Annual Report 2011

How we performed in 2011

key financiaIs
ln mllllon euros 2010 2011 +/
Sales 1S,u02 15,605 8.4 x
Ueratlng roflt (L8lJ) 1,728 1,857 7.8 x
Adjusted ' oeratlng roflt (L8lJ) 1,862 2,029 0.u x
keturn on sales (L8lJ) ln x 11.4 11.9 u.S
Adjusted ' return on sales (L8lJ) ln x 12.8 13.0 u.7
tet lncome 1,148 1,283 12.2 x
attrlbutable to noncontrolllng lnterests 2S 30 2u.u x
attrlbutable to shareholders of Penkel Au 8 Co. kuaA 1,118 1,253 12.1 x
Larnlngs er referred share ln euros 2.S0 2.90 12.u x
Adjusted ' earnlngs er referred share ln euros 2.82 3.14 11.8 x
keturn on caltal emloyed (kUCL) ln x 14.0 16.6 1.7
Caltal exendltures on roerty, lant and equlment 24u 384 6u.u x
kesearch and develoment exenses 801 410 4.0 x
tumber of emloyees (uecember 81) 47,8S4 47,265 1.2 x
ulvldend er ordlnary share ln euros u.7u 0.78 2 11.4 x
ulvldend er referred share ln euros u.72 0.80 2 11.1 x
' Adjusted for onetlme charges/galns and restructurlng charges.
` lroosal to shareholders for the Annual ueneral ueetlng on Arll 16, 2u12.
= ercentage olnts
8aIes by regien
Cororate = sales and servlces not asslgnable
to the lndlvldual buslness sectors.
8aIes by business secter
' Lastern Luroe, Afrlca/ulddle Last, Latln Amerlca,
Asla (excludlng jaan).
HighIights
15,605 million euros
sales
13.0 %
adjusted ' return on
sales (L8lJ). u
o./ ercentage olnts
3.14 euros
adjusted ' earnlngs er
referred share (LlS).
u . ercent
0.80 euros
dlvldend er referred
share `
36 x
western Luroe
4 x
jaan / Australla /
tew 2ealand
42 x
Lmerglng markets '
1 x
Cororate
17 x
torth Amerlca
27 x
Laundry 8
Pome Care
1 x
Cororate
S0 x
Adheslve
Jechnologles
22 x
Cosmetlcs/
Jolletrles
Laundry & Home Care
Cosmetics / Toiletries
Adhesive Technologies
A
t

a

g
l
a
n
c
e
Leadlng market osltlons world
wlde.
Achlevlng rofltable growth
through aeallng lnnovatlons
under strongbrands, allgned to
exactlng customer demands.
Lxandlng our strong market osl
tlon ln Luroe and extendlng our
resence ln torth Amerlca and
selectlvely ln the emerglng markets.
key flnanclals
ln mllllon euros 2010 2011 +/
Sales 4,810 4,304 u.8 x
Ueratlng roflt (L8lJ) S42 511 S.8 x
Adjusted ' oeratlng
roflt (L8lJ) S62 570 1.4 x
keturn on sales (L8lJ) 12.6 x 11.9 % u.7
Adjusted ' return on sales (L8lJ) 18.u x 13.2 % u.2
= ercentage olnts
' Adjusted for onetlme charges/galns and
restructurlng charges.
Jo brands
Leadlng market osltlons world
wlde.
Achlevlng rofltable growth
through aeallng lnnovatlons
under strongbrands, allgned to
exactlng customer demands.
Lxandlng our strong market osl
tlon ln Luroe and extendlng our
resence ln torth Amerlca and
selectlvely ln the emerglng markets.
key flnanclals
ln mllllon euros 2010 2011 +/
Sales 8,260 3,399 4.u x
Ueratlng roflt (L8lJ) 411 471 14.6 x
Adjusted ' oeratlng
roflt (L8lJ) 486 482 1u.S x
keturn on sales (L8lJ) 12.6 x 13.8 % 1.2
Adjusted ' return on sales (L8lJ) 18.8 x 14.2 % u.0
= ercentage olnts
' Adjusted for onetlme charges/galns and
restructurlng charges.
Jo brands
Leadlng our markets worldwlde.
Achlevlng rofltable growth
through lnnovatlons under strong
brands, efflclent rocesses and a
flrm focus on our customers.
uevelolng new allcatlons and
growth otentlal ln all reglons of
the world.
key flnanclals
ln mllllon euros 2010 2011 +/
Sales 7,8u6 7,746 6.u x
Ueratlng roflt (L8lJ) 878 1,002 14.1 x
Adjusted ' oeratlng
roflt (L8lJ) 088 1,075 14.7 x
keturn on sales (L8lJ) 12.u x 12.9 % u.0
Adjusted ' return on sales (L8lJ) 12.8 x 13.9 % 1.1
= ercentage olnts
' Adjusted for one tlme charges/galns and
restructurlng charges.
Jo brands
+2.9 %
organlc
sales growth
Sales
ln mllllon euros
2u!u 4,319
2011 4,304
+5.4 %
organlc
sales growth
Sales
ln mllllon euros
2u!u 3,269
2011 3,399
+8.3 %
organlc
sales growth
Sales
ln mllllon euros
2u!u 7,306
2011 7,746
Contents
1he Cemany
z loreword
6 keort of the Suervlsory 8oard
z uanagement 8oard
q Lxcellence ls our lasslon
zq Shares and bonds
Greu management reert
z8 urou management reort sublndex
zp Cororate governance
q Ueratlonal actlvltles
q Strategy and flnanclal targets for zoz
valuebased management and control system
8uslness erformance
6o tet assets and flnanclal osltlon
6q Lmloyees
6) lrocurement
68 lroductlon
)o kesearch and develoment
)q uarketlng and dlstrlbutlon
)6 8uslness sector erformance
88 klsk reort
p lorecast
p Subsequent events
CenseIidated financiaI statements
p6 Consolldated flnanclal statements sublndex
p8 Consolldated statement of flnanclal osltlon
oo Consolldated statement of lncome
o Consolldated statement of comrehenslve
lncome
o Consolldated statement of changes ln equlty
oz Consolldated statement of cash flows
o totes to the consolldated flnanclal statements
lndeendent Audltors keort
kesonslblllty statement by the lersonally
Llable lartner
6 Cororate management of Penkel Au 8 Co. kuaA

iurther infermatien
6 uarterly breakdown of key flnanclals
6z uultlyear summary
6 ulossary
Credlts / llnanclal calendar
Our Vision
A global leader
ln brands
and technologles.
Our Values
we ut our customers at the
center of what we do.
we value, challenge and reward
our people.
we drlve excellent sustalnable
fnancial erformance.
we are commltted to leadershl
ln sustainability.
we bulld our future on our
family buslness foundatlon.
1 Henkel Annual Report 2011 1
Our commitment
Excellence is our Passion
is a commitment that unites
all of us who work at Henkel.
It represents a performance
challenge to ourselves and
a performance promise to
our customers day by
day, around the world.
Further information
You will notice a number of
cross-references within this
Annual Report. We also indicate
the availability of supplementary
information relating to specifc
subject areas in our Sustainability
Report and on the internet.
Internet
Annual Report
Sustainability Report
Learn more about how more than 47,000 Henkel employees around
the globe live up to this commitment in the section starting on page 14.
Henkel Annual Report 2011 2
2011 was a successful year for Henkel despite
major challenges and uncertainties within the
economic environment. We made considerable
progress in further developing our company,
based on our vision, aligned with our values and
driven by three strategic priorities: achieve
our full business potential, focus more on our
customers, and strengthen our global team.
Excellent results in a challenging environment
The progress made in the implementation of our
strategic priorities is reflected in our key financials.
In a persistently challenging environment marked
by intense competition, we achieved organic sales
growth of 5.9 percent, significantly outperforming
global GDP growth of 2.6 percent. Henkel Group
Kasper Rorsted
Chairman of the Management Board
Foreword
+5.9 %
organic sales growth.
13.0 %
adjusted 1 return
on sales.
+11.3 %
adjusted 1 earnings
per preferred share.
Henkel Annual Report 2011 3
revenues rose to 15,605 million euros. Adjusted 1
return on sales rose to 13.0 percent compared to
12.3 per cent in the previous year, while adjusted
earnings per preferred share increased by 11.3 per
cent to 3.14 euros. All our business sectors
contributed to this successful performance with
profitable growth and further expansion of their
market shares.
We will be proposing to the Annual General
Meeting approval of a dividend payout of 0.80 euros
per preferred share, an increase of 11.1 percent
compared to the 0.72 euros in the previous year,
in line with our established dividend payout policy.
The excellent business performance and solid
finances of Henkel were recognized in the financial
markets. In the course of 2011, both Standard &
Poors and Moodys increased Henkels credit rating
to our target level, highlighting in particular our
strong cash flow and our disciplined reduction of
net debt down to a level below 2 billion euros
since the acquisition of the National Starch busi
nesses.
We fully delivered on our ambitious targets in 2011.
Sales, profits and market shares in nearly all our
business segments reached new highs. Based on
this solid foundation and strong performance, we
are very confident of achieving our 2012 targets
set in 2008.
On behalf of the Management Board, I would like
to extend my sincere thanks to all our employees
for their outstanding contributions in this difficult
economic environment. Their commitment and
their ambition to be the best in everything they
do provide the foundation for Henkels success,
as has consistently been the case during the last
135 years.
We are well aware of our responsibility toward our
employees. Following the tsunami and the sub
sequent reactor incident in Japan, and also during
the flood disaster in Thailand and the political
unrest in the Middle East and North Africa, we
made great efforts to ensure the safety and welfare
of our employees and their families, providing
a broad range of supportive measures.
Excellence is our Passion
Since the beginning of 2011, our commitment to
be the best in everything we do has been reflected
in our new claim, Excellence is our Passion.
We regard this as a performance challenge to our
selves and a performance promise to our customers.
In this report we introduce selected examples
of how more than 47,000 Henkel employees live
up to this commitment day by day, around
the world.
Growth through globalization
Our vision, a global leader in brands and tech
nologies, is reflected in our business strategy.
A major success factor in our performance in 2011
was the further expansion of our position in the
emerging markets, where we generate 42 percent
of our sales and employ 54 percent of our people.
It is a key element of our longterm strategy to
continuously strengthen our position in these
markets characterized by aboveaverage growth.
For example, in 2011 we began construction
of our largest adhesives plant in Shanghai. Over
recent years, Henkel has been benefiting from
the increasing globalization of our businesses. This
shift generates new growth momentum and
enables us to better market our technologies
to industrial customers on a global scale while
growing our strong brands in local markets.
Focus on strong brands
We further strengthened our top brands in 2011
and now generate 42 percent of total sales with
our top 10 brands. Thanks to aboveaverage
margins, these brands contribute significantly to
our profitable growth. Our top 10 brands in the
Cosmetics/Toiletries business sector generate
90 percent of its sales, in Laundry & Home Care
the figure is 81 percent and in the Adhesive Tech
nologies business sector the share is 54 percent.
In our industrial adhesives business we will be
further focusing our portfolio on established,
global brands.
1 Adjusted for one-time charges/gains and restructuring charges.
Foreword
42 %
of our sales generated
in the emerging markets.
42 %
of our sales generated
by our top 10 brands.
Henkel Annual Report 2011 4
Continuous change to drive success
2011 provided a number of striking examples of
how important flexibility and adaptability to
changing business conditions can be. The unrest
in North Africa and the Middle East, the natural
disaster in Japan and the financial crises in Europe
and the USA were still unforeseeable at the be
ginning of the year. These events had considerable
impact on the economic landscape. In addition,
significant raw material price increases and
volatility in a market environment characterized
by tough competition affected all our businesses.
Against this background, it was vital to continue
making Henkel more flexible, faster and more
efficient.
Our response included expansion of our shared
services, further simplifying, standardizing and
automating our processes. Having successfully
introduced the shared services model for corpo
rate functions such as Finance, Purchasing and
Human Resources, we are now extending it to
business unit processes as well. In addition to our
existing shared service centers in Bratislava
(Slovakia) and Manila (Philippines), in 2011 we
opened a third center in Mexico City serving
the Latin America region. By the end of 2011, we
had about 1,000 employees in our shared services
organization, and we are planning to further
increase this number in the coming years.
Diversity an asset for a global company
We are convinced that the commitment and diver
sity of our employees are critical success drivers for
Henkel. For both our consumer goods and our
industrial businesses, the variety of backgrounds,
knowledge and expertise of our diverse employee
base makes the difference in a com petitive en
vironment. In promoting diversity at Henkel, we
focus on three dimensions: gender, internation
ality, and age combined with professional expe
rience. Henkel employs people from more than
120 countries and there are 26 nations represented
among our top 180 managers.
In 2011, the focus in Germany and other countries
was on the topic of women in management. At
Henkel, we have been able to raise the proportion
of female managers by one percentage point as
an annual average over the last six years. The figure
currently stands at approximately 30 percent,
putting Henkel among the leading corporations
listed in the DAX. Going forward, we are committed
to steadily raising this ratio by one to two per
centage points per year.
As part of our effort to strengthen our global team,
we expanded our worldwide career and develop
ment activities in 2011. We now evaluate and
differentiate the performance levels and develop
ment potential of our 9,000 managers and leaders
around the world using a standard process. From
the results, we derive their longterm career and
development requirements.
At Henkel, we prefer to promote talent from within,
but without compromising on quality. I am
particularly pleased that, in the course of 2011,
we promoted three senior managers with long
standing experience within Henkel to our Man
agement Board. And, as already announced, in
July of 2012 we will be appointing a new Chief
Financial Officer from our ranks. This ensures
a high degree of continuity and competence
within the company.
Leadership in sustainability
We are committed to leadership in sustainability
is one of our five company values. Henkel holds
a top international position in this field. For the
fifth consecutive year, we were acknowledged
as the global leader in our industry by the Dow
Jones Sustainability Index; and we are also at the
top of other recognized, independent rankings.
In 2011, we established
a strong platform
for Henkels future.
Foreword
Around 30 %
of our managers
are women.
Henkel Annual Report 2011 5
We intend to maintain and further extend this
leading position in the future, not least because
our customers in the industrial business and also
retail partners and consumers are placing in
creasing emphasis on sustainable products and
processes.
Well ahead of schedule, by the end of 2010 we
achieved our sustainability targets originally
formulated for 2012. Consequently, in 2011 we
developed a new, longterm sustainability strategy
for Henkel, incorporating the insights from ex
ternal, international experts. At the heart of this
strategy lies the ambition to achieve more with
less. We aim to triple our resource efficiency by
the year 2030. As an interim objective, we want to
improve our efficiency by 30 percent by the end
of 2015. Our Annual Report details a number of
important contributions that have been made
in the implementation of this strategy. Detailed
information relating to this strategy, our specific
targets and our progress can be found in our
Sustainability Report and on the internet.
2012 outlook and long-term strategic alignment
We are very confident of meeting our targets for
fiscal 2012: We aim to achieve organic sales growth
of 3 to 5 percent. For our consumer goods busi
nesses we expect growth in the low singledigit
percentage range, and for our Adhesive Techno
logies business, we are targeting sales growth
in the mid singledigit percentage range. Building
on our strong 2011 results, we intend to increase
adjusted return on sales (EBIT) to 14 percent for
the Henkel Group, coupled with a rise in adjusted
earnings per preferred share (EPS) of at least
10 percent.
In 2011, we were able to achieve significant
milestones in our development, making progress
in many key areas and establishing a strong plat
form for the future. In the course of the year, the
Management Board analyzed major trends which
will be affecting Henkel in the future, as well as
various scenarios for the potential development
of our business environment. These analyses will
inform the strategic direction and focus of our
company in the future, as will be communicated
at the end of this year.
In addition to our appreciation of our employees,
I would like on behalf of the entire Management
Board to extend our special thanks to our super
visory bodies. And in the name of the entire
company I thank you, our shareholders, for your
continued trust and support. We also thank our
customers throughout the world for the confidence
they have shown in Henkel, in our brands and
in our technologies.
Dsseldorf, January 27, 2012
Sincerely,
Kasper Rorsted
Chairman of the Management Board
Foreword
Henkel Annual Report 2011 6
Dr. Simone Bagel-Trah
Chairwoman of the Shareholders Committee and the Supervisory Board,
pictured here in Henkels Forscherwelt, a research center created especially for children.
2011 was again a successful year for Henkel. We
were able to significantly increase both sales and
profits in all our business units while further
strengthening our position in many markets.
This was an excellent achievement, particularly
in view of the difficult business environment.
The natural disasters in Japan and Thailand, and
political unrest in the Middle East and North
Africa coincided with major challenges and
uncertainties in our markets arising from the
debt crisis. We also had to deal with significantly
rising raw material prices and persistently intense
competition. Despite these challenges, our com
pany performed very well in fiscal 2011.
On behalf of the Supervisory Board, I thank all
employees for their hard work and commitment.
Without their contribution this outcome would
not have been possible. I would also like to thank
the members of the Management Board for their
successful and effective leadership of the company
through this difficult period, and the employee
Report of the Supervisory Board
Henkel Annual Report 2011 7
representatives and Works Councils for their
constructive support in Henkels development.
In particular, I would like to extend our gratitude
to you, our shareholders, for the confidence you
continue to show in our company, its manage
ment, its employees, and its products and
services.
Ongoing dialogue with the Management Board
Again in fiscal 2011, we as the Supervisory Board
diligently discharged our duties in accordance
with the legal statutes, Articles of Association
and rules of procedure governing our actions. We
carefully and regularly monitored the work of the
Management Board, advising and supporting it in
its stewardship, in the strategic further develop
ment of the company and in decisions relating to
matters of major importance.
Cooperation between the Management Board
and the Supervisory Board takes place through
extensive dialogue based on mutual trust and
confidence. Throughout fiscal 2011, the Manage
ment Board kept us fully informed of all major
issues affecting the company and its Group
companies with prompt, detailed written and
oral reports. Specifically, the Management Board
provided explanations of the business situation,
operational development, business policy, profit
ability issues, and our shortterm and longterm
corporate, financial and personnel planning, as
well as capital expenditures and organizational
measures. In the course of preparing the quarterly
reports, moreover, details were given of the sales
and profits of the Henkel Group as a whole, with
further analysis by business sector and region.
Outside Supervisory Board meetings, I as
Chairwoman remained in regular contact with
the Chairman of the Management Board; this
ensured that the Supervisory Board was constantly
kept informed of current business developments
and major occurrences.
The Supervisory Board and the Audit Committee
each held four regular meetings in 2011. Atten
dance of the Supervisory Board meetings during
the year averaged 94 percent. No member of the
Supervisory Board participated in fewer than
half the meetings. All Audit Committee meetings
were fully attended apart from one.
There were no conflicts of interest involving
Management Board or Supervisory Board
members which had to be disclosed to the
Supervisory Board and reported to the Annual
General Meeting.
Major issues discussed at Supervisory Board
meetings
In all our meetings, we discussed the reports
provided by the Management Board, consulting
with its members on the development of the cor
poration and strategic issues. We also discussed
the overall economic situation and Henkels
business development.
The main items on the agenda for our meeting
of February 22, 2011 were approval of the annual
and consolidated financial statements for 2010,
including the risk report and the corporate gover
nance report, the 2011 Declaration of Compliance,
and our proposed resolutions for the Annual
General Meeting, relevant details of which were
published in our last Annual Report. During
the same meeting, we further dealt with specifics
relating to Henkels market appearance and
questions pertaining to the presentation of
Henkel as an attractive employer.
At our meeting of April 11, 2011, which was held
straight after the Annual General Meeting, the
main topics discussed aside from the general
performance of the individual business sectors
centered on current developments in Japan,
Egypt and Tunisia. We also consulted on the
effects of the increases in raw material prices,
discussed in detail the importance of the North
American market for Henkels branded consumer
goods business and our development in general,
and issues relating to the implementation of our
new vision and values.
In addition to operational developments in
the first eight months of the financial year, our
meeting held on September 27, 2011 also focused
on strategic issues. We consulted on the further
development of our sustainability strategy, for
mulated under the heading Achieving more with
less. We considered the status and structure of
our shared service centers, and also the efficiency
improvements accompanying the further stan
dardization of our processes and the associated
Report of the Supervisory Board
Henkel Annual Report 2011 8
transfer of duties and responsibilities. We like
wise consulted on the future strategic direction
of Henkel and on our information technology
strategy and its alignment to our future
requirements.
At our meeting of December 13, 2011, we exten
sively discussed on the basis of comprehensive
documentation our assets and financial plan
ning, including our statement of income and the
detailed budgets of our business sectors.
In our meetings, we also discussed compliance
issues, focusing particularly on antitrust in
fringements and the related decisions both of the
EU Commission dated April 13, 2011, and of the
French antitrust authority dated December 8, 2011.
Supervisory Board committees
In order to efficiently comply with the duties
incumbent upon us according to legal statute
and our Articles of Association, we assign certain
activities to two separate committees: an Audit
Committee and a Nominations Committee. For
more details on the responsibilities and composi
tion of these committees, please refer to the corpo
rate governance section and the membership lists
on pages 32 and 33, and page 157 respectively.
Committee activities
The Audit Committee met four times in the year
under review. The meetings and resolutions were
prepared through the provision of reports and
other information by the Management Board.
The Chair of the Committee reported promptly
and in full to the plenary Supervisory Board on
the content and results of each of the Committee
meetings.
The focus at all the Audit Committee meetings
was on the company and consolidated Group
accounts, including the interim financial reports,
with all matters being duly discussed with the
Management Board. The three meetings at which
we discussed and approved the interim financial
reports were attended by the auditor. The latter
reported on the results of the respective reviews
and on all the main issues and occurrences
relevant to the work of the Audit Committee.
There were no objections raised in response to
these reports.
The Audit Committee also scrutinized the
accounting process and the efficacy and further
development of the internal Groupwide control
and risk management system. The Committee
received the status reports of the Chief Compli
ance Officer and the Head of Internal Audit, and
approved the audit plan put forward by Internal
Audit, which extends to examining the function
al efficiency and efficacy of the Internal Control
System and our compliance organization.
The Audit Committee mandated the external
auditor, pursuant to the latters appointment by
the 2011 Annual General Meeting, to audit the
annual financial statements and the consolidated
financial statements for fiscal 2011, and also to
review the interim financial reports for fiscal
2011. The audit fee was also established. The Audit
Committee obtained the necessary validation
of auditor independence for the performance of
these tasks. The auditor has informed the Audit
Committee that there are no circumstances that
might give rise to a conflict of interest in the
execution of its duties.
At its meeting of March 5, 2012, attended by
the auditor, the Audit Committee discussed the
annual and consolidated financial statements
for fiscal 2011, including the audit reports, the
associated proposal for the appropriation of prof
its, and the risk report, and submitted to the Su
pervisory Board corresponding proposals for
resolution by the Annual General Meeting. The
Committee further made its recommendation to
the Supervisory Board regarding the latters pro
posal for resolution to be presented before the
Annual General Meeting relating to the appoint
ment of the external auditor for fiscal 2012.

A declaration from the auditor asserting its
independence was again duly received, accompa
nied by details pertaining to nonaudit services
rendered in fiscal 2011 and those envisaged for
fiscal 2012. There was no evidence of any bias or
partiality on the part of the auditor. Other mem
bers of the Supervisory Board also took part as
guests in this specifically auditrelated meeting
of the Audit Committee.
Report of the Supervisory Board
Henkel Annual Report 2011 9
On the basis of the objectives agreed within the
Supervisory Board with respect to its future
composition, the members of the Nominations
Committee made appropriate recommendations
in preparation for the resolutions to be formulated
by the Supervisory Board and placed before the
2012 Annual General Meeting with respect to the
upcoming election of shareholderrepresentative
members.
Efficiency audit
The Supervisory Board and the Audit Committee
regularly examine the efficiency with which
they perform their duties. This is done through
discussion in the Supervisory Board plenary
meetings and within the Audit Committee, based
on a comprehensive, companyspecific checklist.
This deals with relevant major aspects such as
preparation and conduct of meetings, scope and
content of documentation and information
(particularly with respect to financial reporting
and auditing tasks), performance management
and cost control, and risk management. Ques
tions relating to corporate governance and
possible improvements are also dealt with.
The results of these selfassessment audits were
discussed in detail at the meeting of the Audit
Committee on March 5, 2012, and that of the
Supervisory Board on March 6, 2012. The efficiency
of the Audit Committee and the Supervisory
Board, and also the requisite independence of
their members, were duly confirmed.
Corporate governance and declaration of
compliance
Again in 2011, we consulted on issues relating
to corporate governance, details of which are
available in the corporate governance report on
pages 29 to 36, with which we fully acquiesce.
At the meeting of March 6, 2012, we discussed
and approved the joint Declaration of Compliance
of the Management Board, the Shareholders
Committee and the Supervisory Board with respect
to the German Corporate Governance Code (Kodex)
for 2012. The full wording of the current and pre
vious declarations of compliance can be found
on the company website.
Annual and consolidated financial statements /
Audit
The annual financial statements of Henkel AG &
Co. KGaA and the management report have been
prepared by the Management Board in accordance
with the provisions of the German Commercial
Code [HGB]. The consolidated financial state
ments and the Group management report have
been prepared by the Management Board in
accordance with International Financial Report
ing Standards (IFRS) as endorsed by the European
Union, and in accordance with the supplementa
ry German statutory provisions pursuant to
Section 315a (1) HGB. The consolidated financial
statements in their present form exempt us from
the requirement to prepare consolidated financial
statements in accordance with German law.
The auditor appointed for 2011 by the last Annual
General Meeting KPMG AG Wirtschaftsprfungs
gesellschaft (KPMG) has examined the 2011
annual financial statements of Henkel AG & Co.
KGaA and the 2011 consolidated financial state
ments, including the management reports. The
annual financial statements and the consolidated
financial statements have been issued with an
unqualified opinion.
KPMG reports that the annual financial state
ments give a true and fair view of the net assets,
financial position and results of operations of
Henkel AG & Co. KGaA in accordance with German
generally accepted accounting principles, and
that the consolidated financial statements give a
true and fair view of the net assets, financial
position and results of operations of the Group in
compliance with International Financial Report
ing Standards and the supplementary German
statutes pursuant to Section315a (1) HGB.
We look forward with
confidence to the further
development of our
company.
Report of the Supervisory Board
Henkel Annual Report 2011 10
The annual financial statements and management
report, consolidated financial statements and
Group management report, the audit reports of
KPMG and the recommendations by the Manage
ment Board for the appropriation of the profit
made by Henkel AG & Co. KGaA were duly laid
before all members of the Supervisory Board. We
examined these documents and discussed them
at our meeting of March 6, 2012. This was attend
ed by the auditor, which reported on its main
audit findings. We received the audit reports and
voiced our acquiescence therewith. The Chair of
the Audit Committee provided the plenary session
of the Supervisory Board with a detailed account
of the treatment of the annual and the consoli
dated financial statements by the Audit Commit
tee. Having received the final results of the
review conducted by the Audit Committee and
concluded our own examination, we see no
reason for objection to the aforementioned
documents. The assessment by the Management
Board of the position of the company and the
Group coincides with our own appraisal. At our
meeting of March 6, 2012, we concurred with the
recommendations of the Audit Committee and
therefore approved the annual financial state
ments, the consolidated financial statements
and the management reports as prepared by the
Management Board.
We also discussed and approved the proposal
by the Management Board to pay out of the
unappropriated profit of Henkel AG & Co. KGaA a
dividend of 0.78 euros per ordinary share and of
0.80 euros per preferred share, and to carry the
amount attributable to the treasury shares held
by the company at the time of the Annual General
Meeting forward to the following year. This pro
posal takes into account the financial and earn
ings position of the corporation, its mediumterm
financial and investment planning, and the
interests of our shareholders. We consider the
proposed dividends to be reasonable and appro
priate. Also at this meeting, we ratified our
proposal for resolution to be presented before the
Annual General Meeting relating to the appoint
ment of the external auditor for the next financial
year, based on the recommendations of the Audit
Committee.
Risk management
Risk management issues were examined not
only by the Audit Committee but also the plenary
Supervisory Board. The emphasis was on the risk
management system in place at Henkel and any
major individual risks of which we needed to be
notified. There were no identifiable risks that
might jeopardize the continued existence of the
corporation as a going concern. The structure
and function of the risk management system were
also integral to the audit performed by KPMG,
which found no cause for reservation. It is our
considered opinion that the risk management
system corresponds to the statutory requirements
and is fit for the purpose of early identification
of developments that could endanger the continu
ation of the corporation as a going concern.
Changes in the Supervisory Board and
Management Board
Mr. Ulf Wentzien, Senior Staff Representative
on the Supervisory Board, resigned his seat as of
December 31, 2011, and we would like to extend
to him our sincere thanks for his service and
contribution. Dr. Martina Seiler was appointed
by the District Court to take his place.
The Management Board underwent a number of
changes in the course of the year, some of which
were already reported last year. Effective January1,
2011, Mr. JanDirk Auris joined the Management
Board as Executive Vice President for Adhesive
Technologies. Mr. Bruno Piacenza assumed
responsibility for the Laundry & Home Care busi
ness sector on March 1, 2011. He takes over from
Dr. Friedrich Stara who has retired and to whom
we extend our sincere thanks for his many years
of successful service. On October 1, 2011, Mrs.
Kathrin Menges was appointed to the Manage
ment Board as a new member and Executive Vice
President Human Resources, and we wish her
every success in this role. After more than thirty
years with Henkel, Dr. Lothar Steinebach will be
retiring at the end of June 2012; his successor will
be Mr.Carsten Knobel, due to take up his new
duties as of July 2012. We are particularly pleased
that we have been able to fill all these positions
Report of the Supervisory Board
Henkel Annual Report 2011 11
on the Management Board by promoting senior
managers with longstanding experience within
Henkel.
As in the previous year, fiscal 2012 is expected to
bring major challenges for our company, its em
ployees and its management. Many of the issues
and changes that characterized 2011 will remain
with us in 2012. Building on the significant pro
gress that our company has made in recent years,
we are convinced that Henkel is in excellent
shape and we look forward with confidence to
the further development of our company.
We thank you for your ongoing trust and support.
Dsseldorf, March 6, 2012
On behalf of the Supervisory Board
Dr. Simone Bagel-Trah
(Chairwoman)
Report of the Supervisory Board
Henkel Annual Report 2011 12
Our Management Board
Management Board
Dr. Lothar Steinebach
Executive Vice President
Finance (CFO) / Purchasing /
IT / Legal
Born in Wiesbaden,
Germany,
on January 25, 1948;
with Henkel since 1980.
Kathrin Menges
Executive Vice President
Human Resources
Born in Pritzwalk,
Germany,
on October 16, 1964;
with Henkel since 1999.
Kasper Rorsted
Chairman of the
Management Board
Born in Aarhus,
Denmark,
on February 24, 1962;
with Henkel since 2005.
Henkel Annual Report 2011 13 Management Board
Bruno Piacenza
Executive Vice President
Laundry & Home Care

Born in Paris,
France,
on December 22, 1965;
with Henkel since 1990.
Hans Van Bylen
Executive Vice President
Cosmetics/Toiletries
Born in Berchem,
Belgium,
on April 26, 1961;
with Henkel since 1984.
Jan-Dirk Auris
Executive Vice President
Adhesive Technologies

Born in Cologne,
Germany,
on February 1, 1968;
with Henkel since 1984.
Innovative brands
successful in local markets
In highly competitive markets, new products only succeed when they combine innovation with
a deep understanding of the regionally varied expectations and requirements of our customers
and consumers. The example of Persil Black, successful in both the Arab region and in European
markets, proves that Henkel knows how to get the combination right.
Ashraf El Afifi
Regional President and Corporate Senior Vice Presi-
dent for Laundry & Home Care in Africa/Middle East,
in conversation with Dr. Dagmar Preis-Amberger,
Head of Laundry Detergent Production in Dsseldorf.
Left: Maria Lancellotti.
DSSELDORF
GERMANY
Henkel Annual Report 2011 15
Formulated especially for black and dark
apparel, we initially launched Persil in
the Africa/Middle East region five years
ago under the name Persil Abaya. The
abaya is the predominantly black over
garment worn by most Arab women.
The liquid detergent combines true
cleaning power with special color pro
tection for black and dark garments
particularly important if these are washed
frequently. Since June 2011, Persil Black
has also been available in Germany,
Austria and Switzerland catching the
crest of a fashion wave. While black is
the traditional shade for women in the
Africa/Middle East region, the popular
ity of black and dark clothing has also
steadily risen in Western European
markets over recent years.
Persil Black or Persil Abaya is a perfect
example of what our mix of global tech
nology and local market expertise can
achieve, says Ashraf El Afifi, Regional
President and Corporate Senior Vice
President for Laundry & Home Care in
the Africa/Middle East region.
Cultural and regional knowledge transfer
He and his team regularly meet with
colleagues at headquarters in Dsseldorf
to discuss cultural specifics and provide
local expertise for the development of
consumertailored products. With
Dr.Dagmar PreisAmberger, Head of
Laundry Production in Dsseldorf, for
example, El Afifi reviews both common
alities and differences impacting the
production of Persil Black. Its great to
know that, with Persil Black, we can
build on the experience of our colleagues
from the Gulf States their insights are
invaluable for the entire process, from
production to marketing, says Preis
Amberger.
The formulations in Africa/Middle East
and Europe have some common attri
butes, while the fragrances are tailored
to cultural preferences. Package appear
ance and consumer communications are
also regionally aligned. Persil Abaya was
launched in the Gulf States through a
mix of TV commercials and a very suc
cessful viral online marketing campaign.
An interactive website was set up and
there was also a designer competition,
the abaya having transcended from
traditional garment to individual fashion
statement. In the Western European
markets, the consumer campaign relied
mainly on classic TV advertising, com
plemented by social media activities
such as a game on Facebook.
Thanks to our expertise in different
regions, we are able to launch global
innovations successfully in diverse
local markets. This is a special strength
of Henkel, says El Afifi.
Similar formulations, regionally tailored
product marketing, strong performance:
Persil Black and Persil Abaya for black
and dark apparel.
In the Dsseldorf liquid detergent factory, Maria Lancellotti monitors the filling
of Persil Black.
Excellence is our Passion
Persil Black is a
perfect example of
global technology
combined with
local market
expertise.
Ashraf El Afifi
Regional President and Corporate Senior
Vice President for Laundry & Home Care
in Africa/Middle East.

www.persilabayaworld.com
www.persil.de
MOSCOw
RUSSIA
DSSELDORF
GERMAnY
SHANGHAI
CHInA
ROCKY HILL
COnnECTICUT, USA
MANILA
PHILIPPInES
Diversity
an asset for a global company
Mixed teams are simply more successful. One example is the crossborder cooperation put in place
for the development and international marketing of Gliss Kur Ultimate Repair, a product range
specifically created for damaged and dry hair, successfully launched around the world in 2011.
Aida Rizvo
Head of Cosmetics/
Toiletries Marketing for
the Asia-Pacific region.
SHANGHAI
CHINA
Henkel Annual Report 2011 17
Pursuing the international exchange of ideas for the successful development of
innovations (from the left): Enis Toksoez, Regional Marketing Manager for Africa/
Middle East, Jasmin Goller, Head of International Marketing for the Gliss Kur brand,
Aida Rizvo, Head of Cosmetics/Toiletries Marketing for the Asia-Pacific region, and
Juan Pablo Molina, Country Manager for Peru and Ecuador.
After just six months on the market, the
Ultimate Repair line for damaged and
dry hair had become the most success
ful launch in the brand history of Gliss
Kur, leading to substantial market share
gains worldwide. In order to be able to
develop and market such globally suc
cessful innovations, the international
marketing experts from the Cosmetics/
Toiletries business sector regularly and
extensively share knowledge with their
counterparts in the different regions.
Internationality as an innovation driver
The key to our success lies in the inter
national mix of our teams, says Aida
Rizvo, Head of Cosmetics/Toiletries
Marketing for the AsiaPacific region,
who is located in Shanghai. A Bosnian
by birth, Rizvo has been in Shanghai
since June 2011. She speaks five languages
and now she is learning Mandarin. For
me, interacting with international col
leagues in closeknit teams is an integral
part of my work at Henkel, she adds.
Gliss Kur Ultimate Repair, which is
marketed under the name Extra Care
Ultimate Repair in China, was developed
in the strategic business unit in Dssel
dorf with the involvement of Jasmin
Goller, Head of International Marketing
for the Gliss Kur brand. She also kept in
close contact with Rizvo and other re
gional marketing experts such as Enis
Toksoez representing Africa/Middle East,
and Juan Pablo Molina, responsible for
Peru and Ecuador.
Our colleagues in other countries know
their local market, its consumers and
their preferences, better than anyone,
explains Jasmin Goller. Consequently,
interaction with them is vital for the
successful development and smooth
international launch of any innovation.
They all agree that international cooper
ation in diverse teams is what makes the
difference: the variety of knowledge of
consumer needs and marketing concepts
provides such teams with insights and
perspectives which are critical for the
successful launch of new and innovative
products in competitive markets.
Not just contact with international
colleagues but also working in other
countries provides invaluable experi
ence. For instance, Jasmin Goller, who
has Pakistani and German roots, has
already worked for Henkel in India. Enis
Toksoez is currently working in Dubai,
but has also gained experience in Russia.
And Colombian Juan Pablo Molina has
been working in Peru since the beginning
of 2011.
By working abroad, you learn how to
adjust to the mentalities, needs and
demands of other people, comments
Rizvo. This is a highly valuable skill to
acquire both for the individual person
ally and for the success of our global
brands.
Aida Rizvo
Head of Cosmetics/Toiletries Marketing
for the Asia-Pacific region.
Interacting with
international
colleagues is an
integral part of my
work at Henkel.
Excellence is our Passion
Successful in European and Asian
markets: Gliss Kur Ultimate Repair and
Extra Care Ultimate Repair are the result
of internationally coordinated insights
into consumer needs and preferences.



www.schwarzkopf-retail.com.cn
www.glisskur.schwarzkopf.de
DSSELDORF
GERMAnY
MOSCOw
RUSSIA
SHANGHAI
CHInA
ROCKY HILL
COnnECTICUT, USA
MANILA
PHILIPPInES
High-performance products
for advanced customer needs
Sales of smartphones and tablet computers are increasing rapidly. And consumer expectations for
these mobile devices are rising just as fast. They expect them to become ever more portable, yet
more robust and reliable. Henkels Adhesive Technologies business sector helps manufacturers to
meet these challenges by developing materials for handheld device assembly and semiconductor
packaging.
Andrew J. Bardon
Senior Application Engineer in Technical
Customer Service, North America. Far left:
Karl Gabrielson and Susan Levandoski.
ROCKY HILL
CONNECTICUT, USA
Henkel Annual Report 2011 19
Henkel Adhesive Technologies manu
factures materials for a wide range of
applications from inside the chip to
the outside of the mobile device. Under
fills, for example, help ensure that if
your mobile device is dropped, it will
still work. Electrically conductive sol
ders are used to secure semiconductor
devices to circuit boards and establish
the electrical connections so that data
and information can be processed and
transmitted by mobile electronic devices.
Structural adhesives bond the device
housing, buttons, connectors and dis
plays. Henkel adhesives can be found
in most smartphones and tablets around
the globe, says Andrew J. Bardon, Senior
Application Engineer in Technical Cus
tomer Service.
Customized global solutions
Henkel has several development labora
tories located around the globe, each set
up to validate our materials in equip
ment similar to what our customers use.
Working in our labs in Rocky Hill, Con
necticut, USA, Bardon states: We test
our materials in the same way as our
customers, which gives us great insight
on how to improve our formulations.
Henkels adhesives are dispensed using
special equipment, including an innova
tive Loctite 4530 HC dispensing robot.
This unit was developed by Henkel
specifically for dispensing structural
ad hesives, not only for testing but also
for highvolume manufacturing at
customers. Andrew Bardon continually
checks that the robot is dispensing the
adhesive correctly applying an ultrafine
strand with a diameter of just 0.35 milli
meters at a speed of 50 millimeters per
second. The Loctite 4530 HC is offered to
customers together with Henkel adhe
sives as a complete system solution that
perfectly matches their advanced needs.
Henkel teams comprised of researchers,
engineers and sales managers support
manufacturers throughout the product
design and production process. We test
our products on prototypes and often
participate in the design of nextgenera
tion mobile devices, states Bardon.
After we complete development with
our customers design centers, we hand
off the materials for production testing
and implementation in Asia, where the
handheld devices are generally produced
on a large scale.
Rapid response, technological expertise,
and timely customer interaction are
essential for successful collaboration
in fastpaced markets, like electronics.
Thus, we have strategically located our
Henkel material design and test labora
tories close to customers. For example,
the site in Irvine, California, USA, is
closely located to customer design
centers, while our Shanghai design
center is close to the manufacturing
hubs in China. This way, products can
be engineered and tested around the
clock.
Excellence is our Passion
The handheld devices team in Shanghai conducts processing tests to ensure top
quality parts made with adhesives from Henkel Adhesive Technologies. From the left:
Howard Qin Zhu, Dr. John Ouyang and Jessica Zhou.
We offer our
customers tailor
made solutions for
nextgeneration
mobile devices.
Andrew J. Bardon
Senior Application Engineer in Technical
Customer Service, north America.

www.henkel.com/electronics
www.loctite.com
MOSCOw
RUSSIA
DSSELDORF
GERMAnY
SHANGHAI
CHInA
ROCKY HILL
COnnECTICUT, USA
MANILA
PHILIPPInES
Speed and precision in the bonding of
electronic components with the inno-
vative Loctite 4530 HC dispensing robot.
Process excellence
through global shared services
Shared service centers offer greater efficiency, transparency and global standardization in a
broad range of administrative and business processes. In addition to providing services for cor
porate functions such as Human Resources, Purchasing and Finance, teams in Henkels shared
service centers are now also being assigned to support processes serving our three business
sectors.
Catherene Conde
Staff member of the Shared Service
Center in Manila, Philippines.
MANILA
PHILIPPINES
Henkel Annual Report 2011 21
Team meeting at the Shared Service Center in Manila: Catherene Conde (right) with
Head of SSC Barbara Elaine Kunkle and her colleague Martin Roger Daquer.
Established in 2011, the Shared Service
Center in Mexico City has about 100
employees supporting financial pro-
cesses aligned to the Latin America
region.
Catherene Conde is one of around 400
Henkel employees working in our Shared
Service Center in Manilas Makati finan
cial district. The site was established in
2003 as the first of three global Henkel
shared service centers. These centers are
already managing numerous processes
and providing extensive services for
Henkel, from invoice accounting to
capturing and updating product and
customer data. The teams in Manila
primarily support the regions of Asia
Pacific and North America, although
they also have global responsibility for
certain processes.
My colleagues and I are fully committed
to working toward a common objective:
We aim to constantly improve our service
level day by day so that we can become
ever more reliable, faster and more effi
cient, says Conde. We started out sup
porting the functions of Finance, Purchas
ing, Human Resources and Information
Technology. Since 2011, however, we have
also been working for Market Research
and supporting the management of
master data for different business units.
Its an exciting development.
Faster and more efficient
Around the world there are about 1,000
employees located in Manila (Philip
pines), Bratislava (Slovakia) and Mexico
City (Mexico) making an important
contribution to the steady improvement
in efficiency at Henkel.
The three shared service centers perform
a number of different tasks which can be
globally standardized because they do
not require indepth local expertise
unlike the development of new products
or marketing in specific segments and
geographic areas. Each year, for example,
the centers handle around 1 million in
voices and make 750,000 payments,
they process 44,000 purchase orders
and enter the details of more than
10,000 new customers into their systems.
Shared service centers offer a range of
support activities for different organiza
tional units based entirely on standard
ized processes and IT tools. Since the
establishment of these service centers,
Henkel has been able to reduce its num
ber of SAP systems. However, the fewer
systems we now have are more wide
ranging and integrated, which in turn
promotes the further standardization
and optimization of our processes.
Within the shared service centers, we
see ourselves as a global process network
working for Henkels overall benefit. In
this role we not only exchange expertise
across the SSC organization but also work
very closely with the local administrative
units, Conde explains. Previously, many
similar if not identical activities need
ed to be carried out by different colleagues
at various locations, each using their own
systems and processes. We help to ensure
that such processes are clearly defined so
that they can then be executed by our
specialist teams on an integrated basis,
faster and more costefficient. And for our
colleagues in the markets, this ultimately
means more time dedicated to further
strengthening customer relationships.
Catherene Conde
Staff member of the Manila Shared
Service Center in the Philippines.
To become
consistently more
reliable, faster
and more cost
efficient thats
our aim.
Excellence is our Passion
MOSCOw
RUSSIA
DSSELDORF
GERMAnY
SHANGHAI
CHInA
ROCKY HILL
COnnECTICUT, USA
MANILA
PHILIPPInES
Employee development
challenging and rewarding talents
In a highly competitive environment, a strong commitment to high performance is vital for Henkels
success. By applying globally uniform talent management and development processes, and a compen
sation system based on our Development Round Table meetings, we ensure that our managerial staff
of about 9,000 receive clear and differentiated feedback, as well as recognition for outperformance.
Dr. Zuzana Schtz-Halkova
Vice President Human Resources for Central and Eastern
Europe, with Ildar Akbaev, Head of General Industry in the
Adhesive Technologies business sector, discussing the
development of his team.
MOSCOw
RUSSIA
Henkel Annual Report 2011 23
A meeting of the Cosmetics/Toiletries team for Central and Eastern Europe:
Dr. Zuzana Schtz-Halkova (second from the right) advises Vice President Cosmetics/
Toiletries Georg Hbenstreit (fourth from the right) and his team at a DRT that she
and Monika Rauscher (standing) organized.
As VP Human Resources for Central
and Eastern Europe, Dr. Zuzana Schtz
Halkova consults with our toplevel
managers in the region during their
Development Round Tables (DRTs).
In the course of these highly interactive
annual meetings, line managers discuss
the performance, the potential, and
the career opportunities and related
development requirements of their
employees.
Each year, we hold about 50 DRT
meetings covering the entire Central
and Eastern Europe region. These are
our forum for discussing the perfor
mance of our managers within their
spheres of responsibility, and also
possible areas where we can further
support their development, explains
SchtzHalkova. The employees con
cerned subsequently receive compre
hensive feedback from their line manag
ers in an appraisal meeting. The two
participants then agree on the individual
development measures required. Im
particularly proud of the fact that these
annual DRT meetings provide all our
managers around the world with the
same career development opportuni
ties, says SchtzHalkova. My HR col
leagues conduct the process in exactly
the same way in all the countries and
regions in which Henkel operates.
Enhancing our performance-based
feedback culture
The measures derived from the DRT
meetings help to identify, further develop
and effectively deploy talent within
Henkel. In the Central and Eastern Europe
region (CEE), for example, more than
160employees were identified for assign
ment to international postings in 2011. As
well as organizing numerous specialist
and management seminars often using
our CEE Academy platform we also
supported the advancement of around
100managerial staff in our eight develop
ment centers.
An important aspect of the DRT system
is the identification of performance
differentials among our employees
through indepth discussion and evalu
ation by a group of supervising manag
ers. Based on this differentiated assess
ment, we are able to offer aboveaverage
rewards for excellent performance.
At Henkel, we have established a culture
that promotes open feedback combined
with a strong focus on performance,
explains SchtzHalkova. And the
example set by managers is important
for further extending its reach. For
management means not only assembling
and further developing good teams, it
also means dealing with all employees
fairly on the basis of mutual trust and
respect. It is essential that we encourage
each member of the Henkel team to take
full responsibility for their contribution,
clearly identifying areas for improvement
and appropriately rewarding success.
Excellence is our Passion
MOSCOw
RUSSIA
DSSELDORF
GERMAnY
SHANGHAI
CHInA
ROCKY HILL
COnnECTICUT, USA
MANILA
PHILIPPInES
Dr. Zuzana Schtz-Halkova
Vice President HR for Henkel
Central and Eastern Europe
Our aim is to
properly assess
performance,
identify potential
and provide the
best development.
o o
o o
o
zo
o
uo
o
zo
o
uo
key data on Penkel shares zoo/ to zo
ln euros 2007 ' 2008 2000 2010 2011
Larnings er share
Urdlnary share 2.12 2.81 1.88 2.S7 2.88
lreferred share 2.14 2.88 1.4u 2.S0 2.00
$hare rice at year-end
Urdlnary share 84.0S 18.7S 81.1S 88.62 87.40
lreferred share 88.48 22.S0 86.48 46.S4 44.50
High for the year
Urdlnary share 87.Su 84.0S 81.6u 4u.8u 41.10
lreferred share 41.6u 88.48 86.87 48.4u 40.81
Low for the year
Urdlnary share 20.06 16.68 16.10 8u.81 80.78
lreferred share 88.7u 10.8u 17.84 8S.21 86.00
bividends
Urdlnary share u.S1 u.S1 u.S1 u.7u

0.78
lreferred share u.S8 u.S8 u.S8 u.72 0.80
Market caita|ization in bn euros 15.0 8.0 14.6 18.8 17.6
Urdlnary share ln bn euros 0.1 4.0 8.1 1u.u 0.7
lreferred share ln bn euros 6.8 4.u 6.S 8.8 7.0
' Comarable based on share sllt (1.8) of june 18, 2uu7.
` Closlng share rlces, xetra tradlng system.
lroosal to shareholders for Annual ueneral ueetlng on Arll 16, 2u12.
jan. zooz zoo zoou zoo zoo6 zoo/ zoo8 zoo zoo zo leb. uar. Ar. uay june july Aug. Set. Uct. tov. uec.
Penkel referred share Penkel referred share
Penkel ordlnary share (lndexed) Penkel ordlnary share (lndexed)
uj Luro Stoxx Consumer uoods (lndexed) uj Luro Stoxx Consumer uoods (lndexed)
uAx (lndexed) uAx (lndexed)
Penkel share erformance versus market
january through uecember zo
ln euros
Penkel share erformance versus market
zooz through zo
ln euros
Dec.28,2001:
21.11 euros
Dec.l0,2011:
44.50 euros
Dec.l1,2010:
46.54 euros
Dec.l0,2011:
44.50 euros
Shares and bonds
Shares and bonds
Penkel shares track hlgher than overall market
Penkel referred shares uAx o welghtlng lncreased
Penkels osltlon ln leadlng sustalnablllty lndlces connrmed
lnternatlonal, wldely dlverslned shareholder structure
24 Penkel Annual keort zo
Overall, the price of Henkel shares decreased
slightly in the course of 2011. In the wake of the
growing severity of the debt crisis and the asso-
ciated recession fears, the DAX experienced a
decline of 14.7 percent compared to the closing
figure for the preceding year. The industry bench-
mark in the form of the Dow Jones Euro Stoxx
Consumer Goods Index decreased 9.6 percent.
Within this market environment, the price of
Henkel preferred shares fell to 44.59 euros, closing
the year 4.2 percent below the prior-year level.
Our ordinary share prices likewise declined slight-
ly, ending the year 3.1 percent down at 37.40 euros.
This means our shares withstood the general
decline better than both the DAX and the shares
representing the consumer goods sector.
In the course of the year, Henkel shares tended
to track the overall market, although generally
performing somewhat better. In the first quarter,
a period characterized by worldwide political
upheavals, natural disasters and a mixed set of
share price developments on the stock exchanges,
Henkel share prices declined. In the more posi-
tive market environment of the second quarter,
Henkels shares increased significantly in value,
reaching historic highs in May of 49.81 euros for
the preferred share and 41.10 euros for the ordinary
share. In the third quarter, rendered particularly
difficult by the debt crises in Europe and the USA,
Henkels shares suffered double-digit price de-
clines, although still tracking somewhat better
than the overall market. In the fourth quarter,
Henkels shares once again rose appreciably in
value, concluding fiscal 2011 slightly down but
substantially outperforming comparative
indices.
The preferred share premium versus the ordinary
share in 2011 averaged 20.8 percent.
The trading volume of preferred shares was slight-
ly below the prior-year level. Each trading day
saw an average of 0.9 million preferred shares
changing hands (previous year: 1.0 million). The
average volume in the case of our ordinary shares
decreased to 120,000 per trading day (previous
year: 130,000). Due to price movements, the mar-
ket capitalization of our ordinary and preferred
stock combined decreased from 18.3 billion euros
to 17.6 billion euros.
For long-term investors, Henkels shares remain
an attractive investment. Shareholders who in-
vested the equivalent of 1,000 euros when Henkels
preferred shares were issued in 1985, and then
re-invested the dividends received (before tax
deduction) in the stock, would have had a port-
folio value of about 13,974 euros by the end of 2011.
This represents an investment growth of 1,297 per-
cent or an average yield of 10.6 percent per year.
Over the same period, DAX tracking would have
provided an annual yield of 6.4 percent. Over the
last five and ten years, Henkel preferred shares
have shown an average yield of 5.6 and 9.6 percent
per year respectively, offering a significantly
higher return than the DAXs 2.7 percent and
1.3 percent in the same respective periods.
Henkel represented in all major indices
Henkel shares are traded on the Frankfurt Stock
Exchange, predominantly on the Xetra electronic
trading platform. Henkel is also represented on
all the other regional stock exchanges in Germany.
In the USA, investors are able to acquire Henkel
prefer red and ordinary shares by way of stock own-
ership certificates obtained through the Spon-
sored Level I ADR (American Depositary Receipt)
program. The number of ADRs representing
ordinary and preferred shares outstanding at the
end of the year was about 3.7 million (end of 2010:
4.1 million).
Share data
Preferred Ordinary
Security code no. 604843 604840
ISIN code DE0006048432 DE0006048408
Stock exch. symbol HEN3.ETR HEN.ETR
Number of shares 178,162,875 259,795,875
ADR data
Preferred Ordinary
CUSIP 42550U208 42550U109
ISIN code US42550U2087 US42550U1097
ADR symbol HENOY HENKY
17.6bneuros
market capitalization.
Henkel Annual Report 2011 25 Shares and bonds
Shares and bonds
Shareholder structure:
Institutional investors
holding Henkel
preferred shares
24% USA
23% UK
17% Germany
10% France
18% Rest of Europe
8% Rest of world
Source: Thomson Reuters.
The international importance of Henkel preferred
shares derives not least from their inclusion in
major indices that serve as important indicators
for the capital markets and as benchmarks for
fund managers. Particularly noteworthy in this
respect are the MSCI World, the Dow Jones Euro
Stoxx, and the FTSE World Europe indices. Henkel
is also listed in the Dow Jones Titans 30 Personal &
Household Goods Index, confirming our position
as one of the 30 most important listed corpora-
tions operating in the personal and household
goods sectors worldwide. And as a DAX stock,
Henkel counts as one of the 30 most important
listed companies in Germany.
Once again our advances and achievements on
the sustainable development front likewise
impressed the independent experts in 2011.
Henkels position in various national and inter-
national sustainability ratings and indices was
further confirmed. The Dow Jones Sustainability
Index (World and Europe) listed Henkel for the
fifth consecutive year as industry leader in the
market sector Nondurable Household Goods.
Our place in the FTSE4Good Ethical Index was
likewise confirmed, as was our continued mem-
bership of the Ethibel Sustainability Index. In
the latter, Henkel is one of just 200 corporations
included from around the world. Henkel was also
inducted into the Stoxx Global ESG Leaders index
family newly launched in 2011 by Deutsche Brse
(German Stock Exchange), and is thus listed as a
sustainable security in the associated informa-
tion portal. Since April 2011, the portal has acted
as a funnel combining all the sustainable securities
listed for trading on the German stock exchange.

As of year-end 2011 the market capitalization of
the DAX-relevant preferred shares was 7.9 billion
euros, placing Henkel 20th among DAX companies
(2010: 21st). In terms of trading volumes, Henkel
was ranked 27th on the list (2010: 26th). Our DAX
weighting rose to 1.52 percent (2010: 1.32 percent).
International shareholder structure
The ownership structure of our preferred shares
the significantly more liquid class of stock shows
a free float of 100 percent. A large majority of
these shares are owned by institutional investors
with globally distributed shareholdings.
According to notices of disclosure received by the
company, members of the Henkel family own
amajority of the ordinary shares amounting to
53.21percent. We have received no further notices
of disclosure from other shareholders indicating a
shareholding in excess of 3 percent of the voting
shares (noti fiable ownership).
In the period up to 2007, Henkel repurchased
around 7.5 million preferred shares to fund the
Stock Incentive Plan operated for our senior
executive personnel. As of December 31, 2011,
this treasury stock amounted to 3.8 million
preferred shares.
Employee share program
Since 2001, Henkel has been operating an em-
ployee share program (ESP). For each euro invested
in 2011 by an employee (limited to 4 percent of
salary up to a maximum of 5,000 euros per year),
Henkel added an additional 33 eurocents. Around
11,000 employees in 54 countries purchased
Henkel preferred shares under this program in
2011. At year-end, some 14,500 employees held a
total of around 3 million shares within the ESP,
re presenting roughly 1.7 percent of total pre-
ferred shares outstanding. The vesting period
for newly acquired ESP shares is three years.
Henkel bonds
Henkel is represented in the international bond
markets by three bonds with a total nominal
volume of 3.3 billion euros:
Bond data
Seniorbond Seniorbond Hybridbond
Due date June 10, 2013 Mar. 19, 2014 Nov. 25, 2104 1
Volume 1.0 bn euros 1.0 bn euros 1.3 bn euros
Nominal
coupon

4.25 %

4.625 %

5.375 %
Coupon
payment
date


June 10


March 19


Nov. 25
Listing Frankfurt Luxembourg Luxembourg
Security
code no.

