Henkel FY/Q4 2013 Kasper Rorsted Carsten Knobel Düsseldorf Feb 20, 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. FY/Q4 2013 – Henkel Analyst & Investor Call 2 2/20/2014
Agenda 1 Key developments 2013 2 Strategy 2016 - progress in 2013 3 Financials FY 2013 & excellence in value creation 4 Summary & outlook FY 2014 FY/Q4 2013 – Henkel Analyst & Investor Call 3 2/20/2014
Key figures FY 2013 Adj. EPS growth OSG Adj. EBIT margin +3.5% 15.4% +10.0% NWC in % of sales Net financial pos. Div. payout ratio 959 m € 30% 2.3% FY/Q4 2013 – Henkel Analyst & Investor Call 4 2/20/2014
2013 Guidance achieved Guidance FY 2013 FY 2013 Organic sales growth 3 - 5% 3.5% Adjusted EBIT margin ~ 15.0% 15.4% Adjusted EPS growth ~ 10% 10.0% All financial targets achieved FY/Q4 2013 – Henkel Analyst & Investor Call 5 2/20/2014
Achievements 2013 Henkel • Solid organic sales growth driven by all businesses & regions • Emerging Markets with very strong organic sales growth • Adj. EBIT margin at all-time high, supported by all businesses • Net debt changed to net cash position • Increase in dividend payout ratio • Successful first step in 2016 strategy execution FY/Q4 2013 – Henkel Analyst & Investor Call 6 2/20/2014
Challenges 2013 Henkel • Pressure from FX headwind, especially in second half 2013 • Continued geo-political and social unrest in some countries • Western Europe affected by weak Southern Europe • North America & Japan below expectations • Electronic Adhesives & Hair Salon with negative organic sales growth • High promotional pressure in HPC FY/Q4 2013 – Henkel Analyst & Investor Call 7 2/20/2014
Laundry & Home Care Key developments 2013 Sales Return • • Strong OSG Adj. EBIT margin showing excellent increase • Laundry solid, • Home Care very strong ROCE further increased • Emerging Markets OSG double-digit • Mature Markets OSG slightly negative FY/Q4 2013 – Henkel Analyst & Investor Call 8 2/20/2014
Laundry & Home Care Key activities 2013 Persil Duo-Caps Bref Power Active Somat/Pril Gel Caps • • • 1 st to launch multi-chamber Trend-setter in toilet care In-depth cleaning and segment exceptional shine caps in Europe • • • Successful global roll-out Further roll-out of successful Global roll-out started in 2013 innovation FY/Q4 2013 – Henkel Analyst & Investor Call 9 2/20/2014
Beauty Care Key developments 2013 Sales Return • • Solid OSG Adj. EBIT margin showing strong increase • Retail solid, • Hair Salon negative ROCE increased • Emerging Markets OSG very strong • Mature Markets OSG positive FY/Q4 2013 – Henkel Analyst & Investor Call 10 2/20/2014
Beauty Care Key activities 2013 Gliss Kur Ultimate Oil Elixir Dial Coconut Water Syoss Oleo Intense • • • 1 st care with nourishing golden 1 st body wash with nutrient rich 1 st permanent oil coloration from oil elixir coconut water Syoss • Unique, non-dripping oil-in- cream formula FY/Q4 2013 – Henkel Analyst & Investor Call 11 2/20/2014
Adhesive Technologies Key developments 2013 Sales Return • • Solid OSG Adj. EBIT margin showing excellent increase • Emerging Markets OSG • strong ROCE further increased • Mature Markets OSG positive FY/Q4 2013 – Henkel Analyst & Investor Call 12 2/20/2014
Adhesive Technologies Key activities 2013 Loctite MAX 2 Alliance with Nordson Loctite UF3808 MAX 2 • • • 1 st halogen-free underfill Matrix resin for fiberglass- Innovative solution for increased reinforced leaf spring efficiency and energy saving adhesive • Exceptional impact and shock • • Substitution of steel leads to Global roll-out protection 65% weight reduction FY/Q4 2013 – Henkel Analyst & Investor Call 13 2/20/2014
Agenda 1 Key developments 2013 2 Strategy 2016 - progress 2013 3 Financials FY 2013 & excellence in value creation 4 Summary & outlook FY 2014 FY/Q4 2013 – Henkel Analyst & Investor Call 14 2/20/2014
