Earnings Release • Aug 12, 2015
Earnings Release
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| in million euros | Q2/2014 | Q2/2015 | Change 1 | 1–6/2014 | 1–6/2015 | Change 1 |
|---|---|---|---|---|---|---|
| Sales | 4,137 | 4,695 | 13.5% | 8,066 | 9,125 | 13.1% |
| Laundry & Home Care | 1,139 | 1,314 | 15.3% | 2,286 | 2,612 | 14.3% |
| Beauty Care | 897 | 1,006 | 12.2% | 1,753 | 1,946 | 11.0% |
| Adhesive Technologies | 2,069 | 2,343 | 13.3% | 3,962 | 4,503 | 13.7% |
| Operating profit (EBIT) | 589 | 715 | 21.4% | 1,197 | 1,363 | 13.8% |
| Adjusted2 operating profit (EBIT) | 674 | 768 | 14.0% | 1,293 | 1,475 | 14.0% |
| Return on sales (EBIT) in percent | 14.2 | 15.2 | 1.0pp | 14.8 | 14.9 | 0.1pp |
| Adjusted2 return on sales (EBIT) in percent | 16.3 | 16.4 | 0.1pp | 16.0 | 16.2 | 0.2pp |
| Net income | 446 | 531 | 19.1% | 902 | 1,013 | 12.3% |
| Attributable to non-controlling interests | –5 | –10 | 100.0% | –12 | –22 | 83.3% |
| Attributable to shareholders of Henkel AG & Co. KGaA |
441 | 521 | 18.1% | 890 | 991 | 11.3% |
| Earnings per preferred share in euros | 1.02 | 1.20 | 17.6% | 2.06 | 2.29 | 11.2% |
| Adjusted2 earnings per preferred share in euros | 1.16 | 1.29 | 11.2% | 2.20 | 2.47 | 12.3% |
| Return on capital employed (ROCE) in percent | 21.0 | 19.5 | –1.5pp | 21.7 | 18.8 | –2.9pp |
pp = percentage points
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Adjusted for one-time charges/gains and restructuring charges.
26 Interim consolidated financial statements
32 Selected explanatory notes
4,695 million euros
sales: up 13.5 percent
715 million euros
operating profit (EBIT)
1.20euros earnings per preferred share (EPS)
521million euros
net income attributable to shareholders of Henkel AG & Co. KGaA
6.6 % net working capital in percent of sales
+2.4 %
organic sales growth: +4.3 percent Laundry & Home Care +1.9 percent Beauty Care
+1.7 percent Adhesive Technologies
768million euros/+14.0 %
adjusted1 operating profit (EBIT) / year-on-year increase
1.29euros/+11.2 %
adjusted1 earnings per preferred share (EPS) / year-on-year increase
16.4 %
adjusted1 return on sales (EBIT): up 0.1 percentage points 17.1 percent Laundry & Home Care 16.5 percent Beauty Care 17.0 percent Adhesive Technologies
Another double-digit increase in quarterly sales.
Strong organic sales growth in emerging markets.
Double-digit increase in adjusted earnings per preferred share.
Two acquisitions – Laundry & Home Care and Adhesive Technologies – agreed upon and signed.
1 Adjusted for one-time charges (24 million euros)/one-time gains (0 million euros) and restructuring charges (29 million euros).
You will find our annual reports, our quarterly financial reports, the latest data on Henkel's shares and bonds, and also news, reports and presentations relating to the company, on our Investor Relations website:
www.henkel.com/ir
On April 13, 2015, the Annual General Meeting of Henkel AG & Co. KGaA approved a dividend of 1.29 euros per ordinary share and 1.31 euros per preferred share. The payout ratio was therefore 30 percent of net income after non-controlling interests and adjusted for exceptional items.
On April 14, 2015, Henkel signed an agreement to acquire Novamelt GmbH based in Wehr, Germany. This acquisition enables Henkel to further strengthen its position in hotmelt adhesives. Sales of Novamelt GmbH in 2014 amounted to around 50 million euros. The acquisition was completed on June 1, 2015.
Effective May 11, 2015, Henkel signed an agreement with Colgate-Palmolive Company for the purchase of its entire range of laundry detergents and prewash brands in Australia, New Zealand and Fiji. With this acquisition of powder and liquid detergents as well as pre-wash brands, Henkel will become one of the largest players in the market for detergents in the Australia/New Zealand region. These brands generated sales of around 110 million euros in 2014.
On June 1, 2015, Henkel held an Investors and Analysts Day in Düsseldorf. Under the banner slogan "Experience Reinvention," Laundry & Home Care presented its strategy and performance to the financial community, with attendees also being offered the opportunity to visit the business unit's recently opened Global Experience Center.
| in euros | Q2/2014 | Q2/2015 |
|---|---|---|
| Earnings per share | ||
| Ordinary share | 1.02 | 1.20 |
| Preferred share | 1.02 | 1.20 |
| Share price at period end1 | ||
| Ordinary share | 73.50 | 85.49 |
| Preferred share | 84.43 | 100.60 |
| High for the period1 | ||
| Ordinary share | 77.10 | 99.26 |
| Preferred share | 85.77 | 115.20 |
| Low for the period1 | ||
| Ordinary share | 69.94 | 85.49 |
| Preferred share | 75.50 | 100.60 |
| Market capitalization1 in bn euros | 34.1 | 40.1 |
| Ordinary shares in bn euros | 19.1 | 22.2 |
| Preferred shares in bn euros | 15.0 | 17.9 |
| 1 Closing share prices, Xetra trading system. |
The share indices relevant to Henkel posted a decline in the second quarter of 2015. The DAX fell by 8.5 percent, closing at 10,944.97 points. The Stoxx Europe 600 index recorded a smaller decrease of 4.0 percent.
The price of Henkel preferred shares decreased in the second quarter from 109.55 euros to 100.60 euros, or 8.2 percent. The price of our ordinary shares also declined, ending the period down 11.1 percent at 85.49 euros. The premium generated by the preferred share compared to the ordinary share averaged 16.9 percent during the second quarter.
in euros (Henkel preferred share) all other figures indexed
Key financials 1
| in million euros | Q2/2014 | Q2/2015 | +/– |
|---|---|---|---|
| Sales | 4,137 | 4,695 | 13.5% |
| Operating profit (EBIT) | 589 | 715 | 21.4% |
| Adjusted2 operating profit (EBIT) | 674 | 768 | 14.0% |
| Return on sales (EBIT) | 14.2% | 15.2% | 1.0pp |
| Adjusted2 return on sales (EBIT) | 16.3% | 16.4% | 0.1pp |
| Net income – attributable to shareholders of Henkel AG & Co. KGaA | 441 | 521 | 18.1% |
| Adjusted2 net income – attributable to shareholders of Henkel AG & Co. KGaA | 499 | 558 | 11.8% |
| Earnings per preferred share in euros | 1.02 | 1.20 | 17.6% |
| Adjusted2 earnings per preferred share in euros | 1.16 | 1.29 | 11.2% |
pp = percentage points
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Adjusted for one-time charges/gains and restructuring charges.
Sales growth was once again double digit in the second quarter of 2015, increasing by 13.5 percent to 4,695 million euros, with currency developments exerting a positive effect. Adjusted for foreign exchange effects of 7.3 percent, sales improved by 6.2 percent. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by 2.4 percent. We improved adjusted return on sales (EBIT) by 0.1 percentage points to 16.4 percent. Compared to the prioryear quarter, adjusted earnings per preferred share rose by 11.2 percent.
The Laundry & Home Care business unit recorded solid organic sales growth of 4.3 percent, mainly driven by volume. The positive organic growth of 1.9 percent in the Beauty Care business unit was primarily achieved through price increases. The Adhesive Technologies business unit recorded positive organic sales growth of 1.7 percent, also to a large extent driven by price increases.
| in percent | Organic sales growth |
of which price |
of which volume |
|---|---|---|---|
| Laundry & Home Care | 4.3 | 0.5 | 3.8 |
| Beauty Care | 1.9 | 1.6 | 0.3 |
| Adhesive Technologies | 1.7 | 1.5 | 0.2 |
| Henkel Group | 2.4 | 1.2 | 1.2 |
The scope of our business activities and competitive positions as described in our Annual Report 2014 on page 55 did not change materially in the second quarter of 2015.
To continuously adapt our structures to our markets and customers, we spent 29 million euros on restructuring (prior-year quarter: 71 million euros). In order to create a scalable business model, we are – among other things – expanding our shared services and progressing with the combination of our supply chain and sourcing activities into an integrated global supply chain organization. We are also advancing the integration of our acquisitions.
| in percent | Q2/2015 |
|---|---|
| Change versus previous year | 13.5 |
| Foreign exchange | 7.3 |
| Adjusted for foreign exchange | 6.2 |
| Acquisitions/divestments | 3.8 |
| Organic | 2.4 |
| of which price | 1.2 |
| of which volume | 1.2 |
1 Calculated on the basis of units of 1,000 euros.
| in million euros | Q2/2014 | % | Q2/2015 | % | Change |
|---|---|---|---|---|---|
| Sales | 4,137 | 100.0 | 4,695 | 100.0 | 13.5% |
| Cost of sales | –2,168 | –52.4 | –2,430 | –51.8 | 12.1% |
| Gross profit | 1,969 | 47.6 | 2,265 | 48.2 | 15.0% |
| Marketing, selling and distribution expenses | –1,016 | –24.6 | –1,173 | –25.0 | 15.5% |
| Research and development expenses | –102 | –2.5 | –120 | –2.6 | 17.6% |
| Administrative expenses | –180 | –4.3 | –224 | –4.7 | 24.4% |
| Other operating income/charges | 3 | 0.1 | 20 | 0.5 | – |
| Adjusted operating profit (EBIT) | 674 | 16.3 | 768 | 16.4 | 14.0% |
| 1 Calculated on the basis of units of 1,000 euros; figures commercially rounded. |
In the following, we discuss our operating income and expense items up to operating profit, adjusted in each case for one-time charges/gains and restructuring charges. The reconciliation statement and the allocation of the restructuring charges between the various expense items of the consolidated statement of income can be found on page 28.
Compared to the second quarter of 2014, cost of sales increased by 12.1 percent to 2,430 million euros. Gross profit increased by 15.0 percent to 2,265 million euros. We were able to offset the effects of continued intense promotional competition and increase gross margin by 0.6 percentage points to 48.2 percent through selective price increases, savings from cost-reduction measures, and improvements in production and supply chain efficiency in addition to lower prices for direct materials.
We increased marketing, selling and distribution expenses by 15.5 percent to 1,173 million euros, which raised their ratio of sales accordingly, by 0.4 percentage points to 25.0 percent. We spent a total of 120 million euros on research and development, slightly increasing the ratio to sales versus the prior-year quarter to 2.6 percent. Administrative expenses increased compared to the prior-year quarter to 224 million euros, mainly due to acquisitions and foreign exchange effects. At 4.7 percent, the ratio to sales came in above the level of the second quarter of 2014.
At 20 million euros, the balance of other operating income and charges remained at a similarly low level as in the prior-year quarter. The absolute increase was the result of proceeds from a number of individual items, such as gains on asset disposals and land sales.
Adjusted operating profit (EBIT) increased by 14.0 percent from 674 million euros to 768 million euros. We further improved adjusted return on sales for the Group, from 16.3 to 16.4 percent. The Laundry & Home Care business unit recorded a strong margin improvement with an increase from 16.6 to 17.1 percent. This was primarily due to a solid sales performance combined with strict cost management. We achieved a solid improvement in margin in the Beauty Care business unit of 0.3 percentage points to 16.5 percent, thanks to a positive sales performance accompanied by strict cost management. Due to investments made in market- and innovation-oriented business structures, the margin in the Adhesive Technologies business unit came in 0.5 percentage points below the high level of 17.0 percent registered in the prior-year quarter.
The financial result of –11 million euros was at the level of the prior-year quarter. The tax rate was 24.6 percent (adjusted: 25.1 percent).
