Outlook for the Henkel Group

We expect the Henkel Group to generate organic sales growth of between 3 and 5 percent in fiscal year 2013. Our expectation is that each business sector generates organic sales growth within this range.

We base this prediction on our strong competitive position, which we have consolidated and further extended in recent years through our innovative strength, strong brands, leading market positions and quality of our portfolio.

In recent years we have introduced a number of measures that have had a positive effect on our cost structure. Also in this year, we intend to continue adapting our structures to constantly changing market conditions and to continue our strict cost discipline, especially in administration. By optimizing and standardizing our processes and continuing to expand our shared services, we can pool activities and thus further improve our own efficiency while at the same time enhancing the quality of our customer service. The optimization of our production and logistics networks will, moreover, help to improve our cost structures.

These factors, together with the expected increase in sales, will have a positive effect on our earnings performance. Compared to the figures for 2012, we expect our adjusted return on sales (EBIT) to increase to around 14.5 percent, and that all business sectors will contribute to this improvement. We expect adjusted earnings per preferred share to increase by around 10 percent.

We also expect the following developments in 2013:

• Moderate increase in the prices for raw materials, packaging and purchased goods and services,
• Restructuring charges of around 125 million euros.
• Investments in property, plant and equipment of around 500 million euros.

Dividends
Based on the anticipated increase in earnings, we expect a further increase in the dividend paid for fiscal year 2013.

Capital expenditures
We are planning to increase our investments in property, plant and equipment to around 500 million euros in fiscal year 2013. In keeping with our growth strategy, we will allocate the largest share of our budget for the first time to expanding our business in emerging markets.

Considerable investments are planned in our Laundry & Home Care and Beauty Care business sectors for optimizing and expanding production in the Africa/Middle East, Latin America, and Eastern Europe regions. In our Adhesive Tech- nologies business sector, the focus in 2013 will be on further expanding our capacities for products for the construction industry in Eastern Europe to enable us to expand in new regional markets. Investment activity in the emerging markets of Asia-Pacific will focus on further consolidation of our production sites. In addition, investments in IT infrastructure will contribute substantially to optimizing our processes.

Net debt, financing and acquisitions
We plan to reduce our net debt to zero in fiscal year 2013 and to convert it into a net asset. In doing so, we will continue to support our financial flexibility by maintaining adequate holdings of cash and credit lines for securing our commercial paper program.

When assessing potential acquisitions, we will continue to endeavor not to jeopardize our target ratings of “A flat” (Standard & Poor’s) and “A2” (Moody’s) over the long term.

Post-2013 outlook

We announced our new strategy and financial targets for 2016 in November 2012. We are confident that, by rigorously implementing our strategic priorities, we will be able to continue our growth trend in sales and profits in 2014. We plan to advance cash flow from operating activities in line with sales. Capital expenditures are scheduled to remain high. Net debt development will be influenced by our acquisition activity. We will publish specific financial targets for 2014 in our 2013 annual report.