Henkel seeks cost cuts as Russia slowdown hits sales

《Henkel seeks cost cuts as Russia slowdown hits sales》:

(Reuters) – German consumer goods group Henkel & Co is looking for ways to cut costs to make up for a decline in sales caused by economic slowdown in Russia, its fourth-largest market, its chief executive was quoted saying.

“If sales don’t grow as planned you have to change how you handle your expenses,” Kasper Rorsted said in an excerpt of an interview to be published in German weekly magazine Wirtschafts Woche on Monday.

Rorsted said all costs, from procurement, travel and marketingcosts to spending on external consultants, were under review, but there were no plans to cut jobs or curb investments in facilities and infrastructure.

Last month, Henkel, whose brands include Sellotape, Unibond and Schwarzkopf, reported a fourth straight quarterly sales decline and forecast a tough six months ahead, with the situation in Russia and volatile exchange rates hurting sales.

Henkel has annual sales of more than 1 billion euros ($1.3 billion) in Russia, where it has about 2,500 employees and is building a glue factory, its ninth plant in the country.

“And we will certainly add more factories in the future,” Rorsted told Wirtschafts Woche.

He affirmed Henkel’s 2014 outlook for organic sales growth of between 3 and 5 percent and an adjusted operating profit margin of 15.5 percent, the magazine said.

The World Bank said earlier this week Russia’s economy is set to stagnate in the next two years, as the country pays the price for the Ukraine crisis, a lack of structural reforms and an uncertain economic policy. (1 US dollar = 0.7885 euro) (Reporting by Maria Sheahan; Editing by David Holmes)

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