This top manager probably has the most difficult job

Dusseldorf Wolfgang König comes onto the stage with the words “I’m the new guy”. The top manager at Henkel is not that new. He has been in charge of the cosmetics division of the Dax group since June last year. But at the investors’ conference of the Persil and Pril producers on Tuesday morning, he made his first major public appearance.

The timing could not have been better for König: Just before the start of the event, Henkel announced that the manager would be in charge of Henkel’s new consumer goods division from October. It was clear that he would take up this post. Because the restructuring of the group is progressing faster, the 50-year-old is getting his new job now and not in the first quarter of 2023.

The job is likely to be the biggest task of his career. Henkel is merging its ailing cosmetics business (“Dial”, “Syoss”) with the better-performing detergents and cleaning agents sector and its well-known brands such as Persil and Pril. This creates the new consumer goods division called “Consumer Brands”.

König will then be responsible for sales of almost ten billion euros and 18,000 employees. And he should be in the focus of the owner family: Henkel makes the larger and more profitable business with its adhesives division. But the traditional group is publicly known and valued internally for its consumer goods brands such as Persil and Schwarzkopf.

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König takes on a difficult area: Analysts complain that the cosmetics business is too small and not profitable enough compared to that of competitors like L’Oréal. Henkel is mainly active in the mass cosmetics business – and you can’t make as much money with it as with high-quality creams or perfumes that Henkel doesn’t have in its portfolio.

The cleaning and detergents sector is known for its strong Pril and Persil brands. But sales in this division have been stagnating for years – and margins are falling. Depending on the area, they are 9.5 or 13.7 percent. In the future, Henkel wants to land between 13 and 19 percent. “We have to get better first and then bigger,” König told the analysts.

Only products with high margins

In order to get better, König only wants to invest in brands and areas that promise a high margin in the future. In the past, Henkel did not do this accurately. The group therefore wants to part with badly performing brands worth around 200 million euros in sales in the cosmetics business alone by the end of the year or discontinue them altogether.

A high margin is the decisive factor, especially in the consumer goods sector, said König, who wears his hair strictly pulled back. This is the only way to generate money that can then be used for new product innovations or to strengthen existing margins.

“We are building a new company within the company,” says König, who criticizes major inefficiencies: Up to now, two salespeople from Henkel have always spoken to retailers – one from the cosmetics and one from the detergents and cleaning agents sector. In addition, employees from research and development sometimes work on the same basic technologies without even knowing about it. The basic research on hair and fabric fibers is considered comparable.

Cosmetics development at Henkel

The Dax group is reorganizing its consumer business.

(Photo: Henkel)

In order to solve such inefficiencies, Henkel wants to cut 2,000 jobs worldwide by the end of 2023 in a first phase, of which 300 will be affected in Germany. In a second phase, the group also wants to cut costs in the areas of production and supply chain, which will also lead to job cuts. Details are not yet known.

The need for optimization seems great: So far, the two areas have had two completely different supply chains, reported König. Henkel would place two orders with the suppliers and pay two invoices. Even two different trucks would drive from the warehouse to the supermarket.

The manager has hardly seen such inefficiencies in his almost 25-year career in the consumer goods sector. After studying economics at the University of Kassel, König started his career in 1996 at the Nivea manufacturer Beiersdorf, in 2005 he switched to Colgate-Palmolive.

Before joining Henkel, he held a managerial position at US food manufacturer Kellogg, which is known for its breakfast cereals. King is married and has three children.

Technologies as the “main anchor” for the business

In order to make Henkel’s consumer goods business better, König builds on technologies. These are the “main anchor”. In the detergent sector, for example, Henkel uses leading technology that no other competitor has. “We’ve just never said that loud enough.”

Acquisitions are also part of the growth strategy for König. The new structure makes it easier for the group to buy companies that previously did not fit either one area or the other. When asked by an analyst, the manager did not want to comment on whether König is interested in brands from the health sector. Products from this sector are considered to have high margins.

For industry experts and company observers, the restructuring of the Henkel group is above all a defensive measure with advantages on the cost side, but which does not necessarily lead to increased sales. König, on the other hand, wants to achieve the growth targets. The manager must now provide this proof.

More: 7.5 percent more growth – Persil manufacturer Henkel again increases the forecast

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