BERLIN — Henkel AG reported solid earnings performance in the third quarter as all divisions registered growth.
Adjusted for one-time charges, gains and restructuring charges, the Düsseldorf, Germany-based company recorded a 9.2 percent gain in net income to 616 million euros, or $687.7 million, in the three months ended Sept. 30. Adjusted operating profit rose 7.6 percent to 837 million euros, or $934.6 million.
Dollar figures are calculated at average exchange for the period to which they refer.
Group sales for firm — which straddles beauty-care, adhesives, laundry and home-care products — advanced 3.4 percent to 4.75 billion euros, or $5.3 billion. Adjusted for negative foreign exchange effects, sales improved by 6.7 percent, while organic sales growth was pegged at 2.8 percent, with the laundry and home division booking 4 percent growth; beauty, 2.6 percent, and adhesives, 2.5 percent.
In the beauty division, which contributed 20 percent of third-quarter group sales, the maker of Schwarzkopf, Fa, Dial and Syoss grew sales 0.4 percent to 968 million, or $1.08 billion. Organically, the division increased sales 2.6 percent. Henkel trumpeted a very strong growth rate in Eastern Europe, Latin America and the Africa-Middle East region. Sales in mature markets were flat, while beauty sales in Asia, excluding Japan, were down.
The beauty unit continued to see improvements in adjusted operating profit, which hit 170 million euros, or $189.8 million, a gain of 9.1 percent.
Henkel reconfirmed its guidance for the full 2016 fiscal year, which was upwardly revised in August. The group expects organic sales growth of 2 percent to 4 percent in all divisions and a slight decrease in percentage of sales from emerging markets due to foreign exchange effects. Adjusted return on sales (EBIT margin) is expected to gain more than 16.5 percent. Henkel noted that in the first nine months of the year, it outpaced that rate with a 17.4 percent EBIT margin gain. Adjusted earnings per preferred shares are slated to advance between 8 percent to 11 percent, and year-to-date have increased 8.5 percent.
In addition, Henkel further updated several business expectations for the year. The group is forecasting unchanged levels in prices for raw materials, packaging, and purchased goods and services, and a lowering of investments in property, plant and equipment, and intangible assets to between 550 million euros and 600 million euros, or $608 million and $663.2 million at current exchange, compared to the previous forecast of a 650 million euros to 700 million euros, or $718.5 million to $773.7 million, outlay.
But due to the acquisition of the The Sun Products Corp. in America, which was completed in September, restructuring charges for 2016 are now expected to come in at 250 million euros to 300 million euros, or $276.4 million to $331.6 million, versus the 150 million euros to 200 million euros, or $165.8 million to $221.1 million, previously expected.