664196

A0AD9Q

A0JBUR
ISIN code DE0006641962 XS0418268198 XS0234434222
1 First call option for Henkel on November 25, 2015.
Further detailed information regarding these bonds,
current developments in their respective prices
and the associated risk premium (credit margin)
can be found on our website
www.henkel.com/bonds
Henkel Annual Report 2011 26
Shares and bonds
Analyst recommendations
41% Buy
44% Hold
15% Sell
At December 31, 2011.
Basis: 32 equity analysts.
Pro-active capital market communication
Henkel is covered by numerous financial analysts,
primarily in the UK, Germany and the USA.
Over 35 equity and debt analysts regularly publish
reports and commentaries on the performance
of the company.
Henkel places great importance on meaningful
dialogue with both investors and analysts. In 2011,
institutional investors and financial analysts
were afforded the opportunity to talk directly with
our top management in more than 25 capital
market conferences and road shows held in Europe
and North America.
The two highlights of the year were our Analyst
and Investor Conference held in Dsseldorf on
February 24, 2011, and our Investor Day for the
Cosmetics/Toiletries business sector, which took
place on May 17, 2011. At this latter conference
the Cosmetics/Toiletries management team pre-
sented the strategy and new developments of the
business sector to some 50 investors and analysts
from around the world. Outside such events,
we conducted numerous telephone conferences
and one-on-one meetings.
Retail investors are able to receive all relevant
information through telephone enquiry or via the
Investor Relations website at www.henkel.com/ir.
This also serves as the portal for the live broadcast
of telephone and analyst conferences, and the
part-transmission of the Annual General Meeting.
The AGM offers all shareholders the possibility of
obtaining extensive information directly from
Henkels management.
The quality of our capital market communication
was again evaluated in 2011 by various independent
rankings. Our Investor Relations team garnered
a number of top positions in various comparisons
with European corporations in the Home & Per-
sonal Care category, as well as with other DAX
companies including second place in the House-
hold Products & Personal Care sector in the
ThomsonExtel Pan-European Awards ranking.
And in the Institutional Investor ranking, Henkel
was voted by financial analysts as having the best
Investor Relations Team in the European House-
hold & Personal Care Products sector. Following
a study by the research institute Media Tenor,
Henkel took first place for the best media image
of all DAX 30 corporations in 2011.
The quality of our reporting of our non-financial
performance indicators (environmental, social
and governance [ESG] issues) was once again
acknowledged by financial market participants.
In the study Entrepreneurial Responsi bility in
the Age of Transparency carried out by the
auditing and business consultancy company
PricewaterhouseCoopers (PwC), the Henkel
Sustainability Report received the best overall
score of 95 percent. The UK agency Two Tomor-
rows placed Henkel in the second highest invest-
ment category (AA) in recognition of our trans-
parent reporting. In a sustainability rating
published in March 2011 by the German business
weekly WirtschaftsWoche in tandem with
Brse Online, Henkel was voted sector leader
and best German company out of a total of
around 3,000 entities analyzed. And as a partici-
pant in the Carbon Disclosure Project Germany,
Henkel was once again listed in the Carbon
Disclosure Leadership Index.
You will find a financial calendar with all our
earnings release and announcement dates on
the inside back cover of this Annual Report.
Henkel Annual Report 2011 27
29 Corporate governance
29 I. Corporate governance/
Corporate management report
36 II. Remuneration report
45 Operational activities
45 Overview
45 Organization and business sectors
45 Strategy and financial targets for 2012
46 Strategic priorities and progress in fiscal 2011
47 Progress in fiscal 2011
47 Financial targets 2012
48 Sustainability strategy 2030
51 Value-based management and control system
52 EVA

and ROCE
53 Statutory and regulatory situation
53 Business performance
53 World economy
55 Management Board review of business
performance
56 Sales and profits
58 Comparison between actual business
performance and guidance
58 Expense items
59 Other operating income and charges
59 Financial result
59 Net income
59 Dividends
59 Earnings per share (EPS)
60 Net assets and financial position
60 Acquisitions and divestments
60 Capital expenditures
61 Net assets
62 Financing and capital management
63 Financial position
63 Key financial ratios
64 Employees
67 Procurement
68 Production
70 Research and development
74 Marketing and distribution
76 Business sector performance
76 Laundry & Home Care
80 Cosmetics/Toiletries
84 Adhesive Technologies
88 Risk report
88 Risks and opportunities
88 Risk management system
89 Major risk categories
93 Overall risk Management Board appraisal
93 Forecast
93 Macroeconomic development
93 Sector development
94 Opportunities: Emerging markets and
innovative products with plenty of potential
94 Outlook for the Henkel Group in 2012
95 Post-2012 outlook
95 Subsequent events
Group management report
Subindex
Group management report
Subindex
28 Henkel Annual Report 2011
www.corporate-
governance-code.com
Corporategovernance
atHenkelAG&Co.KGaA
The Management Board, the Shareholders Com-
mittee and the Supervisory Board are committed
to ensuring that the management and steward-
ship of the corporation are conducted in a respon-
sible and transparent manner aligned to achieving
a long-term increase in shareholder value. In
keeping with this undertaking, they have pledged
themselves to the following three principles:
Value creation as the foundation of our
management approach.
Sustainability achieved through the application
of socially responsible management principles.
Transparency supported by an active and
open information policy.
I. Corporate governance / Corporate management
report
The German Corporate Governance Code (Kodex)
was introduced in order to promote confidence
in the management and oversight of listed German
corporations. It sets out the regulations and also
the internationally and nationally recognized
standards of responsible corporate management
as applicable to the situation in Germany. The
Kodex, which is aligned to the statutory provisions
applicable to a German joint stock corporation
(Aktiengesellschaft [AG]), is applied analogously
by Henkel AG & Co. KGaA. For a better under-
standing of the situation at Henkel, this report
describes the principles underlying the manage-
ment and control structure of the corporation
together with the special features, distinguishing
us from an AG, that derive from our specific legal
form and our Articles of Association. Also explained
in the following are the main rights granted to share-
holders of Henkel AG & Co. KGaA. The report takes
into account the recommen dations of the Kodex
and contains all the disclosures and explanations
required according to Sections 289(4), 289a and
315(4) of the German Commercial Code [HGB].
Legal form / Special statutory features of
Henkel AG & Co. KGaA
Henkel is a Kommanditgesellschaft auf Aktien
(KGaA). A KGaA is a company with its own legal
personality (i.e. it is a legal entity) in which at
least one partner assumes unlimited liability in
respect of the companys creditors (personally
liable partner). The other partners participate in
the capital stock, which is split into shares, and
their liability is limited by these shares; they are
thus not liable for the companys debts (limited
partners per Section 278 (1) German Stock Corpo-
ration Act [AktG]).
In terms of its legal structure, a KGaA is a
mixture of a joint stock corporation (AG) and a
limited partnership (KG), with the bias toward
stock corporation law. The differences with
respect to an AG are essentially as follows: The
duties of the executive board of an AG are per-
formed at Henkel AG & Co. KGaA by Henkel
Management AG acting through its Manage-
ment Board as the sole Personally Liable
Partner (Sections 278 (2) and 283 AktG in conjunc-
tion with Article 11 of our Articles of Association).
The rights and duties of the supervisory board
of a KGaA are more limited compared to those
of the supervisory board of an AG. In particular,
the supervisory board is not authorized to
appoint personally liable partners, to preside
over the associated contractual arrangements,
to impose procedural rules on the management
board or to rule on business transactions. A
KGaA is not required to appoint a director of
labor affairs, even if, like Henkel, the company
is bound to abide by Germanys Codetermina-
tion Act of 1976.
The general meeting of a KGaA essentially has
the same rights as the shareholders meeting
of an AG. In addition, it votes on the adoption
of the annual financial statements of the
corporation; it further formally approves the
actions of the personally liable partner(s). In
the case of Henkel, it also elects and approves
the actions of the members of the Shareholders
Committee. Resolutions passed in general
meeting require the approval of the personally
liable partner where they involve matters
which, in the case of a partnership, require the
authorization of the personally liable partners
and also that of the limited partners (Section 285
(2) AktG) or relate to the adoption of annual
financial statements (Section 286 (1) AktG).
According to our Articles of Association, in addition
to the Supervisory Board, Henkel also has a
standing Shareholders Committee comprising a
minimum of five and a maximum of ten mem-
bers, all of whom are elected by the Annual General
Meeting (AGM) (Article 27 of the Articles of Asso-
ciation). The Shareholders Committee is required
in particular to perform the following functions:
It acts in place of the AGM in guiding the busi-
ness activities of the corporation.
It decides on the appointment and dismissal
of the personally liable partner(s).
Group management report
Corporate governance
Henkel Annual Report 2011 29
right to vote either personally, by postal vote,
through a legal representative or through a proxy-
holder nominated by the company and are also
entitled to speak on agenda items, ask relevant
questions and propose reasonable motions.
Unless otherwise required by mandatory provi-
sions of statute or the Articles of Association, the
resolutions of the General Meeting are adopted
by simple majority of the votes cast and, inasmuch
as a majority of shares is required by statute, by
simple majority of the voting stock represented
(Art. 24 of the Articles of Association). This also
applies to changes in the Articles of Association.
However, modifications to the object of the
company require a three-quarters majority
(Section 179 (2) AktG).
Approved capital / Share buy-back
According to Art. 6 (5) of the Articles of Association,
there is an authorized capital limit. Acting with-
in this limit, the Personally Liable Partner is
authorized, subject to the approval of the Super-
visory Board and of the Shareholders Committee,
to increase the capital stock of the corporation
in one or several acts until April 18, 2015, by up to
a total of 25,600,000 euros through the issue
for cash of new preferred shares with no voting
rights. All shareholders are essentially assigned
pre-emptive rights. However, these may be
set aside in three cases: (1) in order to dispose
of fractional amounts; (2) to grant to creditors/
holders of bonds with warrants or conversion
rights or a conversion obligation issued by the
corporation or one of the companies dependent
upon it, pre-emptive rights corresponding to
those that would accrue to such creditors/bond-
holders following exercise of their warrant or
conversion rights or on fulfillment of their con-
version obligations; or (3) if the issue price of the
new shares is not significantly below the quoted
market price at the time of issue price fixing.
In addition, the Personally Liable Partner is
authorized to purchase ordinary and/or preferred
shares of the corporation at any time until April
18, 2015, up to a maximum nominal proportion of
the capital stock of 10 percent. This authorization
can be exercised for any legal purpose. To the
exclusion of the pre-emptive rights of existing
shareholders, treasury shares may, in particular,
be transferred to third parties for the purpose
of acquiring entities or participating interests
in entities. Treasury shares may also be sold
for cash, provided that the purchase price is not
It holds both the power of representation and
executive powers over the legal relationships
prevailing between the corporation and Henkel
Management AG, the Personally Liable Partner.
It exercises the voting rights of the corporation in
the General Meeting of Henkel Management AG.
It issues rules of procedure incumbent upon
Henkel Management AG (Section 278 (2) AktG) in
conjunction with Sections 114 and 161 HGB and
Articles 8, 9 and 26 of the Articles of Association.
Capital stock denominations / Shareholder rights
The capital stock of the corporation amounts
to 437,958,750 euros. It is divided into a total of
437,958,750 bearer shares of no par value, of
which 259,795,875 are ordinary bearer shares
(nominal proportion of capital stock: 259,795,875
euros or 59.3 percent) and 178,162,875 are preferred
bearer shares (nominal proportion of capital
stock: 178,162,875 euros or 40.7 percent). All the
shares are fully paid up.
Each ordinary share grants to its holder one vote.
The preferred shares accord to their holders all
shareholder rights apart from the right to vote.
Unless otherwise resolved in General Meeting,
the profit attributable to shareholders of Henkel
AG & Co. KGaA is distributed as follows: First,
the holders of preferred shares receive a preferred
dividend in the amount of 0.04 euros per pre-
ferred share. The holders of ordinary shares then
receive a preliminary dividend of 0.02 euros per
ordinary share, with the residual amount being
distributed to the holders of ordinary and
preferred shares in accordance with the propor-
tion of the capital stock attributable to them
(Art.35(2) of the Articles of Association). If the
preferred dividend is not paid out either in part
or in whole in a year, and the arrears are not paid
off in the following year together with the full
preferred share dividend for that second year, the
holders of preferred shares are accorded voting
rights until such arrears are paid (Section 140 (2)
AktG). Cancellation or limitation of this preferred
dividend requires the consent of the holders of
preferred shares (Section 141 (1) AktG).
There are no shares bearing cumulative/plural
voting rights, preferential voting rights or maxi-
mum voting rights (voting restrictions).
The shareholders exercise their rights in General
Meeting as per the relevant statutory provisions
and the Articles of Association of Henkel AG &
Co. KGaA. In particular, they may exercise their
Group management report
Corporate governance
Henkel Annual Report 2011 30
jority of the votes cast. In the event of a tie, the
Chairperson has the casting vote.
The Management Board agrees with the Share-
holders Committee the strategic alignment of
the corporation and discusses with the Share-
holders Committee at regular intervals the status
of implementation of said strategy.
In keeping with good corporate management
practice, the Management Board informs the Super-
visory Board and the Shareholders Committee
regularly, and in a timely and comprehensive
fashion, of all issues of relevance to the corporation
concerning business policy, corporate planning,
profitability, the business development of the
corporation and of major Group companies, and
also matters relating to risk exposure and risk
management.
For transactions of fundamental significance,
the Shareholders Committee has established
a right of veto in the procedural rules governing
the actions of Henkel Management AG in its
function as sole Personally Liable Partner (Art. 26
of the Articles of Association). This covers, in
particular, decisions or measures that materially
change the net assets, financial position or re-
sults of operations of the corporation. The Man-
agement Board complies with these rights of
consent of the Shareholders Committee and also
duly submits to the spheres of authority of the
corporations General Meeting.
The Shareholders Committee passes its resolutions
on the basis of a simple majority of the votes cast.
It has established a Finance Subcommittee and a
Human Resources Subcommittee, each of which
comprises five members of the Shareholders
Committee. The Finance Subcommittee deals
principally with the financial matters, accounting
issues including external auditing, taxation
planning and accounting policies, and the internal
auditing and risk management of the corporation.
It also carries out the necessary preparatory work
for decisions to be taken by the Shareholders
Committee in such affairs. The Human Resources
Subcommittee principally discusses personnel
matters relating to the members of the Manage-
ment Board, human resources strategy, and
remuneration. It is further concerned with suc-
cession planning and identifying management
potential within the individual business sectors,
taking into account relevant diversity aspects.
materially below the quoted market price at the
time of share disposal. The shares may likewise
be used to satisfy warrants or conversion rights
granted by the corporation. The Personally Liable
Partner has also been authorized with the
approval of the Shareholders Committee and of
the Supervisory Board to cancel treasury stock
without further resolution in General Meeting
being required.
Inasmuch as shares may be issued or used to the
exclusion of pre-emptive rights, the proportion
of capital stock represented by such shares shall
not exceed 10 percent.
Major shareholders
According to notifications received by the com-
pany on October 21, 2010, a total of 53.21 percent
of the voting rights are held by parties to the
Henkel familys share-pooling agreement. This
agreement was concluded between members
of the families of the descendants of company
founder Fritz Henkel; it contains restrictions
with respect to transfers of the ordinary shares
covered (Art. 7 of the Articles of Association).
Interaction between Management Board, Super-
visory Board, Shareholders Committee and other
committees
The Management Board, the Shareholders Com-
mittee and the Supervisory Board are committed
to ensuring that the management and steward-
ship of the corporation are conducted in a respon-
sible and transparent manner aligned to achiev-
ing a long-term increase in shareholder value. In
keeping with this undertaking, they have pledged
themselves to the following three principles:
The members of the Management Board are re-
sponsible for managing Henkels business opera-
tions in their entirety. To this end, the individual
Management Board members are assigned in
accordance with a business distribution plan
areas of competence for which they bear lead
responsibility. The members of the Management
Board cooperate closely as colleagues, informing
one another of all major occurrences within their
areas of competence and conferring on all ac-
tions that may affect several such areas. Further
details relating to cooperation and the division
of operational responsibilities are regulated by
rules of procedure issued by the Supervisory
Board of Henkel Management AG. The Manage-
ment Board reaches its decisions by a simple ma-
53.21%
of voting rights held by
members of the Henkel
share-pooling agreement.
Group management report
Corporate governance
Henkel Annual Report 2011 31
The Nominations Committee comprises the
Chairperson of the Supervisory Board and two
further shareholder representatives elected by the
shareholder representatives on the Supervisory
Board; the Chairperson of the Supervisory Board is
also Chairperson of the Nominations Committee.
The Nominations Committee prepares the pro-
posals to be submitted by the Supervisory Board
to the Annual General Meeting for the election of
members to the Supervisory Board (shareholder
representatives).
At regular intervals, the Supervisory Board and
the Shareholders Committee hold an internal
review to determine the efficiency with which
they and their committees/subcommittees carry
out their duties. This self-assessment is performed
on the basis of an extensive checklist, whereupon
points relating to corporate governance and im-
provement opportunities are also discussed.
Pursuant to the German Corporate Governance
Code (Kodex), conflicts of interest must be dis-
closed in an appropriate manner to the Super-
visory Board or Shareholders Committee, partic-
ularly those that may arise as the result of a
consultancy or committee function performed in
the service of customers, suppliers, lenders or
other business partners. Members encountering
material conflicts of interest that are more than
just temporary are required to resign their mandate.
Some members of the Supervisory Board and of
the Shareholders Committee are or were in past
years holders of senior managerial positions
in other companies. Inasmuch as Henkel pursues
business activities with these companies, the
same arms length principles apply as those
applicable to transactions with and between un-
related third parties.
For more details on the composition of the Man-
agement Board, the Supervisory Board and the
Shareholders Committee, the committees estab-
lished within the Supervisory Board and the
subcommittees of the Shareholders Committee,
please refer to

pages 156 to 159. Details of
compensation can be found in the remuneration
report on

pages 36 to 44.
Objectives regarding Supervisory Board composition
Taking into account the specific situation of the
corporation, in December 2010 the Supervisory
Board passed a resolution detailing the objec-
tives for its composition as detailed below. These
It is the responsibility of the Supervisory Board
to advise and supervise the Management Board
in the performance of its business management
duties. The Supervisory Board also reviews the
annual financial statements of Henkel AG & Co.
KGaA and the consolidated financial statements,
taking into account the audit reports submitted
by the auditor. It further submits to the Annual
General Meeting a proposal indicating its recom-
mendation for the appointment of the external
auditor.
As a rule, the Supervisory Board meets four times
per year. It passes resolutions by a simple majority
of votes cast. In the event of a tie, the Chairperson
has the casting vote. The Supervisory Board has
established an Audit Committee and a Nominations
Committee. The Audit Committee is made up of
three shareholder- and three employee-represen-
tative members of the Supervisory Board, each
elected by the Supervisory Board based on propo-
sals of their fellow shareholder or fellow employee
representatives on the Supervisory Board. The
Chairperson of the Audit Committee is elected by
the shareholder representative members on the
Supervisory Board. It is a statutory requirement
that the Audit Committee includes an independent
member of the Supervisory Board with expertise
in the fields of accounting and auditing. The Chair-
person of the Audit Committee, Dr. Bernhard
Walter, who is not the Chairperson of the Super-
visory Board or a former member of the Manage-
ment Board, satisfies these requirements. The
Audit Committee, which generally meets four
times a year, prepares the proceedings and reso-
lutions of the Supervisory Board relating to the
adoption of the annual financial statements and
the consolidated financial statements, and also
the auditor appointment proposal to be made
to the Annual General Meeting. It issues audit
mandates to the auditor and defines the focal
areas of the audit or review, as well as dealing with
questions of audit fee and other advisory services
provided by the auditor. It monitors the indepen-
dence and qualifications of the auditor, requiring
the latter to submit a declaration of independence
which it then evaluates. The Audit Committee
monitors the accounting process and assesses the
effectiveness of the internal control system, the
risk management system and the internal auditing
and review system, as well as being involved in
compliance issues. It also discusses with the
Management Board, with the external auditor in
attendance, the quarterly reports and the financial
report for the half-year prior to their publication.
Group management report
Corporate governance
Henkel Annual Report 2011 32
international expertise. No-one sitting on the
Supervisory Board exceeds the specified maxi-
mum age.
In accordance with the proposal put forward by
the Executive Staff Representation Committee of
Henkel AG & Co. KGaA, Dsseldorf District Court
appointed Dr. Martina Seiler as member of the
Supervisory Board to replace Mr. Ulf Wentzien, who
resigned from the Supervisory Board as the Rep-
resentative of the Senior Staff of Henkel AG & Co.
KGaA on December 31, 2011. This means that
currently five of the 16 members of the Supervisory
Board are female, and the proportion of women
on the Supervisory Board stands at around 31 per-
cent. In keeping with the objective of, where
possible in new elections, increasing the propor-
tion of seats occupied by women, the Supervisory
Board proposes to the 2012 Annual General Meet-
ing that, for the scheduled re-election of the
shareholder representatives, two women instead
of one as has previously been the case be elected
to the Supervisory Board. Subject to the proposed
candidates being elected, this would increase the
proportion of female representatives on the Super-
visory Board to around 38 percent.
Transparency / Communications
An active and open communication policy ensur-
ing prompt and continuous information dissemi-
nation is a major component of the value-based
management approach at Henkel. Hence share-
holders, shareholder associations, participants in
the capital market, financial analysts, the media
and the public at large are kept informed of the
current situation and major business changes
relating to the Henkel Group, with all stakeholders
being treated equally. All such information is
also promptly made available on the internet.
Up-to-the-minute information is also incorpo-
rated in the regular financial reporting undertaken
by the corporation. The dates of the major recur-
ring publications, including the dates for the
press conference on the preceding fiscal year and
the Annual General Meeting, are announced in
our financial calendar, which is also available on
the internet.
The corporations advancements and targets in
relation to the environment, safety, health and
social responsibility are published annually in
our Sustainability Report. Shareholders, the
media and the public at large are provided with
objectives, to be reviewed at regular intervals,
will be taken into account by the Supervisory Board
when proposing election candidates to the Annual
General Meeting for all re-electable and ad-hoc
replacement Supervisory Board positions:
The members of the Supervisory Board should,
generally speaking, offer the knowledge, skills
and relevant experience necessary in order
to properly perform their duties. Particularly
required are experience and expertise in one
or several of the fields of corporate management,
book-keeping and accountancy, financial
control/risk management, corporate gover-
nance/compliance, research and development,
production/technology, and marketing/sales/
distribution, as is knowledge of the industrial
or consumer business in the primary markets
in which Henkel is active. Members of the
Supervisory Board should also have sufficient
time at their disposal in order to carry out
their mandate.
The international activities of the corporation
should be appropriately reflected in the com-
position of the Supervisory Board. Consequently,
efforts will be made to retain those current
members with an international background.
The mix of candidates proposed for election
should also contain an appropriate number of
women. Here, a proportion of 25 percent is
essentially regarded as appropriate. Efforts will
therefore be made to maintain or, if possible,
increase this proportion for upcoming new
and ad-hoc replacement elections.
In addition, the Supervisory Board should have
a sufficient number of independent members.
In future, therefore, the Supervisory Board is
to contain not more than two former members
of the Management Board, no persons who
perform board or committee functions or act
as consultants for major competitors, and no
persons whose relationship with the corpora-
tion or members of the Management Board
could give rise to conflicts of interest. Further,
no persons shall be proposed for election
who, at the time of the election, have already
reached their 70th birthday.
Objectives attainment status
Generally, the Supervisory Board has at its disposal
the knowledge, skills and technical abilities
needed to properly and effectively perform its
duties. In particular, the Supervisory Board
counts among its number several members offer-
ing international business experience or other
Around 31%
Supervisory Board
membership female.
Group management report
Corporate governance
Henkel Annual Report 2011 33
expects all its employees not only to respect the
companys internal rules and all relevant laws,
but also to avoid conflicts of interest, to protect
Henkels assets and to respect the customs, tradi-
tions and social values of the countries and cul-
tural environments in which the company does
business. The Management Board has therefore
issued a series of Group-wide codes, standards
and guidelines with binding precepts. These reg-
ulatory instruments are regularly reviewed and
amended as appropriate, evolving in step with
the changing legal and commercial conditions
that affect Henkel as a globally active corporation.
Our Code of Conduct supports our employees in
dealing with ethical and legal issues; our Code of
Teamwork and Leadership defines the approach,
actions and attitudes to be adopted by manage-
ment and employees in their interpersonal deal-
ings; and the Code of Corporate Sustainability
describes the principles that underlie our approach
to sustainable, socially responsible development.
These codes also enable Henkel to meet the
commitments derived from the Global Compact
of the United Nations.
Ensuring compliance in the sense of obeying
laws and adhering to regulations is an integral
component of our business processes. Henkel
has established a Group-wide compliance organi-
zation with locally and regionally responsible
compliance officers led by a globally responsible
Chief Compliance Officer. The CCO manages and
controls compliance-related activities undertaken
at the corporate level, coordinates training courses,
oversees fulfillment of both internal and external
regulations, and supports the corporation in the
further development and implementation of the
associated standards. He is assisted in this capacity
by Internal Audit, and also by a Compliance
Committee of interdisciplinary composition.
The remit of the local and regional compliance
officers includes organizing and overseeing the
training activities and implementation measures
tailored to the specific requirements of their
locations. They report through the locally or
regionally responsible presidents to the Chief
Compliance Officer. The CCO and the head of
Internal Audit report regularly to the Management
Board and also the Audit Committee of the Super-
visory Board on identified compliance violations.
The issue of compliance is also a permanent item
in the target agreements signed by all managerial
comprehensive information through press re-
leases and information events, while occurrences
with the potential to materially affect the price of
Henkel shares are communicated in the form of
ad-hoc announcements.
Further details relating to corporate governance can
be found on our website at www.henkel.com/ir
Principles of corporate management / Compliance
The members of the Management Board conduct
the corporations business with the care of a pru-
dent and conscientious business director in ac-
cordance with the requirements stipulated in
law, in the Articles of Association of Henkel Man-
agement AG and the Articles of Association of
Henkel AG & Co. KGaA, the rules of procedure
governing the actions of the Management Board,
the provisions contained in the individual con-
tracts of employment and also the compliance
guidelines and resolutions adopted by and with-
in the Management Board.
Corporate management principles which go be-
yond the statutory requirements are derived
from our vision and our values. For our company
to be successful, it is essential that we share
acommon approach to entrepreneurship. The
companys vision provides its management and
employees worldwide with both direction and
aprimary objective. It reaffirms our ambition to
meet the highest standards in everything we do.
Our vision:
A global leader in brands and technologies.
Our vision provides the foundation for building
acompany with a common ethic: One Henkel.
The companys values guide its employees in all
the day-to-day decisions they make, providing
acompass for their conduct and actions.
Our values:
We put our customers at the center of what we do.
We value, challenge and reward our people.
We drive excellent sustainable financial per-
formance.
We are committed to leadership in sustainability.
We build our future on our family business
foundation.
Henkel is committed to ensuring that all business
transactions are conducted in an ethically irre-
proachable, legal fashion. Consequently, Henkel
Group management report
Corporate governance
Henkel Annual Report 2011 34
Application of the German Corporate
Governance Code
Taking into account the special features arising
from our legal form and Articles of Association,
Henkel AG & Co. KGaA complies with the recom-
mendations (shall provisions) of the German
Corporate Governance Code (Kodex), with two
exceptions: (1) The executive contracts concluded
in 2008 with respect to those members of the
Management Board who were appointed in con-
junction with the establishment of Henkel Man-
agement AG as the Personally Liable Partner in
2008 and whose mandate since that time has not
yet been extended for a period of more than two
years, contain no severance pay cap in the event
of premature termination of their tenure as exec-
utives of the corporation without good cause or
reason, i.e. severance payouts may exceed the
formal maximum of two years emoluments.
Newly concluded post-2008 executive contracts
and executive contracts extended for a period of
more than two years do contain a severance pay
cap. (2) In order to protect the legitimate interests
and private spheres of the members of the corpo-
rate management bodies who are also members
of the Henkel family, their individual sharehold-
ings are not disclosed unless required by law.
The Kodex requires disclosure of shareholdings
upward of 1 percent.
Henkel also complies with all the suggestions
(may/should provisions) of the Kodex in keep-
ing with our legal form and the special statutory
features anchored in our Articles of Association.
In accordance with Section 15 a of the Securities
Trading Act [WpHG] (Directors Dealings), mem-
bers of the Management Board, the Supervisory
Board and the Shareholders Committee, and
parties related to same, are obliged to disclose
transactions involving shares in Henkel AG & Co.
KGaA or their derivative financial instruments
where the value of such transactions attains or
exceeds 5,000 euros in a calendar year. In fiscal
2011 Henkel was informed of a total of 23transac-
tions. In ten transactions conducted by members
of the Shareholders Committee and the Super-
visory Board, or parties related to same, atotal
of 16,000 preferred shares were purchased and
431,327 preferred shares were sold. One member
of the Shareholders Committee conducted atotal
of eight new put and call option transactions
involving a total of 785,717 preferred shares and
505,509 ordinary shares, and in 2010 completed
five put and call option deals involving atotal of
staff in the Group. Because of their seniority, it is
particularly incumbent on them to set the right
example for their subordinates, to effectively
communicate the compliance rules and to ensure
that these are obeyed through the implementation
of suitable organizational measures.
The procedures to be adopted in the event of
complaints or suspicion of malpractice also con-
stitute an important element of the compliance
regime. In addition to our internal reporting
system and complaint registration channels,
employees may also, for the purpose of reporting
serious violations to the CCO, anonymously use
a Compliance Hotline operated by an external
service-provider. The CCO is mandated to initiate
the necessary follow-up procedures.
Our corporate compliance activities are focused
on the fields of safety, health and the environment,
antitrust law and the fight against corruption.
In our Code of Conduct, last revised in 2009, in
the corporate guidelines based upon this, and in
other publications, the Management Board clearly
expresses its rejection of all contraventions of
the principles of compliance, particularly antitrust
violations and corruption. For Henkel, bribery
and anticompetitive agreements are no way to do
business. We do not tolerate such violations of
the law.
A further compliance-relevant area relates to
capital market law. Supplementing the legal pro-
visions, internal codes of conduct have been put
in place to regulate the treatment of information
that has the potential to affect share prices. The
company has an Ad-hoc Committee comprising
representatives of various departments. In order
to ensure that all insider information is handled
as required by law, this reviews developments
and events for their possible effect on share prices,
determining the need to issue reports to the
capital markets on an ad-hoc basis. There are also
rules that go beyond the legal requirements, gov-
erning the behavior of the members of the Board
of Management, the Supervisory Board and the
Shareholders Committee, and also employees of
the corporation who, due to their function or
involvement in projects, have access to insider
information. An insider register is kept, listing
the people involved.
For further information relating to the principles
guiding our corporate stewardship, please go to
our website at www.henkel.com/ir
Group management report
Corporate governance
Henkel Annual Report 2011 35
Regulation, structure and amounts
The compensation for members of the Manage-
ment Board of Henkel Management AG is regulat-
ed by the Supervisory Board of Henkel Manage-
ment AG in consultation with the Human
Resources Subcommittee of the Shareholders
Committee. The Supervisory Board of Henkel
Management AG is comprised of three members
of the Shareholders Committee.
The structure and amounts of the emoluments
accruing to the Management Board are aligned to
the size and international activities of the corpo-
ration, its economic and financial position, its
performance and future prospects, the normal
levels of remuneration encountered in compara-
ble companies and also the general compensa-
tion structure within the Henkel organization.
The compensation package is further determined
on the basis of the functions, responsibilities and
performance of the individual executives and the
performance of the Management Board as a
whole. The variable annual remuneration com-
ponents have been devised such that they take
into account both positive and negative develop-
ments. The overall remuneration mix is designed
to be internationally competitive while also pro-
viding an incentive for ongoing business devel-
opment and a sustainable increase in shareholder
value within a dynamic operating environment.
The Supervisory Board of Henkel Management
AG regularly reviews the compensation arrange-
ments applied to the Management Board.
The remuneration of the members of the Man-
agement Board is based on a so-called target
compensation amount (total remunerations ex-
cluding other ancillary emoluments and pension
entitlements) which accrues to a member of the
Management Board in the event of 100 percent
achievement of the underlying performance tar-
gets, this at-target amount coming in at around
2.1 million euros in total per financial year, as-
suming reasonable similarity of the range of re-
sponsibilities involved. Of this target compensa-
tion, around 30 percent is in fixed salary, some
35percent is performance-related over the short
term and about 35 percent is performance-related
over the long term. In addition, the Supervisory
Board may, at its discretion, grant a special pay-
ment in recognition of exceptional achievements.
605,000 preferred shares. Further details in
this regard can be found on our website at
www.henkel.com/ir
In accordance with the Declaration of Compli-
ance, the following details are reported in rela-
tion to notifiable shareholdings: The aggregate
holdings of the members of the Supervisory
Board and of the members of the Shareholders
Committee exceed in each case 1 percent of the
shares issued by the company. The members of
the Management Board together hold less than
1percent of the shares issued by the company.
The corresponding declarations of compliance
together with the reasons for deviations from
recommendations can be found on our website
at www.henkel.com/ir
II. Remuneration report
This remuneration report provides an outline of
the compensation system for the Management
Board, Henkel Management AG as the Personally
Liable Partner, the Supervisory Board and the
Shareholders Committee of Henkel AG & Co.
KGaA, and the Supervisory Board of Henkel Man-
agement AG; it also explains the level and struc-
ture of the remuneration paid.
This remuneration report takes into account
the recommendations of the German Corporate
Governance Code and contains all the disclosures
and explanations required pursuant to Section
285 sentence 1 no. 9, Section 289 (2) no. 5, Section
314 (1) no. 6 and Section 315 (2) no. 4 of the Ger-
man Commercial Code [HGB]. The associated
information has not therefore been additionally
disclosed in the notes to the consolidated finan-
cial statements at the back of this Annual Report.
1. Remuneration of the Management Board
The remuneration system described in the fol-
lowing, which meets the requirements of the Act
on the Appropriateness of Management Board
Remuneration [VorstAG] and was approved by
the2010 Annual General Meeting of shareholders
of Henkel AG & Co. KGaA with a majority of
99.93percent of the votes cast, applies uniformly
as from fiscal 2010 with respect to the compensa-
tion payable to all members of the Management
Board regardless of the duration of their individ-
ual executive contracts or previous, now super-
seded regulations.
Group management report
Corporate governance
Henkel Annual Report 2011 36
The target amount is adjusted on the basis of a
performance factor related to the degree of target
achievement. In determining the variable annual
remuneration, the Supervisory Board of Henkel
Management AG also takes into due account the
apparent sustainability of the economic success,
and the performance levels of the Management
Board members.
Variable annual remuneration is also subject
to an overall cap, with the result that the amount
paid may only range between 0 percent and
250 percent of the target amount.
Short-term and long-term components of the
variable annual remuneration
The variable annual remuneration is paid annually
in arrears once the corporations annual finan-
cial statements have been approved by the Annual
General Meeting. Of the variable annual remu-
neration, around 60 percent is paid in cash,
which in turn corresponds to a proportion of the
target compensation of around 35 percent. For the
remaining 40 percent corresponding to 25 per-
cent of the target compensation the members
of the Management Board acquire Henkel pre-
ferred shares (own investment) at the price pre-
vailing at the time of acquisition. These shares
are placed in a blocked custody account with a
three-year drawing restriction. This own invest-
ment ensures that the members of the Manage-
ment Board participate through a portion of their
compensation in the long-term performance of
the corporation.
Therefore, around 35 percent of the target com-
pensation amount is short-term performance-
related and due to the own investment portion
and the long-term incentive described below
a further 35 percent is aligned to components
of a long-term performance-related nature.
Long-term incentive (LTI)
The long-term incentive, which accounts for
10percent of the target compensation amount, is
a variable cash payment based on the long-term
performance of the corporation, the amount pay-
able being dependent on the future increase reg-
istered in earnings per preferred share (EPS) over
three consecutive years (the performance period).
Together with the recipients own investment
from the variable annual remuneration, perfor-
mance-related components aligned to the long
term make up 35 percent of the target compensa-
tion amount.
Remuneration structure
Fixedsalary:
30percent
Short-term
components:
35percent
Long-term
components:
35percent
35 percentage
points in variable
annual remuneration
(cash component)
25 percentage points
in variable annual
remuneration (own
investment in Henkel
preferred shares)
10 percentage
points in long-term
incentive
This target compensation amount is supplement-
ed by other emoluments and pension benefits.
The components in detail:
Fixed salary
The annual non-performance-related fixed
salary accounts for around 30 percent of the
target compensation amount. It is paid in twelve
monthly installments. The amount paid reflects
both the function and responsibilities of the
position and relevant market conditions.
Variable annual remuneration
Overall, the variable annual remuneration accounts
for around 60 percent of the target compensation
amount. The variable annual remuneration is
made up of annual performance-related compo-
nents which account for around 35 percent of the
target compensation amount, and a long-term
variable incentive which accounts for around
25 percent of the target compensation amount and
takes the form of an investment by the recipient
(own investment) in Henkel preferred shares with
a minimum vesting period of three years.
Determination of variable annual remuneration
The performance criteria governing the variable
annual remuneration are primarily return on
capital employed (ROCE) and earnings per pre-
ferred share (EPS) in the relevant fiscal year,
adjusted in each case for exceptional items. The
application of these performance parameters
ensures that profitable growth is duly rewarded
by Henkel. The further factors used in establishing
the variable annual remuneration payable to
the Management Board members are: the Group
results and the results of the relevant business
sector or corporate function, the quality of
management demonstrated in those functions,
and the individual contribution made by the
Management Board member concerned.
Group management report
Corporate governance
Henkel Annual Report 2011 37
spouse receives pension payments amounting to
60 percent and each dependant child benefit pay-
ments amounting to 15 percent up to a maxi-
mum of 100 percent for all beneficiaries of the
executives pension entitlement. The surviving
childs benefit is generally paid until the childs
18th birthday or, if longer, until completion of
their professional training, but only up to their
27th birthday.
Other emoluments
The members of the Management Board also
receive other emoluments in the form of benefits
arising out of standard commercial insurance
policies and the provision of a company car.
Other regulatory provisions
In the event of retirement being taken by members
of the Management Board who were first appoint-
ed prior to 2009, they are entitled to continued pay-
ment of their fixed salary for a further six months,
but not beyond the month of their 65th birthday.
In the event of a members position on the Man-
agement Board being terminated without good
cause or reason, the executive contract provides
for a severance settlement amounting to the re-
muneration for the remaining contractual term
in the form of a discounted lump-sum payment.
Since the 2008 AGM, however, severance pay-
ments have been limited to two years compensa-
tion (severance payment cap) with respect to
newly concluded contracts of employment or
contract extensions of more than two years. Such
severance settlements must not, however, cover
more than the remuneration payable for the re-
maining period of the executive contract. In ad-
dition, the executive contracts include a post-
contractual non-competition clause with a term
of up to two years. The associated discretionary
payment can be up to 50 percent of annual com-
pensation after allowing for any severance pay-
ments and earnings from any new extra-contrac-
tual activities. No entitlements exist in the event
of premature termination of executive duties
resulting from a change in control.
The corporation maintains on behalf of members
of the corporate management bodies and em-
ployees of Henkel a third-party group insurance
policy (D&O insurance) protecting against conse-
quential loss, which policy also covers members
of the Management Board. For members of the
Management Board there is an own-risk deduct-
ible amounting to 10 percent per loss event up to
On completion of the performance period, the
degree of target achievement is ascertained by
the Supervisory Board of Henkel Management AG
on the basis of the increase in EPS achieved. The
amounts included in the calculation of the increase
are, in each case, the earnings per preferred share
adjusted for exceptional items, as disclosed in
the certified and approved consolidated financial
statements of the relevant financial years.
Depending on the level of target achievement as-
certained by the Supervisory Board of Henkel
Management AG, the target amount is adjusted by
a performance multiplier. The long-term incentive
is also subject to an overall cap, with the result
that the amount paid may only range between
0percent and 250 percent of the target amount.
Pension benefits
The retirement pension for members joining the
Management Board of the former Henkel KGaA
before January 1, 2005, amounts to a certain percen-
tage of the last paid fixed salary (defined benefit).
Effective January 1, 2005, we changed the pension
entitlement for new members of the Management
Board to a defined contribution scheme. Once
acovered event occurs, the beneficiaries receive
a superannuation lump-sum payment combined
with a continuing basic annuity. The superannu-
ation lump-sum payment comprises the total
of annual contributions calculated on the basis
of a certain percentage of the target compensation
amount, this percentage being the same for all
members of the Management Board. The annual
contributions depend to a certain degree on
developments in the actual total cash compen-
sation paid in the financial year in question. Any
vested pension rights earned within the corpora-
tion prior to the executives joining the Manage-
ment Board are taken into account as start-up units.
The defined contribution pension system ensures
appropriate retirement and welfare benefits while
also incorporating a performance-related element.
An entitlement to pension and welfare benefits
arises on retirement, on termination of the
employment relationship on or after attainment
of the statutory retirement age, or in the event of
incapacity for work. If a member of the Manage-
ment Board (executive) receives no pension
benefits prior to their death, the superannuation
lump sum accumulated up to time of death is
paid out to the surviving spouse or surviving
children. In addition, the executives surviving
Group management report
Corporate governance
Henkel Annual Report 2011 38
euros was in fixed salary (previous year:
3,531,000 euros), 13,090,613 euros for the STI (pre-
vious year: 10,202,690 euros) and 223,936 euros in
other emoluments (previous year: 132,250 euros).
Also included in the total compensation is the
long-term incentive granted for 2011 which de-
pending on the achievement of the performance
targets will only become payable in 2014. It is
alegal requirement that a value be disclosed in
the year of grant. This value is determined on the
basis of an at target calculation, i.e. assuming
the achievement of an increase in EPS over the
performance period of 30 percent, giving an im-
puted amount of 1,258,142 euros (previous year:
963,000 euros).
a maximum of one-and-a-half times their fixed
salary for loss events occurring within a finan-
cial year.
Remuneration for 2011
The total compensation paid to members of the
Management Board for the performance of their
duties for and on behalf of Henkel AG & Co. KGaA
and its subsidiaries during the year under review,
including the cumulative savings reserve for
Special Incentive 2012, amounted to 21,992,191 euros
(previous year: 18,297,607 euros including sever-
ance compensation payments). Of the total cash
emoluments of 17,089,049 euros (previous year:
13,865,940 euros) paid in respect of 2011, 3,774,500
Structure of Management Board remuneration
Long-termremunerationcom-
ponents




in euros
Fixed
salary

Short-term
componentof
variablean-
nualremune-
ration
Long-term
componentof
variablean-
nualremune-
ration
Long-term
incentive

Otheremolu-
ments

Total
remuneration

Total 2011 3,774,500 7,854,368 5,236,245 1,258,142 223,936 18,347,191

20.6 % 42.8 % 28.5 % 6.9 % 1.2 % 100.0 %
Total 2010 3,531,000 6,121,615 4,081,075 963,000 132,250 14,828,940
23.8 % 41.2 % 27.6 % 6.5 % 0.9 % 100.0 %
Management Board remuneration
Cashcomponents


in euros
Fixed
salary
Variablean-
nualremune-
ration
Otheremolu-
ments
Totalcash
emoluments
Valueof
long-term
incentive1
Total
remuneration
Kasper Rorsted 2011 963,000 3,423,549 87,391 4,473,940 321,000 4,794,940
2010 963,000 2,834,370 42,078 3,839,448 321,000 4,160,448
Jan-Dirk Auris
(since Jan. 1, 2011)
2011 642,000 2,199,033 57,189 2,898,222 214,000 3,112,222
2010
Thomas Geitner 2
(until Dec. 31,
2010)
2011
2010 642,000 1,819,580 19,093 2,480,673 2,480,673
Kathrin Menges
(since Oct. 1, 2011)
2011 136,500 482,669 3,033 622,202 45,475 667,677
2010
Bruno Piacenza
(since Jan. 1, 2011)
2011 642,000 2,199,033 28,472 2,869,505 214,000 3,083,505
2010
Dr. Friedrich Stara
(until Feb. 28,
2011)
2011 107,000 308,263 2,466 417,729 35,667 453,396
2010 642,000 1,849,580 21,337 2,512,917 214,000 2,726,917
Dr. Lothar
Steinebach
2011 642,000 2,239,033 24,327 2,905,360 214,000 3,119,360
2010 642,000 1,849,580 25,846 2,517,426 214,000 2,731,426
Hans Van Bylen 2011 642,000 2,239,033 21,058 2,902,091 214,000 3,116,091
2010 642,000 1,849,580 23,896 2,515,476 214,000 2,729,476
Total 2011 3,774,500 13,090,613 223,936 17,089,049 1,258,142 18,347,191
2010 3,531,000 10,202,690 132,250 13,865,940 963,000 14,828,940
1 2011 LTI payout in 2014; these figures will only be attained in the event of EPS increasing by 30 percent in the performance period.
2 LTI for 2010 included in Thomas Geitners severance package.
Group management report
Corporate governance
Henkel Annual Report 2011 39
The special incentive will be paid as follows:
Subject to achievement of an adjusted return on
sales of at least 14 percent in 2012, 60 percent of
the special incentive will be paid out following
the 2013 AGM. The remaining 40 percent will be
paid out following the 2014 AGM provided that,
in 2013, the adjusted return on sales achieved
amounts to at least 13.8 percent. This staggered
arrangement adequately satisfies the criterion of
sustainable performance improvement.
Because this represents a conditional claim to
deferred payment, a savings reserve has to be
created for the Special Incentive, which is then
amortized in subsequent years. The additions to
the savings reserve made for qualifying members
of the Management Board are indicated in the
following table:
Special Incentive 2012
in euros
Additiontosavingsreserve
in2011
Kasper Rorsted 702,000
Jan-Dirk Auris 1 800,000
Kathrin Menges 2 425,000
Bruno Piacenza 1 800,000
Dr. Friedrich Stara 3 182,000
Dr. Lothar Steinebach 4 268,000
Hans Van Bylen 468,000
Total 3,645,000
1 Member of the Management Board since Jan. 1, 2011;
first addition made in 2011.
2 Member of the Management Board since Oct. 1, 2011;
first addition made in 2011.
3 Member of the Management Board until Feb. 28, 2011.
4 Member of the Management Board until June 30, 2012.
The remuneration of the individual members of
the Management Board for the year under review
is indicated in the table on the previous page,
together with a breakdown according to the indi-
vidual components referred to above.
No member of the Management Board was grant-
ed by the company non-standard benefits in the
event of premature termination of their tenure,
nor were any such entitlements or arrangements
modified. No member of the Management Board
was pledged payments from third parties in re-
spect of their duties as executives of the compa-
ny, nor were any such payments granted in the
year under review.
Special Incentive 2012
In order to underpin Henkels strategic priorities
and the ambitious 2012 financial targets an-
nounced in this regard, the Supervisory Board
of Henkel Management AG has, in consultation
with and on the recommendation of the HR
Subcommittee of the Shareholders Committee,
resolved that an additional cash bonus should
be payable to the members of the Management
Board on the primary condition that the adjusted
return on sales for 2012 is at least 14percent
(Special Incentive 2012). Achievement of the gov-
erning thresholds (indicated below) shall be
based on the certified and approved consolidated
financial statements, with relevant margins
having been adjusted for exceptional items.
The volume of the Special Incentive 2012 is
50percent of the ensuing variable annual
remuneration for 2012.
Defined benefit pension

in euros
Retirementpensionp.a.ononset
ofpensionasofreportingdate
Changeinpensionprovisionsfor
2011
Dr. Lothar Steinebach 398,040 46,907

Defined contribution pension
Superannuationlumpsum Basicannuity


in euros
Totallumpsum Additionto
lumpsum2011
Totalbasic
annuity(p.a.)

Additionto
basicannuity
2011
Kasper Rorsted 2,490,300 543,645 1,681 177
Jan-Dirk Auris 104,220 104,220 229 229
Kathrin Menges 21,735 21,735 48 48
Bruno Piacenza 104,220 104,220 201 201
Dr. Friedrich Stara 1,534,695 59,775 762 17
Hans Van Bylen 1,830,914 358,650 1,528 169
Group management report
Corporate governance
Henkel Annual Report 2011 40
Fixed fee
Each member of the Supervisory Board and of the
Shareholders Committee receives a fixed fee of
20,000 euros and 50,000 euros per year respec-
tively. The higher fixed fee in the latter case is
due to the fact that, as required by the Articles of
Association, the Shareholders Committee is in-
volved in business management activities.
Dividend bonus
Each member of the Supervisory Board and of
theShareholders Committee further receives
anannual bonus of 2,400 euros for every full
0.02euros by which the preferred dividend paid
out for the prior year exceeds 0.25 euros.
Long term incentive
As a long-term incentive, each member of the Super-
visory Board and of the Shareholders Committee
receives an additional cash payment each year,
the amount of which depends on the increase in
earnings per preferred share (EPS) over a three-
year reference period. The EPS of the financial
year preceding the year of payment is compared
to the EPS of the second financial year following
the year of payment. If the increase is at least
15percent, an amount of 600 euros is paid for each
full percentage point of the total achieved increase.
If the increase reaches a minimum of 21 percent,
the amount paid per percentage point is 700 euros,
and if the increase is a minimum of 30 percent,
the amount paid per percentage point is 800 euros.
The calculation is based on the certified and
approved consolidated financial statements of
the respective financial years, with EPS having
been adjusted for exceptional items.
The total of the dividend bonus and the long-term
incentive is, however, limited to 50,000 euros (cap).
Remuneration for chairpersons/vice-chairper-
sons/(sub)committee members
The Chairperson of the Supervisory Board and
the Chairperson of the Shareholders Committee
each receives double the amount, and the Vice-
Chairperson in each case one-and-a-half times
the amount accruing to an ordinary member.
Members of the Shareholders Committee who
are also members of one or more subcommittees
of the Shareholders Committee each additionally
receive remuneration equivalent to the initial
amount; if they are the Chairperson of one or
more subcommittees, they receive double.
Pension benefits
The pension benefits accruing to the members of
the former and latter Management Boards as of
the reporting date and also the contributions to
the pension scheme made in 2011 are shown in
the tables on the previous page.
A total of 80,208,248 euros (previous year:
78,758,710 euros) has been provided for pension
obligations to former members of the former and
latter Management Boards and the former direc-
tors of the legal predecessor of the company, and
their surviving dependants. Amounts paid to such
recipients during the year under review totaled
6,332,108 euros (previous year: 6,430,106 euros).
2. Remuneration of Henkel Management AG for
assumption of liability, and reimbursement of
expenses to same
For assumption of the liability and management
of the businesses of the corporation, Henkel
Management AG in its function as Personally
Liable Partner shall receive an annual payment of
50,000 euros (= 5 percent of its capital stock) plus
any value-added tax (VAT) due, said fee being
payable irrespective of any profit or loss made.
Henkel Management AG may also claim reimburse-
ment from or payment by the corporation of all
expenses incurred in connection with the manage-
ment of the latters businesses including the emolu-
ments and pensions paid to its management bodies.
3. Remuneration of the Supervisory Board and of
the Shareholders Committee of Henkel AG &
Co. KGaA
Regulation, structure and amounts
The remuneration for the Supervisory Board and
the Shareholders Committee has been approved
in General Meeting; the corresponding provi-
sions are contained in Articles 17 and 33 of the
Articles of Association.
The structure and amount of the remunerations
are commensurate with the size of the corpora-
tion, its economic success and the functions
performed by the Supervisory Board and the
Shareholders Committee respectively.
The remuneration package comprises three com-
ponents: a fixed fee, a variable dividend-related
bonus and an annual, variable, performance-
related, long-term incentive (LTI) based on the
companys performance. The components in detail:
Group management report
Corporate governance
Henkel Annual Report 2011 41
Total remuneration paid to the members of the
Shareholders Committee for the year under re-
view (fixed fee, dividend bonus, remuneration
payable for subcommittee activity and long-term
incentive for 2011) amounted to 2,295,205 euros
(previous year: 2,209,180 euros). Of the total cash
emoluments paid for 2011 (fixed fee and dividend
bonus, including the above-mentioned components
payable for subcommittee activity) amounting to
2,295,205 euros (previous year: 2,209,180 euros),
561,301 euros was in fixed fee, 561,301 euros in
dividend bonus and 1,172,603 euros in components
payable for subcommittee activity (excluding the
LTI amount due).
In accordance with the proposal put forward by
the Management Board, the dividend bonus in
each case was based on a dividend of 0.80 euros
per preferred share.
Pursuant to Article 17 (3) and Article 33 (3) of the
Articles of Association, the above dividend would
yield a dividend bonus of 64,800 euros per mem-
ber. However, as according to Article 17 (5) and
Article 33 (5) of the Articles of Association, the
amount of dividend bonus and LTI payable to a
simple member cannot exceed 50,000 euros (cap)
in a financial year, the dividend bonus for the
year under review was capped at 50,000 euros
and there will be no LTI payment for 2011.
In the year under review, no compensation or
benefits were paid or granted for personally per-
formed services, including in particular advisory
or intermediation services.
The emoluments of the individual members of
the Supervisory Board and of the Shareholders
Committee, broken down according to the above-
mentioned components, are presented in the
tables on the following pages.
4. Remuneration of the Supervisory Board of
Henkel Management AG
According to Article 14 of the Articles of Associa-
tion of Henkel Management AG, the members of
the Supervisory Board of Henkel Management AG
are each entitled to receive an annual fee of
10,000 euros. However, those members of said
Supervisory Board who are also and simultane-
ously members of the Supervisory Board or the
Shareholders Committee of Henkel AG & Co.
KGaA do not receive this fee.
Members of the Supervisory Board who are also
members of the Audit Committee shall each ad-
ditionally receive a fee of 50 percent of the cash
amount accruing to a member of the Supervisory
Board (fixed fee plus dividend bonus); the Chair-
person of the Audit Committee receives an addi-
tional fee of 100 percent of this amount. Activity
in the Nominations Committee is not remunerat-
ed separately.
Other regulatory provisions
The members of the Supervisory Board or a com-
mittee receive an attendance fee amounting to
500 euros for each meeting in which they partici-
pate. If several meetings take place on one day,
the attendance fee shall only be paid once. In
addition, the members of the Supervisory Board
and of the Shareholders Committee are reim-
bursed expenses arising from the pursuit of their
mandates. The members of the Supervisory
Board are also reimbursed the value-added tax
(VAT) payable on their total remunerations and
reimbursed expenses.
The corporation maintains on behalf of members of
the corporate management bodies and employees
of Henkel a third-party group insurance policy
(D&O insurance) protecting against consequential
loss, which policy also covers members of the
Supervisory Board and of the Shareholders Com-
mittee. For members of the Supervisory Board and
Shareholders Committee there is an own-risk
deductible amounting to 10 percent per loss event
up to a maximum of one-and-a-half times their
fixed annual fee for loss events occurring within
a financial year.
Remuneration for 2011
Total remuneration paid to the members of the
Supervisory Board for the year under review (fixed
fee, dividend bonus, attendance fee, components
payable for committee activity and long-term
incentive for 2011) amounted to 1,515,500 euros
plus VAT (previous year: 1,516,000 euros plus
VAT). Of the total cash emoluments paid for 2011
(fixed fee, dividend bonus, components payable
for committee activity and attendance fees)
amounting to 1,515,500 euros plus VAT of 246,620
euros (previous year: 1,516,000 euros plus VAT of
247,000 euros), 350,000 euros was in fixed fees,
875,000 euros in dividend bonus, 34,500 euros in
attendance fees and 256,000 euros in compo-
nents payable for committee activity (including
relevant additional attendance fees).
Group management report
Corporate governance
Henkel Annual Report 2011 42
Supervisory Board remuneration
Cashcomponents


in euros
Fixedfee Dividend
bonus
Atten-
dancefee
Feefor
committee
activity1
Totalcash
emolu-
ments
Valueof
long-term
incentive2
Total
remuner-
ation3
Dr. Simone Bagel-Trah 4,
Chair
2011 40,000 100,000 2,000 36,500 178,500 178,500
2010 40,000 100,000 2,500 36,500 179,000 179,000
Winfried Zander 4,
Vice-chair
2011 30,000 75,000 2,000 37,000 144,000 144,000
2010 30,000 75,000 2,500 36,500 144,000 144,000
Jutta Bernicke 2011 20,000 50,000 2,500 72,500 72,500
2010 20,000 50,000 2,500 72,500 72,500
Dr. Kaspar von Braun
(since April 19, 2010)
2011 20,000 50,000 2,500 72,500 72,500
2010 14,082 35,205 1,000 50,287 50,287
Johann-Christoph Frey 2011 20,000 50,000 2,500 72,500 72,500
2010 20,000 50,000 2,000 72,000 72,000
Birgit Helten-Kindlein 4 2011 20,000 50,000 2,000 37,000 109,000 109,000
2010 20,000 50,000 2,500 36,500 109,000 109,000
Bernd Hinz
(until July 31, 2010)
2011
2010 11,616 29,041 1,500 42,157 42,157
Prof. Dr. Michael Kaschke 2011 20,000 50,000 1,500 71,500 71,500
2010 20,000 50,000 2,000 72,000 72,000
Thomas Manchot 2011 20,000 50,000 2,500 72,500 72,500
2010 20,000 50,000 2,000 72,000 72,000
Mayc Nienhaus 2011 20,000 50,000 2,500 72,500 72,500
2010 20,000 50,000 2,500 72,500 72,500
Thierry Paternot 2011 20,000 50,000 2,500 72,500 72,500
2010 20,000 50,000 2,000 72,000 72,000
Andrea Pichottka 2011 20,000 50,000 2,500 72,500 72,500
2010 20,000 50,000 2,500 72,500 72,500
Prof. Dr. Theo Siegert 4 2011 20,000 50,000 2,000 36,500 108,500 108,500
2010 20,000 50,000 2,500 36,500 109,000 109,000
Edgar Topsch
(since Aug. 1, 2010)
2011 20,000 50,000 2,500 72,500 72,500
2010 8,384 20,959 1,000 30,343 30,343
Konstantin von Unger
(until April 18, 2010)
2011
2010 5,918 14,795 1,000 21,713 21,713
Michael Vassiliadis 4 2011 20,000 50,000 2,000 37,000 109,000 109,000
2010 20,000 50,000 2,500 36,500 109,000 109,000
Dr. Bernhard Walter 4 2011 20,000 50,000 1,500 72,000 143,500 143,500
2010 20,000 50,000 2,000 71,500 143,500 143,500
Ulf Wentzien
(until Dec. 31, 2011)
2011 20,000 50,000 1,500 71,500 71,500
2010 20,000 50,000 2,500 72,500 72,500
Total 2011 350,000 875,000 34,500 256,000 1,515,500 1,515,500
2010 350,000 875,000 37,000 254,000 1,516,000 1,516,000
1 Fee for service on the Audit Committee; there is no separate fee payable for service on the Nominations Committee.
2 The dividend bonus and LTI for a reference year is limited to 50,000 euros (cap) for a simple member. Therefore, the dividend
bonus of 64,800 euros that mathematically results from a dividend of 0.80 euros per preferred share has been reduced to
50,000 euros. With the cap coming into play for reference year 2011, there is no LTI payable, hence the absence of an LTI fgure.
3 Figures do not include VAT.
4 Member of the Audit Committee chaired by Dr. Bernhard Walter.
Group management report
Corporate governance
As the members of the Supervisory Board of
Henkel Management AG are also members of the
Shareholders Committee, no fee was paid in
respect of this Supervisory Board in the year
under review.
Henkel Annual Report 2011 43
Shareholders' Committee remuneration
Cashcomponents


in euros
Fixedfee Dividend
bonus
Feeforsub-
committee
activity1
Totalcash
emolu-
ments
Valueof
long-term
incentive2
Total
remuner-
ation
Dr. Simone Bagel-Trah,
Chair (Chair HR
Subcommittee)
2011 100,000 100,000 200,000 400,000 400,000
2010 100,000 100,000 200,000 400,000 400,000
Dr. Christoph Henkel,
Vice-chair (Chair Finance
Subcommittee)
2011 75,000 75,000 200,000 350,000 350,000
2010 75,000 75,000 200,000 350,000 350,000
Prof. Dr. Paul Achleitner
(Member Finance
Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Boris Canessa (Member
HR Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Stefan Hamelmann
(Vice-chair
Finance Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Dr. Ulrich Hartmann
(until April 18, 2010)
(Member Finance
Subcommittee)
2011
2010 14,795 14,795 29,590 59,180 59,180
Prof. Dr. Ulrich Lehner
(Member Finance
Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Dr. Norbert Reithofer
(since April 11, 2010)
(Member Finance
Subcommittee)
2011 36,301 36,301 72,603 145,205 145,205
2010
Konstantin von Unger
(Vice-chair
HR Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Karel Vuursteen
(Member HR
Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Werner Wenning
(Member HR
Subcommittee)
2011 50,000 50,000 100,000 200,000 200,000
2010 50,000 50,000 100,000 200,000 200,000
Total 2011 561,301 561,301 1,172,603 2,295,205 2,295,205
2010 539,795 539,795 1,129,590 2,209,180 2,209,180
1 Proportional fxed fee and dividend bonus.
2 The dividend bonus and LTI for a reference year is limited to 50,000 euros (cap) for a simple member. Therefore, the dividend bonus
of 64,800 euros that mathematically results from a dividend of 0.80 euros per preferred share has been reduced to 50,000 euros.
With the cap coming into play for reference year 2011, there is no LTI payable, hence the absence of an LTI fgure.
Group management report
Corporate governance
Henkel Annual Report 2011 44
regional level is the responsibility of the affiliated
national companies. The executive bodies of
these companies manage their businesses in line
with the relevant statutory regulations, supple-
mented by their own articles of association, internal
procedural rules and the principles incorporated
in our globally applicable management standards,
codes and guidelines.
Strategyandfinancialtargets
for2012
We are continuing to expand our three business
sectors Laundry & Home Care, Cosmetics/Toilet-
ries and Adhesive Technologies, each of which
offers a strong and balanced portfolio of activities
capable of significant growth in a positive market
environment and ensuring relative stability in a
downturn, as was clearly demonstrated through-
out 2009 to 2011. Already today, we enjoy leading
positions in all three segments in the mature
markets of Western Europe and North America,
and also in our emerging markets, which we in-
tend to further expand going forward. It is essen-
tial for us to maintain strong or at least expand-
able market positions in the countries in which
we have a presence. Already today, we generate
42 percent of our total sales in our emerging mar-
kets. In 2004, the figure was just 26 percent.
Operationalactivities
Overview
Henkel was founded in 1876. Consequently, the
year under review marks the 135th in our corporate
history. Today, Henkel employs more than 47,000
people worldwide, and we occupy globally leading
market positions in the consumer and industrial
businesses.
Organization and business sectors
Henkel AG & Co. KGaA is operationally active as
well as being the parent company of the Henkel
Group. It is responsible for defining and pursuing
Henkels corporate objectives and also for the
management, control and stewardship of our Group-
wide activities, including risk management
and the allocation of resources. Henkel AG & Co.
KGaA performs its tasks within the legal scope
afforded to it as part of the Henkel Group, with the
affiliated companies otherwise operating as
legally independent entities.
Operational management and control is the re-
sponsibility of the Management Board of Henkel
Management AG in its function as sole Personally
Liable Partner. The Management Board is supported
by corporate functions.
Henkel is organized into three business sectors:
Laundry & Home Care
Cosmetics/Toiletries
Adhesive Technologies
Our product range in the Laundry & Home Care
business sector comprises heavy-duty detergents,
specialty detergents and cleaning products. The
portfolio of the Cosmetics/Toiletries business
sector encompasses hair cosmetics, products for
body, skin and oral care, and products for the
hair salon business. The Adhesive Technologies
business sector offers decoration and renovation
products, adhesive and correction products for
home and office, building adhesives and industrial
and structural adhesives, sealants and surface
treatment products.
Our three business sectors are managed on the
basis of globally operational strategic business
units. These are supported by the corporate func-
tions of Henkel AG & Co. KGaA in order to ensure
optimum utilization of corporate network synergies.
Implementation of the strategies at a country and
Henkels brands and technologies around the world
Dsseldorf, Germany
Global Headquarters
Shanghai, China
Regional Center
Scottsdale,
Arizona, USA
Regional Center
Rocky Hill,
Connecticut, USA
Regional Center
So Paulo, Brazil
Regional Center
Mexico City,
Mexico
Regional Center
Vienna, Austria
Regional Center
Cairo, Egypt
Regional Center
Dubai, United
Arab Emirates
Regional Center
42%
of our sales generated
in the emerging markets.
Group management report
Operational activities / Strategy and fnancial targets for 2012
Henkel Annual Report 2011 45
2. Focus on our top brands
Our focus is on fewer but stronger brands and
further expansion of our strong regional and
global brands. Brand awareness is to be fur-
ther enhanced through extensive marketing
investment and promotional activities. Our
three top brands Schwarzkopf, Loctite and
Persil already account for around 24 percent of
our sales. Our objective is to grow organically
faster with these and other top brands than
Henkel overall, and therefore to further ex-
pand their share of total sales. At the same
time, we are reducing the number of our
brands by selling off or discontinuing the
smaller and less important brands.
3. Innovation and innovation rates
With innovation rates 1 of 41 percent in the
Laundry & Home Care business sector, 43 per-
cent at Cosmetics/Toiletries and around
30percent at Adhesive Technologies, we count
among the strongest innovators in our fields
of competence. We are helped in this respect
by the proximity we have to our consumers
and customers, actively incorporating both
audiences in our product development activi-
ties where appropriate. We have also made it
our principle only to launch a new product
onto the market if it has a positive effect on
gross margin and makes a contribution to
sustainable development in at least one of our
six focal areas (see page 49).
4. Operational excellence
In our purchasing activities, our aim is to create
benefits through the further development of
effective strategies. These include concentrat-
ing on fewer, more efficient suppliers and on
procuring materials in lower-cost emerging
countries. In production and our supply chain,
our objective is to further optimize our pro-
duction footprint. This will enable us to re-
duce the complexity of our structures and
better utilize available capacities. We are also
introducing improvements with respect to our
administrative, selling and distribution ex-
penses, by pooling within our shared service
centers our standardized processes in the areas
of finance, purchasing and human resources,
plus certain activities from our business sec-
tors, and by outsourcing non-core activities
such as IT support. We expect such measures
to yield further cost savings going forward.
With our three growth-generating business sectors
and the leading market positions we occupy, we
have a strong basis for generating profitable growth
in the future.
Strategic priorities and progress in fiscal 2011
In 2008, we set ourselves three strategic priorities:
Achieve
ourfull
businesspotential
Winning
Culture
Focus
moreon
ourcustomers
Strengthen
ourglobal
team
Achieve our full business potential
For this, we have identified the following drivers:
1. Portfolio optimization
Within the Laundry & Home Care business
sector, we aim to increase our profitability in
the mass categories such as heavy-duty deter-
gents and hand-dishwashing products, and
drive growth in the profitable specialty cat-
egories such as household cleaners and fabric
softeners. In the Cosmetics/Toiletries busi-
ness sector, we intend to further enhance
profitability by strengthening our innovation
leadership and expanding our top brands.
Within the Adhesive Technologies business
sector we want to improve our profitability in
the automotive segment, drive growth in spe-
cialty applications and utilize our economies
of scale with innovations in the industrial
adhesives business. In addition, we intend to
increase our investments in order to achieve
disproportionate growth in the emerging
markets. We also want to further increase
our market shares in the mature markets.

