Annual Report 2013

Economic report

R&D expenditures1
in million euros
2009
396
2010
391
2011
410
2012
408
2013
415
1Includes restructuring charges of:
13 million euros (2009),
8 million euros (2010),
14 million euros (2011),
2 million euros (2012),
1 million euros (2013).
R&D expenditures by business unit

Fritz Henkel Award for
Innovation 2013

Research and development

Expenditures by the Henkel Group for research and development in the reporting period amounted to
415 million euros (adjusted for restructuring expenses: 414 million euros) compared to 408 million euros (adjusted: 406 million euros) in 2012. As a percentage of sales, we spent 2.6 percent (adjusted: 2.6 percent) on research and development (2012: 2.5 percent, adjusted: 2.6 percent). Successful implementation of our Open Innovation strategy, project outsourcing, and the relocation of resources in the direction of emerging markets led to improved efficiency and demonstrated our ongoing focus on innovation. Furthermore, we enhanced our innovation capability in the emerging markets by opening four research and development centers – in India, South Africa, South Korea and the United Arab Emirates – and by significantly expanding our R&D site in Russia.

A substantial part of our research and development activity takes place in the areas of polymer and interface chemistry, biotechnology, materials science, surface treatment, process technology and new packaging. These activities are important for all Henkel business units. In 2013, personnel expenses accounted for 60 percent of total R&D spending.

Our research and development costs were fully expensed; no development costs were capitalized in accordance with International Financial Reporting Standards (IFRS).

On an annual average, around 2,600 employees worked in research and development (2012: 2,650). This corresponds to 5.6 percent of the total workforce. The success of our R&D activities is based on the talents, skills and capabilities of our highly qualified employees. Our teams are comprised of natural scientists – predominantly chemists – as well as material scientists, engineers and technicians.

Key R&D figures
2009 2010 2011 2012 2013
R&D expenditures1 (million euros) 383 383 396 406 414
R&D expenditures1 (in % of sales) 2.8 2.5 2.5 2.6 2.6
Employees2 (annual average) 2,750 2,650 2,650 2,650 2,600

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Major Henkel R&D sites around the world

Major Henkel R&D sites around the world

Open Innovation

Our innovations come from both internal and external sources. Therefore, the concept of Open Innovation continues to hold great significance for us. Hence, we have intensified our efforts to involve external partners such as universities, research institutes and suppliers in many of our major projects.

The following examples demonstrate the success achieved by our Open Innovation concept:

  • We presented our raw materials supplier Evonik with the “Best Innovation Contributor Award 2013” for the development of a new, highly efficient silicone compound that creates a uniquely soft feel for laundry after-treatments. The patented ingredient enables a resource-efficient formulation which provides significantly better performance. It also improves the cohesion of fragrance to the fabric.
  • We presented our raw materials supplier BASF with the "Best Innovation Contributor Award 2013" for its innovative contribution to a new type of anti-wrinkle ingredient with natural origins. This new organic ingredient comes from the bark of the South American quassia tree and visibly reduces wrinkles as evidenced by multiple in-vitro and in-vivo studies.
  • Cooperation with Professor Markus Buehler's Laboratory for Atomistic and Molecular Mechanics (LAMM) at the Massachusetts Institute of Technology (MIT) in Cambridge, Massachusetts (USA), enables us to perform computer modeling for new types of polymer structures. With the aid of a special computer program, we can conduct virtual experiments with polymers that would be very difficult and time-consuming to perform in the laboratory. This allows us to identify new polymer forms for specific properties.

Worldwide, growth and quality of life need to be decoupled from resource consumption and emissions. Our contribution lies in the development of innovative products and processes that consume less resources while offering the same or better performance. It is therefore both our duty and our desire to ensure that all new products contribute to sustainable development in at least one of our six defined focal areas. These are systematically integrated within our innovation process: Our researchers must demonstrate the specific advantages of their project in regard to product performance and added value for our customers, resource efficiency, and social progress. We therefore focus our R&D efforts on innovations that combine product performance and quality with social and environmental responsibility.

Life cycle analyses of our key product categories and our many years of experience in the area of sustainable development help us, right from the start of the product development process, to determine where in the various product categories the main environmental effects occur and where appropriate improvement measures might be applied. One key tool in this respect is our "Henkel Sustainability#Master®." This evaluation system centers around a matrix based on the individual steps in our value chains and on our six focal areas. It shows which areas are most relevant from a sustainability perspective, and allows a transparent and quantifiable comparison to be made between two products or processes.

