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Henkel: Earnings, Restructuring, And Sale
WILLIAM STORCK
There was a lot going on at Henkel last week. The German consumer products and chemical company announced its earnings for the first nine months, said it would get rid of more employees, and confirmed that the sale of its Cognis chemical business would go through.
Net earnings for the first three quarters totaled nearly $322 million, an increase of 1.7% over the same period last year, but pretax profits fell 3.6% to $598 million. Sales rose 6.1% to $8.81 billion, despite, in Henkel's words, "a difficult market environment."
Henkel has instituted a restructuring program that will close or partially shut down some production sites. It also will close or redevelop unprofitable businesses. As part of the program, Henkel will reduce its 60,400-person workforce by 2,500 to 3,000. It has also earmarked about $260 million for restructuring measures in the next two years.
And Cognis will be sold. When the deal to sell the chemical unit to an investment group was signed the day after the terrorist attacks in the U.S. (C&EN, Sept. 17, page 13), Henkel granted the investors a withdrawal right up to Nov. 11 because of possible turmoil in world financial markets.
Henkel says the investors are not exercising the option, and the deal should close on Nov. 30. However, the price was lowered to about $2.2 billion from about $2.3 billion.
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