Net income for the quarter increased by 19.1 percent from 446 million euros to 531 million euros. After deducting 10 million euros attributable to non-controlling interests, net income for the quarter was 521 million euros (second quarter 2014: 441 million euros). Adjusted net income for the quarter after deducting non-controlling interests was 558 million euros compared to 499 million euros in the prioryear quarter. Earnings per preferred share (EPS) rose from 1.02 euros to 1.20 euros. Adjusted earnings per preferred share amounted to 1.29 euros versus 1.16 euros in the second quarter of 2014.
| Western Europe |
Eastern Europe |
Africa/ Middle |
North America |
Latin America |
Asia Pacific |
Corporate 2 | Henkel Group |
|
|---|---|---|---|---|---|---|---|---|
| in million euros | East | |||||||
| Sales April–June 2015 | 1,564 | 707 | 342 | 934 | 292 | 826 | 31 | 4,695 |
| Sales April–June 2014 | 1,450 | 739 | 287 | 703 | 259 | 666 | 32 | 4,137 |
| Change from previous year | 7.9% | –4.4% | 19.0% | 32.7% | 12.7% | 23.9% | – | 13.5% |
| Adjusted for foreign exchange | 6.7% | 5.0% | 4.4% | 7.8% | 9.0% | 4.9% | – | 6.2% |
| Organic | – | 5.5% | 4.4% | 0.3% | 8.4% | 3.7% | – | 2.4% |
| Proportion of Henkel sales April–June 2015 |
33% | 15% | 7% | 20% | 6% | 18% | 1% | 100% |
| Proportion of Henkel sales April–June 2014 |
35% | 18% | 7% | 17% | 6% | 16% | 1% | 100% |
| Operating profit (EBIT) April–June 2015 |
328 | 110 | 39 | 110 | 25 | 132 | –29 | 715 |
| Operating profit (EBIT) April–June 2014 |
289 | 105 | 24 | 109 | 21 | 94 | –52 | 589 |
| Change from previous year | 13.8% | 4.3% | 64.2% | 1.3% | 16.9% | 41.6% | – | 21.4% |
| Adjusted for foreign exchange | 10.1% | 17.1% | 39.6% | –21.4% | 5.5% | 12.9% | – | 12.3% |
| Return on sales (EBIT) April–June 2015 |
21.0% | 15.5% | 11.3% | 11.8% | 8.6% | 16.0% | – | 15.2% |
| Return on sales (EBIT) April–June 2014 |
19.9% | 14.2% | 8.2% | 15.5% | 8.2% | 14.0% | – | 14.2% |
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Corporate = sales and services not assignable to the individual regions and business units.
In the following, we comment on our results in the second quarter 2015:
In a highly competitive market environment, we were able to maintain organic sales in Western Europe at the level of the prior-year period. In particular, the countries of Southern Europe along with France and Germany posted positive developments, while sales in Northern Europe and Switzerland were below the prior-year quarter.
Operating profit in the region improved adjusted for foreign exchange by 10.1 percent. Return on sales in the region rose by 1.1 percentage points to 21.0 percent.
In the Eastern Europe region, we increased sales organically by 5.5 percent despite the challenging market environment. The main contribution to this performance came from our businesses in Russia, Turkey and Poland.
Operating profit in the region grew – adjusted for foreign exchange – by 17.1 percent. Return on sales in the region rose by 1.3 percentage points to 15.5 percent.
In the Africa/Middle East region, our growth continued to be impacted by the geopolitical unrest in some countries. Organic sales growth amounted to 4.4 percent.
Operating profit in the region improved adjusted for foreign exchange by 39.6 percent. Return on sales increased by 3.1 percentage points to 11.3 percent.
| Western Europe |
Eastern Europe |
Africa/ Middle |
North America |
Latin America |
Asia Pacific |
Corporate 2 | Henkel Group |
|
|---|---|---|---|---|---|---|---|---|
| in million euros | East | |||||||
| Sales January–June 2015 | 3,095 | 1,332 | 692 | 1,819 | 566 | 1,558 | 63 | 9,125 |
| Sales January–June 2014 | 2,900 | 1,409 | 564 | 1,373 | 500 | 1,254 | 66 | 8,066 |
| Change from previous year | 6.7% | –5.5% | 22.6% | 32.4% | 13.2% | 24.2% | – | 13.1% |
| Adjusted for foreign exchange | 5.7% | 6.2% | 8.3% | 8.7% | 7.8% | 5.9% | – | 6.5% |
| Organic | –0.1% | 6.1% | 8.3% | 1.3% | 6.9% | 4.7% | – | 3.0% |
| Proportion of Henkel sales January–June 2015 |
34% | 15% | 7% | 20% | 6% | 17% | 1% | 100% |
| Proportion of Henkel sales January–June 2014 |
36% | 17% | 7% | 17% | 6% | 16% | 1% | 100% |
| Operating profit (EBIT) January–June 2015 |
636 | 185 | 83 | 239 | 53 | 218 | –51 | 1,363 |
| Operating profit (EBIT) January–June 2014 |
605 | 182 | 72 | 224 | 41 | 157 | –84 | 1,197 |
| Change from previous year | 5.2% | 2.0% | 14.6% | 6.9% | 27.2% | 38.5% | – | 13.8% |
| Adjusted for foreign exchange | 3.0% | 17.7% | –1.9% | –15.5% | 14.5% | 10.6% | – | 6.4% |
| Return on sales (EBIT) January–June 2015 |
20.6% | 13.9% | 11.9% | 13.2% | 9.3% | 14.0% | – | 14.9% |
| Return on sales (EBIT) January–June 2014 |
20.9% | 12.9% | 12.8% | 16.3% | 8.3% | 12.5% | – | 14.8% |
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Corporate = sales and services not assignable to the individual regions and business units.
Sales in the North America region increased organically by 0.3 percent.
Operating profit in the region fell adjusted for foreign exchange by 21.4 percent. At 11.8 percent, return on sales in the region was below the 15.5 percent for the prior-year quarter.
In the Latin America region, we increased sales organically by 8.4 percent, driven particularly by our performance in Mexico.
We were able to increase operating profit adjusted for foreign exchange by 5.5 percent. Return on sales in the region rose by 0.4 percentage points to 8.6 percent.
Sales in the Asia-Pacific region grew organically by 3.7 percent. This solid organic improvement resulted primarily from business performance in China, Japan and India.
We increased operating profit adjusted for foreign exchange by 12.9 percent. Return on sales in the region rose year on year by 2.0 percentage points to 16.0 percent.
Our sales in the emerging markets of Eastern Europe, Africa/Middle East, Latin America and Asia (excluding Japan) grew significantly by 11.0 percent to 2,047 million euros. The share of Group sales from emerging markets declined slightly compared to the second quarter of 2014, to 44 percent. Driven by all business units, organic sales in emerging markets grew by 5.1 percent and again made an above-average contribution to the organic growth of the Group.
| Q2/2014 | Q2/2015 | +/– | 1–6/2014 | 1–6/2015 | +/– |
|---|---|---|---|---|---|
| 1,139 | 1,314 | 15.3% | 2,286 | 2,612 | 14.3% |
| 27% | 28% | 28% | 29% | ||
| 160 | 198 | 23.6% | 356 | 389 | 9.4% |
| 190 | 225 | 18.6% | 380 | 447 | 17.6% |
| 14.0% | 15.1% | 1.1pp | 15.6% | 14.9% | –0.7pp |
| 16.6% | 17.1% | 0.5pp | 16.6% | 17.1% | 0.5pp |
| 26.8% | 21.0% | –5.8pp | 30.6% | 21.0% | –9.6pp |
pp = percentage points
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Adjusted for one-time charges/gains and restructuring charges.
| in percent | Q2/2015 | 1–6/2015 |
|---|---|---|
| Change versus previous year | 15.3 | 14.3 |
| Foreign exchange | 3.6 | 2.9 |
| Adjusted for foreign exchange | 11.7 | 11.4 |
| Acquisitions/divestments | 7.4 | 6.6 |
| Organic | 4.3 | 4.8 |
| of which price | 0.5 | 1.4 |
| of which volume | 3.8 | 3.4 |
1 Calculated on the basis of units of 1,000 euros.
The Laundry & Home Care business unit recorded solid organic sales growth in the second quarter. At 1,314 million euros, we achieved the highest-ever absolute level of quarterly sales. Adjusted operating profit grew double digit and adjusted return on sales showed a strong increase. Thus we were again able to successfully continue our path of profitable growth in the second quarter of 2015.
In the following, we comment on our organic sales performance.
Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), we increased sales by 4.3 percent compared to the second quarter last year. This growth was again higher than that of our relevant markets, resulting in further expansions of market share.
The solid organic improvement was mainly driven by our emerging markets, which posted very strong performance. Both the Eastern Europe and Latin America regions contributed with double-digit growth. The Africa/Middle East region recorded solid growth.
Innovation
Persil sets a new standard in the rapidly growing market of pre-portioned detergents with its new Persil Power-Mix Caps. The unique combination of concentrated power gel and powder booster in a convenient duo-chamber cap offers the best performance in the segment with superiority on bleachable stains such as red wine, coffee or blueberry juice. The new Persil Power-Mix Caps are to be rolled out to more than 20 countries in Western and Eastern Europe. www.persil.nl
You can find further information relating to Laundry & Home Care product innovations on our website: www.henkel.com/brands-solutions
The mature markets saw positive sales growth over the prior-year quarter, supported mainly by performance in Western Europe. Germany, in particular, contributed with solid growth. Sales performance in North America was positive in an environment that continues to be marked by intense competition.
We significantly increased adjusted operating profit (EBIT) in comparison to the prior-year quarter, by 18.6 percent to 225 million euros. Compared to the second quarter of 2014, we recorded a strong increase in adjusted return on sales of 0.5 percentage points to 17.1 percent. Ongoing measures to reduce costs and raise efficiency in production and the supply chain enabled us to offset the effects of persistently tough promotional and price competition, leading to an increase in gross margin. In addition, lower prices for direct materials had a positive effect. At 21.0 percent, return on capital employed (ROCE) was below the level of the prior-year quarter. It was mainly impacted by the capital effect of acquisitions in 2014 and foreign exchange. At –3.1 percent, net working capital as a percentage of sales remained low, albeit slightly above the figure for the prior-year quarter due to the acquisitions made in 2014.
Numerous innovations strengthened our businesses:
In the Laundry Care business area, we posted solid organic growth in the second quarter. Our heavy-duty detergents were the key driver of this solid performance. In particular, the performance of our core brand Persil was very positive. Our fabric softeners recorded very strong growth.
In the premium detergent category, we launched the new Persil Power-Mix Caps in the fast-growing market for pre-portioned detergents in Western and Eastern Europe. They combine the performance advantages of powder and gel in a single, pre-portioned detergent capsule. The capsules guarantee the best performance in this segment with respect to bleachable stains such as red wine, coffee or blueberry juice. The new Persil Power-Mix Caps are to be rolled out to further countries this year.
In the segment for price-conscious consumers, we introduced a new and differentiated positioning approach for our detergents under various brands in the emerging markets. This is based on delivering maximum yield and performance and involves a new packaging design and a new communications campaign. The concept will be rolled out in over 25 countries in Eastern Europe, Latin America and Africa/
Middle East under brands such as Pemos (in Russia), Top brands Tomi (in Hungary) und 1-2-3 (in Mexico).
The Home Care business area recorded strong organic growth in the second quarter, with our WC products once again generating double-digit growth. Our hand dishwashing products also made a significant contribution to this strong performance.
Building on the considerable global success of our Superior Value Rim Blocks in the WC product category, we introduced two new variants featuring innovative fragrances: Hawaiian Plumeria Lei and Rio Carnival.
We also strengthened our dishwashing products business through a number of innovations. In automatic dishwashing products, we expanded our line of Somat gel capsules, adding a lemon variant. In the Africa/Middle East region, we introduced the new Pril 100 Lemons Power in the hand dishwashing product category and supported it with a 360 degree communications campaign.
| Q2/2014 | Q2/2015 | +/– | 1–6/2014 | 1–6/2015 | +/– |
|---|---|---|---|---|---|
| 897 | 1,006 | 12.2% | 1,753 | 1,946 | 11.0% |
| 22% | 21% | 22% | 21% | ||
| 135 | 158 | 17.6% | 248 | 291 | 17.3% |
| 145 | 166 | 14.7% | 279 | 316 | 13.1% |
| 15.0% | 15.7% | 0.7pp | 14.2% | 15.0% | 0.8pp |
| 16.2% | 16.5% | 0.3pp | 15.9% | 16.2% | 0.3pp |
| 25.8% | 23.1% | –2.7pp | 24.1% | 21.7% | –2.4pp |
pp = percentage points
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Adjusted for one-time charges/gains and restructuring charges.
| in percent | Q2/2015 | 1–6/2015 |
|---|---|---|
| Change versus previous year | 12.2 | 11.0 |
| Foreign exchange | 6.5 | 5.3 |
| Adjusted for foreign exchange | 5.7 | 5.7 |
| Acquisitions/divestments | 3.8 | 3.7 |
| Organic | 1.9 | 2.0 |
| of which price | 1.6 | 1.9 |
| of which volume | 0.3 | 0.1 |
1 Calculated on the basis of units of 1,000 euros.
In the second quarter, the Beauty Care business unit achieved over one billion euros in quarterly sales for the first time. Adjusted operating profit grew double digit. At the same time, adjusted return on sales showed a solid increase. Thus we were again able to continue our long-established path of profitable growth.
In the following, we comment on our organic sales performance.
Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), we increased sales by 1.9 percent compared to the prior-year quarter. The improvement was once again higher than the growth rate of our relevant markets, enabling us to further expand our market share.
From a regional perspective, business performance was particularly successful in the emerging markets, with very strong growth rates being achieved there. We once again achieved double-digit increase in sales in both Asia (excluding Japan) and Latin America. The Eastern Europe region posted strong sales performance and we recorded positive sales growth in the Africa/Middle East region.
