Strategic priorities & financial targets 2012: improvement to 14 percent EBIT margin

    * Strong sales growth of 12.0 percent
    * Growth regions: sales plus 24.1 percent
    * Organic sales growth: 3.5 percent
    * Adjusted operating profit (EBIT): plus 6.3 percent
    * Adjusted earnings per preferred share: plus 3.5 percent

Coinciding with the start of the new academic year, the second ‘Henkel Innovation Challenge’, Henkel’s international student competition, is being launched. The challenge this time: competing students will be expected to act as creative business development managers and prepare a concept for a Henkel product from the company’s Cosmetics/Toiletries or Laundry & Home Care business sectors capable of generating success in the year 2050. The competition is open to students of all disciplines in eleven European countries, who are now invited to register at www.henkelchallenge.com. The closing date for enrolment is January 12, 2009. Among the prizes awaiting the winning team is an exciting trip.

Committing to sustainable development and corporate social responsibility includes tackling the issue of where the raw materials for production originate and how they themselves are produced. Palm kernel oil, a renewable raw material used in the manufacture of surfactants (surface-active substances used in laundry and home care and also cosmetic products) is a case in point. Together with independent partners, Henkel has helped to achieve recognition of certificates for sustainable palm kernel oil as issued for official trading by the ‘Roundtable for Sustainable Palm Oil’ – and bought the certificates for the new Terra Activ cleaners. The certificates serve to confirm sustainable palm cultivation in the countries of origin and contribute to protecting the rain forests. The process for trading these certificates, known as ‘Book & Claim’, functions in a manner similar to that applied to eco-electricity.

The fourth Henkel Innovation Letter in 2008 informs concisely about the different innovations made in the business sectors Laundry & Home Care, Cosmetics/Toiletries and Adhesive Technologies.

Henkel has again been included in the FMCG market segment of the Dow Jones Sustainability World Index, signifying that Henkel leads its peers in this industry category. To be incorporated into the index, companies have to show an exemplary track record in adhering to the principles of sustainable development.

Job rotation / international expatriate programmes are viewed by Henkel to contribute to the transfer of know-how within the group whilst giving employees the opportunity of furthering their personal development. Former Henkel Australia employees Michael Wilkinson (ASL- National Marketing Manager) and Brad Humphrey (ASL – Market Development Specialist) are currently settling into expat(riate) life in Germany and China respectively. Charles Vint, formerly National Business Manager (AC -Consumer Adhesives) business, has assumed the responsibilities of ASL - National Marketing Manager, effective May 2008.

Henkel’s annual report has received the highest award for the third time in succession in the competition for the world’s best annual report. The League of American Communications Professionals (LACP) presented the 2007 Henkel annual report with a Platinum award in the category “Consumer – Personal”.

• Strong sales growth of 11.4 percent 
• Organic sales growth: plus 6.1 percent
• Adjusted operating profit (EBIT): plus 7.8 percent   
• Sales in growth regions: plus 19.5 percent

Earlier this year, market research was carried out to evaluate the potential fit between Henkel Australia and OCV Distribution as channel partners for distribution. The main thrust of this possible partnership would centre on the Loctite OEM structural adhesives distribution. OCV have since been appointed as new distributor for Loctite Methyl Methacrylate Adhesives (MMA’s) and Modified Silane (MS) Polymers.

The third Henkel Innovation Letter in 2008 informs concisely about the different innovations made in the business sectors Laundry & Home Care, Cosmetics/Toiletries and Adhesive Technologies.

Henkel Australia’s Engineers are supporting a polymer composites project of large proportions --- based on trials conducted at Henkel’s Head Office in Germany. The scope of the project enlists protective coating of a 110 tonne ball mill.

National Manufacturing Week (NMW), an annual integrated manufacturing exhibition in Australia returned to the Sydney Convention & Exhibition Centre, Darling Harbour 27-30 May 2008. Covering all major aspects of the manufacturing sector, this significant event represented the perfect platform for Loctite to exhibit its specialised adhesives and sealants product range, so as to perpetuate market awareness.

The doors of the world exhibition in Zaragoza, northern Spain, remain open until September 14, 2008. Henkel is an official sponsor of Expo 2008, the theme of which is “Water and Sustainable Development”.

With a total of 1,971 exhibitors and purchase contracts valued at over 10 billion euros having been concluded, print media show Drupa 2008 broke all records this year – more than fulfilling the expectations of the exhibitors. As a supplier of innovative adhesive systems for the graphic arts, flexible packaging and paper processing segments, Henkel also profited from the beneficial investment climate at this leading international trade fair.

At the Drupa 2008, the world biggest printing fair in Duesseldorf, Henkel once again presents innovative solutions for the packaging industry.  All press releases and images are available here for download.

Henkel is the new sponsor of the M-Tel Beach Masters in Bulgaria. With Henkel, the young tournament, which only takes place for the second time this year, has an experienced sponsor supporting the event. Henkel has been sponsoring Beach Volleyball Grand Slam tournaments in Paris, France and Klagenfurt, Austria, for many years. The tremendous success of Henkel’s involvement in these two events was the main reason underlying the company’s decision to extend its sponsoring to the M-Tel Beach Masters in Bulgaria in 2008. The M-Tel Beach Masters competition commenced on May 23rd, and will continue in five different Bulgarian cities until September 7, 2008. The initial tournament from May 23-25, 2008 in Plovdiv was already a major success.