Strategy & financial targets 2016 Outperform Globalize Leverage potential Focus on regions in categories with high potential 20 bn € Sales A global leader 10 bn € EM Sales in brands and technologies 10 % EPS CAGR Simplify Inspire Drive operational Strengthen our excellence global team FY/Q4 2013 – Henkel Analyst & Investor Call 15 2/20/2014
Outperform – Build on strong base Mega Brands Powerful Innovations Consumer Proximity New / expansion Planned until 2016 • • • Top 10: 57% of sales (2012: 44%) Continuous flow of innovations Opening / significant expansion of 5 R&D centers in emerging • • Schwarzkopf reaches 2bn € Innovation rate further markets sales increased FY/Q4 2013 – Henkel Analyst & Investor Call 16 2/20/2014
Globalize – Focus on regions with high potential Emerging Markets: Mature Markets: Emerging Markets: Leverage strength Focused approach Go deep • • • High-tech development center Consistent very strong growth China now within top 5 near Munich countries Beauty Care • Sales Share of Emerging • • Automated high-bay central Markets increased to 44% Largest adhesives factory warehouse in Düsseldorf opened in Shanghai FY/Q4 2013 – Henkel Analyst & Investor Call 17 2/20/2014
Simplify – Drive operational excellence Best-in-Class Processes IT Focus Cost Efficiency Costs ( € ) Profitability benefit Scalable business model Sales ( € ) • • • >2,000 employees in Shared Consolidation of various IT Preparing for an integrated Services systems into one SAP platform global supply chain in Asia (Horizon) • New IBS organization Building a scalable business model FY/Q4 2013 – Henkel Analyst & Investor Call 18 2/20/2014
Inspire – Strengthen our global team Leadership Talent & Performance Diversity • • • Introduction of new Leadership Promotion of >1,000 managers 32% of managers are women Principles • • Review of long-term incentive 31% of managers work in • 6,800 managers trained in 350 scheme Emerging Markets workshops FY/Q4 2013 – Henkel Analyst & Investor Call 19 2/20/2014
Agenda 1 Key developments 2013 2 Strategy 2016 - progress in 2013 3 Financials FY 2013 & excellence in value creation 4 Summary & outlook FY 2014 FY/Q4 2013 – Henkel Analyst & Investor Call 20 2/20/2014
Key financials 2013 (1/2) Sales in m € , OSG in % EPS Pref. Adj. in € Gross Margin Adj. in % EBIT Margin Adj. in % +3.5% +90bp +130bp +10.0% 15.4 4.07 16,510 16,355 48.0 3.70 47.1 14.1 2012 2013 2012 2013 2012 2013 2012 2013 FY/Q4 2013 – Henkel Analyst & Investor Call 21 2/20/2014
Key financials 2013 (2/2) Free Cash Flow in m € Net Financial Position in m € NWC in % of Sales +1,044m € -150bp -20.1% 959 2,023 3.8 1,616 2.3 -85 2012 2013 2012 2013 2012 2013 FY/Q4 2013 – Henkel Analyst & Investor Call 22 2/20/2014
Sales growth in m € , changes in % +2.7% -4.4% +0.8% 16,510 0.0% 16,355 OSG: +3.5 % Sales 2012 Price Volume FX M&A Sales 2013 • Pressure from FX: mainly US Dollar and Emerging Markets currencies FY/Q4 2013 – Henkel Analyst & Investor Call 23 2/20/2014
Sales growth by region in m € , OSG in % Emerging Markets Mature Markets +8.3% -0.1% 9,240 8,977 7,230 7,115 2012 2013 2012 2013 • Continuous balanced and focused approach in Emerging Markets FY/Q4 2013 – Henkel Analyst & Investor Call 24 2/20/2014
Sales growth by region in m € , OSG in % Western Europe Eastern Europe Africa/Middle East +0.2% +6.0% +17.6% 5,610 5,580 3,034 1,077 1,080 2,986 2012 2013 2012 2013 2012 2013 North America Latin America Asia-Pacific +1.0% +8.7% +3.3% 1,062 1,061 2,597 3,023 2,524 2,928 2012 2013 2012 2013 2012 2013 • BRIC very strong, Emerging Markets in Asia strong • Southern Europe and Japan with continued weakness FY/Q4 2013 – Henkel Analyst & Investor Call 25 2/20/2014
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