The Schwarzkopf brand, 3 Wetter Taft, celebrates 60 years of styling success and brand history with the introduction of its new styling line, Ultimate. Thanks to the unique formula with a liquid crystal gloss effect and with ultimate-hold polymers, the new products give hair luxurious radiant shine and the best Taft holding power ever – 100 percent hold that lasts up to 48 hours. www.taft.de
You can find further information relating to Beauty Care product innovations on our website: www.henkel.com/brands-solutions
negative market performance coupled with intense price and promotional competition. Sales in the mature markets remained below the level of the prior-year quarter due to developments in Western Europe. Despite a challenging competitive environment, sales in the North America region experienced solid growth. The mature markets of the Asia-Pacific region performed positively compared to the second quarter of 2014.
We significantly increased adjusted operating profit to 166 million euros. Adjusted return on sales reached 16.5 percent for the first time. Ongoing measures to reduce costs and raise efficiency in production and the supply chain enabled us to offset the negative effects on gross margin of foreign exchange and intense promotional and price competition, leading to an increase in that metric. Lower prices for direct materials also had a positive effect. Return on capital employed (ROCE) decreased versus the prior year to 23.1 percent due to foreign exchange effects. Net working capital as a percentage of sales again remained low at 3.9 percent, slightly below the level of the prior-year period.
Numerous innovations strengthened our businesses:
Our Branded Consumer Goods business area recorded solid sales performance in the second quarter. This was supported by successful innovations leading to further expansion of our market positions.
In Hair Colorants, Syoss impressed with the successful relaunch of our first oil colorant, Oleo Intense. The high-performance formula with an activating oil booster combines maximum color intensity, professional gray coverage and intensive care completely without ammonia. We further strengthened the Syoss portfolio with the new colorant line Vibrant Colors.
In Hair Care, we introduced anti-hair loss and antidandruff variants under the Syoss brand. New Gliss Kur Oil Nutritive is the first oil repair treatment from Gliss Kur with eight precious beauty oils and keratin to reduce split ends. And new Schauma SuperPower! with guarana extract is the first shampoo from Schauma targeted at young males.
In Hair Styling, Schwarzkopf is setting new standards with the introduction of Taft Ultimate, the first line of styling products that combines Taft's strongest holding power with a luxurious crystal shine. The new product line Taft Carbon Kraft provides inde-
The mature markets continued to be impacted by Top brands structible strong hold with micro-carbon molecules. With Got2b Föhnomenal, the trendy Got2b brand launched its first styling line for fast, perfect blowdry styles.
In Body Care, the new Right Guard Heat Control antiperspirant for men was launched, and with Fa Fresh & Dry we introduced the first high-performance antiperspirant with non-stop-fresh technology. In addition, with Dial Omega Moisture, we now offer a new line with a moisturizing formula enriched with omega-packed sea berries.
In Skin Care, Diadermine expanded its innovative product line N°110 with N°110 Serum de Beauté. The innovative formula with 11 super anti-aging ingredients fights the 11 signs of aging skin and visibly rejuvenates the skin as well as the area around the eyes. Diadermine also expanded its portfolio with its Cellular Expert 3D skin care products.
In Oral Care, Denivit White & Brilliant offers a professional whitening system for a radiant white smile. The products feature the Pro-White system that eliminates even tough stains and lightens teeth by up to two shades.
Our Hair Salon business area recorded positive sales growth in a persistently difficult market environment. With innovative product launches and trendoriented services, we continuously inject the hair salon market with new momentum. In the colorants field, Schwarzkopf Professional is setting a new global trend in partner salons worldwide. The eight new Royal Pearlescence shades from Igora with multitonal pearl effects provide an additional color service for fashion-conscious salon clients. Sexy Hair, the North American brand we acquired in 2014, is convincing hair professionals with the styling innovation "Big Sexy Hair Full Bloom" for long-lasting volume and a pleasant feeling of freshness.
| Q2/2014 | Q2/2015 | +/– | 1–6/2014 | 1–6/2015 | +/– |
|---|---|---|---|---|---|
| 2,069 | 2,343 | 13.3% | 3,962 | 4,503 | 13.7% |
| 50% | 50% | 49% | 49% | ||
| 346 | 388 | 12.2% | 677 | 733 | 8.3% |
| 362 | 398 | 9.9% | 681 | 751 | 10.2% |
| 16.7% | 16.6% | –0.1pp | 17.1% | 16.3% | –0.8pp |
| 17.5% | 17.0% | –0.5pp | 17.2% | 16.7% | –0.5pp |
| 20.7% | 19.2% | –1.5pp | 20.5% | 18.4% | –2.1pp |
pp = percentage points
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Adjusted for one-time charges/gains and restructuring charges.
| in percent | Q2/2015 | 1–6/2015 |
|---|---|---|
| Change versus previous year | 13.3 | 13.7 |
| Foreign exchange | 9.7 | 9.4 |
| Adjusted for foreign exchange | 3.6 | 4.3 |
| Acquisitions/divestments | 1.9 | 1.8 |
| Organic | 1.7 | 2.5 |
| of which price | 1.5 | 1.4 |
| of which volume | 0.2 | 1.1 |
1 Calculated on the basis of units of 1,000 euros.
The Adhesive Technologies business unit recorded positive organic sales growth in the second quarter. At 2,343 million euros, we once again achieved the highest-ever absolute level of quarterly sales. Adjusted operating profit increased in the high single-digit range. At 17.0 percent, adjusted return on sales was below the high level of the prior-year quarter.
In the following, we comment on our organic sales performance.
Organic sales (i.e. adjusted for foreign exchange and acquisitions/divestments) grew by 1.7 percent, mainly as a result of price increases.
From a regional perspective, business performance was again successful in the emerging markets, with solid growth rates. The Africa/Middle East region achieved very strong growth. Growth of our businesses in Latin America was strong, and our business performance in the Asia (excluding Japan) region was positive. In the Eastern Europe region, we recorded positive sales performance, despite the ongoing difficult political situation in parts of the region.
Sales performance in the mature markets was positive overall. Our businesses in the mature markets of the Asia-Pacific region posted very strong growth,
The next generation conversion coating Bonderite M-NT 20120 provides customers in various industries with increased flexibility and efficiency coupled with enhanced sustainability. This phosphate-free multimetal pretreatment technology effectively protects steel, zinc and aluminum surfaces against flash rust. Bonderite M-NT 20120 reduces process complexity and thus enables faster cycle times while cutting energy consumption and waste. www.henkelna.com/bonderite-m-nt
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positive. In North America, however, sales were slightly lower year on year.
Adjusted operating profit (EBIT) registered growth in the high single digits, rising to 398 million euros. At 17.0 percent, adjusted return on sales was below the high level of the prior-year quarter due to investments made in market- and innovation-oriented business structures. Our ongoing measures to optimize costs in production and the supply chain contributed to an increase in gross margin. In addition, lower prices for direct materials had a positive effect. Return on capital employed (ROCE) was 19.2 percent, representing a decrease versus the second quarter of 2014 due to acquisitions. Although above the level of the prior-year quarter, net working capital as a percentage of sales was again low at 13.5 percent. The increase was due in part to our acquisitions and to the start of operations of our global supply chain organization.
We posted positive sales performance in the Packaging and Consumer Goods Adhesives business area, with our adhesives business for flexible packaging making an important contribution. Through the acquisition of Novamelt GmbH based in Wehr, Germany, we further strengthened our position in pressure sensitive hotmelt adhesives. Novamelt provides a comprehensive range of specialized pressure sensitive hotmelt adhesives which are used mainly in self-adhesive labels and adhesive tapes.
The Transport and Metal business area achieved the highest growth rate, recording a strong increase in sales compared to the prior-year quarter. Performance by our acoustic solutions and structural adhesives for the automotive industry was once again particularly dynamic, with our tailor-made product innovations for automotive engineering driving growth. These include the matrix resin Loctite MAX 2, developed in cooperation with our customers. Loctite MAX 2 is used, for example, in the series production of lightweight axles with a composite leaf spring for the new Volvo XC90, enabling further weight reduction of the chassis.
The business area General Industry showed positive sales performance. Growth momentum was recorded in the maintenance, repair and overhaul business. We introduced an innovative product under the Bonderite brand for pretreating metals such as steel, zinc and aluminum, demonstrating our role as the leading solution provider offering
and our sales performance in Western Europe was Top brands enhanced sustainability. The phosphate-free formula facilitates a more sustainable and efficient production process while providing excellent protection against flash rust.
We again achieved solid sales growth in the Electronics business area. This can be attributed in particular to our businesses serving consumer electronics manufacturers. Our businesses in thermal management products for the electronics industry – which we assumed with our acquisition of The Bergquist Company in 2014 – achieved double-digit sales growth.
Sales performance in our Adhesives for Consumers, Craftsmen and Building business area was positive, with solid sales growth recorded by the general building materials business and the stationery and crafting business. Under the Pattex brand, which celebrates its 60th anniversary this year, we introduced a new high-performance construction adhesive for the do-it-yourself market. The product is ideally suited to all applications and materials, indoors and outdoors, that require high final strength.
During the reporting period, we laid the cornerstone for our largest adhesives factory in India with the aim of expanding and consolidating our production capacity in the emerging markets. The multi-technology plant in the area of Pune will supply customers in the automotive industry, among others, and is expected to start production in 2017 with around 500 employees.
The general economic conditions described here are based on data published by IHS Global Insight.
The world economy grew by approximately 2.5 percent in the first six months of 2015 compared to the prior-year period. Industrial production weakened somewhat in the same period and only increased by approximately 2.5 percent. Growth in private consumption was unchanged, showing a moderate increase of approximately 2.5 percent.
In North America, economic growth slowed in the second quarter of 2015, to 2.5 percent. The Western European economy grew moderately by approximately 1.5 percent. Economic development in Germany showed growth of around 1 percent.
Economic growth in the region of Asia (excluding Japan) slowed to approximately 5.5 percent. In both Latin America and Eastern Europe, economic growth was subdued in the first six months of 2015 at approximately 0.5 percent.
The euro depreciated against the US dollar in the first six months of 2015 versus the prior-year period, from 1.37 to 1.12 US dollars. Around the world, consumer prices rose by approximately 2 percent. Global unemployment was around 7 percent.
With a rise of approximately 2.5 percent, private consumption in the first six months of 2015 remained moderate. Consumers in North America increased their spending by 3 percent versus the first half of 2014. In Western Europe, consumer spending grew by approximately 2 percent year on year. The propensity to spend weakened in the emerging markets, where consumption increased by around 3 percent.
With a rise of approximately 2.5 percent in the first six months of 2015, industrial production expanded at the same pace as the overall economy. At around 3 percent in the first half of 2015, growth in output in the transport sector and metal industry was lower in the second quarter. The electronics sector expanded production by approximately 4 percent and the automotive sector expanded output by around 2 percent. Growth was subdued in consumer-related sectors such as the global packaging industry, which recorded moderate growth of around 1 percent.
Global construction grew by approximately 1.5 percent in the first six months of this year.
In conditions characterized by modest private spending, we managed to further increase our sales organically in our consumer businesses. Organic sales in the Adhesive Technologies business unit grew by 2.5 percent in the first half of 2015, on a par with growth in industrial production.
We were able to significantly raise our gross margin compared to the prior-year period. Slightly lower prices for raw materials, packaging, and purchased goods and services contributed to this performance, along with savings from cost-reduction measures and improvements in production and supply chain efficiency.
| in million euros | 1–6/2014 | 1–6/2015 | +/– |
|---|---|---|---|
| Sales | 8,066 | 9,125 | 13.1% |
| Operating profit (EBIT) | 1,197 | 1,363 | 13.8% |
| Adjusted2 operating profit (EBIT) | 1,293 | 1,475 | 14.0% |
| Return on sales (EBIT) | 14.8% | 14.9% | 0.1pp |
| Adjusted2 return on sales (EBIT) | 16.0% | 16.2% | 0.2pp |
| Net income – | |||
| attributable to shareholders of Henkel AG & Co. KGaA | 890 | 991 | 11.3% |
| Adjusted2 net income – | |||
| attributable to shareholders of Henkel AG & Co. KGaA | 951 | 1,068 | 12.3% |
| Earnings per preferred share in euros | 2.06 | 2.29 | 11.2% |
| Adjusted2 earnings per preferred share in euros | 2.20 | 2.47 | 12.3% |
pp = percentage points
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
2 Adjusted for one-time charges/gains and restructuring charges.
In the first half of 2015 we increased sales significantly by 13.1 percent to 9,125 million euros. Adjusted for foreign exchange, sales grew by 6.5 percent. With growth of 3.0 percent, organic sales (i.e. adjusted for foreign exchange and acquisitions/divestments) showed a solid rate of increase compared to the first half of 2014.
| in percent | Organic sales growth |
of which price |
of which volume |
|---|---|---|---|
| Laundry & Home Care | 4.8 | 1.4 | 3.4 |
| Beauty Care | 2.0 | 1.9 | 0.1 |
| Adhesive Technologies | 2.5 | 1.4 | 1.1 |
| Henkel Group | 3.0 | 1.5 | 1.5 |
| in percent | 1–6/2015 |
|---|---|
| Change versus previous year | 13.1 |
| Foreign exchange | 6.6 |
| Adjusted for foreign exchange | 6.5 |
| Acquisitions/divestments | 3.5 |
| Organic | 3.0 |
| of which price | 1.5 |
| of which volume | 1.5 |
1 Calculated on the basis of units of 1,000 euros.
All business units contributed to this performance with solid organic sales growth: The Laundry & Home Care business unit recorded organic sales growth of 4.8 percent. The Beauty Care business unit was able to increase its organic sales by 2.0 percent. In the Adhesive Technologies business unit, we achieved organic sales growth of 2.5 percent.
