Henkel Integrative Case: Part I
Who Is Henkel?
Company Introduction
Founded in 1876, Henkel AG & Co. KgaA is a 13.6 billion German-based consumer products
company. The company is comprised of three primary businesses. The Laundry and Home Care
segment (maker of Persil, Purex, Pril) is active in the marketing, selling, and distribution of
branded products for the laundry and home care markets. The Cosmetics/Toiletries segment
(Schwarzkopf, Fa, Dial) is active in the branded consumer goods segments of hair cosmetics,
body care, skin care, and oral care. The Adhesives segment (maker of Loctite, Ceresit, Teroson)
produces industrial-strength adhesives to companies around the world. Over the past five years
the company has grown considerably, but, like most companies, faced difficulties during the
financial crisis of 2008 and 2009.
Instructions
Before analyzing and valuing Henkel, it is important to understand who the company is, what
and where it sells, and how the company finances its operations. For this assignment, please
construct a short presentation that introduces the class to Henkel. Assume the audience will be
comprised of investors who are unfamiliar with the company. Please focus on data found in the
annual report. For this assignment, do not rely on other resources.
For your presentations, please construct the document in three sections:
1. In the first section, provide a financial overview (charts) and commentary (text) about
company. Use a mixture of five-year or most recent year analysis of revenue, operating
profit (as defined by Henkel without adjustments), growth, and operating margin. How
are revenue and operating profit distributed by segment and geography? No advanced
adjustments or analysis is necessary.
2. In the second section, provide a financial overview and commentary by business
segment. Specifically, what can you learn from the annual report about each segment?
Information disclosed in the annual report about business segments is typically more
insightful about the company’s product markets than the notes are.
3. In the third section, provide an assessment of the company’s capital structure (i.e., how
the company is financed). From an equity perspective, how many classes of shares does
Henkel have and what are the differences between share classes? What was the year-end
closing price and resulting market capitalization (share price times number of shares)?
How much debt does the company have? What is the breakout of debt by short-term and
long-term borrowings? How has the capital structure changed over the past year?
Helpful Page Locations, Henkel 2009 Annual Report
Five-year summary data can be found on page 145.
Segment information can be found on pages 59–70.
Equity information can be found on pages 16–18.
Debt information can be found in notes 30 and 35.