Henkel Strategy

Presenter: Bruno Piacenza

Townhall Meetings

Henkel: Roadmap of long-term Strategy

Where are we coming from?

Whats our starting point?

Where do we want to go?

How do we get there?

Who will we be in 2016?

Henkel Strategy

We set a clear strategic direction & ambitious targets

Org. Sales Growth (average) EBIT Margin (2012)* EPS-Growth (CAGR)*

* adjusted

3-5% 14% > 10%

Henkel Strategy

All strategic priorities were pursued consistently

Strong financial performance Efficiency gains Strengthened global footprint Focus on brands & innovations

Customer focus

Performance culture

Leadership in
sustainability
4 Henkel Strategy

Improved diversity

Our progress is built on various drivers

Shift to Emerging Regions / Strong Mature Markets Continuous efficiency gains incl. Shared Services Shift of Manufacturing Footprint Strengthening of Top Brands / Reduction of Brands

Performance & Talent Management, Vienna

Vision & Values Sustainability Strategy Targets 2016 & Strategy 2008
5

2012
Henkel Strategy

and will continue

We are on track! As one company ONEHenkel!

Thank you!
6 Henkel Strategy

Henkel: Roadmap of long-term Strategy

Where are we coming from?

Whats our starting point?

Where do we want to go?

How do we get there?

Who will we be in 2016?

Henkel Strategy

Galileo Core questions of our strategic review

Which megatrends will shape our markets in the years to come?

2
3
8

How well is our portfolio positioned against these trends?

What actions are necessary to capitalize on these trends?

Henkel Strategy

Overview of megatrends and their implications

Trend Description

Trend Implication

Consolidation of suppliers,
manufacturers and buyers

Increasing importance of
competitive size

Shift of market growth to

Emerging Markets

Increasing importance of
Emerging Market presence

Rapidly changing markets &

faster transfer of information

Increasing importance of
operational excellence in processes and structures

Henkel Strategy

Long-term market assessment

Active in markets of significant size
Markets are attractive in terms of profitability
and offer long-term growth potential

Strong potential to expand our businesses

Strong ability to win in attractive markets

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Leverage full potential in all businesses

Consumer Business
Laundry & Home Care Beauty Care

Industrial Business
Adhesive Technologies

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Henkel Strategy

Henkel: Roadmap of long-term Strategy

Where are we coming from?

Whats our starting point?

Where do we want to go?

How do we get there?

Who will we be in 2016?

12

Henkel Strategy

Overview of megatrends and their implications

Trend Description Performance TrendDimensions Implication 2016

Consolidation of suppliers,
manufacturers and buyers

Increasing importance of

Total competitive size

sales

Shift of market growth to

Emerging Markets

Increasing importance of

EM sales Emerging Market presence

Rapidly changing markets &

faster transfer of information

Increasing importance of
operational EPS excellence in growth processes and structures

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Henkel Strategy

Henkels financial targets 2016

[bn ]

NES [bn ]*

~3.5 bn

~20 20
~2.5 bn

20
14.1
2008
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2012

2016

* Incl. continuous portfolio optimization (without major divestments and acquisitions)

Henkels financial targets 2016

NES [bn ]*

Step-change in scale Outperform Strong investments in categories Globalize Focus on regions with high potential

20
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* Incl. continuous portfolio optimization (without major divestments and acquisitions)

Henkels financial targets 2016

[bn ]

EM sales [bn ]*
~3 bn

10
5.2
2008
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~2 bn

~10 10

2012

2016

* Incl. continuous portfolio optimization (without major divestments and acquisitions)

Henkels financial targets 2016

EM sales [bn ]*

Accelerate growth in Emerging Markets Go deep in existing Emerging Markets Selectively enter country white spots

10
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* Incl. continuous portfolio optimization (without major divestments and acquisitions)

Henkels financial targets 2016

[]

