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More Henkel Corporate Reporting 2015
A clear strategic framework guides digital projects and initiatives across all business units and functions at Henkel. As members of our Digital Steering Group, Dr. Nils Daecke, Dr. Salima Douven and Georg Wawer (from the left) regularly discuss current and future trends and align on the execution of key digital initiatives – from internal processes and systems to customer-facing platforms and channels.
Digitalization offers an abundance of choices and creates transparency about quality and prices. It also helps to build strong brands in order to meet customer and consumer demands. This has a significant impact on our business operations, innovations, production technologies and processes. It also changes the way global teams around the world collaborate and communicate. We anticipated these trends early on and included digitalization as a main component of our strategic priority “Outperform.” This has given us the ability to leverage digital opportunities that lie ahead.
Our digital strategy provides a clear framework for a consistent and integrated approach to digitalization throughout the entire company. It enables us to evolve our digital culture, leverage data and technology, engage customers and consumers across all digital touchpoints and grow our business through digitalization.
Our Digital Council promotes and coordinates this strategy. Within this Council, senior managers and digital experts from all business units and functions work together on strategic digital projects. In 2015, we made progress on the integration of our SAP systems into one platform. We also launched our internal networking platform Yammer, which connects our global workforce and enables digital exchange and collaboration. We expanded our customer-facing digital activities, for example through targeted social media campaigns. We also successfully grew our eCommerce activities, such as in our Beauty Care business in China or with our business-to-business platform “Henkel POD.”
In 2015, we continued to focus on strengthening our top brands and were able to expand their share of sales: Our top 10 brands accounted for 61 percent of our total Group sales, up from 59 percent in the previous year. Our top three brands, Persil, Schwarzkopf and Loctite, generated combined sales of around 5.9 billion euros in 2015 compared to around 5 billion euros in 2014. We focus on our top brands and strengthen them through investments in innovation and brand equity as they generate above-average growth and profitability.
Persil is the leading brand for our Laundry & Home Care business unit and has been characterized by a commitment to innovation and performance for more than 100 years. Today, Persil is available in more than 50 countries, gaining market share and new customers year after year. In 2015, we launched Persil ProClean in the US market, supported by a successful, targeted social media campaign. It is now being rolled out nationwide. In 2015, our high-performance laundry detergents from Persil achieved global sales of around 1.2 billion euros.
Our Schwarzkopf brand is the global hair expert and the largest brand of our Beauty Care business unit. Schwarzkopf products are available in more than 60 countries. Since its creation in 1898, outstanding innovation, quality, passion and competence have been the key characteristics of this iconic brand. Thanks to its winning innovations in both its professional and retail markets, Schwarzkopf has continuously gained market shares in all categories and generated sales of more than 2 billion euros. Supported by a holistic, consumer-centered approach with a clear focus on digital activities, we successfully introduced Schwarzkopf in the US retail market in 2015. The brand, with its premium positioned hair care, styling and color products, is now being rolled out nationwide.
Loctite is the largest brand within our Adhesive Technologies business unit and one of the most trusted brands for adhesives, sealants and coating solutions. Loctite products are used in more than 130 countries globally and in many different industries, including aerospace, automotive, and industrial assembly and repair. It is also widely used in consumer applications. In 2015, Loctite products achieved sales of around 2.7 billion euros. Loctite became the firstever adhesives brand to advertise during the annual National Football League Super Bowl® in the USA in 2015. The commercial generated 45 million page impressions on social media and was the numberone trending topic on Twitter directly after airing. The campaign significantly increased brand awareness and helped position Loctite as a leading adhesives brand.
With our new-generation fabric softener Silan Soft & Oils, our Laundry & Home Care business answers consumer demand for “affordable luxury” in Eastern and Western Europe. It is the first transparent fabric softener on the market and allows for extra softness as well as an intensive, long-lasting fragrance. This innovation has enabled us to significantly increase value in the fabric softener category, giving us a clear competitive advantage. The product is available in 19 European countries under the brand names Silan and Vernel. Here we see a Polish consumer using Silan Soft & Oils.
In highly competitive markets, we continuously strengthen our innovation capabilities to better anticipate and meet the needs of our customers and consumers around the world. Our regional research centers allow us to develop customer-specific solutions and innovations. Since the start of our current strategy cycle in 2013, we have opened or expanded five research and development centers globally.
In 2015, we achieved high innovation rates in all three business units. In both Laundry & Home Care and Beauty Care, the innovation rate – the share of products launched within the last three years – was more than 45 percent. In Adhesive Technologies, the share of sales from products launched within the last five years was around 30 percent.
Customer focus is one of our values at Henkel. We put our customers at the center of everything we do and promote customer understanding and connection across the entire company. We put particular emphasis on deepening our relationships with our largest customers through “top-to-top” exchanges led by our Management Board. This helps us to better understand their dynamic business environment and growth ambitions, and to adapt our cooperation with them accordingly to drive joint business success.
Our Laundry & Home Care Global Experience Center in Düsseldorf provides a unique platform for such “top-to-top” meetings. Here, visitors learn firsthand about our innovation capabilities through cutting-edge technology, live demonstrations and opportunities for interaction. Since its opening at the beginning of 2015, we have welcomed numerous customers as well as other stakeholders from all over the world.
Within Beauty Care, our strong customer focus forms one of the key pillars for our long-term profitable growth. Through both the Beauty Care Lighthouse, our well-established customer center in Düsseldorf, and extended strategic partnerships with key retailers around the world, we have been able to leverage global and local agreements and work together on joint business planning. This enables us to generate above-average growth and regularly earns us top rankings in global customer surveys as well as prestigious industry awards as best supplier in the beauty category.
Within our Adhesive Technologies business unit, we have further reinforced our innovation capabilities worldwide to develop tailor-made solutions together with our customers. In our global innovation centers, we offer a broad portfolio of application technologies, specification testing, validation, and training for various industries. With our new innovation center in Shanghai, for example, our customers particularly benefit from our expert knowledge based on strong collaboration across all our business areas.