EQS-News: Henkel delivers good organic sales growth and very strong earnings improvement in first half of 2024

Strong half-year results reinforce successful implementation of growth strategy

Henkel delivers good organic sales growth and very strong earnings improvement in first half of 2024

Group sales grow organically by 2.9 percent in the first half of the year to around
10.8 billion euros (nominal -1.0 percent) – growth in both business units
Operating profit (EBIT)*: very strong increase to 1,610 million euros (+28.4 percent)
EBIT margin* also improves very strongly to 14.9 percent (+340 basis points)
Earnings per preferred share (EPS)* increase by around a third to 2.78 euros,
+32.9 percent at constant exchange rates
Very good free cash flow of around 800 million euros
Further progress in implementing strategic growth agenda
Earnings outlook for fiscal 2024 already raised in mid-July:

Organic sales growth: 2.5 to 4.5 percent (unchanged)
Adjusted return on sales: 13.5 to 14.5 percent (previously: 13.0 to 14.0 percent)
Adjusted earnings per preferred share (EPS): increase in the range of +20.0 to +30.0 percent at constant exchange rates (previously: +15.0 to +25.0 percent)

Mid- to long-term financial ambition already to be reached mid-term

Düsseldorf – In the first half of 2024, Henkel recorded good organic sales growth and a very strong increase in earnings in a persistently challenging economic environment. The company thus
successfully continued its profitable growth path. “Overall, we achieved a very good business performance in the first half of the year. This demonstrates that we are on the right track with our
strategy and that our focus on purposeful growth is delivering tangible success,” said Henkel CEO Carsten Knobel.

“In the first half of the year, organic sales growth and the improvement in earnings were driven by both business units. The merger of our consumer businesses is successful and the implementation
of our strategic measures and initiatives has a very positive impact on sales, gross margin and earnings development. Also in our adhesives business where we have aligned the organizational
structure even more closely to our customers, the changes we have initiated are significantly contributing to Henkel’s positive development. Our free cash flow was also strong, exceeding the
already high level from the first half of 2023. All of this allows us to further make targeted investments in our business and our future: in brands, technologies and innovations. In addition, we
are driving important initiatives in the areas of sustainability and digitalization to further enhance our competitive position,” Carsten Knobel added.

“Following the strong business performance in the first half of the year, we are confident about the remainder of the year and therefore raised our earnings outlook for fiscal 2024 in mid-July. We
are delivering what we have committed to, and we are on the right track for further profitable growth. This is also reflected in the adjustment of our mid- to long-term financial ambition: we are
confident that we will achieve the sales and earnings targets now already mid-term.”

Outlook for fiscal 2024

The outlook for the current financial year, which was updated on May 3, 2024, was raised on July 17 regarding the earnings expectation. This is mainly due to higher profit expectations in the
Consumer Brands business unit, while at the same time, the company is increasing investments in marketing to support innovations. The outlook continues to consider the expectation of higher prices
for direct materials in the second half of the year. Henkel now expects the following sales and earnings development for fiscal 2024:

At Group level, Henkel continues to expect organic sales growth of 2.5 to 4.5 percent in fiscal 2024. For the Adhesive Technologies business unit, organic sales growth is still expected to
be in the range of 2.0 to 4.0 percent, and for the Consumer Brands business unit between 3.0 to 5.0 percent. Adjusted return on sales (EBIT margin) at Group level is now expected to be in
the range of 13.5 to 14.5 percent (previously: 13.0 to 14.0 percent). For the Adhesive Technologies business unit, adjusted return on sales is still expected in the range of 16.0 and 17.0 percent.
For the Consumer Brands business unit, adjusted return on sales is now expected between of 13.0 and 14.0 percent (previously: 12.0 to 13.0 percent). For the development of adjusted earnings per
preferred share (EPS) at constant exchange rates, Henkel now expects an increase in the range of +20.0 to +30.0 percent (previously: +15.0 to +25.0 percent).

