German consumer goods group Henkel, which is prominent in Russia, struck a cautious note on its 2015 outlook as it expects stagnation in Eastern Europe and further pressure on the Russian economy and currency over the coming months.
The maker of Persil washing powder and Scharzkopf hair products expects its adjusted operating profit margin to tick slightly higher in 2015, to around 16 percent from 15.8 percent in 2014.
Russia is Henkel's fourth-largest market with annual sales of about 1.1 billion euros and 2,500 staff in the country.
In the fourth quarter 2014, the euro traded around 30 percent higher against the rouble compared to the same period of the previous year as plunging oil prices and Western sanctions over the Ukraine crisis shrivelled Russia's exports and investment inflows.
Henkel forecast 2015 organic sales growth of 3 to 5 percent, below expectations for 6.1 percent growth according to analysts polled by Reuters poll.
Henkel said the economic environment remained challenging and very volatile.
"We will continue to adapt our processes and structures, making us more flexible and efficient," CEO Kasper Rorsted said in a statement.
Henkel shares were seen opening 1.4 percent lower, making them the top loser in the German bluechip index DAX, which was seen opening 0.4 percent higher.
The group posted a 3.1 percent increase in its fourth-quarter adjusted operating profit, largely in line with estimates, thanks to cost savings and emerging markets demand for washing powder, beauty products and industrial adhesives.
Henkel's adjusted earnings before interest and tax (EBIT) rose to 602 million euros ($672 million), compared with an average forecast of 599 million euros in a Reuters poll. Henkel said it would propose a 2014 dividend of 1.31 euros per preferred share after 1.22 euros in 2013.
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