Group management report
Strategy and fnancial targets for 2012
1 Percentage share of sales accounted for by new products
launched onto the market in the last three years (five years for
Adhesive Technologies).
24%
of sales achieved with our
top brands Schwarzkopf,
Loctite and Persil.
Henkel Annual Report 2011 46
Focus more on our customers
We have further extended our partnerships
with customers and regularly meet with their
representatives at the highest management
level in order to identify further possible joint
projects.
We have developed a new sustainability strategy
with goals extending through to 2030.
Strengthen our global team
Throughout Henkel, there have been numerous
activities implemented in order to establish
the new vision and values introduced in 2010.
Together with their teams, all our line managers
have examined the implementation of the
measures agreed in 2010 as applicable to their
spheres of responsibility, and are continuing
to drive such activities forward.
We have adapted our global short-term incentive
on the basis of the globally standardized system
developed in 2010 for differentiated assessment
of the performance and development potential
of our managerial staff.

Financial targets 2012
In 2008, we set ourselves financial targets for
2012 which we intend to achieve through diligent
pursuit of our strategic priorities.
Financial targets 2012
Annual organic sales growth (average):
35percent
Adjusted 1 return on sales (EBIT):
14 percent
Annual growth in adjusted earnings per
preferred share (average):
>10percent
Despite major challenges and uncertainties in
the economic environment, 2011 was a successful
year for us: We achieved strong organic sales
growth of 5.9 percent and succeeded in increasing
adjusted return on sales by 0.7 percentage points
to 13.0 percent. Adjusted earnings per preferred
share came in at 3.14 euros, an increase of 11.3 per-
cent above the level of 2010.
Focus more on our customers
In order to place our customers right at the center
of all we do, we have prioritized expanding our
dialogue with them at the highest managerial
level (top-to-top contacts), coupled with the
further development of our customer partnership
structures. Our aims are to establish a joint
strategic approach to our markets, to expand
services offering measurable added value for our
customers, and to effectively leverage our own
competences, such as our leadership in the field
of sustainability.
Strengthen our global team
Our employees are our most important assets.
With clear and unequivocal feedback, discernible
rewards in recognition of individual performance,
and tailored development plans, we ensure that
our competent and motivated team can master
the challenges with which they are confronted.
We are keen to develop and promote our managers
from within. At the same time, we are also aware
of the need to bring in external talents, especially
when their knowledge of their local markets
is better than that of the established managerial
staff within the company. Already today, there
are people from more than 120 nations working
for Henkel; and the proportion of female managers
is around 30 percent worldwide, with the trend
clearly rising. The diversity of our global team
gives us a competitive advantage, one that we
intend to further extend.
Progress in fiscal 2011
We made further substantial progress in the pur-
suit of our three strategic priorities in fiscal 2011.
The salient advancements were as follows:
Achieve our full business potential
Despite major challenges and uncertainties
in the economic environment, all three of our
business sectors achieved very good results.
We have further expanded our shared service
centers in Bratislava (Slovakia) and Manila
(Philippines), and have opened a third in Mexico
City (Mexico). In addition to increasing the
level of usage of these facilities for corporate
functions such as Finance, Purchasing and HR,
we have also transferred to them a number of
activities from our business sectors, for example
aspects of market research and certain control-
ling functions.
Group management report
Strategy and fnancial targets for 2012
1 Adjusted for one-time charges/gains and restructuring charges.
Henkel Annual Report 2011 47
view, we have adopted the Vision 2050 of the
World Business Council for Sustainable Develop-
ment (WBCSD) as the basis for our strategy: In
2050, 9 billion people live well and within the
resource limits of the planet. This translates the
abstract principle of sustainable development
into a concrete vision for society in 2050.
For us as a company, this means helping people
to live well by generating value while using less
resources and causing less emissions. This is the
idea at the heart of our new sustainability strate-
gy: Achieving more with less. We want to create
more value for our customers and consumers,
for the communities we operate in, and for our
company while at the same time reducing our
ecological footprint. To accomplish this, we need
innovations, products and technologies that can
enhance quality of life while using less input
materials. Building on our decades of experience
in sustainable development, we aim to work
together with our suppliers, customers, and
consumers to develop viable solutions for the
future. By doing so, we will be contributing both
to sustainable development and to our companys
economic success.
Our goal for 2030: Triple our efciency
Our long-term goal reflects the global challenges
of sustainability. We will have to significantly
improve our efficiency in order to reconcile peo-
ples desire to live well within the resource limits
of the planet.
Therefore, within the next 20 years we want to
triple the value we create through our business
operations in relation to the ecological footprint
of our products and services. We call this ambi-
tion of becoming three times more efficient
Factor 3. One way to achieve this is to triple the
value we create while leaving the footprint at the
Following on from the successes of the year under
review, we are very confident that we will achieve
our 2012 financial targets.
Developments up to year-end 2011
2010 2011
Organic sales growth + 7.0 % +5.9%
Organicsalesgrowth,average* +1.8% +3.1%
Adjustedreturnonsales(EBIT) 12.3% 13.0%
Adjusted earnings per preferred
share in euros 2.82 3.14
Growth + 47.6 % +11.3%
Averagegrowth** +13.5% +12.8%
* Arithmetic mean 2009 through 2011.
** Compound annual growth rate (CAGR) 2008 through 2011.
In order to further promote achievement of our
ambitious financial targets, a one-time payment
(Special Incentive 2012) approximating to the value
of the variable annual remuneration amount was
put in place in 2010 for around 3,000senior man-
agerial staff of the Henkel Group (Management
Circles 0 to IIb). This becomes payable on condi-
tion that the adjusted return on sales achieved
in 2012 is at least 14 percent.
Sustainability strategy 2030
Our corporate value as the foundation
Commitment to leadership in sustainability is
one of our core corporate values. Maintaining a
balance between economic success, protection of
the environment, and social responsibility has
been fundamental to our corporate culture for
decades. As pioneers, we aim to develop new
solutions for sustainable development while con-
tinuing to shape our business responsibly and
increase our economic success. This ambition
encompasses all of our companys activities
along the entire value chain.
Achieving more with less
We are facing immense challenges: The global
human footprint is already greater today than the
planets resources can bear. By the year 2050, the
worlds population is expected to grow to 9 bil-
lion. The accompanying acceleration in global
economic activity will lead to rising consump-
tion and resource depletion. The pressure on
available resources will thus intensify in the
coming decades. Since sacrificing quality of life
and consumption is not a realistic solution in our
Our goal is to become three times more efficient by 2030. We
call this Factor 3. That means tripling the value we create
through our business activities in relation to the ecological
footprint made by our products and services.
5times
sector leader in
the Dow Jones
Sustainability Index
(see page 26).
Group management report
Strategy and fnancial targets for 2012
Henkel Annual Report 2011 48
these focal areas, we drive progress along the
entire value chain through our products and pro-
cesses. With our new strategy, we have added a
sixth focal area to the previous five, namely that
of Performance. This reflects not only our aims
as a commercial enterprise, but also our core
value contribution to society. At the same time,
we have subdivided the focal areas into two di-
mensions: more value and reduced footprint.
Three focal areas therefore represent the value
we want to deliver to our customers, sharehold-
ers and our company, for example in the form of
enhanced occupational safety and contributions
to social progress. The three other focal areas
describe the way in which we want to reduce
our ecological footprint, for instance through
reduced water and energy consumption and
less waste.
same level. Or we can reduce the ecological foot-
print to one third of todays level, achieving our
Factor 3 improvement in efficiency by deliver-
ing the same value.
To reach this ambitious 20-year goal, we will
have to improve our efficiency by an average of
5 to 6 percent each year. We have therefore set
concrete 5-year targets for our focal areas (see
chart). By 2015, we intend to improve the
relationship between the value we create and
the ecological footprint of our business activity
by 30 percent overall.
Our contributions in six focal areas
To successfully implement our strategy, we are
concentrating on six focal areas of activity that
reflect the challenges of sustainable develop-
ment as they relate to our operations. In each of
Our focal areas and company-wide targets for 2015
Group management report
Strategy and fnancial targets for 2012
Morevalue
Reducedfootprint
More social progress and
better quality of life
Less energy used and
less greenhouse gases
More value for our customers
and more value for Henkel
Safer workplaces and
better health & hygiene
Less water used and
less water pollution
Less resources used
and less waste generated
+20%
safer per million
hours worked
15%
less water per
production unit
15%
less waste per
production unit
15%
less energy per
production unit
+10%
more net sales per
production unit
Performance
Safety
and
Health
Water
and
Wastewater
Materials
andWaste
Energy
and
Climate
Deliver
more value
atareduced
footprint

Social
Progress
Henkel Annual Report 2011 49
Sustainability Report 2011
internal audits performed at our production and
administration sites, and also increasingly
audits at our toll and contract manufacturers and
logistics centers.
By joining the United Nations Global Compact in
July 2003, we also publicly underscored our com-
mitment to respect human rights and fundamen-
tal labor standards, to promote environmental
protection and to work against all forms of cor-
ruption.
Stakeholder dialogue
Viable solutions promoting sustainability can
only be developed in dialogue with all the rele-
vant social groups. These include our employees,
shareholders, customers, suppliers, civil authori-
ties, politicians, associations, governmental and
non-governmental organizations, academia and
the public at large. We view interaction with our
stakeholders as an opportunity to identify the
needs of our different markets at an early stage
and to define the directions which our activities
should take. Our dialogue with various stake-
holder groups enables us to access new ideas for
our company, which flow continuously into our
strategy development and reporting.
We deploy a wide range of communication in-
struments in order to meet the specific informa-
tion requirements of our stakeholders, ranging
from our own publications and technical articles
to events and direct contact. More details and
background reading on the subject of sustain-
ability can be found in our

Sustainability Re-
port. With this, we document the high priority
assigned to the pursuit of sustainable develop-
ment by our company, at the same time satisfy-
ing the reporting obligations laid down in the
United Nations Global Compact.
Further information, reports, background details
and the latest news on sustainable development
at Henkel can be found on our website:
www.henkel.com/sustainability
Our approach for sustainable business processes
In order to successfully implement our strategy
and reach our goal, both of these dimensions
must be manifest in the minds and day-to-day
actions of our more than 47,000 employees, and
apparent in our business processes. We have de-
fined three strategic principles to achieve this:
products, partners, and people.
Our products deliver more value for our custom-
ers and consumers. We achieve this through in-
novative solutions and education, and through
products that offer better performance with a
smaller footprint, thus saving resources and re-
ducing other negative environmental impacts.
Our partners are key to driving sustainability
along our value chains and in all areas of busi-
ness and life. We support them with our products
and expertise. And we collaborate with selected
vendors, so that they can supply us with raw
materials that have an improved environmental
footprint. At the other end of the chain, we help
our customers and consumers to reduce their
own environmental footprint.
Our people make the difference through their
dedication, skills and knowledge. They make
their own contributions to sustainable develop-
ment, both in their day-to-day business and as
members of society. They interface with our cus-
tomers and consumers, make innovation possi-
ble, develop successful strategies, and give our
company its unique identity.
Organization
The Henkel Management Board bears overall
responsibility for our sustainability strategy and
objectives, and hence the pursuit thereof within
the corporation. Henkels Sustainability Council
steers our global sustainability activities in col-
laboration with the individual business sectors
and functions, and our regional and national
affiliated companies.
Our understanding of socially responsible behav-
ior has been specified and communicated to our
employees throughout the entire Group in our
Code of Corporate Sustainability and our Code of
Conduct. From these codes are derived our more
detailed internal standards governing safety,
health and environmental protection, our social
standards and our Group purchasing standards.
Compliance with these rules and requirements is
regularly monitored throughout the Group by
Detailed information and
background reading on the
subject of sustainability can
be found in our Sustainability
Report which is available in
both printed and online form.
www.henkel.com/
sustainabilityreport
Group management report
Strategy and fnancial targets for 2012
Henkel Annual Report 2011 50
Value-basedmanagementand
controlsystem
We align our corporate management and control
activities to the overall objective of achieving a
sustainable increase in shareholder value. To make
achievement of our growth targets measurable,
we have adopted a modern system of metrics
with which we calculate value-added and return
ratios in line with capital market practice.
We use economic value added (EVA

) 1 to assess
growth to date and to appraise future plans.
EVA

is a measure of the surplus financial value

generated by a company over a certain period.
A company creates economic value added if its
operating profit exceeds its cost of capital, the
latter being defined as the return on capital ex-
pected by the capital market.
Operational business performance is measured
on the basis of operating profit (EBIT) adjusted
for any goodwill impairment losses. The capital
employed figure is calculated from the assets side
of the statement of financial position. A re con-
ciliation of the year-end figures in that financial
state ment to the average values used in determin-
ing capital employed can be found on page 147.
The cost of capital employed is calculated as
a weighted average of the cost of capital (WACC)
comprising both equity and debt. In fiscal 2011
we applied a WACC after tax of 6.5 percent. Before
tax, the figure was 9.0 percent. We regularly re-
view our cost of capital in order to reflect changing
market conditions. Starting fiscal 2012, therefore,
we have adopted a WACC of 9.5 percent before tax
and 6.5 percent after tax.
We further apply different WACC rates depending
on the business sector involved. This is based
on sector-specific beta factors taken from a peer
group benchmark. In fiscal 2011, this resulted in
aWACC before tax of 9.0 percent (6.5 percent after
tax) for both Laundry & Home Care and Cosmetics/
Toiletries, and of 10.5 percent before tax (7.5 per-
cent after tax) for Adhesive Technologies. In 2012
we are applying a WACC of 9.5 percent before tax
(6.5 percent after tax) for the business sectors
Laundry & Home Care and Cosmetics/Toiletries,
and 11.5 percent before tax (8.0 percent after tax)
for Adhesive Technologies.
1 EVA

is a registered trademark of Stern Stewart & Co.

9.0%
Group WACC before tax in
fscal 2011.
Weighted average cost of capital (WACC)
2011 from2012
Risk-free interest rate 3.3 % 3.5 %
Market risk premium 4.5 % 4.5 %
Beta factor 0.8 0.8
Costofequityaftertax 6.8% 7.1 %
Cost of debt capital before tax 4.1 % 4.7 %
Tax shield (30 %) 1.2 % 1.4 %
Costofdebtcapitalaftertax 2.9% 3.3 %
Share of equity 1
(peer group structure) 85 % 85 %
Share of debt capital 1
(peer group structure) 15 % 15 %
WACCaftertax2 6.5% 6.5 %
Tax rate 30 % 30 %
WACCbeforetax2 9.0% 9.5 %
1 At market values.
2 Rounded.
WACC before tax by business sector
2011 from2012
Laundry & Home Care 9.0 % 9.5 %
Cosmetics/Toiletries 9.0 % 9.5 %
Adhesive Technologies 10.5 % 11.5 %
Group management report
Value-based management and control system
Henkel Annual Report 2011 51
Group management report
Value-based management and control system
848 million euros, an increase of 279 million euros
(+49.0 percent) above the prior-year figure. This
is attributable to both the very strong rise in ope-
rating profit and a decrease in capital employed.
All our business sectors posted a positive EVA

.
At Laundry & Home Care, the figure was 303 mil-
lion euros, 5.7 percent above the prior-year level,
resulting from a very strong reduction in capital
employed. Cosmetics/Toiletries generated EVA

of
290 million euros, a major plus of 40.6 per cent ver-
sus 2010 achieved thanks to a substantial increase
in operating profit. At Adhesive Technologies, we
increased our EVA

to 282 million euros, a rise of

209 million euros, due both to the significant
improvement in operating profit and a reduction
in capital employed compared to the previous
year.
ROCE increased from 14.9 percent to 16.6 percent.
This is essentially due to the very strong develop-
ment in operating profit and a reduction in the
level of capital employed.
EVA

and ROCE
EVA

serves to promote value-added decisions
and profitable growth in all our business sectors.
Operations exhibiting negative value contribu-
tions with no prospect of positive EVA

in the
future are divested or otherwise discontinued.
At Henkel, EVA

is calculated as follows:
EVA

= EBIT * (Capital Employed x WACC).

In order to be better able to compare business
units of varying size, we additionally apply return
on capital employed, calculated as follows:
ROCE = EBIT * Capital Employed.
ROCE represents the return on average capital
employed. We create value where this metric
exceeds the cost of capital before tax.
In fiscal 2011, the Henkel Group posted positive
economic value added (EVA

) amounting to
EVA

and ROCE 1

in million euros
Laundry&
HomeCare
Cosmetics/
Toiletries
Adhesive
Technologies
HenkelGroup
EBIT * 511 471 1,002 1,857
Capital employed 2,314 2,001 6,853 11,208
Costofcapital2 208 180 720 1,0093
EVA

2011 303 290 282 8483

EVA

2010 286 207 73 5694

ROCE2011 22.1% 23.5% 14.6% 16.6%
ROCE 2010 21.2 % 20.1 % 12.5 % 14.9%
1 Calculated on the basis of units of 1,000 euros.
2 Calculated on the basis of the diferent sector-specifc WACC rates applied.
3 Calculated on the basis of a WACC rate of 9.0 percent for the Henkel Group.
4 Calculated on the basis of a WACC rate of 10.0 percent for the Henkel Group.
* Adjusted for goodwill impairment losses.
848million
euros
economic value added (EVA

)
in 2011.
Henkel Annual Report 2011 52
Businessperformance
World economy
Overview:
Global economic slow-down
Following the semi-recovery in 2010, the world
economy 1 cooled down again in 2011. Global gross
domestic product increased by 2.6 percent. While
the emerging regions registered a rise of 5.4 per-
cent, the industrialized countries exceeded the
prior-year level by a mere 1.3 percent. Persistently
high risks emanating from the debt crises in
Europe and the USA, and the decline in growth
in Asia resulting from the measures introduced
to combat inflation, had an adverse effect on
economic development and also increasingly
dampened investor and private consumer
confidence.
Developments in 2011:
Declining dynamism as the year progressed
After the rapid, strong recovery from the severe
recession during the period from 2010 to the first
quarter of 2011, the global business environment
exhibited a decrease in dynamism in the remain-
der of the year.
Industry and consumption:
Further increase in industrial output
With growth of around 6 percent, industrial pro-
duction again expanded faster than private
consumption, the latter rising by about 3 percent.
While the export-dependent industries in par-
ticular posted in part significant increases,
developments in the consumer-related sectors
were correspondingly sluggish.
Regions:
Mature markets restrained,
emerging regions robust
Expansion in Western Europes gross domestic
product was generally weak. With a plus of 3 per-
cent in Germany, however, the region was able
to achieve growth of just over 1.5 percent. The
North American economy likewise grew very
little through the year as a whole. Compared to
the previous year, the region registered an in-
crease in economic output of just over 1.5 per-
cent. High commodity prices and a high unem-
ployment rate, combined with only moderate
increases in disposable income, greatly inhibited
private consumption as a growth driver. Japans
economy contracted by around half a per cent as a
result of its natural disaster. The emerging mar-
1 Source of world economic data:
Feri EuroRating Services, January 2012.
Group management report
Value-based management and control system / Business performance
Statutory and regulatory situation
Our business is governed by national rules and
regulations and within the European Union
(EU) increasingly by harmonized pan-European
laws. In addition, some of our operations are
subject to rules and regulations derived from
approvals, licenses, certificates or permits.
Our manufacturing operations are bound by
rules and regulations with respect to the usage,
storage, transportation and handling of certain
substances and also in relation to emissions,
wastewater, effluent and other waste. The con-
struction and operation of production facilities
and other plant and equipment are likewise
governed by framework rules and regulations
including those relating to the decontamination
of soil.
Product-specific regulations of relevance to us
relate in particular to ingredients and input
materials, safety of manufacture, the handling
of products and their constituents, and the pack-
aging and marketing of these items. The control
mechanisms include statutory material-related
regulations, usage prohibitions or restrictions,
procedural requirements (test and inspection,
identification marking, provision of warning
labels, etc.), and product liability law.
Our internal standards are geared to ensuring
compliance with statutory regulations and
the safety of our manufacturing facilities and
products. The associated requirements have been
incorporated within, and implemented through,
our management systems, and are subject to a
regular audit and review regime. This includes
monitoring and evaluating relevant statutory and
regulatory requirements and changes.
One important statutory instrument affecting
us is the European regulation on the registration,
evaluation, authorization and restriction of
chemicals Regulation (EC) No. 1907/2006, ab-
breviation: REACH. This regulation primarily
addresses Henkel as a user of chemical materi-
als; however, it also affects us as an importer
and manufacturer. In order to ensure the effi-
cient implementation of the associated require-
ments, we have established a central REACH
management team for handling and controlling
the main REACH processes.
Henkel Annual Report 2011 53
kets of Eastern Europe, Asia (excluding Japan),
Latin America and Africa/Middle East exhibited
robust economic growth compared to the previous
year. In Eastern Europe, economic recovery con-
tinued with growth of around 3 percent. Russia
stood out as one of the more dynamic economies
of the region, posting expansion of 4 percent.
Latin America registered strong growth of about
5 percent. The emerging countries of Asia increased
their economic output by around 7 per cent, with
India and China once again leading the way.
Raw material prices:
Strong increase across the board
The high demand for raw materials, particularly in
the emerging countries of Asia, led to a substan-
tial rise in the associated prices in the course of
the year under review. Commodities subject to
these price developments included crude oil,
ethylene, propylene, palm kernel oil, paper and
metals. At around 110 US dollars per barrel, for
example, the average price for crude oil for the
year was almost 30 dollars above the level of the
previous year. Raw material prices stabilized at a
high level during the second half of the year due
to the general global decline in economic growth
rates.
Currencies:
Euro in the throes of the European fnancial crisis
Taking the annual average for 2011, the euro
appreciated slightly against the US dollar, from
1.33 to 1.39. However, there was no clear trend as
the year progressed. At the beginning of 2011 the
euro rose steadily, occasionally reaching levels
above 1.46 US dollars around the middle of the
year. By the end of the third quarter, however, the
euro was again trending weaker, and at the end
of the year it had hit a low of 1.29 US dollars, with
the European debt crisis as the primary cause.
Developments in the exchange rates of currencies
important to Henkel are indicated in the follow-
ing table:
Average rates of exchange versus the euro
2010 2011
Chinese yuan 8.98 8.99
Mexican peso 16.75 17.31
Polish zloty 4.00 4.13
Russian ruble 40.26 40.91
US dollar 1.33 1.39
Infation:
Rise in global price levels
Global inflation has risen from just under 3 to
4percent, due mainly to the strong increase in
commodity prices. Consumer prices have risen
in all regions, although developments were very
mixed from one country to another. In North
America and in Western Europe and here par-
ticularly in Germany inflation underwent a
substantial rise. By contrast, developments in
Japan were persistently deflationary. In China,
inflation rose significantly, driven by strong
growth coupled with high price increases,
particularly for food products.
Unemployment:
Slight global decline to around 7 percent
In the industrialized regions, unemployment
decreased slightly to 8 percent. In North America,
the figure has remained high at around 9 per-
cent. The labor market in Germany developed
positively with the unemployment rate falling
to just under 7 percent, noticeably below the
prior-year figure. In the emerging regions, unem-
ployment rates remained stable at about 7 per-
cent. Around the world, unemployment de-
creased slightly to approximately 7 percent.
Developments by sector:
Slight increase in consumption
Growth in private consumer spending remained
sluggish at around 3 percent. In the industrialized
countries, consumers only spent 1 percent more
in 2011 than in 2010. Consumers in North America
increased their spend by about 2 percent. In
Western Europe, consumer spending was only
marginally above the prior-year level, with the
Group management report
Business performance
Henkel Annual Report 2011 54
Review of overall business performance
Henkels business performance was influenced
by the challenging market environment outlined
above. In the course of the year, the rate of world
economic growth slackened. Despite persistent
threats such as the debt crises in Europe and the
USA, the consequences of the political unrest in
North Africa, the environmental disaster in Japan
and the decline in growth in Asia, we achieved an
organic sales increase of 5.9 percent, exceeding our
guidance of 3 to 5 percent. In all our business
sectors we continued to outpace our relevant mar-
kets. We also increased the share of sales ac-
counted for by our emerging markets to 42 percent.
The prices for our total direct materials rose on
our procurement markets in the course of the
year, stabilizing at a high level during the second
half. We were able to extensively mitigate the
negative impact of this development, although not
completely offset it, by introducing appropriate
countermeasures such as increasing our own
selling prices and implementing projects designed
to achieve cost reductions in production and sup-
ply chain. Overall, adjusted 1 gross margin de-
creased by 1.3 percentage points to 45.8 percent.
Nevertheless, with an adjusted return on sales
figure of 13.0 percent, we were able to fulfill our
guidance, improving our profitability compared
to the previous year by 0.7 percentage points a
significant step in the direction of the 14 percent
targeted for 2012. Reflected in these results are
the savings successfully achieved from our accel-
erated initiatives to align our structures to our
markets and customers. The expansion of our
shared service centers with the opening of a
third site in Mexico City further reduced the
overheads component in our costs.
We continued optimizing our portfolio through
the sale of non-core businesses in 2011: In the
second quarter, we disposed of our branded con-
sumer goods business in India and also the
roofing membrane business operated by Adhesive
Technologies. We have reduced the complexity
of our brands portfolio from an original basket of
over 1,000 to a current total of about 400. This
enables us to focus more strongly on our top brands
and fully exploit the opportunities available to
us in our core businesses.
1 Adjusted for one-time charges/gains and restructuring charges.
Group management report
Business performance
rise coming primarily from Germanys increase of
about 1 percent. The emerging regions exhibited a
higher propensity to consume with a plus of
around 5 percent, matching the overall rate of
regional economic expansion.
Industry shows robust growth
With growth of 6 percent, industrial production
continued to increase more rapidly than the
economy as a whole. The primary drivers in this
development were the export-dependent indus-
tries, and here particularly electrical and electronic
engineering, the transport sector and metal pro-
cessing, each of which saw output substantially
rise, benefiting from the increase in investment
activity in the industrialized nations, and brisk
export activity.
However, developments in industrial production
were very mixed at the regional level. Manufac-
turing in Western Europe and North America
expanded by something over 4 percent. Asias
industrial output grew by around 8 percent.
The contributions of the emerging countries of
China, South Korea and India were particularly
prominent in this regard, while Japanese manu-
facturing declined due to the natural and nuclear
disasters suffered by that country.
Our important customer industries of transport
and electronics saw production expand consider-
ably, by around 7 percent. Strong growth was also
generated in the automotive industry. Within the
electronics sector, growth of relevance to us in
basic products such as microchips and printed
circuit boards was only slightly positive. Growth
in the metals industry was a robust 8 percent. How-
ever, expansion in the consumer-related sectors
such as the global packaging industry was sluggish,
joining food products, beverages, paper and
printing with growth in the lower single-digit
range. After several years of decline, construction
avoided contraction in 2011. While building
activity in the emerging regions was extremely
brisk, North America and Western Europe regis-
tered declines of 9 and 1 percent respectively.
Henkel Annual Report 2011 55
Group management report
Business performance
Sales development 1
in percent 2011
Changeversuspreviousyear 3.4
Foreign exchange 1.9
Adjustedforforeignexchange 5.3
Acquisitions/divestments 0.6
Organic 5.9
of which price 3.0
of which volume 2.9
1 Calculated on the basis of units of 1,000 euros.
We posted increases in organic sales in each of
our business sectors, further expanding our share
of relevant markets. Adhesive Technologies was
able to increase organic sales by 8.3 percent to
a new high of 7,746 million euros. The Cosmetics/
Toiletries business sector continued its positive
revenue trend of recent years and, with growth
of 5.4 percent, significantly outperformed a pre-
dominantly declining market. Laundry & Home
Care achieved an increase in organic sales of
2.9 percent within a slightly declining market.
Price and volume effects


in percent
Organic
sales
growth
ofwhich
price
ofwhich
volume
Laundry & Home
Care 2.9 1.6 1.3
Cosmetics/
Toiletries 5.4 0.3 5.7
Adhesive
Technologies 8.3 5.3 3.0
Henkel Group 5.9 3.0 2.9
We were able to further grow revenues in almost
all our regions, except for North America:
In the highly competitive market environment
of Western Europe, we increased sales by 2.8 per-
cent to 5,624 million euros. Organic sales growth
amounted to 2.3 percent, driven primarily by
expansion in Germany and France. The share of
sales accounted for by the region remained stable
at 36 percent.
We increased sales in Eastern Europe by 6.2 per-
cent to 2,813 million euros. The organic sales
growth of 10.3 percent was generated primarily as
a result of business expansion in Turkey and the
successes of our adhesives business in Russia.
The regions share of consolidated sales stayed
at 18 percent.
In response to our continuing good business
performance and our improved financial profile,
we also regained our target ratings of A flat
(Standard & Poors) and A2 (Moodys) in the second
quarter. Our financial ratios have improved
significantly: Thanks to strong cash flows from
operating activities, the net debt of the Henkel
Group decreased to 1.7 billion euros (28 percent)
in the course of the year. We also increased our
operating debt coverage from 71 to 83 per cent.
Overall, we have a solid long-term financing struc-
ture and sufficient liquidity reserves for us to
exploit opportunities in value-creating external
growth, provided that these do not jeopardize
our regained target ratings in the long term.
As a front-runner in sustainability, we intend
to introduce new solutions to meet the chal-
lenges of sustainable development and to further
develop our business by generating economic
success based on responsibility. Having achieved
our sustainability targets for 2012 ahead of
schedule in 2010, we extended our sustainability
strategy in the year under review through to the
year 2030 with the adoption of our Factor 3
objective: Within the next 20 years, we want to
triple the value that we create with our business
activities in relation to the ecological footprint
caused by our products and services.
The highly gratifying results of fiscal 2011 took
us a further important step closer to achieving our
ambitious financial targets for 2012.
Sales and profits
In a challenging economic environment, Henkel
Group sales grew to 15,605 million euros in 2011,
a rise of 3.4 percent versus prior year. After ad-
justing for foreign exchange, sales increased by
5.3 percent. In organic terms (i.e. after adjusting
for foreign exchange and acquisitions/divest-
ments), sales improved by a high 5.9 percent. Half
of this rise was attributable to the increase in our
selling prices, particularly in the Adhesive Tech-
nologies business sector, reflected in a price
effect of 3.0 percent.
In the course of the financial year, the rate of our
revenue increase declined somewhat against the
backdrop of slowing world economic expansion.
While organic growth in the first half of the year
came in at 6.7 percent, in the second half it eased,
albeit to a still substantial 5.2 percent.
Sales by business
sector *
in million euros
Laundry & Home Care
2010 4,319
2011 4,304
Cosmetics/Toiletries
2010 3,269
2011 3,399
Adhesive Technologies
2010 7,306
2011 7,746
* Excluding Corporate.
Sales
in million euros
2007 13,074
2008 14,131
2009 13,573
2010 15,092
2011 15,605
Henkel Annual Report 2011 56
Group management report
Business performance
In our effort to continuously adapt our structures
to our markets and customers, we increased our
restructuring charges from 184 million euros to
227 million euros, with the focus primarily on
Western Europe. We further expanded our shared
service centers, reorganized our Laundry & Home
Care business sector for enhanced efficiency, and
further optimized the production footprint serv-
ing our Adhesive Technologies business sector.
To make the development of our underlying
operating activities more transparent, in the fol-
lowing we discuss the earnings of our business
sectors after adjusting for one-time charges/gains
and restructuring charges:
Adjusted operating profit (EBIT)
in million euros 2010 2011 %
EBIT(asreported) 1,723 1,857 7.8
One-time gains 59 57
One-time charges 14 2
Restructuring charges 184 227
AdjustedEBIT 1,862 2,029 9.0
Our adjusted operating profit (adjusted EBIT)
increased by 9.0 percent, from 1,862 million euros
in 2010 to 2,029 million euros, with all our busi-
ness sectors contributing. Despite the burdens
arising from the substantial increase in prices on
our procurement markets, the Groups adjusted
return on sales (adjusted EBIT margin) improved
by 0.7 percentage points to 13.0 percent, thus
reaching our guidance.
The most significant improvement in margin was
achieved by Adhesive Technologies with an in-
crease from 12.8 to 13.9 percent. This was achieved
on the back of both increases in our selling prices
and the ongoing success of our cost management
activities. The Cosmetics/Toiletries business
sector increased its adjusted return on sales by
0.9 percentage points to 14.2 percent (previous
year: 13.3 percent). This likewise reflects a combi-
nation of gratifying sales growth and efficiency
enhancements. The Laundry & Home Care business
sector saw its profitability grow despite strongly
increased material prices, reaching 13.2 percent
in 2011 (previous year: 13.0 percent).
Further details relating to our business performance
can also be found in the individual reports
dealing with our business sectors, which begin
on page 76.
Growth in the Africa/Middle East region was
adversely affected by the political unrest in some
countries. This meant that unlike in previous
years we were unable to achieve the usual double-
digit nominal growth rates. In fact, revenues
rose by 3.7 percent to 934 million euros, although
organic sales growth did pass the double-digit
mark with a 10.0 percent increase, achieved as
aresult of double-digit growth rates in the United
Arab Emirates, Saudi Arabia and Algeria. The
share of sales of the region was unchanged at
6 percent.
Due to foreign exchange factors, sales of the North
America region decreased slightly, by 0.3 percent
to 2,716 million euros. Despite a reluctant consum-
er climate in the USA, organic sales growth of the
region came in at 4.4 percent. Even our Laun-
dry & Home Care business sector, which under-
went organic contraction at the beginning of the
year due to declining markets and persistently
tough compe titive pressures, saw organic sales
slightly increase. The share of sales of the region
decreased from 18 to 17 percent.
The Latin America region continued to develop
well, posting sales growth of 8.4 percent to
1,065 million euros. The double-digit organic
growth rate of 11.0 percent was driven in particular
by our business performance in Mexico, Brazil
and Venezuela. The share of sales of the region
remained at the prior-year level of 7 percent.
Within the Asia-Pacific region, the consequen ces
of the natural disaster in Japan exerted a damp-
ening influence on regional sales growth. This
amounted to 5.9 percent, taking the total to
2,296 million euros. With an organic growth rate
of 8.6 percent, however, the region continued to
exhibit positive development, driven particularly
by double-digit rates of expansion in China,
India and South Korea. Asia-Pacific increased its
share of sales compared to the previous year
from 14 to 15 percent.
Sales in the emerging markets of Eastern Europe,
Africa/Middle East, Latin America and Asia
(excluding Japan) increased by 6.2 percent to
6,512 million euros. Organic growth reached 10.8
percent with contributions coming particularly
from the business sectors Adhesive Technologies
and Cosmetics/Toiletries, both of which posted
double-digit increases. The share of sales of our
emerging markets rose from 41 to 42 percent.
Sales by region *
in million euros
Western Europe
2010 5,470
2011 5,624
Eastern Europe
2010 2,649
2011 2,813
Africa/Middle East
2010 901
2011 934
North America
2010 2,724
2011 2,716
Latin America
2010 982
2011 1,065
Asia-Pacific
2010 2,168
2011 2,296

* Excluding Corporate.
EBIT by region *
in million euros
Western Europe
2010 706
2011 767
Eastern Europe
2010 314
2011 384
Africa/Middle East
2010 81
2011 79
North America
2010 320
2011 289
Latin America
2010 104
2011 105
Asia-Pacific
2010 306
2011 360

* Excluding Corporate.
Henkel Annual Report 2011 57
Expense items
In the following, we discuss our operating ex-
penses adjusted for one-time charges/gains and
restructuring charges. The reconciliation state-
ment and also the allocation of the restructuring
charges to the various items of the statement of
income can be found on page 100.
The cost of sales in 2011 outstripped the increase
in revenues, coming in 5.9 percentage points
higher at 8,455 million euros due to the rise in raw
material prices. Gross profit rose to 7,150 million
euros, while our gross margin decreased by
1.3 percentage points to 45.8 percent. The nega-
tive impact from the cost of sales rise was about
80 percent offset by increases in our selling pric-
es, savings from cost reduction measures, and
efficiency improvements in both production and
supply chain.
At 4,081 million euros, marketing, selling and
distribution expenses decreased by 3.5 percent
compared to the figure for the previous year. We
were able to make our sales and distribution pro-
cesses more efficient. Lower marketing expendi-
tures reflected a market environment character-
ized by a decline in general advertising
expenditures.
We spent a total of 396 million euros on research
and development. Our R&D ratio (R&D expenses
expressed as a proportion of sales) therefore re-
mained constant versus prior year at 2.5 percent.
Comparison between actual business perfor-
mance and guidance
In our report for fiscal 2010, we offered guidance
for the coming financial year of 2011 indicating
that we intended to once again outperform our
relevant markets in terms of organic sales growth,
expec ting an increase within the range of 3 to
5 percent. Building on the figures of 2010, we
anticipated adjusted return on sales (EBIT) to
increase to around 13 percent, and adjusted earn-
ings per preferred share to undergo a rise of
around 10 percent.
Although the price rises encountered for our to-
tal direct materials were higher than budgeted,
we succeeded in delivering in full our sales and
earnings guidance: With an organic growth rate
of 5.9 percent, we actually exceeded the guidance
corridor. In all three business sectors, we posted
organic growth rates above those of the relevant
markets. At Group level, we achieved a significant
increase in adjusted return on sales from 12.3 to
13.0 percent, and also an improvement in adjusted
earnings per preferred share of 11.3 percent to
3.14 euros (2010: 2.82 euros).
In our 2010 annual report, moreover, we indicated
that we expected the increase in the prices for
raw materials, packaging, contract manufacturing
and traded goods to be in the high single-digit
percentage range. The actual price increase was
in the low double-digit range and therefore high-
er than expected.
Guidance versus performance 2011
Guidance2011 Performance2011
Organic sales growth



Outperform relevant market development



Laundry & Home Care: +2.9 percent
(relevant market: slight decline)
Cosmetics/Toiletries: +5.4 percent
(relevant market: predominantly
declining)
Adhesive Technologies: +8.3 percent
(relevant market: low single-digit growth)
Adjusted return on sales Increase to around 13 percent Increase to 13.0 percent
Adjusted earnings per preferred share Increase of around 10 percent Increase of 11.3 percent
Group management report
Business performance
Henkel Annual Report 2011 58
Reconciliation from sales to adjusted operating profit
in million euros 2010 % 2011 % Change
Sales 15,092 100.0 15,605 100.0 3.4%
Cost of sales 7,983 52.9 8,455 54.2 5.9 %
Grossproft 7,109 47.1 7,150 45.8 0.6%
Marketing, selling and distribution expenses 4,229 28.1 4,081 26.2 3.5 %
Research and development expenses 383 2.5 396 2.5 3.4 %
Administrative expenses 711 4.7 706 4.5 0.7 %
Other operating income/charges 76 0.5 62 0.4 18.4 %
Adjustedoperatingproft(EBIT) 1,862 12.3 2,029 13.0 9.0%
The share of administrative expenses related to
sales decreased from 4.7 percent to 4.5 percent, a
develop ment to which the expansion of our
shared service centers significantly contributed.
Other operating income and charges
The balance of adjusted other operating income
and charges decreased by 14 million euros to
62 million euros. This was due to lower gains
from the disposal of non-current assets and write-
ups, and also a decline in numerous individual
gains from our operating activities, for example
insurance payouts and similar income.

Financial result
Overall, our financial result improved by 16 million
euros to 155 million euros, attributable primarily
to the reduction in our net debt.
Net income
Income before tax increased by 150 million euros
to 1,702 million euros. Taxes on income amounted
to 419 million euros. The tax rate was 24.6 percent,
a decrease of 1.8 percentage points compared to the
previous year. This was due to positive one-time
effects arising from successfully concluded tax
audits relating to previous years. The adjusted tax
rate was 26.0 percent (previous year: 26.6 percent).
Net income for the year increased by 12.2 percent,
from 1,143 million euros to 1,283 million euros.
After deducting non-controlling interests of
30 million euros, net income totaled 1,253 million
euros (+12.1 percent). Adjusted net income after
non-controlling interests rose by 11.4 percent to
1,356 million euros. The annual financial state-
ments of Henkel AG & Co. KGaA, parent of the
Henkel Group, are summarized on page 152.
Dividends
According to our financial strategy, our dividend
payout ratio should be around 25 percent of the
net income attributable to shareholders of Henkel
AG & Co. KGaA after adjustment for exceptional
items. We therefore intend to propose to the
Annual General Meeting that the distribution
should increase to 0.80 euros per preferred share
and 0.78 euros per ordinary share, giving a pay-
out ratio of 25.5 percent.

Earnings per share (EPS)
Basic earnings per preferred share increased
from 2.59 euros to 2.90 euros, and earnings per
ordinary share rose from 2.57 euros to 2.88 euros.
Adjusted earnings per preferred share amounted
to 3.14 euros (previous year: 2.82 euros). As of
December 31, 2011, the Stock Incentive Plan intro-
duced in 2000 resulted in a dilution of earnings
per ordinary and per preferred share of 1 euro-
cent each.
Group management report
Business performance
Preferred share dividends
in euros
2007 0.531
2008 0.53
2009 0.53
2010 0.72
2011 0.802
1 Comparable based on share
split (1:3) of June 18, 2007.
2 Proposal to shareholders for
the Annual General Meet ing
on April 16, 2012.
Net income
in million euros
2007 941
2008 1,233
2009 628
2010 1,143
2011 1,283
Henkel Annual Report 2011 59
Capital expenditures
by business sector
37% Laundry &
Home Care
25% Cosmetics/
Toiletries
37% Adhesive
Technologies
1% Corporate
Corporate = sales and ser-
vices not assignable to the
individual business sectors.
Netassetsandfinancialposition
Acquisitions and divestments
Effective January 1, 2011, we assumed control over
Schwarzkopf Inc., Culver City, California, USA.
Having a direct presence in the US hair salon
seg ment enables us to better exhaust the potential
of this market. The purchase price paid was
42 million euros.
As of April 1, 2011, we now include in our consoli-
dated financial statements Purbond Group,
Hatfield, Great Britain, previously accounted for
using the equity method. The purchase price
paid amounted to 4 million euros.
In the second half of 2011, we spent 3 million euros
acquiring outstanding non-controlling interests
in Rilken Cosmetics Industry S.A., Athens, Greece.
Effective December 31, 2011, we increased our
shareholding from 50 to 78 percent at a cost of
3million euros, with the intention of acquiring
100 percent of the shares in the future.
At the end of January 2011, we disposed of our
non-core TAED bleach activator business in
Ireland for 4 million euros.
On May 31, 2011, we sold our shares in Henkel
India Ltd., Chennai, India, for 29 million euros,
generating a gain of 48 million euros.
Effective June 30, 2011, we divested our roofing
membrane business under the Wolfin brand
operated by Adhesive Technologies. The proceeds
of the sale amounted to 13 million euros with a
gain of 9 million euros.
On December 9, 2011, we also disposed of our non-
core corrosion-protection business in the USA
operated by the Adhesive Technologies business
sector. The proceeds of the sale were 8 million
euros, resulting in a gain of 4 million euros.
On December 15, 2011, we sold our 51 percent share
in the joint venture Cemedine Henkel Co. Ltd.,
Tokyo, Japan, generating proceeds of 6 million
euros and a gain of 1 million euros.
For further details relating to the acquisitions and
divestments made, please refer to the Notes on
pages 105 and 106.
Group management report
Net assets and fnancial position
Neither the acquisitions and divestments made
nor other measures undertaken resulted in
any changes in our business and organizational
structure. For further details relating to our
organization and business activities, please refer
to the corresponding passages on page 45.
Thanks to continuing good business performance
and our improved financial profile, we regained
our target ratings of A flat (Standard & Poors)
and A2 (Moodys) in the second quarter of 2011.
Looking forward, we intend not to jeopardize our
target ratings in the long term when assessing
possible acquisitions.
Capital expenditures
Capital expenditures (excluding financial assets)
in fiscal 2011 amounted to 393 million euros.
At 384 million euros, investments in property,
plant and equipment for continuing operations
returned to the level prevailing prior to the global
financial and economic crisis of 2008/2009. The
investment increase versus prior year amounted
to 144 million euros. We spent 9 million euros
onintangible assets (2010: 16 million euros). The
main focal points were structural optimizations
inproduction, and investments in plant for the
manufacture of innovative, sustainable product
lines (Laundry & Home Care and Cosmetics/
Toiletries). The emphasis within the Adhesive
Technologies business sector was on efficiency
improvements at our production sites and the
expansion of production capacities in our
emerging markets.
The major individual projects of 2011 were as
follows:
Construction of a production facility for
machine-dishwashing products (Somat tabs) in
Dsseldorf, Germany (Laundry & Home Care)
Expansion of storage capacities for laundry
detergents in Perm, Russia, and Ferentino, Italy
(Laundry & Home Care)
Construction of a production plant for liquid
laundry detergents in dissolvable sachets in
Krsladny, Hungary (Laundry & Home Care)
Efficiency enhancements at our production
sites in Europe and Shanghai, China, and
expansion of production capacity in Chengdu,
China (Adhesive Technologies)
Consolidation of graphite product manufacturing
in Delaware, Ohio, USA (Adhesive Technologies)
Packaging lines for new folding boxes for colo-
rants in Viersen, Germany (Cosmetics/Toiletries).
Henkel Annual Report 2011 60
Group management report
Net assets and fnancial position
Capital expenditures 2011

in million euros
Continuing
operations
Acquisitions Total
Intangible assets 9 50 59
Property, plant
and equipment 384 384
Total 393 50 443
In regional terms, the major portion of the invest-
ments made in 2011 focused on Europe and North
America. Around three-quarters of our capital
expenditures went into expansion projects and
rationalization measures.
First-time consolidations and purchase price
adjustments resulted in additions to intangible
assets in the amount of 50 million euros. For
further details, please refer to the Notes on
pages111 to 114.
Net assets
Total assets rose versus prior year by 1.1 billion
euros to 18.6 billion euros. Under non-current
assets, the increase in intangible assets was
primarily due to currency translation from the
stronger US dollar. The figure for property,
plant and equipment remained roughly constant,
capital expenditures of 384 million euros in our
operating businesses being offset by depreciation
of 302 million euros and disposals with a book
value of 28 million euros. There was also a counter-
vailing effect in the form of a positive currency
translation balance of 4 million euros.
Current assets increased from 5.9 billion euros
to 6.7 billion euros. Inventories and trade accounts
receivable both rose as a result of higher business
volumes. Cash and cash equivalents increased
by 465 million euros to 1,980 million euros, due
primarily to our strong cash flow from operating
activities in the third quarter.
Equity including non-controlling interests rose
by 812 million euros to 8,762 million euros. The
changes are shown in detail in the consolidated
statement of changes in equity on page 101.
The equity ratio increased compared to the previ-
ous year by 1.8 percentage points to 47.2 percent.
At 5.5 billion euros, non-current liabilities were
above the level as of year-end 2010. The increase
of 0.4 billion euros reflects developments in
pension provisions. The decline in security prices
adversely affected plan assets. Moreover, lower
valuation discount rates had the effect of increasing
calculated pension liabilities. As in the previous
year, non-current borrowings include three
bonds: two senior bonds with a redemption value
of 1 billion euros each, and a hybrid bond with
a redemption value of 1.3 billion euros.
Intangible assets/
Property, plant and equipment
Other non-current assets

Cash and cash equivalents
1 Including assets held for sale.
Financial structure
in million euros
Assets
ofwhichin%
Liabilities
ofwhichin%
18,579
2011
17,525
2010
18,579
2011
17,525
2010
Current assets 1
62
59
47
5
4
5
19
25
25
6
9
11
2
21
Equity
Pension provisions
Other non-current liabilities
Current borrowings
Non-current borrowings
Other current liabilities
45
3
20
6
3
23
Henkel Annual Report 2011 61
Current liabilities ended the year at 4.3 billion
euros, slightly below the prior-year level. This
reflects a decrease of 124 million euros in our
current borrowings, offset by an increase in trade
accounts payable of 103 million euros to 2,411 mil-
lion euros.
At December 31, 2011 our net debt 1 amounted
to 1,677 million euros. Compared to the prior-year
figure, therefore, we reduced the balance by
666 million euros, bringing it below the 2 billion
euro mark for the first time since the acquisition
of the National Starch businesses.
Financing and capital management
The finances of the Group are centrally managed
by Henkel AG & Co. KGaA. Financial funds
are, as a rule, centrally procured and then allo-
cated within the Group. We pursue a conserva-
tive borrowings policy aligned to flexibility and
characterized by a balanced financing portfolio.
The primary goals of financial management are
to secure the liquidity and creditworthiness of
the Group, together with ensuring access at all
times to the capital market, and to generate a
sustainable increase in shareholder value. Measures
deployed in order to achieve these aims include
ongoing optimization of our capital structure,
adoption of an appropriate dividends policy,
equity management, acquisitions, divestments
and debt reduction. Our capital needs and capital
procurement activities are coordinated to
ensure that relevant requirements with respect
to yield, liquidity, security and independence
are taken into account and properly balanced.
In the year under review, Henkel paid a higher
dividend for both our ordinary and our preferred
shares compared to the previous year. Cash flows
not required for capital expenditures, dividends
and interest payments are used to reduce our net
debt, for allocations to pension funds and in the
financing of acquisitions. We cover our short-
term financing requirement primarily with
commercial papers and bank loans. Our multi-
currency commercial paper program is addition-
ally secured by a syndicated credit facility.
The outstanding bonds serve to cover long-term
financing requirements. Our financial steward-
ship is aligned to the financial ratios defined in
our financial strategy (see page 63). Due to
the international alignment of our businesses,
we have to comply with a variety of statutory and
regulatory requirements, depending on the region
concerned. The status and further development
of these regulations are centrally monitored and
any changes are taken into account in our capital
management decision-making.
Our creditworthiness is regularly checked by the
two rating agencies Standard & Poors and Moodys.
We further improved our financial ratios in 2010
and 2011, thus meeting a major stipulation of the
rating agencies for upgrading us to our target
ratings of A flat (Standard & Poors) and A2
(Moodys). This success was due to our increased
profitability and substantially reduced net debt.
On May 15, 2011, Standard & Poors raised its long-
term rating for Henkel debt one notch, from A
to A flat and its short-term rating from A2
to A1. Moodys likewise raised its ratings for
us by one notch on June 1, 2011, from A3 / P2 to
A2 / P1. This means that both Standard & Poors
and Moodys continue to assign to Henkel an in-
vestment grade rating, the best possible category.
Credit ratings
Standard&Poors Moodys
Long-term A flat A2
Outlook Stable Stable
Short-term A1 P1
At Dec. 31, 2011.
At December 31, 2011, our non-current borrowings
amounted to 3,501 million euros. Included in
this figure are the hybrid bond issued in November
2005 with a nominal value of 1.3 billion euros,
and the fixed-interest bonds issued in May 2003
and March 2009, each with a volume of 1.0 bil-
lion euros. Our current borrowings i.e. those with
matu rities of less than 12 months amounted
Group management report
Net assets and fnancial position
Net debt
in million euros
2007 1,702
2008 3,881
2009 2,799
2010 2,343
2011 1,677
1 Borrowings less cash and cash equivalents, minus any positive
or plus any negative fair values of hedging contracts covering
those borrowings, provided that the underlying borrowings
are themselves subject to mark-to-market accounting.
Net debt
in million euros
1,677
atDec.31,2011
2,343
at Dec. 31, 2010
951
Free cash
flow
323
Dividends
paid
46
Allocation
to pension
funds
84
Other
Henkel Annual Report 2011 62
to 412 million euros as of the reporting date.
These essentially comprise interest-bearing loans
and overdrafts from banks.
We used our cash flow from operating activities
to redeem current borrowings and to build
up cash and cash equivalents, thus reducing our
net debt. The hybrid bond is treated as 50 per-
cent equity by Standard & Poors and following
a change in its evaluation method now also by
Moodys. This treatment benefits the rating-spe-
cific debt ratios of the Group (see key financial
ratios table below).
For further information on our financial instru-
ments, please refer to the Notes on pages 128
to 138.
Our financial risk management activities are
explained in the financial instruments report
in the Notes on pages 128 to 138 and also in
the risk report on pages 90 and 91.
Financial position
In 2011, cash flow from operating activities
amounted to 1,562 million euros, a total of 289 mil-
lion euros below the prior-year level. The cash
inflow from the growth in operating profit was
offset by the outflow arising from higher net
working capital caused by an increase in invento-
ries and trade accounts receivable. The increase
in operating profit led to a rise in income taxes
paid. The higher gains from asset disposals have
been adjusted out of cash flow from operating
activities. Where cash-relevant, they are disclosed
instead in cash flow from investing activities/
acquisitions.
Cash outflow in cash flow from investing activ-
ities/acquisitions was 57 million euros higher
than the prior-year level. The increase in invest-
ments in property, plant and equipment com-
pared to previous year led to higher outflows,
countervailed by increased proceeds from divest-
ments, predominantly from the sale of our branded
consumer goods business in India and our
business involving roofing membrane under
the Wolfin brand.
With a net outflow of 802 million euros, cash flow
from financing activities showed a significant
improvement of 421 million euros compared to
the previous year, despite a higher dividend pay-
out. The transfer of liquid funds to other current
financial assets effected in the previous year,
and the use of liquid funds to further strengthen
our pension plan assets, were also reported as
outflows under this heading.
Cash and cash equivalents increased by 465 mil-
lion euros to 1,980 million euros as a result of
the cash flow from operating activities.
Free cash flow amounted to 951 million euros,
a decrease of 557 million euros below the prior-
year figure due to the lower cash flow from oper-
ating activities and higher capital expenditures.
Key financial ratios
With our reduced indebtedness, our operating debt
coverage increased to 83.2 percent in 2011, bring-
ing it well above our target of 50 percent. Our
interest coverage ratio, i.e. EBITDA divided by net
interest expense, also improved further, aided by
lower interest expense. And our equity ratio sim-
ilarly reflects the high financial strength of the
Group.
Key financial ratios
2010 2011
Operatingdebtcoverage 1
(Net earnings + Amortization and
depreciation + interest element
of pension provisions) Net bor-
rowings and pension provisions 71.4 % 83.2%
Interestcoverageratio
(EBITDA Net interest expense
including interest element of
pension provisions) 12.8 14.6
Equityratio
(Equity Total assets)

