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Emerging Markets Boost Henkel in Q2

Solid performance in all sectors leads to sales and earnings rise.

BERLIN — Consumer goods giant Henkel registered a rise in sales and earnings for its second quarter, boosted by the strong performance of emerging markets.   

Net income rose 6.7 percent to 432 million euros, or $564 million. Sales were up 1.9 percent to 4.29 billion euros, or $5.6 billion, an increase of 4 percent in organic terms.   

The firm’s adjusted operating results (EBIT) came in at 660 million euros, or $861.7 million, a gain of 8.2 percent.  New markets and currency effects contributed positively, the company said.

“While all regions reported growth, once again our emerging markets made an important contribution. The share of sales in emerging markets rose substantially, reaching 45 percent for the first time,” Henkel chief executive officer Kasper Rorsted said in a statement.

 

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In the three-month period ended June, sales for Henkel’s beauty care business, which accounts for 22 percent of the company’s sales, advanced 0.2 percent to 923 million euros, or $1.21 billion, a rise of 2.8 organically.   

Adjusted EBIT for the unit, which includes the Schwarzkopf, Dial and Syoss brands, gained 3.6 percent to 138 million euros, or $180.2 million.  All regions contributed to the increase, according to the company.  

All dollar figures are converted at average exchange rates for the period to which they refer.

During the first half of fiscal year 2013, Henkel’s adjusted net profits rose 12.5 percent to 902 million euros, or $1.18 billion. Sales totaled 8.32 billion euros, or $10.9 billion, up 1.3 percent in reported terms and up 3.2 percent organically.

Adjusted group EBIT advanced 8.6 percent to 1.26 billion euros, or $1.65 billion.  The firm’s adjusted EBIT margin increased to 15.1 percent from the previous year’s 14.1 percent.

Henkel’s beauty care division turned in sales of 1.8 billion euros, or $2.36 billion, during the six-month period, a rise of 0.8 percent, or 3.4 percent organically.  Adjusted EBIT for the division grew by 4.4 percent to 268 million euros, or $351.9 million.

Emerging markets, especially China, powered improved results. North America registered strong growth for the division and Western Europe was stable, while sales declined in Southern Europe and Japan. Performance was boosted by new launches in the hair care and personal care sector.

Citing continuing challenges in the marketplace, Rorsted vowed to adapt and improve competitiveness. Henkel confirmed its estimated performance for the full fiscal year of organic sales growth between 3 percent and 5 percent, and an adjusted EBIT margin of 14.5 percent.