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Henkel’s consumer business restructuring to save $530 mln, cost 2,000 jobs, Retail News, ET Retail

Henkel's consumer business restructuring to save $530 mln, cost 2,000 jobsBERLIN: German consumer goods group Henkel expects the merger of its cosmetics and detergents business units to boost growth and generate gross savings of 500 million euros ($530.60 million) in the medium term, it said on Thursday.

“From today’s perspective, around 2,000 jobs will be affected worldwide, mainly in sales and administration,” the maker of Persil washing detergents said.

The merger of laundry and home care products such as Persil, Perwoll and Pril and beauty brands including Schwarzkopf and Dial into one business unit will be implemented in two steps, leading to net savings of around 250 million euros on an annualized basis until end-2023, it said.

Building on its brands, Henkel aims for organic sales growth of 3-4% and an adjusted margin of earnings before interest and tax in the mid-teens percent range for the new unit in the medium- to long-term.

Henkel said that businesses that do not meet its growth and profitability criteria could be halted or sold.

Businesses and brands with total sales of up to 1 billion euros were under review. On the other hand, Henkel is open for buys that add growth opportunities to the new unit.

“By consistently focusing on businesses and brands with high gross margins, we are creating the conditions for increasing our earnings performance, as well as for additional funds for further investments in growth,” said future consumer brands chief Wolfgang Koenig.

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