Lux Research Summit Amsterdam, June 16, 2015

Entrepreneurship and Innovation Ecosystems in a Corporate Environment: 3D Printing a House

Dr. Paolo Bavaj

Personal Profile Paolo Bavaj

Educational background: PhD in Chemistry, RWTH Aachen, Germany

23 years of professional experience: Manufacturing, Sales and Marketing

Research and New Business Development

Strategy

Current position: Member of the Adhesive Innovation Executive Committee

Responsible for global New Business Development

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Image

Who we are Entrepreneurial Spirit since more than 130 Years

Founded 1876

Historical basis: Chemicals based on natural oils & fats

Preferred stocks traded since 1985

Family owns > 59 % of ordinary stocks

June 16, 2015

Who we are Henkel at a glance 2014

1 Adjusted for one-time charges/gains and restructuring charges.

Almost

50,000 employees all over the world

44% of our sales generated in emerging markets

2.6 billion euros adjusted1 operating profit (EBIT)

59% of our sales generated by our top 10 brands

138 years of brand success

16.4 billion euros sales, 3.4% organic sales growth

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Who we are Global leading positions in consumer and industrial businesses

Laundry & Home Care Adhesive Technologies Beauty Care

Industrial Business Consumer Businesses

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Adhesive Technologies Key Financials 2014

Organic sales growth

+3.7% Sales

8,127 m€

Adj.1 EBIT margin

17.2%

Sales generated by our Top 10 brands

80% Innovation rate²

30%

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1 Adjusted for one-time charges/gains and restructuring charges. 2 Percentage share of sales generated with new products launched onto the market within the last five years.

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Adhesive Technologies A leading solution provider worldwide

Deep industry expertise Leading brands for industrial customers

and consumers Best-in-class quality and service Global presence and customer proximity

Customer Partnership Innovation Leader

Comprehensive portfolio of leading technologies Innovation driver in the industry Shaping industry megatrends (e.g.

Sustainability or Lightweight)

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Successful Innovation in Three Horizons Striving for Technology and Innovation Leadership

exis

ting

new

new

Mar

kets

Technologies / Products

existing

New Technologies / Applications

2-5 years

New Business Development / Incubators > 5 years

adja

cent

incremental

Development of Current Business

< 2 years

Incremental Innovations

keep current businesses

healthy and attractive

Adjacent Innovations drive

profitable growth based on

current businesses

Breakthrough Innovations

ensure sustainable growth for

the future B

usin

ess

Uni

ts

(Exp

loita

tion)

New

Bus

ines

s D

evel

opm

ent

(Exp

lora

rion)

Different horizons and timelines ensure healthy project pipeline

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Efficient and incremental innovation

Building on existing products and markets

Driven by performance-related incentives

Innovation Ownership Core Business and New Business Development

Core Business New Business Development / Incubators

Creative and original approach to innovation

Driven by entrepreneurship

Across or outside core businesses

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Plastic Welding of different plastics

Allowing broader choice of plastics increasing the design freedom, i.e. for lightweight

Target application: Interior Automotive

Innovation Ownership New Business Incubators

Incubator “Plastic Welding” New Business Development / Incubators

Creative and original approach to innovation

Driven by entrepreneurship

Across or outside core businesses

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High performance Barrier Layers for printed and flexible electronics

Protection against air and moisture

Target applications: OLED Lighting / Display

Innovation Ownership New Business Incubators

Venturing “Barrier Layers for Electronics” New Business Development / Incubators

Creative and original approach to innovation

Driven by entrepreneurship

Across or outside core businesses

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Key Ingredients of Innovation The success factor is to foster both cultures under one roof

When it comes to innovation, entrepreneurship and performance culture go hand in hand

Core Business New Business Development /

Incubators

Performance Culture Entrepreneurial Spirit

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New Business Development From Trends to New Businesses

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Building an innovation growth platform for Henkel

Search Fields Applications New

Businesses Mega

Trends

Mega Trends

Urbanization and Population Growth

Sustainability and Health

Mobility and Communication

Scouting and Start-up Screening Foresight Management Incubators Venturing

Ecosystem

Structure of Teams Interdisciplinary Teams Involving Business Units and R&D

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Leverage internal and external capabilities

Strongly engage existing knowledge in operative businesses and R&D

InnoManagers are primary connection points to identity suitable people

Create a strong network to cross leverage know-how and use as sounding board

Project related internal and external networks established

Foresight Management @Henkel Adhesive Technologies

Foresight Management: Create future scenario & identify new business opportunities

Make strategic decision and initiate developments in the present

Outperform competition by moving first with new products and applications

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Systematic process to anticipate future market trends

Strategic decisions

Backcast

Future Scenario 1

2 3

2016 2013

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Drivers of Change Perspective 2025 Driver 01: Demographic Change and Urbanization

8.1 bn world population 58%

urbanization rate

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Drivers of Change Perspective 2025

Individuality Driver 03: Individualization

Lifestyle Express yourself

Self- Fulfillment

19

Printing Your Living Space: 3D printing of spare parts and throw-away articles as well as of individualized living space

© by Henkel

External Project Support Evaluation of Applications

Multi-level contacts throughout entire

value chain

Outside-in perspective

Voices from the market - a reality check • Market sizes and dynamics • Pain points • Henkel’s potential role • Potential partners

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3D Printing – Emerging Business Opportunity Mega trend: mass customization

Design feasibility check Reduced tooling time and cost Production of complex parts

Rapid Prototyping Tooling/ Pre-production parts Manufacturing

€ 2 bn material market by 2020 – our initial opportunity Emerging market Market to be made

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Case Study: 3D Printing a House Products for high performance applications

Idea • 3D Printing a Canal House in Amsterdam • Use of Bio-based products Key requirements • Materials that are durable, stable and

fire-proof • Specialized adhesive for connecting

components • Sound and thermo insulation Pain Points • Materials not optimal for house printing • Slow printing process • No real-time control possible

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Case Study: 3D Printing a House Building an innovation ecosystem

June 16, 2015 Lux Research Summit Europe 2015: From Corporate Foresight to Start-up Investments

Right picture: © by Mats van Soolingen

23

Case Study: 3D Printing a House Products for high performance applications

June 16, 2015 Lux Research Summit Europe 2015: From Corporate Foresight to Start-up Investments

Pictures: © by Olivier Middendorp

24

Case Study: 3D Printing a House Products for high performance applications

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Case Study: 3D Printing a House Achievements

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Building 2nd printer with significant

improvements

Printing speed increased by 400%

due to improves material

Currently assembly of ground floor

Thank you

June 16, 2015

Dr. Paolo Bavaj Head of New Business Development Henkel AG & Co. KGaA Adhesive Technologies Phone: +49 (0)211 797 2289 Mobile: +49 (0)151 6800 2289 Email: paolo.bavaj@henkel.com