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Henkel Net Profits Up 32.6 Percent in 2008

German cosmetics and household products giant Henkel reported a 248.6 percent fourth-quarter 2008 net earnings leap to 861 million euros.

BERLIN — German cosmetics and household products giant Henkel reported a 248.6 percent fourth-quarter 2008 net earnings leap to 861 million euros, or $1.14 billion at average exchange, from 247 million euros, or $357.6 million, in the same period a year ago.

This story first appeared in the February 26, 2009 issue of WWD.  Subscribe Today.

That performance was largely due to the sale of its 29 percent stake in cleaning company EcoLab for approximately $2 billion, the acquisition of the National Starch business in April 2008 and integrating a global efficiency plan to help control costs. Henkel’s profits came on sales of 3.54 billion euros, or $4.67 billion, an 11.1 percent rise.

The Düsseldorf-based company did not give projections for 2009.

Henkel’s beauty division, which includes skin, body and hair care, posted a 2.2 percent decrease in operating profits to 95 million euros, or $125.4 million, on sales that rose 4 percent to 759 million euros, or $1 billion, in the period. That segment showed organic growth of 3.3 percent.

Overall, Henkel’s fourth-quarter earnings before interest and taxes, adjusted for onetime items and restructuring charges, gained 16.6 percent to 379 million euros, or $500.3 million.

Henkel’s overall 2008 sales were 14.13 billion euros, or $19.32 billion at average exchange, an 8.1 percent uptick over 2007. Its net profits were 1.22 billion euros, or $1.79 billion, up 32.6 percent.

The company’s beauty segment registered revenue growth of 1.5 percent year-over-year to 3.02 billion euros, or $4.44 billion. After adjusting for foreign exchange, the increase was 4.2 percent. The division’s organic growth was 4.7 percent and its adjusted EBIT gained 4.1 percent to 376 million euros, or $552.7 million.

Sales of beauty products made up 21 percent of Henkel’s 2008 revenues. The company stated its skin care business got a boost from the Diadermine antiaging line, plus Gliss Kur and Shauma in hair care and new products from body care brands Fa and Dial.

Looking ahead, Henkel’s chief executive officer Kasper Rorsted was circumspect.

“We know that 2009 is not going to be an easy year,” he stated. “At the moment, it is difficult to predict how the economy as a whole is going to develop. However, we are well equipped to weather the storm.”