Sales and earnings development in the first half of 2024

In a persistently challenging market environment, Henkel achieved Group sales of 10,813 million euros in the first half of 2024, equivalent to a nominal development of -1.0 percent. After
nominal sales development in the previous quarters was negatively impacted by the divestment of the business activities in Russia, Henkel was now able to achieve nominal sales growth again in the
second quarter of 2024 (Q2: 5,496 million euros, +3.4 percent). Foreign exchange effects reduced sales by -1.9 percent (Q2: +0.2 percent). Acquisitions and divestments reduced sales by -2.1 percent
(Q2: +0.3 percent). While the divestment of our business activities in Russia in April 2023 had a negative impact, the recently closed acquisitions in both business units – Seal for Life and Vidal
Sassoon – contributed positively. In organic terms – i.e. adjusted for foreign exchange and acquisitions/divestments – Henkel achieved good sales growth of 2.9 percent (Q2: +2.8 percent).

The Adhesive Technologies business unit generated good organic sales growth of 2.0 percent in the first half year of 2024, driven by the Mobility & Electronics, and the Craftsmen,
Construction & Professional business areas. (Q2: +2.6 percent). The Consumer Brands business unit achieved very strong organic sales growth of 4.3 percent, to which all business areas
contributed (Q2: +3.3 percent). Sales growth in both business units was driven by a positive price development. At Group level, volume development, which continues to be impacted by the portfolio
measures in Consumer Brands showed a slightly positive trend – both compared to the first half of 2023 and a sequential improvement compared to the first quarter of 2024.

In the first half of the year, organic sales growth in the Europe region amounted to 1.8 percent (Q2: +1.2 percent). In the IMEA region, Henkel achieved significant double-digit
organic sales growth of 21.0 percent (Q2: +13.7 percent). The North America region recorded organic sales growth of -1.6 percent (Q2: -0.2 percent). The Latin America region recorded
a flat organic sales development of 0.0 percent (Q2: +2.7 percent). The Asia/Pacific region achieved organic sales growth of 5.5 percent (Q2: +7.5 percent).

Adjusted operating profit (adjusted EBIT) increased significantly from 1,254 million euros in the first half of 2023 by 28.4 percent to 1,610 million euros, in particular as a result
of the strong increase in gross margin.

Adjusted return on sales (adjusted EBIT margin) of the Henkel Group consequently recorded a very strong increase by 340 basis points from 11.5 percent to 14.9 percent.

Earnings per preferred share increased significantly to 2.46 euros (previous year: 1.35 euros). Adjusted earnings per preferred share grew by 30.5 percent to 2.78 euros compared to 2.13
euros in the prior-year period. This substantial increase was predominantly driven by the increase in adjusted operating profit. At constant exchange rates, adjusted earnings per preferred share
increased by a clear double-digit 32.9 percent.

Net working capital decreased by 0.9 percentage points compared to the prior-year period, from 6.1 percent to 5.2 percent.

Free cash flow reached 772 million euros and thus was higher than in the first half of 2023 (749 million euros). This is mainly due to the higher cash flow from operating activities.

At June 30, 2024, the net financial position amounted to -1,440 million euros (December 31, 2023: 12 million euros).

Development of the business units in the first half of 2024

The Adhesive Technologies business unit generated sales of 5,475 million euros in the first half of 2024, which is nominally on par with the prior-year period (Q2: 2,798 million
euros). Organically, sales increased by 2.0 percent (Q2: 2.6 percent). This development was driven by a price component of +0.2 percent and volume growth of 1.8 percent. Thus, the business
unit showed a sequential improvement in volume development in the second quarter compared to the first quarter of 2024.

The Mobility & Electronics business area achieved a very strong organic sales increase of 5.3 percent (Q2: +6.8 percent). This growth was supported by all businesses and in particular by
the Electronics business, which delivered a double-digit organic sales increase against a weak prior-year period. The Packaging & Consumer Goods business area recorded an organic sales
development of -0.6 percent (Q2: -1.0 percent). In the Packaging business, an increase in volume offset the negative price development. Overall, the Consumer Goods business recorded a slight
decline compared to a strong prior-year period. The Craftsmen, Construction & Professional business area generated organic sales growth of 1.0 percent (Q2: +1.7 percent), with the
Construction and Consumers & Craftsmen businesses contributing. The General Manufacturing & Maintenance business, on the other hand, recorded a slight decline as a result of softer demand.

