Sustainability - Henkel

Our Responsibility
Performance based on Sustainability -
Drive Innovation and stay in the Lead
C-A Weinberger
Corporate Senior Vice President
Chief Marketing Officer, Chief Sustainability Officer
Laundry & Home Care
July 1, 2009
1

3 Business Units
2008:
1 2 3 4
Laundry &
Home Care
Share of
Sales
32%
Cosmetics/
Toiletries
Share of
Sales
23%
Adhesives
Technologies
Share of
Sales
43%
Quality with Brands & Technologies
• Sales 14,1 Mio. € • 52,000 Employees • 125 Countries
2

Henkel Power Brands
10 Power Brandclusters - Sales 3,4 bn EUR
6 Power Brands – Sales 2,5 bn EUR
11 Power Brands - Sales 3 bn EUR
1 2 3 4
3

Branded Equity Power House:
1 2 3 4
4

Agenda
1
2
3
4
Sustainability at Henkel
Performance based on Sustainability - Persil
PboS – New quality standard for
innovative sustainable consumption
Summary/Conclusions
5

Our Vision
Henkel is a leader with brands and technologies that
make people's lives easier, better and more beautiful.
1 2 3 4
6

Our Values
1 2 3 4
• We are customer driven
• We develop superior brands
and technologies
• We aspire to excellence in
quality
• We strive for innovation
• We embrace change
• We are successful because
of our people
• We are committed to
shareholder value
• We are dedicated to
sustainability and corporate
social responsibility
• We communicate openly
and actively
• We preserve the tradition of an
open family company
7

Sustainability − a total company
focus
• Coporate Vision
1 2 3 4
• Corporate Values
• Focal Areas
8

Contributions to Sustainable
Development
Efficient utilization
of energy
resources, and
hence climate
protection.
Efficient utilization
of available raw
materials and the
avoidance of
waste.
1 2 3 4
Social progress for our employees, our customers,
and all countries in which we operate.
Conservation of
available water
resources.
Safe and healthy
environment for our
employees,
neighbors,
customers and
consumers.
9

Our Strategy for Sustainability:
Focal Areas
1 2 3 4
10

Sustainability
is the sum of
social, ecological and economic responsibility
or more simple:
“People“ “Planet“ “Profit“
1 2 3 4
MK Lindau, June 30, 2009 12

Sustainability at Henkel:
Systematically engrained in DNA
1900 Free lunchtime meals for workers, company apartments, first-aid centre
1915 Election of first workers’ council as representative body for employees
1927 Start of occupational safety program, recruitment of a safety engineer
1938 Plant kindergarden and part-time medical service at Henkel Holthausen
1959 Regular ecological checks for detergents and household cleaners
1976 Management Principles
(Since 2004: Code of Teamwork and Leadership)
1982 Principles of Environmental and Consumer Protection
1991 Signing of Business Charter for Sustainable Development
1992 First Environment Report
1994 Strategy: competitive advantages through eco-leadership
1997 Integrated management systems and world-wide audits for
safety, health, environment and quality
2000 Code of Conduct and Business Ethics
2003 Henkel joins the Global Compact Initiative of the United Nations
2005 Code of Corporate Sustainability
1 2 3 4
12

Systematically engrained in DNA:
Early Commitment
1900 Free lunchtime meals for workers, company apartments, first-aid centre
1915 Election of first workers’ council as representative body for employees
1927 Start of occupational safety program, recruitment of a safety engineer
1938 Plant kindergarden and part-time medical service at Henkel Holthausen
1959 Regular ecological checks for detergents and household cleaners
1976 Management Environment Principles included in Henkel‘s
1982
1991
1992
(Since 2004: Code of Teamwork and Leadership)
Policies and Principles with publication
Principles of Environmental and Consumer Protection
of our “Principles of Environmental and
Signing of Business Charter for Sustainable Development
First Consumer Environment Report Protection”
1994 Strategy: competitive advantages through eco-leadership
1997 Integrated management systems and world-wide audits for
safety, health, environment and quality
2000 Code of Conduct and Business Ethics
2003 Henkel joins the Global Compact Initiative of the United Nations
2005 Code of Corporate Sustainability
1 2 3 4
13