EPS CAGR [%]*

10%

10
2.19 2008
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>10%

2012

2016

* Incl. continuous portfolio optimization (without major divestments and acquisitions); adjusted per preferred share

Henkels financial targets 2016

EPS CAGR [%]*

Balanced value creation through top & bottom

line growth

10
19

Standardization & complexity reduction along

entire value chain to drive profitability

Maintain strong cash orientation & financial

discipline to secure A flat/A2-rating

* Incl. continuous portfolio optimization (without major divestments and acquisitions); adjusted per preferred share
Henkel Strategy

Henkels financial targets 2016

NES [bn ]*

EM sales [bn ]*

EPS CAGR [%]*

20
20 Henkel Strategy

10

10

* Incl. continuous portfolio optimization (without major divestments and acquisitions); EPS: adjusted per preferred share

Our Strategy is based on our Vision & Values A global leader in brands and technologies

Customers

People

Financials

Sustainability

Family

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Henkel Strategy

Key success factors to achieve our Vision A global leader in brands and technologies
Leading position

Global footprint Leading processes Strong & diverse team Leading financial performance

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Henkel Strategy

Key success factors to achieve our Vision A global leader in brands and technologies
Leading position

Global footprint Leading processes Strong & diverse team Leading financial performance

#1 choice for customers & consumers Innovation leader Powerful brands Balanced portfolio

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Henkel Strategy

Henkel Strategy

We will outperform our competition as a globalized company with simplified operations and a highly inspired team!

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Henkel Strategy

Henkel Strategy
Outperform Globalize

We will outperform our competition

company as a globalized A global leader

with simplified
in brands and technologies operations

and a highly inspired team!

Simplify Inspire

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Henkel Strategy

Henkel Strategy
Outperform
Leverage potential in categories

Globalize
Focus on regions with high potential

A global leader in brands and technologies

Simplify
Drive operational excellence

Inspire
Strengthen our global team

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Henkel Strategy

Henkel Strategy
Active portfolio mgmt. Leverage top brands Powerful innovations Focus on customers
A global leader in brands and technologies

Outperform Outperform

Globalize

Simplify

Inspire

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Henkel Strategy

Outperform Leverage potential in categories

Core Categories Growth Categories Value Categories

Continuous investment in
top positions

Investments in category and

new segment expansion

Leverage profit potential

with adequate investment

Divest/exit businesses
(~500 m )

Active Portfolio Management

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Outperform Build on strong base

Brands Innovations Customers

Focused & balanced brand

portfolio

Consistent innovation
process

Customer relationship
management

Strong growth of top brands Brand consolidation

Trend-based innovations

Consumer proximity

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Henkel Strategy

Accelerate sales growth with top brands

in % of sales

Other

Top10

62%

54%

~40%

38% 2008

46%

~60%

2012*

2016

Strong growth driven by innovations & further roll-out of global brands Further portfolio alignment towards umbrella brands
* estimate
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Consistently drive trend-based innovations

Accessible Luxury

Performance & Sustainability

Convenience & Superior Quality

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Henkel Strategy

New R&D sites fostering consumer proximity

Planned new site

Moscow* Seoul Pune Toluca* Dubai

Sao Paulo

Johannesburg
* Significant expansion

Significant expansion of R&D centers in all emerging regions Further leverage local competence
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Actively deploy customer focus

Laundry & Home Care Shopper Marketing

Beauty Care Meet-your-Customer Center

Adhesive Technologies Technology & Design Partnerships

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Henkel Strategy

Henkel Strategy
Outperform Globalize Globalize
Leverage strength in Mature Markets

Expand footprint in Emerging Markets

A global leader in brands and technologies

Simplify

Inspire

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Henkel Strategy

Globalize Focus on regions with high potential

Mature Markets: Leverage Strengths Emerging Markets: Go Deep Emerging Markets: Enter White Spots