Thomas Geitner (53), who has been a member of the Henkel Management Board since March 1, 2008, will assume responsibility for the Adhesives Technologies busiess sector, effective mid-June. As already announced in February 2008, Alois Linder (60), Executive Vice President Adhesives Technologies, will resign from his office at his own request.

In aircraft engineering, there is a growing trend toward lightweight construction. Novel materials are playing a key role here. Henkel's innovative Epsilon technology represents a milestone in the production of fiber composites.

Henkel has earmarked assistance totaling 150,000 euros to help the victims of the recent, devastating earthquake in China. Working closely with the Henkel sites in China, the company is already in the process of channeling a large portion of this emergency aid in the form of monetary and product donations via the Henkel Friendship Initiative e.V. (HFI) to the people in the regions affected. Building on this immediate assistance, a further portion of the total is to be invested in the next few months in specific reconstruction projects. The HFI is an independent charitable association founded by Henkel together with its employees and retirees in order to provide immediate aid to people worldwide who fall victim of crises or catastrophes. It is one of the pillars supporting the Henkel Smile program. All the company’s social involvement activities beyond its business operations – internationally known as corporate citizenship – come together under the Henkel Smile umbrella.

For ten years now, Henkel has been supporting its employees and retirees around the world in their socially important volunteering activities. The chosen vehicle is the MIT Initiative (Make an Impact on Tomorrow), and in order to celebrate its tenth anniversary, Henkel intends to support a specially selected project with a grant of 100,000 euros. With the establishment of the MIT Initiative in 1998, Henkel was one of the first German companies to recognize the volunteering activities of its employees and retirees as an essential component of its corporate culture and social responsibility. In this anniversary year, the focus is on developing an international MIT network which effectively integrates the efforts of all these volunteers.

• Robust organic sales growth of 3.3 percent
• Operating profit (EBIT) adjusted for foreign exchange: plus 2.5 percent
• Earnings per preferred share (EPS): plus 6.3 percent
• Growth regions: 16.2 percent organic sales growth

All-round praise for the Henkel Team at the first run of the Dakar Series. During the Central Europe Rally through Hungary and Romania Loctite and Teroson mechanicals supported the competitors actively. Together with the best drivers the Henkel Charlies pushed through to the finish line.

For the second time in as many years, Henkel will be on show and prominent at the world’s premier annual ice hockey event. Following its successful involvement in the 2007 “world cup” in Russia, the company is again stepping up as an official sponsor of the 72nd IIHF World Championship, scheduled to take place in Canada from May 2 to 18, 2008. For Henkel, this showcase in the home of ice hockey offers not only the advantages of association with an international sport event but also the possibility of significantly increasing the company’s awareness ratings in North America. During the competition, Henkel will be permanently present through its corporate brand supported by the product brands Purex (Laundry Care), Right Guard (Cosmetics) and Le Page (Adhesives).

In the fall of 2007, Henkel launched an international student competition under the name ‘Henkel Innovation Challenge’. Now the finals in Barcelona have just come to an end. Six teams of students from throughout Europe presented their ideas before an international jury comprised of Henkel managers. The challenge facing these young talents was to develop innovative products and business concepts for the laundry and home care segment of the year 2050. The eventual winners were the team from Spain studying at the ESADE Business School, Barcelona. These economics students presented a compelling concept involving a house-keeping robot, networked with the entire house using advanced technology. The German team from Berlin took second place. “Ultimately, however, all these students are winners. Because where else are these young people going to get such an opportunity to gather real business experience and make themselves known to an international company?” asked jury member Fridtjof Helemann, Corporate Vice President Human Resources at Henkel.

Henkel has been presented with the prestigious PR Report Award in recognition of its corporate brand communications strategy in the “Long-term PR Strategy” category. The prize was awarded for the systematic strategy for the long-term establishment and strengthening of the Henkel corporate brand worldwide. This is the sixth time that specialist trade magazine “PR Report” has recognized outstanding communication campaigns in the German public relations industry.

Diisobutyl phthalate (DiBP), a plasticizer frequently used until now in adhesives for the paper converting industry, is suspected of being harmful to health. The German manufacturers and processors of paper, board and cardboard have therefore undertaken to stop using products containing DiBP. To protect consumers in the long term, Henkel has now come up with a solution – the Adhesin A 78 Series, a new generation of plasticizer-free adhesives formulations for all applications in the paper and packaging industry.

For decades, Henkel has been an active proponent of sustainability and corporate social responsibility. This includes committing to the use of renewable raw materials and promoting resource conservation. Whenever palm oil is in discussion, reference is constantly made to the felling of the rainforests. It is the mission of the “Roundtable on Sustainable Palm Oil” (RSPO) to ensure that commercialized palm oil satisfies certain key sustainability criteria. Right from the start, Henkel has supported this process, participating in meetings and contributing its expert knowledge to the ensuing debate. As a visible symbol of this engagement, Henkel joined the international RSPO as an official member in April 2008.

