share. This equals a payout ratio of 43.7 percent, which is above the target range of 30 to 40 percent, reflecting the 
special nature of the burdens on earnings caused by the COVID-19 pandemic. This payment is possible not least thanks to 
the strong financial base and low net financial debt of the Henkel Group. Going forward Henkel's dividend policy 
remains unchanged. 
Business unit performance in fiscal 2020 
In fiscal 2020, sales in the Adhesive Technologies business unit were nominally 
-8.2 percent below prior-year level, reaching 8,684 million euros. Organically, sales development was -4.2 percent. The 
first half of the year in particular was strongly impacted by the COVID-19 pandemic. However, the second half of the 
year saw a recovery in demand across all business segments and regions. Adjusted operating profit reached 1,320 million 
euros (Previous year: 1,712 million euros). At 15.2 percent, adjusted return on sales was below the level of 2019. The 
margin decline was in particular due to the significantly lower sales volume as a result of the pandemic. 
In the Beauty Care business unit, sales in fiscal 2020 showed an organic development of 
-2.8 percent. Nominally, sales were -3.2 percent below prior-year level, reaching 3,752 million euros. The development 
is particularly due to the negative impacts of the COVID-19 pandemic on the Hair Salon business while the Retail 
business achieved an overall good organic sales development. Adjusted operating profit reached 377 million euros 
(Previous year: 519 million euros). Adjusted return on sales reached 10.0 percent, impacted by the declining sales 
volume in the Hair Salon business as well as higher investments in marketing and advertising as well as digital and IT. 
The Laundry & Home Care business unit generated organic sales growth of 5.6 percent in fiscal 2020. Nominally, sales 
increased by 0.7 percent to 6,704 million euros. Adjusted operating profit amounted to 1,004 million euros. (Previous 
year: 1,096 million euros). At 15.0 percent, adjusted return on sales was below the level of 2019, especially due to 
the higher investments in marketing and advertising as well as digital and IT. 
"Purposeful Growth" agenda: Strong momentum 
At the beginning of March 2020, Henkel presented the company's growth agenda for the coming years which focuses on: 
shaping a winning portfolio, strengthening competitive edge, particularly in the areas of innovation, sustainability 
and digitalization, establishing future-ready operating models as well as creating a strong and collaborative corporate 
culture. "This strategic framework will help us to win the 20s for Henkel with a clear focus on purposeful growth. 
Despite our focus on crisis management in 2020, we were able to launch and start the implementation of our growth 
agenda. We are fully committed to driving further progress in 2021 and the following years," Carsten Knobel said. 
A key element of Henkel's future direction is an active portfolio management. Henkel has identified brands and 
categories with a total sales volume of more than one billion euros, predominantly in its consumer businesses, of which 
around 50 percent are marked to be divested or discontinued by 2021. The remaining brands and businesses are expected 
to show sustainable performance improvements. In 2020, already 60 percent of the revenue base of these brands and 
businesses delivered improved topline momentum. 
Despite the market uncertainties in 2020, Henkel already signed agreements to sell, completed the sale or discontinued 
businesses with an annual sales volume of more than 100 million euros. In the context of Henkel's active portfolio 
management, charges of about 300 million euros were booked in 2020, due to a non-cash impairment loss on businesses to 
be sold or discontinued. 
At the same time, Henkel strengthened its portfolio through M&A, leveraging its strong balance sheet. In 2020, Henkel 
agreed and closed two acquisitions with a combined purchase price of around 500 million euros in its Beauty Care and 
Adhesive Technologies businesses. 
To further strengthen its competitive edge, Henkel is accelerating impactful innovations, boosting sustainability as a 
differentiating factor, and driving the digital transformation of the company. 
In 2020, Henkel increased investments by around 200 million euros compared to 2019 
(350 million euros compared to 2018) to strengthen its brands, technologies, and innovations, as well as to accelerate 
the digital transformation of the company. The investments are showing first tangible results: Henkel was able to 
increase market shares in many key markets and categories. The company also further accelerated its innovation 
processes and the launches of new products. This helped, for example, to respond quickly to the strong surge in demand 
for hygiene, disinfecting and cleaning products with "fast-track innovations". The focus was on key trends such as 
hygiene, more natural and sustainable products, and higher convenience. 