Continuation of profitable
growth with strong cost focus

Acceleration of growth in
existing Emerging Markets

Enter country white spots in

selective Emerging Markets

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Henkel Strategy

Mature Markets Further leverage strengths 2016

Higher profit contribution More top positions

Outperform our markets Increase brand investments Continue cost focus

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Henkel Strategy

Emerging Markets Accelerate growth

Algeria

Brazil

China

Egypt

India

Korea

Mexico

Poland

Russia

Turkey

UAE

Ukraine

2016: Balanced EM footprint with 12 EM countries in Henkel Top 20

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Henkel Strategy
Outperform Globalize

A global leader in brands and technologies

Simplify

Inspire

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Henkel Strategy

Invest in our businesses

Increase capex spend by >40%* to ~2 bn

Strong focus on IT with investment of ~140 m

Structural shift to Emerging Markets

Strengthen top brands and innovations via higher

marketing investments

* total 2013-2016 vs. 2009-2012

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Acquisitions
In Line with Strategy Boosting Growth Restrictive Selection

Integrated part of our

overall strategy

Adhesives: Technology
leadership

Restrictive evaluation and

selection process

Clear prioritization of
categories and regions

Laundry & Home Care/Beauty

Care: Regions & categories

Centralized decision and

execution

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Henkel Strategy

Henkel Strategy
Outperform Globalize

A global leader in brands and technologies

Cost efficiency Best-in-class processes Strong IT focus

Simplify Simplify

Inspire

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Henkel Strategy

Simplify Drive operational excellence

Cost Efficiency Best-in-Class Processes IT Focus

Further improve admin costs Location footprint optimization Further reduce NWC

Foster leading sourcing Continued expansion of

shared services

IT as an enabler to drive
performance

Simplified & standardized

global IT structure

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Henkel Strategy

Shared services expansion: >3,000 employees

Captive SSCs BPO: India since 09/12

Bratislava

Mexico City

Bangalore

Manila

Newly established Business Process Outsourcing hub in Bangalore/India Hubs for Arabic speaking region & Greater China/N-E Asia
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Invest ~140 m in IT until 2016

Reduce complexity & leverage one IT platform

>20,000 ~2,200 ~800 Past Supply Chain Mgmt. APO Today SSC IT Solutions Global integration Horizon

# of processes

Promotion Spend Planning & management

Global Henkel IT Platform: Horizon (SAP)

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Henkel Strategy
Outperform Globalize

A global leader in brands and technologies

Strong leadership Talent & performance focus

Simplify

Inspire Inspire

Diverse teams

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Henkel Strategy

Inspire Strengthen our global team

Leadership Talent & Performance Diversity

Set clear expectations Develop strong leaders

Attract the best talents Reward performance

Leverage diversity as key

success factor

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Henkel Strategy

Diverse teams as key success factor

Nationality/Culture

Foster internationality in our teams

Gender

Increase female share by systematic career development

Age/Seniority

Leverage experience of senior colleagues

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Henkel Strategy

Strong Impact around the Globe

Global Roadshow of Board Members

Bangkok Barcelona Bratislava Breda Bridgewater

Dubai Dsseldorf Istanbul London Manila

Mexico City Milano Moscow Mumbai Osaka

Paris Rocky Hill Sao Paulo Scottsdale Seoul

Shanghai Singapore Stockholm Tokyo Vienna Yokohama

26 Locations
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22 Countries

Summary: Henkel Strategy

We will outperform our competition as a globalized company with simplified operations and a highly inspired team!

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Henkel Strategy

Summary: Henkel Strategy

Outperform Globalize

outperform globalized A global leader simplified inspired

Simplify Inspire
in brands and technologies

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Henkel Strategy

Summary: Strategic Framework

Vision Vision

A global leader in brands and technologies

Customers People Financials Sustainability Family

Values Values

Strategy

Outperform

Globalize

Simplify

Inspire

Targets Targets

20 bn
SALES
Henkel Strategy

10 bn
EM SALES

10 %
EPS CAGR

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Thank you!
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