Soap boxed

6 July 2004

The German retailer’s problems at home stagnant markets and tougher price competition have spread further across Europe. Henkel saw trouble ahead hence its purchase of America’s Dial. But bedding down this deal well is now more important than ever.

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Henkel, the German detergentstoadhesives conglomerate, cuts its forecast for sales growth this year to 2%. It had earlier expected growth of between 3% and 4%. The targets exclude acquisitions and are adjusted for currency effects.

However, the company maintained its forecast for double digit growth in operating profit on the same basis.

The ongoing sluggish demand in Germany in the consumer markets relevant for Henkel has spread to the other European markets in the past few months, the company said in a statement. Linked to this are a stagnant to downward trend of the markets and tougher competition as well as pricing activities of the large competitors to which Henkel responds.

Henkel, which is bedding down a $2.9bn acquisition of Dial, a US detergents maker, said it was prioritising securing its profit targets and market positions ahead of hitting its sales goals. To this end it was investing in markets and brands and implement further costreduction measures.

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