In the first half of 2015 there were no material changes to the scope of our business activities and competitive positions as described in our Annual Report 2014 on page 55.
To continuously adapt our structures to our markets and customers, we spent 83 million euros on restructuring (first half year 2014: 99 million euros). In order to create a scalable business model, we are – among other things – expanding our shared services and progressing with the combination of our supply chain and sourcing activities into an integrated global supply chain organization. We are also advancing the integration of our acquisitions.
In the following, we discuss our operating income and expense items up to operating profit, adjusted in each case for one-time charges/gains and restructuring charges. The reconciliation statement and the allocation of the restructuring charges between the various expense items of the consolidated statement of income can be found on page 29.
| in million euros | 1–6/2014 | % | 1–6/2015 | % | Change |
|---|---|---|---|---|---|
| Sales | 8,066 | 100.0 | 9,125 | 100.0 | 13.1% |
| Cost of sales | –4,175 | –51.7 | –4,683 | –51.3 | 12.2% |
| Gross profit | 3,891 | 48.3 | 4,442 | 48.7 | 14.2% |
| Marketing, selling and distribution expenses | –2,046 | –25.4 | –2,312 | –25.3 | 13.0% |
| Research and development expenses | –206 | –2.6 | –237 | –2.7 | 15.0% |
| Administrative expenses | –358 | –4.4 | –450 | –4.9 | 25.7% |
| Other operating income/charges | 12 | 0.1 | 32 | 0.4 | – |
| Adjusted operating profit (EBIT) | 1,293 | 16.0 | 1,475 | 16.2 | 14.0% |
1 Calculated on the basis of units of 1,000 euros; figures commercially rounded.
Compared to the first half of 2014, cost of sales increased by 12.2 percent to 4,683 million euros. We increased gross profit by 14.2 percent to 4,442 million euros. We were able to offset the effects of continued intense promotional competition through selective price increases, savings from cost-reduction measures, and improvements in production and supply chain efficiency, combined with slightly lower prices for direct materials. As a consequence, gross margin increased by 0.4 percentage points to 48.7 percent.
Marketing, selling and distribution expenses rose by 13.0 percent from 2,046 million euros to 2,312 million euros. The ratio to sales was thus 25.3 percent, slightly below the level of the prior-year period. We spent a total of 237 million euros on research and development, raising the ratio to sales slightly to 2.7 percent. Administrative expenses increased compared to the prior-year period to 450 million euros, mainly due to acquisitions and foreign exchange effects. At 4.9 percent, the ratio to sales was above the level of the first half of 2014.
The overall balance of other operating income and charges, at 32 million euros, remained similarly low as in the prior-year period. The absolute increase resulted mainly from the disposal of assets held for sale.
Adjusted operating profit (EBIT) increased by 14.0 percent from 1,293 million euros to 1,475 million euros. We improved adjusted return on sales for the Group from 16.0 to 16.2 percent. The Laundry & Home Care business unit recorded a strong margin improvement with an increase of 0.5 percentage points from 16.6 to 17.1 percent. This was primarily due to a solid sales performance combined with ongoing strict cost management. Beauty Care showed a solid increase of 0.3 percent in return on sales, from 15.9 to 16.2 percent. This can be attributed to a solid sales performance combined with ongoing strict cost management. Due to investments made in marketand innovation-oriented business structures, the margin in the Adhesive Technologies business unit came in 0.5 percent below the high level of 16.7 percent registered in the prior-year period.
Our financial result improved from –26 million euros in the first half of 2014 to –20 million euros in the first half of 2015, attributable to improvements in both net interest result and foreign exchange result. The improvement in net interest result was due in part to the repayment of our senior bond and the maturing of interest rate fixings, both in March 2014. The tax rate was 24.6 percent (adjusted: 25.0 percent).
| Guidance for 2015 | Performance first half year 2015 | |||
|---|---|---|---|---|
| Organic sales growth | Henkel Group: 3–5 percent | Henkel Group: 3.0 percent | ||
| Laundry & Home Care: 3–5 percent Beauty Care: approximately 2 percent Adhesive Technologies: 3–5 percent |
Laundry & Home Care: 4.8 percent Beauty Care: 2.0 percent Adhesive Technologies: 2.5 percent |
|||
| Percentage of sales from emerging markets | At prior-year level | Slightly below prior-year level | ||
| Adjusted return on sales (EBIT) | Increase to around 16 percent | Increase to 16.2 percent | ||
| Adjusted earnings per preferred share | Increase of around 10 percent | Increase of 12.3 percent |
Net income for the half year increased by 12.3 percent from 902 million euros to 1,013 million euros. After deducting 22 million euros attributable to non-controlling interests, net income for the half year was 991 million euros (first half year 2014: 890 million euros ). Adjusted net income for the half year after deducting non-controlling interests was 1,068 million euros compared to 951 million euros in the first half of 2014. We increased earnings per preferred share (EPS) from 2.06 euros to 2.29 euros. After adjustment, EPS amounted to 2.47 euros versus 2.20 euros in the prior-year period.
In our report for fiscal 2014, we published guidance for fiscal 2015 indicating that we expect to achieve organic sales growth of between 3 and 5 percent. We furthermore expect stable development in the share of sales from our emerging markets. For adjusted return on sales (EBIT), we forecasted an increase to around 16 percent, and for adjusted earnings per preferred share, we anticipated a rise of approximately 10 percent (2014: 4.38 euros).
We confirm our guidance for fiscal 2015.
Compared to year-end 2014, total assets rose by 1.4 billion euros to 22.4 billion euros.
Under non-current assets, intangible assets increased by 670 million euros, primarily as a result of foreign exchange effects. Assets in property, plant and equipment rose, with capital expenditures of 226 million euros partially offset by depreciation of 161 million euros.
Current assets rose from 6.8 billion euros to 7.5 billion euros. While inventories and trade accounts receivable increased, other financial assets decreased due to the partial disposal of our securities and time deposits. Cash and cash equivalents increased by 92 million euros in the reporting period.
Compared to the end of fiscal 2014, equity including non-controlling interests increased by 1,211 million euros to 12,855 million euros. The individual components influencing equity development are shown in the statement on page 30. Equity was increased by net income for the half year in the amount of 1,013 million euros, while foreign exchange also had a positive impact of 611 million euros. The dividend payment of Henkel AG & Co. KGaA reduced the overall
Financial structure in million euros
increase, however. The equity ratio (equity as a percentage of total assets) increased compared to yearend 2014 by 1.9 percentage points to 57.5 percent.
Non-current liabilities declined slightly by 0.2 billion euros to 3.5 billion euros. Our pension obligations declined compared to year-end 2014 as a consequence of higher discount rates.
Current liabilities rose by 0.5 billion euros to 6.1 billion euros, mainly due to the increase in borrowings as a result of the dividend payment in the second quarter.
Net financial position
1 Including purchase of non-controlling interests with no change of control. 2 Primarily foreign exchange effects.
Effective June 30, 2015, our net financial position1 amounted to –634 million euros (December 31, 2014: –153 million euros). The change compared to the prior year was mainly the result of dividends paid.
| in million euros | |
|---|---|
| Q2/2014 | 156 |
| Q3/2014 | 740 |
| Q4/2014 | –153 |
| Q1/2015 | 10 |
| Q2/2015 | –634 |
As was already the case at the end of fiscal 2014, our operating debt coverage ratio in the reporting period remained well above the target of 50 percent as a result of our continuing low debt level. Our interest coverage ratio also further improved, supported by higher EBITDA.
| Dec. 31, 2014 |
June 30, 2015 |
|
|---|---|---|
| Operating debt coverage1 (net income + amortization and depreciation, impairment and write-ups + interest element of pension obligations) /net borrowings and pension obligations |
274.8% | 251.9% |
| Interest coverage ratio EBITDA/ interest result including interest element of pension obligations |
48.4 | 83.5 |
| Equity ratio equity / total assets |
55.6% | 57.5% |
| 1 Hybrid bond included on 50 percent debt basis. |
The development of our financial position is indicated in detail in the consolidated statement of cash flows on page 31.
Cash flow from operating activities of 623 million euros in the first half of 2015 was significantly higher than the comparable figure of the prior-year period (379 million euros). In addition to the higher operating profit, and despite higher outflows from trade accounts receivable, the increase was primarily due to higher cash inflows from trade accounts payable and lower outflows from both inventory and other liabilities and provisions in comparison to the first half of 2014.
Net working capital2 relative to sales increased year on year by 0.6 percentage points to 6.6 percent.
Despite an increase in investments in intangible assets and property, plant and equipment, the cash outflow in cash flow from investing activities (–294 million euros) was below the figure of the prior-year period (–540 million euros). This was due to lower capital expenditure on the acquisition of subsidiaries and other business units versus the prior-year period, together with higher proceeds on disposal of subsidiaries and other business units.
Cash flow from financing activities of –299 million euros in the first half of 2015 was below the comparable figure of the prior year (33 million euros), despite repayment of the senior bond in March 2014. This development is primarily the result of lower proceeds from the sale of short-term securities and time deposits, a reduction in commercial paper issued, higher dividend payments, and higher payments for the purchase of non-controlling interests with no change of control.
Cash and cash equivalents rose compared to December 31, 2014, by 92 million euros to 1,320 million euros.
The increase in free cash flow to 311 million euros was driven by significantly higher cash flow from operating activities compared to the first half of 2014 (152 million euros).
1 Cash and cash equivalents plus readily monetizable financial instruments classified as "available for sale" or using the "fair value option," less borrowings, plus positive and less negative fair values of hedging transactions.
2 Inventories plus payments on account, receivables from suppliers and trade accounts receivable, less trade accounts payable, liabilities to customers, and current sales provisions.
Capital expenditures on property, plant and equipment for continuing operations totaled 226 million euros, following 173 million euros in the first half of 2014. We invested 55 million euros in intangible assets (first half 2014: 23 million euros). Around twothirds of the expenditure was channeled into expansion projects, innovation, and rationalization measures, which included expanding our production capacity, introducing innovative product lines and optimizing our production structure and business processes.
Major individual projects in 2015 to date:
In regional terms, capital expenditures focused primarily on Western Europe, Eastern Europe and Asia-Pacific.
| Continuing | Acquisitions | Total | |
|---|---|---|---|
| in million euros | operations | ||
| Intangible assets | 55 | 36 | 91 |
| Property, plant and equipment |
226 | 8 | 234 |
| Total | 281 | 44 | 325 |
Effective May 11, 2015, we entered into an agreement with Colgate-Palmolive Company for the purchase of all laundry detergents and pre-wash brands in Australia, New Zealand and Fiji. This acquisition is part of our global strategy to invest in attractive country category positions in mature markets.
Effective June 1, 2015, we completed the acquisition of all shares in Novamelt GmbH, thereby expanding our business in pressure sensitive hotmelt adhesives in the Adhesive Technologies business unit.
On May 29, 2015, we spent 19 million euros to acquire the outstanding non-controlling shares of Henkel (Jiangsu) Auto Parts Co. Ltd., Danyang, China, thus increasing our ownership interest to 100 percent.
On June 18, 2015, we spent 26 million euros to acquire the outstanding non-controlling shares of Henkel Chembond Surface Technologies Ltd., Navi Mumbai, India, thus increasing our ownership interest to 100 percent.
Further details can be found in the selected explanatory notes on page 35. There were no changes to the business and organizational structure. For a detailed description of our organization and business activities, please refer to the information provided in our Annual Report 2014 on page 55.
Our long-term ratings remain at "A flat" (Standard & Poor's) and "A2" (Moody's). These are also our target ratings. Looking forward, we intend not to jeopardize these when assessing possible acquisitions.
As of June 30, 2015, we had around 50,200 employees (December 31, 2014: 49,750).
The increase in the first half of 2015 is due to our acquisition of Novamelt and a higher headcount in the emerging markets, mainly in our Adhesive Technologies business unit. We also continued to expand our shared service centers.
Effective July 16, 2015, we concluded the acquisition of the hairstyling business and the associated brands of Industrias Wet Line S.A. de C.V. in Latin America. The purchase price was 53 million euros. The acquisition is part of our strategy to further strengthen our presence in emerging markets. Final audited financial statements were not available to us at the time this quarterly report was prepared. Further disclosures pursuant to IFRS 3 can therefore not be made.
