Dec 30, 2014 Düsseldorf / Germany
2014: A busy year for Henkel
Increase of the dividend payout ratio, acquisitions in all business units and sustainability awards where only a few highlights of the year 2014 at Henkel.
In January, Henkel decided to propose a future dividend payout ratio of between 25 percent and 35 percent of net income after non-controlling interests and adjusted for exceptional items. The dividend payout ratio was at around 25 percent before.
Also in January, Henkel officially launched the Henkel Korea Technical Center, reinforcing its position as the leader in the global adhesives market. The state-of-the-art center develops the latest technologies to provide engineering solutions for customers based in Korea, and is one of the Henkel sites around the world that have been set up to provide rapid, customer-focused services and support.
In February, the Henkel family extended its share-pooling agreement, which covers around 59 percent of the ordinary shares with voting rights in the company. The contract, which could originally be first terminated as of December 31, 2016, has been concluded for an indefinite term and can now first be terminated as of December 31, 2033.
For the seventh consecutive year, Henkel received RobecoSAM’s Gold Class award and was named one of the World’s Most Ethical Companies by the Ethisphere Institute in March. The accolades recognized and confirmed Henkel’s continued leadership and consistent commitment to sustainability. By 2030, Henkel aims to triple the value it creates for the footprint made by its operations, products and services. Over the past eleven years, the company has cut water and energy consumption by 51 percent and 44 percent per ton of production, respectively, and reduced waste by 47 percent per ton of production. Over the same period, the number of work accidents dropped by 90 percent.
In April, 21 student teams from 30 countries around the world took part in the international final of the “Henkel Innovation Challenge” in Düsseldorf, Germany. The students had three days in which to showcase their innovative concepts to a panel of Henkel managers. The jury ultimately selected the team from Croatia as having submitted the best product vision for the year 2050 with a revolutionary hairstyling product.
In May, Henkel Adhesive Technologies signed a joint-development agreement with US-based Vitriflex, Inc. as part of its innovation strategy. Founded in San Jose, California in 2010, Vitriflex has developed a unique ultra-barrier film technology that utilizes a proprietary roll-to-roll technique to deliver high-performance barrier films in an easy-to-integrate form factor. Barrier films protect electronic components against moisture and oxygen ingress. This invention offers the first time ever cost competitive flexible barrier film technology for the display market.
In June, Henkel signed an agreement with TSG Consumer Partners to acquire the three US Hair Professional companies SexyHair, Alterna and Kenra for around 270 million euros in cash. These businesses will strengthen the Henkel US Hair Professional portfolio, especially in the categories of care and styling.
In the same month, Henkel signed an agreement with funds advised by BC Partners to acquire the Spotless Group in France. The transaction, including debt, was valued at 940 million euros and was financed in cash. The Spotless Group mainly operated in the areas of laundry aids (laundry sheets, stain removers, fabric dyes), insect control and household care in Western Europe. The acquisition was part of Henkel’s global strategy to selectively invest in attractive country category positions in mature markets.
With the launch of Loctite FT220 in August, Henkel extended the cyanoacrylate technology to the shoe industry for the first time. Fast bonding and ease of use make the technology a perfect solution for shoe repair applications and mark a revolution in a very attractive industry: footwear. The global footwear market is worth more than USD 120 billion, having grown on average 4.6 percent a year over the last five years, according to industry market researcher IBISWorld.
Cyanoacrylate has been part of the Loctite brand family since the early 1970s but was unusable in shoes due to poor water resistance and flexibility. A new technology developed in the Henkel R&D labs rectified this.
In September, Henkel opened its largest automated storage facility at its corporate headquarters in Düsseldorf, Germany, marking the end of a project in which the company invested a total of 35 million euros. The result is a superlative facility: built on an area the size of two football fields, its ten-rack levels offer storage capacity for more than 25 million packs of laundry and home-care products.
In the same month, Henkel signed an agreement to acquire the Bergquist Company, a privately-held leading supplier of thermal-management solutions for the electronics industry worldwide. With this acquisition, which is in line with Henkel Adhesive Technologies’ global strategy to invest in complementary leading technologies, Henkel is strengthening its position as a global market and technology leader.
For the eighth consecutive year, Henkel has been listed in the Dow Jones Sustainability Index (DJSI World) and Dow Jones Sustainability Index Europe (DJSI Europe) also in September. The inclusion in both indices confirms Henkel’s excellent performance among the leading companies in the Household Products category. The indices list corporations that follow the principles of sustainable development in their business operations.
In November, CEO Kasper Rorsted specified Henkel’s financial outlook for 2014.
“We continue to expect organic sales growth of between 3 and 5 percent. We have raised our guidance for adjusted EBIT margin and now anticipate an increase to just under 16.0 percent. We also continue to expect an increase in adjusted earnings per preferred share in the high-single digits,” Rorsted said.