Henkel Reports Robust Performance in Q2, Confirms Guidance for Fiscal Year 2017

Dubai, UAE, August 29, 2017:  In Q2 2017, Henkel delivered a strong performance in a highly challenging market environment. The company reached new highs in quarterly sales, adjusted operating profit and EBIT margin, and increased earnings per preferred share. 

 

“All three of our business units contributed to the positive growth we witnessed in Q2,” said Henkel CEO Hans Van Bylen. “Sales grew significantly to around €5.1 billion. We further improved our adjusted operating profit as well as our adjusted EBIT margin. As a result, adjusted earnings per preferred share showed a double-digit growth.”

 

“We expect an overall volatile and uncertain market environment throughout the current fiscal year. Currency fluctuations are likely to continue, and we anticipate the difficult conditions in the consumer goods markets to persist. Looking ahead, we are fully committed to continuing our strong performance and to implementing our strategic priorities to reinforce the robust growth achieved,” added Van Bylen.

 

“Furthermore, we confirm our guidance for the full fiscal year 2017, and anticipate an organic sales growth of two to four percent. We estimate our adjusted EBIT margin to increase to more than 17 percent, while adjusted earnings per preferred share climbs by seven to nine percent.”

 

Sales in Q2 2017 reached an all-time high of €5,098 million, and grew nominally by 9.6 percent compared to the same period last year, with acquisitions and divestments accounting for 7.4 percent of this growth. Meanwhile, organic sales that exclude the impact of foreign exchange effects and acquisitions/divestments, showed a solid increase of 2.2 percent, with positive contributions by both emerging and mature markets.

 

In a continuously challenging market environment characterized by high promotional and pricing pressure, the Western Europe region reported a slightly negative organic sales growth of -1.2 percent. All other regions recorded positive organic sales growth: Africa / Middle East posted a sales growth of 1.1 percent, while sales in North America increased by 3.2 percent. In Eastern Europe, sales grew by 5.2 percent. Latin America achieved a sales growth of 6.1 percent and in the Asia-Pacific region, sales surged by 4.8 percent. 

 

The Adhesive Technologies business unit posted strong organic sales growth of 3.4 percent. In nominal terms, sales rose by 3.5 percent to a new high of €2,370 million. Adjusted operating profit increased by 6.6 percent to €455 million. Meanwhile, adjusted return on sales also reported a strong surge, reaching a record 19.2 percent.  

 

In the Beauty Care business unit, organic sales remained consistent for the same quarter last year. Nominally, sales grew by 0.9 percent to €997 million. Adjusted operating profit showed a significant increase of 4.3 percent and reached €180 million. Adjusted return on sales recorded a very strong growth to 18 percent, an all-time high.

 

The Laundry & Home Care business unit reported a solid 2.1 percent increase in organic sales. Nominally, sales increased by 26.6 percent to €1,703 million compared to the same quarter last year. Adjusted operating profit rose by 22.2 percent to €298 million, and adjusted return on sales recorded 17.5 percent.

 

Acquisitions by business units, including the acquisition of the global Darex Packaging Technologies business and the Sonderhoff Group at the beginning of Q3 2017 by the Adhesives Technologies business and of The Sun Products Corporation by the Laundry and Home Care business unit, contributed significantly to both sales and operating profit. 

 

Henkel confirms the outlook for the fiscal year 2017. Henkel expects to generate organic sales growth of 2 to 4 percent and anticipates that each business unit will generate organic sales growth within this range. For adjusted return on sales (EBIT), Henkel expects an increase versus the prior year to more than 17.0 percent. Henkel expects an increase in adjusted earnings per preferred share (EPS) of between 

7 and 9 percent.