At June 30, 2015
In the first six months of the fiscal year, research and development expenditures amounted to 241 million euros (adjusted for restructuring charges: 237 million euros) compared to 207 million euros (adjusted: 206 million euros) in the prior-year period. Relative to sales, research and development expenditures increased by 0.1 percentage points versus the prioryear period. The ratio was 2.7 percent (adjusted: 2.7 percent).
The development of innovative products is of key importance to our business model. The research and development strategy described in our Annual Report 2014 (starting on page 81) has remained unchanged.
Our assessment of future world economic development is based on data provided by IHS Global Insight.
We expect global economic growth to soften in 2015 and assume that gross domestic product will increase moderately by approximately 2.5 percent.
We expect the mature markets to grow by approximately 2 percent. The North American economy is likely to grow by approximately 2 percent, which is less than previously expected. We expect economic growth in Western Europe of approximately 1.5 percent in 2015. The Japanese economy will continue to grow by approximately 1 percent.
The emerging markets will once again achieve comparatively strong economic growth of approximately 4 percent in 2015. We expect economic output to increase by around 6 percent in Asia (excluding Japan) and by approximately 3 percent in the Africa/ Middle East region. Flat economic performance is anticipated in Latin America in 2015. In light of the ongoing conflict between Russia and Ukraine, we continue to expect stagnation in Eastern Europe for 2015.
Global inflation in 2015 will be around 2 percent. While we can continue to expect price levels to remain constant in the mature markets, the inflation rate in the emerging markets is likely to average approximately 5 percent.
We anticipate that private consumption will increase more slowly than previously expected, growing by approximately 2.5 percent in 2015. In the mature markets, consumers are likely to spend around 2 percent more than in the previous year. The emerging markets should exhibit a slightly higher propensity to spend, with an increase of approximately 3 percent in 2015.
Industrial production will expand by approximately 3 percent year on year, slightly more than the economy as a whole but at a somewhat slower pace than previously anticipated.
We expect the transport and metal industries to expand output by approximately 3 percent. The electronics industry, which is an important customer sector for Henkel, will expand production by around 5 percent, and thus at a higher rate than in 2014. In consumer-related sectors, such as the global packaging industry, we expect growth to be in the low singledigit range again in 2015.
We expect global construction output to be lower year on year at around 2 percent.
With respect to proceedings brought by various antitrust authorities in Europe in which Henkel and other consumer goods manufacturers and distributors are involved, please see the explanatory notes provided in our Annual Report 2014 on page 147. On May 15, 2015, we provisionally paid the fine of 109 million euros imposed on December 18, 2014 by the French antitrust authorities. A decision in the action we filed with regard to the amount of the fine is still pending. In the current antitrust proceedings in Belgium, an agreement has been reached with the Belgian antitrust authorities. Henkel will pay around 6 million euros in this regard.
We have identified no further significant risks and opportunities during the reporting period beyond those presented in our Annual Report 2014 on pages 102 to 107.
At the time this report was prepared, there were no identifiable risks related to future developments that could endanger the existence either of Henkel AG & Co. KGaA, or a material subsidiary included in the consolidation, or the Group, as a going concern.
We continue to expect the Henkel Group to generate organic sales growth of 3 to 5 percent in fiscal 2015. Our expectation is that the Adhesive Technologies and Laundry & Home Care business units will each generate organic sales growth within this range. In the Beauty Care business unit, we expect growth of approximately 2 percent.
We furthermore continue to expect a stable development in the share of sales from our emerging markets. We confirm our guidance for adjusted return on sales (EBIT). Compared to 2014, we expect an increase to around 16 percent (2014: 15.8 percent), and that all business units will contribute to this improvement. We expect an increase in adjusted earnings per pre-
ferred share of approximately 10 percent (2014: 4.38 euros).
The starting point for this is our strong competitive position, which we will continue to consolidate and foster through our innovative strength, our strong brands, our leading market positions and the quality of our portfolio. Our market position and the adaptation of our structures to constantly changing market conditions, coupled with the expected increase in sales, will have a positive impact on our earnings performance.
Furthermore, we maintain the following expectations for 2015:
| in million euros | June 30, 2014 | % | Dec. 31, 2014 | % | June 30, 2015 | % |
|---|---|---|---|---|---|---|
| Intangible assets | 8,574 | 44.4 | 10,590 | 50.5 | 11,260 | 50.3 |
| Property, plant and equipment | 2,282 | 11.8 | 2,461 | 11.8 | 2,609 | 11.7 |
| Other financial assets | 173 | 0.9 | 114 | 0.5 | 62 | 0.3 |
| Income tax refund claims | 6 | – | 7 | – | 7 | – |
| Other assets | 114 | 0.6 | 140 | 0.7 | 138 | 0.7 |
| Deferred tax assets | 693 | 3.6 | 838 | 4.0 | 814 | 3.6 |
| Non-current assets | 11,842 | 61.3 | 14,150 | 67.5 | 14,890 | 66.6 |
| Inventories | 1,657 | 8.6 | 1,671 | 8.0 | 1,814 | 8.1 |
| Trade accounts receivable | 2,779 | 14.4 | 2,747 | 13.1 | 3,334 | 14.9 |
| Other financial assets | 1,694 | 8.7 | 676 | 3.2 | 503 | 2.3 |
| Income tax refund claims | 111 | 0.6 | 174 | 0.8 | 179 | 0.8 |
| Other assets | 301 | 1.5 | 284 | 1.4 | 319 | 1.4 |
| Cash and cash equivalents | 922 | 4.8 | 1,228 | 5.9 | 1,320 | 5.9 |
| Assets held for sale | 19 | 0.1 | 31 | 0.1 | 11 | – |
| Current assets | 7,483 | 38.7 | 6,811 | 32.5 | 7,480 | 33.4 |
| Total assets | 19,325 | 100.0 | 20,961 | 100.0 | 22,370 | 100.0 |
| in million euros | June 30, 2014 | % | Dec. 31, 2014 | % | June 30, 2015 | % |
|---|---|---|---|---|---|---|
| Issued capital | 438 | 2.3 | 438 | 2.1 | 438 | 2.0 |
| Capital reserve | 652 | 3.4 | 652 | 3.1 | 652 | 2.9 |
| Treasury shares | –91 | –0.5 | –91 | –0.4 | –91 | –0.4 |
| Retained earnings | 10,798 | 55.8 | 11,396 | 54.4 | 12,017 | 53.6 |
| Other components of equity | –1,487 | –7.7 | –887 | –4.3 | –300 | –1.3 |
| Equity attributable to shareholders of Henkel AG & Co. KGaA | 10,310 | 53.3 | 11,508 | 54.9 | 12,716 | 56.8 |
| Non-controlling interests | 109 | 0.6 | 136 | 0.7 | 139 | 0.7 |
| Equity | 10,419 | 53.9 | 11,644 | 55.6 | 12,855 | 57.5 |
| Pension obligations | 1,021 | 5.3 | 1,262 | 6.0 | 1,006 | 4.5 |
| Income tax provisions | 64 | 0.3 | 84 | 0.4 | 80 | 0.4 |
| Other provisions | 364 | 1.9 | 380 | 1.8 | 406 | 1.7 |
| Borrowings | 1,367 | 7.1 | 1,354 | 6.5 | 1,327 | 5.9 |
| Other financial liabilities | 2 | – | 1 | – | 1 | – |
| Other liabilities | 13 | 0.1 | 13 | 0.1 | 12 | 0.1 |
| Deferred tax liabilities | 441 | 2.3 | 628 | 3.0 | 619 | 2.8 |
| Non-current liabilities | 3,272 | 17.0 | 3,722 | 17.8 | 3,451 | 15.4 |
| Income tax provisions | 205 | 1.1 | 251 | 1.2 | 286 | 1.3 |
| Other provisions | 1,268 | 6.5 | 1,513 | 7.2 | 1,420 | 6.4 |
| Borrowings | 898 | 4.6 | 390 | 1.9 | 708 | 3.2 |
| Trade accounts payable | 2,900 | 15.0 | 3,046 | 14.4 | 3,226 | 14.4 |
| Other financial liabilities | 86 | 0.4 | 117 | 0.6 | 72 | 0.3 |
| Other liabilities | 262 | 1.4 | 268 | 1.3 | 342 | 1.5 |
| Income tax liabilities | 15 | 0.1 | 10 | – | 10 | – |
| Liabilities held for sale | – | – | – | – | – | – |
| Current liabilities | 5,634 | 29.1 | 5,595 | 26.6 | 6,064 | 27.1 |
| Total equity and liabilities | 19,325 | 100.0 | 20,961 | 100.0 | 22,370 | 100.0 |
| in million euros | Q2/2014 | % | Q2/2015 | % | Change |
|---|---|---|---|---|---|
| Sales | 4,137 | 100.0 | 4,695 | 100.0 | 13.5% |
| Cost of sales1 | –2,210 | –53.4 | –2,439 | –51.9 | 10.4% |
| Gross profit | 1,927 | 46.6 | 2,256 | 48.1 | 17.1% |
| Marketing, selling and distribution expenses1 | –1,025 | –24.8 | –1,185 | –25.3 | 15.6% |
| Research and development expenses1 | –103 | –2.5 | –122 | –2.7 | 18.4% |
| Administrative expenses1 | –216 | –5.2 | –241 | –5.1 | 11.6% |
| Other operating income | 17 | 0.4 | 31 | 0.7 | 82.4% |
| Other operating charges | –11 | –0.3 | –24 | –0.5 | 118.2% |
| Operating profit (EBIT) | 589 | 14.2 | 715 | 15.2 | 21.4% |
| Interest income 2 | 10 | 0.3 | 9 | 0.2 | –10.0% |
| Interest expense 2 | –8 | –0.2 | –12 | –0.3 | 50.0% |
| Other financial result2 | –13 | –0.3 | –7 | –0.1 | –46.2% |
| Investment result | – | – | –1 | – | – |
| Financial result | –11 | –0.2 | –11 | –0.2 | – |
| Income before tax | 578 | 14.0 | 704 | 15.0 | 21.8% |
| Taxes on income | –132 | –3.2 | –173 | –3.7 | 31.1% |
| Tax rate in % | 22.8 | 24.6 | |||
| Net income | 446 | 10.8 | 531 | 11.3 | 19.1% |
| – Attributable to non-controlling interests | –5 | –0.1 | –10 | –0.2 | 100.0% |
| – Attributable to shareholders of Henkel AG & Co. KGaA | 441 | 10.7 | 521 | 11.1 | 18.1% |
| Earnings per ordinary share – basic and diluted in euros |
1.02 | 1.20 | 17.6% | ||
| Earnings per preferred share – basic and diluted in euros |
1.02 | 1.20 | 17.6% |
| in million euros | Q2/2014 | Q2/2015 | Change | |
|---|---|---|---|---|
| EBIT (as reported) | 589 | 715 | 21.4% | |
| One-time gains | –3 | – | – | |
| One-time charges | 17 | 243 | – | |
| Restructuring charges | 71 | 29 | – | |
| Adjusted EBIT | 674 | 768 | 14.0% | |
| Adjusted return on sales | in % | 16.3 | 16.4 | 0.1pp |
| Adjusted tax rate | in % | 24.0 | 25.1 | 1.1pp |
| Adjusted net income – Attributable to shareholders of Henkel AG & Co. KGaA | 499 | 558 | 11.8% | |
| Adjusted earnings per ordinary share | in euros | 1.16 | 1.29 | 11.2% |
| Adjusted earnings per preferred share | in euros | 1.16 | 1.29 | 11.2% |
1 Restructuring charges, second quarter 2015: 29 million euros (second quarter 2014: 71 million euros), of which: cost of sales 9 million euros (second quarter 2014: 42 million euros), marketing, selling and distribution expenses 12 million euros (second quarter 2014: 9 million euros), research and development expenses
2 million euros (second quarter 2014: 1 million euros), administrative expenses 6 million euros (second quarter 2014: 19 million euros). 2 Comparable figures shown for the previous year (see notes on page 34).