Systematically engrained in DNA:
“Sustainanable Development”
1900 Free lunchtime meals for workers, company apartments, first-aid centre
1915
1927
1938
1959
1976
Election of first workers’ council as representative body for employees
One of the first companies to sign the ICC’s
Start of occupational safety program, recruitment of a safety engineer
“Business Charter for Sustainable Development”
Plant kindergarden and part-time medical service at Henkel Holthausen
Regular at ecological the second checks World for detergents Industry and household Conference cleaners on
Management Environmental Principles Management (WICEM II)
(Since 2004: Code of Teamwork and Leadership)
1982 Principles of Environmental and Consumer Protection
1991 Signing of Business Charter for Sustainable Development Gro Harlem Brundtland
1992 First Environment Report
and
1994 Strategy: competitive advantages through eco-leadership
Prof. Dr. Helmut Sihler
1997 Integrated management systems and world-wide audits for
safety, health, environment and quality
2000 Code of Conduct and Business Ethics
2003 Henkel joins the Global Compact Initiative of the United Nations
2005 Code of Corporate Sustainability
1 2 3 4
14

DNA Translated into Actions:
Environmental Reporting Pioneer
1900 Free lunchtime meals for workers, company apartments, first-aid centre
1915 Election of first workers’ council as representative body for employees
1927 Start of occupational safety program, recruitment of a safety engineer
1938 Plant kindergarden and part-time medical service at Henkel Holthausen
1959
1976
Regular ecological checks for detergents and household cleaners
Henkel among the first*
Management Principles
(Since 2004: Code of Teamwork companies and Leadership) worldwide
1982 Principles of Environmental to publish and Consumer environmental
Protection
1991
1992
Signing of Business Charter for Sustainable Development
reports
First Environment Report
1994 Strategy: competitive advantages through eco-leadership
1997 Integrated *about management two dozen systems companies and world-wide reporting audits in 1992 for
safety, health, environment and quality
2000 Code of Conduct and Business Ethics
2003 Henkel joins the Global Compact Initiative of the United Nations
2005 Code of Corporate Sustainability
1 2 3 4
15

DNA Translated into Actions:
Pioneer in Water Protection
1 2 3 4
1958:
Ecological monitoring of the Rhine
1964:
Biodegradable Surfactants
1983:
First phosphate free detergent
16

Sustainability as Part of our DNA –
Management Perspective 1972
1 2 3 4
„I believe the times are over
when an entrepreneur could
solely concentrate on
maximizing profits and on the
well-being of the company.“
Dr. Konrad Henkel, 1972
17

Sustainability as Part of our DNA –
Management Perspective today
1 2 3 4
“We are convinced that our
continued focus on sustainability
will help grow the long-term value
of our company.”
Kasper Rorsted, 2009
18

Our History:
Sustainability Performance 1998 – 2007
1 2 3 4
19

Corporate CSR/Sustainability Targets
for 2012
– 15 % – 10 % – 10 % – 20 %
further reduction
in
energy
consumption*
further reduction
in
water
consumption*
* Targets per metric ton of output. Base year: 2007
1 2 3 4
further reduction
in
waste
generated*
further reduction
in
occupational
accidents
Long-term target:
Zero occupational
accidents.
20

Company Objectives:
Product Contributions
Sustainability-profile in Henkel Innogate
1 2 3 4
Each new product
contributes to
sustainable development
in at least one of these
focal areas.
21

All Henkel Innovations contribute to at least
one of the five Focal Areas of Sustainability
Top cleaning performance
at just 15 degrees Celsius
An average 85 percent of the
ingredients are based on
renewable raw materials
1 2 3 4
2008: 1,306 non-profit MIT
projects, of which 336
children's projects
Biodegradability
of the
ingredients has
been enhanced
Top standards for
flexible food package
safety
MK Lindau, June 30, 2009 14

