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Strategy 2020+

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 shape the future of our company.

Henkel has defined four strategic priorities to continue its sustainable profitable growth through 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.

Our Ambition

In 2016, we 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 further promoting sustainability in all our business activities.

Henkel has defined the following financial ambition for the period from 2016 until 2020:

  • We are aiming to achieve organic sales growth of 2 to 4 percent on average over the four years until 2020.
  • For adjusted earnings per preferred share, we are targeting a compound annual growth rate (CAGR) of 7 to 9 percent between 2016 and 2020. This ambition for EPS growth includes the impact of currency developments, and minor and mid-sized acquisitions. It excludes major acquisitions as well as share buy-backs.
  • We are aiming for continued improvement in adjusted EBIT margin. In addition, we will maintain our focus on free cash flow expansion. 
Financial ambition 2020
Organic growth2 – 4 %
(average 2017–2020)
Adjusted EPS growth7 – 9 %
(CAGR1 2016 – 2020, per preferred share)
Adjusted EBIT marginContinued improvement
in adjusted EBIT margin
Free cash flowContinued 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

Compound annual growth rate Year-over-year rate of growth, e.g. of an investment.

Compound annual growth rate Schließen

Earnings Before Interest and Taxes (EBIT) adjusted for exceptional items in the form of one-time charges, one-time gains and restructuring expenses.

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, facilitating comparability between entities where these are financed by varying levels of debt capital.

EBIT Schließen

Our Strategic Priorities

  • Drive growth
  • Accelerate digitalization
  • Increase agility
  • Fund growth

Driving growth in mature and emerging markets is a key strategic priority for Henkel. In order to achieve this, we 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 helps 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 is a critical success factor for Henkel. This requires energized and empowered teams, fastest time-to-market as well as smart and simplified processes.

In order to fund growth, we are implementing 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.