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We have a clear long-term strategy which is based on our purpose, vision, mission and values. It is the foundation which helps us successfully to shape the future of our company.
Henkel has defined four strategic priorities to continue its sustainable profitable growth through to 2020 and beyond: drive growth, accelerate digitalization, increase agility and fund growth. Our balanced and broadly diversified portfolio with strong brands, innovative technologies and leading positions in attractive markets and categories provides a strong foundation. Our passionate global team is united in a strong corporate culture with shared values.
Building on its strong foundation, Henkel intends to continue its path of profitable growth. On November 17, 2016, we presented the ambition and strategic priorities that will drive the company through to 2020 and beyond.
We have defined our ambition in a very volatile market environment characterized by increasing globalization, accelerating digitalization, rapidly changing markets, and an increasing relevance of resource scarcity and social responsibility.
We want to become more customer-focused and make the company even more innovative, agile and digital, in both our internal processes and our customer- facing activities. In addition, we are aiming to further promote sustainability in all our business activities.
Henkel has defined the following financial ambition for the period until 2020:
|Financial ambition 2020|
|Organic growth||2 – 4 %|
|Adjusted EPS growth||7 – 9 %|
(CAGR1 2016 – 2020, per preferred share)
|Adjusted EBIT margin||Continued improvement|
in adjusted EBIT margin
|Free cash flow||Continued focus|
on free cash flow expansion
|1 Compound annual growth rate.|
Alongside organic growth, acquisitions will continue to be an integral part of our strategy. Our assessment of potential acquisitions is based on whether the targets are available, fit Henkel’s strategy, and are financially attractive. The focus in the Adhesive Technologies business unit is on expanding technology leadership, whereas in the Beauty Care and Laundry & Home Care business units, we will be striving to strengthen our categories.
Growth in revenues after adjusting for effects arising from acquisitions, divestments and foreign exchange differences – i.e. “top line” growth generated from within.Organic sales growth Schließen
Year-over-year rate of growth, e.g. of an investment, over a defined period.Compound annual growth rate Schließen
Earnings Before Interest and Taxes (EBIT) adjusted for exceptional items in the form of one-time charges, onetime gains and restructuring charges.Adjusted EBIT Schließen
Cash flow actually available for acquisitions, dividend payments, the reduction of borrowings and contributions to pension funds.Free cash flow Schließen
Abbreviation for Earnings before Interest and Taxes. Standard profit metric that enables the earning power of the operating business activities of a company to be assessed independently of its financial structure, enabling comparability between entities where these are financed by varying levels of debt capital.EBIT Schließen
Driving growth in mature and emerging markets will be a key strategic priority for Henkel. In order to achieve this, we will focus on targeted initiatives to create superior customer and consumer engagement, strengthen our leading brands and technologies, develop exciting innovations and services, and capture new sources of growth.
Accelerating digitalization will help us to successfully grow our business, strengthen the relationships with our customers and consumers, optimize our processes and transform the entire company. By 2020, we will implement a range of initiatives to drive our digital business, leverage Industry 4.0, and eTransform the organization.
In a highly volatile and dynamic business environment, increasing the agility of the organization will be a critical success factor for Henkel in the future. This will require energized and empowered teams, fastest time-to-market as well as smart and simplified processes.
In order to fund growth, we will implement new approaches to optimize resource allocation, focus on net revenue management, further increase efficiency in our structures, and continue to expand our Global Supply Chain organization. Together, these initiatives will contribute to further improving profitability and enable us to fund our growth ambitions for 2020 and beyond.
Investor & Analyst Conference
Nov. 17, 2016
Focus on growth, digitalization and agility