Generating the Link Between
Commitment and Contributions
1 2 3 4
Common Focus
Corporate Level
+
Credible Translation
According to Market Needs
Laundry &
Home Care
Brand Level
Cosmetics/
Toiletries
Adhesive
Technologies
23

Rated Best in Class:
on European & Global Level
1 2 3 4
2009
WORLD‘S MOST
ETHICAL
COMPANIES
WWW.ETHISPHERE.COM
WalMart
Sustainability Award
24

Performance
based on Sustainability
1 2 3 4
Persil
25

Persil – the first self acting detergent…
1 2 3 4
26

Innovation and Sustainability
Persil 1907 – The Washday Revolution
1 2 3 4
• The world’s first self-acting detergent
• Washes and bleaches without
chlorine
• Takes the drudgery out of washing
• Improves hygiene in the household
⇒ Directly tangible contribution
to social progress!
27

Innovation and Sustainability:
Pioneer in Water Management 1950s
1 2 3 4
28

Innovation and Sustainability:
Pioneer in Water Management 1950s
MBAS, LAS
[g/sec]
600
500
400
300
200
100
1 2 3 4
MBAS = anionic surfactants
LAS = most prominent anionic surfactant
BiAS = non-ionic surfactants
0
0
1958 1963 1968 1973 1978 1983 1988 1993 1998 2003 2008
BiAS [g/sec]
140
120
100
80
60
40
20
29

Innovation and Sustainability
Persil 1965 – Biodegradable Surfactants
1 2 3 4
• Henkel research: The new
quality standard in the
detergent market with
biodegradable surfactants
30

Innovation and Sustainability
Persil 1986 – Phosphate–Free!
1 2 3 4
• Phosphate acts as a water softener
in detergents but can also lead to
over-fertilization
• Henkel research: The new standard
in the detergent market by replacing
phosphate with Sasil ®
• 1986: Persil – phosphate-free!
31

Innovation and Sustainability
Persil 1993: Plantaren
“ better recyclable than a leaf”
1 2 3 4
• Plantaren: surfactants based
on 100% renewable resources
• Outstanding ecological profile
(formula and packaging), but
weaker in (washing)
performance than standard
Persil
no commercial success, as
consumers missed the
“Persil-performance”
32

Innovation and Sustainability
Persil 1994 – First Super Concentrate
1 2 3 4
• Responsible and efficient handling
of raw materials and packaging
is vital in a world of scarce
resources!
• 1994: Persil Megaperls ® – first
super concentrate detergent
worldwide!
• Better performance with less
detergent – Megaperls ® instead of
powder!
33

Innovation and Sustainability
Persil 2005/6 – Short washing cycle formula
1 2 3 4
• Best Persil washing
performance thanks
to its exclusive and
innovative active stainremover
• Fresher fragrance
experience
34

… celebrating 100 years of innovation…
1 2 3 4
REINHEIT ZUKUNFT
35

Innovation and Sustainability
Persil 2007 (100y) – Best Performance Ever!
1 2 3 4
• Best Persil washing
performance
-> exclusive & innovative
active stain-remover
• Fresher fragrance
experience
Best performance Ever!
Best handling & dosing!
2007
36

Innovation and Sustainability
Persil 2008 – Best of its time Cold Formula
1 2 3 4
Performance up!
Best in class
stain removal!
Temperature down!
From 20°C onwards –
for laundry and the
environment!
37

Innovation and Sustainability
LP 2008 – Best of its Time Cold Formula
Temperature down!
From 20°C onwards –
for laundry and the environment!
1 2 3 4
Performance up!
Top stain removal!
38

