Henkel Eyes Cuts After Q4 Slump

In an effort to boost profit margins, Henkel says it will embark on a campaign to cut costs and boost its profit margins after fourth-quarter results came in below expectations.

“Henkel intends to further adapt its structures to the constantly changing market conditions while maintaining its strict cost discipline,” the company said, citing a challenging economic environment and high raw material costs.

The group, whose brands include Persil detergent and Schwarzkopf hair products, confirmed its 2012 targets for adjusted EBIT margin of 14% and sales growth of between 3-5%.

The 2011 margin was 13.2%.

However, analysts are skeptical that Henkel will reach the 2012 margin target given the expected slowdown in the global economy, with the average forecast at 13.5. Rival Unilever said 2012 will be a difficult year, while Procter & Gamble has announced thousands of job cuts in a bid to trim costs.