Adjusted operating profit rose by 21.8 percent to 933 million euros in the first half of 2024, compared to 766 million euros in the same period of the previous year. Adjusted return on
sales increased significantly by 310 basis points to 17.0 percent. Lower raw material costs, positive mix effects and supply chain efficiencies had a particularly positive impact on gross
margin.

The Consumer Brands business unit generated sales of 5,266 million euros in the first six months of 2024 (Q2: 2,662 million euros). This corresponds to a nominal development of -1.8
percent. Organically, sales increased by 4.3 percent (Q2: +3.3 percent). This development was driven by a price component of +5.1 percent. Primarily due to the ongoing portfolio optimization
measures, volumes decreased slightly by -0.9 percent. However, volume development showed a sequential improvement in the second quarter compared to the first quarter of 2024.

The Laundry & Home Care business area generated strong organic sales growth of 3.1 percent (Q2: +1.5 percent). The Laundry Care business achieved a positive organic sales increase,
predominantly driven by a double-digit increase in the Fabric Care category and good sales growth in the Fabric Cleaning category. Significant growth in the Home Care business was primarily driven
by double-digit sales increases in the Dishwashing and Toilet Care categories. The Hair business area achieved significant organic sales growth of 7.3 percent in the first six months of the
year (Q2: +7.7 percent). The Consumer business posted double-digit growth, mainly driven by the Hair Styling category, which also recorded double-digit organic sales increases in the same period of
the previous years. The Professional business achieved strong organic sales growth. The Other Consumer Businesses business area recorded good organic sales growth of 2.3 percent (Q2: +0.7
percent).

Adjusted operating profit amounted to 753 million euros and therefore rose by 34.8 percent compared to the prior-year period. This increase was driven by selling price developments and
savings generated from the creation of the integrated Consumer Brands business unit, as well as portfolio optimization and valorization measures. Adjusted return on sales increased
significantly by 390 basis points to 14.3 percent.

Growth agenda implementation consistently driven forward

In the first half of 2024, Henkel continued to consistently drive forward the strategic priorities of its purposeful growth agenda and achieved good progress in all areas.

The merger of the former Laundry & Home Care and Beauty Care businesses into the Consumer Brands business unit, which is executed in two phases, was successfully driven forward in
the first half of 2024. Henkel achieved further savings in the process. Overall, the company is targeting savings of 525 million euros from both phases of the integration. These are to be realized
in full swing by the end of 2026.

As part of the second phase of the integration, which focuses on supply chain excellence in the Consumer Brands business unit, the so-called 1-1-1 principle has been introduced already in close to
30 countries. This relates to driving forward commercial integration with optimized logistics processes in line with the “one face to the customer” principle. This means: one order, one delivery,
one invoice. In addition, the production and logistics network was further optimized and consolidated, for example in the USA and Eastern European countries in the Laundry & Home Care business.
Overall, these measures have already resulted in an overall reduction in complexity of around 16 percent.

Henkel has also further focused its Consumer Brands portfolio. Recently, the focus was on the Laundry & Home Care business in North America.

To further strengthen its competitiveness, Henkel focuses on strong innovations in attractive business areas. These again contributed to growth in both business units in the first half of
2024. In Adhesive Technologies, Henkel serves the trend to more integrated automotive components, which drives demand for innovative adhesive solutions. One example is the integration of
electronic components which come with high benefit for cars irrespective of the power train. At the same time, it is a highly complex field with very specific requirements with regard to thermal
management of adhesive solutions applied. Henkel is one of the few players who recognized the trend early on and collaborated with leading OEMs and key tier suppliers in developing innovative
solutions. Market growth potential of more than 20 percent is expected for such integrated components over the next few years. In the Consumer Brands business unit, the very strong organic
sales growth of more than 7 percent in Hair was driven in particular by the Schwarzkopf umbrella brand – both in the Consumer as well as in the Professional business. This business area has now
recorded four consecutive quarters of positive volume development. At the same time, market share increased by 40 basis points in both Hair Styling and Coloration. In addition, the relaunch of
Gliss with new formulas for 100% stronger hair resulted in double-digit organic sales growth for the brand in the first half of the year.