3 Includes 11 million euros related to optimization of our IT system architecture for managing business processes and 13 million euros for provisions related to legal disputes.
| in million euros | 1–6/2014 | % | 1–6/2015 | % | Change |
|---|---|---|---|---|---|
| Sales | 8,066 | 100.0 | 9,125 | 100.0 | 13.1% |
| Cost of sales1 | –4,226 | –52.4 | –4,703 | –51.5 | 11.3% |
| Gross profit | 3,840 | 47.6 | 4,422 | 48.5 | 15.2% |
| Marketing, selling and distribution expenses1 | –2,058 | –25.5 | –2,351 | –25.8 | 14.2% |
| Research and development expenses1 | –207 | –2.6 | –241 | –2.7 | 16.4% |
| Administrative expenses1 | –418 | –5.2 | –486 | –5.3 | 16.3% |
| Other operating income | 67 | 0.8 | 61 | 0.7 | –9.0% |
| Other operating charges | –27 | –0.3 | –42 | –0.5 | 55.6% |
| Operating profit (EBIT) | 1,197 | 14.8 | 1,363 | 14.9 | 13.8% |
| Interest income 2 | 19 | 0.2 | 17 | 0.2 | –10.5% |
| Interest expense 2 | –27 | –0.3 | –23 | –0.3 | –14.8% |
| Other financial result2 | –24 | –0.3 | –13 | –0.1 | –45.8% |
| Investment result | 6 | 0.1 | –1 | – | – |
| Financial result | –26 | –0.3 | –20 | –0.2 | –23.1% |
| Income before tax | 1,171 | 14.5 | 1,343 | 14.7 | 14.7% |
| Taxes on income | –269 | –3.3 | –330 | –3.6 | 22.7% |
| Tax rate in % | 23.0 | 24.6 | |||
| Net income | 902 | 11.2 | 1,013 | 11.1 | 12.3% |
| – Attributable to non-controlling interests | –12 | –0.2 | –22 | –0.2 | 83.3% |
| – Attributable to shareholders of Henkel AG & Co. KGaA | 890 | 11.0 | 991 | 10.9 | 11.3% |
| Earnings per ordinary share – basic and diluted in euros |
2.05 | 2.28 | 11.2% | ||
| Earnings per preferred share – basic and diluted in euros |
2.06 | 2.29 | 11.2% |
| in million euros | 1–6/2014 | 1–6/2015 | Change | |
|---|---|---|---|---|
| EBIT (as reported) | 1,197 | 1,363 | 13.8% | |
| One-time gains | –28 | – | – | |
| One-time charges | 25 | 293 | – | |
| Restructuring charges | 99 | 83 | – | |
| Adjusted EBIT | 1,293 | 1,475 | 14.0% | |
| Adjusted return on sales | in % | 16.0 | 16.2 | 0.2pp |
| Adjusted tax rate | in % | 24.0 | 25.0 | 1.0pp |
| Adjusted net income – Attributable to shareholders of Henkel AG & Co. KGaA | 951 | 1,068 | 12.3% | |
| Adjusted earnings per ordinary share | in euros | 2.19 | 2.46 | 12.3% |
| Adjusted earnings per preferred share | in euros | 2.20 | 2.47 | 12.3% |
1 Restructuring charges, first half year 2015: 83 million euros (first half year 2014: 99 million euros), of which: cost of sales 20 million euros (first half year 2014: 51 million euros), marketing, selling and distribution expenses 39 million euros (first half year 2014: 12 million euros), research and development expenses 4 million euros (first half year 2014: 1 million euros), administrative expenses 20 million euros (first half year 2014: 35 million euros).
2 Comparable figures shown for the previous year (see notes on page 34).
3 Includes 16 million euros related to optimization of our IT system architecture for managing business processes and 13 million euros for provisions related to legal disputes.
| in million euros | Q2/2014 | Q2/2015 | 1–6/2014 | 1–6/2015 |
|---|---|---|---|---|
| Net income | 446 | 531 | 902 | 1,013 |
| Components to be reclassified to income: | ||||
| Exchange differences on translation of foreign operations | 102 | –364 | 32 | 611 |
| Gains from derivative financial instruments (hedge reserve per IAS 39) | –4 | – | –4 | –15 |
| Gains from financial instruments in the available-for-sale category (available-for-sale reserve) | – | 1 | 1 | – |
| Components not to be reclassified to income: | ||||
| Remeasurements from defined benefit plans | –62 | 214 | –134 | 228 |
| Other comprehensive income (net of taxes) | 36 | –149 | –105 | 824 |
| Total comprehensive income for the period | 482 | 382 | 797 | 1,837 |
| – Attributable to non-controlling interests | 8 | 3 | 12 | 31 |
| – Attributable to shareholders of Henkel AG & Co. KGaA | 474 | 379 | 785 | 1,806 |
| Issued capital | Other components of equity | ||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|
| in million euros | Ordinary shares |
Preferred shares |
Capital reserve |
Treasury shares |
Retained earnings |
Currency transla tion |
Hedge reserve per IAS 39 |
Available for-sale reserve |
Share holders of Henkel AG & Co. KGaA |
Non-con trolling interests |
Total |
| At Dec. 31, 2013/Jan. 1, 2014 | 260 | 178 | 652 | –91 | 10,561 | –1,336 | –182 | 2 | 10,044 | 114 | 10,158 |
| Net income | – | – | – | – | 890 | – | – | – | 890 | 12 | 902 |
| Other comprehensive income | – | – | – | – | –134 | 32 | –4 | 1 | –105 | – | –105 |
| Total comprehensive income for the period |
– | – | – | – | 756 | 32 | –4 | 1 | 785 | 12 | 797 |
| Dividends | – | – | – | – | –525 | – | – | – | –525 | –15 | –540 |
| Sale of treasury shares | – | – | – | – | – | – | – | – | – | – | – |
| Changes in ownership interest with no change of control |
– | – | – | – | – | – | – | – | – | – | – |
| Other changes in equity |
– | – | – | – | 6 | – | – | – | 6 | –2 | 4 |
| At June 30, 2014 | 260 | 178 | 652 | –91 | 10,798 | –1,304 | –186 | 3 | 10,310 | 109 | 10,419 |
| At Dec. 31, 2014/Jan. 1, 2015 | 260 | 178 | 652 | –91 | 11,396 | –723 | –167 | 3 | 11,508 | 136 | 11,644 |
| Net income | – | – | – | – | 991 | – | – | – | 991 | 22 | 1,013 |
| Other comprehensive income | – | – | – | – | 228 | 602 | –15 | – | 815 | 9 | 824 |
| Total comprehensive income for the period |
– | – | – | – | 1,219 | 602 | –15 | – | 1,806 | 31 | 1,837 |
| Dividends | – | – | – | – | –564 | – | – | – | –564 | –17 | –581 |
| Sale of treasury shares | – | – | – | – | – | – | – | – | – | – | – |
| Changes in ownership interest with no change of control |
– | – | – | – | –34 | – | – | – | –34 | –11 | –45 |
| Other changes in equity |
– | – | – | – | – | – | – | – | – | – | – |
| At June 30, 2015 | 260 | 178 | 652 | –91 | 12,017 | –121 | –182 | 3 | 12,716 | 139 | 12,855 |
| in million euros | Q2/2014 | Q2/2015 | 1–6/2014 | 1–6/2015 |
|---|---|---|---|---|
| Operating profit (EBIT) | 589 | 715 | 1,197 | 1,363 |
| Income taxes paid | –193 | –266 | –304 | –371 |
| Amortization/depreciation/impairment/write-ups of intangible assets and property, plant and equipment1 | 108 | 117 | 196 | 224 |
| Net gains/losses on disposal of intangible assets and property, plant and equipment, and from divestments | – | –3 | –5 | –24 |
| Change in inventories | 34 | 54 | –139 | –89 |
| Change in trade accounts receivable | –130 | –210 | –369 | –484 |
| Change in other assets | –12 | –8 | –68 | –55 |
| Change in trade accounts payable | –58 | –44 | 1 | 79 |
| Change in other liabilities and provisions | –131 | –151 | –130 | –20 |
| Cash flow from operating activities | 207 | 204 | 379 | 623 |
| Purchase of intangible assets and property, plant and equipment, including payments on account | –118 | –159 | –208 | –284 |
| Acquisition of subsidiaries and other business units | –293 | –45 | –349 | –50 |
| Purchase of associated companies and joint ventures held at equity | – | – | – | –6 |
| Proceeds on disposal of subsidiaries and other business units | 1 | – | 6 | 22 |
| Proceeds on disposal of intangible assets and property, plant and equipment | 2 | 6 | 11 | 24 |
| Cash flow from investing activities | –408 | –198 | –540 | –294 |
| Dividends paid to shareholders of Henkel AG & Co. KGaA | –525 | –564 | –525 | –564 |
| Dividends paid to non-controlling shareholders | –14 | –15 | –15 | –17 |
| Interest received | 20 | 15 | 86 | 35 |
| Interest paid | –15 | –21 | –92 | –43 |
| Dividends and interest paid and received | –534 | –585 | –546 | –589 |
| Repayment of bonds | – | – | –1,030 | – |
| Other changes in borrowings | 347 | 446 | 683 | 228 |
| Allocation to pension funds | –11 | –17 | –28 | –32 |
| Other changes in pension obligations | –7 | –19 | –24 | –44 |
| Purchase of non-controlling interests with no change of control | – | –52 | –8 | –52 |
| Other financing transactions2 | 448 | 200 | 986 | 190 |
| Cash flow from financing activities | 243 | –27 | 33 | –299 |
| Net change in cash and cash equivalents | 42 | –21 | –128 | 30 |
| Effect of exchange rates on cash and cash equivalents | 9 | – 42 | –11 | 62 |
| Change in cash and cash equivalents | 51 | –63 | –139 | 92 |
| Cash and cash equivalents at January 13 | 871 | 1,383 | 1,061 | 1,228 |
| Cash and cash equivalents at June 30 | 922 | 1,320 | 922 | 1,320 |
1 Of which: Impairment, first half year 2015: 11 million euros (first half year 2014: 16 million euros); second quarter 2015: 11 million euros (second quarter 2014: 16 million euros).
2 Other financing transactions in the first half year 2015 include payments of –290 million euros for the purchase of short-term securities and time deposits as well as provision of financial collateral (first half year 2014: –751 million euros). The figure for the second quarter of 2015 includes payments of 0 million euros (second quarter 2014: –19 million euros).
3 Cash and cash equivalents at January 1, 2014 include cash and cash equivalents of 10 million euros which are reported in the statement of financial position as held for sale and result in the amount shown of 1,051 million euros.
| in million euros | Q2/2014 | Q2/2015 | 1–6/2014 | 1–6/2015 |
|---|---|---|---|---|
| Cash flow from operating activities | 207 | 204 | 379 | 623 |
| Purchase of intangible assets and property, plant and equipment, including payments on account | –118 | –159 | –208 | –284 |
| Proceeds on disposal of intangible assets and property, plant and equipment | 2 | 6 | 11 | 24 |
| Net interest paid | 5 | –6 | –6 | –8 |
| Other changes in pension obligations | –7 | –19 | –24 | –44 |
| Free cash flow | 89 | 26 | 152 | 311 |
| Second quarter 2015 | Laundry & Home Care |
Beauty Care |
Adhesives for Consumers, Craftsmen |
Industrial Adhesives |
Total Adhesive Technolo gies |
Operating business units total |
Corporate | Henkel Group |
|---|---|---|---|---|---|---|---|---|
| in million euros | and Building | |||||||
| Sales April–June 2015 | 1,314 | 1,006 | 501 | 1,842 | 2,343 | 4,663 | 31 | 4,695 |
| Proportion of Henkel sales | 28% | 21% | 11% | 39% | 50% | 99% | 1% | 100% |
| Sales April–June 2014 | 1,139 | 897 | 497 | 1,571 | 2,069 | 4,105 | 32 | 4,137 |
| Change from previous year | 15.3% | 12.2% | 0.8% | 17.2% | 13.3% | 13.6% | –2.2% | 13.5% |
| Adjusted for foreign exchange | 11.7% | 5.7% | 0.1% | 4.6% | 3.6% | 6.3% | – | 6.2% |
| Organic | 4.3% | 1.9% | 0.1% | 2.2% | 1.7% | 2.5% | – | 2.4% |
| EBIT April–June 2015 | 198 | 158 | 81 | 307 | 388 | 745 | –29 | 715 |
| EBIT April–June 2014 | 160 | 135 | 82 | 265 | 346 | 641 | –52 | 589 |
| Change from previous year | 23.6% | 17.6% | –0.9% | 16.2% | 12.2% | 16.2% | – | 21.4% |
| Return on sales (EBIT) April–June 2015 | 15.1% | 15.7% | 16.2% | 16.7% | 16.6% | 16.0% | – | 15.2% |
| Return on sales (EBIT) April–June 2014 | 14.0% | 15.0% | 16.4% | 16.8% | 16.7% | 15.6% | – | 14.2% |
| Adjusted EBIT April–June 2015 | 225 | 166 | 82 | 316 | 398 | 789 | –21 | 768 |
| Adjusted EBIT April–June 2014 | 190 | 145 | 87 | 276 | 362 | 697 | –23 | 674 |
| Change from previous year | 18.6% | 14.7% | –5.7% | 14.8% | 9.9% | 13.3% | – | 14.0% |
| Adjusted return on sales (EBIT) April–June 2015 | 17.1% | 16.5% | 16.3% | 17.2% | 17.0% | 16.9% | – | 16.4% |
| Adjusted return on sales (EBIT) April–June 2014 | 16.6% | 16.2% | 17.4% | 17.5% | 17.5% | 17.0% | – | 16.3% |
| Capital employed April–June 20152 | 3,772 | 2,739 | 952 | 7,129 | 8,081 | 14,591 | 98 | 14,689 |
| Capital employed April–June 20142 | 2,386 | 2,093 | 873 | 5,818 | 6,691 | 11,170 | 68 | 11,237 |
| Change from previous year | 58.1% | 30.9% | 9.0% | 22.5% | 20.8% | 30.6% | – | 30.7% |
| Return on capital employed (ROCE) April–June 2015 |
21.0% | 23.1% | 34.0% | 17.2% | 19.2% | 20.4% | – | 19.5% |
| Return on capital employed (ROCE) April–June 2014 |
26.8% | 25.8% | 37.4% | 18.2% | 20.7% | 23.0% | – | 21.0% |
| Amortization/depreciation/impairment/write-ups of intangible assets and property, plant and equipment April–June 2015 |
38 | 14 | 10 | 53 | 63 | 115 | 2 | 117 |
| of which impairment losses 2015 | 9 | – | – | 2 | 2 | 11 | – | 11 |
| of which write-ups 2015 | – | – | – | – | – | – | – | – |
| Amortization/depreciation/impairment/write-ups of intangible assets and property, plant and equipment April–June 2014 |
39 | 14 | 10 | 42 | 52 | 105 | 3 | 108 |
| of which impairment losses 2014 | 16 | – | – | – | – | 16 | – | 16 |
| of which write-ups 2014 | – | – | – | – | – | – | – | – |
| Capital expenditures (excluding financial assets) April–June 2015 |
52 | 21 | 43 | 78 | 121 | 194 | 5 | 199 |
| Capital expenditures (excluding financial assets) April–June 2014 |
37 | 293 | 20 | 31 | 51 | 381 | 8 | 389 |
| Operating assets April–June 20153 | 5,994 | 4,048 | 1,498 | 8,668 | 10,165 | 20,207 | 424 | 20,632 |
| Operating liabilities April–June 2015 | 2,025 | 1,496 | 588 | 2,034 | 2,622 | 6,143 | 327 | 6,470 |
| Net operating assets April–June 20153 | 3,969 | 2,552 | 909 | 6,634 | 7,543 | 14,064 | 98 | 14,162 |
| Operating assets April–June 20143 | 4,163 | 3,177 | 1,390 | 7,004 | 8,394 | 15,734 | 404 | 16,138 |
| Operating liabilities April–June 2014 | 1,616 | 1,286 | 574 | 1,654 | 2,227 | 5,130 | 337 | 5,466 |
| Net operating assets April–June 20143 | 2,548 | 1,890 | 816 | 5,350 | 6,166 | 10,604 | 68 | 10,672 |
