* CEO says to meet challenges "head-on"
* Expects weak foreign currencies will continue to hurt
* CEO confirms outlook for the current year
(Adds comments on currencies, impact on rivals)
DUESSELDORF, Germany, April 4 German consumer
goods group Henkel said the weak Russian rouble
would hurt its first-half earnings but it had no plans to
withdraw from Russia or Ukraine in spite of uncertainty
following Moscow's annexation of Crimea.
Investing in emerging markets with high growth inevitably
meant risk and volatility, Chief Executive Kasper Rorsted told
the company's annual shareholders' meeting on Friday.
Russia is Henkel's fourth-largest market with annual sales
of around 1 billion euros ($1.4 billion) last year.
Rorsted said that while the weak rouble was hurting
business, it was too early to quantify the impact on first-half
The rouble has lost 20 percent against the dollar
since protests against the now toppled government in Ukraine
began in November.
"Not that this changes anything in our strategy - quite the
opposite, in fact. We are determined to meet these challenges
head-on," he told shareholders at the meeting in Duesseldorf.
The German company, maker of Persil washing powder and
Schwarzkopf hair products, employs about 2,500 staff in Russia
and also runs several factories in Ukraine with about 1,000
employees, and Rorsted said pulling out of the region was not on
Analysts at Kepler Chevreux estimate that Russia and the
Ukraine accounted for 10 percent of Henkel's total sales of 16.4
billion euros last year.
Russia's annexation of Crimea has worried companies with
assets in the region as it is unclear how the change and
sanctions imposed by Western countries may affect business.
Several top German executives have criticised the strategy
of the United States and European Union in dealing with Russia
as they fear the consequences for their business.
The depreciation of emerging market currencies has weighed
on the earnings of other consumer goods groups.
Industry leader Procter & Gamble cut its outlook
reflecting unfavourable exchange rates in Venezuela and other
developing markets in February, while Nivea-maker Beiersdorf
reported lower-than-expected sales due to currency
Henkel has a target to generate half of its sales from
emerging markets by 2016. In 2013, that proportion stood at
around 44 percent, up from 43 percent the previous year.
Rorsted also on Friday confirmed the company's targets of a
slight increase in its adjusted operating margin this year to
15.5 percent and organic sales growth of 3 to 5 percent.
($1 = 0.7291 euros)
(Reporting by Matthias Inverardi; Writing by Kirsti Knolle;
Editing by Susan Fenton)