Henkel Annual Report 2011 - Henkel AG & Co. KGaA Annual Report ...

46
Group management report
Strategy and financial targets for 2012
24%
of sales achieved with our
top brands Schwarzkopf,
Loctite and Persil.
With our three growth-generating business sectors
and the leading market positions we occupy, we
have a strong basis for generating profitable growth
in the future.
Strategic priorities and progress in fiscal 2011
In 2008, we set ourselves three strategic priorities:
Focus
more on
our customers
Achieve
our full
business potential
Winning
Culture
Strengthen
our global
team
Achieve our full business potential
For this, we have identified the following drivers:
1. Portfolio optimization
Within the Laundry & Home Care business
sector, we aim to increase our profitability in
the mass categories such as heavy-duty detergents
and hand-dishwashing products, and
drive growth in the profitable specialty categories
such as household cleaners and fabric
softeners. In the Cosmetics/Toiletries business
sector, we intend to further enhance
profitability by strengthening our innovation
leadership and expanding our top brands.
Within the Adhesive Technologies business
sector we want to improve our profitability in
the automotive segment, drive growth in specialty
applications and utilize our economies
of scale with innovations in the industrial
adhesives business. In addition, we intend to
increase our investments in order to achieve
disproportionate growth in the emerging
markets. We also want to further increase
our market shares in the mature markets.
Henkel Annual Report 2011
2. Focus on our top brands
Our focus is on fewer but stronger brands and
further expansion of our strong regional and
global brands. Brand awareness is to be further
enhanced through extensive marketing
investment and promotional activities. Our
three top brands Schwarzkopf, Loctite and
Persil already account for around 24 percent of
our sales. Our objective is to grow organically
faster with these and other top brands than
Henkel overall, and therefore to further expand
their share of total sales. At the same
time, we are reducing the number of our
brands by selling off or discontinuing the
smaller and less important brands.
3. Innovation and innovation rates
With innovation rates 1 of 41 percent in the
Laundry & Home Care business sector, 43 percent
at Cosmetics/Toiletries and around
30 percent at Adhesive Technologies, we count
among the strongest innovators in our fields
of competence. We are helped in this respect
by the proximity we have to our consumers
and customers, actively incorporating both
audiences in our product development activities
where appropriate. We have also made it
our principle only to launch a new product
onto the market if it has a positive effect on
gross margin and makes a contribution to
sustainable development in at least one of our
six focal areas (see page 49).
4. Operational excellence
In our purchasing activities, our aim is to create
benefits through the further development of
effective strategies. These include concentrating
on fewer, more efficient suppliers and on
procuring materials in lower-cost emerging
countries. In production and our supply chain,
our objective is to further optimize our production
footprint. This will enable us to reduce
the complexity of our structures and
better utilize available capacities. We are also
introducing improvements with respect to our
administrative, selling and distribution expenses,
by pooling within our shared service
centers our standardized processes in the areas
of finance, purchasing and human resources,
plus certain activities from our business sectors,
and by outsourcing non-core activities
such as IT support. We expect such measures
to yield further cost savings going forward.
1 Percentage share of sales accounted for by new products
launched onto the market in the last three years (five years for
Adhesive Technologies).