Henkel Case Study

Henkel a multinational company headquartered in Dusseldorf, Germany is a consumer goods industry operating in three major business areas namely , the Laundry & Home Care, the Beauty Care and Oral Care products and the Adhesive Technologies for consumer and industrial purposes. Some of the well known brands of Henkel are Persil a laundry detergent famous since early 1900's, Persil, Schwarzkopf, Loctite, Pril, Dial etc . Fritz Henkel founded the company in 1876 and by around 1920's the company had flourished into a leading German detergent producer. Following Henkel's demise and the impending World War 2 saw most of Henkel's infrastructure dead .However during 1965, Henkel sponsored the first ever ad on international television with its Persil

Starting as an executive vice president in 2005 he had to start all over again . His management style was entirely different as he seldom used e-mail to communicate instead chose face-to-face interaction. His constant endeavour for efficiency and setting ambitious targets lead him to be made the CEO of Henkel in 2008. Henkel changed the entire thought process of the company adopting to a more dominating winning culture and made its biggest ever acquisition for a humongous 3.7 billion Euros for the adhesives and electronic materials business of the National Starch and Chemical Company thereby reiterating its worldwide position in adhesives. The targets he set for 2012 were insurmountable as many laughed it off as a rumour or being ridiculous. However after the 2012 annual report were out, Henkel delivered sales and earnings at record levels with a Sales increase of 5.4% to around 16k million Euros, operating profit 24% from last year to 2k million Euros, EBIT margin up by 0.7% to peak at 13%. The following table will compare Henkel's business parameters in 2012,2014 and the 2nd quarter

The 'Winning Culture' paved the company's way into a fast growing sector in Laundry, Beauty Care and Adhesives. During the first half of 2015 Henkel were able to increase sales by almost 1.1 billion Euros to excess of 9.1 billion Euros. With EBIT margin of 16.2% they are on track to achieve full year expected results. As one can see from the results of the 2nd quarter sales yet again rose by 13.5% to 4695 million Euros. The Laundry sector recorded sales growth of 4.3% while in the Beauty Care unit, there was a positive increase in sales of around 2% and the Adhesive business unit also posted increase in sales of 1.7%. The return on sales also increased by 0.1% to a high 16.4%. The Net working capital relative to sales increased yoy by 0.6% points to 6.6%. This can be easily attributed to the acquisitions that they have got in. Operating profit rose by 182 million Euros to 1475 million Euros, a massive 14% change. Henkel's overall financial position at the end of the 2nd quarter was poised to be at 634 million Euros as opposed to last year final quarters 152 million Euros. In conclusion on account of Rorsted's dynamic organizational outlook coupled with a more stringent performance Management criteria adopting a DRT Rankings to each and every employee of Henkel made it clear that the business performance of Henkel has ever since been on the rise. The