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Henkel on Track to Meet 2012 Goals

The company anticipates 3 percent to 5 percent organic sales growth this year.

BERLIN — Henkel AG confirmed its financial targets for 2012 during its annual general meeting in its home city of Düsseldorf today.

 

The consumer goods and adhesives company’s chief executive officer Kasper Rorsted said he anticipates a rise in organic revenue growth of 3 percent to 5 percent, a return on sales of 14 percent, and an uptick in adjusted earnings per preferred share of approximately 10 percent this year. Henkel is on track to meet ambitious goals for 2012 set in 2008, he explained.

 

As previously reported, Henkel’s 2011 net income rose 12.2 percent to 1.29 billion euros, or $1.8 billion, while adjusted operating profits increased 9 percent to 2.03 billion euros, or $2.83 billion – figures that met or exceeded the firm’s predictions. Group sales for the year were up 3.4 percent to 15.61 billion euros, or $21.76 billion.

 

Dollar figures are converted at the average exchange rate for the period to which they refer.

 

Henkel’s cosmetics and toiletries business, which includes the Fa, Schwarzkopf and Dial brands, posted adjusted operating profits of 482 million euros, or $672 million, a 10.5 percent gain, as previously noted. The division’s sales rose 4 percent to 3.4 billion euros, or $4.74 billion, outperforming the market. Factors driving gains included emerging markets and Henkel’s three-year-old Syoss hair care brand.  

 

Henkel’s adhesives division also showed positive development, with adjusted operating profits rising 14.7 to a record 1.08 billion euros, or $1.55 billion.  To meet rapid demand in China, the company plans to build the world’s largest adhesives factory in Shanghai later this year.

 

Henkel’s overall business gains in 2011 came despite a challenging year that included a difficult market environment, European economic uncertainty and crisis management for workers in countries and zones that faced natural or political upheaval, such as Japan, Thailand, the Middle East and North Africa, said Rorsted.

 

Henkel’s management board has undertaken in-depth environmental, economic and trend analysis for future planning, and long-term strategies will be announced in the fourth quarter of 2012, said Rorsted. Meanwhile, the company’s interim goals were laid out. By 2015, Henkel hopes to generate 10 percent more sales, plus reduce energy consumption and emissions, consume less water and reduce the firm’s waste footprint — all by 15 percent.

 

The company will also continue its strategy of reducing its number of brands to focus on key offerings. Henkel has eliminated more than 600 from its portfolio since 2008 and has around 100 yet to shed to meet its stated goal of having nearly 300 brands.

 

“We have made great progress in the pursuit of our strategic priorities,” said Rorsted. “Volatility is the new normal condition, so we will need to continue adapting to rapid change going forward.”

 

As previously announced, Henkel shareholders will also benefit from the company’s successful year. It proposed today that annual dividends should be increased to 0.80 euros, or $1.05 at current exchange, from 0.72 euros, or $0.94, per ordinary share. The amount distributed will total 345 million euros, or $451.3 million.