45.4 %

47.2%
1 Hybrid bond included on 50 percent debt basis only.
Prior-year figures not adjusted.
Group management report
Net assets and fnancial position
Henkel Annual Report 2011 63
Employees
The number of people employed at Henkel at the
end of 2011 was 47,265 (annual average: 47,753),
1percent below the 2010 level. The year was
characterized by our focus on the emerging
markets, accompanied by efficiency enhance-
ments in the mature markets, with our shared
service centers covering a growing number of
processes from around the world. Personnel
growth was strongest in Eastern Europe with an
increase in payroll of 3 percent, while Western
Europe registered the highest decline of 3 per-
cent. Sales per capita increased by 4 percent to
326,766 eu ros. Personnel expenses came in at
2,522 million euros.
We rely on high-performing teams to attain our
ambitious goals. We offer our employees attractive
development opportunities within our global
cor por ation and provide specific training oppor-
tuni ties in order for them to build on their skills
and expertise. Such activities also strengthen our
attractiveness for new recruits, whereby promot-
ing the diversity of our teams in terms of nation-
ality, gender and age/professional experience
is a primary focus.
In 2011 we were again able to position ourselves
in the employer rankings of many countries as an
attractive company both for graduates and for
candidates with professional experience. For the
second consecutive year, the CRF Institute, one
of the leading research organizations in the field
of employer certification and employer branding,
recognized Henkel with its Top Employer Ger-
many award. We also took first place in the
subcategories Corporate Culture, Training and
Development, and Work Life Balance. Our em-
ployer branding campaign launched in February
2011 was recognized by Batten & Company with
first place in its Best Employer Brand Award
2011. By fall 2011, we had disseminated our new
employer brand in all the communication channels
we use. These activities all contribute to position-
ing Henkel more effectively as an employer of
choice, attracting new talent and retaining exist-
ing employees.
Coinciding with the new employer branding
campaign, we introduced a standard on-boarding
program: through interactive online media for
example a comprehensive e-book and an intranet
platform new employees are provided with
preparation for employment with Henkel several
weeks before their first working day, helping
them achieve a good start and familiarizing them
with essential aspects of the company.
We also launched the fifth edition of our global
innovation competition for students, the Henkel
Innovation Challenge, to coincide with the start
of the 2011/2012 academic year. The competition
has now been extended to 14 European countries
and also the regions of Asia-Pacific, North
America and Latin America. And for the first
time, all our business sectors were involved. By
extending the brief to include Henkel technolo-
gies and realigning the focus to ward sustain-
ability in the innovation process, we were
able to also attract engineers and scientists
as contenders. We are making increasing use
of social media such as Facebook in order to
address students. The accompanying mentoring
Employees
by region in 2011
32% Western Europe
19% Eastern Europe
11% Africa/Middle East
11% North America
8% Latin America
19% Asia-Pacific
Employees
by business sector
20% Laundry &
Home Care
16% Cosmetics/
Toiletries
51% Adhesive Technologies
13% Functions
In 2011, Henkel garnered the European Diversity Leadership
Honour in the category Multicultural Working Environment
in recognition of our commitment and transparency in the
diversity domain.
The purpose of a new employer branding campaign is to
position Henkel specifically as an employer of choice. Its design
elements serve as an effective eye-catcher in our information
booths at graduate fairs.
Group management report
Employees
64 Henkel Annual Report 2011
program has led to a substantial increase in
high-caliber job applicants. In Germany, Henkel
offers more than 20 apprentice ship professions, for
which we took on 161 apprentices in 2011. In all,
we currently have 483 apprentices under con-
tract. All our trainees successfully completed
their final examination with the German Chamber
of Commerce and Industry [IHK]. We again of-
fered the dual study courses introduced in 2009.
Here, students are able to combine a con ventional
apprenticeship with a Bachelor degree at a univer-
sity, allowing them to obtain an academic qualifica-
tion while gathering professional experience. In
all, the number of applicants for both kinds of
training course was very encouraging, providing
a good indication of the attractiveness of a
Henkel apprenticeship scheme. In 2011, we again
conferred the Hugo Henkel Award under the pa-
tronage of Dr. Christoph Henkel. This recognizes
projects and concepts in German schools designed
to promote the teaching of science and technology
to students in grade 5 and above.
Once more, our worldwide talent management
system was at the focus of our activities during
the year. Through our globally established De-
velopment Round Tables, our managers ensure
that our people are assessed on the basis of uni-
form principles and criteria. The annual assess-
ments of individual performance and potential
based on the management competences revised
in 2010 were conducted with our employees in
personal, open feedback discussions during the
first quarter of 2011, accompanied by agreement
on individually aligned development measures.
Effective January 1, 2011, Henkel introduced a
further developed global short-term incentive (STI).
As a performance-based component of compen-
sation, the new STI both encourages and rewards
excellent performance. Managers can thus affect
a major portion of their annual STI bonus through
their individual performance. This innovative
concept ensures a transparent, differentiated and
motivating compensation regime.
Our comprehensive range of training and develop-
ment offerings covers the requirements of differ-
ent employee groupings. In addition to classic
seminars and online training courses for all em-
ployees, we cooperate closely with internationally
renowned business schools in order to further
promote the development of our managerial staff.
To achieve global uniformity in the provision
and quality of our range of training and develop-
ment tools, we prepared a new global learning
concept in 2011 involving standardized course
seminars. These are scheduled for content com-
pletion and introduction in the course of 2012.
We also reviewed our international development
and assessment centers for managerial staff in
2011 in terms of concept and methodology in order
to ensure that, as an established component
of our personnel development system, these can
continue to deliver results in line with the in-
creasing demands being placed on management.
We successfully expanded our Executive Resource
Program launched in 2010 for our high-perform-
ing, high-potential employees. To prepare these
talents effectively for their future duties and
responsibilities, they were invited to participate
in a range of high-caliber events covering strategic
issues, as well as projects with an international
dimension. At a one-day event attended by mem-
bers of the Management Board, participants in
the program, devised by the Harvard Business
School, presented the results of their work in
the form of projects and analyses based on their
course content. And several top management
positions have now been filled with graduates
of the Executive Resource Program.
Employees 1
(at December 31) 2007 % 2008 % 2009 % 2010 % 2011 %
Europe/Africa/Middle East 33,687 64.0 33,485 60.7 30,933 62.8 30,078 62.9 29,530 62.5
North America 6,438 12.2 7,360 13.4 5,714 11.6 5,440 11.4 5,233 11.1
Latin America 4,268 8.1 4,293 7.8 4,002 8.1 3,699 7.7 3,681 7.8
Asia-Pacific 8,235 15.7 10,004 18.1 8,613 17.5 8,637 18.0 8,821 18.6
Total 52,628 100.0 55,142 100.0 49,262 100.0 47,854 100.0 47,265 100.0
1 Basis: permanent employees excluding apprentices.
Employees
by activity
49% Production and
engineering
31% Marketing, selling
and distribution
14% Administration
6% Research and
development
Employees
by age group
18% 1629 years
35% 3039 years
29% 4049 years
18% 5065 years
Group management report
Employees
65 Henkel Annual Report 2011
The diversity of our people with their different
experiences and cultural backgrounds offers us
aclear competitive advantage. Globally, our focus
in this respect is on the dimensions of gender,
internationality and age/professional experience.
One key area involves encouraging women into
managerial positions. As a result of a number of
measures implemented in recent years, we have
increased the proportion of women in manage-
ment to around 30 percent achieving an aver-
age growth rate of 1 percentage point per year.
This makes Henkel a leader among the DAX 30
corporations in Germany. We intend to extend
this lead going forward and further increase
the percentage of women at all levels. We have
committed ourselves to this objective in a joint
declaration signed by all DAX 30 companies.
Henkel has set itself specific quantitative and
qualitative targets and defined the measures
necessary in order to achieve them. We intend to
further increase the proportion of women in man-
agerial positions right across the Henkel Group
by an average of 1 to 2 percentage points per year.
Measures implemented for enhancing the
presence of women in the workplace focus both
nationally and internationally on recruitment,
personnel development and flexible working
arrangements. During the recruitment process,
Henkel endeavors to ensure a balanced range of
candidates with the objective of achieving an
equal distribution of women and men. Long-term
career plans are put in place to ensure that pro-
fessional needs can be reconciled with the de-
mands of private life. Assignments abroad are
introduced at an early stage in the career develop-
ment program. Mentoring schemes have also
been established to support the development
of female managers. Major elements of flexible
working arrangements include job-sharing mod-
els, part-time working opportunities, working at
home, and the extensive use of mobile communi-
cations devices. With these offerings, we are able
to move away from classic presence culture, shift-
ing the focus to performance and contribution.
Henkel, McKinsey & Company and the German
business magazine WirtschaftsWoche conferred
the German Diversity Awards for the first time in
2011. The purpose of this ranking is to recognize
outstanding examples of practiced diversity as a
means of highlighting the relevance of this issue
and encouraging others to emulate best practice.
The award is supported by the Charta der Viel-
falt [Diversity Charter] organization, a public-
private initiative designed to promote diversity
in companies.
Our employees play a key role in the implementa-
tion of our sustainability strategy: They interface
with our customers and develop increasingly
sustainable products. Consequently, in order to
disseminate our new sustainability strategy, we
have deliberately adopted a dialogue-based ap-
proach involving action plan meetings in which
the strategy is jointly discussed and analyzed.
Around the world, every top manager at Henkel
was required to have carried out an action plan
meeting with their immediate team members by
the end of 2011. The process for the lower man-
agement levels is scheduled for completion by
the middle of 2012. In addition to the action plan
meeting as an implementation instrument, we
continue to effectively integrate the topic of sus-
tainability to a greater extent within other train-
ing and development courses and events.
As a company aware of our responsibilities, the
aspect of social engagement or corporate citizen-
ship is also an important component of our cor-
porate culture one that has been firmly an-
chored in our corporate values since the company
first came into being. We have divided our activi-
ties into three areas: support for employee and
retiree volunteering activities, cor porate and
brand partnerships aligned to the common good,
and emergency aid for natural disaster relief.
The private involvement of our employees and re-
tirees is of key importance in this regard. The
company has been supporting their volunteering
activities since 1998 through our MIT initiative
(Make an Impact on Tomorrow). We currently
allocate around 53 percent of our global charita-
ble funds to MIT projects, supporting activities
aligned to social progress, education and science,
fitness and health, culture and ecology.
Around 30%
of our managers
are women.
Group management report
Employees
66 Henkel Annual Report 2011
our purchasing strategy. Working together with
the three business sectors, Purchasing is perma-
nently engaged in reducing product complexity,
optimizing our raw material mix and promoting
the standardization of packaging and raw materials.
This gives us stronger negotiating positions and
creates scope for further consolidation of our
vendor base. In establishing long-term business
relationships, we focus our efforts on vendors in
which we see potential with respect to innovation,
optimization of manufacturing cost and improv-
ing our logistics processes. One of our main con-
cerns within this context is to limit the risk of
supply shortages. We manage our preferred ven-
dors on the basis of individual target agreements.
Through these measures, we have succeeded
in reducing the number of vendors we use by
10 percent.
We have been able to increase the processing and
management efficiency of our purchasing activi-
ties by further standardizing, automating and
centralizing our procurement processes. Large
parts of our administrative work, for example
purchase order processing and price manage-
ment, have been pooled within our shared
service center organization.
The improvement in our net working capital is due
particularly to the optimization of our terms and
conditions of payment with respect to our sup-
pliers. We have also succeeded in optimizing
our raw material inventories through a process
of continuous improvement in our supply chain
processes.
Given the uncertainties that exist with respect to
material price development and supply shortages
on the procurement markets, risk management
constitutes an important aspect of our purchasing
strategy, with the emphasis on reducing price
and supply risks while maintaining uniformly
high quality. In adopting an active price manage-
ment approach, we deploy strategies aligned
to safeguarding prices over the long term, both
through contracts and where appropriate and
possible by means of financial hedging instru-
ments. In order to minimize the risks of delivery
default, we put in place supply disruption clauses
and perform detailed risk assessments of our
vendors to determine their financial stability.
With the aid of an external, independent financial
services provider, we continuously monitor
important suppliers whose financial situation
is regarded as critical. If a high risk of vendor
Procurement
In order to be able to produce our finished products,
we need externally procured materials (raw ma-
terials, packaging, and traded goods) and servic-
es. These items all fall under the general category
of direct materials. Examples include washing-
active substances (surfactants), adhesive compo-
nents, cardboard boxes or external filling servic-
es. The prices paid for total direct materials rose
in 2011, stabilizing at a high level in the second
half of the year.
In addition to the forces of supply and demand, the
prices of raw materials, packaging, contract manu-
facturing and traded goods are essentially deter-
mined by the prices of the input materials used
in their manufacture (feedstocks). And here we
saw the extraordinary price fluctuations on the
procurement markets of 2010 repeated through
2011. The price upsurge with respect to petro-
chemical products continued, extending to other
feedstocks such as oleochemicals, paper and
metals. The situation was exacerbated by supply
shortages due to demand rising in the wake of
expanding economic development. And there
were disruptions in the supply chains of external
vendors caused by postponed maintenance and
repair activities, and unforeseen failures in pro-
duction facilities. These developments led to
feedstock price levels which, taking the average
for the year, were substantially above the 2010
figure. A delayed increase in the purchase prices
of the raw materials, packaging, contract manu-
facturing and traded goods procured by Henkel
then ensued.
Our expenditures for total direct materials in the
year under review amounted to 7.3 billion euros,
0.6 billion euros more than in the previous year.
This is primarily attributable to higher production
volumes and increased prices for feedstocks.
Through our global procurement strategy, we
were able to cushion the effect on adjusted 1 gross
margin exerted by the price increases for our
direct materials. However, we were unable to
compensate for them fully.
In order to improve efficiency and secure material
supplies, we consistently endeavor to optimize
our value chain while maintaining quality levels.
In addition to our diligence in negotiating new,
competitive contractual conditions, our ongoing
global program aligned to reducing overall pro-
curement cost is a major factor in the success of
1 Adjusted for one-time charges/gains and restructuring charges.
Material expenditures
by business sector
29% Laundry &
Home Care
20% Cosmetics/Toiletries
51% Adhesive Technologies
Material expenditures
by type
63% Raw materials
18% Packaging
19% Contract manufactur-
ing and traded goods
Group management report
Procurement
67 Henkel Annual Report 2011
Due to positive business developments, the over-
all volume of indirect materials and services rose
in 2011. The related expenditures there fore in-
creased compared to 2010, by 0.4 billion euros
to 4.3 billion euros.
Production
We further optimized our production footprint in
2011, with Henkel manufacturing products with a
total weight of around 7.6 million metric tons at
180 sites located in 56 countries around the world.
Our largest production facility is in Dsseldorf, Ger-
many. Here we manufacture not only detergents and
household cleaners but also adhesives for consum-
ers and craftsmen, and products for our industrial
customers. Cooperation with toll manufacturers is
an integral component of our production strategy,
enabling us to optimize our production and logistics
structures when developing new markets or where
volumes are still small. Each year we purchase
around 10 percent in additional production tonnage
from toll manufacturers based on current figures.
Number of production sites
2010 2011
Laundry & Home Care 31 29
Cosmetics/Toiletries 8 8
Adhesive Technologies 149 143
Total 188 180
Our Dsseldorf facility is also the largest produc-
tion site of the Laundry & Home Care business
sector. Here we predominantly manufacture
powder and liquid detergents, fabric softeners
and liquid cleaning products. We have further
upgraded our Germany-based production activities
within our European manufacturing concept.
Following the construction of a factory in Dssel-
dorf for the production of liquid laundry and
home care detergents in 2010, we have now also
constructed on the same site a new facility for
the manufacture of machine-dishwashing tabs to
be supplied to the markets of Germany, the rest
of Europe and the Middle East region as from 2012.
In 2011, we further reduced the number of produc-
tion sites around the world from 31 to 29. Concen-
trating our laundry and home care product
failure is identified, we systematically prepare
back-up plans in order to ensure consistency
of supply.
We expect our suppliers and contractual partners
to behave in a manner in keeping with our own
corporate ethics and values. The basic require-
ments in this regard are set out in our purchasing
standards, valid across the Group, and our safety,
health and environmental standards formulated in
1997, through which we have long acknowledged
our responsibility for the entire supply chain.
Consequently, when selecting and developing
our vendors and contractual partners, we also
consider their performance in relation to the
requirements of sustainable development. We
use the cross-industry Code of Conduct published
by the German Federal Association of Materials
Management, Purchasing and Logistics [BME] as
a globally applicable vendor code and the basis
for our multi-faceted Responsible Supply Chain
Process. The objective of this process is to ensure
compliance by our suppliers with these standards
and to improve, together with our strategic ven-
dors, the sustainability standards pertaining to
our supply chain. A global training program fur-
ther ensures that the requirements governing
the sustainability profile of our vendors are un-
derstood and properly applied by our employees.
Our five most important commodity groups are
raw materials for use in hotmelt adhesives, washing-
active substances (surfactants), raw materials for
polyurethane-based adhesives, solvents and in-
organic raw materials for use e.g. in detergents
and surface treatment products. These account
for around 34 percent of our total direct material
expenditures. Our five largest suppliers account
for around 14 percent of our direct material cost.
Purchases made in the general category indirect
materials and services are not directly linked
to the production of our finished products.
Examples include maintenance, repair and
overhaul materials, and logistics, marketing
and IT services. Through our global procurement
strategy and structural cost reduction measures,
we succeeded in reducing our procurement prices
in these categories compared to the previous year.
Group management report
Procurement / Production
68 Henkel Annual Report 2011
manufacturing activities on fewer, more efficient
factories close to our customers has enabled us
to continuously improve our performance. At the
end of 2011, our Ratibor site in Poland became the
first Henkel factory around the world to be certi-
fied according to the international standard for
energy management systems, ISO 50001. The
Laundry & Home Care business sector is thus
continuing its successful implemen tation of
sustainability strategies in production.
Through the implementation of a global manage-
ment and control approach to the functions of
production, planning and logistics, we are now
able to centrally coordinate decision processes
extending over the entire supply chain. In con-
junction with optimized structures and process-
es, this leads to the faster commercialization of
innovations, more efficient cost structures and,
ultimately, a higher level of competitiveness
throughout the supply chain.
Cosmetics/Toiletries is very efficiently structured
with eight factories around the world. The largest
of these, located in Wassertrdingen, Germany,
manufactures body care and hair care products.
We further optimized production in Europe in
2011 by focusing on dedicated technologies in
each of our production plants.
2011 also saw us successfully complete the roll-
out of our Total Productive Management (TPM
Plus) program. This involves ensuring the all-en-
compassing and continuous optimization of our
production and supply chain processes. Through
it, we have been able to achieve improvements in
productivity, quality and sustainability. For example,
we have further reduced our energy consumption
levels and waste and wastewater volumes at
all our facilities. Our commitment to sustainable
methods was underlined by the Factory of the
Year award won by the Wassertrdingen plant
in the category Excellent Resource Efficiency.
The award is jointly conferred by the business
magazine Produktion and the management
consultancy A.T. Kearney.
The currently two largest sites for Adhesive
Technologies are likewise located in Germany:
in Dsseldorf with a portfolio of high-quality
specialty adhesives for industry and consumers
and in Heidelberg, where we manufacture a
broad range of adhesives and sealants.
However, in August 2011 we laid the foundations
for our largest adhesives production facility. This
is being built in Shanghai in order to serve rapidly
rising demand for industrial adhesive technolo-
gies in China and the wider Asia- Pacific region.
Through the further development of the produc-
tion processes and technologies involved, water
and energy consumption and carbon dioxide
emissions will be state-of-the-art in this new,
advanced facility. Hence our production opera-
tions will also be exemplary in terms of meeting
sustainability criteria. This investment in China
is a major step in the further expansion of our
capacities in the emerging markets.
As part of our ongoing efficiency enhancement
program, we further consolidated our global pro-
duction footprint in 2011. Despite further expan-
sion of our capacities in the emerging markets, we
reduced the overall number of factories by six to
143. With other efficiency improvements also
having been put in place, we have therefore been
able to further reduce our manufacturing cost.
Sustainability performance 2007 to 2011, Henkel Group
Environmental indicators
per metric ton of output
Water consumption 33 %
Energy consumption 29 %
Waste footprint 25 %
Occupational accidents 1 35 %
1 Per million hours worked.
In all three business sectors, our optimization
efforts are aligned to reducing the ecological
footprint of our production activities. We focus
particularly on cutting energy consumption, not
least because of the climate protection benefits
that this brings, on reducing our material input
and waste volumes, and on limiting water
consumption and wastewater pollution. New
storage concepts and the manufacture of pack-
aging materials directly at the filling site reduce
transport costs and thus likewise make acontri-
bution to climate protection.
Group management report
Production
69 Henkel Annual Report 2011
Researchanddevelopment
In 2011, expenditures within the Henkel Group on
research and development amounted to 410 mil-
lion euros (adjusted for restructuring charges:
396 million euros), compared to 391 million euros
(adjusted: 383 million euros) in 2010. These
figures demonstrate our continuing commitment
to innovation as our primary driver of profitable
growth. As in the previous year, R&D expenditure
related to sales amounted to 2.6 percent (adjusted:
2.5 percent).
A major portion of this expenditure goes into
the fields of polymer research, surface modifica-
tion and innovative packaging. These are of ma-
jor importance for all three business sectors.
Around half the total R&D spend is accounted
for by personnel expenses.
Our research and development costs were
completely expensed in the year under review
there were no development costs qualifying
for capitalization pursuant to International
Financial Reporting Standards.
As an annual average, the number of employees
working in research and development at our sites
around the world was 2,654 (2010: 2,665), corre-
sponding to 6 percent of the total workforce. The
success of our R&D activities derives from the
talents, skills and capabilities of our highly quali-
fied employees. Our teams comprise scientists
predominantly chemists but also material
scientists, engineers and technicians; 18 percent
of our staff hold doctorates.
Key R&D figures
2007 2008 2009 2010 2011
R&D expenditures
(million euros)

350 377 1


383 1

383 1

3961
R&D expenditures
(in % of sales)

2.7

2.7 1

2.8 1

2.5 1

2.51
Employees
(annual average)

2,794

2,942

2,743

2,665

2,654
1 Adjusted for restructuring charges.
R&D expenditures
in million euros
2007 350
2008 4291
2009 3961
2010 3911
2011 4101

1 Includes restructuring charges
of 52 million euros (2008),
13 million euros (2009),
8 million euros (2010),
14 million euros (2011).
R&D expenditures
by business sector
24% Laundry &
Home Care
15% Cosmetics/Toiletries
61% Adhesive Technologies
Our corporate-wide targets relating to occupational
safety, resource conservation and emissions
reduction for 2012 were achieved ahead of
schedule by the end of 2010. Overall, our global
programs for 2011 resulted in 61 percent of our
sites reducing their energy consumption,
67 percent cutting their water consumption and
50percent lowering their waste footprint. Build-
ing on this and with the further development of
our strategy, we have set ourselves new sustain-
ability targets for the period up to 2015:
15 percent less energy per production unit.
15 percent less water per production unit.
15 percent less waste per production unit.
20 percent increase in occupational safety per
million hours worked.
For further details relating to our sustainability
targets, please go to page 49.
Our standards governing safety, health and the
environment, and also our social standards, apply
to all our sites worldwide. Through a clearly de-
fined process comprising communication, training
courses and audits, we ensure compliance with
these standards, particularly at the production level.
We have our environmental management systems
at our sites externally certified where this gener-
ates benefits within our markets. By the end of
2011, around 70 percent of our production output
was generated by factories certified according
to the international standard for environmental
management systems, ISO 14001.
Group management report
Production / Research and development
70 Henkel Annual Report 2011
As part of our research and development strategy,
we have further developed our open innovation
approach involving greater collaboration with and
integration of university teams, research insti-
tutes, suppliers and customers in our innovation
processes. In order to ensure the market rele-
vance of our developments, we have stepped up
the inclusion of major customers in our R&D
processes. The following examples illustrate the
success we have achieved through this approach:
For a new generation of defoamers that we use
throughout the world in all our powder deter-
gents, we conferred on the company Dow
Corning our 2011 Best Innovation Contributor
award. The patented technology permits partic-
ularly efficient control of the foaming proper-
ties as a decisive quality feature for the wash
process, and also reduces the raw material
input by up to 80 percent.
We also conferred our Best Sustainability
Contributor Award for the first time in 2011,
recognizing partners in the supply chain that
have been particularly supportive of our Factor 3
sustainability objective, which involves
tripling our resource efficiency (details of
our 2030 sustain ability strategy can be found on
page48). The award went to BASF for its
contribution in the development of the new
machine-dishwashing tablets Somat 10 with
their immediate-active formula. Somat 10 tabs
dissolve twice as fast as the predecessor product
and are therefore able to deve lop their powerful
cleaning performance in all dish washing pro-
grams, even at low temperatures.
In the hair styling field, our close cooperation
with one of our main suppliers reached the level
of technology transfer in product innovation.
With the formulation developed through this
alliance, we are now marketing a new generation
of hair sprays which, in addition to impressive
hold, also add exceptional luster to the hair.
Together with the University of Pennsylvania in
the USA, our adhesive researchers have developed
new acrylate-based block copolymers with a
high performance profile. These offer flexible
adaptability to the requirements profile of each
application. The technology has led to the suc-
cessful development of an initial range of seal-
ants for the automotive industry offering out-
standing oil resistance. The new polymers also
form the basis for a new generation of hotmelt
contact adhesives.
Worldwide, growth and quality of life need to be
decoupled from resource consumption and emis-
sions. Our contribution as a company is to develop
innovative products and processes that consume
less resource while still offering the same or better
performance. It is therefore both our duty and
our desire to ensure that all products contribute
Major Henkel R&D sites around the world
Hamburg, Germany
Dsseldorf, Germany Dublin, Ireland
Shanghai, China
Bridgewater, USA
Scottsdale, USA
Rocky Hill, USA
Irvine, USA
Vienna, Austria
Group management report
Research and development
71 Henkel Annual Report 2011
Development of a body wash generation which,
in addition to the usual cleaning action, also
offers an optimized formula for extensive
protection against body odor and a freshness
feel that lasts up to 18 hours.
Formulation for hair gels with extreme hold
on the basis of innovative polymer technology;
also the development of styling powder prod-
ucts for the Branded Consumer Goods business.
Adhesive Technologies
Global market launch of a new generation of
polyolefin-based hotmelt adhesives for hygiene
products, offering significantly reduced
consumption per application and a low energy
requirement.
New underfill materials for innovative
applications in mobile electronic devices,
fulfilling the requirements of advancing minia-
turization in both the devices themselves and
their components.
Development of the first gap-filling instant
adhesive in the form of Loctite 3090. This
patent-pending, gel-like two-component
adhesive hardens after three to five minutes,
issuitable for almost all materials, and offers
ideal per formance even under difficult condi-
tions, e. g. involving uneven, porous surfaces,
repairs with missing parts, or overhead
applications.
Each year we select a number of outstanding
developments for our Fritz Henkel Award for
Innovation. In 2011, this accolade went to three
interdisciplinary project teams in recognition
of their efforts in the realization and commer-
cialization of the following concepts:
Innovative WC rim block Bref Power Activ
known in Germany as Kraft-Aktiv under the
WC Frisch brand offers patent-pending tech-
nology for all-round WC freshness. This is the
first WC rim block with four functions to com-
bat dirt and odor. The combination of actives
comprises an anti-limescale formulation, a
cleaning foam, a dirt repellent and a freshness
intensifier. With four active pearls, each flush
to sustainable development in at least one of our
six defined focal areas. These are systematically
integrated within our innovation process. Hence,
our researchers have to demonstrate the specific
benefits that their project brings with respect to
product performance and added value for our cus-
tomers, resource efficiency and social progress.
We therefore concentrate our R&D effort on inno-
vations that combine product performance and
quality with responsibility toward people and
the environment. Life cycle analyses and our
many years of experience in the field of sustain-
able development help us, right from the start of
the product development process, to determine
where in the various product categories the main
environmental impact occurs and where appro-
priate improvement measures might be applied.
Our scientists have made key contributions to
both sustainability and our performance in
many fields. The following examples provide a
selection of major research work that they have
carried out:
Laundry & Home Care
Development of a new, modified protease
through the optimization of enzyme/stain inter-
action as a means of improving the washing
performance of liquid detergents, particularly
at low wash temperatures starting at just 20de-
grees Celsius.
Development of highly concentrated liquid
laundry detergents in soluble, pre-dosed cap-
sules which guarantee, with just half the usual
dose, maximum performance per wash, while
at the same time conserving resources
particularly with respect to packaging material.
Development of a new generation of glass
cleaners using surfactants manufactured entirely
from renewable raw materials.
Cosmetics/Toiletries
Use of treatment oils in a hair colorant offering
noticeably improved care properties, and inno-
vative hair care products for rebuilding the hair
structure and reducing split ends.
Group management report
Research and development
72 Henkel Annual Report 2011
results in the WC undergoing a thorough clean
and freshness boost. Available in three different
fragrances, the innovation has convinced people
in over 30 countries in Western and Eastern
Europe of its powerful freshness effect.
Gliss Kur Ultimate Repair repairs extremely
damaged hair with triple-concentrated human-
identical keratin components. The innovative
technology of the new treatment series, developed
in cooperation with our partners from industry,
university teams and research institutes, is
based on biomimetic reconstruction of the natu-
ral lipid protective layer of the hair fiber, com-
bined with human-identical keratin components
that also repair deep areas of damage within
the hair. The formula with triple-concentrated
liquid hair components provides the hair with
resilience and renewed luster. Also included in
this hair care range is the innovative treatment
product Gliss Kur Oil Elixir: Based on innova-
tive oil evaporation technology, it imparts to
the hair full-bodied gloss and suppleness without
making it over-heavy.
Aquence Co-Cure 90o Series is a coating that
provides environmentally sound corrosion
protection for metal substrates, combining the
two operations of pre-treatment and coating.
Unlike conventional surface treatment methods,
waterborne Aquence technology inhibits corro-
sion through the action of a unique chemical
process. Aquence Co-Cure also significantly
reduces the number of operations required
prior to painting. The patented Aquence process
consumes less energy, generates lower carbon
dioxide emissions, causes less waste and thus
also sustainably reduces the capital outlay and
process costs of our customers.
We currently hold some 8,000 patents as protection
for our technologies around the world. We also
have more than 5,000 patent applications pend-
ing, and own approximately 2,000 registered
designs safeguarding our intellectual property.
Further information on our research and develop-
ment activities can be found on our website:
www.henkel.com/innovation
Group management report
Research and development
Fritz Henkel Awards for Innovation 2011
www.bref.it www.wcfrisch.de www.glisskur.schwarzkopf.de www.henkel.com/aquence-
autophoretic-12623.htm
73 Henkel Annual Report 2011
Marketinganddistribution
We put our customers at the center of what we do.
Hence we align our marketing and distribution
activities in each of our business sectors to the
requirements of each specific audience and target
group.
At Laundry & Home Care we further centralized
our marketing activities within the new organi-
zational structure introduced in the third quarter,
aligning it more effectively to our markets and
customers. Central management of our global
brands enables us to adopt more efficient decision-
making processes, accelerate the market launch
of our innovations and implement further improved
cost structures. Through the close cooperation
of our central marketing unit with our interna-
tional organizational units, we also ensure that
local market conditions are properly taken into
account. We plan our distribution activities on
acountry-specific basis, while coordinating them
at the international level. Introduction of the new
organization has also allowed us to harmonize
our processes on a global scale and improve the
transfer of knowledge, experience and application
know-how within the organization.
In the Cosmetics/Toiletries business sector, we
develop marketing strategies for both our branded
consumer goods and our hair salon businesses on
a global scale, while implementing them locally.
Here too, our distribution activities are managed
on a national level while being increasingly coor-
dinated at the international level. We communi-
cate with consumers primarily through media
advertising and point-of-sale campaigns. Address-
ing the market through the new media is also
gaining in importance. Consumers purchase our
products from retailers, primarily drug stores,
grocery stores, supermarkets and department
stores. We engage with our customers in the hair
salon business through the activities of our sales
force. Field sales representatives support the sa-
lons at the local level with, for example, product
demonstrations and technical advice. As an addi-
tional service, we also offer specialist seminars
and training courses in our globally established
Schwarzkopf academies.
In our consumer goods businesses, marketing
is focused on the needs of the consumer. Our mar-
keting organization initiates innovation process-
es and effectively utilizes knowledge gained
from market research and observation. Our mar-
keting teams develop and execute media strate-
gies and advertising formats that specifically
address consumers. In order to support our ma-
jor brands and continue to successfully market
our innovations, we manage our marketing activi-
ties and investments on the basis of clear priori-
tization by category and region.
Our primary direct customer grouping is the grocery
retail trade with distribution channels in the form
of supermarkets, mass merchandisers/hypermar-
kets and discount stores. In Europe, drug stores are
also important, while in markets outside Europe
and North America, a large proportion of our sales
continues to be channeled via wholesalers and dis-
tributors. Our Sales unit offers a full range of com-
petences in serving our trade customers.
The Adhesive Technologies business sector serves
a wide range of customers with different uses
for our products. Client groups extend from large,
internationally active corporations to small and
medium-sized industrial businesses, craftsmen,
do-it-yourselfers and private consumers.
We mainly rely on our own sales personnel as the
channel for addressing our customers. Our direct
customers are industrial clients and retail com-
panies; these latter are able to meet demand from
private users, craftsmen and small industrial
customers more efficiently than can be achieved
through direct sales. Our most important customers
are supported by our key-account management
teams. As many of our products are characterized
by their high technical complexity, our technical
customer service and the training of users also
play an important role.
Group management report
Marketing and distribution
74 Henkel Annual Report 2011
For our industrial accounts, we have introduced
a new standard system for customer relationship
management, which more than 5,000 employees
are already using in over 60 countries around
the world. Its functionalities go far beyond those
of previously applied sales management systems,
enabling us to further improve on our ability to
cover existing and future client requirements.
Our strong, international brands, on which we
intend to focus even more closely in the future,
are of central importance to our portfolio.
We develop our marketing strategy on both the
global and regional level. The measures derived
from our planning are then locally implemented.
To communicate with private consumers, we rely
on media advertising with supportive point-of-
sale activities in the retail trade. Craftsmen and
industrial consumers are addressed primarily
by our sales organization through the provision
of technical advice, product demonstrations and
training courses, and also at industrial fairs.
Electronic media are constantly growing in im-
portance for communication with customers
and users. In all three of our business sectors,
therefore, we are focusing not only on constantly
improving our existing website presence but
also and increasingly on the use of digital and
social media.
The importance of sustainability has grown
significantly in our relations with our customers
and consumers. Customers increasingly expect
from their suppliers demonstrable compliance with
global environmental, safety and social standards.
Our standards and management systems, our many
years of experience in sustainability reporting,
and excellent appraisals by external rating agencies
all help us to convince our audience of our cre-
dentials in this domain. Moreover, the credible
implementation of our sustainability strategy
strengthens both our brands and the reputation
of our company in the marketplace. With our
decades of experience in aligning our activities
to sustainable development, we are able to position
ourselves as a leader in the field and as a partner
capable of offering our customers future-viable
solutions. And we cooperate closely with our
customers in trade and industry in the develop-
ment and implementation of viable concepts.
In order to convey to our customers and consum-
ers the added value of our innovations best
possible performance combined with responsibil-
ity toward people and the environment we use
direct product communication and detailed in-
formation in the new media, for example elec-
tronic newspapers or online platforms, as well as
events.
We intend to increase our involvement in the
development of urgently needed appropriate
measurement and assessment methods in order
to facilitate effective, credible communication
of our contributions to sustainability. We partici-
pate in related projects and working groups allied
to, for example, the Consumer Goods Forum, the
Sustainability Consortium and the Environmen-
tal Footprint Pilot Project of the Commission of
the European Union.
For further information on the products and
brands of our three business sectors, please go to:
www.henkel.com/brands-and-solutions
Group management report
Marketing and distribution
75 Henkel Annual Report 2011
Top brands
Perwoll Re-new Effect
The innovative Re-new Effect in
the formulations of our delicates
laundry detergents Perwoll
Brilliant Colors, Intensive Black
and Radiant White smoothes
roughened textile fibers and brings
lustrous life to faded shades.
www.perwoll.de
Persil Black
Persil Black offers the best in Persil
cleanness combined with special
color protection for black and dark
textiles. The liquid detergent is
available for sale in Germany,
Austria and Switzerland.
www.persil.de
Somat 10
Thanks to its immediate-active
formula, Somat 10 dissolves faster
than ever, enabling it to release
its cleaning performance right
from the start. Somat 10 was
launched onto the German market
in mid-2011.
www.somat.de
Innovations 2011
Sales development
*

in percent 2011
Changeversuspreviousyear 0.3
Foreign exchange 2.3
Adjustedforforeignexchange 2.0
Acquisitions/divestments 0.9
Organic 2.9
of which price 1.6
of which volume 1.3
*
Calculated on the basis of units of 1,000 euros.
Key financials
*

in million euros 2010 2011 +/
Sales 4,319 4,304 0.3 %
Proportion of Henkel sales 29 % 27% 2 pp
Operating profit (EBIT) 542 511 5.8 %
Adjusted operating profit (EBIT) 562 570 1.4 %
Return on sales (EBIT) 12.6 % 11.9% 0.7 pp
Adjusted return on sales (EBIT) 13.0 % 13.2% 0.2 pp
Return on capital employed
(ROCE) 21.2 % 22.1% 0.9 pp
Economic value added (EVA

) 286 303 5.7 %

pp = percentage points
*
Calculated on the basis of units of 1,000 euros;
figures commercially rounded.
1 Adjusted for one-time charges/gains and restructuring charges.
Group management report
Laundry & Home Care
Laundry & Home Care
76 Henkel Annual Report 2011
Economic environment and market position
The world market for laundry and home care pro-
ducts was generally characterized in 2011 by fur-
ther intensified competition and strong increases
in raw material costs. After implementing sub-
stantial price decreases in 2010, manufacturers of
branded pro ducts responded to these develop-
ments by moderately raising prices in 2011 in
order to partially offset the pressure on margins.
The consumer climate was dampened through-
out the world by a high level of uncertainty re-
garding the further development of the debt
crises in Europe and the USA. Similar to the
previous year, our relevant markets declined
slightly overall. Due to price increases intro-
duced by brand manufacturers, suppliers of
private labels were able to slightly expand their
market share. This was predominantly due to
the behavior of consumers in the countries of
Southern Europe, particularly Italy, Spain, Greece
and Portugal.
Despite this challenging market environment,
in 2011 we again succeeded in significantly outper-
forming our relevant markets. The increase in
our market shares was predominantly due to
favorable developments in Europe and a notice-
able improvement of our business in North Amer-
ica. Again in 2011, the mature markets of West-
ern Europe and North America were characterized
by a decline in growth and consumer reticence.
By contrast, the German market grew slightly,
faring better than all the other countries of West-
ern Europe. Meanwhile, the US market declined
significantly. We were, however, able to increase
our shares in both the Western European and the
North American markets. The market share gains
in Germany were particularly noticeable. After
the virtual stagnation of the previous year, the
Eastern Europe region returned to moderate
growth, with rapid expansion in the Russian and
Turkish markets driving developments. In a
highly competitive environment, we succeeded
in further expanding our market position in
Eastern Europe, reaching new highs in terms of
market share. The Africa/Middle East region was
hit by political unrest during the first half of the
year, although recovered significantly in the
course of the second half. The Latin American
market recorded growth and we were able to
consolidate our market shares here and in South
Korea, our only market in the Asia-Pacific region.
Business activity and strategy
The business sector is globally active in the
Laundry and Home Care branded consumer
goods businesses. The Laundry business includes
not only heavy-duty and specialty detergents
but also fabric softeners, laundry performance
enhancers and laundry care products. The port-
folio of our Home Care business encompasses
hand-dish washing and machine-dishwashing
products, cleaners for bath and WC applications,
and house hold, glass and specialty cleaners.
We also have a market presence in selected
regions with air fresheners and insecticides
for household applications.
Our aim is to continue generating profitable
growth through the organic expansion of our
continuing operations. We therefore intend to
pursue both sustainable market share gains and
further margin improvements. Based on our
leading positions in the profitable mature mar-
kets of Western Europe and North America, we
plan to further expand the share of sales of our
emerging markets, particularly Eastern Europe,
Africa/Middle East and Latin America. We in-
tend to leverage the dynamics of these emerging
markets in order to accelerate the growth of our
portfolio. We also endeavor to further increase
our market share in these regions and raise prof-
itability to the higher level of the mature mar-
kets.
Strong brands and innovations offering consum-
ers added value provide the basis for our strategy
of profitable growth. Last year showed once
again that the launch of successful products can
make a positive contribution, particularly under
challenging economic and market conditions. It
therefore remains our objective to maintain an
innovation rate 1 of at least 40 per cent. In 2011, we
were able to increase it to 41 percent. Through
central and even more efficient management of
our innovation process and with deepened in-
sights into the purchasing habits of consumers,
we are able to quickly identify and respond to
consumer trends and effectively convert these
into new products. By prioritizing product cate-
gories and centrally steering our global brand
portfolio, we are able to direct our investments
toward those segments that offer growth and
profitability, enabling us to generate dispropor-
tionately strong growth with our most important
brands and market segments. In 2011, we generated
41%
innovation rate.
1 Percentage share of sales generated with new products
launched onto the market within the last three years.
Group management report
Laundry & Home Care
77 Henkel Annual Report 2011
81 percent of our sales with our top ten brand
clusters 1.
Sales and profits
Nominally, sales declined slightly by 0.3 percent to
4,304 million euros for the year. Organically i.e.
after adjusting for foreign exchange and acquisi-
tions/divestments we succeeded in increasing
sales by 2.9 percent, significantly outstripping the
slightly declining development of our relevant
markets. Despite the difficulties presented by the
market environment, we were able to implement
price increases for our products, particularly in
the second half of the year, thus offsetting a sig-
nificant portion of the material price increases.
Our average selling prices rose by 1.6 percent,
while volume increase contributed 1.3 percent to
the business sectors organic growth. In deter-
mining the price effect, we do not account for the
positive structural effect arising from the launch
of new products, but instead include it under
volume.
All our regions contributed to the positive busi-
ness performance achieved. Western Europe
posted an increase in organic sales, benefiting
significantly from our very good perfor mance
in Germany. In North America, we were able to
slightly increase sales in a highly competitive
and appreciably declining market. Developments
in our emerging markets were positive across the
board. Supported in particular by rapid expan-
sion in Russia and Turkey, sales in Eastern Eu-
rope significantly increased organically. In con-
trast, growth in some other core countries of
Eastern Europe was hampered by market decline.
While our business in the Africa/Middle East
region was adversely affected by the political un-
rest in the first half of the year, we succeeded
in significantly accelerating business expansion
during the second half, enabling us to register
good growth in the mid-single-digit range for the
year as a whole. Our business in Latin America
generated high single-digit growth, with the
launch of our top brand Persil making a signifi-
cant contribution and triggering our entry into
the premium segment for laundry care products
in Mexico. In Asia, organic sales were slightly up,
despite the exit from our Philippines business in
the previous year.
Operating profit (EBIT) decreased by 5.8 percent
compared to the previous year, due in particular
to significantly higher restructuring charges
occurring in conjunction with the realignment
of the business sector. In the course of streamlin-
ing our portfolio, we disposed of our branded
consumer goods business in India in the second
quarter of 2011, generating a gain from the trans-
action. Adjusted operating profit rose by 1.4 per-
cent and adjusted return on sales improved by
0.2percentage points, from 13.0 percent in 2010
to 13.2 percent in 2011.
Fiscal 2011 was generally characterized by high raw
material price increases. However, with price
increases of our own, particularly in the second
half of the year, and our ongoing measures to
reduce costs and increase efficiency in both pro-
duction and supply chain, we were able to exten-
sively offset the negative impact on gross margin
caused by the strong increase in material costs.
We also continued our strict cost management
approach in other areas, likewise contributing to
an improvement in margin. A decline in adver-
tising spend was another characteristic feature
of the market in 2011. Against this background,
we kept our share of advertising/share of market
ratio 2 constant.
Return on capital employed (ROCE) rose by 0.9 per-
centage points to 22.1 percent. This improvement
is due to a significant reduction of our capital
employed. We continued our focus on managing
net working capital. As a proportion of sales,
this amounted to 2.4 percent and was thus
below the already very low level of the previous
year. Economic value added (EVA

) rose from
286million euros in 2010 to 303 million euros.
Business areas
Laundry
The Laundry business posted strong sales perfor-
mance in 2011, with our strategically important
category of heavy-duty detergents generating
the greatest growth momentum. The major driv-
ers behind this expansion included the launch
of Persil in Mexico and in South Korea. Success-
ful innovations likewise contributed greatly to
the growth achieved. For instance, we introduced
Persil Black in Germany, Austria and Switzerland.
2 A companys share of total advertising spend in relation to its
market share, specific to Henkels active markets.
1 A brand cluster comprises several individual local brands
which, in terms of their positioning, are comparable to a large
international brand. By adopting this approach, we are able to
generate high synergies in our marketing mix.
+2.9%
organic sales growth in a
slightly declining world
market.
Sales
in million euros
2007 4,148
2008 4,172
2009 4,129
2010 4,319
2011 4,304
Group management report
Laundry & Home Care
78 Henkel Annual Report 2011
Due to its long-term black-boosting formula, this
product offers not only optimum washing perfor-
mance but also exceptional color protection for
black and dark apparel. We also newly launched
Mega-Caps in a number of core countries in
Western Europe. Mega-Caps are water-soluble
capsules filled with concentrated laundry liquid.
Because they are pre-dosed, Mega-Caps are
particularly easy to use and offer superb results
with the usual Henkel quality. Plastics con-
sumption with Persil Mega-Caps will significant-
ly decrease compared to conventional detergent
bottles, thanks to the use of resealable composite
film packaging. We likewise launched a range
of innovative specialty detergents for delicates
under the Perwoll brand featuring a Re-new
Effect: the formulations of Perwoll Brilliant
Colors, Intensive Black and Radiant White
smooth roughened textile fibers, bringing
lustrous life to faded shades.
We succeeded in maintaining the positive trend
with our fabric softeners, aided by the launch of
Purex Crystals in the USA, and innovative prod-
uct variants of Vernel in Europe aligned specifical-
ly to hygiene and purity. In some of the major
countries of Western Europe, we introduced a
range of heavy-duty liquid detergents that offer
smaller doses for the same performance, thus
improving environmental compatibility and
reducing packaging and logistics costs.
Home Care
In the Home Care business, sales for 2011 were
slightly below the prior-year figure. Although de-
clining overall due to the market entry of new
competitors, and a significant drop in demand,
our air freshener business in North America reg-
istered an upward trend. Conversely, we were
able to generate significant revenue increases
with our WC products in Europe, due in particu-
lar to the major success of Bref Power Activ
marketed in Germany under the brand WC Frisch.
Our machine-dishwashing products likewise
performed well, supported especially by the
launch of Somat 10 in Germany. Somat 10 now
dissolves twice as fast in the machine, enabling
it to release its cleaning performance right from
the start. The new immediate-active formula
also works quickly and powerfully in short and
low-temperature wash cycles.
Capital expenditures
The main focus of our investments was on inno-
vations and cost optimization in our production
and distribution processes. We also invested in
plant safety and environmental systems. Overall,
we spent 160 million euros on property, plant and
equipment, compared to 83 million euros in
2010. The increase in 2011 is due to a high vol-
ume of innovations, particularly in the field of
pre-dosed liquid detergent capsules and in WC
products.
Outlook
We are confident to continue our positive growth
path in 2012 and generate sales growth in the low
single-digit percentage range. We expect the rate
of increase in raw material prices to decelerate
compared to 2011. We will remain firmly focused
on main taining our strict cost discipline, partic-
ularly in administration. While increasing the
quality of service to our customers, we can further
improve our efficiency by grouping activities
within our shared service centers. With these
measures, we expect adjusted return on sales to
increase significantly compared to the previous
year (2011 figure: 13.2 per cent).
We see opportunities arising from a revival in
demand in North America, while the successful
launch of further innovations offers additional
potential for our businesses. Currently unpre-
dictable relief could also come from the raw
materials side.
We see risk arising from a further downturn in
the macroeconomic conditions, particularly
against the background of the currently uncertain
outcome of the prevailing debt crises. Strongly
rising unemployment, higher taxes and social
contributions, and also the possibility of strikes
could adversely affect the consumer climate.
Due to uncertainties in relation to price develop-
ments on the commodity markets, material pric-
es could rise significantly more than anticipated.
We regard unrest in the Africa/Middle East
region as a substantial political risk.
Group management report
Laundry & Home Care
79 Henkel Annual Report 2011
Top brands
Bonacure Oil Miracle
Our revolutionary finishing pro-
duct for daily hair care features a
luxuriant oil to intensively nourish
the hair, instantly giving it a rich
gloss without that heavy feel.
Available as an intensive treatment
with argan oil or with marula oil
for lighter applications.
www.schwarzkopf-professional.de
Fa NutriSkin
Our first body care line to feature
a unique combination of seven
nourishing care ingredients for
protecting the skin from dryness
and generating an irresistibly soft
skin feeling.
www.fa.com
Gliss Kur Ultimate Repair
This innovative hair repair series
with triple-concentrated liquid hair
components effectively repairs
dry hair both internally and at the
surface, making hair more supple,
lustrous and resilient.
www.glisskur.schwarzkopf.de
Innovations 2011
Sales development
*

in percent 2011
Changeversuspreviousyear 4.0
Foreign exchange 1.1
Adjustedforforeignexchange 5.1
Acquisitions/divestments 0.3
Organic 5.4
of which price 0.3
of which volume 5.7
*
Calculated on the basis of units of 1,000 euros.
Key financials
*

in million euros 2010 2011 +/
Sales 3,269 3,399 4.0 %
Proportion of Henkel sales 22 % 22%
Operating profit (EBIT) 411 471 14.6 %
Adjusted operating profit (EBIT) 436 482 10.5 %
Return on sales (EBIT) 12.6 % 13.8% 1.2 pp
Adjusted return on sales (EBIT) 13.3 % 14.2% 0.9 pp
Return on capital employed
(ROCE) 20.1 % 23.5% 3.4 pp
Economic value added (EVA

) 207 290 40.6 %

pp = percentage points
*
Calculated on the basis of units of 1,000 euros;
figures commercially rounded.
1 Adjusted for one-time charges/gains and restructuring charges.
Group management report
Cosmetics/Toiletries
Cosmetics/Toiletries
80 Henkel Annual Report 2011
Economic environment and market position
The world cosmetics market of relevance to us
was characterized in 2011 by intense displacement
competition and predominantly declining de-
mand. Despite the persistently difficult and
highly competitive environment, we were able to
globally expand our market shares and therefore
further strengthen our leading position in our
relevant markets across the world.
Our core markets in Western Europe and North
America remained weak as a result of the difficult
economic conditions and low consumer confi-
dence prevailing. Increased promotional activi-
ties, growing price pressure and a decline in the
pricing level were particularly noticeable in the
Western European branded goods market for hair
cosmetics and the US body care market. In nu-
merous segments, volume expansion failed to
compensate for these developments. Despite this
challenging market background, however, we suc-
ceeded in maintaining our growth trend of re-
cent years, again outstripping the market over-
all. As a result, we were able to further expand our
market shares in Western Europe and extend our
leading position in the hair cosmetics business.
We also consolidated our position in our core
segments in North America. The emerging mar-
kets of Africa/Middle East, Latin America and
Asia (excluding Japan) continued their positive
development. By contrast, our market in Eastern
Europe failed for the first time to show any
growth against the background of increasing
displacement compe tition. Nevertheless, we
were able to further expand our business in the
emerging markets in general, generating dispro-
portionate growth and, as a result, gaining signif-
icant market share.
In the hair salon market, persistent customer
reluctance led to a decline in overall demand. How-
ever, we were able to buck this trend, growing our
Schwarzkopf Professional Hair Salon business and
thus further consolidating our position as the
world number three in this segment.
Business activity and strategy
The Cosmetics/Toiletries business sector is active
in the Branded Consumer Goods business area
with Hair Cosmetics, Body Care, Skin Care and
Oral Care, as well as in the professional Hair
Salon business.
Expansion in the Branded Consumer Goods
business in Western Europe and North America
is focused on further increasing market share.
The objective of our growth strategy is to extend
our innovation leadership. To this end, we pursue
a consistent, pro-active innovation strategy
accompanied by strict cost management to allow
us to step up our market investments and increase
profitability. In Asia, the Middle East and other
emerging markets, we further drive business
development through the rapid expansion of our
portfolio. In the Hair Salon business, we continue
our strategy of globalization, generating growth
momentum particularly in Asia, Latin America
and the Middle East.
Organic development is at the center of our growth
strategy. In a market environment characterized
by strong competition, we pursue this by focusing
on our top brands, ensuring the rapid international
launch of innovations with above-average prof-
itability, and by selectively driving regional ex-
pansion. Further key success factors include
strong support for our top brands through media
advertising and promotional activities. We regu-
larly analyze our businesses and brands as part
of our pro-active portfolio management approach.
In our Branded Consumer Goods business area,
our focus is on the international expansion of
our core businesses of Hair Cosmetics, Body Care,
Oral Care and Skin Care. Through targeted port-
folio management and the associated marketing
measures aimed at strengthening our top brands,
our ten largest brands again grew substantially
faster than the overall portfolio in 2011. They
now contribute more than 90 percent to the
business sectors sales revenues. In addition to
strengthening our brand equities, we focus par-
ticularly on the growth potential available in our
key accounts.
We also endeavor to drive forward our Hair Salon
business on the basis of efficient sales and distri-
bution structures backed up by a steady flow of
innovations. And we are constantly looking to
develop new regional potential on a selective basis.
Through our pro -active innovation strategy
and the consistent further strengthening of our
brand equities, we expect to continue generating
dynamic, profitable growth. In 2011, we further
increased our innovation rate 1 to 43percent. And
we are developing additional growth potential
through expansion of strategic partnerships
with our customers.
1 Percentage share of sales generated with new products
launched onto the market within the last three years.
43%
innovation rate.
Group management report
Cosmetics/Toiletries
81 Henkel Annual Report 2011
Sales and profits
With a nominal sales increase of 4.0 percent in
2011, we maintained the unbroken trend in pro-
fitable revenue growth of recent years. Organical-
ly i.e. after adjusting for foreign exchange and
acquisitions/divestments we grew sales by an
even stronger 5.4 percent. Our performance
was therefore once again well above that of the
overall market. As ever, the foundation for this
success was provided by our strong innovation
program. Due to the intensely com petitive mar-
ket environment, we too found the need to in-
crease our promotional activities for our existing
portfolio. As a result, average prices were slightly
below those of the previous year. In determining
the price effect, we do not account for the posi-
tive structural effect arising from the launch of
new products, but instead include it under volume.
All our regions contributed to the significant
increase in sales. The strongest rises were once
again posted by the emerging markets of Africa/
Middle East, Latin America and Asia (excluding
Japan). As in previous years, we were able to
generate double-digit growth here. Particularly
Asia (excluding Japan) and Latin America deve-
loped very dynamically with our strong core
business being supplemented by numerous new
product launches. We also achieved strong growth
in Eastern Europe. Sales likewise increased in
all our mature markets, with the mature markets
of the Asia-Pacific region even registering high
single-digit growth. Western Europe and especial-
ly North America developed well compared to the
previous year, with our businesses there generat-
ing growth above that of our relevant markets.
We were able to increase operating profit (EBIT)
to 471 million euros, 14.6 percent above the level
of the previous year. The figure was positively
impacted by a one-time gain from the disposal of
our branded consumer goods business in India.
We significantly increased adjusted operating
profit (EBIT) versus prior year with a rise of
10.5 percent to 482 million euros, our highest
earnings figure to date. As a result, adjusted
return on sales rose by 0.9 percentage points to
14.2 per cent, likewise reaching a new high. The
foundation for this was provided partly by our
measures to reduce costs and increase efficiency
in both production and supply chain. Through
these, we were able to partially offset the nega-
tive impact on our gross margin caused by the
increase in material costs. We also continued our
strict cost management approach in other areas,
likewise contributing to an improvement in mar-
gin. In an environment characterized by a slight
decline in advertising spend, we maintained our
share of advertising/share of market 1 ratio.
Return on capital employed (ROCE) reached
a new high of 23.5 percent, up 3.4 percentage
points versus the previous year. Aside from our
improved operating profit, further reductions in
our capital base contributed to this high figure.
Our economic value added (EVA

) rose from
207million euros in the previous year to 290 mil-
lion euros in 2011. As a proportion of sales, net
working capital was a very low 3.2 percent.
Business areas
Branded Consumer Goods
Our Branded Consumer Goods business generat-
ed a gratifying increase in overall sales in 2011.
The Hair Cosmetics business in particular posted
very strong organic sales growth. As a result,
we were once again able to expand our market
shares to new record levels, growth being driven
by our successful innovations under the
Schwarz kopf and Syoss brands.
In the Hair Care business, we succeeded in further
strengthening our market shares, with the inter-
nationally very successful launch of the new Gliss
Kur line Ultimate Repair making a major contri-
bution. Our Syoss brand was given a further
boost by a relaunch involving the professional
active ingredient, pro-cellium keratin. Aside
from the introduction of the range-extending
Syoss Men line, the launch of our highly success-
ful Beauty Elixir Absolute Oil was particularly
significant under the Syoss brand.
We were once again able to grow market shares in
our Hair Colorants business to new record levels.
Significant contributions came from the success-
ful international launch of new, innovative sub-
brands such as Syoss Mixing Colors, a product
with two harmonized shades for self-mixing, and
Palette Mousse Color, the first foam colorant in
Europe that mixes in a shaker. Palette was able
to expand its number-one position in the Euro-
pean market, thanks in particular to the success-
ful relaunch of the Deluxe line which, with seven
oils, offers enhanced care performance. The fur-
ther roll-out of our exceptionally successful
+5.4%
organic sales growth in a pre-
dominantly declining world
market.
1 A companys share of total advertising spend in relation to its
market share, specific to Henkels active markets.
Sales
in million euros
2007 2,972
2008 3,016
2009 3,010
2010 3,269
2011 3,399
Group management report
Cosmetics/Toiletries
82 Henkel Annual Report 2011
brands Perfect Mousse and Syoss Color addition-
ally contributed to the growth achieved.
Similarly, the Hair Styling business again posted
new highs in market share. Drei Wetter Taft
Europes number one in the styling category fur-
ther strengthened its position with inno vations
such as Taft Heidis Heat Styles and Taft Volume
Powder. Our trend styling brand Got2b gained
further market share, driven in particular by
the successful innovations Got2b Powderful,
the innovative styling powder line, and Got2b
rockinit.
Our Body Care business was stimulated by a
range of innovations, entry into new categories
and product launches under the Fa, Dial and
Right Guard brands. We expanded our successful
Dial series NutriSkin, both with new variants in
existing categories and in the newly developed
body lotion category. In Europe we introduced
the high-performance deodorants Right Guard
Xtreme Dry and Xtreme Sports, two products that
meet the needs of especially demanding custom-
ers. With Fa, the focus was on the launch of
NutriSkin in the shower, deodorant and body
lotion categories. As a result, Fa was able to sig-
nificantly increase its market shares in Europe.
In the Skin Care business, we continued to focus
on the development of innovative anti-aging
products. The innovative strength of Diadermine
was once again underlined by, among other things,
the launch of Dr. Caspari Hormoderm, the first
care product from Diadermine countering the
effects of menopause on the skin aging process.
In the Oral Care business, we achieved good results
with our new toothpaste series Denivit Dr. Philip.
Hair Salon
The Hair Salon business also substantially
increased sales. Despite a persistently difficult
market environment, we consolidated our position
as the world number three. Innovative launches
brought stimulus to the market. With its innova-
tion [3D]Mension, Schwarzkopf Professional devel-
oped its first hair care series especially aligned to
men. In the styling category, our top styling
brand Osis was expanded by innovative products
such as Osis Style Shifters. In the hair care field,
the introduction of new Bonacure Oil Miracle in
particular generated further growth momentum.
Capital expenditures
The emphasis of our investment activity in the
year under review was on optimizing our produc-
tion structures and processes. Expenditures on
property, plant and equipment increased from
40 million euros in 2010 to 66 million euros in
2011. Among others we invested in further effi-
ciency enhancements of our production, packag-
ing tools for new products and expansion of our
capacities.
Outlook
We are confident to continue our positive growth
path in 2012 and generate sales growth in the low
single-digit percentage range. We will remain
firmly focused on main taining our strict cost
discipline, particularly in administration. While
increasing the quality of service to our custom-
ers, we can further improve our efficiency by
grouping activities within our shared service
centers. We foresee the rate of increase in raw
material prices decelerating compared to 2011. We
expect adjusted return on sales to increase com-
pared to prior year (2011 figure: 14.2 percent).
We see good prospects for the further expansion
of our market positions in Europe and North
America resulting from the continued diligent
pursuit of our innovation offensive. There are
also opportunities in the further utilization of
the potential offered by our emerging markets.
Currently unpredictable relief could also come
from the raw materials side.
Risks lie in the uncertainty of the overall eco-
nomic development and the currently uncertain
outcome of the debt crises in Europe and the
USA, combined with a significant deterioration
in the consumer climate and intensification of
displacement competition. This would result in
a further rise in already high promotional and
price pressures, as well as increased advertising
expenditures. Moreover, unexpectedly high raw
material and packaging price rises could increase
the pressure on our margins.
Group management report
Cosmetics/Toiletries
83 Henkel Annual Report 2011
Top brands
Pattex 100%
Pattex 100% is based on our
patented Flextec Technology
and is 100 percent solvent-free.
The product offers high adhesive
strength with easy usability and
is universally suitable for projects
both in and around the house.
www.pattex.de
Loctite
Loctite offers the first range of
label-free anaerobic products
covering all applications from
fastener locking to thread and
surface sealing.
www.loctiteproducts.com
Aquence Co-Cure 900 Series
This award-winning, patented
solution from Aquence combines
several surface-coating operations
performed in paint shops, leading
to savings in energy costs and
reducing production complexity
for our customers.

www.henkel.com/aquence-
autophoretic-12623.htm
Innovations 2011
Sales development
*

in percent 2011
Changeversuspreviousyear 6.0
Foreign exchange 2.1
Adjustedforforeignexchange 8.1
Acquisitions/divestments 0.2
Organic 8.3
of which price 5.3
of which volume 3.0
*
Calculated on the basis of units of 1,000 euros.
Key financials
*

in million euros 2010 2011 +/
Sales 7,306 7,746 6.0 %
Proportion of Henkel sales 48 % 50 % 2 pp
Operating profit (EBIT) 878 1,002 14.1 %
Adjusted operating profit (EBIT) 938 1,075 14.7 %
Return on sales (EBIT) 12.0 % 12.9 % 0.9 pp
Adjusted return on sales (EBIT) 12.8 % 13.9 % 1.1 pp
Return on capital employed
(ROCE) 12.5 % 14.6 % 2.1 pp
Economic value added (EVA

) 73 282 >100 %
pp = percentage points
*
Calculated on the basis of units of 1,000 euros; figures
commercially rounded.
1 Adjusted for one-time charges/gains and restructuring charges.
Group management report
Adhesive Technologies
Adhesive Technologies
84 Henkel Annual Report 2011
Economic environment and market position
Set against the strong developments encountered
in 2010, the growth rates of our markets underwent
a slow-down in the year under review. While
growth in almost all our industrial sectors flat-
tened, particularly in the second half of the
year, private consumption remained stable.
Overall market volume increased in the low
single-digit percentage range. However, devel-
opments in the various markets of relevance to
our adhesives, sealants and surface treatment
technologies were mixed. The construction sec-
tor saw a small degree of expansion, while
growth rates in the steel, automotive and elec-
tronic industries were lower in 2011 compared to
the significant gains made in 2010.
All our regions registered growth in 2011, with the
upward trend in the emerging markets once
again taking prominence. Working from a balanced
business and regional platform, we were able
once again to utilize our strong portfolio in
accelerating growth past that of our markets. Our
extensive presence in the emerging markets was
a contributory factor in this regard. Overall, we
were able to further consolidate our leading
market position in the world and gain further
market share.
However, the substantial rise in prices for raw
materials and packaging was a particular chal-
lenge. This was exacerbated by supply shortages
with respect to various important raw materials
resulting from persistent capacity limitations
among some of our vendors.
Looking forward, certain dominant trends will
continue to provide growth momentum for
example, the ever-present need to increase energy
efficiency and reduce carbon dioxide emissions,
leading to higher demand for sustainable prod-
ucts and technologies. In addition, new areas of
application for adhesives and sealants are con-
stantly arising.
Business activity and strategy
The Adhesive Technologies business sector
comprises five market- and customer-focused
strategic business units.
In the Adhesives for Consumers, Craftsmen and
Building business, we market a wide range of
brandname products for private and professional
users. Based on our four international brand
platforms, namely Loctite, Pritt, Pattex and
Ceresit, we offer target group-aligned system
solutions for applications in the household, in
schools and offices, for do-it-yourselfers and
craftsmen and also for the building industry.
Our Transport and Metal business serves major
international customers in the automotive and
metal-processing industries, offering tailored
system solutions and specialized technical services
that cover the entire value chain from steel
coating to final vehicle assembly. With BASF
Coatings GmbH, we have established ajoint
venture aligned to the development of innovative
corrosion protection solutions for the automotive
industry, which went operational in 2011.

