Henkel Cosmetics Egypt

About the company

Henkel is a multinational company with the
headquarters in Dsseldorf Germany
established 1876
Operates in 81 countries worldwide with
50,000 employees
Three main business divisions
- Adhesive technologies (Pattex, Pritt, Loctite)
- Laundry & home care (Persil, Pril, Dixan)
- Cosmetics and toiletries (Schwarzkopf, FA,
Dial)

Annual NES is 13.5 Billion Euros in 2011

Henkel Egypt Cosmetics Division

Our concern is Henkel Egypt Cosmetics
business unit.
The company annual NES is 150 MEGP
Current Sales strategy/pattern of
cosmetics focuses on SALES IN to the
companys distributors (traditional trade &
modern trade)
The distributors perform warehousing,
distribution on cost + commission basis

Process
The process is as follows:
- Company imports and produces products.
- Company stocks its products in company
warehouses.
- Company performs its monthly sales through
shipping volumes of products into its two
channels (traditional & modern) SALES IN
- The company tries to boost the demand and
SALES OUT of its products to end users
through BTL & ATL activities in both channels

Diagram
The following diagram is mapping the
strategy that the company uses for
distribution and sales pattern maintained
to achieve monthly sales targets

Facts & Findings

Expired & slow moving products wroth 3
MEGP with 15% increase Vs. previous
year
Annual sales returns amount of 26 MEGP
with 40% increase vs. previous year.
Stock replenishment cost 0.50 MEGP with
27% increase vs. previous year
Extra warehouse rentals to distributors
360 TEGP

Facts & Findings

Expired products execution provision
increasing 18% Vs previous year reaching
2.5 MEGP
Stocks at traditional channels reaching
250 days.
Sales out percentage of sales in
decreasing 12% that last year reaching
66%

Facts & Findings

A/R % increase to reach 40% of NES
Over dues increase to reach 17% of total
A/R
Credit terms increased to distributors from
60 to 90 days which affects the cash
networking capital negatively.

Conclusion

Achieving targets does not always indicate a

successful strategy