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More Henkel Corporate Reporting 2014
As part of our Strategy 2016, we aim to “Outperform” our competition. We will leverage our full potential in our product categories in order to gain market share. We will actively manage our portfolio, strengthen our top brands, launch powerful innovations, and focus on customers and consumers.
In 2014, our focus on strengthening our top brands led to remarkable results: Our top 10 brands now account for 59 percent of our total Group sales globally, up from 57 percent in the previous year. Thanks to our commitment to innovation and investments in brand equity, we have established a range of strong and successful brands that generate above-average sales, growth and profitability.
Our high-performance detergents from Persil, which has been the leading brand for our Laundry & Home Care business for more than 100 years, reached sales of around one billion euros in 2014. This is a result of continuous product innovation and a focus on quality as well as the ongoing brand internationalization. Persil is now available in more than 50 mature and emerging markets worldwide and continues to gain market shares year after year.
Schwarzkopf is one of the leading hair care brands globally and the biggest brand of our Beauty Care business. Schwarzkopf has stood for outstanding innovations, quality, passion and competence – since 1898. Offering winning solutions in both retail and professional markets, Schwarzkopf achieved sales of around two billion euros in 2014. Schwarzkopf products are available in more than 60 markets around the world.
Loctite is the leading brand within our Adhesive Technologies business and globally one of the most trusted brands for adhesives, sealants and coating solutions. With a history of almost 60 years, the Loctite brand has steadily increased sales to around two billion euros in 2014. Today, Loctite products are used in a wide range of different industries including aerospace, automotive, electronics, industrial assembly and repair, as well as in consumer applications, in more than 130 markets around the world.
In highly competitive markets, we strive for a flow of innovations that meet the needs of our customers and consumers around the world. By investing in new research and development centers and expanding existing ones, we have strengthened our innovation capacities, especially in emerging markets.
In 2014, we again 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 increased to more than 30 percent. For more information on innovations in all three business units, please see Research and development and Business units in the Group management report.
We put our customers at the center of what we do – this is one of our values at Henkel. We are strongly committed to customer focus across the entire company. In order to understand our customers’ needs and expectations, and to be able to anticipate future requirements, our Management Board regularly engages in “top-to-top” exchanges with our largest customers. These help us to better align our business activities and generate a growing share of sales with them.
Already more than 100 global key customers and strategic partners have witnessed our strong brands and innovation power while visiting the Beauty Care Lighthouse in Düsseldorf. This venue holistically demonstrates our Beauty Care competence and sets the benchmark for customer interaction.
Our Laundry & Home Care Global Experience Center in Düsseldorf opened at the beginning of 2015. Here, customers and visitors will experience Laundry & Home Care’s innovation capabilities through cutting-edge technology, live demonstrations and opportunities for interaction across more than 1,000 square meters.
In 2014, we continued investing in our business to drive both organic and inorganic growth. We increased capital expenditures, excluding acquisitions, from 436 million euros to 517 million euros. We also invested around 1.8 billion euros in a number of acquisitions in both mature and emerging markets. These acquisitions will strengthen the market positions of all three business units (for more information, see table Acquisitions completed in fiscal 2014).
Digitization offers competitive advantages for our company. Internally, the standardization and digitization of processes will enable higher efficiency and flexibility. Externally, digital platforms will gain importance as tools for engaging with customers and consumers and capturing growth opportunities.
In our Beauty Care business, we successfully launched a comprehensive range of digital initiatives to intensify relationships with our customers and consumers. From brand communication to digital advisory services and e-commerce, we have significantly enhanced the digital consumer experience. One example is the viral video “Schwarzkopf – A declaration of love,” which has been viewed over 15 million times on YouTube. Another example is the launch of our leading 3D Schwarzkopf hair advisor app that enables consumers to virtually color and style their hair – either directly at the point of sale or on a smartphone at home. Additional product information is immediately accessible and products can be purchased directly online.
In our Laundry & Home Care business, we also substantially expanded digital interaction with consumers in 2014. One example was a viral campaign built around a music video for Henkel’s innovative WC rim blocks. The campaign reached around 10 million users on social platforms such as YouTube, an unparalleled success for a digital campaign in this home care product category.
In our Adhesive Technologies business, we continued the global roll-out of our e-commerce platform “Henkel POD,” primarily for adhesives products, which generated over 500 million euros in sales in 2014. The platform offers customers the ability to place orders around-the-clock and provides personalized access to ordering status, invoices, product pricing and availability as well as technical documents.