Within the General Industry business, our
customers comprise manufacturers from a mul-
titude of industries, ranging from household
appliance producers to the wind power industry.
Our portfolio here encompasses Loctite products
for industrial main tenance, repair and overhaul,
as well as a wide range of sealants and system
solutions for surface treatment applications, and
specialty adhesives. Through our high-quality
solutions, we help our customers strengthen
their own competitiveness.
The Packaging, Consumer Goods and Construction
Adhesives business serves major international
customers as well as medium- and small-sized
manufacturers of the consumer goods and furni-
ture industries. Leveraging our economies of
scale, we offer attractive solutions for standard
and volume applications. Through our global tech-
nical customer service, we also provide inno-
vative product ideas and technical advice, en-
abling our customers to become more efficient
and achieve more with less material input.
Our Electronics business offers customers from
the worldwide electronics industry a comprehen-
sive portfolio of innovative high-tech adhesives
and soldering materials for the manu facture of
microchips and printed circuit boards. Dispropor-
tionately high investments in research and devel-
opment and cooperation with our customers help
in engineering solutions for future product gen-
erations.
Within the Adhesive Technologies business sec-
tor, we therefore cover the requirements of wide-
ly differing customer groups and industries
Group management report
Adhesive Technologies
85 Henkel Annual Report 2011
worldwide. We intend to further expand our lead-
ing market positions with high profitability in all
our business segments and regions, endeavoring
to grow faster than the respective markets. An
important success factor in this regard is our
specific application know-how in the relevant
technical fields. Due to the close contact and the
extensive cooperation existing between our sales
personnel and our customers, we can deliver
tailored products and services on a global scale.
Through strict portfolio management and our
focus on strengthening our top brands, we in-
creased the proportion of sales accounted for by
our top ten brands to 54 percent in the year under
review.
The close contact of our employees with customers
and users is also an important source of inno-
vation. We further see our commitment to develop-
ing sustainable solutions as a significant innovation
driver and differentiator within the competitive
environment. We have already attained an acknow-
ledged leading position in the sustainability field
within our markets. We will consistently extend
this as we pursue the long-term sustainability
strategy that Henkel has put in place.
Through a range of measures, we are continually
increasing our innovation rate: In 2011, we gener-
ated around 30 percent of our sales with products
successfully launched onto the market within
the last five years.
Our strong position in emerging markets is also
an important engine for growth. We harness the
high market dynamics and the disproportionate
rise in demand for adhesives encountered in
these markets to drive our business development.
We will thus continue to increase our investments
in these regions going forward.
In the future, we intend to utilize our scale even
more effectively in order to add to our competi-
tiveness. As in recent years, we will further im-
prove our structures. We are currently placing
new emphasis on the global standardization of
our business processes and the grouping of activ-
ities within our shared service centers. We also
intend to generate further economies of scale by
reducing complexity in our product ranges and
our brands portfolio. We regularly review all com-
ponents of our portfolio in terms of their contri-
bution to achieving the long-term objectives of
the business sector. Hence, in 2011 again we
divested a number of small, non-core activities.
Sales and profits
The Adhesive Technologies business sector con-
tinued its profitable growth trend in 2011. In an
increasingly difficult general market environment,
we improved sales by 6.0 percent nominally to
a new high of 7,746 million euros. At 8.3 percent,
organic growth i.e. after adjusting for foreign
exchange and acquisitions/divestments was
once again significantly higher than the rate by
which our relevant markets expanded. This good
performance was achieved through a mix of price
and volume increases. With growth in the mid-
single-digit percentage range, the mature markets
of Western Europe and North America showed
favorable expansion overall. In our emerging mar-
kets, we again generated disproportionate double-
digit growth, with our highest rates of increase
occurring in the Eastern Europe region.
As in recent years, we continued to pursue the
long-term adaptation of our cost structures and
capacities in 2011. With an EBIT of 1,002 million
euros for 2011, we succeeded for the first time in
posting an operating profit figure above the 1bil-
lion euro mark. Adjusted operating profit for the
year came in at 1,075 million euros. As a result,
return on sales rose by 0.9 percentage points
versus the previous year, to 12.9 percent. Adjusted
return on sales once again reached a new high
with 13.9 percent.
The negative impact on gross margin emanating
from the substantial rise in material costs was
extensively offset by price increases in all our busi-
nesses and regions, as well as our ongoing mea-
sures to reduce costs and increase efficiency in
both production and supply chain. Net working
capital expressed as a proportion of sales amounted
to 15.1 percent. Return on capital employed
(ROCE) increased appreciably by 2.1percentage
points to 14.6 percent. Our economic value
added (EVA

) improved by 209 million euros to

282 million euros.
+8.3%
organic sales growth in a
world market with growth in
the low single-digits.
30%
innovation rate.
Sales
in million euros
2007 5,711
2008 6,700
2009 6,224
2010 7,306
2011 7,746
Group management report
Adhesive Technologies
86 Henkel Annual Report 2011
Business areas
Adhesives for Consumers, Craftsmen and Building
The Adhesives for Consumers, Craftsmen and
Building business once again performed well.
As a result of a slight recovery in the building
sector, particularly in Eastern Europe, our
business with the construction industry made
a significant contribution to the rise in revenues.
We achieved the highest growth versus prior
year in Eastern Europe and Africa/Middle East.
Industrial Adhesives
We were also able to substantially increase sales in
the Packaging, Consumer Goods and Construction
Adhesives business. Supply shortages with respect
to certain important raw materials impacted
particularly heavily on this business. Neverthe-
less, all our regions were able to contribute to
its gratifying performance, with our emerging
markets generating double-digit growth rates
across the board.
Following a further recovery in its sales markets,
our Transport and Metal business was able to
maintain its good sales performance from 2010
also in 2011. Our ongoing investments in research
and development were rewarded with several
customer awards, particularly in recognition of
the contributions made by our products to in-
creasing efficiency and improving quality.
We posted our highest sales increase in the
General Industry business. All our regions
contributed to the strong growth, led by the
emerging markets of Eastern Europe and Asia
(excluding Japan). The mature markets of Western
Europe and North America also showed a very
pleasing development. Our Loctite brand business
involving products for industrial maintenance,
repair and overhaul made a vital contribution to
this development.
Following very strong growth in the previous year,
demand for the products and services provided
by our Electronics business weakened some-
what. Overall, sales in 2011 were slightly below the
level of the previous year, due mainly to a decline
in the Asia-Pacific region. This decrease is par-
tially attributable to the natural disaster suffered
in Japan. However, we were able to generate posi-
tive momentum with a range of new developments,
particularly in relation to the rapidly growing
market for mobile communication devices.
Capital expenditures
In 2011, we invested primarily in improving the
efficiency of our production facilities and in further
expanding our capacities in the emerging mar-
kets. Overall, we increased our spend on property,
plant and equipment from 109 million euros
in 2010 to 154 million euros in the year under
review.
Outlook
For 2012 we estimate organic sales growth in the
mid-single-digit percentage range. We expect
to once again develop significantly better in the
emerging markets than in the mature markets.
We see the prices for raw materials and packaging
rising more slowly than in 2011. Persistent capacity
bottlenecks affecting our suppliers may once
again lead to supply shortages. We will remain
firmly focused on main taining our strict cost
discipline. While increasing the quality of ser-
vice to our customers, we can further improve
our efficiency by grouping activities within our
shared service centers. Also on the basis of our
significantly improved cost structures, we expect
adjusted return on sales to increase versus prior
year (2011 figure: 13.9 percent).
We see opportunities for our business develop-
ment primarily in expediting the launch of inno-
vations and in the possibility that the market
dynamics might be more positive than currently
expected. Currently unpredictable relief could
also come from the raw materials side.
We see risks lying in the macroeconomic effects
arising from the current debt crises and also, to
a degree, in the development of our emerging
markets. In key sectors such as the automotive
and electronic industries, and also in the metal-
processing segment, lie not inconsiderable
potential risks in case of declining demand.
With a less dynamic demand, the competitive
pressures would increase. Moreover, unexpectedly
high increases in raw material and packaging
prices could exacerbate the pressure on margins.
Group management report
Adhesive Technologies
87 Henkel Annual Report 2011
Riskreport
Risks and opportunities
In the pursuit of our business activities, Henkel
becomes exposed to a multiplicity of risks inher-
ent in the global market economy. We deploy an
array of effective monitoring and control systems
aligned to identifying risk at an early stage, eval-
uating the exposure and introducing effective
countermeasures. We have incorporated these
instruments within a uniform risk management
system as described below.
Entrepreneurial activity also involves identify-
ing, developing and exploiting opportunities as a
means of securing and extending the companys
competitiveness. The reporting aspect of our risk
management system does not extend to entrepre-
neurial opportunity. Rather, we continuously
examine and evaluate the opportunities available
to us under the auspices of our business sectors,
as an elementary component of our strategy.
Major opportunities have been included in our
forecast report on pages 93 to 95.
Risk Management System
The Risk Management System (RMS) at Henkel
is an integral component of the comprehensive
planning, control and reporting regime practiced
in the individual companies, in our business
sectors and at corporate level. It encompasses
the systematic identification, evaluation, man-
agement, documentation, communication and
monitoring of risks. Risk control and monitoring
combined with our Internal Control System (ICS)
support our risk management capability within
the corporate governance framework.
We have defined the principles, processes and
responsibilities relating to risk management in a
corporate standard that is binding on the Group.
New knowledge, intelligence and findings flow
into our guidelines and systems as they are con-
tinuously developed. At Henkel, risk manage-
ment is performed on a holistic, integrative basis
involving the systematic assessment of our
exposure. We understand risk as the likelihood
of a negative deviation from a financial target or
key performance indicator (KPI) resulting from
an event or change in circumstances.
Our annual risk reporting process begins with
identifying major risks using checklists based on
predefined operating risk categories (e.g. procure-
ment and production) and predefined functional
risk categories (e.g. information technology and
human resources). We evaluate the risks in a
two-stage process according to occurrence like-
lihood and potential loss. Included in the report-
ing remit are risks with a loss potential of at least
1 million euros or 10 percent of the net external
sales of a country, where the occurrence likeli-
hood is considered greater than zero.
We initially determine the gross risk and then,
in a second stage, the net risk after taking into
account our countermeasures. Initially, risks are
recorded on a decentralized, per-country basis,
with the assistance of regional coordinators. The
locally collated risks are then analyzed by the
experts in the business sectors and corporate
functions, classified in the appropriate corporate
management committees and finally assigned to
a segment-specific risk inventory. Corporate
Accounting is responsible for coordinating the
overall process and analyzing the inventoried
exposure.
All the risk management processes are supported
by an intranet-resident database which ensures
transparent communication throughout the
entire corporation. Within the framework of its
2011 audit of our financial statements, the auditor
examined the structure and function of our risk
early warning system, confirming its adequacy
and regulatory compliance.
The following describes the main features of the
internal control and risk management system in
relation to our accounting processes in accor-
dance with Section 315 (2) no. 5 of the German
Commercial Code [HGB] as amended by the
German Accounting Law Reform Act [BilMoG]. In
accordance with the definition of our Risk Man-
agement System, the objective of our accounting
processes lies in the identification, evaluation
and management of all those risks that jeopardize
the regulatory preparation of our annual and
consolidated financial statements. Consequently,
it is the task of the Internal Control System imple-
mented in order to combat such discrepancies, to
put in place corresponding principles, proce-
dures and controls that will ensure a regulatorily
compliant process for the preparation of such
financial statements.
Within the organization of the Internal Control
System, the Management Board assumes overrid-
Group management report
Risk report
88 Henkel Annual Report 2011
ing responsibility at Group level. The duly coor-
dinated subsystems of the Internal Control Sys-
tem lie within the spheres of responsibility of the
functions Risk Management, Compliance, Corpo-
rate Accounting, Corporate Finance and Finan-
cial Operations. Within these functions, there
are a number of integrated monitoring and con-
trol levels, ensuring multi-point stability of the
internal control and risk management system.
This is further attested by regular and compre-
hensive efficacy reviews performed by our
Internal Audit function.
Of the many and varied control processes incor-
porated into the accounting regime, some are
worthy of particular mention. The basis for all
our accounting processes is provided by our
Accounting corporate standard, which contains
detailed accounting and reporting instructions
covering all major activities and material eventu-
alities. It specifies, for example, the procedure to
be adopted in inventory valuation, and how the
transfer prices applicable for intra-group trans-
actions are to be determined. This corporate
standard is binding on the entire Group and is
regularly reviewed and re-released by the CFO.
In particular, further globally binding procedural
instructions affecting our accounting practice
are contained in our corporate standards Treasury
and Investments.
With appropriate organizational measures in
conjunction with restrictive control of access to
our information systems, we ensure the effective
separation of responsibilities in our accounting
systems between transaction entry on the one
hand and checking/auditing and approval on the
other. Documentation relating to the operational
accounting and closure processes ensures that
important tasks such as the reconciliation of
receivables and payables on the basis of balance
statements and confirmations are clearly as-
signed. Strict authorization regulations also exist
governing the approval of contracts, credit notes
and similar, and we practice the double-check
security principle right across the board. This is
also stipulated in our Group-wide corporate
standards.
We consider our systems to be fit for purpose
and functionally efficient. They are regularly
reviewed in order to determine their potential
for further development and optimization. Once
identified, such potential is duly utilized.
Major risk categories
Operating risks
Procurement market risks
On the procurement markets, we expect prices
to rise further in 2012, albeit not to the same
degree as encountered in 2011. As uncertainties
will continue to prevail in the development of
raw material prices, we see additional price risks
arising in relation to important raw materials
Major risk categories
Riskcategory Likelihood Potentialfinancialimpact
Operatingrisks
Procurement market risks Possible Major
Production risks Unlikely Major
Economic and sector-specific risks Likely Major
Functionalrisks
Financial risks
Credit risks Unlikely Major
Liquidity risks Unlikely Minor
Currency risks Possible Major
Interest rate risks Possible Minor
Risks from pension obligations Possible Major
Legal risks Unlikely Major
IT risks Unlikely Major
Personnel risks Possible Minor
Environmental and safety risks Possible Major
Businessstrategyrisks Possible Moderate
Group management report
Risk report
89 Henkel Annual Report 2011
procedures in order to mitigate concomitant risk.
The procedures implemented incorporate all the
relevant specialist functions and are regulated in
an internal corporate guideline requiring that
such investments be analyzed in advance on the
basis of a detailed risk appraisal. Further audit-
ing and analytical procedures accompanying
projects at the assessment and implementation
stage provide the foundation for successful project
management and effective risk reduction.
Macroeconomic and sector-specific risks
We remain exposed to macroeconomic risks
emanating from the uncertainties of the current
economic environment. Specifically, declining
market growth combined with intensifying com-
petitive pressures constitutes risk in both our
branded consumer goods and our industrial
businesses. We are currently observing an ongoing
process of consolidation within the retail trade,
resulting in increased pressure on both prices
and terms of business relating to the trades own
private labels. Our focus therefore is on achiev-
ing a steady increase in our brand equities and
developing further innovations. We see innova-
tive products as enabling us to differentiate our-
selves from the competition, this being a signifi-
cant prerequisite for the success of our company.
Functional risks
Financial risks
Henkel is exposed to financial risk in the form of
credit risks, liquidity risks, currency risks, inter-
est rate risks and risks arising from our pension
obligations.
For information relating to our credit risk, liquid-
ity risk, interest rate and currency risk, including
the risk-limiting measures applied and the man-
agement approach to such exposure, please refer
to Note 21 on pages 128 to 138.
Risks from pension obligations relate to changes
in interest rates, inflation rates, trends in wages
and salaries, and changes in the statistical life
expectancy of pension beneficiaries. To mini-
mize exposure and improve risk management,
the pension obligations arising in the most
important countries are therefore almost fully
funded. They are managed on the basis of a two-
track portfolio approach: The main portion of the
portfolio is invested in interest-bearing plan
assets (liability-driven investments), reducing
the interest rate and inflation risk. In order to
and packaging. Further price and supply risks
ensue from the possibility of supply shortages in
the procurement markets for reasons of demand
or production restrictions. We combat these risks
by adopting a comprehensive risk management
approach. This involves the pro-active manage-
ment of our vendor portfolio and utilization of
our globally engaged, cross-divisional sourcing
capability, together with strategies aimed at se-
curing both price and volume through the con-
clusion of contracts. Where appropriate and pos-
sible, we also make prudent use of effectively
tailored financial safeguards and hedging instru-
ments. (For further information relating to the
risks arising from derivative financial instru-
ments used for hedging purposes, please refer
to Note 21 on pages 128 to 138.)
We also work within interdisciplinary teams
(Research and Development, Supply Chain Man-
agement and Purchasing) on devising alternative
formulations and different forms of packaging to
be able to respond flexibly to unforeseen fluctua-
tions in raw material prices. We also avoid be-
coming dependent on individual vendors so as
to better secure the constant supply of the goods
and services that we require. Close collaboration
with our strategic suppliers plays an exception-
ally important role in our risk man agement
regime. We deal in detail with the assessment of
vendor risk with respect to vendor financial stability
in the section on Procurement on pages 67
and 68. The basis for our successful risk manage-
ment approach in this domain is a comprehensive
procurement information system that ensures
permanent transparency with respect to our
purchasing volumes.
Production risks
Risks in the field of production arise in the
Henkel case not only from low capacity utilization
due to volume decreases, but also in the possibility
of operational interruptions, especially at our
so-called single-source sites. The negative ef-
fects of possible production outages can be offset
through flexible production control and, where
economically viable, appropriate insurance poli-
cies. Generally, risks in the field of production
are minimized by ensuring a high level of em-
ployee qualification, establishing clearly defined
safety standards, and carrying out regular plant
and equipment maintenance. Decisions relating
to capital expenditures on property, plant and
equipment are made in accordance with defined,
differentiated responsibility matrices and approval
Group management report
Risk report
90 Henkel Annual Report 2011
cover the risks arising from trends in wages,
salaries and life expectancies, and to close the
potential deficit between plan assets and pension
obligations over the long term, additional invest-
ments are made in a return-enhancing portfolio
as an add-on instrument that contains assets
such as equities, private equity investments,
hedge funds, real estate and commodity invest-
ments.
The pension funds can be adversely affected in
the event of a downturn in the capital markets.
We mitigate this risk by investing in widely
diversified classes of assets and different instru-
ments within each asset class. The risks inherent
in the pension plan assets are continuously mon-
itored and controlled on the basis of risk and
return criteria. Risks are quantified using sensi-
tivity analyses. Major pension funds are admin-
istered by external fund managers in Germany,
the USA, the UK, Ireland and the Netherlands. All
these countries follow the above-described stan-
dard investment strategy and are centrally moni-
tored. The funds covering our pension obliga-
tions are invested on the basis of asset-liability
studies aligned to the expected cash flows aris-
ing from the country-specific pension obliga-
tions. Further information on the development of
our pension obligations can be found in Note 15
on pages 120 to 124.
Legal risks
As a globally active corporation, we are also
exposed in the course of our ordinary business
activities to a range of risks relating to litigations
and other proceedings or actions, including
those brought by governmental agencies, in
which we are currently involved or may become
involved in the future. These risks arise, in par-
ticular, in the fields of product liability, product
deficiency, laws relating to competition and
monopolies, the infringement of proprietary
rights, patent law and tax law, and environmental
protection and land contamination issues. The
possibility cannot be discounted that the final
decisions taken in some of these litigations and
proceedings will go against us.
We counteract legal risks by issuing correspond-
ing binding guidelines and codes of conduct and
by instituting appropriate training measures. We
address current actions and the associated expo-
sure by maintaining constant contact between
the corporate legal department and local attor-
neys, and also through our separate reporting
system. For certain legal risks, we have concluded
insurance policies that are standard for the in-
dustry and that we consider to be fit for purpose.
We form provisions for litigations where it is
likely in our estimation that obligations may
arise which are either excluded from or not fully
covered by our insurance policies and where a
reasonably accurate estimate of the potential loss
is possible. However, predicting the results of
actions is beset with considerable difficulties,
especially in cases in which the claimant is seek-
ing substantial or unspecified damages. Given
these imponderables, we are unable to predict
what obligations may arise from such litigations.
Consequently, major losses can emanate from
litigations and proceedings that are not covered
by our insurance policies or our provisions.
We do not currently foresee risks arising from
litigations or proceedings, either pending or
threatened, that could have a material influence
on our net assets, financial position or results of
operations.
Supplementary information on pending actions:
Henkel is involved in litigations being brought
by various antitrust authorities in Europe. These
relate to infringements, some of which occurred
more than ten years ago. Henkel has cooperated
with the authorities with respect to all such
actions.
On April 13, 2011, the European Commission im-
posed fines on a number of international laundry
detergent manufacturers for reason of infringe-
ments that had occurred in various countries in
Western Europe between 2002 and the beginning
of 2005, which were discovered by Henkel in the
course of internal compliance audits carried out
in 2008. Henkel then immediately informed the
relevant authorities and contributed materially
to investigations into the matter. Due to our
extensive cooperation with the EU Commission,
Henkel was granted full immunity from fines.
On December 8, 2011, the French antitrust au-
thorities imposed fines totaling around 360 mil-
lion euros on several international detergent
manufacturers on account of antitrust violations
in France in the period from 1997 to 2004. Henkel
received a fine of around 92 million euros. We
have deposited the monies and filed an action
against the decision of the French antitrust
authorities. This action has no suspensive effect
with regard to lodgment of the fine. In our
Group management report
Risk report
91 Henkel Annual Report 2011
opinion and in that of the attorneys from whom
we are seeking advice, the French antitrust
authorities decision is not legally correct. We
cooperated extensively with the antitrust author-
ities throughout the entire proceedings and, on
the basis of our own internal investigations,
supplied important information that assisted in
establishing the key facts of the matter in France.
In addition, we were the first company to disclose
the European dimension of the case. In our un-
derstanding, the case in France is directly related
to the antitrust violations concerning heavy-duty
detergents in various West European countries
including France that led to sanctions being
imposed by the European Commission on April
13, 2011. We were granted full exemption from
any fines in relation to these antitrust violations.
It would be contradictory if the French antitrust
authorities were to impose separate sanctions on
us in respect of these infringements.
Information technology risks
The risks associated with our IT operations
relate primarily to the potential for unauthorized
access and data loss. Appropriate approval
procedures, authorization profiles and defensive
technologies are deployed in order to guard
against such eventualities. Daily data back-up
runs are conducted to shadow all critical data-
bases, and the resultant files are transferred to
another site. We also carry out regular restore
tests. External attacks that took place in 2011
for example in the form of hacking, spamming or
viruses were successfully repelled by the secu-
rity measures implemented and therefore had no
disruptive effect on our business processes.
Moreover, Henkel has put in place a globally
binding internal IT guideline to which our exter-
nal service-providers are also bound. Major com-
ponents of this code include measures for avoid-
ing risk, and descriptions of escalation processes
and best-practice technologies. Correct imple-
mentation is continuously monitored by our
globally active Internal Audit function. In addi-
tion, our safeguards are examined for their effi-
cacy and efficiency by external specialists.
Personnel risks
The future economic development of Henkel is
essentially dependent upon the commitment and
capabilities of our employees. We respond to the
increasing competition for well qualified technical
and managerial staff by maintaining close
contacts with selected universities and by
conducting special recruitment campaigns. Our
new employer branding campaign is serving to
position us even more effectively as an employer
of choice. We combat the risk of failing to retain
valuable employees over the long term through
specifically aligned personnel development
programs. The basis for these is provided by
regular potential and performance analyses
leading to attractive qualification and further
training opportunities linked to performance-
related compensation arrangements. You will
find further information relating to our employees
on pages 64 to 66.
Environmental and safety risks
Henkel is a global manufacturing company and
is therefore exposed to risks pertaining to
environment, safety, health and social standards,
manifesting in the form of personal injury, physical
damage to goods and reputational damage. We
minimize these risks by applying the appropriate
management systems and processes, and also
through our auditing, advisory and training
activities. We update these preventive and pre-
cautionary measures on a continual basis with a
view to safeguarding our facilities, assets and
reputation. Integrity in this respect is further
ensured by compliance with high technical stan-
dards and our rules of conduct, and by faithful
implementation of relevant statutory directives.
Business strategy risks
Business strategy risks can arise from the expec-
tations that we have invested in internal projects,
acquisitions and strategic alliances failing to
materialize in part or in full. This may, in turn,
mean that we are unable to recoup the associated
capital expenditures. Individual projects could
also be delayed by unforeseen risks. We endeavor
to minimize these business strategy risks
through regular and intensive analysis of the
market and our competition.
Our strategy of standardizing our processes on a
global scale and concentrating our production
facilities may give rise, for example, to strained
relationships with employees and vendors. We
limit exposure through early risk analyses
performed by experienced specialist depart-
ments, supported by external consultants where
appropriate.
Group management report
Risk report
92 Henkel Annual Report 2011
Forecast
Macroeconomic development
Overview: Gross domestic product growth below
3 percent with mixed regional developments
expected
We expect 2012 to bring a general slowdown in
economic growth, but without a global collapse
such as experienced in the crisis year 2008/2009.
Based on the data provided by Feri EuroRating
Services 1, we expect gross domestic product to
rise by less than 3 percent.
2012 should again see the emerging regions
undergo robust economic expansion, supported
in particular by developments in Russia and
China. For Asia (excluding Japan) we expect an
increase in economic output of around 6 percent,
while that of Latin America is likely to be about
4percent. Eastern Europe should grow by around
3percent, while expansion of the economies in
the Africa/Middle East region is anticipated at
roughly 4percent.
We expect the industrialized countries to grow
1.5 percent. North American GDP is likely to ex-
pand 2 percent. Western Europes growth should
be less than 1 percent, that of Japan 2 percent.
Raw material prices: Moderate rise in price level
With raw material prices having consolidated at
ahigh level during the second half of 2011, we
expect them to rise moderately in 2012. In the
previous year, we were confronted with a high
degree of volatility in the procurement markets.
For 2012, we expect uncertainties in relation to
raw material price developments. We also anticipate
that logistics services will become more expensive.
Currencies: No major changes
We do not expect any material change in the euro
exchange rate versus the US dollar, with the annual
average for 2012 likely to be around 1.41 US dollars.
However, this is based on the assumption that the
debt crisis in Europe will not increase in severity
and that a political solution will be found. More-
over, based on these assumptions, we expect that
currencies of importance for Henkel from the
emerging regions, such as the Russian ruble, the
Mexican peso and the Polish zloty, will moderately
appreciate in this economic climate.
Our forecasts are based on the following
exchange rates:
Average exchange rates versus the euro
2011 20121
Chinese yuan 8.99 8.69
Mexican peso 17.31 16.40
Polish zloty 4.13 3.91
Russian ruble 40.91 40.30
US dollar 1.39 1.41
1 Forecast.
Inflation: Slight increase in global price indices
expected
According to data supplied by Feri EuroRating
Services, global inflation is forecasted to be
around 4 percent. While we can expect a con-
tinuing high degree of price stability for the in-
dustrialized countries with the figure at 2 per-
cent, the inflation rate of the emerging regions
is likely to average around 6 percent.
Sector development
Consumption and the retail sector:
Growth at 2011 level
Based on data provided by Feri EuroRating
Services, we anticipate that worldwide private
consumption and, linked to this, retail sales
will expand in 2012 at approximately the same
rate as in 2011 (about 3 percent). Consumers in
1 As of January 2012.
Group management report
Risk report / Forecast
Overall risk Management Board appraisal
At the time of writing this report, there are no
identifiable risks relating to future developments
that could endanger the existence either of
Henkel AG & Co. KGaA or of the Group as a going
concern. As we have no special-purpose entities
or investment vehicles, there is no risk that
might emanate from such a source. Aggregation
of the most significant individual risks is not
appropriate due to the unlikelihood that such
risks would occur simultaneously. Our risk anal-
ysis indicates that our exposure to risk does not
represent any lasting endangerment to the net
assets, financial position and results of opera-
tions either of Henkel AG & Co. KGaA or of the
Group. The overall picture shows no underlying
change to the risk situation compared to the
previous year. The system of risk categorization
undertaken by Henkel continues to indicate that
the most significant exposure currently relates to
the impact of macroeconomic and sector uncer-
tainty and financial risk, to which we are re-
sponding with the countermeasures described.
93 Henkel Annual Report 2011
the industrialized countries are expected to
spend about 1 percent more than in 2011, while
the emerging markets will again see a rise in
consumption of about 5 percent in 2012.
Industry: Growth of 3 percent
According to data supplied by Feri EuroRating
Services, growth in industrial output will ease in
2012 compared to 2011 and, at around 3 percent,
will only expand slightly faster than the global
economy as a whole.
It is expected that the transport industry will
register a plus of over 3 percent, with the automo-
tive sector posting a similar number. Production
of the electronics industry, an important customer
sector for Henkel, should also increase further,
by about 4percent. Growth in basic products
such as semiconductors and printed circuit
boards is actually likely to be more robust than
in 2011. Production of the metal industry should
expand more slowly than in 2011, with growth
expected to be around 3 percent. Developments
in consumer-related sectors such as the global
packaging industry are likely to be sluggish,
growing according to our estimates in the low
single-digit percentage range, as was the case
in 2011. Global construction should expand by
around 2percent.
Opportunities: Emerging regions and innovative
products with plenty of potential
We continue to see great potential in the emerg-
ing markets, with above-average growth oppor-
tunities from which we intend to benefit through
our local business activities. The regions con-
cerned include, in particular, Asia, Eastern Europe
and Africa/Middle East, with Latin America also
part of the wider group.
We regard our research and development activities
as a further great source of opportunity. We are
developing a steady stream of new and innova-
tive products and product solutions offering our
customers added value. We have a well filled and
balanced pipeline of medium and long-term proj-
ects involving products and systems that we in-
tend to launch onto the markets of all three of
our business sectors, both this year and in years
to come.
Further opportunity lies in our strict focus on
cost and our willingness to constantly examine
and analyze the status quo. Such scrutiny regu-
1 After adjusting for one-time charges/gains and restructuring
charges.
larly reveals further potential for cost reductions
and capacity adjustments, or the elimination of
non-core business activities and minor brands
from our portfolio. We also expect the planned
further expansion of our shared service centers
to make a substantial contribution to cost reduction.
Opportunities will also arise from the ongoing
pursuit and implementation of our three strate-
gic priorities, which we explain in detail in the
section entitled Strategy and financial targets
for 2012 on pages 45 to 48.
Further specific opportunities and risks are
discussed in the individual business sector
reports starting on page 76.
Outlook for the Henkel Group in 2012
We expect the Henkel Group to generate organic
sales growth of between 3 and 5 percent in fiscal
2012.
We are confident of continuing the positive
growth trend posted by our consumer goods
businesses, with revenues expanding in the
low single-digit percentage range.
For the Adhesive Technologies business sector,
we expect sales to grow in the mid-single-digit
percentage range.
We base this prediction on our strong competi-
tive position. This we have consolidated and fur-
ther extended in recent years through our inno-
vative strength, our strong brands, our leading
market presence and the quality of our portfolio.
In recent years we have introduced a number of
measures that have had a positive impact on our
cost structure. And in this year too, we intend to
further adapt our structures to the constantly
changing market conditions as a continuation of
our commitment to strict cost discipline. We also
intend to counteract the burden on earnings
caused by high raw material costs.

These factors, together with the expected increase
in sales, will positively influence our earnings
development. Based on our 2011 results, we
anticipate achieving an increase in adjusted 1
return on sales (EBIT) to 14 percent (2011:
13.0percent) and an increase in adjusted earnings
per preferred share of at least 10 percent.
Group management report
Forecast
94 Henkel Annual Report 2011
We also expect the following developments in 2012:
Increase in the prices for raw materials,
packaging, contract manufacturing and traded
goods in the mid-single-digit percentage range.
Restructuring charges of around 100 million
euros.
Investments in property, plant and equipment
of around 410 million euros.
Further specific expectations are discussed in
the individual business sector reports starting
on page 76.
Financial targets for 2012
Annual organic sales growth (average):
35percent
Adjusted return on sales (EBIT):
14percent
Annual growth in adjusted earnings per
preferred share (average):
>10percent
Dividends
In keeping with our financial strategy, the divi-
dend payout should be around 25 percent of net
income attributable to shareholders of Henkel AG
& Co. KGaA. Based on the anticipated increase in
earnings, we therefore expect to further increase
dividends paid for 2012.
Capital expenditures
We are planning to increase our investments
in property, plant and equipment to around
410 million euros in 2012. In so doing, we will
be increasing our focus on investment in our
emerging markets. For structural reasons, the
majority of our capital expenditures will be in
Europe and North America.
Major investments in production facilities for the
manufacture of innovative products are planned
for the business sectors Laundry & Home Care
and Cosmetics/Toiletries. Another major area lies
in production plant optimization and capacity
expansion. The focus of our Adhesive Technolo-
gies business sector in 2012 will be on consoli-
dating and rationalizing our production footprint.
As part of this process, in 2011 we laid the foun-
dations in China for the construction of our larg-
est industrial adhesives production facility
worldwide. In the emerging markets of Eastern
Europe and South America, our investment activ-
ities will concentrate on expanding production
capacity.
Acquisitions, financing and liquidity
We plan to further reduce our net debt in fiscal
2012. We intend to maintain a sufficient balance
of liquid funds in order to enhance our financial
flexibility. We are further aiming at renewing the
credit line, which expires in 2012, safeguarding
our commercial paper program.
Thanks to continuing good business perfor-
mance and our improved financial profile, we
regained our target ratings of A flat (Standard &
Poors) and A2 (Moodys) in the second quarter
of 2011. Looking forward we intend not to jeopar-
dize our target ratings in the long term when
assessing possible acquisitions.
Post-2012 outlook
Diligent pursuit of our strategic priorities
formulated in 2008 has led to a significant im-
provement in our key financials, with the trend
remaining upward. We will again be aiming to
achieve profitable growth in 2013. We will be
presenting specific financial targets for the
years after 2012 at the end of fiscal 2012.
Subsequentevents
There have been no notifiable events.
Group management report
Forecast / Subsequent events
95 Henkel Annual Report 2011
Consolidated
financial statements
98 Consolidated statement of financial position
100 Consolidated statement of income
101 Consolidated statement of comprehensive
income
101 Consolidated statement of changes in
equity
102 Consolidated statement of cash flows
103 Group segment report by business sector
104 Key financials by region
105 Accounting principles and methods applied
in preparation of the consolidated financial
statements
Notes to the consolidated statement of
financial position
111 Intangible assets
114 Property, plant and equipment
116 Other financial assets
116 Other assets
117 Deferred taxes
117 Inventories
117 Trade accounts receivable
117 Cash and cash equivalents
118 Assets held for sale
118 Issued capital
119 Capital reserve
119 Retained earnings
119 Other components of equity
119 Non-controlling interests
120 Pension obligations
125 Income tax provisions and other provisions
126 Borrowings
127 Other financial liabilities
127 Other liabilities
127 Trade accounts payable
128 Financial instruments report
Consolidated fnancial statements
Subindex
96 Henkel Annual Report 2011
Notes to the consolidated statement of
income
139 Sale proceeds and principles of
income realization
139 Cost of sales
139 Marketing, selling and distribution expenses
139 Research and development expenses
139 Administrative expenses
139 Other operating income
140 Other operating charges
140 Financial result
140 Taxes on income
142 Non-controlling interests
Other disclosures
143 Payroll cost
146 Employee structure
146 Group segment report
148 Earnings per share
148 Consolidated statement of cash flows
149 Contingent liabilities
149 Other unrecognized financial commitments
149 Voting rights/Related party disclosures
150 Exercise of exemption options
150 Remuneration of the corporate management
150 Declaration of compliance with the Corporate
Governance Code (Kodex)
150 Subsidiaries and other investments
150 Auditors fees and services
151 Recommendation for the approval
of the annual financial statements
and the appropriation of profit of
Henkel AG & Co. KGaA
152 Annual financial statements of
Henkel AG & Co. KGaA (summarized)
153 Independent Auditors Report
155 Responsibility statement by the
Personally Liable Partner
156 Corporate management of
Henkel AG & Co. KGaA
Consolidated fnancial statements
Subindex
97 Henkel Annual Report 2011
Consolidated statement of financial position
Assets
in million euros Note 2010 % 2011 %
Intangible assets 1 8,641 49.3 8,769 47.2
Property, plant and equipment 2 2,215 12.6 2,264 12.2
Other financial assets 1 3 238 1.4 246 1.3
Income tax refund claims 3 1
Other assets 1 4 135 0.8 103 0.6
Deferred tax assets 5 358 2.0 465 2.5
Non-current assets 11,590 66.1 11,848 63.8
Inventories 6 1,460 8.3 1,550 8.3
Trade accounts receivable 7 1,893 10.8 2,001 10.8
Other financial assets 1 3 684 3.9 748 4.0
Income tax refund claims 133 0.8 164 0.9
Other assets 1 4 219 1.2 237 1.2
Cash and cash equivalents 8 1,515 8.7 1,980 10.7
Assets held for sale 9 31 0.2 51 0.3
Current assets 5,935 33.9 6,731 36.2
Total assets 17,525 100.0 18,579 100.0
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).
Consolidated fnancial statements
Consolidated statement of fnancial position
98 Henkel Annual Report 2011
Equity and liabilities
in million euros Note 2010 % 2011 %
Issued capital 10 438 2.5 438 2.4
Capital reserve 11 652 3.7 652 3.5
Treasury shares 99 0.5 93 0.5
Retained earnings 12 7,926 45.2 8,586 46.2
Other components of equity 13 1,058 6.0 942 5.1
Equity attributable to shareholders of Henkel AG & Co. KGaA 7,859 44.9 8,641 46.5
Non-controlling interests 14 91 0.5 121 0.7
Equity 7,950 45.4 8,762 47.2
Pension obligations 1 15 644 3.7 998 5.4
Income tax provisions 16 119 0.7 93 0.5
Other provisions 16 302 1.7 394 2.1
Borrowings 17 3,570 20.4 3,501 18.8
Other financial liabilities 1 18 73 0.4 54 0.3
Other liabilities 1 19 25 0.1 23 0.1
Deferred tax liabilities 5 416 2.4 481 2.6
Non-current liabilities 5,149 29.4 5,544 29.8
Income tax provisions 16 327 1.9 309 1.7
Other provisions 16 867 4.9 833 4.4
Borrowings 17 536 3.1 412 2.2
Trade accounts payable 20 2,308 13.2 2,411 13.0
Other financial liabilities 1 18 147 0.8 84 0.5
Other liabilities 1 19 230 1.2 207 1.1
Corporate income tax liabilities 11 0.1 17 0.1
Current liabilities 4,426 25.2 4,273 23.0
Total equity and liabilities 17,525 100.0 18,579 100.0
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).
Consolidated fnancial statements
Consolidated statement of fnancial position
99 Henkel Annual Report 2011
Consolidated statement of income
in million euros Note 2010 % 2011 % Change
Sales 22 15,092 100.0 15,605 100.0 3.4 %
Cost of sales 1 23 8,078 53.5 8,538 54.7 5.7 %
Gross proft 7,014 46.5 7,067 45.3 0.8 %
Marketing, selling and distribution expenses 1 24 4,257 28.2 4,132 26.5 2.9 %
Research and development expenses 1 25 391 2.6 410 2.6 4.9 %
Administrative expenses 1 26 750 5.0 785 5.0 4.7 %
Other operating income 27 216 1.4 209 1.3 3.2 %
Other operating charges 28 109 0.7 92 0.6 15.6 %
Operating proft (EBIT) 1,723 11.4 1,857 11.9 7.8 %
Interest income 25 0.2 45 0.3 80.0 %
Interest expense 197 1.3 200 1.3 1.5 %
Interest result 172 1.1 155 1.0 9.9 %
Investment result 1 100.0 %
Financial result 29 171 1.1 155 1.0 9.4 %
Income before tax 1,552 10.3 1,702 10.9 9.7 %
Taxes on income 30 409 2.7 419 2.7 2.4 %
Tax rate in % 26.4 24.6
Net income 1,143 7.6 1,283 8.2 12.2 %
attributable to non-controlling interests 31 25 0.2 30 0.2 20.0 %
attributable to shareholders of Henkel AG & Co. KGaA 1,118 7.4 1,253 8.0 12.1 %
1 Restructuring charges 2011: 227 million euros (2010: 184 million euros), of which: cost of sales 83 million euros (2010: 114 million euros);
marketing, selling and distribution expenses 51 million euros (2010: 23 million euros); research and development expenses 14 million euros
(2010: 8 million euros); administrative expenses 79 million euros (2010: 39 million euros).
Earnings per share (basic)
in euros Note 2010 2011 Change
Ordinary shares 35 2.57 2.88 12.1 %
Non-voting preferred shares 35 2.59 2.90 12.0 %
Earnings per share (diluted)
in euros Note 2010 2011 Change
Ordinary shares 35 2.56 2.87 12.1 %
Non-voting preferred shares 35 2.58 2.89 12.0 %
Additional voluntary information
in million euros 2010 2011
EBIT (as reported) 1,723 1,857
One-time gains 1 59 57
One-time charges 14 2
Restructuring charges 184 227
Adjusted EBIT 1,862 2,029
Adjusted return on sales in % 12.3 13.0
Adjusted tax rate in % 26.6 26.0
Adjusted earnings per share (basic) in euros 2.82 3.14
Adjusted net income
attributable to shareholders of Henkel AG & Co. KGaA 1,217 1,356
1 Of which: 48 million euros gain from the sale of our branded consumer goods business in India, and 9 million euros gain from the sale of our roofing membrane
business under the Wolfin brand operated by Adhesive Technologies.
Consolidated fnancial statements
Consolidated statement of income
100 Henkel Annual Report 2011
Consolidated statement of comprehensive income
See Notes 15 and 21 for further explanatory information
Consolidated statement of changes in equity
See Notes 10 to 14 for further explanatory information
in million euros 2010 2011
Net income 1,143 1,283
Exchange differences on translation of foreign operations 531 113
Gains/losses from derivative financial instruments (Hedge reserve per IAS 39) 59 4
Losses from financial instruments in the available-for-sale category
(Available-for-sale reserve) 2
Actuarial gains/losses 53 297
Other comprehensive income (net of taxes) 525 182
Total comprehensive income for the period 1,668 1,101
attributable to non-controlling interests 31 29
attributable to shareholders of Henkel AG & Co. KGaA 1,637 1,072
Issued
capital
Other components
of equity



in million euros
Ordinary
shares


Preferred
shares

Capital
reserve


Treasury
shares


Retained
earnings


Transla-
tion dif-
ferences

Hedge
reserve
per
IAS 39
Available-
for-sale
reserve
Share-
holders
of Henkel
AG & Co.
KGaA
Non-con-
trolling
interests

Total



At January 1, 2010 260 178 652 109 7,017 1,301 223 6,474 70 6,544
Net income 1,118 1,118 25 1,143
Other comprehensive
income 53 525 59 519 6 525
Total comprehensive
income for the period 1,171 525 59 1,637 31 1,668
Dividends 225 225 19 244
Sales of treasury shares 10 9 19 19
Changes in ownership inter-
est without loss of control 27 27 10 37
Other changes in equity 19 19 19
At December 31, 2010/
January 1, 2011 260 178 652 99 7,926 776 282 7,859 91 7,950
Net income 1,253 1,253 30 1,283
Other comprehensive
income 297 114 4 2 181 1 182
Total comprehensive
income for the period 956 114 4 2 1,072 29 1,101
Dividends 307 307 16 323
Sales of treasury shares 6 6 12 12
Changes in ownership
interest without loss
of control 1 1 2 3
Other changes in equity 6 6 19 25
At December 31, 2011 260 178 652 93 8,586 662 278 2 8,641 121 8,762
Consolidated fnancial statements
Consolidated statement of comprehensive income / Consolidated statement of changes in equity
101 Henkel Annual Report 2011
Consolidated statement of cash flows
See Note 36 for further explanatory information
in million euros 2010 2011
Operating proft (EBIT) 1,723 1,857
Income taxes paid 365 426
Amortization/depreciation/write-ups of non-current assets (excluding financial assets) 478 403
Net gains/losses on disposal of non-current assets including divestments (excluding financial assets) 5 68
Change in inventories 182 105
Change in trade accounts receivable 72 111
Change in other assets 14 71
Change in trade accounts payable 341 111
Change in other liabilities and provisions 53 28
Cash fow from operating activities 1,851 1,562
Purchase of intangible assets 16 9
Purchase of property, plant and equipment 240 384
Payments for acquisitions 46 4
Proceeds on disposal of subsidiaries and business units 19 53
Proceeds on disposal of other non-current assets 43 47
Cash fow from investing activities/acquisitions 240 297
Dividends paid to shareholders of Henkel AG & Co. KGaA 225 307
Dividends (of subsidiaries) paid to non-controlling interests 19 16
Interest received 21 37
Interest paid 181 200
Dividends and interest paid and received 404 486
Change in borrowings 174 181
Allocation to pension funds 312 46
Other changes in pension obligations 30 102
Purchase of non-controlling interests with no change of control 23 3
Other financing transactions 340 16
Cash fow from fnancing activities 1,223 802
Net change in cash and cash equivalents 388 463
Effect of exchange rates on cash and cash equivalents 17 2
Change in cash and cash equivalents 405 465
Cash and cash equivalents at January 1 1,110 1,515
Cash and cash equivalents at December 31 1,515 1,980
Additional voluntary information
Reconciliation to free cash flow
in million euros 2010 2011
Cash flow from operating activities 1,851 1,562
Purchase of intangible assets 16 9
Purchase of property, plant and equipment 240 384
Proceeds on disposal of other non-current assets 43 47
Net interest paid 160 163
Other changes in pension obligations 30 102
Free cash fow 1,508 951
Consolidated fnancial statements
Consolidated statement of cash fows
102 Henkel Annual Report 2011
Group segment report by business sector 1
See Note 34 for further explanatory information



in million euros
Laundry &
Home Care

Cosmetics/
Toiletries

Adhesives
for Consum-
ers, Crafts-
men and
Building
Industrial
Adhesives

Total
Adhesive
Techno-
logies
Operating
business
sectors
total
Corporate


Henkel
Group

Sales 2011 4,304 3,399 1,933 5,813 7,746 15,449 156 15,605
Change from previous year 0.3 % 4.0 % 3.3 % 7.0 % 6.0 % 3.7 % 21.5 % 3.4 %
After adjusting for foreign exchange 2.0 % 5.1 % 5.9 % 8.9 % 8.1 % 5.7 % 5.3 %
Organic 2.9 % 5.4 % 8.1 % 8.3 % 8.3 % 6.1 % 5.9 %
Proportion of Group sales 27 % 22 % 12 % 37 % 50 % 99 % 1 % 100 %
Sales 2010 4,319 3,269 1,872 5,434 7,306 14,894 199 15,092
EBIT 2011 511 471 232 769 1,002 1,983 127 1,857
EBIT 2010 542 411 216 662 878 1,831 108 4 1,723
Change from previous year 5.8 % 14.6 % 7.8 % 16.2 % 14.1 % 8.3 % 7.8 %
Return on sales (EBIT) 2011 11.9 % 13.8 % 12.0 % 13.2 % 12.9 % 12.8 % 11.9 %
Return on sales (EBIT) 2010 12.6 % 12.6 % 11.5 % 12.2 % 12.0 % 12.3 % 11.4 %
Adjusted EBIT 2011 570 482 254 821 1,075 2,127 98 2,029
Adjusted EBIT 2010 562 436 246 692 938 1,936 74 1,862
Change from previous year 1.4 % 10.5 % 3.3 % 18.7 % 14.7 % 9.9 % 9.0 %
Return on sales (adjusted EBIT) 2011 13.2 % 14.2 % 13.2 % 14.1 % 13.9 % 13.8 % 13.0 %
Return on sales (adjusted EBIT) 2010 13.0 % 13.3 % 13.1 % 12.7 % 12.8 % 13.0 % 12.3 %
Capital employed 2011 2 2,314 2,001 979 5,874 6,853 11,168 40 11,208
Capital employed 2010 2 2,558 2,041 1,004 6,046 7,049 11,648 53 11,595
Change from previous year 9.5 % 2.0 % 2.4 % 2.8 % 2.8 % 4.1 % 3.3 %
Return on capital employed (ROCE) 2011 22.1 % 23.5 % 23.7 % 13.1 % 14.6 % 17.8 % 16.6 %
Return on capital employed (ROCE) 2010 21.2 % 20.1 % 22.1 % 11.0 % 12.5 % 15.8 % 14.9 %
Amortization/depreciation/write-ups 2011 113 49 43 181 224 386 17 403
of which impairment losses 2011 14 1 6 7 21 21
of which write-ups 2011 1 1 1 1
Amortization/depreciation/write-ups 2010 121 48 67 220 287 456 22 478
of which impairment losses 2010 12 2 25 35 60 74 1 75
of which write-ups 2010 1 4 5 5 1 6
Capital expenditures
(excl. fnancial assets) 2011 162 113 59 105 164 439 4 443
Capital expenditures
(excl. financial assets) 2010 85 43 35 85 120 248 11 260
Operating assets 2011 3 3,704 2,848 1,429 7,019 8,448 15,000 425 15,424
Operating liabilities 2011 1,228 1,050 504 1,458 1,962 4,240 385 4,625
Net operating assets employed 2011 3 2,476 1,798 925 5,561 6,486 10,759 40 10,799
Operating assets 2010 3 4,135 2,919 1,433 7,190 8,623 15,677 352 16,029
Operating liabilities 2010 1,408 1,077 487 1,419 1,906 4,391 405 4,796
Net operating assets employed 2010 3 2,727 1,842 946 5,770 6,717 11,286 53 11,233
1 Calculated on the basis of units of 1,000 euros.
2 Including goodwill at cost prior to any accumulated amortization in accordance with IFRS 3.79 (b).
3 Including goodwill at net book value.
4 Including restructuring charges of 14 million euros disclosed in 2010 for the last time under Corporate, arising from integration of the National Starch businesses.
Consolidated fnancial statements
Group segment report by business sector
103 Henkel Annual Report 2011
Key financials by region 1

in million euros
Western
Europe
Eastern
Europe
Africa/
Middle East
North
America
Latin
America
Asia-
Pacific
Regions
total
Corporate Henkel
Group
Sales 2 2011 5,624 2,813 934 2,716 1,065 2,296 15,449 156 15,605
Sales 2 2010 5,470 2,649 901 2,724 982 2,168 14,894 199 15,092
Change from previous year 2.8 % 6.2 % 3.7 % 0.3 % 8.4 % 5.9 % 3.7 % 3.4 %
After adjusting for foreign
exchange 2.5 % 10.5 % 10.0 % 4.3 % 11.1 % 5.6 % 5.7 % 5.3 %
Organic 2.3 % 10.3 % 10.0 % 4.4 % 11.0 % 8.6 % 6.1 % 5.9 %
Proportion of Group sales 2011 36 % 18 % 6 % 17 % 7 % 15 % 99 % 1 % 100 %
Proportion of Group sales 2010 36 % 18 % 6 % 18 % 7 % 14 % 99 % 1 % 100 %
Operating proft (EBIT) 2011 767 384 79 289 105 360 1,983 127 1,857
Operating profit (EBIT) 2010 706 314 81 320 104 306 1,831 108 1,723
Change from previous year 8.6 % 22.3 % 2.6 % 9.9 % 1.2 % 17.8 % 8.3 % 7.8 %
After adjusting for foreign
exchange 8.2 % 27.0 % 5.8 % 5.7 % 4.0 % 17.8 % 10.2 % 9.6 %
Return on sales (EBIT) 2011 13.6 % 13.6 % 8.5 % 10.6 % 9.8 % 15.7 % 12.8 % 11.9 %
Return on sales (EBIT) 2010 12.9 % 11.9 % 9.0 % 11.8 % 10.5 % 14.1 % 12.3 % 11.4 %
1 Calculated on the basis of units of 1,000 euros.
2 By location of company.
In 2011, the affiliated companies domiciled in Germany,
including Henkel AG & Co. KGaA, generated sales of 2,241 mil-
lion euros (previous year: 2,182 million euros). Sales realized
by the affiliated companies domiciled in the USA in 2011
amounted to 2,499 million euros (previous year: 2,502 mil-
lion euros). In fiscal 2010 and 2011, no individual customer
accounted for more than 10 percent of total sales.
Of the total non-current assets disclosed for the Henkel Group
as of December 31, 2011 (excluding financial instruments and
deferred tax claims) amounting to 11,137 million euros (previ-
ous year: 10,981 million euros) 1, 1,043 million euros (previous
year: 1,053 million euros) 1 was attributable to the affiliated
companies domiciled in Germany, including Henkel AG & Co.
KGaA. The non-current assets (excluding financial assets and
deferred tax assets) recognized in respect of the affiliated
companies domiciled in the USA amounted to 5,993 million
euros (previous year: 5,821 million euros) 1.
Consolidated fnancial statements
Key fnancials by region
1 Prior-year figures adjusted
(see Recognition and measurement methods on pages 108 and 109).
104 Henkel Annual Report 2011
Accounting principles and methods applied in preparation
of the consolidated financial statements
General information
The consolidated financial statements of Henkel AG & Co. KGaA
as of December 31, 2011 have been prepared in accordance with
International Financial Reporting Standards (IFRS) as adopted
by the European Union and in compliance with Section 315a of
the German Commercial Code [HGB].
The individual financial statements of the companies included
in the consolidation are drawn up on the same accounting
date, December 31, 2011, as that of Henkel AG & Co. KGaA.
Members of the KPMG organization or other independent firms
of auditors instructed accordingly have audited the financial
statements of the material companies included in the consol-
idation. Having prepared the consolidated financial state-
ments, on January 27, 2012 the Management Board of Henkel
Management AG which is the Personally Liable Partner of
Henkel AG & Co. KGaA approved the release of same to the
Supervisory Board. The Supervisory Board is responsible for
reviewing the consolidated financial statements and declar-
ing whether it approves them.
The consolidated financial statements are based on the prin-
ciple of historical cost with the exception that certain financial
instruments are accounted for at their fair values. The Group
currency is the euro. Unless otherwise indicated, all amounts
are shown in million euros. In order to improve the clarity
and informative value of the consolidated financial statements,
certain items are combined in the consolidated statement of
financial position, the consolidated statement of income and
the consolidated statement of comprehensive income, and
then shown separately in the Notes.

