Henkel Initiates Measures to Increase Long-Term Profitability

Against the background of changing market conditions, especially with regard to ever stronger competition and increasing cost pressure, caused among others by markedly rising raw material prices, the Management Board of Henkel KGaA has decided the basics of an efficiency enhancement program.

”With this step, we are responding early and responsibly to the ever faster changes in our markets”, says Ulrich Lehner, Chairman of the Management Board of Henkel KGaA. ”This way, we prepare for oncoming developments and ensure the future viability of our company from a position of strength."

The program, which will be initiated on a worldwide level, is to define projects in all business sectors, regions and functions with the aim to sustainably strengthen both Henkel’s profitability and long-term competitiveness. The initiative, with a volume of about 500 million euros, is designed to generate annual savings of around 150 million euros from 2011. Based on experience from similar programs carried through in the past, these measures could result in the reduction of about 3,000 jobs.

“We are fully aware of the particular responsibility entailed especially with this part of the considerations”, says Lehner. “The program is not about mere reduction of costs, but about an investment in processes and structures with future viability to which we are committed due to our corporate responsibility. As in the past, and in accordance with our tradition and values, the possible job reduction will be carried out in a socially responsible manner.”

Henkel will finalize the details of the program following the development of single project ideas and the subsequent discussion with both the works councils and the employees likely to be affected.

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