Feb 23, 2017
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Henkel reports strong quarter driven by emerging markets

Feb 23, 2017

German consumer goods group Henkel reported stronger-than-expected fourth-quarter results on Thursday, helped by growth in its beauty division and emerging markets.


Henkel reported quarterly earnings before interest and taxes (EBIT), adjusted for one-offs, of 765 million euros ($807 million) on sales up 10.8 percent to 4.86 billion euros, at the top end of analysts' forecasts.

It said growth was driven by emerging markets, which account for 42 percent of sales, with Latin America, particularly Mexico, leading the pack.

Its beauty division, which includes the brands Schwarzkopf, Syoss, Fa and Diadermine posted a 2.1% rise in sales.

The consumer goods industry has had a turbulent couple of weeks with U.S. food company Kraft Heinz Co proposing and then withdrawing a $143-billion bid for with larger rival Unilever Plc, while activist investor Trian has disclosed a $3.5 billion stake in Procter & Gamble Co.

Known for laundry detergent Persil, beauty line Schwarzkopf and adhesives brand Loctite, Henkel stuck to its standard forecast for organic sales growth in 2017 of 2-4 percent, and a 7-9 percent increase in adjusted earnings per preferred share.

"We expect the highly volatile and uncertain market environment to continue," Chief Executive Hans Van Bylen said.

"Nevertheless, based on our clear strategic direction, our strong global team and our innovative brands and technologies with leading market positions, we are well positioned for further profitable growth."

Henkel said last November that acquisitions would remain a key part of its strategy after it spent $3.6 billion to buy North American laundry detergent maker Sun Products, known for its Snuggle brand.

($1 = 0.9477 euros)


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