Scope of consolidation
In addition to Henkel AG & Co. KGaA as the ultimate parent
company, the consolidated financial statements at December 31,
2011 include seven German and 170 non-German companies
in which Henkel AG & Co. KGaA has a dominating influence
over financial and operating policy, based on the concept
of control. This is generally the case where Henkel AG & Co.
KGaA holds, directly or indirectly, a majority of the voting
rights. Companies in which not more than half of the voting
rights are held are fully consolidated if Henkel AG & Co. KGaA,
on the basis of contractual agreements or rights held, has the
power, directly or indirectly, to appoint executive and managerial
bodies and thereby to govern their financial and operating policies.
Compared to December 31, 2010, four new companies have been
included in the scope of consolidation and eleven companies
have left the scope of consolidation. Seven mergers also took
place. The changes in the scope of consolidation have not
had any material effect on the main items of the consolidated
financial statements.
Acquisitions and divestments
The acquisitions and divestments made in fiscal 2011 had no
material effect on the business and organizational structure
of Henkel, nor on our net assets, financial position or results
of operations.
Acquisitions
Effective January 1, 2011, we assumed control of Schwarzkopf
Inc., Culver City, California, USA. We own 100 percent of the
voting rights of the company. Having a direct presence in the
US hair salon segment enables us to better exhaust the poten-
tial of this market. The purchase price paid was 42 million
euros. Goodwill in the amount of 41 million euros was recog-
nized. It is assumed that the capitalized goodwill is com-
pletely tax-deductible. Cash acquired in the amount of 1 million
euros is shown in the consolidated statement of cash flows
under payments for acquisitions. Customer and supplier
relationships were capitalized in the amount of 3 million
euros. The fair value applied to the acquired trade accounts
receivable is 6million euros.
As from April 1, 2011, we now include Purbond Group, Hatfield,
UK, which was previously recognized at equity, as a fully
consolidated entity in our consolidated financial statements.
Our share of the voting rights is 100 percent. The purchase
price paid amounted to 4 million euros. Fifty percent of the
shares had already been acquired as of April 3, 2008. Taking
into account the provisions of IFRS 3 pertaining to business
combinations achieved in stages (step acquisition) and the
corresponding revaluation of previously held shares at fair
value, there ensued a positive contribution to earnings
amounting to 2.5 million euros recognized under other oper-
ating income.
In the second half of 2011, we spent 3 million euros acquiring
outstanding non-controlling interests in Rilken Cosmetics
Industry S.A., Athens, Greece. Effective December 31, 2011, we
increased our shareholding from 50 percent to 78 percent with
the purpose of acquiring 100 percent of the shares in the future.
The difference between the previously held share of net assets
and the purchase price was recognized in retained earnings.
The goodwill recognized in the year under review essentially
represents the market position and profitability of the acquired
businesses, together with expected synergies.
Consolidated fnancial statements
Accounting principles and methods applied in preparation
of the consolidated fnancial statements
105 Henkel Annual Report 2011
The purchase price allocation procedure for all acquisitions
was completed as of December 31, 2011.
The following table shows the acquisitions made in fiscal
2011. The acquisitions indicated, taken both individually and
in sum, did not exert any material effect on the net assets,
financial position or results of operations of the Group.
Acquisitions
January 1 to December 31
in million euros
Carrying
amount
Adjustments Fair value
Assets 14 3 17
Non-current assets 1 2 3
Current assets 12 1 13
Cash and cash equivalents 1 1
Liabilities 13 2 15
Non-current liabilities and
provisions 6 6
Current liabilities and
provisions 7 2 9
Net assets 1 1 2
Goodwill 2011
in million euros Fair value
Purchase price 46
Fair value of non-controlling interests 3
Less net assets 2
Goodwill 47
Divestments
At the end of January 2011, we disposed of our non-core TAED
bleach activator business in Ireland for 4 million euros.
On May 31, 2011, we sold our shares in Henkel India Ltd.,
Chennai, India. The sale proceeds amounted to 29 million
euros while the gain totaled 48 million euros. In the course
of the divestment, bank liabilities amounting to 66 million
euros were discharged.
Effective June 30, 2011, we sold our roofing membrane busi-
ness under the Wolfin brand operated by the Adhesive Tech-
nologies business sector. The proceeds of the sale amounted
to 13 million euros with a gain of 9 million euros.
On December 9, 2011, we also disposed of our non-core corrosion-
protection business in the USA operated by the Adhesive
Technologies business sector. The proceeds of the sale were
8million euros, resulting in a gain of 4 million euros.
On December 15, 2011, we sold our 51 percent share in the joint
venture Cemedine Henkel Co. Ltd., Tokyo, Japan, generating
proceeds of 6 million euros and a gain of 1 million euros.
The proceeds from the divestments indicated were received in
cash. The gains were recognized under other operating income.
The following table shows the disposal and deconsolidation
effects from entity sales in 2011 and from the divestment
in 2011 of operations that no longer form part of our core
business.
Divestments and deconsolidation effects

January 1 to December 31
in million euros
Henkel
India Ltd.
Other
entities
Other
opera-
tions
Total

Disposal efects
Non-current assets 4 6 2 12
Current assets 16 10 6 32
Assets held for sale 4 4
Cash and cash equivalents 4 4
Non-current liabilities
and provisions

1

2

3
Current liabilities
and provisions

69

9

78
Net assets 49 14 6 29
Share of net assets owned
by shareholders of Henkel
AG & Co. KGaA


19


10


6


3
Total consideration 29 10 21 60
Incidental costs of disposal 3 2 5
Accumulated currency trans-
lation gains 3 1 4
Deconsolidation gain (+)/
loss ()

48

1

13

62
Consolidation methods
The annual financial statements of Henkel AG & Co. KGaA
and of the subsidiaries included in the consolidated financial
statements were prepared on the basis of uniformly valid
principles of recognition and measurement, applying the
standardized year-end date adopted by the Group.
Such entities are included in the consolidated financial state-
ments as of the date on which the Group acquired control.
All receivables and liabilities, sales, income and expenses,
as well as intra-group profits on transfers of non-current
assets or inventories, are eliminated on consolidation. Intra-
group transactions are effected on the basis of market or
transfer prices.
The purchase method is used for capital consolidation. With
business combinations, therefore, all hidden reserves and
hidden charges in the entity acquired are fully reflected at
fair value and all identifiable intangible assets are separately
Consolidated fnancial statements
Accounting principles and methods applied in preparation
of the consolidated fnancial statements
106 Henkel Annual Report 2011
disclosed. Any difference arising between the cost of acqui-
sition and the (share of) net assets is recognized as goodwill.
Entities acquired are included in the consolidation for the
first time as subsidiaries by offsetting the carrying amount of
the Henkel AG & Co. KGaA investment in them against their
assets and liabilities. Contingent consideration is recognized
at fair value as of the date of first-time consolidation. (Inci-
dental) costs related to the acquisition of subsidiaries are not
included in the valuation of those shares. Instead, they are
recognized in other operating expenses in the period in
which they occur. In the recognition of acquisitions of less
than 100 percent, minority interests are measured at the fair
value of the share of net assets that they represent. We do not
apply the option of measuring minority interests at their fair
value (full goodwill method).
In subsequent years, the carrying amount of the Henkel AG &
Co. KGaA investment is eliminated against the current equity
of the subsidiary entities concerned.
Changes in the shareholdings of subsidiary companies, as
a result of which the participating interests of the Group
decrease or increase without loss of control, are recognized
within equity as changes in ownership without loss of control.
As soon as the control of a subsidiary is relinquished, all the
assets and liabilities and the non-controlling interests, and
also the accumulated currency translation gains or losses, are
Currency
Average exchange rate Closing exchange rate
Dec. 31
ISO code 2010 2011 2010 2011
Chinese yuan CNY 8.98 8.99 8.82 8.16
Mexican peso MXN 16.75 17.31 16.55 18.05
Polish zloty PLN 4.00 4.13 3.98 4.46
Russian ruble RUB 40.26 40.91 40.82 41.77
US dollar USD 1.33 1.39 1.34 1.29
derecognized. In the event that Henkel continues to own
non-controlling interests in the non-consolidated entity,
these are measured at fair value. The result of deconsolidation
is recognized under other operating income or charges.
Currency translation
The annual financial statements of the consolidated compa-
nies, including the hidden reserves and hidden charges of
Group companies recognized under the purchase method,
and also goodwill arising on consolidation, are translated
into euros using the functional currency method outlined in
International Accounting Standard (IAS) 21 The Effects of
Changes in Foreign Exchange Rates. The functional currency
is the currency in which the foreign company predominantly
generates funds and makes payments. As the functional
currency for all the companies included in the consolidation
is the local currency of the company concerned, assets and
liabilities are translated at closing rates, while income and
expenses are translated at the average rates for the year, based
on an approximation of the actual rates at the date of the
transaction. The differences arising from using average rather
than closing rates are taken to equity and shown as other
components of equity or non-controlling interests, and
remain neutral in respect of net income until the shares
are divested.
Financial assets and liabilities in foreign currencies are
measured at closing rates and recognized in profit or loss. For
the main currencies in the Group, the following exchange
rates have been used based on 1 euro:
Consolidated fnancial statements
Accounting principles and methods applied in preparation
of the consolidated fnancial statements
107 Henkel Annual Report 2011
Recognition and measurement methods
Summary of selected measurement methods
Items in the consolidated statement of financial position Measurement method
Assets
Goodwill Lower of carrying amount and recoverable amount (impairment only method)
Other intangible assets
with indefinite useful lives Lower of carrying amount and recoverable amount (impairment only method)
with definite useful lives (Amortized) cost less any impairment losses
Property, plant and equipment (Amortized) cost less any impairment losses
Financial assets (categories per IAS 39)
Loans and receivables (Amortized) cost using the effective interest method
Available for sale Fair value with gains or losses recognized directly in equity 1
Held for trading Fair value through profit or loss
Other assets (Amortized) cost
Inventories Lower of cost and net realizable value
Assets held for sale Lower of cost and fair value less costs to sell
1 Apart from permanent impairment losses and effects arising from measurement in a foreign currency.
Liabilities
Provisions for pensions and similar obligations Present value of future obligations (projected unit credit method)
Other provisions Settlement amount
Financial liabilities (categories per IAS 39)
Measured at amortized cost (Amortized) cost using the effective interest method
Held for trading Fair value through profit or loss
Other liabilities Settlement amount
The methods of recognition and measurement are described
in detail in the Notes relating to the individual items of the
statement of financial position on these pages. Also provided
as part of the report on our financial instruments (Note 21
on pages 128 to 138) are the disclosures relevant to IFRS 7
showing the breakdown of our financial instruments by
category, our methods for fair value measurement, and the
derivative financial instruments that we use.
Changes in the methods of recognition and measurement
arising from revised and new standards are applied retro-
spectively, provided that there are no alternative regulations
that supersede the standard concerned. The consolidated
statement of income from the previous year and the opening
balance of the consolidated statement of financial position for
this comparative period are adjusted as if the new methods
of recognition and measurement had always been applied.
In order to standardize the disclosure of financial instru-
ments in accordance with IFRS 7 and IAS 39, we disclosed the
assets from overfunding of pension obligations falling under
IAS 19 (previous year: 15 million euros) and the reimburse-
ment rights relating to employee benefits (previous year:
90 million euros in non-current assets and 9 million euros in
current assets) under other assets instead of in other finan-
cial assets. Since 2011, the liabilities to employees falling
under IAS 19 have been recognized under other liabilities
instead of other financial liabilities. We have adjusted the
consolidated statement of financial position as of December
31, 2010. There were no effects on the consolidated statement
of income or the consolidated statement of comprehensive
income.
In addition, we reclassified portions of liabilities to em-
ployees in the USA resulting from deferred compensation to
pension obligations (previous year: 50 million euros) in the
2011 fiscal year. In economic terms, and based on the analysis
of the actual treatment of the payments, these constitute post-
employment benefits as defined in IAS 19. The reimburse-
ment rights related to those pension obligations in the USA
(previous year: 84 million euros) are therefore accounted for
in accordance with the provisions of IAS 19 in the same way
as the corresponding liabilities. Due to the change in this
recognition method, we have appropriately adjusted the
prior-year figures for pension obligations in the consolidated
statement of financial position and also revised the prior-
year Notes relating to pension obligations and other assets.
The disclosures pertaining to the financial result have been
expanded. There was no effect on the total amount of the
income and expenses disclosed under financial result in the
Consolidated fnancial statements
Accounting principles and methods applied in preparation
of the consolidated fnancial statements
108 Henkel Annual Report 2011
previous year, as the expected return from reimbursement
rights corresponded to the actual return generated.
The reclassifications had the following effects on the relevant
items of the consolidated statement of financial position
dated December 31, 2010:
Reclassifications
in million euros
Dec. 31,
2010
Non-current assets 15
Other financial assets 90
Other assets 105
Current assets 15
Other financial assets 24
Other assets 9
Non-current liabilities 3
Pension obligations 50
Other financial liabilities 55
Other liabilities 8
Current liabilities 3
Other financial liabilities 28
Other liabilities 25
Accounting estimates, assumptions and discretionary
judgments
Preparation of the consolidated financial statements is based
on a number of accounting estimates and assumptions. These
have an impact on the reported amounts of assets, liabilities
and contingent liabilities at the reporting date and the disclo-
sure of income and expenses for the reporting period. The
actual amounts may differ from these estimates.
The accounting estimates and their underlying assumptions
are continually reviewed. Changes in accounting estimates
are recognized in the period in which the change takes place
where such change exclusively affects that period. A change
is recognized in the period in which it occurs and in later
periods where such change affects both the reporting period
and subsequent periods. The judgments of the Management
Board regarding the application of those IFRSs which have a
significant impact on the consolidated financial statements
are presented in the explanatory notes on taxes on income
(Note 30 on pages 140 to 142), intangible assets (Note 1 on
pages 111 to 114), pension obligations (Note 15 on pages
120 to 124), financial instruments (Note 21 on pages 128 to
138) and share-based payment plans (Note 32 on pages 143
to 145).
Essentially, discretionary judgments are made in respect of
the following two areas:
The US dollar liabilities of Henkel of America, Inc. are set
off against sureties of Henkel AG & Co. KGaA, as the deposit
and the loan are with the same lender and of the same
maturity, there is a legal right to set off these sums and the
Group intends to settle net.
The demarcation of the cash-generating units is also a
discretionary judgment of the Group management and
is explained under Note 1 on pages 111 to 114.
New international accounting regulations according to
International Financial Reporting Standards (IFRS)
Accounting regulations applied for the first time in the year
under review
Application of the following standards, amendments and
interpretations has been mandatory since January 1, 2011:
Accounting regulations applied for the first time in the year
under review
Significance
Collective standard: Improvements to IFRS 2010 Minor
IAS 24 (Rev. 2009) Related Party Disclosures Irrelevant
IAS 32 Classification of Rights Issues (Amendment) Irrelevant
IFRIC 14 Prepayments of a Minimum Funding Require-
ment (Amendment) Irrelevant
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments Irrelevant
In May 2010, the International Accounting Standards Board
(IASB) issued amendments of existing standards and inter-
pretations as part of its annual improvement project. In
addition to editorial revisions introduced to clarify existing
regulations, amendments also relate to changes of individual
standards affecting recognition, measurement or disclosure.
In November 2009, the IASB published a revision of IAS 24
Related Party Disclosures. The revised standard clarifies
the definition of a related party and simplifies the disclo-
sure requirement for government-related entities.
In October 2009, the IASB published amendments to
International Accounting Standard (IAS) 32 Financial
Instruments: Presentation. The amendments stipulate the
accounting at the issuer of pre-emptive rights, options and
warrants issued to acquire a fixed number of equity instru-
ments that are denominated in a currency other than that
of the issuer. Such cases were hitherto reported as derivative
liabilities. Pre-emptive rights that are issued pro rata at a
fixed currency amount to the existing shareholders of a
company are in future to be classified as equity. The
currency in which the exercise price is stated is irrelevant.
Consolidated fnancial statements
Accounting principles and methods applied in preparation
of the consolidated fnancial statements
109 Henkel Annual Report 2011
International Financial Reporting Interpretations Commit-
tee (IFRIC) 14 IAS 19 The Limit on a Defined Benefit Asset,
Minimum Funding Requirements and their Interaction
deals with the accounting treatment of voluntary prepaid
contributions made by a company in order to meet existing
minimum funding requirements. The amendment allows
a company to recognize the benefit arising from such a
prepayment as an asset.
IFRIC 19 Extinguishing Financial Liabilities with Equity
Instruments states in particular that if a debtor issues
equity instruments to a creditor to extinguish all or part of
a financial liability, those equity instruments are consider-
ation paid in accordance with IAS 39.41. The debtor should
measure the equity instruments issued to the creditor at
fair value. The debtor recognizes in profit or loss the differ-
ence between the carrying amount of the financial liability
extinguished and the initial measurement of the equity
instruments issued.
The first-time application of the revised and amended
standards and interpretations had no material impact on
the presentation of our financial statements.
Accounting regulations not applied in
advance of their effective date
The following interpretations and amendments to existing
standards of possible relevance to Henkel, which have been
adopted into EU law (endorsement mechanism) but are not
yet mandatory, have not yet been applied:
Accounting regulations not applied in advance of their effective
date
Mandatory for fiscal years
beginning on or after
IFRS 7 Disclosures Relating to the Trans-
fer of Financial Assets and Liabilities
(Amendment) July 1, 2011
In October 2010, the IASB published an amendment to IFRS 7
Financial Instruments: Disclosure. The purpose of the
extended disclosure requirements is to provide financial
statement users with a better understanding of the relation-
ship between the transferred financial assets and the corre-
sponding liabilities. Particularly where financial assets are
completely derecognized, the additional information now
required should enable an assessment of the type and the
risks of any continuing involvement. The amendment is
applicable for financial years beginning on or after July 1,
2011, with earlier application permitted.
This amendment of IFRS 7 will not be applied by Henkel until
fiscal 2012. We do not expect application to have any material
impact on the presentation of our financial statements.
Accounting regulations not yet adopted into EU law
In fiscal 2011, the IASB issued the following standards or in-
terpretations of and amendments to standards of relevance to
Henkel which still have to be adopted into EU law (endorse-
ment mechanism) before they become applicable:
Accounting regulations not yet adopted into EU law
Mandatory for fiscal years
beginning or after
IAS 1 Presentation of Items of Other
Comprehensive Income (Amendment) July 1, 2012
IAS 19 (Rev. 2011) Employee Benefits January 1, 2013
IAS 28 Investments in Associates and
Joint Ventures (Amendment) January 1, 2013
IAS 32 Offsetting Financial Assets and
Liabilities (Amendment) January 1, 2014
IFRS 7 Disclosures Offsetting Financial
Assets and Liabilities (Amendment) January 1, 2013
IFRS 9 Financial Instruments January 1, 2015
IFRS 10 Consolidated Financial
Statements January 1, 2013
IFRS 11 Joint Arrangements January 1, 2013
IFRS 12 Disclosure of Interests in Other
Entities January 1, 2013
IFRS 13 Fair Value Measurement January 1, 2013
These amendments and standards will be applied by Henkel
from fiscal 2012 or later. We expect the future application
of the aforementioned regulations not to have a significant
impact on the presentation of the financial statements.
Consolidated fnancial statements
Accounting principles and methods applied in preparation
of the consolidated fnancial statements
Henkel Annual Report 2011 110
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
Notes to the consolidated statement of financial position
The measurement and recognition policies for financial statement items are described in the relevant Note.
Non-current assets
All non-current assets with definite useful lives are amor-
tized or depreciated using the straight-line method on the
basis of estimated useful lives. The useful life estimates are
reviewed annually. Impairment losses are recognized when
required. These are then charged to the relevant functions.
The following unchanged, standardized useful lives are
applied:
Useful life
in years
Intangible assets with definite useful lives 3 to 20
Residential buildings 50
Office buildings 40
Research and factory buildings, workshops,
stores and staff buildings

25 to 33
Production facilities 10 to 25
Machinery 7 to 10
Other equipment 10
Vehicles 5 to 20
Factory and research equipment 2 to 5
(1) Intangible assets
Cost
Trademark rights and other rights




in million euros
Assets with
indefinite
useful lives

Assets with
definite
useful lives

Internally
generated
intangible assets
with definite
useful lives
Goodwill



Total



At January 1, 2010 1,156 1,437 156 6,148 8,897
Acquisitions 1 1
Divestments
Additions 6 10 16
Disposals 16 1 74 91
Reclassifications into assets held for sale
Reclassifications 2 2
Translation differences 84 88 3 457 632
At December 31, 2010/January 1, 2011 1,240 1,517 168 6,532 9,457
Acquisitions 3 47 50
Divestments 5 5
Additions 5 4 9
Disposals 14 14
Reclassifications into assets held for sale 27 27
Reclassifications 1 1
Translation differences 35 26 2 149 212
At December 31, 2011 1,248 1,538 174 6,723 9,683
Henkel Annual Report 2011 111
Accumulated amortization
Trademark rights and other rights




in million euros
Assets with
indefinite
useful lives

Assets with
definite
useful lives

Internally
generated
intangible assets
with definite
useful lives
Goodwill



Total



At January 1, 2010 9 603 56 11 679
Divestments
Write-ups
Scheduled amortization 86 23 109
Impairment losses 4 23 6 33
Disposals 16 1 6 23
Reclassifications into assets held for sale
Reclassifications
Translation differences 17 1 18
At December 31, 2010/January 1, 2011 13 713 79 11 816
Divestments
Write-ups
Scheduled amortization 81 21 102
Impairment losses
Disposals 14 14
Reclassifications into assets held for sale
Reclassifications
Translation differences 9 1 10
At December 31, 2011 13 789 101 11 914
Net book values
Trademark rights and other rights




in million euros
Assets with
indefinite
useful lives

Assets with
definite
useful lives

Internally
generated
intangible assets
with definite
useful lives
Goodwill



Total



At December 31, 2011 1,235 749 73 6,712 8,769
At December 31, 2010 1,227 804 89 6,521 8,641
Trademarks and other rights acquired for valuable consider-
ation are stated initially at acquisition cost, while internally
generated software is stated at manufacturing cost.
Thereafter, goodwill and trademark rights and other rights
with indefinite useful lives are subject to an impairment test
at least once a year (impairment only approach). In the
course of our annual impairment test, we reviewed the carrying
amounts of goodwill and trademark rights and other rights
with indefinite useful lives. The following table shows the
cash-generating units together with the associated goodwill
and trademark rights and other rights with indefinite useful
lives at book value at the reporting date. The description
of the cash-generating units can be found in the Group
management report on pages 76 to 87.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
112 Henkel Annual Report 2011
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
Book values
December 31, 2010 December 31, 2011


Cash-generating units (summarized)
in million euros
Trademarks and
other rights with
indefinite useful
lives
Goodwill


Trademarks and
other rights with
indefinite useful
lives
Goodwill


Laundry 362 683 372 700
Home Care 241 776 249 797
Total Laundry & Home Care 603 1,459 621 1,497
Branded Consumer Goods 481 1,046 467 1,073
Hair Salon 13 51 13 96
Total Cosmetics/Toiletries 494 1,097 480 1,169
Adhesives for Consumers, Craftsmen and Building 47 411 49 408
Industrial Adhesives 83 3,554 85 3,638
Total Adhesive Technologies 130 3,965 134 4,046
The assessment for goodwill impairment according to the
fair-value-less-cost-to-sell approach is based on future estimat-
ed cash flows which are obtained from corporate budgets.
The assumptions upon which the essential planning param-
eters are based reflect experience gained in the past, aligned
to current information provided by external sources. Budgets
are prepared on the basis of a financial planning horizon of
three years. For the period after that, a growth rate in a band-
width between 1 and 2 percent in the cash flows is assumed
for the purpose of impairment testing. The US dollar to euro
exchange rate applied is 1.36. Taking into account specific
tax effects, the cash flows in all cash-generating units are
discounted at different rates reflecting the cost of capital
(WACC) in each business sector: 6.5 percent after tax for
Laundry & Home Care and Cosmetics/Toiletries, and 8.0 per-
cent after tax for Adhesive Technologies. The reportable seg-
ment Industrial Adhesives is comprised of the two business
areas Packaging, Consumer Goods and Construction Adhe-
sives, and Transport, Metal, General Industry and Electronics.
Goodwill at our Packaging, Consumer Goods and Construction
Adhesives business in fiscal 2011 amounted to 1,857 million
euros (previous year: 1,817 million euros), while goodwill at
Transport, Metal, General Industry and Electronics had a value
of 1,781million euros in 2011 (previous year: 1,737 million euros).
In the Laundry & Home Care business sector, we have as-
sumed an increase in sales during the three-year forecasting
horizon of approximately 3 percent per year with a slight in-
crease in world market share. Sales growth in the Cosmetics/
Toiletries business sector over the three-year forecasting
horizon is likewise budgeted at around 3 percent per annum.
With the cosmetics market relevant to Henkel expected to
grow at an annual rate of less than 1 percent, this would mean
an increase in market shares. The anticipated average sales
growth during the three-year forecasting horizon in the
Adhesive Technologies business sector is approximately
6 percent per annum.
In all the business sectors, we have assumed that a future
increase in the cost of raw materials can be extensively offset
by cost reduction measures in purchasing and/or passed on
to our customers. With measures to improve efficiency and
pro-active management of the portfolio, we anticipate
achieving higher gross margins in all our business sectors.
The impairment tests revealed sufficient buffer so that, as in
the previous year, no goodwill write-downs were required. In
the previous year, the disposal of our adhesives business in
South Korea resulted in a goodwill impairment loss of 6 mil-
lion euros, which was recognized in other operating charges.
The brands/trademark rights with indefinite useful lives are
established in their markets and will continue to be inten-
sively promoted. Moreover, there are no other statutory, regu-
latory or competition-related factors that limit our usage of
our brand names. The value of trademarks and other rights
with indefinite useful lives attributable to our Industrial
Adhesives segment is comprised of 43 million euros (previ-
ous year: 42 million euros) for our Packaging, Consumer
Goods and Construction Adhesives businesses, and 42 mil-
lion euros (previous year: 41 million euros) for our Transport,
Metal, General Industry and Electronics businesses.
The impairment tests on trademark rights and other rights
with indefinite useful lives resulted in no unscheduled
charges. In the previous year, the impairment loss recognized
was 4million euros.
113 Henkel Annual Report 2011
The company also intends to continue using the brands dis-
closed as having definite lives. No impairment losses were
registered with respect to trademark rights and other rights
with definite lives in 2011. The impairment charges of 23 mil-
lion euros recognized in 2010 related predominantly to assets
(2) Property, plant and equipment
Cost



in million euros
Land, land rights
and buildings

Plant and
machinery

Factory and
office equip-
ment
Payments on
account and as-
sets in course of
construction
Total


At January 1, 2010 1,915 2,692 898 108 5,613
Acquisitions
Divestments
Additions 21 74 50 95 240
Disposals 55 154 63 2 274
Reclassifications into assets held for sale 1 10 34 2 46
Reclassifications 50 42 17 105 4
Translation differences 81 67 34 182
At December 31, 2010/January 1, 2011 2,002 2,687 934 96 5,719
Acquisitions
Divestments 7 14 5 26
Additions 32 80 61 211 384
Disposals 40 134 82 1 257
Reclassifications into assets held for sale 1 9 1 1 7
Reclassifications 13 52 16 82 1
Translation differences 7 4 2 3 8
At December 31, 2011 1,998 2,668 927 227 5,820
1 Of which 4 million euros cost (previous year: 6 million euros cost) and 2 million euros depreciation (previous year: 3 million euros) arising from reclassification from
assets held for sale, as disposal is no longer intended.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
attributable to Adhesive Technologies acquired in previous
years. Write-downs of trademark rights and other rights are
recognized as selling expenses.
The write-downs on other intangible assets are allocated
to the relevant functions in the consolidated statement of
income.
114 Henkel Annual Report 2011
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
Accumulated depreciation



in million euros
Land, land rights
and buildings

Plant and
machinery

Factory
and office
equipment
Payments on
account and
assets in course
of construction
Total


At January 1, 2010 828 1,873 664 3,365
Divestments
Write-ups 4 2 6
Scheduled depreciation 57 152 91 300
Impairment losses 13 25 4 42
Disposals 40 141 60 241
Reclassifications into assets held for sale 1 7 32 2 41
Reclassifications 6 1 4 3
Translation differences 29 39 14 82
At December 31, 2010/January 1, 2011 882 1,915 707 3,504
Divestments 3 12 4 19
Write-ups 1 1
Scheduled depreciation 54 145 82 281
Impairment losses 9 11 1 21
Disposals 24 125 80 229
Reclassifications into assets held for sale 1 6 1 1 4
Reclassifications 1 1
Translation differences 2 1 2 3
At December 31, 2011 913 1,933 710 3,556
1 Of which 4 million euros cost (previous year: 6 million euros cost) and 2 million euros depreciation (previous year: 3 million euros) arising from reclassification from
assets held for sale, as disposal is no longer intended.
Net book values



in million euros
Land, land rights
and buildings

Plant and
machinery

Factory
and office
equipment
Payments on
account and
assets in course
of construction
Total


At December 31, 2011 1,085 735 217 227 2,264
At December 31, 2010 1,120 772 227 96 2,215
Additions are stated at purchase or manufacturing cost. The
latter includes direct costs and appropriate proportions of
necessary overheads. Interest charges on borrowings are not
included, as Henkel does not currently hold any qualifying
assets in accordance with IAS 23 Borrowing Costs. A quali-
fying asset is an asset that necessarily takes a substantial
period of time to get ready for its intended use. Cost figures
are shown net of investment grants and allowances. Inciden-
tal acquisition costs incurred in order to make the asset ready
for the intended use are capitalized. An overview of the
primary investment projects undertaken during the fiscal
year can be found on pages 60 and 61.
Liabilities secured by mortgages at December 31, 2011 amounted
to 32 million euros (previous year: 30 million euros). The
periods over which the assets are depreciated are based on
their estimated useful lives as set out on page 111.
Scheduled depreciation and impairment losses recognized are
disclosed in the consolidated statement of income according
to the functions in which the assets are used.
Of the impairment charges amounting to 21 million euros,
further production optimization measures attributable to
the Adhesive Technologies business sector in North America
accounted for 6 million euros. Portfolio adjustments and
structural optimization projects, including the termination
of our Biozym joint venture, resulted in impairment losses
in the Laundry & Home Care business sector amounting to
11 million euros. Write-downs are allocated to the relevant
functions in the consolidated statement of income.
115 Henkel Annual Report 2011
(3) Other financial assets
Analysis
December 31, 2010 December 31, 2011
in million euros Non-current Current Total Non-current Current Total
Financial receivables from other investments 2 2 1 5 6
Financial receivables from third parties 26 27 53 23 22 45
Derivative financial instruments 187 144 331 194 70 264
Financial investments 22 22 19 19
Receivables from Henkel Trust e.V. 9 9 115 115
Securities and time deposits 362 362 362 362
Sundry financial assets 1 3 140 143 9 174 183
Total 1 238 684 922 246 748 994
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).
With the exception of derivatives, securities and time depos-
its, other financial assets are measured at amortized cost.
The receivables from Henkel Trust e.V. relate to pension
payments made by Henkel AG & Co. KGaA to retirees, for
which reimbursement can be claimed from Henkel Trust e.V.
Included under securities and time deposits are monies
deposited as part of our short-term financial management
arrangements. The securities involved are primarily floating
interest bonds from industrial companies and financial
institutions. All the bonds are publicly listed and can be
sold at short notice.
Sundry non-current financial assets include receivables from
employees.
The sundry current financial assets include the following:
A surety payment related to a pending litigation in France
in the amount of 92 million euros (previous year: 0 million
euros).
Amounts due from sureties and guarantee deposits of
31million euros (previous year: 32 million euros).
Receivables from suppliers of 15 million euros (previous
year: 21 million euros).
Receivables from employees amounting to 10 million euros
(previous year: 10 million euros).
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
(4) Other assets
Analysis
December 31, 2010 December 31, 2011
in million euros Non-current Current Total Non-current Current Total
Tax receivables 10 134 144 123 123
Payments on account 26 26 21 21
Overfunding of pension obligations 1 15 15 4 4
Reimbursement rights related to
employee benefits 1 90 9 99 79 9 88
Accruals 6 38 44 5 46 51
Sundry other assets 14 12 26 15 38 53
Total 1 135 219 354 103 237 340
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).
116 Henkel Annual Report 2011
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
Disclosed under other assets for the first time are the over-
funding of pension obligations, and reimbursement rights
related to employee benefits. For further explanation of the
adjustments of prior-year amounts, please refer to pages
108 and 109.
Of the reimbursement rights related to employee benefits,
84 million euros (previous year: 90 million euros) is for
reimbursement rights related to defined-benefit pension
obligations, both of which are reported unnetted in the
statement of financial position in accordance with IAS 19.
The other reimbursement rights relate to liabilities to
employees disclosed under other liabilities.
(5) Deferred taxes
Deferred taxes arise from differences between financial state-
ment valuations and valuations prescribed for determining
taxable income. They emanate from the following factors:
Timing differences between the valuation of an asset or a
liability in the financial statement and the relevant tax base.
Unused tax losses expected to be utilized.
Tax credits.
No deferred taxes are allocated in respect of the temporary
differences arising from the first-time recognition of goodwill.

Deferred taxes are calculated on the basis of tax rates that apply
in the individual countries as of the year-end date. Deferred
tax assets are netted with deferred tax liabilities where the
company has a legally enforceable claim to set off correspond-
ing current tax assets against current tax liabilities and the
taxes are levied by the same tax authority. Deferred tax assets
are only recognized to the extent that it is probable that the
resultant future tax advantages will be utilized. An impairment
test is conducted annually in this regard as of the year-end date.
The breakdown of claims in respect of the various items in
the statement of financial position is indicated under Note 30
Taxes on income on pages 140 to 142.
(6) Inventories
In accordance with IAS 2, reported under inventories are
those assets that are intended for sale in the normal course of
business (finished products and merchandise), those under-
going manufacture ready for sale (unfinished products) and
those to be utilized or consumed in the course of manufac-
ture or the provision of services (raw materials and supplies).
Payments on account made for the purpose of purchasing
inventories are likewise disclosed under the inventories
heading.
Inventories are measured at the lower of cost and net realiz-
able value.
Inventories are measured using either the first in, first out
(FIFO) or the average cost method. Manufacturing cost in-
cludes not only the direct costs but also appropriate portions
of necessary overheads (for example goods-in department,
raw material storage, filling, costs incurred through to the
finished goods warehouse), production-related administrative
expenses, the costs of the retirement pensions of people who
are employed in the production process, and production-
related depreciation and amortization. The overhead add-ons
are calculated on the basis of average capacity utilization.
Not included, however, are interest expenses incurred during
the manufacturing period.
The net realizable value is determined as an estimated selling
price less costs yet to be incurred through to completion and
necessary selling and distribution costs. Write-downs to the
net realizable value are made if, as of year-end, the carrying
amounts of the inventories are above their realizable fair values.
The resultant valuation allowance for fiscal 2011 amounts to
105 million euros (previous year: 108 million euros).
Analysis of inventories

in million euros
December
31, 2010
December
31, 2011
Raw materials and supplies 446 475
Work in progress 61 61
Finished products and merchandise 950 1,010
Payments on account for merchandise 3 4
Total 1,460 1,550
(7) Trade accounts receivable
Trade accounts receivable amount to 2,001 million euros
(previous year: 1,893 million euros), all due within one year.
Valuation allowances have been recognized in respect of
specific risks as appropriate. Overall, the total valuation
allowances recognized amount to 23 million euros (previous
year: 24 mil lion euros).
(8) Cash and cash equivalents
Recognized under cash and cash equivalents are liquid funds,
sight deposits and other financial assets with an original
term of not more than three months. In accordance with IAS 7,
also recognized under cash equivalents are shares in money
market funds which, due to their first-class credit rating and
investment in extremely short-term money market securities,
undergo only minor value fluctuations and can be readily
converted within one day into known amounts of cash. Utilized
bank overdrafts are recognized in the statement of financial
position as liabilities to banks.
117 Henkel Annual Report 2011
The volume of cash and cash equivalents increased compared
to the previous year, from 1,515 million euros to 1,980 million
euros. Of this figure, 829 million euros (previous year: 1,505 mil-
lion euros) relates to cash and 1,151 million euros (previous
year: 10 million euros) to cash equivalents. The change is shown
in the consolidated statement of cash flows.
(9) Assets held for sale
Assets held for sale are assets that can be sold in their current
condition and whose sale is very probable. Disposal must be
expected within one year from the time of reclassification
as held for sale. Such assets may be individual assets, groups
of assets (disposal groups) or business operations (discontinued
operations). Assets held for sale are no longer subject to
scheduled depreciation or amortization and are instead
recognized at the lower of carrying amount and fair value
less costs to sell.
Compared to December 31, 2010, the figure for assets held for
sale rose by 20 million euros to 51 million euros. The increase
is primarily due to the reclassification of non-core brands
within the Cosmetics/Toiletries business sector into assets
held for sale. Certain non-current assets of various Group
companies were similarly reclassified. This effect was coun-
tervailed by the disposal of our non-core TAED bleach activa-
tor business in Ireland, with a carrying value of 4 million
euros, and also sales of assets at various Group companies.
Moreover, assets of one company with a carrying value of
2 million euros were classified back to property, plant and
equipment as there was no longer any intention to sell.
Measurement of assets held for sale at the lower of carrying
amount and fair value less costs to sell resulted in an impair-
ment charge of 2 million euros in the Adhesive Technologies
business sector.
(10) Issued capital
Issued capital

in million euros
December
31, 2010
December
31, 2011
Ordinary bearer shares 260 260
Preferred bearer shares 178 178
Capital stock 438 438
Comprising
259,795,875 ordinary shares, 178,162,875 non-voting preferred shares.
All the shares are fully paid in. The ordinary and preferred
shares are bearer shares of no par value, each of which repre-
sents a nominal proportion of the capital stock amounting to
1 euro. The liquidation proceeds are the same for all shares.
The number of ordinary shares issued has remained un-
changed since December 31, 2010. The number of preferred
shares in circulation increased by 250,395 to 174,386,705 due
to the exercise of option rights from stock incentive plans
during the fiscal year, accompanied by a corresponding
decrease in the number of treasury shares.
According to Art. 6 (5) of the Articles of Association, the Per-
sonally Liable Partner is authorized with the approval of the
Shareholders Committee and of the Supervisory Board to
increase the capital of the corporation in one or more install-
ments at any time until April 18, 2015, up to a total of 25.6 mil-
lion euros (25.6 million shares) by issuing new non-voting
preferred shares to be paid up in cash (authorized capital).
All shareholders are essentially assigned pre-emptive rights.
However, these may be set aside where necessary in order to
grant to holders of bonds with warrants or conversion rights
issued by the corporation, or one of the companies dependent
upon it, pre-emptive rights to new shares corresponding to
those that would accrue to such bondholders following the
exercise of their warrant or conversion rights, or if the issue
price of the new shares is not significantly below the quoted
market price at the time of issue price fixing. Pre-emptive
rights may also be set aside where necessary in order to
dispose of fractional amounts.
On April 19, 2010, the Annual General Meeting of Henkel AG &
Co. KGaA resolved to authorize the Personally Liable Partner
to acquire, by April 18, 2015, ordinary or preferred shares of
the corporation representing a nominal proportion of the
capital stock of not more than 10 percent. This authorization
can be exercised for any legal purpose. To the exclusion of
the pre-emptive rights of existing shareholders, treasury
shares may be used to operate the Stock Incentive Plan of the
Henkel Group or transferred to third parties for the purpose
of acquiring companies or investing in companies. Treasury
stock may also be sold to third parties against payment in
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
118 Henkel Annual Report 2011
Consolidated fnancial statements
Notes to the consolidated statement of financial position
cash, provided that the selling price is not significantly below
the quoted market price at the time of share disposal. The
shares may likewise be used to satisfy warrants or conversion
rights granted by the corporation.
The Personally Liable Partner has also been authorized
with the approval of the Shareholders Committee and of the
Supervisory Board to cancel treasury shares without further
resolution in General Meeting being required. The proportion
of capital stock represented by treasury shares issued or sold
on the basis of these authorizations must not exceed a total
of 10 percent. Also to be taken into account in this restriction
are shares used to service bonds with warrants or conversion
rights or a conversion obligation, issued by the corporation or
one of the companies dependent upon it, where these bonds
were or are issued with the pre-emptive rights of existing
shareholders excluded.
Treasury stock held by the corporation at December 31, 2011
amounted to 3,776,170 preferred shares. This represents 0.86 per-
cent of capital stock and a proportional nominal value of
3.8 million euros. The treasury shares were acquired in order
to service the option rights arising from the Stock Incentive
Plans. Originally, 992,680 shares were purchased in the year
2000, an amount of 808,120 shares was purchased in 2001
and 694,900 shares were purchased in 2002. This corre-
sponds to a total of 2,495,700 shares or, following the share
split implemented in 2007 (at a ratio of 1:3), 7,487,100 shares.
Options were exercised for the first time under the Stock
Incentive Plan in 2004. Since 2004, taking the share split
into account, the exercise of options has led to a reduction of
3,710,930 in treasury shares held, with a proportional nomi-
nal value of 3.7 million euros (0.85 percent of capital stock).
In 2011, the exercise of options led to a reduction of 250,395 in
treasury shares held. The proportional nominal value of the
capital stock amounted to 0.3 million euros (0.06 percent).
The selling prices were based on the stock market prices pre-
vailing at the time of disposal. The total proceeds on disposal
of 12 million euros were recognized directly in equity.
See also the explanatory notes on pages 30 and 31 of the
management report.
(11) Capital reserve
The capital reserve comprises the amounts received in previ-
ous years in excess of the nominal value of preferred shares
and convertible warrant bonds issued by Henkel AG & Co.
KGaA.
(12) Retained earnings
Included in the retained earnings are the following:
Amounts allocated in the financial statements of Henkel AG &
Co. KGaA in previous years.
Amounts allocated from the consolidated net income less
those amounts attributable to non-controlling interests.
Buy-back of treasury shares by Henkel AG & Co. KGaA at
cost and the proceeds from their disposal.
Actuarial gains and losses recognized in equity.
(13) Other components of equity
Reported under this heading are differences arising from the
currency translation of annual financial statements of for-
eign subsidiaries and also the effects arising from the reve-
nue-neutral valuation of financial assets in the available for
sale category and of derivative financial instruments for
which hedge accounting is used. The latter are derivatives
used in connection with cash flow hedges or hedges of a net
investment in a foreign entity.
Due in particular to the appreciation of the US dollar versus
the euro, the negative difference attributable to shareholders
of Henkel AG & Co. KGaA arising from currency translation
was reduced by 114 million euros compared to the figure as of
December 31, 2010, to 662 million euros.
(14) Non-controlling interests
Recognized under non-controlling interests are equity shares
held by third parties in a number of consolidated subsidiar-
ies, measured on the basis of the proportion of net assets that
those shareholdings represent.
119 Henkel Annual Report 2011
(15) Pension obligations
Employees in companies included in the consolidated finan-
cial statements have entitlements under company pension
plans which are either defined contribution or defined bene-
fit plans. These take different forms depending on the legal,
financial and tax regime of each country. The level of bene-
fits provided is based, as a rule, on the length of service and
on the earnings of the person entitled.
The defined contribution plans are structured in such a way
that the corporation pays contributions to public or private
sector institutions on the basis of statutory or contractual
terms or on a voluntary basis and has no further obligations
regarding the payment of benefits to employees. The contri-
butions for defined contribution plans for the year under
review amounted to 90 million euros (previous year: 91 mil-
lion euros). In 2011, payments to public sector institutions
totaled 50 million euros (previous year: 46 million euros) and
payments to private sector institutions totaled 40 million
euros (previous year: 45 million euros).
In defined benefit plans, the liability for pensions and other
post-employment benefits is calculated at the present value
of the future obligations (projected unit credit method). This
actuarial method of calculation takes future trends in wages,
salaries and retirement benefits into account.
The mortality rates used are based on published statistics
and actuarial data as applicable in each country. In Germany,
the assumptions are based on the Heubeck 2005 G mortal-
ity table. In the USA, the assumptions are based on the RP
2000 projected to 2015 mortality table.
To provide protection under civil law of the pension entitle-
ments of future and current pensioners of Henkel AG & Co.
KGaA against insolvency, we have allocated proceeds of the
bond issued in 2005 and certain other assets to Henkel Trust
e.V. The trustee invests the cash with which it has been en-
trusted in the capital market in accordance with investment
policies laid down in the trust agreement.
Trends in wages, salaries and retirement benefits
Germany USA Rest of world 1
in percent 2010 2011 2010 2011 2010 2011
Discount factor 4.50 4.30 5.40 4.40 3.8 4.2
Income trend 3.25 3.25 4.25 4.25 3.1 3.1
Retirement benefit trend 2.00 2.00 4.25 4.30 2.2 2.2
Expected return on plan assets 6.19 5.69 5.80 5.80 4.1 3.8
Expected return from reimbursement rights 6.50 6.50
Expected increases in costs for medical benefits 8.50 8.50 8.0 8.0
1 Weighted average. Prior-year figures adjusted.
Present value of pension obligations at December 31, 2010
in million euros Germany USA 1 Rest of world Total
At January 1, 2010 2,070 973 690 3,733
Changes in the Group 2 2
Translation differences 77 30 107
Actuarial gains ()/losses (+) 110 10 40 140
Current service cost 78 20 26 124
Gains ()/losses (+) arising from the termination and curtailment of plans 16 2 18
Interest expense 100 53 34 187
Retirement benefits paid out of plan assets/out of reimbursement rights 130 58 37 225
Employers payments for pension obligations 5 20 17 42
Past service cost (+)/gain () 1 1
At December 31, 2010 2,223 1,018 762 4,003
of which unfunded obligations 134 198 97 429
of which funded obligations 2,089 732 665 3,486
of which obligations covered by reimbursement rights 88 88
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
120 Henkel Annual Report 2011
Fair value of plan assets at December 31, 2010
in million euros Germany USA Rest of world Total
At January 1, 2010 1,730 567 543 2,840
Changes in the Group 1 1
Translation differences 44 21 65
Employer contributions to pension funds 213 77 22 312
Employee contributions to pension funds 1 1
Retirement benefits paid out of plan assets 130 48 37 215
Expected return on plan assets 107 36 28 171
Actuarial gains (+)/losses () 178 10 26 214
At December 31, 2010 2,098 686 603 3,387
Actual return on plan assets 285 46 54 385

Fair value of reimbursement rights at December 31, 2010
in million euros Germany USA Rest of world Total
At January 1, 2010 84 84
Changes in the Group
Translation differences 6 6
Employer contributions to pension funds 2 2
Employee contributions to pension funds
Retirement benefits paid out of reimbursement rights 8 8
Expected return on reimbursement rights 6 6
Actuarial gains (+)/losses ()
At December 31, 2010 90 90
Actual return on reimbursement rights 6 6

Net pension cost 2010
in million euros Germany USA 1 Rest of world Total
Current service cost 78 20 26 124
Amortization of past service cost
Gains ()/losses (+) arising from the termination and curtailment of plans 16 2 18
Interest expense 100 53 34 187
Expected return on plan assets 107 36 28 171
Expected return on reimbursement rights 6 6
Net pension cost 2010 71 15 30 116
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).

Reconciliation of overfunding/underfunding to recognized
provisions for pension obligations and to net obligation at December 31, 2010
in million euros Germany USA 1 Rest of world Total
Overfunding/underfunding of obligations 125 332 159 616
Amount not recognized due to asset ceiling 9 9
Past service cost 6 2 4
Reimbursement rights 90 90
Net obligation 125 248 166 539
Plan assets reported as net assets 9 6 15
Recognized as reimbursement rights (asset) 90 90
Recognized provision for pension obligations at December 31, 2010 134 338 172 644
1 Prior-year figures adjusted (see Recognition and measurement methods on

pages 108 and 109).
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
121 Henkel Annual Report 2011
Present value of pension obligations at December 31, 2011
in million euros Germany USA Rest of world Total
At January 1, 2011 2,223 1,018 762 4,003
Changes in the Group 1 1 3 3
Translation differences 41 14 55
Actuarial gains ()/losses (+) 59 121 56 236
Current service cost 35 16 27 78
Gains ()/losses (+) arising from the termination and curtailment of plans 1 2 3
Interest expense 97 49 33 179
Retirement benefits paid out of plan assets/out of reimbursement rights 119 54 30 203
Employers payments for pension obligations 25 21 14 60
Past service cost (+)/gain () 1 3 2
At December 31, 2011 2,269 1,169 846 4,284
of which unfunded obligations 105 208 92 405
of which funded obligations 2,164 867 754 3,785
of which obligations covered by reimbursement rights 94 94
Fair value of plan assets at December 31, 2011
in million euros Germany USA Rest of world Total
At January 1, 2011 2,098 686 603 3,387
Changes in the Group 3 3
Translation differences 24 13 37
Employer contributions to pension funds 23 23 46
Employee contributions to pension funds 1 1
Retirement benefits paid out of plan assets 119 46 30 195
Expected return on plan assets 119 35 26 180
Actuarial gains (+)/losses () 188 29 9 150
At December 31, 2011 1,933 728 642 3,303
Actual return on plan assets 69 64 35 30
Fair value of reimbursement rights at December 31, 2011
in million euros Germany USA Rest of world Total
At January 1, 2011 90 90
Changes in the Group
Translation differences 2 2
Employer contributions to pension funds
Employee contributions to pension funds
Retirement benefits paid out of reimbursement rights 7 7
Expected return on reimbursement rights 4 4
Actuarial gains (+)/losses () 5 5
At December 31, 2011 84 84
Actual return on reimbursement rights 1 1
Net pension cost 2011
in million euros Germany USA Rest of world Total
Current service cost 35 16 27 78
Amortization of past service cost
Gains ()/losses (+) arising from the termination and curtailment of plans 1 2 3
Interest expense 97 49 33 179
Expected return on plan assets 119 35 26 180
Expected return on reimbursement rights 4 4
Net pension cost 2011 13 25 32 70
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
122 Henkel Annual Report 2011
Reconciliation of overfunding/underfunding to recognized
provisions for pension obligations and to net obligation at December 31, 2011
in million euros Germany USA Rest of world Total
Overfunding/underfunding of obligations 336 441 204 981
Amount not recognized due to asset ceiling 9 9
Past service cost 5 1 4
Reimbursement rights 84 84
Net obligation 336 362 212 910
Plan assets reported as net assets 4 4
Recognized as reimbursement rights (asset) 84 84
Recognized provision for pension obligations at December 31, 2011 336 446 216 998
To facilitate comparison, the figures for pension obligations
to employees from the previous year have been adjusted, as
explained on pages 108 and 109.
Exercising the elective right that exists, we recognize actuarial
gains and losses in the year in which they arise as part of the
pension provision and include them in the statement of com-
prehensive income in accordance with IAS 19.93B Employee
Benefits. Hence, the full extent of the obligation is recognized
as of the statement of financial position date. As of December 31,
2011, accumulated actuarial losses of 1,475 million euros
(previous year: 1,084 million euros) were offset against retained
earnings.
We have derived the expected return on total plan assets
from the weighted expected long-term return on the various
asset classes.
Of the amounts added to the provision in 2011, 78 million euros
(previous year: 124 million euros) is included in operating
profit (pension costs as part of payroll cost, see page143)
and 5 million euros (previous year: 10 million euros) in
financial result (see page 140). The expenses shown in
operating profit are allocated by function, depending on the
sphere of activity of the employees. All gains/losses from the
termination and curtailment of plans have been recognized
in other operating income/charges. The employers contribu-
tions in respect of state pension provisions are included as
Social security costs and staff welfare costs under Note 32,
page 143. In 2011, payments into the plan assets amounted
to 46 million euros (previous year: 314 million euros).
The reimbursement rights covering a portion of the pension
obligations in the USA are assets that do not fulfill the defini-
tion of plan assets as stated in IAS 19. The reimbursement
rights indicated are available to the Group in order to cover
the expenditures required to fulfill the respective pension
obligations. Reimbursement rights and the associated
pension obligations must, according to IAS 19, be shown
unnetted in the statement of financial position.
Analysis of plan assets
December 31, 2010 December 31, 2011
in million euros Fair value in % Fair value in %
Investment funds invested in
shares 952 28.1 951 28.8
bonds 1,826 53.9 2,026 61.3
cash 360 10.6 130 4.0
Other assets 176 5.2 186 5.6
Cash 73 2.2 10 0.3
Total 3,387 100.0 3,303 100.0
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
123 Henkel Annual Report 2011
At December 31, 2011, other assets making up the plan assets
included the present value of a non-current receivable of
47million euros (previous year: 42 million euros) relating to
claims pertaining to a hereditary building lease assigned by
Henkel AG & Co. KGaA to Henkel Trust e.V. Also shown here is
a claim of 132 million euros (previous year: 135 million euros)
against BASF Personal Care & Nutrition GmbH (formerly
Cognis) for indemnification of pension obligations.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
In 2011, Henkel AG & Co. KGaA received or claimed indem-
nification out of the assets held by Henkel Trust e.V. with
respect to benefits paid to pensioners in the amount of
117million euros.
Payments into pension funds in fiscal 2012 are expected
to total 52 million euros.
In the next five financial years, the payments expected to
come out of pension funds are as follows:
Future pension payments
in million euros Germany USA Rest of world Total
2012 155 108 30 293
2013 140 88 30 258
2014 137 87 32 256
2015 131 87 34 252
2016 128 87 34 249
Effect of discount rate changes on the present
value of pension obligations
in million euros Germany USA
Present value of obligations 2,269 1,169
Increase of 0.5 percentage points 130 54
Decrease of 0.5 percentage points 138 60
Effects of a trend change in medical costs
December 31, 2010 December 31, 2011

in million euros
Service cost Interest
expense
Present value of
obligations
Service cost Interest
expense
Present value of
obligations
Increase in medical costs
of 1 percentage point

8 8
Decrease in medical costs
of 1 percentage point

7
Multi-year summary
in million euros 2007 1 2008 1 2009 1 2010 2011
Present value of obligations 3,118 3,248 3,684 4,003 4,284
of which: post-retirement health care obligations 189 212 199 191 196
Fair value of plan assets 2,461 2,445 2,840 3,387 3,303
of which: for post-retirement health care obligations 4 8 7 7 6
Overfunding/underfunding of obligations 657 803 844 616 981
Experience adjustments on pension obligations 14 5 25 9 5
Experience adjustments on plan assets 125 499 53 214 150
1 The figures for 2007 to 2009 have not been adjusted as described in detail on

pages 108 and 109.
124 Henkel Annual Report 2011
(16) Income tax provisions and other provisions
Development in 2011

in million euros
Initial balance
January 1, 2011
Other
changes
Utilized

Released

Added End balance
December 31,
2011
Income tax provisions 446 4 94 80 126 402
of which non-current 119 1 8 26 9 93
of which current 327 5 86 54 117 309
Restructuring provisions 245 3 102 12 157 291
of which non-current 74 17 8 2 45 92
of which current 171 20 94 10 112 199
Sundry provisions 924 3 534 32 575 936
of which non-current 228 4 27 5 110 302
of which current 696 7 507 27 465 634
Total 1,615 10 730 124 858 1,629
of which non-current 421 22 43 33 164 487
of which current 1,194 32 687 91 694 1,142
Provisions are recognized in response to an obligation to
third parties where the outflow of resources is probable and
the expected obligation can be reliably estimated. Provisions
are aligned to the best estimate of the expenditures required
in order to meet the current obligation as of the reporting
date. Price increases expected to take place prior to the time
of performance are included in the calculation. Provisions in
which the interest effect is material are discounted to the report-
ing date at a pre-tax interest rate. For obligations in Germany, we
have applied interest rates of between 2.6 and 4.5 percent.
The income tax provisions comprise accrued tax liabilities
and amounts set aside for the outcome of external tax audits.
Other provisions include identifiable obligations toward third
parties. They are measured at total cost.
Other changes in provisions include changes in the scope
of consolidation, movements in exchange rates, and adjust-
ments to reflect changes in maturity as time passes.
Provisions are recognized in respect of restructuring mea-
sures, provided that work has begun on the implementation of
a detailed, formal plan or such a plan has already been com-
municated. In order to continuously adapt our structures to
our markets and customers, we have increased the additions
to our restructuring provisions, particularly in respect of
Western Europe and North America. We are further expand-
ing our shared service centers, realigning our organization in
the Laundry & Home Care business sector toward greater
efficiency, and optimizing the production network within
the Adhesive Technologies business sector.
The provisions for obligations arising from our sales activi-
ties cover expected burdens in the form of subsequent reduc-
tions in already generated revenues, and risks arising from
onerous contracts.
Provisions for obligations in the personnel sphere essentially
cover expenditures likely to be incurred by the Group for
variable, performance-related compensation components.
In the year under review, we added 62 million euros to the
provisions for our Special Incentive 2012, which is included
in non-current provisions for payments to employees. The
program extends to our management circles 0 to IIb.
Provisions for obligations in the production and technology
sphere relate primarily to provisions for warranties.
Analysis of sundry provisions by function
in million euros
December
31, 2010
December
31, 2011
Sales 166 120
of which non-current 9 4
of which current 157 116
Personnel 506 585
of which non-current 144 228
of which current 362 357
Production and technology 39 40
of which non-current 20 22
of which current 19 18
Various sundry obligations 213 191
of which non-current 55 48
of which current 158 143
Total 924 936
of which non-current 228 302
of which current 696 634
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
125 Henkel Annual Report 2011
(17) Borrowings
December 31, 2010 December 31, 2011
in million euros Non-current Current Total Non-current Current Total
Bonds 3,468 219 3,687 3,483 187 3,670
Commercial papers 1 79 79 29 29
Liabilities to banks 2 102 233 335 15 194 209
(of which amounts secured) (11) (93) (104) (12) (62) (74)
Other borrowings 5 5 3 2 5
Total 3,570 536 4,106 3,501 412 3,913
1 From the euro and US dollar commercial paper program (total volume 2.1 billion euros).
2 Obligations with floating rates of interest or interest rates pegged for less than one year.
Bonds
Issuer

Type

Nomi-
nal
Carrying amounts
excluding accrued
interest
Market values
excluding accrued
interest 1
Market values
including accrued
interest 1
Interest rate 2

Interest
fixing
in million euros 2010 2011 2010 2011 2010 2011 2010 2011
Henkel AG & Co. KGaA Bond 1,000 1,049 1,030 1,057 1,044 1,081 1,068 4.2500 4.2500 until 2013 3
Interest rate swap
(3-month Euribor +0.405 %) 6 Receiver swap 1,000 55 32 55 32 78 55 1.4351 1.8751 3 months
Henkel AG & Co. KGaA Bond 1,000 1,020 1,029 1,076 1,072 1,112 1,108 4.6250 4.6250 until 2014 4
Interest rate swap
(3-month Euribor +2.02 %) 6 Receiver swap 1,000 24 32 24 32 59 67 3.0453 3.4403 3 months
Henkel AG & Co. KGaA Hybrid bond 1,300 1,399 1,424 1,320 1,296 1,327 1,303 5.3750 5.3750 until 2015 5
Interest rate swap
(3-month Euribor +1.80 %) 6 Receiver swap 650 37 54 37 54 39 55 2.8352 3.2712 3 months
Interest rate swap
(1-month Euribor +0.955 %) 6 Receiver swap 650 69 81 69 81 72 84 1.7590 2.0750 1 month
Total bonds 3,300 3,468 3,483 3,453 3,412 3,520 3,479
Total interest rate swaps 3,300 185 199 185 199 248 261
1 Market value of the bonds derived from the stock market price at December 31.
2 Interest rate on December 31.
3 Fixed-rate interest of bond coupon: 4.25 percent, converted using interest rate swaps into a floating interest rate; interest rate to be fixed next on March 12, 2012
(previous year: March 10, 2011) (fair value hedge).
4 Fixed-rate interest of bond coupon: 4.625 percent, converted using interest rate swaps into a floating interest rate; interest rate to be fixed next on March 19, 2012
(previous year: March 21, 2011) (fair value hedge).
5 Fixed-rate interest of bond coupon: 5.375 percent, converted using interest rate swaps into a floating interest rate; interest rate to be fixed next on January 25, 2012
(previous year: January 25, 2011 ) (fair value hedge).
6 Not including the valuation allowance in the amount of 4.8 million euros to provide for counterparty default risk.
The ten-year bond issued in 2003 by Henkel AG & Co. KGaA
for 1 billion euros with a coupon of 4.25 percent matures in
June 2013.
The five-year bond issued in 2009 by Henkel AG & Co. KGaA
for 1 billion euros with a coupon of 4.625 percent matures in
March 2014.
The 1.3 billion euro subordinated hybrid bond issued by Henkel
AG & Co. KGaA in November 2005 to finance a large part of
the pension obligations in Germany matures in 2104. Under
the terms of the bond, the coupon for the first ten years is
5.375 percent. The earliest bond redemption date is November
25, 2015. If it is not redeemed, the bond interest will be based
on the 3-month Euribor interest rate plus a premium of
2.85 percentage points. The bond terms also stipulate that if
there is a cash flow event, Henkel AG & Co. KGaA has the
option or the obligation to defer the interest payments. A cash
flow event is deemed to have occurred if the adjusted cash
flow from operating activities is below a certain percentage
of the net liabilities (20 percent for optional interest deferral,
15 percent for mandatory interest deferral); see Section 3 (4) of
the bond terms and conditions for the definition. On the basis
of the cash flow calculated at December 31, 2011, the percent-
age was 77.42 percent (previous year: 72.23 percent).
The US dollar liabilities of Henkel of America, Inc. are set off
against sureties of Henkel AG & Co. KGaA. Liabilities to banks
set off against deposits amounted to 1,536 million euros. See
also the explanatory notes on discretionary judgments on
page 109.
The securities for liabilities to banks relate to mortgages,
assigned receivables and inventory pledged.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
126 Henkel Annual Report 2011
(18) Other financial liabilities
Analysis
December 31, 2010 December 31, 2011
in million euros Non-current Current Total Non-current Current Total
Liabilities to non-consolidated
affiliated companies

15

15 8 8
Liabilities to customers 30 30 33 33
Derivative financial instruments 69 90 159 50 25 75
Sundry financial liabilities 4 12 16 4 18 22
Total 1 73 147 220 54 84 138
1 Prior-year figures adjusted (see Recognition and measurement methods on pages 108 and 109).