“Overall, we are very pleased with Henkel’s successful business performance in the first half of the year and proud of the good progress we have made in implementing our strategic growth agenda,”
said Carsten Knobel. “We are delivering what we have committed to and what we have announced. And we are making tangible progress: in our businesses, in sales and in earnings. We are changing
Henkel with bold decisions for a successful future. And with a clear strategy, we are on the right track for further profitable growth.”

* Adjusted for one-time expenses and income, and for restructuring expenses.

About Henkel

With its brands, innovations and technologies, Henkel holds leading market positions worldwide in the industrial and consumer businesses. The business unit Adhesive Technologies is the global
leader in the market for adhesives, sealants and functional coatings. With Consumer Brands, the company holds leading positions especially in laundry & home care and hair in many markets and
categories around the world. The company’s three strongest brands are Loctite, Persil and Schwarzkopf. In fiscal 2023, Henkel reported sales of more than 21.5 billion euros and adjusted operating
profit of around 2.6 billion euros. Henkel’s preferred shares are listed in the German stock index DAX. Sustainability has a long tradition at Henkel, and the company has a clear sustainability
strategy with specific targets. Henkel was founded in 1876 and today employs a diverse team of about 48,000 people worldwide – united by a strong corporate culture, shared values and a common
purpose: “Pioneers at heart for the good of generations.” More information at
www.henkel.com

This document contains statements referring to future business development, financial performance and other events or developments of future relevance for Henkel that may constitute forward-looking
statements. Statements with respect to the future are characterized by the use of words such as expect, intend, plan, anticipate, believe, estimate, and similar terms. Such statements are based on
current estimates and assumptions made by the corporate management of Henkel AG & Co. KGaA. These statements are not to be understood as in any way guaranteeing that those expectations will
turn out to be accurate. Future performance and 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 (both positively and negatively) from the forward-looking statements. Many of these factors are outside Henkel’s control and cannot be accurately estimated in advance, such as the
future economic environment and the actions of competitors and others involved in the marketplace. Henkel neither plans nor undertakes to update forward-looking statements.

This document includes supplemental financial indicators that are not clearly defined in the applicable financial reporting framework and that are or may be alternative performance measures. These
supplemental financial indicators should not be viewed in isolation or as alternatives to measures of Henkel’s net assets and financial position or results of operations as presented in accordance
with the applicable financial reporting framework in its Consolidated Financial Statements. Other companies that report or describe similarly titled alternative performance measures may calculate
them differently.

This document has been issued for information purposes only and is not intended to constitute an investment advice or an offer to sell, or a solicitation of an offer to buy, any securities.

Contact

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Phone: +49 211 797 – 2606
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Wulf Klüppelholz
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Hanna Philipps
Phone: +49 211 797 – 3626
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Investors & Analysts

Leslie Iltgen
Phone: +49 211 797 – 1631
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Dr. Dennis Starke
Phone: +49 211 797 – 5601
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Jennifer Ott
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Email: [email protected]

Dr. Sascha Kieback
Phone: +49 211 797 – 1810
Email: [email protected]

www.henkel.com/press

www.henkel.com/ir

13.08.2024 CET/CEST Dissemination of a Corporate News, transmitted by EQS News – a service of EQS Group AG.
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Language:	English
Company:	Henkel AG & Co. KGaA
	Henkel Str. 67
	40191 Düsseldorf
	Germany
Phone:	+49 (0)211 797-0
Fax:	+49 (0)211 798-4008
E-mail:	[email protected]
Internet:	www.henkel.de
ISIN:	DE0006048432, DE0006048408
WKN:	604843, 604840
Indices:	DAX
Listed:	Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated Unofficial Market in Tradegate Exchange
EQS News ID:	1966333