1 Calculated on the basis of units of 1,000 euros.
2 Including goodwill at cost prior to any accumulated impairment in accordance with IFRS 3.79 (b).
3 Including goodwill at net book value.
| First half year 2015 in million euros |
Laundry & Home Care |
Beauty Care |
Adhesives for Consumers, Craftsmen and Building |
Industrial Adhesives |
Total Adhesive Technolo gies |
Operating business units total |
Corporate | Henkel Group |
|---|---|---|---|---|---|---|---|---|
| Sales January–June 2015 | 2,612 | 1,946 | 931 | 3,573 | 4,503 | 9,061 | 63 | 9,125 |
| Proportion of Henkel sales | 29% | 21% | 10% | 39% | 49% | 99% | 1% | 100% |
| Sales January–June 2014 | 2,286 | 1,753 | 911 | 3,051 | 3,962 | 8,000 | 66 | 8,066 |
| Change from previous year | 14.3% | 11.0% | 2.1% | 17.1% | 13.7% | 13.3% | –3.8% | 13.1% |
| Adjusted for foreign exchange | 11.4% | 5.7% | 1.8% | 5.1% | 4.3% | 6.6% | – | 6.5% |
| Organic | 4.8% | 2.0% | 1.8% | 2.7% | 2.5% | 3.0% | – | 3.0% |
| EBIT January–June 2015 | 389 | 291 | 130 | 603 | 733 | 1,414 | –51 | 1,363 |
| EBIT January–June 2014 | 356 | 248 | 141 | 536 | 677 | 1,281 | –84 | 1,197 |
| Change from previous year | 9.4% | 17.3% | –7.8% | 12.5% | 8.3% | 10.3% | – | 13.8% |
| Return on sales (EBIT) January–June 2015 | 14.9% | 15.0% | 13.9% | 16.9% | 16.3% | 15.6% | – | 14.9% |
| Return on sales (EBIT) January–June 2014 | 15.6% | 14.2% | 15.4% | 17.6% | 17.1% | 16.0% | – | 14.8% |
| Adjusted EBIT January–June 2015 | 447 | 316 | 131 | 620 | 751 | 1,514 | –39 | 1,475 |
| Adjusted EBIT January–June 2014 | 380 | 279 | 143 | 539 | 681 | 1,340 | –47 | 1,293 |
| Change from previous year | 17.6% | 13.1% | –8.4% | 15.2% | 10.2% | 12.9% | – | 14.0% |
| Adjusted return on sales (EBIT) January–June 2015 | 17.1% | 16.2% | 14.1% | 17.4% | 16.7% | 16.7% | – | 16.2% |
| Adjusted return on sales (EBIT) January–June 2014 | 16.6% | 15.9% | 15.7% | 17.7% | 17.2% | 16.8% | – | 16.0% |
| Capital employed January–June 20152 | 3,714 | 2,689 | 915 | 7,062 | 7,976 | 14,379 | 104 | 14,483 |
| Capital employed January–June 20142 | 2,325 | 2,056 | 872 | 5,744 | 6,616 | 10,997 | 58 | 11,056 |
| Change from previous year | 59.7% | 30.8% | 4.9% | 22.9% | 20.6% | 30.7% | – | 31.0% |
| Return on capital employed (ROCE) January–June 2015 |
21.0% | 21.7% | 28.4% | 17.1% | 18.4% | 19.7% | – | 18.8% |
| Return on capital employed (ROCE) January–June 2014 |
30.6% | 24.1% | 32.3% | 18.7% | 20.5% | 23.3% | – | 21.7% |
| Amortization/depreciation/impairment/write-ups of intangible assets and property, plant and equipment January–June 2015 |
64 | 31 | 20 | 104 | 124 | 219 | 5 | 224 |
| of which impairment losses 2015 | 9 | – | – | 2 | 2 | 11 | – | 11 |
| of which write-ups 2015 | 1 | – | – | – | – | 1 | – | 1 |
| Amortization/depreciation/impairment/write-ups of intangible assets and property, plant and |
||||||||
| equipment January–June 2014 | 59 | 28 | 20 | 83 | 103 | 190 | 6 | 196 |
| of which impairment losses 2014 of which write-ups 2014 |
16 5 |
– – |
– – |
– 2 |
– 2 |
16 7 |
– – |
16 7 |
| Capital expenditures (excluding financial assets) | ||||||||
| January–June 2015 | 93 | 45 | 64 | 117 | 181 | 319 | 6 | 325 |
| Capital expenditures (excluding financial assets) January–June 2014 |
116 | 308 | 37 | 55 | 92 | 516 | 10 | 526 |
| Operating assets January–June 20153 | 5,896 | 4,012 | 1,443 | 8,541 | 9,985 | 19,892 | 471 | 20,364 |
| Operating liabilities January–June 2015 | 1,987 | 1,511 | 572 | 1,978 | 2,549 | 6,047 | 367 | 6,414 |
| Net operating assets January–June 20153 | 3,909 | 2,501 | 872 | 6,563 | 7,435 | 13,845 | 104 | 13,950 |
| Operating assets January–June 20143 | 4,122 | 3,155 | 1,366 | 6,921 | 8,287 | 15,565 | 398 | 15,963 |
| Operating liabilities January–June 2014 | 1,635 | 1,301 | 549 | 1,643 | 2,192 | 5,128 | 340 | 5,468 |
| Net operating assets January–June 20143 | 2,487 | 1,854 | 817 | 5,278 | 6,095 | 10,436 | 58 | 10,495 |
1 Calculated on the basis of units of 1,000 euros.
2 Including goodwill at cost prior to any accumulated impairment in accordance with IFRS 3.79 (b).
3 Including goodwill at net book value.
In calculating earnings per share for the period January through June 2015, we have included the standard dividend differential between ordinary and preferred shares for the full year of 2 eurocents (as stipulated in the Articles of Association), weighted on a proportional basis.
| 1–6/2014 | 1–6/2015 | ||
|---|---|---|---|
| Net income – Attributable to shareholders of Henkel AG & Co. KGaA in million euros |
890 | 991 | |
| Number of outstanding ordinary shares |
259,795,875 | 259,795,875 | |
| Earnings per ordinary share (basic) |
in euros | 2.05 | 2.28 |
| Number of outstanding preferred shares1 |
174,482,310 | 174,482,311 | |
| Earnings per preferred share (basic) |
in euros | 2.06 | 2.29 |
| Earnings per ordinary share (diluted) |
in euros | 2.05 | 2.28 |
| Earnings per preferred share (diluted) |
in euros | 2.06 | 2.29 |
| 1 Weighted average of preferred shares. |
Treasury shares held by the Group at June 30, 2015 remained unchanged at 3,680,564 preferred shares. This represents 0.84 percent of the capital stock and a proportional nominal value of 3.7 million euros.
The interim financial report of the Henkel Group has been prepared in accordance with Section 37w of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG), in accordance with International Financial Reporting Standards (IFRS) – as adopted by the European Union – and consequently in compliance with International Accounting Standard (IAS) 34 "Interim Financial Reporting."
The same accounting principles have been applied as for the 2014 consolidated financial statements, with the exception of the accounting pronouncements recently adopted in fiscal 2015, which are explained on page 127 of our Annual Report 2014. These pronouncements do not exert any material influence on the presentation of the interim financial report for the first half year.
In order to further ensure a true and fair view of our net assets, financial position and results of operations, additional line items have been included and some line items have been renamed in the consolidated statement of financial position, consolidated statement of income, consolidated statement of comprehensive income, consolidated statement of changes in equity, and consolidated statement of cash flows. In accordance with IAS 8.29, we have implemented a voluntary change in the presentation of our financial result. Under other financial result, we show the interest result from pension obligations, currency results, and sundry financial items. Comparable figures are shown for the previous year.
To simplify interim financial reporting, IAS 34.41 allows certain estimates and assumptions to be made beyond the scope permitted for annual financial statements, on condition that all material financial information is appropriately presented to enable a proper assessment of the net assets, financial position and results of operations of the company. In calculating taxes on income, the interim tax expense is determined on the basis of the estimated effective income tax rate for the current fiscal year.
The interim report for the first half year, composed of condensed consolidated financial statements and an interim Group management report, was duly subjected to an auditor's review.
In addition to Henkel AG & Co. KGaA as the ultimate parent company, the scope of consolidation at June 30, 2015 includes nine German and 203 non-German companies in which Henkel AG & Co. KGaA has a dominating influence over financial and operating policy, based on the concept of control. The Group has a dominating influence on a company when it is exposed, or has rights, to variable returns from its involvement with the company and has the ability to affect those returns through its power over the company.
The following table shows the changes in the scope of consolidation compared to December 31, 2014:
| At January 1, 2015 | 206 |
|---|---|
| Additions | 8 |
| Mergers | –1 |
| Disposals | – |
| At June 30, 2015 | 213 |
The changes in the scope of consolidation have not had any material effect on the main items of the consolidated financial statements.
Effective May 11, 2015, we entered into an agreement with Colgate-Palmolive Company for the purchase of all laundry detergents and pre-wash brands in Australia, New Zealand and Fiji. This acquisition is part of our global strategy to invest in attractive country category positions in mature markets. The purchase price is 220 million euros, financed with cash.
Effective June 1, 2015, we completed the acquisition of all shares of Novamelt GmbH, Wehr, Germany, expanding our business in pressure sensitive hotmelt adhesives in the Adhesive Technologies business unit. The purchase price was 48 million euros, financed with cash. Provisional goodwill was recognized in an amount of 36 million euros. Because the acquisition was completed over the course of the year, the allocation of the purchase price to the acquired assets and liabilities in accordance with IFRS 3 "Business combinations" is provisional.
Effective January 30, 2015, in the USA we concluded the sale of our chemical additives business for the processing industry in the Adhesive Technologies business unit. These assets were included in assets held for sale as of December 31, 2014. The sale price was 29 million euros.
On May 29, 2015, we spent 19 million euros to acquire the outstanding non-controlling shares of Henkel (Jiangsu) Auto Parts Co. Ltd., Danyang, China, thus increasing our ownership interest to 100 percent.
On June 18, 2015, we spent 26 million euros to acquire the outstanding non-controlling shares of Henkel Chembond Surface Technologies Ltd., Navi Mumbai, India, thus increasing our ownership interest to 100 percent.
Allocation of purchase price to acquired assets and liabilities with respect to the two major acquisitions in the Laundry & Home Care and Adhesive Technologies business units made in 2014 and mentioned on page 120 of our Annual Report 2014 has not yet been finalized.
Of the components included in other comprehensive income, tax expense relating to actuarial gains amounts to 40 million euros (June 30, 2014: tax income of 71 million euros) and tax income from cash flow hedges amounts to 4 million euros (June 30, 2014: tax income of 1 million euros).