Effective the end of Henkel’s 2008 Annual General Meeting, Kasper Rorsted is the new Chairman of the Management Board. Having reached the internally agreed age of retirement, his predecessor, Ulrich Lehner, resigned as of the same date. Lehner was appointed Chairman back in May 2000 and, with a brief interruption, had been with Henkel since 1981. He will, however, remain closely associated with the company as a member of its Shareholders’ Committee.

Nothing you can say for yourself is as valuable as what customers have to say about you. It is because of this very reason that Loctite have recently begun executing a new communications strategy in a series of print advertisements. By using the testimonials of renowned experts or professionals in the industry, Loctite aims to show through print media that past customers have had a positive emotional experience with Loctite products and services and in doing so build instant credibility for the business.

Frekote products are part of Henkel’s portfolio of success. The Frekote® line of adhesives offers the broadest product range in the industry for virtually all types of composite, plastic and rubber moulding operations. Depicted as a largely untapped market in Australia, Loctite recently appointed Eileen Siew as Business Development Manager. Eileen will work towards uncovering the widespread opportunities that exist for this business and to that end market the Frekote line of mould release agents in a much bigger way.

Sales and Marketing have developed a valuable sales tool for Teroson’s team of specialists; a Teroson Adhesive and Sealants Work Station. The new stylishly designed stand contains an extensive range of Teroson’s most popular and high turnover adhesives and sealants. This professional OEM Adhesives and Sealants stand is suitable for medium to large sized Auto Body Repairers. Teroson Sales Representatives have already been inundated with orders and are keen to install their customer’s workshop with the new outfit.

Henkel has taken over from Akzo Nobel the Adhesives and Electronic Materials businesses previously owned by National Starch. “This acquisition represents a milestone in our 130-plus-year corporate history and points Henkel clearly in the direction of further profitable growth,” said Ulrich Lehner, Chairman of the Management Board of Henkel KGaA. The acquisition was preceded by the carve-out of the businesses to be acquired by Henkel and the requisite antitrust and anticompetitive investigations by the relevant authorities.

Loctite Freeze & Release has been a big success story since its launch in February 2007. To keep the momentum the popular “Freeze em-off with Loctite” TV advert was aired regionally throughout Australia during February and March. The advert was shown exclusively during the coverage of Australia V India One Day Cricket matches and also during news coverage. The One Day International Triangular Series proved to be the perfect platform to reach mass markets and deliver key messages to our target market about Loctite’s exceptional new product ‘Freeze & Release’.

Energy consumption down 21 percent, water consumption down 15 percent, and waste down 32 percent – profit and sales up. These are three results of Henkel’s sustainability performance over the past five years, as presented today at a Sustainability Press Conference. By the year 2012, Henkel intends to reduce its energy consumption by another 15 percent, and achieve further reductions of 10 percent in water consumption and waste generation, per metric ton of output in each case. Using its laundry and homecare products as examples, Henkel also demonstrated how these can help to save energy, for instance by washing laundry at temperatures as low as 20 degrees Celsius.

Henkel Australia has released their brand new Loctite Automotive Catalogue. After much feedback and input from our customers, our dedicated Sales, Marketing and Technical teams have come together to produce a comprehensive 48 page catalogue. The Loctite Adhesives and Sealants Guide showcases our new products with new capabilities that provide solutions to your problems and will make selecting the Loctite product you need an easy task.

For the last ten years, Henkel has been supporting its employees and pensioners involved in volunteer social work. By establishing the MIT (Make an Impact on Tomorrow) Initiative 1998, Henkel became one of the very first German companies to declare the honorary social involvement of employees and pensioners to be a key element of its corporate culture and corporate social responsibility commitment. Henkel employees and pensioners are involved in doing volunteer social work across the entire globe. These initiatives are as diverse as the people themselves who coordinate and take responsibility for them. The spectrum of projects ranges from computer courses for senior citizens in Düsseldorf and a therapy center for babies in South Africa to the Riverbend environmental project for children in American cities.

• Sales up 2.6 percent to 13.07 billion euros
• Organic sales growth of 5.8 percent
• Operating profit (EBIT): up 3.5 percent to 1,344 million euros
• Net earnings for the year: up 8.0 percent to 941 million euros

Against the background of changing market conditions, especially with regard to ever stronger competition and increasing cost pressure, caused among others by markedly rising raw material prices, the Management Board of Henkel KGaA has decided the basics of an efficiency enhancement program.

The latest reports on the plasticizer diisobutyl phthalate (DIBP), which can migrate from paper and board packages and accumulate in the packaged foods, have alerted food and packaging manufacturers. The plasticizer can come from sources such as dispersion adhesives, which are frequently used in the packaging industry. To protect the consumer from possible risks, Henkel has developed novel dispersion adhesives that are entirely free of plasticizer.

The jurors of the Research/Technology Invention Award 2007 found it no easy task to pick the winners among more than 20 highly promising projects.