German group Henkel said it plans to sell or discontinue some brands in its consumer businesses by 2021 while looking for acquisition opportunities as it seeks to turn around its fortunes after a string of profit warnings.
Carsten Knobel, Henkel’s former finance chief who took over as chief executive in January said in a report by Reuters that “active portfolio management” would be a key element in his new strategy.
Admitting in a webcast presentation that the maker of Persil detergent had put too much focus on cost cutting and executives had “sugar-coated” results Knobel said “we need a new gameplan”.
New finance chief Marco Swoboda, who also took over in January, said the coronavirus could cut first-quarter sales by 100 million euros ($111.56 million), but added the full-year guidance was unchanged based on its current assumptions.
Henkel said it had identified brands and categories with a total sales volume of more than 1 billion euros, mainly in its consumer units, of which around 50% were marked to be divested or discontinued by 2021.
The consumer units – beauty, laundry and home care – made combined sales of 10.5 billion euros in 2019.
Acquisitions would remain an integral part of Henkel’s strategy, as it aims to expand its technology leadership in adhesives and look for consumer brands that would strengthen its position in its top markets and categories.
Reuters reported that Henkel is vying with Unilever and buyout funds including Advent and Cinven for some of Coty’s top beauty brands including professional haircare products like Wella, in a deal worth up to $7 billion.
If successful, Henkel could strengthen its position in salon haircare, where its Schwarzkopf brand already makes it the third biggest player globally.