Our scientists again made valuable contributions to the company’s success through their innovations in 2013. A selection of particularly outstanding research projects is provided in the examples below:

Laundry & Home Care

  • Worldwide launch of a new low-temperature formula with significantly improved performance, especially at 20 and 30 degrees Celsius. The new and completely reformulated enzyme system plays a key role in substantially reducing energy and material consumption.
  • The Perwoll Aktiv & Sport brand benefited from the introduction of our unique, patented Re-Fresh technology. The fragrance anchor molecules developed specifically for this product in the Henkel Fragrance Center release perfume substances as humidity increases, while simultaneously absorbing any unpleasant odors. The formula, which uses additional ingredients designed for functional textiles, provides exceptionally long-lasting freshness, particularly during physical activity.
  • The launch of gel tabs on the European market as a completely new dosage form for automatic dishwashing products. The innovative multifunctional technology exhibits powerful cleaning, outstanding shine, and easier handling. Its decisive features are superior solubility and the quick release of active substances, which are particularly effective for short wash cycles and low temperatures. A completely new manufacturing technology played a key role in this development. Its contribution to sustainability is especially apparent in the reduction of material consumption achieved through optimized packaging.

Beauty Care

  • The innovative formulation platform for oxidative hair colorants launched under the Igora brand delivers visibly superior color properties through “high-definition” pigment blending for salon use. For the Branded Consumer Goods business, the oxidative hair colorant Color Ultimate was developed in conjunction with a leading aerosol filler. The product is very easy to use – there is no separate mixing step – and provides an ecological advantage due to its multi-application dispenser.
  • Further development of the hair care platforms for Bonacure and Gliss Kur through Keratin-Primer technology, which strengthens hair fibers from within. The high efficacy of this new conditioning technology enables a reduction of conventional conditioning ingredients in the formulations, thus improving the environmental footprint. Silicone lamination technology was used for the first time under the Syoss brand. This technology seals the surface of the hair, providing optimal shine.
  • Development of new formulation platforms for especially skin-friendly body wash gels that were introduced to the market under the Fa and Dial brands in Europe and North America. Smart application of conditioning polymers means surfactant raw materials are used with greater efficiency, resulting in a reduced carbon dioxide footprint and further ecological benefits.

Adhesive Technologies

  • Global launch of a new two-stage process for pretreating multi-metal car bodies prior to painting. Overall, both the quality and ecological impact of this pretreatment process have been improved thanks to a reduction in the chemical and energy input. At the same time, a much smaller quantity of phosphate sludge is produced, which positively impacts the waste footprint.
  • New, solvent-free assembly adhesives for craftsmen and consumers with improved performance capabilities. These products are replacing solvent-based adhesives as part of our sustainability strategy.
  • Launch of a new generation of polyurethaneand acrylate-based adhesives for bonding mobile devices. New application devices developed specifically for these products now allow customers to use these adhesives more efficiently.

Fritz Henkel Award for Innovation

Each year we select a number of outstanding developments for our Fritz Henkel Award for Innovation. In 2013, the innovation award went to three international, interdisciplinary project teams for the realization and successful commercialization of the following concepts:

  • Persil Duo-Caps combines the innovative brightness formula with a powerful active stain remover in a
    water-soluble gel capsule featuring our unique dual-chamber technology. The specially formulated gels in the two chambers are double-concentrated, are separated from each other by a water-soluble film, and only combine their strength when washing starts. Persil Duo- Caps achieves full washing performance even at low temperatures for perfectly sparkling clean and bright laundry. The pre-portioned doses are easy to use and prevent overdosage. Packaging material is reduced by as much as 70 percent per load of washing. As a result, Persil Duo-Caps contributes to resource conservation and reduces the product's CO2 footprint by around 15 percent.
  • Syoss Oleo Intense is the new cross-category hair colorant and care line for a new dimension in performance and care. The oil color technology delivers unique color performance with extraordinary color intensity, excellent color retention, and 100 percent coverage of grays – without ammonia. The nourishing oils also give hair exceptional shine and smoothness, satisfying customers' demands for both performance and care. The Hair Care product offers the user everyday smoothness and shine through its thermoactive oil formula.
  • Halogen-free underfill Loctite UF3808 provides exceptional impact and shock protection for electronic components. It cures quickly at low temperatures, reducing the stress on other components. The material's mechanical properties ensure protection for solder joints, even under changing temperatures.

We hold more than 7,800 patents to protect our technologies around the world. Close to 4,800 patents are currently pending. And we have registered nearly 1,600 design patents to protect our designs.

Further information on our research and development activities can be found on our website at www.henkel.com/innovation