Compared to December 31, 2014, assets held for sale declined by 20 million euros to 11 million euros. The decrease is primarily due to the sale in the USA of our chemical additives business for the processing industry in the Adhesive Technologies business unit. No liabilities were held for sale (December 31, 2014: 0 million euros).
Financial instruments assigned to the valuation categories "Available for sale" and "Held for trading" are generally measured at fair value. Other securities and time deposits as well as other investments which are not measured using the equity method, both part of other financial assets in the statement of financial position, are categorized as "Available for sale." Only the derivative financial instruments held by the Henkel Group which are not included in hedge accounting are designated as "Held for trading."
The following hierarchy is applied in order to determine and disclose the fair value of financial instruments:
Of the securities and time deposits measured at fair value in the Henkel Group in the category "Available for sale" recognized in the amount of 6 million euros (June 30, 2014: 789 million euros), 3 million euros (June 30, 2014: 754 million euros) are allocated to level 1. The fair value of financial collateral provided in the "Available for sale" category allocated to level 1 is 344 million euros (June 30, 2014: 68 million euros), of which 331 million euros (June 30, 2014: 51 million euros) were netted. There were no securities or time deposits in the category "Fair value option" (June 30, 2014: 594 million euros, of which
level 1: 240 million euros). All financial derivatives are classified as level 2. Derivative financial instruments with a positive fair value recognized under other financial assets have a reported fair value of 85 million euros (June 30, 2014: 134 million euros). The amount recognized under other financial liabilities in respect of derivative financial instruments with a negative fair value is 24 million euros (June 30, 2014: 35 million euros).
The carrying amount (including accrued interest) of the bond issued by Henkel and reported within borrowings is 1,361 million euros as of the reporting date. The fair value amounts to 1,364 million euros.
The fair value of securities and time deposits classified as level 1 is based on the quoted market prices on the reporting date. Observable market data are used to measure the fair value of level 2 securities. For forward exchange contracts, we determine the fair value on the basis of the reference exchange rates of the European Central Bank prevailing at the reporting date, after allowing for forward premiums and discounts on the contracted exchange rate for the remaining term of the contract. Foreign exchange options are measured using price quotations or recognized models for the determination of option prices. We measure interest rate hedging instruments on the basis of discounted cash flows expected in the future, taking into account market interest rates applicable for the remaining term of the contracts. These are indicated for the two most important currencies in the following table. It shows the interest rates quoted on the interbank market in each case on December 31 and June 30.
| At December 31/June 30 | Euro | US dollar | |||
|---|---|---|---|---|---|
| Term | 2014 | 2015 | 2014 | 2015 | |
| 1 month | 0.02 | –0.06 | 0.17 | 0.19 | |
| 3 months | 0.08 | –0.01 | 0.26 | 0.28 | |
| 6 months | 0.17 | 0.05 | 0.36 | 0.44 | |
| 1 year | 0.33 | 0.16 | 0.63 | 0.77 | |
| 2 years | 0.18 | 0.13 | 0.88 | 0.89 | |
| 5 years | 0.36 | 0.50 | 1.75 | 1.75 | |
| 10 years | 0.81 | 1.15 | 2.27 | 2.43 |
Due to the complexities involved, financial derivatives for hedging commodity price risks are primarily measured on the basis of simulation models derived from market quotations. Regular plausibility checks are performed in order to ensure correct measurement.
In measuring derivative financial instruments, counterparty credit risk is taken into account with an adjustment to the fair values concerned, determined on the basis of credit risk premiums.
As reported, Henkel and other consumer goods manufacturers and distributors are involved in proceedings brought by various antitrust authorities in Europe (see the notes to the consolidated financial statements in the Annual Report 2014, page 147). On May 15, 2015, we provisionally paid the fine of 109 million euros imposed on December 18, 2014 by the French antitrust authorities. A decision in the action we filed with regard to the amount of the fine is still pending. In the current antitrust proceedings in Belgium, an agreement has been reached with the Belgian antitrust authorities. Henkel will make a payment of around 6 million euros in this regard.
In the second quarter of 2015, we increased the provision for civil law disputes with customers. In accordance with IAS 37.92, further disclosures with respect to the proceedings and their related risks to Henkel have not been made in order to refrain from interference with their outcome.
Effective June 30, 2015, liabilities under guarantee and warranty agreements totaled 5 million euros. On December 31, 2014, these liabilities amounted to 4 million euros.
Operating leases as defined in IAS 17 comprise all forms of rights of use of assets, including rights of use arising from rent and leasehold agreements. Payment commitments under operating lease agreements are shown at the total amounts payable up to the earliest date of termination. The amounts shown are the nominal values. At June 30, 2015, operating lease commitments were due for payment as follows:
| in million euros | Dec. 31, 2014 | June 30, 2015 |
|---|---|---|
| Due in the following year | 67 | 70 |
| Due within 1 to 5 years | 135 | 148 |
| Due after 5 years | 24 | 21 |
| Total | 226 | 239 |
The company has been notified that, on November 3, 2014, the proportion of voting rights held by the members of the Henkel family share-pooling agreement represented in total a share of 60.84 percent of the voting rights (158,048,919 votes) in Henkel AG & Co. KGaA.
There have been no changes in the basis by which the segments are classified or in the presentation of the segment results as compared to the consolidated financial statements of December 31, 2014. For definitions of ROCE, net operating assets and capital employed, please refer to our Annual Report 2014, pages 169 and 190.
The main items of the consolidated statement of cash flows and the changes thereto are explained on page 21. The other changes in borrowings take into account a number of cash inflows and outflows, particularly those arising from shortterm borrowings and redemptions of commercial paper and current liabilities to banks. Of the dividend of 564 million euros paid to shareholders of Henkel AG & Co. KGaA, an amount of 335 million euros was paid on ordinary shares, while an amount of 229 million euros was paid on preferred shares.
Düsseldorf, August 3, 2015
Henkel Management AG, Personally Liable Partner of Henkel AG & Co. KGaA
Management Board Kasper Rorsted, Jan-Dirk Auris, Carsten Knobel, Kathrin Menges, Bruno Piacenza, Hans Van Bylen
To Henkel AG & Co. KGaA, Düsseldorf:
We have reviewed the condensed interim consolidated financial statements – comprising the consolidated statement of financial position, the consolidated statement of income, the consolidated statement of comprehensive income, the consolidated statement of changes in equity, the consolidated statement of cash flows, and selected notes – and the interim Group management report (pages 6 to 25) of Henkel AG & Co. KGaA, Düsseldorf, for the period from January 1, 2015 to June 30, 2015, which form part of the half-year financial report in accordance with Section 37w of the German Securities Trading Act (Wertpapierhandelsgesetz – WpHG).
The preparation of the condensed interim consolidated financial statements in accordance with those International Financial Reporting Standards (IFRS) applicable to interim financial reporting as adopted by the EU, and of the interim Group management report in accordance with the requirements of the German Securities Trading Act applicable to interim group management reports, is the responsibility of the Company's legal representatives. Our responsibility is to issue a report on the condensed interim consolidated financial statements and on the interim Group management report based on our review.
We conducted our review of the condensed interim consolidated financial statements and the interim Group management report in accordance with the German generally accepted standards for the review of financial statements promulgated by the Institut der Wirtschaftsprüfer (IDW) and in supplementary compliance with the International Standard on Review Engagements 2410 (ISRE 2410). Those standards require that we plan and perform the review so that we can preclude through critical evaluation, with a certain level of assurance, that the condensed interim consolidated financial statements have not been prepared, in material aspects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, and that the interim Group management report has not been prepared, in material aspects, in accordance with the regulations of the German Securities Trading Act applicable to interim group management reports.
A review is limited primarily to inquiries of company employees and analytical assessments and therefore does not provide the assurance attainable in a financial statement audit. Since, in accordance with our engagement, we have not performed a financial statement audit, we cannot issue an auditor's report.
Based on our review, no matters have come to our attention that cause us to believe that the condensed interim consolidated financial statements have not been prepared, in material respects, in accordance with the IFRS applicable to interim financial reporting as adopted by the EU, or that the interim Group management report has not been prepared, in material respects, in accordance with the regulations of the German Securities Trading Act applicable to interim group management reports.
Düsseldorf, August 3, 2015
KPMG AG Wirtschaftsprüfungsgesellschaft
Prof. Dr. Kai C. Andrejewski Wirtschaftsprüfer (German Public Auditor)
Simone Fischer Wirtschaftsprüferin (German Public Auditor)
To the best of our knowledge, and in accordance with the applicable accounting principles for interim financial reporting, the interim consolidated financial statements give a true and fair view of the net assets, financial position and results of operations of the Group, and the interim management report of the Group includes a fair review of the development, performance and results of the business and the position of the Group, together with a cogent description of the principal opportunities and risks associated with the expected development of the Group over the remainder of the fiscal year.
Düsseldorf, August 3, 2015
Henkel Management AG, Personally Liable Partner of Henkel AG & Co. KGaA
Management Board Kasper Rorsted, Jan-Dirk Auris, Carsten Knobel, Kathrin Menges, Bruno Piacenza, Hans Van Bylen
In the meeting of August 3, 2015, the interim consolidated financial report for the first six months of fiscal 2015 and the report prepared by KPMG AG, Wirtschaftsprüfungsgesellschaft, on its review of the condensed interim consolidated financial statements and the interim Group management report were presented to the Audit Committee, who also received verbal explanations from the Management Board and KPMG pertaining to the above. The Audit Committee has approved and endorses the interim consolidated financial report.
Düsseldorf, August 3, 2015
Chairman of the Audit Committee Prof. Dr. Theo Siegert
| 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|
| 3,953 | 4,206 | 4,286 | 4,137 | 4,695 |
| 1,076 | 1,147 | 1,186 | 1,139 | 1,314 |
| 881 | 921 | 923 | 897 | 1,006 |
| 1,963 | 2,099 | 2,138 | 2,069 | 2,343 |
| 514 | 609 | 660 | 674 | 768 |
| 0.79 | 0.96 | 1.07 | 1.16 | 1.29 |
| in million euros | 2011 | 2012 | 2013 | 2014 | 2015 |
|---|---|---|---|---|---|
| Sales | 7,776 | 8,214 | 8,319 | 8,066 | 9,125 |
| Laundry & Home Care | 2,148 | 2,254 | 2,363 | 2,286 | 2,612 |
| Beauty Care | 1,702 | 1,782 | 1,796 | 1,753 | 1,946 |
| Adhesive Technologies | 3,846 | 4,099 | 4,082 | 3,962 | 4,503 |
| Adjusted1 operating profit (EBIT) |
987 | 1,160 | 1,260 | 1,293 | 1,475 |
| Adjusted1 earnings per preferred share in euros |
1.52 | 1.81 | 2.03 | 2.20 | 2.47 |
| 1 Adjusted for one-time charges/gains and restructuring charges. |
Corporate Communications
Phone:+49 (0) 211/ 797-35 33 Fax:+49 (0) 211/ 798-24 84 E-mail: [email protected]
Investor Relations Phone: +49 (0) 211/ 797-39 37 Fax: +49 (0) 211/ 798-28 63 E-mail: [email protected]
Published by: Henkel AG & Co. KGaA 40191 Düsseldorf, Germany Phone: +49 (0) 211/ 797-0
© 2015 Henkel AG & Co. KGaA
Edited by: Corporate Communications, Investor Relations, Corporate Accounting Coordination: Renata Casaro, Dr. Hannes Schollenberger, Wolfgang Zengerling Design und typesetting: mpm Corporate Communication Solutions, Mainz Photographs: Claudia Kempf, Nils Hendrik Müller; Henkel English translation: RR Donnelley Language Solutions, London Pre-print proofing: Paul Knighton, Cambridge; Thomas Krause, Krefeld Printed by: Druckpartner, Essen
Date of publication of this Report: August 12, 2015
This quarterly and half-year financial report is printed on Galaxi Keramik FSC. The paper is made from pulp bleached without chlorine. It has been certified and verified in accordance with the rules of the Forest Stewardship Council (FSC). The printing inks contain no heavy metals.
Except as otherwise noted, all marks used in this publication are trademarks and/or registered trademarks of the Henkel Group in Germany and elsewhere.
This document contains forward-looking statements which are based on the current estimates and assumptions made by the executive management of Henkel AG & Co. KGaA. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and the 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 forwardlooking 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 forward-looking statements.
Publication of Report for the Third Quarter /Nine Months 2015: Wednesday, November 11, 2015
Publication of Report for Fiscal 2015: Thursday, February 25, 2016
Annual General Meeting Henkel AG & Co. KGaA 2016: Monday, April 11, 2016
Up-to-date facts and figures on Henkel also available on the internet: www.henkel.com
Our quarterly financial reports are also published in the Henkel app.
www.henkel.com/annualreport
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Henkel AG & Co. KGaA 40191 Düsseldorf, Germany Phone: +49(0) 211-797-0 www.henkel.com
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