 1.0% in price Q2 2014 – Henkel Analyst & Investor Call 24 August 12, 2014

Gross margin impacted by challenging environment Income statement adjusted Sales in m € , nom. growth % Gross Profit in m € Gross Margin in % of Sales -3.5% -5.0% -70bp 4,286 4,137 48.3 2,072 47.6 1,969 Q2/13 Q2/14 Q2/13 Q2/14 Q2/13 Q2/14 • Gross margin affected by FX, slight increase of direct material prices and intensified promotional pressure Q2 2014 – Henkel Analyst & Investor Call 25 August 12, 2014

Very strong adj. EBIT margin increase, plus 90bp Income statement adjusted in m € , % of sales 47.6% -24.6% 1,969 -2.5% -4.3% 16.3% +0.1% 674 Marketing, Gross Profit R&D Admin. OOI/OOE EBIT selling & distr. • Marketing, selling & distribution expenses affected by FX • Efficiency gains in Selling & Distribution, Marketing affected by shift to promotions Q2 2014 – Henkel Analyst & Investor Call 26 August 12, 2014