To accelerate innovation and develop new business models, the consumer business units Beauty Care and Laundry & Home 
Care have established internal incubator teams, combining agile work approaches with the scale and expertise of a 
global company: The "Fritz Beauty Lab", inspired by the company's founder Fritz Henkel, aims to identify areas with 
growth potential for existing brands, or white spots to create completely new brands. The Laundry & Home Care business 
also launched a new sustainability idea factory under the Love Nature umbrella brand, focusing on sustainable solutions 
in laundry and home care categories. In Adhesive Technologies, Henkel continued its investments in its state-of-the-art 
innovation center in Düsseldorf. The center, representing a total investment of 130 million euros, is nearing 
completion, and will become operational in the first half of 2021. 
Sustainability is one of Henkel's great strengths. The company has a leading role that is regularly confirmed in 
ratings and rankings. Building on this strong track record, Henkel aims to leverage sustainability as a competitive 
differentiator. In 2020, Henkel successfully continued to integrate sustainability in all its business activities and 
to drive progress along the entire value chain. Henkel launched new products addressing the rising consumer 
expectations toward natural and sustainable products, such as solid bars under the Beauty Care brands Nature Box and 
N.A.E. In the Laundry & Home Care business the Pro Nature product range was expanded and Love Nature, a cross-category 
sustainable brand, was successfully introduced. In Adhesive Technologies, a new technology under the Loctite brand was 
developed. It allows the replacement of polyethylene with paper for use in food and non-food packaging. Beyond 
innovations for more sustainable products, Henkel entered into a virtual power purchasing contract for energy from 
renewable sources, which will cover the energy demand of all Henkel sites in North America. And Henkel was the first 
company to issue a plastic waste reduction bond with a volume of around 100 million euros to finance measures to reduce 
plastic waste across the value chain. The bond underlines Henkel's commitment to foster a circular economy and reduce 
plastic waste as well as to Sustainable Finance. 
Henkel is pursuing the goal of tripling the value of its operations, products and services in relation to its 
environmental footprint between 2010 and 2030. On the way to this long-term goal Henkel had defined medium-term targets 
for 2020. The company was able to achieve the set targets in most dimensions. 
Overall, Henkel improved its resource efficiency in 2020 by 64 percent compared to 2010. 
Next to innovation and sustainability, another key driver in strengthening Henkel's competitive edge is to transform 
digital into a customer and consumer value creator across all business units. To enable and accelerate this process, 
Henkel created a new unit in 2020, Henkel dx, combining Digital, Business Process Management and IT expertise in one 
global organization. Henkel dx has opened its first innovation hub in Berlin and plans to expand its global network 
with more hubs in the future. In the course of 2020, the share of sales across digital channels increased 
substantially, with all business units benefiting. Overall, digital sales at Henkel increased by about 20 percent, with 
the consumer businesses combined delivering growth of more than 60 percent. For the Group, the digital share in overall 
sales further increased and climbed to around 15 percent. 
Lean, fast and future-ready operating models are important elements of Henkel's strategic framework. To ensure this and 
to improve competitiveness and efficiency, the company continuously adapts and reshapes processes and structures across 
the entire company. In doing so, Henkel aspires to enable new business models, to step up customer and consumer 
proximity with faster decision-making, and to further increase efficiency. Through the introduction of new 
organizational structures in the Adhesive Technologies business unit in 2020, Henkel was able to address and serve 
specific customer segments and markets even better. In the Beauty Care and Laundry & Home Care business units, Henkel 
implemented further organizational changes to enable a stronger regional focus and increase customer and consumer 
proximity. 
Further developing Henkel's corporate culture and accelerating the cultural transformation is at the heart of Henkel's 
"Purposeful Growth" agenda. The company aims to foster a collaborative culture with empowered people and with its 
leadership commitments at the core. In 2020, Henkel launched a range of measures to advance a culture of collaboration 
and empowerment, upskill employees for future capabilities and enable its people to grow and develop - personally and 
professionally. Henkel conducted a global Organizational Health Survey to identify strengths and areas for improvement,

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March 04, 2021 01:33 ET (06:33 GMT)