Henkel Ag & Co. Kgaa · XETR:HEN
Henkel Ag & Co. Kgaa — H1 2023 Earnings Presentation
39 slides from Henkel Ag & Co. Kgaa's earnings presentation, Aug 10, 2023
Slide 1: Henkel H1 2023
HENKEL H1 2023 CARSTEN KNOBEL, MARCO SWOBODA – 10 AUGUST 2023
Slide 2: Disclaimer
DISCLAIMER This presentation 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”
Slide 3: Agenda
AGENDA 01 Key Developments 02 Business Performance H1 2023 & Outlook 03 Key Take-Aways & Closing 3 HENKEL H1 2023
Slide 4: Sustained growth momentum with margin expansion
SUSTAINED GROWTH MOMENTUM WITH MARGIN EXPANSION H1 2023 HENKEL ADHESIVE CONSUMER GROUP TECHNOLOGIES BRANDS ▪ Very strong organic sales growth driven by double-digit price increases in both Adhesive Technologies and Consumer Brands OSG OSG OSG ▪ Strong margin increase supported by pricing, accelerate
Slide 5: Economic environment
ECONOMIC ENVIRONMENT Overall heterogenous Diverse dynamics in Adhesive macroeconomic environment – Technologies end markets – global GDP with stable growth muted demand in Electronics, throughout the year, Construction and Packaging; IPX expected to slightly improve growth in Automotive and after mu
Slide 6: Highlight achievements in H1 2023
HIGHLIGHT ACHIEVEMENTS IN H1 2023 Further shaped Consistent investment in Consumer Brands innovations, supported by portfolio with focus on step up in marketing spend to two global categories further strengthen brand Laundry & Home Care equity and Hair Ahead of plan with Strong double-digit integrat
Slide 7: Further shaping our Consumer Brands business
FURTHER SHAPING OUR CONSUMER BRANDS BUSINESS Implementation well on track ▪ Ramping up net savings faster than anticipated ▪ Total of ~1,500 positions reduced by June 2023 ▪ Further progress in shaping the portfolio: – Total of ~€0.5bn divested/discontinued – Portfolio enhanced through value-creatin
Slide 8: Top brand Persil with dynamic growth momentum
TOP BRAND PERSIL WITH DYNAMIC GROWTH MOMENTUM Relaunch with unique enzyme technology rolled out across 30 countries in H1 2023 – strong marketing campaign with increased media invest DOUBLE-DIGIT organic sales growth of Persil in H1 2023 #2 fabric cleaning brand in Europe 8 HENKEL H1 2023
Slide 9: Styling relaunch is boosting got2b growth
STYLING RELAUNCH IS BOOSTING GOT2B GROWTH Co-created relaunch rolled out in >30 countries in H1 2023 – supported by dedicated digital campaign DOUBLE-DIGIT organic sales growth of got2be in H1 2023 #3 styling brand in Europe – #1 position in gels, creams, waxes with market share gains of 260 bps 9 H
Slide 10: Advancing our Adhesive Technologies business
ADVANCING OUR ADHESIVE TECHNOLOGIES BUSINESS Enhanced business and organizational set-up ▪ New leadership team in place ▪ Established new optimized organizational structure – further enhancing customer and market proximity along three business areas Sales split by business area ▪ Continuously advanc
Slide 11: Shaping the future of e-mobility
SHAPING THE FUTURE OF E-MOBILITY Attractive market: E-DRIVE SYSTEM EV share of total produced e.g., potting for vehicles increased in H1 23 to thermal management 17% vs. 12% in H1 22 ~70% organic sales growth with Henkel EV solutions in H1 23 EV sales potential for Henkel solutions >2x compared to a
Slide 12: Accelerating growth in aerospace
ACCELERATING GROWTH IN AEROSPACE INTERIORS On average more than PROPULSION e.g., fire retardant 2,000 e.g., structural bonding bonding for floor panels for engine nacelle aircrafts per year expected to be built in next 20 years High double-digit organic sales growth of our aerospace business in H1 2