Sundry other liabilities include payments owed to the Pen-
sionssicherungsverein (German pension protection fund)
amounting to 9 million euros (previous year: 12 million euros).
(19) Other liabilities
Analysis
December 31, 2010 December 31, 2011
in million euros Non-current Current Total Non-current Current Total
Other tax liabilities 83 83 81 81
Liabilities to employees 1 8 25 33 4 18 22
Liabilities relating to employees deductions 51 51 53 53
Liabilities in respect of social security 21 21 20 20
Sundry other liabilities 17 50 67 19 35 54
Total 1 25 230 255 23 207 230
1 Prior-year figures adjusted (see Recognition and measurement methods on pages 108 and 109).
The sundry other liabilities primarily comprise various accruals
and deferrals amounting to 15 million euros (previous year:
16 million euros) and also include payments on account in the
amount of 4 million euros (previous year: 5 million euros).

(20) Trade accounts payable
Trade accounts payable increased from 2,308 million euros
to 2,411 million euros. In addition to purchase invoices, they
also relate to accruals for invoices outstanding in respect of
goods and services received. All such payables are due within
one year.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
127 Henkel Annual Report 2011
(21) Financial instruments report

Financial instruments explained by category
A financial instrument is any contract that gives rise to a
financial asset of one entity and a financial liability or equity
instrument of another entity.
Within the Henkel Group, financial instruments are reported
under trade accounts receivable, trade accounts payable, bor
rowings, other financial assets and other financial liabilities,
and also cash and cash equivalents within the statement of
financial position.
Financial instruments are recognized once Henkel becomes
a party to the contractual provisions of the financial instru
ment. The recognition of financial assets takes place at the
settlement date, with the exemption of derivative financial
instruments that are recognized on the transaction date.
All financial instruments are initially recognized at their fair
value. Incidental acquisition costs are only capitalized if the
financial instruments are not subsequently remeasured to
fair value through profit or loss.
For subsequent remeasurement, financial instruments are
divided into the following classes in accordance with IAS 39:
Financial instruments measured at amortized cost
Financial instruments measured at fair value
Different valuation categories are allocated to these two
classes. Financial instruments assigned to the valuation
categories Available for sale and Held for trading are es
sentially measured at fair value. Securities and time deposits
recognized as other financial assets, and also financial
investments are categorized as Held 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. All other financial instruments including
the financial assets categorized as Loans and receivables
are recognized at amortized cost using the effective interest
method. The measurement categories Held to maturity and
Fair value option are not used within the Henkel Group.
The financial instruments in the measurement category
Loans and receivables are nonderivative financial instru
ments. They are characterized by fixed or determinable pay
ments and are not traded in an active market. Within the
Henkel Group, this category is mainly comprised of trade
accounts receivable, cash and cash equivalents, and other
financial assets with the exception of derivatives, securities
and time deposits. The carrying amounts of the financial
instruments categorized as loans and receivables approxi
mate to their fair value due to their predominantly shortterm
nature. If there are doubts as to the realizability of these
financial instruments, they are recognized at amortized
cost less appropriate individual valuation allowances
or global valuation allowances for bad debts.
Financial instruments in the category Available for sale
are not derivative financial assets and are, provided that it
is reliably determinable, recognized at fair value. If the fair
value cannot be reliably determined, they are recognized at
cost. Value changes between the reporting dates are essen
tially recognized in the consolidated statement of compre
hensive income (revaluation reserve) without affecting
revenue, unless the cause lies in permanent impairment.
Impairment losses are recognized through profit or loss. When
the asset is derecognized, the amounts recognized in the
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position

Categories used by Henkel
Financial instruments
Financial assets Financial liabilities
Equity
instruments
Fair value Amortized cost Fair value Cost
Comprehensive
income
Available for sale
Loans and
receivables
Held to maturity
Amortized cost
Held for trading Fair value option
Profit and loss
128 Henkel Annual Report 2011
revaluation reserve are released through profit or loss. In the
Henkel Group, the se curities and time deposits recognized
under other financial assets and also the financial investments
are categorized as Available for sale. The fair values of the
securities and time deposits are based on quoted market prices.
As the fair values of the financial investments cannot be
reliably determined, they are measured at amortized cost.
The sale or disposal of these financial instruments is not
currently intended.
The derivative financial instruments not included in a desig
nated hedging relationship and therefore categorized as held
for trading are essentially recognized at their fair value. All
fair value changes are recognized through profit or loss. In
order to avoid profit and loss variations arising from fair
value changes in derivative financial instruments, in individ
ual cases where possible and economically sensible hedge
accounting is applied. Depending on the type of underlying
and the risk needing to be hedged, fair value and cash flow
hedges are also designated within the Group. Details relating
to the hedging contracts transacted within the Group and
how the fair values of the derivatives are determined are
provided on pages 131 to 133.
All financial liabilities, with the exception of derivative
financial instruments, are essentially recognized at amortized
cost using the effective interest method.
Borrowings for which a hedging transaction has been con
cluded that meets the requirements of IAS 39 with respect to
hedge accounting are recognized through hedge accounting.
Carrying amounts and fair values of financial instruments
Valuation according to IAS 39


December 31, 2010
in million euros
Carrying
amount
December 31
Amortized cost


Fair value
through other
comprehensive
income
Fair value
through profit
or loss
Fair value
December 31

Assets
Loans and receivables 3,615 3,615 3,615
Trade accounts receivable 1,893 1,893 1,893
Other financial assets 207 207 207
Cash and cash equivalents 1,515 1,515 1,515
Available for sale 384 22 362 384
Other financial assets 384 22 362 384
Held for trading 83 83 83
Derivative financial instruments not included in a designated
hedging relationship 83 83 83
Derivative financial instruments included in a designated hedging
relationship 248 248 248
Total 4,330 3,637 362 331 4,330
Liabilities
Amortized cost 6,475 6,475 6,460
Trade accounts payable 2,308 2,308 2,308
Borrowings with no financial statement hedging relationship 571 571 571
Borrowings with a financial statement hedging relationship 3,535 3,535 3,520
Other financial liabilities 61 61 61
Held for trading 89 89 89
Derivative financial instruments not included in a designated
hedging relationship 89 89 89
Derivative financial instruments included in a designated hedging
relationship 70 70 70
Total 6,634 6,475 70 89 6,619
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
129 Henkel Annual Report 2011
Valuation according to IAS 39


December 31, 2011
in million euros
Carrying
amount
December 31
Amortized cost


Fair value
through other
comprehensive
income
Fair value
through
profit or loss
Fair value
December 31

Assets
Loans and receivables 4,330 4,330 4,330
Trade accounts receivable 2,001 2,001 2,001
Other financial assets 349 349 349
Cash and cash equivalents 1,980 1,980 1,980
Available for sale 381 19 362 381
Other financial assets 381 19 362 381
Held for trading 8 8 8
Derivative financial instruments not included in a designated
hedging relationship 8 8 8
Derivative financial instruments included in a designated hedging
relationship 256 256 256
Total 4,975 4,349 362 264 4,975
Liabilities
Amortized cost 6,387 6,387 6,316
Trade accounts payable 2,411 2,411 2,411
Borrowings with no financial statement hedging relationship 363 363 363
Borrowings with a financial statement hedging relationship 3,550 3,550 3,479
Other financial liabilities 63 63 63
Held for trading 24 24 24
Derivative financial instruments not included in a designated
hedging relationship 24 24 24
Derivative financial instruments included in a designated hedging
relationship 51 51 51
Total 6,462 6,387 51 24 6,391
The following hierarchy is applied in order to determine and
disclose the fair value of financial instruments:
Level 1: Fair values which are determined on the basis of
quoted, unadjusted prices in active markets.
Level 2: Fair values which are determined on the basis of
parameters for which either directly or indirectly derived
market prices are available.
Level 3: Fair values which are determined on the basis of
parameters for which the input factors are not derived from
observable market data.
The securities categorized within the Henkel Group as
available for sale and measured at fair value fall under
fair value hierarchy level 1, while derivative financial
instruments fall under fair value hierarchy level 2.
Net gains and losses from financial instruments by category
The net gains and losses from financial instruments can
be allocated to the following categories:
Net results of the measurement categories and reconciliation
to financial result
in million euros 2010 2011
Loans and receivables 52 66
Available for sale 5 9
Held for trading including derivatives in a
designated hedging relationship 37 43
Financial liabilities measured at amortized cost 230 220
Total net results 210 102
Foreign exchange effects 58 59
Interest expense of pension provisions
less expected return from plan assets and
reimbursement rights 10 5
Other financial result
(not related to financial instruments) 9 1
Financial result 171 155
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
130 Henkel Annual Report 2011
The net result of loans and receivables is allocated in full to
interest income. Expenses arising from valuation allowances
amounting to 39 million euros (previous year: 41 million
euros) and income from writeups amounting to 2 million
euros (previous year: 3 million euros) were recognized in
operating profit.
The net result from securities and time deposits classified
as available for sale breaks down to 9 million euros (previous
year: 4 million euros) for interest income and 0 million euros
(previous year: 1 million euros) for income from financial
investments. The measurement of these financial instru
ments at fair value led to an impairment charge of 2 million
euros (previous year: 0 million euros) which was recognized
in the reserve for financial instruments available for sale in
other comprehensive income.
The net result from Held for trading financial instruments
plus derivatives included in a designated hedging relation
ship includes, in addition to the outcome of remeasurement
of these derivatives to fair value amounting to 11 million euros
(previous year: 92 million euros), an expense of 4 million
euros (previous year: 0 million euros) arising from the valuation
allowance made for counterparty credit risk. Also recognized
under this heading is the interest income arising from interest
rate hedging instruments amounting to 36 million euros
(previous year: 55 million euros).
The net result from financial liabilities measured at amor
tized cost is essentially derived from the interest expense for
borrowings amounting to 217 million euros (previous year:
227 million euros). Fees for procuring money and loan
resources amounting to 3 million euros (previous year:
3 million euros) were also recognized under this heading.
The realization and valuation of financial assets and liabili
ties in foreign currencies resulted in an expense of 59 million
euros (previous year: gain of 58 million euros).
Derivative financial instruments
Derivative financial instruments are measured at their fair
value at the reporting date. Recognition of the gains and losses
arising from fair value changes of derivative financial instru
ments is dependent upon whether the requirements of IAS 39
are fulfilled with respect to hedging relationships (hedge
accounting).
Hedge accounting is not applied to the large majority of
derivative financial instruments. The fair value changes
in these derivatives which, in economic terms, represent
effective hedges within the framework of Group strategy, are
recognized through profit or loss. These are, however, largely
compensated by fair value changes undergone by the hedged
items.
In hedge accounting, derivative financial instruments are
qualified as instruments for hedging the fair value of a
re cognized underlying (fair value hedge), as instruments
for hedging future cash flows (cash flow hedge) or as in
struments for hedging a net investment in a foreign entity.
The following table provides an overview of the derivative
financial instruments utilized and recognized within the
Group, and their fair values:
Derivative financial instruments
At December 31
in million euros
Nominal value Positive fair value 2 Negative fair value 2
2010 2011 2010 2011 2010 2011
Forward exchange contracts 1 2,396 1,445 77 7 89 23
(of which: for hedging loans within the Group) (1,848) (881) (75) (4) ( 83) (14)
Interest rate swaps 4,797 4,537 248 256 70 51
(of which: designated as fair value hedge) (3,300) (3,300) (248) (256) () ()
(of which: designated as cash flow hedge) (1,497) (1,237) () () ( 70) (51)
Other interest rate hedging instruments 500 386 2
(of which: designated for hedge accounting) () () () () () ()
Commodity futures 1 44 39 4 1 1
(of which: designated for hedge accounting) () () () () () ()
Total derivative financial instruments 7,737 6,407 331 264 159 75
1 Maturity shorter than 1 year.
2 Fair values including accrued interest and a valuation allowance for counterparty credit risk of 4.8 million euros (prior year: 0.8 million euros).
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
131 Henkel Annual Report 2011
also with respect to the interest rate risk exposure of the
Henkel Group.
To a lesser extent, commodity derivatives are used to hedge
uncertainties in future commodity price developments. See
also the explanations relating to other price risks on page 138.
Fair value hedges: A fair value hedge hedges the fair value of
recognized assets and liabilities. The change in the fair value
of the derivatives and the change in the fair value of the
underlying relating to the hedged risk are simultaneously
recognized in profit or loss.
Receiver interest rate swaps are used to hedge the fair value risk
of the fixedinterest bonds issued by Henkel AG & Co. KGaA.
The fair value of these interest rate swaps is 199 million euros
(previous year: 185 million euros) excluding accrued interest.
The changes in fair value of the receiver interest rate swaps
arising from market interest rate risks amounted to 14 million
euros (previous year: 72 million euros). The corresponding
changes in fair value of the hedged bonds amounted to
15 million euros (previous year: 69 million euros). In deter
mining the fair value change in the bonds (see also Note 17 on
page 126), only that portion is taken into account that
relates to the interest rate risk.
The following table provides an overview of the gains and losses
arising from fair value hedges (valuation allowance made for
the counterparty credit risk not included):
Gains and losses from fair value hedges
in million euros 2010 2011
Losses () from hedged items 69 15
Gains (+) from hedging instruments 72 14
Balance 3 1
Cash flow hedges: A cash flow hedge safeguards against the
fluctuations in future cash flows from recognized assets and
liabilities (in the case of interest rate risks), and also transac
tions that are either planned or highly probable, or firmly
contracted unrecognized financial commitments, from
which a currency risk arises. The effective portion of a cash
flow hedge is recognized in the hedge reserve under equity.
Ineffective portions arising from the change in value of the
hedging instrument are recognized through profit or loss in
the financial result. The gains and losses associated with the
hedging measures initially remain in equity and are subse
quently recognized through profit or loss in the period in
which the hedged transaction influences the results for that
period. If the hedging of a contracted item subsequently
results in the recognition of a nonfinancial asset, the gains
and losses recognized in equity are usually assigned to the
asset on its addition (basis adjustment).
For forward exchange transactions, the fair value is deter
mined on the basis of the reference exchange rates of the
European Central Bank prevailing at the reporting date, taking
into account forward premiums/forward discounts for the
remaining term of the respective contract versus the con
tracted foreign exchange rate. Foreign exchange options are
measured using price quotations or recognized models for
the determination of option prices. Interest rate hedging
instruments are measured 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 as of December 31.
Interest rates in percent p.a.
At December 31
Term
EUR USD
2010 2011 2010 2011
3 months 0.96 1.36 0.48 0.69
6 months 1.23 1.84 0.40 0.76
1 year 1.51 1.95 0.88 1.23
2 years 1.53 1.29 0.82 0.75
5 years 2.50 1.73 2.23 1.27
10 years 3.35 2.42 3.56 2.10
Due to the complexities involved, financial derivatives entered
into as hedges of commodity price risks are primarily measured
on the basis of bankdeveloped simulation models, which are
derived from market quotations. Regular plausibility checks
are performed in order to safeguard valuation correctness.
In measuring derivative financial instruments, counterparty
credit risk is taken into account with a lumpsum adjustment
to the fair values concerned, determined on the basis of
credit risk premiums. The adjustment relating to fiscal 2011
amounts to 4.8 million euros (previous year: 0.8 mil lion euros).
The addition was expensed under financial result.
Depending on their fair value and their maturity on the re
porting date, derivative financial instruments are included in
financial assets (positive fair value) or in financial liabilities
(negative fair value).
Most of the forward exchange contracts and currency options
serve to hedge risks arising from trade accounts receivable
and payable, and those pertaining to Group financing in US
dollars.
The interest rate hedging instruments are entered into in order
to manage the interest rate risks arising from the fixedinterest
bonds issued by Henkel AG & Co. KGaA and the floating
interest bank liabilities (loans and overdrafts) entered into
by Henkel of America, Inc. See also the following explana
tions relating to fair value hedges and cash flow hedges, and
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
132 Henkel Annual Report 2011
Cash flow hedges
(after tax)



in million euros
Initial
balance

Addition
(recognized
in equity)
Disposal
(recognized
through pro-
fit or loss)
End
balance

2011 351 4 347
2010 276 75 351
The initial value of the cash flow hedges recognized in equity
reflects firstly the fair values of the payer interest swaps used
to hedge the cash flow risks arising from floatinginterest US
dollar liabilities at Henkel of America, Inc., and secondly for
ward exchange contracts taken out in previous years in the
course of the acquisition of the National Starch businesses.
The addition in the amount of 4 million euros after taxes on
income relates to the interest rate hedge of the US dollar
liabilities of Henkel of America, Inc. The fair value of interest
rate swaps for the US dollar liabilities of Henkel of America,
Inc. amounts to 50 million euros (previous year: 69 million
euros) excluding accrued interest. In the fiscal year under
review, ineffective portions amounting to 0.2 million euros
(previous year: 0.4 million euros) were recognized in profit or
loss under financial result. The cash flows arising from hedging
the floating interest rate of the US dollar liabilities of Henkel
of America, Inc. are expected in the period from 2012 to 2014
and will be recognized through profit or loss in the periods
concerned as interest expense. The hedged cash flows relating
to the acquisition of the National Starch businesses will only
be recognized in operating profit with disposal or in the
event of an impairment loss on the goodwill attributable
to the acquisition of these businesses.
Hedges of a net investment in a foreign entity: The accounting
treatment of hedges in a net investment in a foreign entity
against translation risk is similar to that applied to cash flow
hedges. The gain or loss arising from the effective portion
of the hedging instrument is recognized in equity through
other comprehensive income; the gain or loss of the ineffective
portion is recognized directly through profit or loss. The gains
or losses recognized directly in equity remain there until
disposal or partial disposal of the net investment.
The items recognized in equity relate to translation risks
arising from net investments in Swiss francs (CHF) and US
dollars (USD) for which the associated hedges were entered
into and settled in previous years.
In the past financial year, no hedges of a net investment in a
foreign entity were entered into. No amounts were transferred
in the course of the year from equity to profit or loss.
Hedges of a net investment in a foreign entity
(after tax)



in million euros
Initial
balance

Addition
(recognized
in equity)
Disposal
(recognized
through pro-
fit or loss)
End
balance

2011 69 69
2010 53 16 69
Risks arising from financial instruments, and risk management
As a globally active corporation, Henkel is exposed in the
course of its ordinary business operations to credit risks,
liquidity risks and market risks (currency translation, inter
est rate and commodity price risks). The purpose of financial
risk management is to restrict the exposure arising from
operating activities through the use of selective derivative
and nonderivative hedges. Henkel uses derivative financial
instruments exclusively for the purposes of risk management.
Without these instruments, Henkel would be exposed to
higher financial risks. Changes in exchange rates, interest
rates or commodity prices can lead to significant fluctuations
in the fair values of the derivatives used. These variations in
fair value should not be regarded in isolation from the hedged
items, as derivatives and the underlying constitute a unit in
terms of forex countervalue fluctuation.
Management of currency, interest rate and liquidity risks is
based on the treasury guidelines introduced by the Management
Board, which are binding on the entire corporation. Defined
in these are the targets, principles, accountability and com
petences of Corporate Treasury. They describe the fields of
responsibility and establish the distribution of these respon
sibilities between the Corporate Treasury department and
Henkels subsidiaries. The Management Board is regularly and
comprehensively informed of all major risks and of all rele
vant hedging transactions and arrangements. The objectives
and fundamental principles adopted in capital management
are described in the Management Report on pages 62 and 63.
There were no major risk clusters in the year under review.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
133 Henkel Annual Report 2011
Credit risk
In the course of business activities with third parties, the
Henkel Group is exposed to global credit risk arising from
both its operating business and its financial investments.
This risk derives from the possibility of a contractual party
not fulfilling its obligations.
The maximum credit risk is represented by the carrying value
of the financial assets recognized in the statement of finan
cial position, as indicated in the following table:
Maximum risk position
in million euros 2010 2011
Trade accounts receivable 1,893 2,001
Derivative financial instruments not included in a
designated hedging relationship 83 8
Derivative financial instruments included in a
designated hedging relationship 248 256
Other financial assets 591 730
Cash and cash equivalents 1,515 1,980
Total carrying values 4,330 4,975
In its operating business, Henkel is confronted by progressive
concentration and consolidation on the customer side,
reflected in the receivables from individual customers.
A credit risk management system operating on the basis of
a globally applied credit policy ensures that credit risks are
constantly monitored and bad debts minimized. This policy,
which applies to both new and existing customers, governs
the allocation of credit limits and compliance with those limits,
individual analyses of customers creditworthiness based on
both internal and external financial information, risk classi
fication, and continuous monitoring of the risk of bad debts
at the local level. Our key customer relationships are also
monitored at the regional and global level. In addition, hedging
measures are implemented on a selective basis for particular
countries and customers inside and outside the euro zone.
Collateral received and other safeguards include country
specific and customerspecific protection afforded by credit
insurance, confirmed and unconfirmed letters of credit in
the export business, as well as warranties, guarantees and
cover notes.
Valuation allowances are made in respect of financial assets
so that those assets are recognized at their fair value as of
the reporting date. In the case of impairment losses that have
already occurred but have not yet been identified, global
valuation allowances are made on the basis of empirical evi
dence, taking into account the overdue structure. Financial
assets that are more than 180 days overdue are, following the
impair ment test, generally written off.
In all, we recognized individual valuation allowances on
loans and receivables in 2011 in the amount of 35 million
euros (previous year: 35 million euros) and global valuation
allowances in the amount of 4 million euros (previous year:
6 million euros).
The carrying amount for loans and receivables, the term of
which was renegotiated because they would have otherwise
fallen overdue or been impaired, was 1 million euros (previous
year: 0 million euros).
Based on our experience, we do not expect the necessity to
arise for any further valuation allowances, other than those
described above, on nonoverdue, nonimpaired financial
assets.
Age analysis of non-impaired overdue loans
and receivables
Analysis

in million euros
Less than
30 days
30 to 60
days
61 to 90
days
91 to 180
days
Total
At December 31, 2011 130 35 14 2 181
At December 31, 2010 96 28 10 3 137
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
134 Henkel Annual Report 2011
Credit risks also arise from financial investments such as cash
at bank, securities, time deposits and the positive fair value
of derivatives. Such exposure is limited by our Corporate
Treasury specialists through selection of banks of good reputa
tion with at least an A rating, and restriction of the amounts
allocated to individual investments. In financial investments
and derivatives trading with German and international
banks, we only enter into transactions with counterparties
of the highest financial standing. Financial investments are
generally undertaken for periods of less than one year and are
widely diversified between both different counterparties and
also different investment types. To minimize the credit risk,
netting arrangements are agreed with counter parties and
investment limits are set. These limits are based on the credit
rating of the counterparty and are regularly monitored and
adjusted. Besides relevant ratings, certain other indicators
such as the pricing of credit default swaps (CDS) by the banks
are applied in determining the limits. We additionally enter
into collateral agreements with selected banks, on the basis
of which reciprocal sureties are established to hedge the fair
values of contracted derivatives and other claims and obliga
tions. Effective December 31, 2011, the balance of collateral
received from such banks and paid to such banks amounted
to 70 million euros.
Liquidity risk
Liquidity risk is defined as the risk of an entity failing to
meet its financial obligations at any given time.
We minimize this risk by deploying longterm financing in
struments in the form of bonds. In order to secure the financial
flexibility of the Henkel Group at any time, the liquidity with
in the Group is extensively centralized and managed through
the use of cash pools. We predominantly invest cash in finan
cial assets traded in a liquid market in order to ensure that
they can be sold at any time to procure liquid funds. In addi
tion, the Henkel Group has at its disposal confirmed credit
lines of 2.1 billion euros to ensure its liquidity and financial
flexibility at all times. These credit lines were contracted to
secure the commercial paper program and they have terms
extending to 2012 and 2015. The individual subsidiaries of the
Henkel Group additionally have at their disposal committed
bilateral loans of 0.4 billion euros with a revolving term of up
to one year. Our credit rating is regularly assessed by the
rating agencies Standard & Poors and Moodys.
Our liquidity risk can therefore be regarded as very low.
The maturity structure of the original and derivative finan
cial liabilities within the scope of IFRS 7 based on cash flows
is shown in the following table.
Cash flows from financial liabilities
Remaining term



in million euros
December
31, 2010
Carrying
amount
Up to
1 year

Between
1 and
5 years
More than
5 years

December
31, 2010
Total
cash flows
Bonds 1 3,687 313 3,736 4,049
Commercial papers 2 79 79 79
Liabilities to banks 335 240 100 2 342
Trade accounts payable 2,308 2,308 2,308
Sundry financial instruments 3 66 62 4 66
Original financial instruments 6,475 3,002 3,840 2 6,844
Derivative financial instruments 159 119 41 160
Total 6,634 3,121 3,881 2 7,004
1 The cash flows from the hybrid bond issued in 2005 are disclosed for the period until the first possible redemption date by Henkel on November 25, 2015.
2 From the euro and US dollar commercial paper program (total volume: 2.1 billion euros).
3 Sundry financial instruments include amounts due from customers and finance bills. These prior-year figures have been adjusted (see Recognition and
measurement methods on pages 108 and 109).
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
135 Henkel Annual Report 2011
Cash flows from financial liabilities
Remaining term


in million euros
December
31, 2011
Carrying
amount
Up to
1 year
Between
1 and
5 years
More than
5 years
December
31, 2011
Total
cash flows
Bonds 1 3,670 284 3,644 3,928
Commercial papers 2 29 29 29
Liabilities to banks 209 201 12 2 215
Trade accounts payable 2,411 2,411 2,411
Sundry financial instruments 3 68 61 4 3 68
Original financial instruments 6,387 2,986 3,660 5 6,651
Derivative financial instruments 75 45 30 75
Total 6,462 3,031 3,690 5 6,726
1 The cash flows from the hybrid bond issued in 2005 are disclosed for the period until the first possible redemption date by Henkel on November 25, 2015.
2 From the euro and US dollar commercial paper program (total volume: 2.1 billion euros).
3 Sundry financial instruments include amounts due from customers and finance bills.
Market risk
Market risks exist where the fair value or future cash flows
of a financial instrument may fluctuate due to changes in
market prices. Market risks primarily take the form of currency
risk, interest rate risk and various price risks (particularly
the commodity price risk).
The Corporate Treasury department manages currency expo
sure and interest rates centrally for the Group and is therefore
responsible for all transactions with financial derivatives
and other financial instruments. Trading, Treasury Control
ling and Settlement (front, middle and back offices) are sepa
rated both physically and in terms of organization. The par
ties to the contracts are German and international banks
which Henkel monitors regularly, in accordance with Corpo
rate Treasury guidelines, for creditworthiness and the quality
of their quotations. Financial derivatives are used to manage
currency exposure and interest rate risks in connection with
operating activities and the resultant financing requirements,
again in accordance with the Treasury guidelines. Financial
derivatives are entered into exclusively for hedging purposes.
The currency and interest rate risk management of the Group
is supported by an integrated treasury system which is used to
identify, measure and analyze the Groups currency exposure
and interest rate risks. In this context, integrated means
that the entire process from the initial recording of financial
transactions to their entry in the accounts is covered. Much
of the currency trading takes place on internetbased, multi
bank dealing platforms. These foreign currency transactions
are automatically transferred into the treasury system. The
currency exposure and interest rate risks reported by all sub
sidiaries under standardized reporting procedures are inte
grated into the treasury system by data transfer. As a result,
it is possible to retrieve and measure at any time all currency
and interest rate risks across the Group and all derivatives
entered into to hedge the exposure to these risks. The treasury
system supports the use of various risk concepts.
Market risk is monitored on the basis of sensitivity analyses
and valueatrisk computations. Sensitivity analyses enable
estimation of potential losses, future gains, fair values or
cash flows of instruments susceptible to market risks arising
from one or several selected hypothetical changes in foreign
exchange rates, interest rates, commodity prices or other
relevant market rates or prices over a specific period. Sensi
tivity analyses are used in the Henkel Group because they
enable reasonable risk assessments to be made on the basis of
direct assumptions (e.g. an increase in interest rates). Value
atrisk computations reveal the maximum potential future
loss of a certain portfolio over a given period that, based on a
specified probability level, will not be exceeded.
Currency risk
The global nature of our business activities results in a huge
number of cash flows in different currencies. The resultant
currency risk breaks down into two categories, namely
transaction and translation risks.
Transaction risks arise from possible exchange rate fluctua
tions causing changes in the value of future foreign currency
cash flows. The hedging of the resultant exchange rate risks
forms a major part of our central risk management activity.
Transaction risks arising from our operating business are
partially avoided by the fact that we largely manufacture our
products in those countries in which they are sold. Residual
transaction risks on the operating side are proactively
managed by Corporate Treasury. This includes the ongoing
assessment of specific currency risk and the development of
appropriate hedging strategies. The objective of our currency
hedging is to fix prices based on hedging rates so that we are
protected from future adverse fluctuations in exchange rates.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
136 Henkel Annual Report 2011
Because we limit our potential losses, any negative impact
on profits is restricted. The transaction risk arising from
major financial payables and receivables is, for the most part,
hedged. In order to manage these risks, we primarily utilize
forward exchange contracts and currency swaps. To avoid
complexity and given the costs and benefits involved, we do
not apply hedge accounting for the derivatives employed. The
derivatives are designated as held for trading and are recog
nized at fair value through profit or loss. The currency risk
that exists within the Group in the form of transaction risk
therefore has a direct effect on income rather than being
recognized in equity.
The valueatrisk pertaining to the transaction risk of the
Henkel Group as of December 31, 2011 amounted to 16 million
euros after hedging (previous year: 17 million euros). The
valueatrisk shown represents the maximum expected risk
of loss in a month as a result of currency fluctuations. The
risk arises from imports and exports by Henkel AG & Co.
KGaA and its foreign subsidiaries. Due to the international
nature of its activities, the Henkel Group has a portfolio with
more than 50different currencies. In addition to the US
dollar, the main influence on currency risk is exerted by the
Russian ruble, the Mexican peso, the Turkish lira, the Canadian
dollar and the Japanese yen. The valueatrisk analysis as
sumes a time horizon of one month and a unilateral confi
dence interval of 95 percent. The calculation is based on the
variancecovariance approach. Fluctuations and correlations
are determined using historical data. The valueatrisk analysis
is based on the operating book positions and budgeted
positions in foreign currency, with a forecasting horizon
of up to twelve months.
Translation risks emanate from changes caused by foreign
exchange fluctuations to items on the statement of financial
position and the income statement of a subsidiary, and the
effect these changes have on the translation of individual
company financial statements into Group currency. However,
unlike transaction risk, translation risk does not necessarily
impact future cash flows. The Groups equity reflects the
changes in carrying value resulting from foreign exchange
influences. The risks arising from the translation of the
earnings results of subsidiaries in foreign currencies and
from net investments in foreign entities are only hedged in
exceptional cases.
Interest rate risk
The interest rate risk encompasses those potentially positive
or negative influences on profits, equity or cash flow in current
or future reporting periods arising from changes in interest
rates. In the case of fixedinterest financial instruments,
changing capital market interest rates result in a fair value
risk, as the attributable fair values fluctuate depending on
capital market interest rates. In the case of floatinginterest
financial instruments, a cash flow risk exists because the
interest payments may be subject to future fluctuations.
The Henkel Group obtains and invests the majority of the cash
it requires from the international money and capital markets.
The resulting financial liabilities and our cash deposits may
be exposed to the risk of changes in interest rates. The aim of
our centralized interest rate management system is to manage
this risk by selecting appropriate maturities and through the
use of derivative financial instruments. Only those derivative
financial instruments that can be modeled, monitored and
assessed in the risk management system may be used to hedge
the interest rate risk.
Henkels interest management strategy is essentially aligned
to optimizing the net interest result for the Group. The decisions
taken in interest management relate to the bonds issued to
secure Group liquidity, and other financial instruments. The
financial instruments and interest rate derivatives exposed to
interest rate risk are denominated in euros and US dollars.
Depending on forecasts with respect to interest rate develop
ments, Henkel enters into derivative financial instruments,
primarily interest rate swaps, in order to optimize the interest
rate lockdown structure. The coupon interest on the euro
denominated bonds issued by Henkel has been converted from
fixed to floating with the aid of interest rate swaps. In the
event of an expected rise in interest rate levels, Henkel pro
tects its positions by transacting additional interest rate caps
and forward rate agreements as an effective means of guard
ing against interest rates rising over the short term. A major
portion of the financing of Henkel of America, Inc. in US dol
lars has been converted from floating to fixed interest rates
through interest rate swaps. As a result, the net interest
position comprises a structured mix of fixed US dollar and
floating euro interest rates.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
137 Henkel Annual Report 2011
Our exposure to interest rate risk at the reporting dates 2010
and 2011 was as follows:
Interest rate exposure
Carrying amounts
in million euros 2010 2011
Fixed-interest financial instruments
Euro
US dollar 1,497 1,237
Others
1,497 1,237
Floating-interest financial instruments
Euro 337 170
US dollar 202 212
Others 33 304
506 78
The calculation of the interest rate risk is based on sensitivity
analyses. The analysis of cash flow risk examines all the
main financial instruments which bear interest at a variable
rate at the statement of financial position date. Securities,
time deposits, fixedinterest instruments and interest hedging
instruments are deducted from net borrowings. The interest
rate risk figures shown in the table are based on this calcula
tion at the relevant reporting date, assuming a parallel shift
in the interest curve of 100 basis points. The analysis of fair
value risk also assumes a parallel shift in the interest curve
of 100 basis points, with the hypothetical loss or gain of the
relevant interest rate derivatives at the reporting date being
calculated accordingly. The fixedinterest financial instru
ments exposed to fair value risk are essentially the fixed in
terest rate bank liabilities denominated in US dollars.
The risk of interest rate fluctuations with respect to the earn
ings of the Henkel Group is shown in the basis point value
(BPV) analysis in the table below.
Interest rate risk
in million euros 2010 2011
Based on an interest rate rise
of 100 basis points

52 27
of which:
Cash flow through profit and loss 10 5
Fair value recognized in equity through
comprehensive income

42

22
Other price risks (commodity price risk)
Uncertainty with respect to raw material price development
impacts Group business. Purchase prices for raw materials
can affect the net assets, financial position and results of
operations of the corporation. The risk management strategy
put in place by the Group management for safeguarding
against the procurement market risk is described in more
detail in the risk report on pages 89 and 90.
As a small part of the risk management strategy, cashsettled
commodity futures are entered into on the basis of forecasted
purchasing requirements in order to hedge future uncertainties
with respect to commodity prices. Cashsettled commodity
derivatives are only used at Henkel where there is a direct
relationship between the hedging derivative and the physical
underlying. Henkel does not practice hedge accounting and
is therefore exposed to temporary price risks when holding
commodity derivatives. Such price risks arise due to the fact
that the commodity derivatives are measured at fair value
whereas the purchasing requirement, as a pending transaction,
is not measured or recognized. This can lead to losses being
recognized in profit or loss and equity. Developments in fair
values and the resultant risks are continuously monitored.
The influence of negative commodity price developments on
the valuation of the derivatives employed is immaterial to the
financial position of the Henkel Group due to the low volume
of derivatives used. In the event of a change in commodity
prices of 10 percent, the resultant loss would be less than
1million euros.
Consolidated fnancial statements
Notes to the consolidated statement of fnancial position
138 Henkel Annual Report 2011
Notes to the consolidated statement of income
(22) Sale proceeds and principles of income realization
Sales increased from 15,092 million euros to 15,605 million
euros.
Revenues and their development by business sector and region
are summarized in the Group segment report and in the key
financials by region on pages 103 and 104. A detailed ex-
planation of the development of major income and expense
items can be found in the management report on pages 58
and 59.
Sales comprise sales of goods and services less sales deductions
such as customer-related rebates, credits and other benefits
paid or granted. Sales are recognized once the goods have been
delivered or the service has been performed. In the case of
goods, this coincides with the physical delivery and transfer
of risks and rewards. Henkel uses different terms of delivery
determining the transfer of risks and rewards. It must also
be probable that the economic benefits associated with the
transaction will flow to the Group, and the costs incurred in
respect of the transaction must be reliably measurable.
Services are generally provided in conjunction with the sale
of goods, and recorded once the service has been performed.
No sale is recognized if there are significant risks relating to
the receipt of the consideration or it is likely that the goods
will be returned.
Interest income is recognized on a time-proportion basis that
takes into account the effective yield on the asset and the inte rest
rate in force. Dividend income from investments is recognized
when the shareholders right to receive payment is legally
established.
(23) Cost of sales
The cost of sales rose from 8,078 million euros to 8,538 mil-
lion euros.
Cost of sales comprises the cost of products and services sold
and the purchase cost of merchandise sold. It consists of the
directly attributable cost of materials and primary production
cost, as well as indirect production overheads including the
production-related amortization and depreciation of intan-
gible assets and property, plant and equipment.
(24) Marketing, selling and distribution expenses
Marketing, selling and distribution expenses amounted to
4,132 million euros (previous year: 4,257 million euros).

In addition to marketing organization and distribution ex-
penses, this item comprises, in particular, advertising, sales
promotion and market research expenses. Also included here
are the expenses of technical advisory services for customers,
and valuation allowances on trade accounts receivable.
(25) Research and development expenses
Research and development expenses rose compared to the
previous year by 19 million euros to 410 million euros.
Research expenditures may not be recognized as an asset.
Develop ment expenditures are recognized as an asset if all the
criteria for recognition are met, the research phase can be
clearly distinguished from the development phase and the
expenditures can be attributed to distinct project phases.
Currently, the criteria set out in IAS 38 Intangible Assets for
recognizing development expenditures are not all being met,
due to a high level of interdependence within the development
projects and the difficulty of assessing which products will
eventually be marketable.
(26) Administrative expenses
Administrative expenses amounted to 785 million euros
(previous year: 750 million euros).
Administrative expenses include personnel and non-personnel
costs of Group management and costs relating to the Human
Resources, Purchasing, Accounting and IT departments.
(27) Other operating income
Other operating income
in million euros 2010 2011
Release of provisions 1 68 37
Gains on disposal of non-current assets 19 15
Insurance claim payouts 12 7
Write-ups of non-current assets 6 1
Release of valuation allowances for
bad debts

3 2
Profits on sale of businesses 3 62
Sundry operating income 105 85
Total 216 209
1 Including income from the release of provisions for pension obligations
(curtailment gains) of 3 million euros (previous year: 18 million euros).
Sundry operating income relates to a number of individual
items arising from ordinary operating activities, such as
rent income, grants and subsidies, bonus credits and similar
income.
Consolidated fnancial statements
Notes to the consolidated statement of income
139 Henkel Annual Report 2011
(28) Other operating charges
Other operating charges
in million euros 2010 2011
Losses on disposal of non-current assets 14 9
Goodwill impairment losses 6
Write-downs on assets held for sale 2
Write-downs on other assets 1 5
Sundry operating expenses 88 76
Total 109 92
Sundry operating expenses relate to a number of individual
items arising from ordinary operating activities, such as
contractual termination severance payments, compensation
settlements and similar expenses.
(29) Financial result
Financial result
in million euros 2010 2011
Investment result 1
Interest result 172 155
Total 171 155
Investment result
in million euros 2010 2011
Income from other investments
Other 1
Total 1
Interest result
in million euros 2010 2011
Interest and similar income from third parties 1 17 34
Expected return on plan assets less interest
expense for pension provisions 2 1
Expected return on reimbursement rights
(IAS 19) 6 3 4
Other financial income 2 6
Totalinterestincome 25 45
Interest to third parties 1 134 3 145
Other financial charges 47 55
Interest expense for pension provisions less
expected return on plan assets 2

16 3
Totalinterestexpense 197 200
Total 172 155
1 Including interest income and interest expense, both in the amount of
41 million euros (previous year: 39 million euros), in respect of mutually
offset deposits and liabilities to banks, reported on a net basis.
2 Interest expense of 179 million euros and expected interest income of
180 million euros (previous year: interest expense of 187 million euros and
expected interest income of 171 million euros).
3 Prior-year figures adjusted (see Recognition and measurement methods
on pages 108 and 109).
An overview on the net results by measurement category
(IFRS 7) and a reconciliation to the financial result is provided
on page 130 in Note 21 Financial instruments report.
(30) Taxes on income
Earnings before taxes on income and analysis of taxes
in million euros 2010 2011
Earningsbeforetax 1,552 1,702
Current taxes 424 384
Deferred taxes 15 35
Taxesonincome 409 419
Tax rate in percent 26.4% 24.6%
Main components of tax expense and income
in million euros 2010 2011
Current tax expense/income in the reporting year 432 455
Current tax adjustments for prior years 8 71
Deferred tax expense/income from temporary
differences 25 14
Deferred tax expense/income from unused tax
losses 38 22
Deferred tax expense/income from tax credits 3 2
Deferred tax expense/income from changes in
tax rates 6 5
Increase/decrease in valuation allowances on
deferred tax assets 37 2
In accordance with IAS 12, deferred tax assets and liabilities
are recognized with respect to temporary differences between
the statement of financial position valuation of an asset or
liability and its tax base, unused tax losses and tax credits.
Deferred taxes are calculated on the basis of the tax rates that
are applicable or anticipated in the individual countries at the
time of realization or utilization. In Germany there is a uni-
form corporate income tax rate of 15 percent plus a solidarity
tax of 5.5 percent. After taking into account trade tax, this
yields an overall tax rate of 31 percent.
Deferred tax assets are recognized where it is likely that
sufficient taxable income will be generated in future to realize
the corresponding benefit.
Deferred tax assets and liabilities are netted where they
involve the same tax authority and the same tax creditor.
The deferred tax assets and liabilities stated at December 31,
2011 relate to the following items of the consolidated state-
ment of financial position, unused tax losses and tax credits:
Consolidated fnancial statements
Notes to the consolidated statement of income
140 Henkel Annual Report 2011
Allocation of deferred taxes
Deferred tax assets Deferred tax liabilities
in million euros
December 31,
2010
December 31,
2011
December 31,
2010
December 31,
2011
Intangible assets 122 99 669 674
Property, plant and equipment 23 19 86 87
Financial assets 1 2 7 7
Inventories 41 39 5 5
Other receivables and other assets 63 63 143 108
Special tax-allowable items 49 46
Provisions 409 522 6 8
Liabilities 188 144 11 12
Tax credits 11 9
Unused tax losses 106 52
964 949 976 947
Amounts netted 560 466 560 466
Valuation allowances 46 18
Financial statement figures 358 465 416 481
The deferred tax assets amounting to 522 million euros (pre-
vious year: 409 million euros) relating to provisions in the
financial statement result primarily from recognition and
measurement differences with respect to pensions and similar
obligations.
The deferred tax liabilities amounting to 674 million euros
(previous year: 669 million euros) relating to intangible assets
are chiefly attributable to business combinations such as the
acquisition of the National Starch businesses in 2008.
Deferred taxes have not been recognized with respect to un-
used tax losses of 58 million euros (previous year: 144 mil-
lion euros), as it is not sufficiently probable that taxable gains
or benefits will be available against which they may be utilized.
Of these tax losses carried forward, 6 million euros lapse
within one year, 4 million euros within two years, 2 million
euros within three years, 24 million euros after three years,
with 22 million euros non-expiring.
The table below summarizes the expiry dates of unused tax
losses and tax credits. This table includes unused tax losses
arising from the disposal of assets of 12 million euros
(previous year: 13 million euros) which may be carried forward
without restriction. In many countries, different tax rates
apply to losses on the disposal of assets and to operating profits,
and in some cases losses on the disposal of assets may only
be offset against gains on the disposal of assets.
Expiry dates of unused tax losses and tax credits
Unused tax losses Tax credits
in million euros
December 31,
2010
December 31,
2011
December 31,
2010
December 31,
2011
Lapse within
1 year 10 9
2 years 23 5
3 years 19 14
more than 3 years 364 254 11 9
May be carried forward without restriction 167 104
Total 583 386 11 9
Consolidated fnancial statements
Notes to the consolidated statement of income
141 Henkel Annual Report 2011
Of unused tax losses lapsing beyond three years, 202 million
euros (previous year: 222 million euros) relate to loss carry-
forwards of US subsidiaries in respect of state taxes (tax rate
about 5 percent).
Equity-increasing deferred taxes of 91 million euros were
recognized in 2011 (previous year: equity-reducing amount
of 33 million euros). Within this figure, 94 million euros is a
net actuarial gain on pension obligations, this being offset by
3million euros in net loss from cash flow hedges.
The individual company reports prepared on the basis of
the tax rates applicable in each country and taking into account
consolidation procedures have been summarized in the
statement below, showing how the estimated tax charge, based
on the tax rate applicable to Henkel AG & Co. KGaA of 31 percent,
is reconciled to the effective tax charge disclosed.
Tax reconciliation statement
in million euros 2010 2011
Income before taxes on income 1,552 1,702
Tax rate (including municipal trade tax)
on income of Henkel AG & Co. KGaA 31 % 31 %
Estimated tax charge 481 528
Tax reductions due to differing tax rates abroad 64 64
Tax increases/reductions for prior years 9 61
Tax increases/reductions
due to changes in tax rates 6 5
Tax increases/reductions due to the recognition
of deferred tax assets relating to unused tax losses
and temporary differences 37 2
Tax reductions due to tax-free income
and other items 46 49
Tax increases due to non-deductible expenses 60 68
of which
Non-deductible write-downs
on intangible assets 2
Taxation effects arising from additions and
reductions for local taxes 15 18
Non-deductible and non-offsettable
withholding tax 12 20
Other non-deductible expenses 31 30
Tax charge disclosed 409 419
Effective tax rate 26.4 % 24.6 %
The decrease in the effective tax rate in 2011 to 24.6 percent
(previous year: 26.4 percent) is primarily due to the success-
ful conclusion of appeal proceedings and of transfer price
negotiations between among others Germany and France,
which had a beneficial effect on ongoing tax audits in a num-
ber of countries.
Deferred tax liabilities relating to the retained earnings of
foreign subsidiaries have not been calculated due to the fact
that these earnings are available to the entities concerned for
their own use.
(31) Non-controlling interests
The amount shown here represents the proportion of net
income and losses attributable to other shareholders of affili-
ated companies.
Their share of net income was 33 million euros (previous
year: 31 million euros) and that of losses 3 million euros
(previous year: 6 million euros).
Consolidated fnancial statements
Notes to the consolidated statement of income
142 Henkel Annual Report 2011
Other disclosures
(32) Payroll cost
Payroll cost 1
in million euros 2010 2011
Wages and salaries 2,012 2,052
Social security contributions and
staff welfare costs

331 336
Pension costs 144 134
Total 2,487 2,522
1 Excluding personnel-related restructuring charges of
140 million euros (previous year: 128 million euros).
Share-based payment plans
The objective of the Henkel Stock Incentive Plan introduced
in the year 2000 is to provide additional motivation for about
700 senior executive personnel around the world. Participants
in the plan are granted option rights to subscribe for Henkel
preferred shares, which may be exercised for the first time
once a vesting period of three years has elapsed. The exercise
of rights must be within a period not exceeding five years
after completion of the vesting period. Under the plan, rights
were issued annually on a revolving basis, the relevant terms
being revised each year by the Management Board and Share-
holders Committee. In 2004, options were issued for the last
time, in this case to the members of the Management Board.
Each option granted originally carried the right to acquire up
to eight Henkel preferred shares. After the 1:3 share split on
June 18, 2007, the number of preferred shares per option right
was trebled. The exact number of shares that can be bought
per option at a specific price depends on the extent to which
the performance targets are met. One target is based on abso-
lute performance the performance of the Henkel preferred
share price. The other takes into account relative performance,
comparing the movement in value of the Henkel preferred
share with that of the Dow Jones Euro Stoxx (600) index. For
both performance targets, the average market price of the
Henkel preferred share at the date of issue is compared to the
average market price three years later. The average market
price is calculated in each case on the basis of 20 stock ex-
change trading days after the Annual General Meeting. The
calculation of relative performance takes account of dividend
payments and other rights and benefits as well as movements
in the share price (total shareholder return). The subscription
rights attached to an option are split into two categories.
Taking the share split into account, up to 15 subscription
rights can be exercised by reference to the absolute perfor-
mance and up to nine subscription rights by reference to
the relative performance.
Option rights are granted to members of the Management
Board and corporate senior vice presidents, and to managers
of comparable status within German and foreign affiliated
companies, on condition that they make a direct investment
of three preferred shares for each option right.
The total value of stock options granted to senior executive
personnel at the grant date is determined using an option
pricing model. The total value of the stock options calculated
in this way is treated as a payroll cost spread over the period
in which the corporation receives the service of the employ-
ee. For financial years since 2005, this cost in respect of the
option rights granted in 2003 (tranche 4) and 2004 (tranche 5)
is required to be expensed.
The table shows the number of option rights granted per
tranche and the number of shares in the various tranches,
taking into account the 1:3 share split of June 18, 2007. The
vesting period has now expired for all the tranches. Because
the exercise period for the fourth tranche expired on May 11,
2011, option rights that were not exercised have lapsed.
In 2004 for the fourth tranche and in 2007 for the fifth
tranche, the Management Board decided to avail itself of the
right to pay in cash the gain arising on the exercise of the
options to the employees participating in the plan. The fifth
tranche is treated as if it had been paid in shares.
Consolidated fnancial statements
Other disclosures
143 Henkel Annual Report 2011
Option rights / Subscribable preferred shares
in number of shares/options 4th tranche 5th tranche Total
At January 1, 2011 21,056 7,200 28,256
expressed in preferred shares 315,845 151,200 467,045
Options granted
expressed in preferred shares
Options exercised 1 12,986 2,648 15,634
expressed in preferred shares 194,795 55,600 250,395
Options forfeited 210 210
expressed in preferred shares 3,150 3,150
Lapsed options 7,860 7,860
expressed in preferred shares 117,900 117,900
At December 31, 2011 4,552 4,552
expressed in preferred shares 95,600 95,600
1 Average price at exercise date: 46.68 euros.
At December 31, 2010, there was a provision of 8.3 million
euros for the fourth tranche, of which 5.2 million euros was
used in fiscal 2011. The amount released of 3.1 million euros
increased earnings for the period.
The costs are calculated using the Black-Scholes option
pricing model, modified to reflect the special features of the
Stock Incentive Plan. The cost calculation was based on the
following factors:
Black-Scholes option pricing model
On issue
5th tranche
Exercise price (before share split) in euros 71.28
Exercise price (after share split) in euros 23.76
Expected volatility of the preferred
share price in % 26.6
Expected volatility of the index in % 18.6
Expected forfeiture rate in %
Risk-free interest rate in % 3.96
The expected volatility rates are based on the historic volatility
of the Henkel preferred share and of the Dow Jones Euro
Stoxx (600) index. The period to which the estimate of the
volatility of the Henkel share relates starts at the beginning
of the remaining term of the option tranche and finishes on
the date on which the tranche is valued.
The performance period relating to the fourth tranche ended
on May 11, 2006, and that of the fifth tranche on May 15, 2007.
Thereafter, at any time during a five-year period, the benefi-
ciaries of the fourth tranche were able to exercise their right
to acquire 15 Henkel preferred shares per option, and in the
case of the fifth tranche 21 shares per option. The allocation
for the fourth tranche was based exclusively on absolute per-
formance. The allocation for the fifth tranche was 15 shares
as a result of absolute performance and six shares as a result
of relative performance. The option rights for the fourth
tranche lapsed on May 11, 2011 as per the prescribed deadline.
The outstanding option rights for tranche five may be exer-
cised at any time, except during blocked periods which in
each case cover the four weeks prior to the reporting dates
of the corporation.
Global Cash Performance Units (CPU) Plan
Since the end of the Stock Incentive Plan, those eligible for
that plan, the senior executive personnel of the Henkel Group
(excluding members of the Management Board) have, since
2004, been part of the Global CPU Plan, which enables them
to participate in any increase in price of the Henkel preferred
share. Cash Performance Units (CPUs) are awarded on the
basis of the level of achievement of certain defined targets.
They grant the beneficiary the right to receive a cash payment
at a fixed point in time. The CPUs are granted on condition
that the member of the Plan is employed for three years by
Henkel AG & Co. KGaA or one of its subsidiaries in a position
senior enough to qualify to participate and that he or she is
not under notice during that period. This minimum period of
employment pertains to the calendar year in which the CPUs
are granted and the two subsequent calendar years.
Consolidated fnancial statements
Other disclosures
144 Henkel Annual Report 2011
The number of CPUs granted depends not only on the senior-
ity of the officer, but also on the achievement of set target
figures. For the periods to date, these targets have been oper-
ating profit (EBIT) and net income attributable to sharehold-
ers of Henkel AG & Co. KGaA. The value of a CPU in each case
is the average price of the Henkel preferred share as quoted
20 stock exchange trading days after the Annual General
Meeting following the performance period. In the case of
exceptional increases in the share price, there is an upper
limit or cap. After the 1:3 share split of June 18, 2007, the
number of CPUs was trebled.
The total value of CPUs granted to senior management per-
sonnel is remeasured at each year-end and treated as a pay-
roll cost over the period in which the plan member provides
their services to Henkel. The fifth tranche, which was issued
in 2008, became due for payment in July 2011. Across the
world, at December 31, 2011, the CPU Plan comprised
400,498CPUs issued in the sixth tranche in 2009 (expense:
6.0 million euros), 551,718 CPUs from the seventh tranche
issued in 2010 (expense: 8.2 million euros) and 456,754 CPUs
from the eighth tranche issued in the reporting year
(expense: 6.8 million euros). The corresponding provision
amounted to 41.0 million euros (previous year: 32.5 million
euros).
Cash Performance Units Program
Effective fiscal 2010, the compensation system for members
of the Management Board changed. From 2010, they receive
as a long-term incentive (LTI) a variable cash payment related
to the corporations long-term financial performance as mea-
sured by the increase in earnings per share (EPS) over a peri-
od of three years (performance period). (For details, please
refer to the remuneration report on pages 36 to 44.)
In fiscal 2005 to 2009, the members of the Management
Board received an LTI in the form of a cash payment based on
preferred share performance. Each member of the Manage-
ment Board was allocated, as a function of the absolute
increase in the price of the Henkel preferred share and the
increase in the earnings per Henkel preferred share (EPS)
achieved over a period of three years (performance period),
the cash equivalent of up to 10,800 preferred shares
so-called Cash Performance Units per financial year (this
being equivalent to a tranche). On expiry of the performance
period, the number and the value of the Cash Performance
Units (CPUs) due are determined and the resulting tranche
income is paid in cash. Each member of the Management
Board participating in a tranche was required to acquire a
personal stake by investing in Henkel preferred shares to the
value of 25 percent of the gross tranche payout, and to place
these shares in a blocked custody account with a five-year
drawing restriction.
In the event of an absolute rise in the share price during
the performance period of at least 15 percent, 21 percent or
30percent, each participant is allocated 1,800, 3,600 or
5,400CPUs respectively. To calculate the increase in the
share price, the average price in January of the year of issue
of a tranche is compared with the average price in January of
the third financial year following the year of issue (reference
price). If, during the performance period, earnings per
preferred share increase by at least 15 percent, 21 percent or
30percent, each participant is allocated a further 1,800, 3,600
or 5,400 CPUs respectively. To calculate the increase in earn-
ings per preferred share, the earnings per preferred share of
the financial year prior to the year of issue is compared with
the earnings per preferred share of the second financial
year after the year of issue. The amounts included in the
calculation of the increase are, in each case, the earnings
per preferred share as disclosed in the certified and approved
consolidated financial statements of the relevant financial
years, adjusted for exceptional items.
The monetary value per CPU essentially corresponds to the
reference price of the Henkel preferred share. A ceiling value
(cap) is imposed in the event of extraordinary share price
increases.
The base price for the 2009 tranche was 21.78 euros. We based
the measurement of the provision for the year of tranche
issue on the achievement of mid-range targets; in the subse-
quent years, the pro rata provisions for the still live tranches
issued in the previous years were adjusted on the basis of the
latest figures. This has resulted in the addition of a further
expense of 0.5 million euros in the financial year. At Decem-
ber 31, 2011, the provision for the still live tranche from this
Program, which was discontinued as of 2009, was 1.9 million
euros (previous year: 3.4 million euros).
Consolidated fnancial statements
Other disclosures
145 Henkel Annual Report 2011
(33) Employee structure
Annual average amounts excluding apprentices and trainees,
work experience students and interns, based on quarterly
figures:
Number of employees per function
2010 2011
Production and engineering 23,672 23,568
Marketing, selling and distribution 15,106 14,941
Research and development 2,665 2,654
Administration 6,698 6,590
Total 48,141 47,753
(34) Group segment report
The format for reporting the activities of the Henkel Group by
segment is by business sector; selected regional information
is also provided. This classification corresponds to the way in
which the Group manages its operating business.
The activities of the Henkel Group are divided into the follow-
ing operating segments: Laundry & Home Care, Cosmetics/
Toiletries and Adhesive Technologies (Adhesives for Consum-
ers, Craftsmen and Building, and Industrial Adhesives).
Laundry & Home Care
The Laundry & Home Care business sector is globally active
in the laundry and home care branded consumer goods busi-
ness. The Laundry business includes not only heavy-duty and
specialty detergents but also fabric softeners, laundry perfor-
mance enhancers and laundry care products. The portfolio
of our Home Care business encompasses hand-dishwashing
and machine-dishwashing products, cleaners for bath and
WC applications, and household, glass and specialty cleaners.
Wealso have a market presence in selected regions with air
fresheners and insecticides for household applications.
Cosmetics/Toiletries
The Cosmetics/Toiletries business sector is active in the
Branded Consumer Goods business area with Hair Cosmetics,
Body Care, Skin Care and Oral Care, as well as in the profes-
sional Hair Salon business.
Adhesive Technologies (Adhesives for Consumers, Craftsmen and
Building, and Industrial Adhesives)
The Adhesive Technologies business sector comprises five
market- and customer-focused strategic business units.
In the Adhesives for Consumers, Craftsmen and Building
segment, we market a wide range of brandname products for
private and professional users. Based on our four international
brand platforms, namely Loctite, Pritt, Pattex and Ceresit, we
offer target group-aligned system solutions for applications
in the household, in schools and offices, for do-it-yourselfers
and craftsmen, and also for the building industry.
Our Transport and Metal business serves major international
customers in the automotive and metal-processing industries,
offering tailored system solutions and specialized technical
services that cover the entire value chain from steel coating
to final vehicle assembly.
Within the General Industry business, our customers com-
prise manufacturers from a multitude of industries, ranging
from household appliance producers to the wind power in-
dustry. Our portfolio here encompasses Loctite products for
industrial main tenance, repair and overhaul, as well as a wide
range of sealants and system solutions for surface treatment
applications, and specialty adhesives.
The Packaging, Consumer Goods and Construction Adhesives
business serves major international customers as well as
medium- and small-sized manufacturers of the consumer
goods and furniture industries. Leveraging our economies of
scale, we offer attractive solutions for standard and volume
applications.
Our Electronics business offers customers from the world-
wide electronics industry a comprehensive portfolio of inno-
vative, high-tech adhesives and soldering materials for the
manu facture of microchips and printed circuit boards.
In determining the segment results and the asset and liability
values, essentially the same principles of recognition and
measurement are applied as in the consolidated financial
statements. Operating assets in foreign currencies have been
valued at average exchange rates.
The Group measures the performance of its segments on the
basis of a segment income variable referred to by Internal
Control and Reporting as adjusted EBIT. For this purpose,
operating profit (EBIT) is adjusted for one-time charges and
gains and also restructuring charges.