Innovation and Sustainability
Persil Gold 2009 – Cold Power Formula
1 2 3 4
• Stiftung Warentest Winner
• Cold Power Formula for
sustainable performance
• Radiant Cleanliness
Best cleaning !
Best sustainability!
39

Performance
based on Sustainability
New quality standard
for innovative
sustainable consumption
40

Key Take Away
Performance based on Sustainability
new quality standard
key innovation driver for the future
defines achievement vs. avoidance currency
sets agenda for energy, water, education
1 2 3 4
INNOVATIVE SUSTAINABLE CONSUMPTION

Sustainability in Laundry Washing:
Progress in the last three decades
Henkel first to market
1978 1980 1985 1990 1995 2000 2005 2010
140
Index*
Stain Removal
Index*
New
Protease
1995
New
Protease
2000
New 2007
Generation
Amylase
2005
120
+40
100
Bleach
Activator
Introduction
1982
Dosage
[grams per wash cycle]**
New
Generation
Protease
1990
Amylase
Introduction
1995
*heavy duty powder detergent on 20 stubborn stains
at 40°C (1978 = 100)
drivers for
competitive advantage!
** 40°C cotton program of up-to-date washing machine (1978 = 100)
1 2 3 4
New
Generation
Soil Release
Polymer
Cold
Wash
Formula
2008
80
60
40
-65
MK Lindau, June 30, 2009 19 42

Performance based on Sustainability
2009
WORLD‘S MOST
ETHICAL
WWW.ETHISPHERE.COM
1 2 3 4
COMPANIES
Ultraconcentrate (10x)
-62% packaging
-79% CO2 in transport
= Innodriver
43

Quality & Responsibility
latest Reconfirmation
1 2 3 4
“best cleaning properties”
“outstanding ecological properties”
44

Performance based on Sustainability
Henkel:
Represents the values of an open family company for more than 130 years.
Quality:
High performing people
Committed to Passion for winning
Superior technology / Best PhD´s
Leading Brands
Company DNA
Pricing Power (Equity & Innovation)
1 2 3 4
Responsibility:
Strong values and tradition
Open family company
Thinking in generations vs. quarters
Fair competition
Resource-conserving use
We drive change
Deliver on focal areas
49

Holistic Approach
1 2 3 4
Henkel Focus
Corporate Level
+
Authentic translation
in consumer language
Brand Level
50

Performance based on Sustainability
1 2 3 4
51

Performance based on Sustainability:
“Quality & Responsibility”
• Produktlogo auf allen Henkel Wasch- und Reinigungsmitteln weltweit
• Sichtbares Zeichen unserer Verpflichtung zum nachhaltigen
Wirtschaften − übersetzt in mehr als 20 Sprachen
1 2 3 4

Quality & Responsibility –
Worldwide Implementation on Products
1 2 3 4
53

Performance based on
Sustainability
1 2 3 4
Global Guideline: Banderole+Soundlogo in all TVC´s
as of 20 seconds, linking brand and Henkel corporate sender

We are striving for cooperation with best
in class partners along the value chain!
1 2 3 4
Use phase
Distribution
Disposal
Manufacturing
of Product and
Packaging
Raw Materials
Transportation
Manufacturing
of Ingredients
55

Henkel “market maker” of Certificates
for Sustainable Palm Kernel Oil …
1 2 3 4
56

… as part of a new Quality Definition:
Terra Activ – highest performance
& best environmental compatibility
1 2 3 4
57

Sustainable Brands and Technologies
Laundry & Home Care
Combining excellent performance with greatest responsibility
toward people and the environment
• An average 85 percent of the ingredients are based on renewable
raw materials
www.terra-activ.de
Contributes to the focal area:
1 2 3 4
58