Slide 13: Progressing towards carbon-neutral operations
PROGRESSING TOWARDS CARBON-NEUTRAL OPERATIONS 10 sites converted to carbon-neutral production in H1 2023 -56% CO2 emissions from our operations per ton of product (vs. 2010) 13 HENKEL H1 2023
Slide 14: Leveraging digital tools and artificial intelligence
LEVERAGING DIGITAL TOOLS AND ARTIFICIAL INTELLIGENCE STRATEGIC PARTNERSHIPS with leading tech companies to further drive digital co-innovation Megaplatform RAQN enabling hyper-personalized content and omni-channel experiences: >3,000 campaigns for 40 brands AI-ENABLED Schwarzkopf SalonLab for indivi
Slide 15: Updated outlook 2023
Layout tbd – new chart UPDATED OUTLOOK 2023 ORGANIC SALES GROWTH 2.5 to 4.5% ADJUSTED EBIT MARGIN 11.0 to 12.5% ADJUSTED EPS1 +5 to +20% 15 HENKEL H1 2023 1 Per preferred share, at constant exchange rates
Slide 16: Agenda
AGENDA 01 Key Developments 02 Business Performance H1 2023 & Outlook 03 Key Take-Aways & Closing 16 HENKEL H1 2023
Slide 17: Very strong organic sales growth driven by double-digit pricing
VERY STRONG ORGANIC SALES GROWTH DRIVEN BY DOUBLE-DIGIT PRICING H1 2023 4.9% -2.2% -2.5% 0.1% OSG M&A FX NOMINAL PRICE VOLUME SALES 12.1% -7.2% €10.9bn 17 HENKEL H1 2023
Slide 18: Organic sales development by region
ORGANIC SALES DEVELOPMENT BY REGION H1 2023 Organic sales growth Europe 2.4% North America 3.8% IMEA 25.7% Asia-Pacific -2.7% Latin America 13.2% 18 HENKEL H1 2023
Slide 19: Adhesive Technologies
In progress ADHESIVE TECHNOLOGIES H1 2023 ORGANIC ADJ. SALES GROWTH EBIT MARGIN 4.7% 14.0% SALES ADJ. EBIT €5.5BN €766M PRICE VOLUME 10.2% -5.5% 19 HENKEL H1 2023
Slide 20: Adhesive Technologies business unit performance
ADHESIVE TECHNOLOGIES H1 2023 – Business Unit Performance Adj. EBIT and adj. EBIT margin development in €m ▪ Very strong organic sales growth with 800 787 15,0% double-digit pricing 766 750 743 14,5% ▪ Volumes below prior year – comparably resilient development given muted demand in relevant end 14,
Slide 21: Adhesive Technologies business area performance
ADHESIVE TECHNOLOGIES H1 2023 – Business Area Performance MOBILITY & PACKAGING & CRAFTSMEN, ELECTRONICS CONSUMER GOODS CONSTRUCTION & PROF. SALES OSG SALES OSG SALES OSG €1,899m 10.9% €1,733m -1.5% €1,843m 4.9% Growth driven by Automotive Stable development of Growth driven by all and Industrials –
Slide 22: Consumer Brands
CONSUMER BRANDS H1 2023 ORGANIC ADJ. SALES GROWTH EBIT MARGIN 5.7% 10.4% SALES ADJ. EBIT €5.4BN €559M PRICE VOLUME 14.1% -8.4% 22 HENKEL H1 2023
Slide 23: Consumer Brands business unit performance
CONSUMER BRANDS H1 2023 – Business Unit Performance Adj. EBIT and adj. EBIT margin development in €m ▪ Very strong growth driven by double-digit pricing 600 12% 559 ▪ Volumes also reflecting impact from portfolio measures and trade negotiations – 10,4% 500 482 recent progress to materialize in H2 10
Slide 24: Consumer Brands business area performance
CONSUMER BRANDS H1 2023 – Business Area Performance LAUNDRY & HAIR OTHER CONSUMER HOME CARE BUSINESSES SALES OSG SALES OSG SALES OSG €3,453m 5.3% €1,568m 7.9% €344m 0.0% Laundry Care with very strong Double-digit increase in Consumer Double-digit growth in growth driven by Fabric Care and mainly dri
Slide 25: Bridge from adjusted gross profit to adjusted EBIT
BRIDGE FROM ADJUSTED GROSS PROFIT TO ADJUSTED EBIT H1 2023 Impact on adjusted EBIT margin in pp vs. PY, in % of sales 44.7% -25.7% -2.6% -4.8% 0.0% 11.5% +2.1pp -0.6pp -0.2pp -0.2pp -0.2pp +0.8pp Adj. Gross Profit Marketing, selling R&D Admin OOI / OOE Adj. EBIT & distribution 25 HENKEL H1 2023
Slide 26: Bridge from reported to adjusted EBIT
