Henkel KGaA's Q4 earnings were flat, hurt by higher raw material prices, and the group said it would sell all or part of its Ecolab stake to help it buy National Starch.The German group, which makes got2b hair products, Persil laundry detergent and Pritt and Loctite glues, said it expected organic sales - which exclude the impact of acquisitions and currency movements - to grow 3% to 4% this year and growth in operating earnings would exceed that.
Earnings before interest and tax (EBIT) in the quarter ended December were €323 million ($478.7 million), below a Reuters poll average forecast of €349 million.
While EBIT at the adhesives unit rose 23%, a Henkel spokesman said higher raw material costs affected the earnings.
Henkel said no final decision had yet been taken on Minnesota-based Ecolab, in which it holds 29.4%. Henkel's stake was worth €2.5 billion at end-December.
To combat higher raw material costs and price pressures, Henkel announced a program that could save it up to €150 million a year from 2011 and could result in 3,000 job cuts.
Henkel had said earlier that it planned to issue up to €2.5 billion of debt to finance its €4 billion acquisition of parts of the National Starch business from Britain's ICI and keep its ‘A’ credit rating. It had yet to say how it would raise the remaining €1.5 billion. (Reuters)