For reconciliation with the figures for the Henkel Group,
Group overheads are reported under Corporate together with
income and expenses that cannot be allocated to the individual
business sectors.
Proceeds transferred between the segments only exist to a
negligible extent and are therefore not separately disclosed.
Operating assets, provisions and liabilities are assigned to
the segments in accordance with their usage or origin. Where
usage or origin is attributable to several segments, allocation
is effected on the basis of appropriate ratios and keys.
Consolidated fnancial statements
Other disclosures
146 Henkel Annual Report 2011
For regional and geographic analysis purposes, sales are
allocated to countries on the basis of the country-of-origin
principle; non-current assets are allocated in accordance
with the domicile of the international company to which
they pertain.
Reconciliation between net operating assets/
capital employed and financial statement figures
Net operating assets

Financial
statement
figures
Net operating assets

Financial
statement
figures

in million euros
Annual
average 1 2010
December 31,
2010
December 31,
2010
Annual
average 1 2011
December 31,
2011
December 31,
2011
Goodwill at book value 6,512 6,521 6,521 6,361 6,713 6,713
Other intangible assets and property, plant and equipment
(total) 4,500 4,335 4,335 4,192 4,319 4,319
Deferred taxes
358 465
Inventories 1,451 1,460 1,460 1,588 1,550 1,550
Trade accounts receivable from third parties 2,062 1,893 1,893 2,110 2,001 2,001
Intra-group accounts receivable 1,079 919 799 911
Other assets and tax refund claims 2 425 388 1,412 374 431 1,500
Cash and cash equivalents 1,515 1,980
Assets held for sale 31 51
Operating assets (gross)/Total assets 16,029 15,516 17,525 15,424 15,926 18,579
Operating liabilities 4,796 4,648 4,625 4,687
of which:
Trade accounts payable to third parties 2,262 2,308 2,308 2,460 2,411 2,411
Intra-group accounts payable 1,079 919 799 911
Other provisions and other liabilities 2
,
3
(financial and non-financial) 1,455 1,421 1,644 1,366 1,365 1,595
Net operating assets 11,233 10,868 10,799 11,239
Goodwill at book value 6,512 6,361
+ Goodwill at cost 4 6,875 6,770
Capital employed 11,595 11,208
1 The annual average is calculated on the basis of the twelve monthly figures.
2 Only amounts relating to operating activities are taken into account in calculating net operating assets.
3 Prior-year figures adjusted (see Recognition and measurement methods on pages 108 and 109).
4 Before deduction of accumulated amortization pursuant to IFRS 3.79 (b).
Consolidated fnancial statements
Other disclosures
147 Henkel Annual Report 2011
(35) Earnings per share
The Stock Incentive Plan (Note 32, pages 143 to 145) dilutes
earnings per ordinary share and earnings per preferred share
by 1 eurocent in each case.
Earnings per share
in million euros (rounded) 2010 2011
Net income attributable to shareholders of Henkel AG & Co. KGaA 1,118 1,253
Dividends, ordinary shares 182 203
Dividends, preferred shares 125 139
Total dividends 307 342
Retained earnings per ordinary share 486 545
Retained earnings per preferred share 325 366
Retained earnings 811 911
Number of ordinary shares 259,795,875 259,795,875
Dividend per ordinary share in euros 0.70 0.78 4
of which preliminary dividend per ordinary share in euros 1 0.02 0.02
Retained earnings per ordinary share in euros 1.87 2.10
EPS per ordinary share in euros 2.57 2.88
Number of outstanding preferred shares 2 173,924,174 174,309,407
Dividend per preferred share in euros 0.72 0.80 4
of which preferred dividend per preferred share in euros 1 0.04 0.04
Retained earnings per preferred share in euros 1.87 2.10
EPS per preferred share in euros 2.59 2.90
Number of ordinary shares 259,795,875 259,795,875
Dividend per ordinary share in euros 0.70 0.78 4
of which preliminary dividend per ordinary share in euros 1 0.02 0.02
Retained earnings per ordinary share in euros after dilution 1.86 2.09
Diluted EPS per ordinary share in euros 2.56 2.87 5
Number of potential outstanding preferred shares 3 174,300,359 174,467,626
Dividend per preferred share in euros 0.72 0.80 4
of which preferred dividend per preferred share in euros 1 0.04 0.04
Retained earnings per preferred share in euros after dilution 1.86 2.09
Diluted EPS per preferred share in euros 2.58 2.89 5
1 See Group management report, Corporate governance, Division of capital stock, Shareholder rights.
2 Weighted annual average of preferred shares (Henkel buy-back program).
3 Weighted annual average of preferred shares adjusted for the potential number of shares arising from the Stock Incentive Plan.
4 Proposal to shareholders for the Annual General Meeting on April 16, 2012.
5 Based on income attributable to shareholders of Henkel AG & Co. KGaA of 1,251 million euros (IAS 33.59).
(36) Consolidated statement of cash flows
The statement of cash flows is prepared in accordance with
IAS 7 Statements of Cash Flows. It describes the flow of cash
and cash equivalents by origin and usage of liquid funds. It
distinguishes between changes in funds arising from operating
activities, investing activities/acquisitions, and financing
activities. Financial funds include cash on hand, checks and
credits at banks, and other financial assets with a remaining
term of not more than three months. Securities are therefore
included in financial funds, provided that they are available
at short term and are only exposed to an insignificant price
change risk. As in the previous year, Henkels financial funds
match the cash and cash equivalents figure disclosed in the
consolidated statement of financial position. Effects arising
from currency translation are allowed for in the computation.
In some countries, there are administrative hurdles to the
transfer of money to the parent company.
Cash flows from operating activities are determined by ini-
tially adjusting operating profit by non-cash variables such as
depreciation/amortization/write-ups on assets, supplemented
by changes in provisions, changes in other assets and liabili-
ties, and also changes in net working capital. Payments made
for income taxes are disclosed under operating cash flow.
Consolidated fnancial statements
Other disclosures
148 Henkel Annual Report 2011
Cash flows from investing activities/acquisitions occur
essentially as a result of the flow of funds generated by
disposals of non-current assets, subsidiary companies and
business operations, and the outflow of funds arising from
investments in non-current assets and acquisitions.
Cash flow from investing activities/acquisitions includes
payments for acquisitions in the amount of 4 million euros
(previous year: 46 million euros) and relate exclusively to
the acquisition of the Purbond Group within the Adhesive
Technologies business sector.
Cash flows from financing activities take into account interest
and dividends paid and received, the change in borrowings
and in pension provisions, and also payments made for the
acquisition of non-controlling interests and other financing
transactions. The change in borrowings takes into account
a number of cash inflows and outflows, particularly arising
from the assumption and amortization of current liabilities
to banks.
Free cash flow shows how much cash is actually available
for acquisitions and dividends and/or for reducing debt.
(37) Contingent liabilities
Analysis
in million euros
December
31, 2010
December
31, 2011
Liabilities under guarantee and
warranty agreements

15

8
(38) Other unrecognized financial commitments
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 obligations under
operating lease agreements are shown at the total amounts
payable up to the earliest date when they can be terminated.
The amounts shown are the nominal values. At December 31,
2011, they were due for payment as follows:
Operating lease commitments
in million euros
December
31, 2010
December
31, 2011
Due in the following year 58 59
Due within 1 to 5 years 127 118
Due after 5 years 36 35
Total 221 212
In the course of the 2011 financial year, 67 million euros be-
came due for payment under operating leases (previous year:
67million euros).
As of the end of 2011, commitments arising from orders for
property, plant and equipment amounted to 52 million euros
(previous year: 36 million euros). As in the previous year, there
were no purchase commitments arising from toll manufac-
turing contracts.
Payment commitments under the terms of agreements for
capital increases and share purchases contracted prior to
December 31, 2011 amounted to 7 million euros (previous
year: 5 million euros).
(39) Voting rights / Related party disclosures
Related parties as defined by IAS 24 (Related Party Disclo-
sures) are legal entities or natural persons who may be able to
exert influence on Henkel AG & Co. KGaA and its subsidiaries,
or be subject to the control or a material influence by Henkel
AG & Co. KGaA or its subsidiaries. These include, in particular,
the members of the Henkel share-pooling agreement, non-
consolidated entities in which Henkel holds participating
interest, and also the members of the management bodies of
Henkel AG & Co. KGaA whose remunerations are indicated in
the Remuneration Report section of the Management Report
on pages 36 to 44. Henkel Trust e.V. and Metzler Trust e.V.
also fall into the category of related parties as defined in IAS 24.
Information required by Section 160 (1) no. 8 of the German
Stock Corporation Act [AktG]:
The company has been notified that the share of voting rights
of the parties to the Henkel share-pooling agreement at
October 21, 2010 represents in total 53.21 percent of the voting
rights (138,240,804 votes) in Henkel AG & Co. KGaA, and is
held by
111 members of the families of the descendants of Fritz
Henkel, the companys founder,
four foundations set up by members of those families,
one civil-law partnership set up by members of those
f amilies, and
eight private limited companies set up by members of those
families, seven limited partnerships with a limited company
as general partner (GmbH & Co. KG) and one limited part-
nership (KG)
under the terms of a share-pooling agreement (agreement
restricting the transfer of shares) pursuant to Section 22 (2)
of the German Securities Trading Act [WpHG], whereby the
shares held by the eight private limited companies, the seven
limited partnerships with a limited company as general part-
ner and the one limited partnership representing a total of
14.02 percent (36,419,097 voting rights) are attributed (pursu-
ant to Section 22 (1) no. 1 WpHG) to the family members who
control those companies.
Consolidated fnancial statements
Other disclosures
149 Henkel Annual Report 2011
Dr. Christoph Henkel, London, has exceeded the 5 percent
threshold of voting rights in Henkel AG & Co. KGaA with
14,172,457 voting ordinary shares in Henkel AG & Co. KGaA,
representing a rounded percentage of 5.46 percent. Even after
adding voting rights expressly granted under the terms of
usufruct agreements, no other party to the share-pooling
agreement has a notification obligation triggered by their
reaching or exceeding the threshold of 3 percent or more of
the total voting rights in Henkel AG & Co. KGaA.
The authorized representative of the parties to the Henkel
share-pooling agreement is Dr. Simone Bagel-Trah, Dsseldorf.
Financial receivables from and payables to other investments
in the form of non-consolidated entities are disclosed in
Notes 3 and 18.
Henkel Trust e.V. and Metzler Trust e.V., as parties to relevant
contractual trust arrangements (CTA), hold the assets required
to cover the pension obligations in Germany. The claim on
Henkel Trust e.V. for reimbursement of pension payments made
is shown under other financial assets (Note 3 on page 116).
(40) Exercise of exemption options
The following German companies included in the consolidated
financial statements of Henkel AG & Co. KGaA exercised ex-
emption options in fiscal 2011:
Elch GmbH, Leverkusen (Section 264 (3) German Commercial
Code [HGB])
Schwarzkopf Henkel Production Europe GmbH & Co. KG,
Dsseldorf (Section 264b German Commercial Code [HGB]).
The Dutch company Henkel Nederland B.V., Nieuwegein,
exercised the exemption option afforded in Article 2:403 of
the Civil Code of the Netherlands.
(41) Remuneration of the corporate management
The total remuneration of the members of the Supervisory
Board and of the Shareholders Committee of Henkel AG & Co.
KGaA amounted to 1,515,500 euros plus VAT (previous year:
1,516,000 euros) and 2,295,205 euros (previous year:
2,209,180 euros) respectively. The total remuneration
(Section 285 no. 9 German Commercial Code [HGB]) of the
Management Board and members of the Management Board
of Henkel Management AG amounted to 21,992,191 euros
(previous year: 18,297,602 euros). For further details regarding
the emoluments of the corporate management, please refer to
the remuneration report on pages 36 to 44.
(42) Declaration of compliance with the Corporate
Governance Code (Kodex)
In February 2011, the Management Board of Henkel Manage-
ment AG and the Supervisory Board and Shareholders Com-
mittee of Henkel AG & Co. KGaA approved a joint declaration
of compliance with the recommendations of the German
Corporate Governance Code (Kodex) in accordance with
Section 161 of the German Stock Corporation Act [AktG]. The
declaration has been made permanently available to share-
holders on the company website: www.henkel.com/ir
(43) Subsidiaries and other investments
Details relating to the investments held by Henkel AG & Co. KGaA
and the Henkel Group are provided in a separate schedule
appended to these notes to the consolidated financial state-
ments but not included in the printed form of the Annual
Report. Said schedule is included in the accounting record
submitted for publication in the Electronic Federal Gazette
and can be viewed there and at the Annual General Meeting.
The schedule is also included in the online version of the
Annual Report on our website: www.henkel.com/ir
(44) Auditors fees and services
The total fees charged to the Group for the services of the
auditor KPMG AG Wirtschaftsprfungsgesellschaft and the
other KPMG companies in fiscal 2010 and 2011 were as
follows:
Type of fee
in million euros
2010 of which
Germany
2011 of which
Germany
Audits 8.5 1.3 7.7 1.3
Other audit-related services 1.2 0.3 1.4 0.3
Tax advisory services 0.9 0.4 0.6 0.1
Other services 0.6 0.4 0.8 0.7
Total 11.2 2.4 10.5 2.4
The item Audits includes fees and disbursements in respect
of the audit of the Group accounts and the legally prescribed
financial statements of Henkel AG & Co. KGaA and its affiliated
companies. The fees for audit-related services relate primar-
ily to the quarterly reviews. The item Tax advisory services
includes fees for advice and support on tax issues and the
performance of tax compliance services on behalf of affiliated
companies outside Germany. Other services comprise fees
predominantly for project-related consultancy services.
Consolidated fnancial statements
Other disclosures
150 Henkel Annual Report 2011
Recommendation for the approval of the annual
financial statements and the appropriation of
the profit of Henkel AG & Co. KGaA
It is proposed that the annual financial statements of Henkel AG & Co. KGaA be
approved as presented and that the unappropriated profit of 345,171,082.50 euros
for the year ended December 31, 2011 be applied as follows:
a) Payment of a dividend of 0.78 euros per ordinary share
(259,795,875 shares) = 202,640,782.50 euros
b) Payment of a dividend of 0.80 euros per preferred share
(178,162,875 shares) = 142,530,300.00 euros
345,171,082.50 euros
According to Section 71 German Stock Corporation Act [AktG], treasury shares
do not qualify for a dividend. The amount in unappropriated profit which
relates to the shares held by the corporation (treasury stock) at the date of
the Annual General Meeting will be carried forward as retained earnings. As
the Annual General Meeting can change the number of such treasury shares,
a correspondingly adapted proposal for the appropriation of profit will be
submitted to it, providing for an unchanged payout of 0.78 euros per ordinary
share qualifying for a dividend and 0.80 euros per preferred share qualifying
for a dividend, with corresponding adjustment of the other retained earnings
and retained earnings carried forward to the following year.
Dsseldorf, January 27, 2012
Henkel Management AG
(Personally Liable Partner
of Henkel AG & Co. KGaA)
Management Board
151 Notes to the consolidated fnancial statements Henkel Annual Report 2011
Notes to the consolidated fnancial statements
Annual financial statements of
Henkel AG & Co. KGaA (summarized) *
Statement of income
in million euros 2010 2011
Sales 3,272 3,424
Cost of sales 2,262 2,426
Gross profit 1,010 998
Selling, research and administrative expenses 1,283 1,331
Other income (net of other expenses) 458 442
Operating profit 185 109
Financial result 874 6
Profit on ordinary activities 1,059 103
Change in special accounts with reserve element 14 11
Extraordinary result 37
Earnings before tax 1,110 114
Taxes on income 141 82
Net income 969 32
Profit brought forward 377 304
Allocated to other retained earnings / transferred from other retained earnings 484 9
Unappropriated profit 1 862 345
1 Statement of income figures are rounded; unappropriated profit 2010: 861,527,712.35 euros; unappropriated profit 2011: 345,171,082.50 euros.
Balance sheet
in million euros 2010 2011
Intangible assets and property, plant and equipment 671 660
Financial assets 7,017 7,185
Non-current assets 7,688 7,845
Inventories 224 233
Receivables and miscellaneous assets / Deferred charges 1,994 1,591
Marketable securities 250 309
Liquid funds 1,117 1,389
Current assets 3,585 3,522
Assets arising from the overfunding of pension obligations 115 2
Total assets 11,388 11,369
Equity 5,468 5,204
Special accounts with reserve element 151 139
Provisions 654 762
Liabilities, deferred income and accrued expenses 5,115 5,264
Total equity and liabilities 11,388 11,369
* The full financial statements of Henkel AG & Co. KGaA with the auditors
unqualified opinion are filed with the commercial register and are also
available at www.henkel.com/ir. Copies can be obtained from Henkel AG
& Co. KGaA on request.
152 Henkel Annual Report 2011
Independent Auditors Report
We have issued the following unqualified auditors report:
Independent Auditors Report
To Henkel AG & Co. KGaA, Dsseldorf
Report on the Consolidated Financial Statements
We have audited the accompanying consolidated financial
statements of Henkel AG & Co. KGaA, Dsseldorf, and its
subsidiaries, which comprise the consolidated statement of
financial position as at December 31, 2011, and the consolidated
statement of income, the consolidated statement of compre-
hensive income, the consolidated statement of changes in
equity, the consolidated statement of cash flows for the
financial year then ended, and the notes to the consolidated
financial statements.
Responsibility of the Personally Liable Partner of the
Company for the Consolidated Financial Statements
The personally liable partner of Henkel AG & Co. KGaA is
responsible for the preparation of these consolidated finan-
cial statements. This responsibility includes preparing these
consolidated financial statements in accordance with Inter-
national Financial Reporting Standards as adopted by the
European Union and the supplementary requirements of
German law pursuant to Section 315a (1) German Commercial
Code, to give a true and fair view of the net assets, financial
position and results of operations of the Group in accordance
with these requirements. The personally liable partner of the
company is also responsible for the internal controls that it
determines are necessary to enable the preparation of consol-
idated financial statements that are free from material
misstatement, whether due to fraud or error.

Auditors Responsibility
Our responsibility is to express an opinion on these consoli-
dated financial statements based on our audit. We conducted
our audit in accordance with Section 317 German Commercial
Code and German generally accepted standards for the audit
of financial statements promulgated by the Institut der
Wirtschaftsprfer (Institute of Public Auditors in Germany)
as well as in supplementary compliance with International
Standards on Auditing (ISA). Those standards require that we
comply with professional requirements and plan and perform
the audit to obtain reasonable assurance about whether the
consolidated financial statements are free from material
misstatement.
An audit involves performing audit procedures to obtain
audit evidence about the amounts and disclosures in the
consolidated financial statements. The selection of audit
procedures depends on the auditors professional judgment.
This includes the assessment of the risks of material mis-
statement of the consolidated financial statements, whether
due to fraud or error. In assessing those risks, the auditor
considers the system of internal control relevant to the entitys
preparation of the consolidated financial statements that give
a true and fair view. The aim of this is to plan and perform
audit procedures that are appropriate in the given circum-
stances, but not for the purpose of expressing an opinion on
the effectiveness of the Groups system of internal control. An
audit also includes evaluating the appropriateness of account-
ing policies used and the reasonableness of accounting
estimates made by the personally liable partner of the
company, as well as evaluating the overall presentation
of the consolidated financial statements.

We believe that the audit evidence we have obtained is suffi-
cient and appropriate to provide a basis for our audit opinion.
Audit Opinion
Pursuant to Section 322 (3) 1 German Commercial Code, we
state that our audit of the consolidated financial statements
has not led to any reservations.

In our opinion, based on the findings of our audit, the consol-
idated financial statements comply in all material respects
with International Financial Reporting Standards as adopted
by the European Union and the supplementary requirements
of German law pursuant to Section 315a (1) German Commer-
cial Code and give a true and fair view of the net assets and
financial position of the Henkel Group as at December 31, 2011,
as well as the results of operations for the financial year then
ended, in accordance with these requirements.
Report on the Group Management Report
We have audited the accompanying Group management
report of Henkel AG & Co. KGaA. The personally liable partner
of Henkel AG & Co. KGaA is responsible for the preparation
of the Group management report in compliance with the
applicable requirements of German law pursuant to Section
315a (1) German Commercial Code. We conducted our audit in
accordance with Section 317 (2) German Commercial Code
and German generally accepted standards for the audit of the
Group management report promulgated by the Institut der
Wirtschaftsprfer (Institute of Public Auditors in Germany).
Those standards require that we plan and perform the audit
of the Group management report to obtain reasonable assur-
ance about whether the Group management report is consis-
tent with the consolidated financial statements and with the
findings of our audit, and as a whole provides a suitable view
of the Groups position and suitably presents the opportunities
and risks of future development.
153 Henkel Annual Report 2011
Prof. Dr. Kai C. Andrejewski
Wirtschaftsprfer
(German Public Auditor)
Michael Gewehr
Wirtschaftsprfer
(German Public Auditor)
Pursuant to Section 322 (3) 1 German Commercial Code, we
state that our audit of the Group management report has not
led to any reservations.
In our opinion, based on the findings of our audit of the con-
solidated financial statements and of the Group management
report, the Group management report is consistent with the
consolidated financial statements, and as a whole provides a
suitable view of the Groups position and suitably presents
the opportunities and risks of future development.
Dsseldorf, January 27, 2012
KPMG AG
Wirtschaftsprfungsgesellschaft
154 Henkel Annual Report 2011
Responsibility statement by the Personally Liable
Partner
To the best of our knowledge, and in accordance with the applicable accounting
principles for financial reporting, the consolidated financial statements give a
true and fair view of the net assets, financial position and results of operations
of the Group, and the 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.
Dsseldorf, January 27, 2012
Henkel Management AG
Management Board
Kasper Rorsted,
Jan-Dirk Auris, Kathrin Menges, Bruno Piacenza,
Dr. Lothar Steinebach, Hans Van Bylen
155 Henkel Annual Report 2011
Dr. rer. nat. Simone Bagel-Trah
Chairwoman,
Private Investor, Dsseldorf
Born in 1969
Member since April 14, 2008
Memberships:
Henkel Management AG (Chairwoman) 1
Henkel AG & Co. KGaA (Shareholders Committee,
Chairwoman) 2
Heraeus Holding GmbH 1
Winfried Zander *
Vice-chairman,
Chairman of the General Works Council of
Henkel AG & Co. KGaA and Chairman of the
Works Council of Henkel AG & Co. KGaA,
Dsseldorf site
Born in 1954
Member since May 17, 1993
Jutta Bernicke *
Member of the Works Council of
Henkel AG & Co. KGaA, Dsseldorf site
Born in 1962
Member since April 14, 2008
Dr. rer. nat. Kaspar von Braun
Astrophysicist, Pasadena
Born in 1971
Member since April 19, 2010
Johann-Christoph Frey
Commercial Executive, Klosters
Born in 1955
Member since September 23, 2009
Birgit Helten-Kindlein *
Member of the Works Council of
Henkel AG & Co. KGaA, Dsseldorf site
Born in 1964
Member since April 14, 2008
Corporate management of Henkel AG & Co. KGaA
Boards / memberships as defined by Section 125 (1) sentence 5 of the German Stock Corporation Act [AktG] as at January, 2012
Dipl.-Ing. Albrecht Woeste: Honorary Chairman of the Henkel Group
Prof. Dr. sc. nat. Michael Kaschke
Chairman of the Executive Board of
Carl Zeiss AG, Oberkochen
Born in 1957
Member since April 14, 2008
Memberships:
Carl Zeiss Group mandates:
Carl Zeiss MicroImaging GmbH (Chairman) 1
Carl Zeiss SMT GmbH (Chairman) 1
Carl Zeiss Japan Co. Ltd. (Chairman) , Japan 2
Carl Zeiss Far East (Chairman), Hong Kong 2
Carl Zeiss India Pte. Ltd. (Chairman), India 2
Thomas Manchot
Private Investor, Dsseldorf
Born in 1965
Member since April 10, 2006
Mayc Nienhaus *
Member of the General Works Council of
Henkel AG & Co. KGaA and Chairman of the
Works Council of Henkel AG & Co. KGaA, Unna site
Born in 1961
Member since January 1, 2010
Thierry Paternot
Operating Partner, Duke Street Capital, Paris
Born in 1948
Member since April 14, 2008
Memberships:
Eckes AG 1
Bio DS SAS, France 2
Freedom-FullSix SAS (Chairman), France 2
Oeneo SA, France 2
Andrea Pichottka *
Executive Assistant to the Executive Board
Member Section 3 responsible for
members, target groups, education
IG Bergbau, Chemie, Energie, Hannover
Born in 1959
Member since October 26, 2004
Memberships:
Siltronic AG 1
Dr. rer. nat. Martina Seiler*
(since January 1, 2012)
Chemist, Duisburg
Representative of the Senior Staff of
Henkel AG & Co. KGaA
Born in 1971
Member since January 1, 2012
* Employee representative.
1 Membership in statutory supervisory and administrative boards in Germany.
2 Membership of comparable oversight bodies.
Prof. Dr. oec. publ. Theo Siegert
Managing Partner of
de Haen-Carstanjen & Shne, Dsseldorf
Born in 1947
Member since April 20, 2009
Memberships:
Deutsche Bank AG 1
E.ON AG 1
Merck KGaA 1
DKSH Holding Ltd., Switzerland 2
E. Merck OHG 2
Edgar Topsch *
Member of the General Works Council of
Henkel AG & Co. KGaA and Vice-chairman of the
Works Council of Henkel AG & Co. KGaA,
Dsseldorf site
Born in 1960
Member since August 1, 2010
Michael Vassiliadis *
Chairman of the Executive Committee of
IG Bergbau, Chemie, Energie, Hannover
Born in 1964
Member since May 4, 1998
Memberships:
BASF SE 1
K + S AG (Vice-chairman) 1
STEAG GmbH (Vice-chairman) 1
Dr.-Ing. E.h. Bernhard Walter
Former Chairman of the Executive Board
of Dresdner Bank AG, Frankfurt/Main
Born in 1942
Member since May 4, 1998
Memberships:
Bilfinger Berger SE (Chairman) 1
Daimler AG 1
Deutsche Telekom AG 1
Ulf Wentzien *
(until December 31, 2011)
Commercial Executive, Dsseldorf
Representative of the Senior Staff of
Henkel AG & Co. KGaA
Born in 1963
Member from April 14, 2008
Supervisory Board of Henkel AG & Co. KGaA
156 Notes to the consolidated fnancial statements
Corporate management of Henkel AG & Co. KGaA
Henkel Annual Report 2011
Nominations Committee
Functions
The Nominations Committee prepares the resolutions of the Supervisory Board
on election proposals to be presented to the Annual General Meeting for the elec-
tion of members of the Supervisory Board (representatives of the shareholders).
Members
Dr. Simone Bagel-Trah, Chairwoman
Dr. Bernhard Walter
Johann-Christoph Frey
Audit Committee
Functions
The Audit Committee prepares the proceedings and resolutions of the Supervi-
sory Board relating to the approval of the annual financial statements and the
consolidated financial statements, and relating to ratification of the proposal to
be put before the Annual General Meeting regarding appointment of the audi-
tor. It also deals with accountancy, risk management and compliance issues.
Members
Dr. Bernhard Walter, Chairman
Prof. Dr. Theo Siegert, Vice-chairman
Dr. Simone Bagel-Trah
Birgit Helten-Kindlein
Michael Vassiliadis
Winfried Zander
Subcommittees of the Supervisory Board
157 Notes to the consolidated fnancial statements
Corporate management of Henkel AG & Co. KGaA
Henkel Annual Report 2011
Dr. rer. nat. Simone Bagel-Trah
Chairwoman,
Private Investor, Dsseldorf
Born in 1969
Member since April 18, 2005
Memberships:
Henkel AG & Co. KGaA (Chairwoman) 1
Henkel Management AG (Chairwoman) 1
Heraeus Holding GmbH 1
Dr. rer. pol. h.c. Christoph Henkel
Vice-chairman,
Managing Partner Canyon Equity LLC, London
Born in 1958
Member since May 27, 1991
Prof. Dr. oec. HSG Paul Achleitner
Member of the Executive Board of
Allianz SE, Munich
Born in 1956
Member since April 30, 2001
Memberships:
Bayer AG 1
RWE AG 1
Daimler AG 1
Allianz Group mandates: Allianz Global Investors AG 1
Allianz Investment Management SE (Chairman) 1
Boris Canessa
Private Investor, Dsseldorf
Born in 1963
Member since September 19, 2009
Memberships:
Wilhelm von Finck Deutsche Family Office AG 1
Stefan Hamelmann
Private Investor, Dsseldorf
Born in 1963
Member since May 3, 1999
Memberships:
Henkel Management AG (Vice-chairman) 1
Prof. Dr. rer. pol. Ulrich Lehner
Former Chairman of the Management Board
of Henkel KGaA, Dsseldorf
Born in 1946
Member since April 14, 2008
Memberships:
Deutsche Telekom AG (Chairman) 1
E.ON AG 1
Henkel Management AG 1
Porsche Automobil Holding SE 1
ThyssenKrupp AG 1
Dr. August Oetker KG 2
Novartis AG, Switzerland 2
Dr.-Ing. Dr.-Ing. E.h. Norbert Reithofer
(since April 11, 2011)
Chairman of the Management Board
of Bayerische Motoren Werke AG, Munich
Born in 1956
Member since April 11, 2011
Konstantin von Unger
Founding Partner, Blue Corporate Finance AG,
London
Born in 1966
Member since April 14, 2003
Memberships:
Ten Lifestyle Management Ltd.,
Great Britain 2
Karel Vuursteen
Former Chairman of the Executive Board
of Heineken N.V., Amsterdam
Born in 1941
Member since May 6, 2002
Memberships:
Akzo Nobel N.V. (Chairman), Netherlands 2
Heineken Holding N.V., Netherlands 2
Tom Tom N.V. (Chairman), Netherlands 2
Werner Wenning
Former Chairman of the Executive Board
of Bayer AG, Leverkusen
Born in 1946
Member since April 14, 2008
Memberships:
Deutsche Bank AG 1
E.ON AG (Chairman) 1
HDI V.a.G. 1
Talanx AG 1
Freudenberg & Co. KG 2
Shareholders Committee of Henkel AG & Co. KGaA
Finance Subcommittee
Functions
The Finance Subcommittee deals principally with financial matters, accounting
issues including the statutory year-end audit, taxation and accounting policy,
and risk management in the company.
Members
Dr. Christoph Henkel, Chairman
Stefan Hamelmann, Vice-chairman
Prof. Dr. Paul Achleitner
Prof. Dr. Ulrich Lehner
Dr. Norbert Reithofer (since April 11, 2011)
Human Resources Subcommittee
Functions
The Human Resources Subcommittee deals principally with personnel matters
relating to members of the Management Board, issues pertaining to human
resources strategy, and with remuneration.
Members
Dr. Simone Bagel-Trah, Chairwoman
Konstantin von Unger, Vice-chairman
Boris Canessa
Karel Vuursteen
Werner Wenning
Subcommittees of the Shareholders Committee
1 Membership in statutory supervisory and administrative boards in Germany.
2 Membership of comparable oversight bodies.
158 Notes to the consolidated fnancial statements
Corporate management of Henkel AG & Co. KGaA
Henkel Annual Report 2011
Kasper Rorsted
Chairman of the Management Board
Born in 1962
Member since April 1, 2005 3
Memberships:
Bertelsmann AG1
Danfoss A/S, Denmark 2
Jan-Dirk Auris
(since January 1, 2011)
Adhesive Technologies
Born in 1968
Member since January 1, 2011
Memberships:
Henkel Corporation (Chairman), USA 2
Kathrin Menges
(since October 1, 2011)
Human Resources
Born in 1964
Member since October 1, 2011
Memberships:
Henkel Central Eastern Europe GmbH, Austria 2
Henkel Norden AB, Sweden 2
Henkel of America Inc., USA 2
Henkel Norden Oy, Finland 2
Bruno Piacenza
(since January 1, 2011)
Laundry & Home Care
(since March 1, 2011)
Born in 1965
Member since January 1, 2011
Dr. rer. soc. oec. Friedrich Stara
(until February 28, 2011)
Laundry & Home Care
Born in 1949
Member from July 1, 2005 3
Memberships:
Wiener Stdtische Allgemeine Versicherung AG,
Austria 2
Dr. jur. Lothar Steinebach
Finance / Purchasing / IT / Legal
Born in 1948
Member since July 1, 2003 3
Memberships:
LSG Lufthansa Service Holding AG 1
Henkel Adhesives Middle East E.C., Bahrain 2
Henkel (China) Investment Co. Ltd., China 2
Henkel & Cie AG, Switzerland 2
Henkel Central Eastern Europe GmbH (Chairman),
Austria 2
Henkel Consumer Goods Inc. (Chairman), USA 2
Henkel Ltd., Great Britain 2
Henkel of America Inc. (Chairman), USA 2
Henkel Technologies Egypt SAE, Egypt 2
Trk Henkel Kimya Sanayi ve Ticaret AS (Chairman),
Turkey 2
Hans Van Bylen
Cosmetics/Toiletries
Born in 1961
Member since July 1, 2005 3
Memberships:
Henkel Belgium N.V., Belgium 2
Henkel Nederland BV, Netherlands 2
The Dial Corporation (Chairman), USA 2
Management Board of Henkel Management AG
*
Dr. rer. nat. Simone Bagel-Trah
Chairwoman,
Private Investor, Dsseldorf
Born in 1969
Member since February 15, 2008
Memberships:
Henkel AG & Co. KGaA (Chairwoman) 1
Henkel AG & Co. KGaA (Shareholders Committee,
Chairwoman) 2
Heraeus Holding GmbH 1
Stefan Hamelmann
Vice-chairman,
Private Investor, Dsseldorf
Born in 1963
Member since September 19, 2009
Memberships:
Henkel AG & Co. KGaA
(Shareholders Committee) 2
Prof. Dr. rer. pol. Ulrich Lehner
Former Chairman of the Management Board
of Henkel KGaA, Dsseldorf
Born in 1946
Member since February 15, 2008
Memberships:
Deutsche Telekom AG (Chairman) 1
E.ON AG 1
Porsche Automobil Holding SE 1
ThyssenKrupp AG 1
Henkel AG & Co. KGaA (Shareholders Committee) 2
Dr. August Oetker KG 2
Novartis AG, Switzerland 2
Supervisory Board of Henkel Management AG
*
* Personally Liable Partner of Henkel AG & Co. KGaA.
1 Membership in statutory supervisory and administrative boards in Germany.
2 Membership of comparable oversight bodies.
3 Including membership of the Management Board of Henkel KGaA.
159 Notes to the consolidated fnancial statements
Corporate management of Henkel AG & Co. KGaA
Henkel Annual Report 2011
Further information
Corporate Senior Vice Presidents
Further information
Hikaru Adachi
Aleksej Ananishnov
Giacomo Archi
Faruk Arig
Thomas Hans Jrg Auris
Dr. Kourosh Bahrami
Paul Berry
Cedric Berthod
Michael Biondolillo
Dr. Joachim Bolz
Oriol Bonaclocha
Guy Boone
Oliver Bossmann
Robert Bossuyt
Hanno Brenningmeyer
Daniel Brogan
Sergey Bykovskih
Angela Cackovich
Edward Capasso
Renata Casaro
Michelle Cheung
Adil Choudhry
Jrgen Convent
Susanne Cornelius
Matthias Czaja
Michael Czech
Dr. Nils Daecke
Paul De Bruecker
Ivan De Jonghe
Patrick De Meyer
Joseph DeBiase
Hermann Deitzer
Nicola delli Venneri
Raymond Dimuzio
Eric Dumez
Christoph Eibel
Wolfgang Eichstaedt
Simon Ellis
Steven Essick
Charles Evans
Ahmed Fahmy
Thomas Feldbrgge
Dr. Lars Feuerpeil
Dr. Peter Florenz
Dr. Thomas Frster
Timm Rainer Fries
Stephan Fsti-Molnr
Holger Gerdes
Roberto Gianetti
Dr. Karl W. Gladt
Michael Goder
Ralf Grauel
Peter Gnther
Peter Hassel
Roswitha Heiland
Lars Hennemann
Georg Hbenstreit
Dr. Alois Hoeger
Katharina Hhne
Dr. Dirk Holbach
Jos Hubin
Jeremy Hunter
Dr. Regina Jger
Dr. Dieter Kahling
Julio Muoz Kampff
George Kazantzis
Thomas Keller
Michael Kellner
Klaus Keutmann
Dr. Christian Kirsten
Patrick Kivits
Rolf Knrzer
Nuri Erdem Koak
Dr. Harald Kster
Luis Carlos Lacorte
Dr. Daniel Langer
Tom Linckens
Jasmin Manner
Alfredo Morales
Liam Murphy
Christoph Neufeldt
Sylvie Nicol
Heinz Nicolas
Joseph OBrien
Bjrk Ohlhorst
Dr. Uwe Over
Ian Parish
Jerry Perkins
Jeffrey Piccolomini
Dr. Torsten Pilz
Michael Rauch
Gary Raykowitz
Birgit Rechberger-Krammer
Wolfgang Reiter
Dr. Michael Reuter
Robert Risse
Dr. Michael Robl
David Rodriguez
Steffen Ruebke
Norman Sack
Jean-Baptiste Santoul
Dr. Arndt Scheidgen
Dr. Berthold Schreck
Marie-Eve Schrder
Prof. Dr. Hans-Willi Schroiff
Dr. Zuzana Schtz-Halkova
Dr. Johann Seif
Dr. Simone Siebeke
Katrin Steinbchel
Dr. Walter Sterzel
Klaus Strottmann
Monica Sun
Marco Swoboda
Csaba Szendrei
Makoto Tamaki
Dr. Boris Tasche
Agns Thee
Michael G. Todd
Thomas Tnnesmann
Johnny Tong
Gordon Tredgold
Amlie Vidal-Simi
Dr. Tilo Weiss
Dr. Jrgen Wichelhaus
Dr. Hans-Christof Wilk
Dorian Williams
Bing Wu
Active personnel,
as at January 2012.
Management Circle I Worldwide
Prof. Dr. Ramn Bacardit
Adhesive Technologies
Research
Georg Baratta-Dragono
Laundry & Home Care
Western Europe,
International Sales,
Customer Operations
Alain Bauwens
Laundry & Home Care
International Marketing Laundry Care,
New Business & Trends,
Latin America
Wolfgang Beynio
Corporate Functions
Finance/Controlling
Dr. Andreas Bruns
Corporate Functions
Infrastructure Services
Julian Colquitt
Adhesive Technologies
North America,
SBU General Industry
Bertrand Conquret
Corporate Functions
Purchasing
Ashraf El Afifi
Laundry & Home Care
Middle East/North Africa,
President Africa/Middle East
Jean Fayolle
Adhesive Technologies
SBU Packaging Industry
Enric Holzbacher
Adhesive Technologies
Africa/Middle East,
SBU Consumer & Building Industry
Pascal Houdayer
Laundry & Home Care
International Marketing Home Care,
Digital, Export and
Business Development, Asia
Dr. Stefan Huchler
Cosmetics/Toiletries
Supply Chain/Packaging
Dr. Joachim Jckle
Corporate Functions
Financial Operations
Patrick Kaminski
Cosmetics/Toiletries
Emerging Markets, Exports,
President Asia-Pacific
Paul Kirsch
Adhesive Technologies
SBU Transportation & Metal Industry
Carsten Knobel
Cosmetics/Toiletries
Financial Director,
Corporate Functions
Corporate Controlling
Dirk-Stephan Koedijk
Corporate Functions
Chief Compliance Officer
Norbert Koll
Cosmetics/Toiletries
Laundry & Home Care
North America
(since September 1, 2011)
Thomas Gerd Khn
Corporate Functions
Legal, IP, Insurance
Dr. Marcus Kuhnert
Laundry & Home Care
Financial Director
Tina Mller
Cosmetics/Toiletries
Chief Marketing Officer Retail
Prof. Dr. Thomas Mller-Kirschbaum
Laundry & Home Care
R&D, Technology, Supply Chain
Michael Olosky
Adhesive Technologies
Asia-Pacific
Dr. Matthias Schmidt
Adhesive Technologies
Financial Director
Jens-Martin Schwrzler
Cosmetics/Toiletries
Western Europe, Germany,
International Sales
(since February 1, 2011)
Stefan Sudhoff
Cosmetics/Toiletries
Schwarzkopf Professional
(since September 1, 2011)
Alan Syzdek
Adhesive Technologies
SBU Electronics Industry
Gnter Thumser
Laundry & Home Care
Eastern Europe
President Henkel
Central Eastern Europe
Carsten Tilger
Corporate Functions
Corporate Communications
Dr. Peter Wroblowski
Corporate Functions
Information Technology
Active personnel,
as at January 2012.
SBU = Strategic Business Unit
160 Henkel Annual Report 2011
Quarterly breakdown of key financials
Further information
in million euros
1st quarter 2nd quarter 3rd quarter 4th quarter Full year
2010 2011 2010 2011 2010 2011 2010 2011 2010 2011
Sales
Laundry & Home Care 1,049 1,072 1,086 1,076 1,123 1,110 1,061 1,046 4,319 4,304
Cosmetics/Toiletries 762 821 865 881 845 860 797 836 3,269 3,399
Adhesive Technologies 1,651 1,884 1,890 1,963 1,945 2,020 1,820 1,879 7,306 7,746
Corporate 50 46 49 33 49 38 51 39 199 156
Henkel Group 3,512 3,823 3,890 3,953 3,961 4,028 3,729 3,800 15,092 15,605
Cost of sales 1,829 2,073 2,074 2,138 2,106 2,215 2,069 2,111 8,078 8,538
Gross profit 1,683 1,750 1,816 1,815 1,855 1,813 1,660 1,689 7,014 7,067
Marketing, selling and distribution
expenses 1,011 1,057 1,108 1,063 1,090 1,041 1,048 971 4,257 4,132
Research and development expenses 95 103 103 105 95 103 98 99 391 410
Administrative expenses 185 187 202 196 185 209 178 193 750 785
Other operating charges and income 30 27 18 86 16 9 43 13 107 117
EBIT
Laundry & Home Care 151 100 137 157 139 125 115 129 542 511
Cosmetics/Toiletries 100 112 112 140 113 111 86 107 411 471
Adhesive Technologies 185 244 222 269 268 254 202 235 878 1,002
Corporate 15 27 50 29 19 38 24 32 108 127
Henkel Group 422 430 421 537 501 451 379 439 1,723 1,857
Investment result 1 1 1 1
Net interest 54 37 35 41 37 38 46 39 172 155
Financial result 54 37 35 41 37 37 45 40 171 155
Earnings before tax 368 393 386 496 464 414 334 399 1,552 1,702
Taxes on income 102 103 106 121 121 100 80 95 409 419
Net income 266 290 280 375 343 314 254 304 1,143 1,283
attributable to non-controlling
interests 7 5 7 9 6 7 5 9 25 30
attributable to shareholders
of Henkel AG & Co. KGaA 259 285 273 366 337 307 249 295 1,118 1,253
Earnings per
preferred share in euros 0.60 0.66 0.63 0.85 0.78 0.71 0.58 0.68 2.59 2.90
in million euros
1st quarter 2nd quarter 3rd quarter 4th quarter Full year
2010 2011 2010 2011 2010 2011 2010 2011 2010 2011
EBIT (as reported) 422 430 421 537 501 451 379 439 1,723 1,857
One-time gains 32 1 57 10 16 59 57
One-time charges 9 5 2 14 2
Restructuring charges 31 43 47 34 26 90 80 61 184 227
Adjusted EBIT 421 473 476 514 517 541 448 502 1,862 2,029
Adjusted earnings
per preferred share in euros 0.60 0.73 0.73 0.79 0.80 0.85 0.69 0.77 2.82 3.14
The quarterly figures are specific to the quarter to which they refer and have been rounded for commercial convenience.
161 Henkel Annual Report 2011
in million euros 2005 2006 2007 2008 6 2009 2010 2011
Sales 11,974 12,740 13,074 14,131 13,573 15,092 15,605
Operating profit (EBIT) 1,162 1,298 1,344 779 1,080 1,723 1,857
Earnings before tax 1,042 1,176 1,250 1,627 885 1,552 1,702
Net income 770 871 941 1,233 628 1,143 1,283
Net income attributable to shareholders
of Henkel AG & Co. KGaA 757 855 921 1,221 602 1,118 1,253
Earnings per preferred share (EPS) 1 in euros 1.77 1.99 2.14 2.83 1.40 2.59 2.90
Total assets 13,944 13,346 13,048 16,173 15,818 17,525 18,579
Non-current assets 2 9,065 8,664 7,931 11,360 11,162 11,590 11,848
Current assets 4,879 4,682 5,117 4,813 4,656 5,935 6,731
Liabilities 8,545 7,799 7,342 9,539 9,274 9,575 9,817
Operating debt coverage ratio 3 in % 39.9 48.4 71.6 45.1 41.8 71.4 83.2
Interest coverage ratio 3 7.1 9.4 9.4 4.8 8.7 12.8 14.6
Equity 5,399 5,547 5,706 6,535 6,544 7,950 8,762
Equity ratio in % 38.7 41.6 43.7 40.3 41.4 45.4 47.2
Net return on sales 4 in % 6.4 6.8 7.2 8.7 4.7 7.6 8.2
Return on equity 5 in % 17.7 16.1 17.0 21.6 9.6 17.5 16.1
Dividend per ordinary share in euros 0.43 0.48 0.51 0.51 0.51 0.70 0.78
7
Dividend per preferred share in euros 0.45 0.50 0.53 0.53 0.53 0.72 0.80
7
Total dividends 193 214 227 227 227 310 345
7
Capital expenditures (including financial assets) 1,119 897 548 4,074 415 260 443
Investment ratio as % of sales 9.3 7.0 4.2 28.8 3.0 1.7 2.8
Research and development expenses 324 340 350 429 396 391 410
Number of employees 8 (at December 31) 52,101 51,819 52,628 55,142 49,262 47,854 47,265
of which in Germany 10,224 9,981 9,820 9,747 8,830 8,580 8,322
of which abroad 41,877 41,838 42,808 45,395 40,432 39,274 38,943
1 Basis: share split (1:3) of June 18, 2007.
2 Prior-year figures adjusted (see Recognition and measurement methods on pages 108 and 109).
3 See page 63 for formula.
4 Net income divided by sales.
5 Net income divided by equity at the start of the year.
6 Adjusted following finalization of purchase price allocation relating to the acquisition of the National Starch businesses.
7 Proposed.
8 Basis: permanent employees excluding apprentices.
Multi-year summary
Further information 162 Henkel Annual Report 2011
Glossary
Adjusted EBIT
Earnings before interest and taxes adjusted for
exceptional items in the form of one-time charges,
one-time gains and restructuring charges.
Beta factor
Reflects the systemic risk (market risk) of a share
price compared to a certain index (stock market
average): in the case of a beta factor of 1.0, the
share price fluctuates to the same extent as the
index. If the factor is less than 1.0, this indicates
that the share price undergoes less fluctuation,
while a factor above 1.0 indicates that the share
price fluctuates more than the market average.
Capital employed
Interest-bearing capital invested in company assets
and operations.
Cash flows
Inflows and outflows of cash and cash equivalents
divided within the statement of cash flows into cash
flows from ordinary activities, from investing and
acquisition activities, and from financing activities.
Commercial papers
Short-term bearer bonds with a promise to pay,
issued for the purpose of generating short-term
debt capital.
Compliance
Acting in conformity with applicable regulations;
adherence to laws, rules, regulations and in-house
or corporate codes of conduct.
Compound annual growth rate
Year over year rate of growth, e.g. of an investment,
over a defined period.
Corporate governance
System of management and control, primarily within
listed companies. Describes the powers and authority
of corporate management, the extent to which these
need to be monitored and the extent to which struc-
tures should be put in place through which certain
interest/stakeholder groups may exert influence on
the corporate management.
Corporate Governance Code (Kodex)
The Kodex is intended to render the rules applicable
in Germany governing corporate management and
control transparent for national and international
investors, engendering trust and confidence in the
corporate management of German companies.
Credit default swap
Instrument used by Henkel to evaluate the credit
risks of banks.
Credit facility
Aggregate of all loan services available on call from
one or several banks as cover for an immediate
credit requirement.
DAX

Abbreviation for Deutscher Aktienindex, the German

share index. The DAX lists the stocks and shares
of Germanys 30 largest listed corporations. Henkels
preferred shares are quoted on the DAX. DAX is a
registered trademark of Deutsche Brse AG, the
German stock exchange company.
Declaration of conformity
Declaration made by the management/executive
board and supervisory board of a company accord-
ing to Section 161 of the German Stock Corporation
Act [AktG], confirming implementation of the rec-
ommendations of the Governmental Commission for
the German Corporate Governance Code (Kodex).
Deferred taxes
In accordance with International Accounting Stan-
dard (IAS) 12, deferred taxes are recognized with
respect to temporary differences between the state-
ment of financial statement valuation of an asset or
a liability and its tax base, unused tax losses and tax
credits.
Defined benefit plans
Post-employment benefit plans other than defined
contribution plans.
Defined contribution plans
Post-employment benefit plans under which an
entity pays fixed contributions into a separate entity
(a fund) and will have no legal or constructive obli-
gation to pay further contributions if the fund does
not hold sufficient assets to pay all employee ben-
efits relating to employee service in the current and
prior periods.
Derivative
Financial instrument, the value of which changes
in response to changes in an underlying asset or an
index, which will be settled at a future date and
which initially requires only a small or no invest-
ment.
Divestment
Disposal, sale or divestiture of an asset, operation
or business unit.
Earnings per share (EPS)
Metric indicating the income of a joint stock
corporation divided between the weighted average
number of its shares outstanding. The calculation
is performed in accordance with International
Accounting Standard (IAS) 33.
EBIT
Abbreviation for Earnings before Interest and Taxes.
Standard profit metric that enables the earning
power of the operating business activities of a com-
pany to be assessed independently of its financial
structure, enabling comparability between entities
where these are financed by varying levels of debt
capital.
EBITDA
Abbreviation for Earnings before Interest, Taxes,
Depreciation and Amortization.
Economic value added (EVA

)
The EVA concept reflects the net wealth generated
by a company over a certain period. A company
achieves positive EVA when the operating result
exceeds the weighted average cost of capital. The
WACC corresponds to the yield on capital employed
expected by the capital market. EVA is a registered
trademark of Stern Stewart & Co.
Equity ratio
Financial metric indicating the ratio of equity to
total capital. It expresses the share of total assets
financed out of equity (owners capital) rather than
debt capital (provided by lenders). Serves to assess
the financial stability and independence of a com-
pany.
Fair value
Amount at which an asset or a liability might be
exchanged or a debt paid in an arms length trans-
action between knowledgeable, willing parties.
Free cash flow
Cash flow actually available for acquisitions, divi-
dend payments and the reduction of borrowings.
Goodwill
Amount by which the total consideration for
a company or a business exceeds the netted sum of
the fair values of the individual, identifiable assets
and liabilities.
Gross margin
Indicates the percentage by which a companys sales
exceed cost of sales, i.e. the ratio of gross profit to
sales.
Gross profit
Difference between sales and cost of sales.
Hedge accounting
Method for accounting for hedging transactions
whereby the compensatory effect of changes in the
fair value of the hedging instrument (derivative)
and of the underlying asset or liability is recognized
in either the statement of income or the statement
of comprehensive income.
Hybrid bond
Equity-like corporate bond, usually with no specified
date of maturity, or with a very long maturity, char-
acterized by its subordination in the event of the
issuer becoming insolvent.
IAS/IFRS
Abbreviation for International Accounting Standards
and International Financial Reporting Standards
respectively. In Europe, capital market-oriented
companies are generally required to prepare consoli-
dated financial statements in accordance with the
International Financial Reporting Standards adopted
by the European Union. Standards issued before
2003 are known as IAS, those since that date are
IFRS.
Glossary 163 Henkel Annual Report 2011
KGaA
Abbreviation for Kommanditgesellschaft auf Aktien.
A KGaA is a company with a legal identity (legal
entity) in which at least one partner has unlimited
liability with respect to the companys creditors
(personally liable partner), while the liability for
such debts of the other partners participating in
the share-based capital stock is limited to their
share capital (limited shareholders).
Long-term incentive (LTI)
Bonus aligned to long-term financial performance.
Market capitalization
Market value of a company calculated from the
number of shares issued multiplied by their list
price as quoted on the stock exchange.
Net debt
Borrowings less cash and cash equivalents minus
any positive or plus any negative fair values of
hedging contracts covering those borrowings, pro-
vided that the underlying borrowings are themselves
subject to mark-to-market accounting.
Net working capital
Net balance of inventories, trade accounts receiv-
able, and trade accounts payable.
Non-controlling interests
Proportion of equity attributable to third parties in
subsidiaries included within the scope of consolida-
tion. Previously termed minority interests. Valued
on a proportional net asset basis. A pro-rata portion
of the net earnings of a corporation is due to share-
holders owning non- controlling interests.
Organic sales growth
Growth in revenues after adjusting for effects
arising from acquisitions, divestments and foreign
exchange differences i.e. top line growth
generated from within.
Payout ratio
Indicates what percentage of annual net income
(adjusted for exceptional items) is paid out in
dividends to shareholders, including non-controlling
interests.
Rating
Assessment of the creditworthiness of a company as
published by rating agencies.
Return on capital employed (ROCE)
Profitability metric reflecting the ratio of earnings
before interest and taxes (EBIT) to capital employed.
Return on sales (EBIT)
Operating business metric derived from the ratio of
EBIT to revenues.
Scope of consolidation
The scope of consolidation is the aggregate of
companies incorporated in the consolidated financial
statements.
Share of advertising/Share of market
A companys share of total advertising spend in
relation to its market share, specific to its active
markets.
Short-term incentive (STI)
Bonus aligned to short-term financial performance.
Supply chain
Encompasses purchasing, production, storage,
transport, customer services, requirements
planning, production scheduling and supply chain
management.
Swap
Term given to the exchange of capital amounts in
differing currencies (currency swap) or of different
interest obligations (interest swap) between two
entities.
Value at risk
Method, based on fair value, used to calculate the
maximum likely or potential future loss arising from
a portfolio.
Viral online marketing campaign
A form of internet marketing aimed at generating
digital WOM (word of mouth) via e-mail, social
networks and/or video networks in order to get a
product or brand quickly known. The term viral
alludes to the manner by which the information
spreads like a virus.
Volatility
Measure of fluctuation and variability in the prices
quoted for securities, in interest rates and in foreign
exchange rates.
Weighted average cost of capital (WACC)
Average return on capital, calculated on the basis
of a weighted average of the cost of debt and equity.
WACC represents the minimum return expected of
a company by its lenders for financing its assets.
Glossary 164 Henkel Annual Report 2011
Credits
Published by:
Henkel AG & Co. KGaA
40191 Dsseldorf, Germany
Phone: +49 (0)211-797-0
2012 Henkel AG & Co. KGaA
Edited by:
Corporate Communications, Investor Relations,
Corporate Accounting and Reporting
Coordination: Constance Spitzer,
Jens Bruno Wilhelm, Wolfgang Zengerling
English translation: Paul Knighton, Cambridge
Design and production:
mpm Corporate Communication Solutions, Mainz
Photographs: Claudia Kempf, Rdiger Nehmzow,
Alberto Venegas, Gerhard Weinkirn; Henkel
Pre-print proofing: Thomas Krause, Krefeld
Printed by: Druckpartner, Essen
Date of publication of this Report:
March 8, 2012
Corporate Communications
Phone: +49 (0)211-797-2606
Fax: +49 (0)211-798-2484
E-mail: [email protected]
Investor Relations
Phone: +49 (0)211-797-3937
Fax: +49 (0)211-798-2863
E-mail: [email protected]
PR no.: 03 12 5,000
ISSN: 0724-4738
ISBN: 978-3-941517-33-2
The Annual Report is printed on PROFIsilkFSC from Sappi. The paper is made from
pulp bleached without chlorine. It consists of wood fibers originating from sustain-
ably managed forests and certified according to the rules of the Forest Stewardship
Council (FSC). The printing inks contain no heavy metals. This publication was cover-
finished and bound with these Henkel products: Cellophaning with Adhesin laminat-
ing adhesive, UV spot coating with Miracure UV coating, bound so as to be suitable
for recycling, using Purmelt MicroEmission and Technomelt Ultra for the highest
occupational health and safety standards.
All product names are registered trademarks of Henkel AG & Co. KGaA, Dsseldorf, or
its affiliated companies.
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 formu-
lations. 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 the for-
ward-looking statements. Many of these factors are outside Henkels control and can-
not 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.
www.henkel.com
Financial calendar
Annual General Meeting
Henkel AG & Co. KGaA 2012:
Monday, April 16, 2012
Publication of Report
for the First Quarter 2012:
Wednesday, May 9, 2012
Publication of Report
for the Second Quarter / Half Year 2012:
Wednesday, August 1, 2012
Publication of Report
for the Third Quarter / Nine Months 2012:
Friday, November 16, 2012
Publication of Report
for Fiscal 2012:
Thursday, February 28, 2013
Annual General Meeting
Henkel AG & Co. KGaA 2013:
Monday, April 15, 2013
Up-to-date facts and figures on Henkel also
available on the internet:
www.henkel.com/sustainabilityreport www.henkel.com/annualreport
The Henkel Corporate Report app:
Henkel in social media:
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Henkel AG & Co. KGaA
40191 Dsseldorf, Germany
Phone: +49 (0)211-797-0
www.henkel.com