HEN3 Henkel AG & Co KGAA

By Ed Frankl

Henkel AG & Co. KGaA on Thursday laid out plans to save 500 million euros ($531.1 million) annually as part of the merger of its consumer businesses.

The combination of its laundry & home care and beauty-care units into a consumer brands business would affect around 2,000 jobs world-wide, mainly in sales and administration, with the first phase of measures to be implemented by the end of 2023, Henkel said.

The German company expects one-time costs of around EUR350 million on the move.

It is targeting around EUR500 million in gross savings in the midterm, and to save around EUR250 million net each year, it said.

For the consumer-brands segment, Henkel is targeting organic sales growth of 3%-4% and an adjusted EBIT margin in the mid-teens percentage range, Henkel said.

The Dusseldorf-based company added that it is reviewing its portfolio brands worth up to EUR1 billion in annual sales.

Separately, Henkel said first-quarter sales increased on year by 6.1% to EUR5.27 billion, driven by higher prices, despite what it called a "very challenging environment."

It kept its full-year guidance, but said it now expects material prices to increase in the mid-twenties percentage range compared with 2021 amid tight supply chains made worse by the Ukraine war.

Write to Ed Frankl at edward.frankl@dowjones.com

(END) Dow Jones Newswires

May 05, 2022 02:37 ET (06:37 GMT)

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