New Henkel Merger Springs Consolidated Consumer Brands Business
Henkel is consolidating its businesses, introducing Henkel consumer brands, a result from a merger with its laundry, home care and beauty divisions. The integration process will begin immediately to establish a formal kick-off for early 2023.
This is the latest step in Henkel’s strategy to build a single multi-category platform that combines its consumer brands and businesses, featuring brands such as Persil and Schwarzkopf.
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Henkel’s CEO Carsten Knobel stated that creating “one strong, integrated business” is the key to building a foundation for future profitable growth.
New Leadership
Wolfgang König, currently executive vice president for Henkel´s beauty care business, will lead the combined unit. Bruno Piacenza, who has led Henkel´s laundry and home care business as executive vice president since 2011, will continue to lead the laundry and home care business, working with König on the transition and staying with Henkel until the end of 2022, at the latest.
Dr. Simone Bagel-Trah, chairwoman of the Shareholders’ Committee and the Supervisory Board of Henkel said König’s international management and leadership experience in the consumer goods, home, and personal care industry will be highly valuable in forming and successfully developing the new consumer brands business unit together with the new leadership team.
Under the leadership of König, said Knobel, the combined team will focus on “advancing the entire consumer brands business, with leaner structures and faster decision-making.”
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Merger Goals
Helkel stated it is looking to drive growth and profitability with the merger in order to meet 3% to 4% organic sales growth, an adjusted EBIT margin of around 16% and mid- to high-single-digit percentage growth in adjusted earnings per preferred share.
The company has established the following key initiatives:
- Better capture the full potential for organic and inorganic growth and focus on products with attractive growth and margin potential — beyond the measures of the active portfolio management completed by the end of 2021.
- Divest or discontinue non-core brands and businesses as well as acquisitions in categories across the consumer space.
- Capture significant synergies and become more efficient and agile to help the organization act faster and be more flexible in a highly volatile environment. Key focus will be in areas such as administration, distribution, marketing, and supply chain.
- Free up resources for higher investments and better target these investments in strategic capabilities like digitalization of R&D, e-commerce capabilities, or sustainability efforts around recyclable packaging.
- Organize new business around customer and channel centricity — with an integrated approach for retailers, trade, or channel partners across all consumer categories.
- Have the combined team focus on advancing the entire consumer business, with leaner structures and faster decision-making.
- Offer bigger roles and opportunities, becoming a more attractive employer for teams, leaders, talents, and new hires.
Process & Timing
Henkel will be consulting with employee representatives immediately as the merger will have implications across all business units, the company said. It will present additional details and its strategic agenda during a press conference on Feb. 23. Further financial details will be published in a report on May 5.
“We are creating a multi-category platform with around 10 billion euros in sales,” said Knobel. “This will provide a broader basis to further optimize and shape our portfolio toward a higher growth and margin profile. We will also capture significant synergies and efficiency gains, allowing us to free up resources which will be used in part for targeted investments in our strategic priorities, such as innovation, sustainability, and digitalization."
