The consumer goods group Henkel is now withdrawing from Russia. Apparently, with this about-face, the management is taking the consequences of the increasing public pressure.
Only two weeks after its decision to stick with the Russian business, the management of the DAX company Henkel has now completed a strategic U-turn. They now want to give up the business in Russia.
“Against the background of the current developments in the war in Ukraine, Henkel has decided to give up business in Russia,” the manufacturer of Pritt and Persil said at noon.
“Henkel condemns the Russian war of aggression against Ukraine and the violence against innocent civilians,” said CEO Carsten Knobel. The implementation of the decision is now being prepared. Meanwhile, the approximately 2,500 Henkel employees in Russia would continue to be employed and paid.
U-turn of own statements
Just two weeks ago, the CEO had declared at the group’s annual general meeting that they wanted to hold on to business in Russia. However, Henkel had stopped all advertising and ended all sponsorship activities. The company had also stopped all planned investments in Russia.
Above all, the group wanted to continue to manufacture and sell everyday goods such as cleaning and hygiene products in Russia. In addition, the employees in Russia want to face up to his responsibility.
At the beginning of April, Henkel also stated that it feared a possible expropriation by the Russian government. In addition, local managers are at risk if they stop doing business locally.
Image damage threatens
Despite these arguments, it seemed that the deal could no longer be terminated. Many corporations that are still active in Russia are publicly denounced and suffer damage to their image.
Henkel has been active in Russia for more than 30 years and operates eleven production sites there. The group recently generated sales of around one billion euros in Russia. The financial impact of the planned exit from Russia “cannot be further quantified at this point in time,” Henkel said.
Stock falls through with investors
On the stock exchange, the Henkel share is one of the weakest values in the DAX, the title loses almost three percent in the afternoon. Over a twelve-month period, Henkel shares are also among the bottom performers in the index, down 40 percent.
The industry competitor Beiersdorf, also listed in the DAX, is still present in Russia. The group had said last week that business in Russia had been significantly reduced and that they wanted to continue offering everyday products there.