BRIDGE FROM REPORTED TO ADJUSTED EBIT H1 2023 in €m 864 -3 +238 +155 1,254 REPORTED EBIT ONE-TIME INCOME ONE-TIME EXPENSES RESTRUCTURING ADJUSTED EBIT ▪ One-time expenses reflecting divestment of business in Russia ▪ Restructuring mainly related to further shaping Consumer Brands business 26 HENKEL
Slide 27: Bridge from adjusted EBIT to adjusted EPS
BRIDGE FROM ADJUSTED EBIT TO ADJUSTED EPS H1 2023 in €m 1,254 -41 -309 904 -10 894 (25.5%1) ADJUSTED EPS2 €2.13 9.2% y-o-y 14.4% at constant currencies Adj. net income Financial Taxes on Adj. Adj. EBIT Minorities attributable to result income (adj.) net income shareholders 27 HENKEL H1 2023 1 Adjust
Slide 28: Development of key cash KPIs
DEVELOPMENT OF KEY CASH KPIs H1 2023 in €m ▪ Net working capital increase driven by NET WORKING CAPITAL Change volume and price effects, mainly in Adhesive y-o-y Technologies 6.1% +80 bps ▪ Significantly improved free cash flow driven FREE CASH FLOW Change y-o-y by increased operating cash flow €749
Slide 29: Updated outlook 2023
UPDATED OUTLOOK 2023 ORGANIC ADJUSTED ADJUSTED SALES GROWTH EBIT MARGIN EPS1 GROUP 2.5 to 4.5% 11.0 to 12.5% +5 to +20% previously: 1.0 to 3.0% previously: 10.0 to 12.0% previously: -10 to +10% ADHESIVE 2.0 to 4.0% 13.5 to 15.0% TECHNOLOGIES previously: 1.0 to 3.0% previously: 13.0 to 15.0% CONSUMER
Slide 30: Agenda
AGENDA 01 Key Developments 02 Business Performance H1 2023 & Outlook 03 Key Take-Aways & Closing 30 HENKEL H1 2023
Slide 31: Key take-aways
KEY TAKE-AWAYS STRONG BOTTOM LINE VERY STRONG AND DEVELOPMENT REFLECTING BROAD-BASED SUCCESSFUL EXECUTION ORGANIC SALES GROWTH OF STRATEGIC PRIORITIES AND OPERATIONAL INITIATIVES ADVANCING LEVEL OF LOOKING AHEAD WITH INVESTMENTS TO CONFIDENCE – THRIVE GROWTH IN FY 2023 GUIDANCE RAISED QUICKLY EVOLVI
Slide 32: Questions & Answers
QUESTIONS & ANSWERS 32 HENKEL H1 2023
Slide 33: Upcoming events
UPCOMING EVENTS What‘s next 2023 AUG 10 | H1 2023 RELEASE Financial Report HY/Q2 NOV 9 | Q3 2023 RELEASE Quarterly Statement 2024 MAR 4 | FY 2023 RELEASE Annual Report + Sustainability Report 33 HENKEL H1 2023
Slide 34: Thank you
THANK YOU. 34 HENKEL H1 2023
Slide 35: Balanced and diversified portfolio
BALANCED AND DIVERSIFIED PORTFOLIO FY 20221 1% 40% 50% 49% ADHESIVE €22.4bn CONSUMER 27% SALES TECHNOLOGIES BRANDS 34% 27% 7% 16% 1% 10% Corporate €11.2bn €10.9bn SALES 33% SALES 7% 33% 66% Europe Asia/Pacific IMEA Latin America Mobility & Electronics Laundry & Home Care North America Corporate Pack
Slide 36: Sales by business unit and business area Q1 2022 – Q2 2023
SALES BY BUSINESS UNIT AND BUSINESS AREA Q1 2022 – Q2 2023 - Q1 2022 Q2 2022 Q3 2022 Q4 2022 Q1 2023 Q2 2023 €m Sales OSG Sales OSG Sales OSG Sales OSG Sales YoY OSG Sales YoY OSG HENKEL GROUP 5,271 7.1% 5,642 10.9% 5,976 11.3% 5,509 6.0% 5.609 6.4% 6.6% 5,316 -5.8% 3.2% ADHESIVE 2,631 10.7% 2,836 1
Slide 37: Sales, adj. EBIT and adj. EBIT margin by business unit H1 2023
SALES, ADJ. EBIT AND ADJ. EBIT MARGIN BY BUSINESS UNIT H1 2023 - Sales Adj. EBIT Adj. EBIT margin €m H1 2022 H1 2023 YoY OSG H1 2022 H1 2023 H1 2022 H1 2023 HENKEL GROUP 10,913 10,926 0,1% 4,9% 1,166 1,254 10.7% 11.5% ADHESIVE 5,467 5,475 0,1% 4,7% 743 766 13.6% 14.0% TECHNOLOGIES Mobility & 1,758 1
Slide 38: Updated outlook 2023 additional input for selected KPIs
UPDATED OUTLOOK 2023 ADDITIONAL INPUT FOR SELECTED KPIS Mid single-digit % negative1 CURRENCY IMPACT ON SALES Previously: low single-digit % negative1 M&A IMPACT ON SALES Mid single-digit % negative2 Low single-digit % increase1 PRICES FOR DIRECT MATERIALS Previously: low-to-mid single-digit % incre
Slide 39: Find out more on henkel.com/ir
FIND OUT MORE ON HENKEL.COM/IR