A Sustainable Business Model …
… has to focus on the entire Value Chain
CO 2-Emissions Persil Universal Powder vs. Megaperls
[kg/1000 wash loads]
1.000
250
100
10
1
Raw
materials
1 2 3 4
Powder Megaperls
Production
Packaging
Transport
60 °C 30 °C
Use Waste
Disposal
Improvements Reduction in of the
entire packaging value chain by
switching material from by normal 90% to
concentrated Reduction detergent: of
handling Reduction cost of pack- by
more aging material than 50% by 90 %
50 400,000 % reduced km less
handling truck km/year cost due to
less Reduction number of of energy pallets
needed
consumption by
400,000 switching km to less lower truck
km/year
washing
for the main
format
temperatures
59

A Sustainable Business Model …
… has to focus on the entire Value Chain
1200
1000
800
600
400
200
0
1 2 3 4
Total Raw
materials
LCA Persil Megaperls
Packaging
materials
Production Use Disposal
30°C 60°C
Reduction of
packaging
material by 90%
Reduction of
handling cost by
more than 50%
400,000 km less
truck km/year
Reduction of energy
consumption by
switching to lower
washing
temperatures
60

PCF Pilotprojekt: Persil Megaperls
1 2 3 4

Handlungsrelevanz:
Persil TV Spot
1 2 3 4

Handlungsrelevanz:
Somat 7 TV Spot
1 2 3 4

Performance based on Sustainability
Spain
Hungary
Czech
1 2 3 4
German
Global Communication on “Quality & Responsibility”
French
English

Decision paper – Money Gate – III
1 2 3 4

Innovation and Sustainability
Translation to the Consumer
1 2 3 4
• Naturally-sourced ingredients
• 2x concentrated formulas
• Min.25% post-consumer resin in bottle
• Hypoallergenic & Biodegadable formula
• No unnecessary dyes
• 1 st mainstream brand with
DfE designation by EPA
66

Purex Laundry Sheets 3-in-1
Breakthrough Innovation 2009
Less water: Ultraconcentrate (10x)
Less waste: -62% packaging
Less weight: -79% CO2 in transport
1 2 3 4
Washing Drying

Corporate CSR/Sustainability Targets
for 2012
Also central to our commitment are:
• All new products contribute to sustainable development
in at least one focal area.
• All employees receive training and continuing education
to ensure that they are appropriately qualified for their
tasks.
• All of our strategic suppliers satisfy our expectations
with regard to corporate ethics.
1 2 3 4
68

Sustainable Brands and Technologies
Laundry & Home Care
Contributes to the focal areas:
1 2 3 4
Top cleaning performance at just 20 degrees Celsius
• New formulations remove stains more efficiently at just 20 degrees Celsius
• This makes it possible to cut the energy consumption of washing machines by up to 40
percent – thus saving energy and reducing carbon dioxide emissions
Excellent eco-performance
• Purex is the first leading detergent brand to be included in the “Design for the
Environment” program of the American Environmental Protection Agency (EPA)
All-around efficiency
• Fourfold concentration of Vernel max in Turkey reduces the traditional dosage by more
than 75 percent, from 110 to 24 milliliters
• The bottle size has been reduced from 4 liters to 1 liter, saving material and water during
production and cutting transport and storage costs
69

Sustainable Brands and Technologies
Laundry & Home Care
1 2 3 4
Saving valuable water
• In Tunisia, the adjustment of the formulation of Nadhif Semi-Automatic to the needs of
semi-automatic washing machines prevents excessive foaming
• The new Nadhif also enables the foam formed during washing to be rinsed out more easily
– with the same powerful cleaning performance
Conserving resources
• In 2008, we also switched to efficient compact washing powders in Turkey
• Thanks to the compact formulations, consumers can reduce the standard dosage per
laundry cycle by one third, from 150 to 100 grams
70

Key Take Away
Performance based on Sustainability
new quality standard
key innovation driver for the future
defines achievement vs. avoidance currency
sets agenda for energy, water, education
1 2 3 4
INNOVATIVE SUSTAINABLE CONSUMPTION

Our Responsibility
Performance based on Sustainability
We drive innovation, we stay in the lead
We set standards, we contribute
72