Henkel Integrative Case Professor David Wessels The Wharton School of the University of Pennsylvania Available on this website is a comprehensive case that analyzes and values Henkel AG, a $13 billion German consumer products company. The case builds upon material in Chapters 5-14 of Valuation, Measuring and Managing the Value of Company, 5^th Edition. Case Structure The integrative case contains 5 subparts. In the first case, we introduce the class to Henkel at the most fundamental level, i.e. how large are they, what do they sell, and from where in the organization does growth and profit come from? In the second section, students reorganize the income statement and balance sheet for Henkel into NOPLAT and invested capital respectively, in order to determine return on invested capital (ROIC). The third subsection uses reorganized financial statements to benchmark Henkel AG to Reckitt Benckiser (line by line) and a broader set of companies (for selected data). In the fourth case, students determine the cost of capital for Henkel AG (using an unlevered industry beta) and a cost of capital for each division. In the final case, we value Henkel using discounted cash flow using “as-is” forecasts. Case Instructions Each case contains (1) students instructions, (2) an annual report or excel spreadsheet (to be distributed with the instructions), and (3) an excel solution and/or sample presentation. When running the case, only release PDFs of answer keys; otherwise you may find the excel key being turned in as original work in subsequent years! To protect the case for other instructors, please DO NOT POST any material (especially solutions) on a public site. Please do not allow student access to this site. Although the case follows the Valuation text closely, the case does not make every possible adjustment. For instance, a £3 million hedging asset in other assets of Reckitt Benckiser was ignored (it was treated as operating, rather than a nonoperating asset). To make every adjustment would have made the case unbearably complex. Each student instruction provides details on how to treat various line items. Beyond that, I leave it to each instructor to decide the level of appropriate complexity. Case Updates If you find an error, inconsistency, or potential improvement to the case, please let me know. I will update the case accordingly. I plan to update the case annually in April of each year. I can be reached at wessels@wharton.upenn.edu. Good luck! Henkel Integrative Case Case Materials
	Case	Student Instructions	Data for Students	Sample Solution^1	Sample Presentation
	1	Who is Henkel?	Annual Report – Henkel	Not applicable	Henkel Overview Henkel Overview (supporting graphs)
	2	Reorganizing the Balance Sheet	Annual Report – Henkel	Henkel – Reorganized (spreadsheet OR pdf)	Not applicable
	3	Competitive Benchmarking	1. Annual Report – Henkel 2. Annual Report – Reckitt Benckiser 3. Financial Data – Henkel 4. Financial Data – Reckitt Benckiser 5. Select Financial & Market Data	Henkel – Ratios (spreadsheet OR pdf) Reckitt – Ratios (spreadsheet OR pdf)	Henkel Benchmarking Henkel Benchmarking (supporting graphs)
	4	Cost of Capital	1. Annual Report – Henkel 2. Annual Report – Reckitt Benckiser 3. Select Financial & Market Data	Henkel – Cost of Capital (spreadsheet OR pdf)	Henkel Cost of Capital Henkel Cost of Capital (supporting graphs)
	5	Valuation	No additional data	Henkel – Valuation (spreadsheet OR pdf)	Not applicable
	^1 I do not recommend releasing Excel spreadsheets to students. Otherwise you may find the excel key being turned in as original work in subsequent years! Consequently, PDFs of the excel solutions are also provided.