12-Aug-2015 Düsseldorf / Germany
Henkel delivers solid performance in second quarter
- Sales: +13.5% to 4,695 million euros (organic: +2.4%)
- Operating profit*: +14.0% to 768 million euros
- EBIT margin*: +0.1 percentage points to 16.4%
- Earnings per preferred share* (EPS): +11.2% to 1.29 euros
- Strong organic sales growth in emerging markets: +5.1%
“In a persistently challenging market environment, Henkel delivered overall a solid performance in the second quarter. We again achieved double-digit growth for both sales and earnings. The main drivers were solid organic sales growth, last year’s acquisitions and, above all, the strong US dollar. Organic sales in emerging markets were strong, once again making an above-average contribution to growth,” said Henkel CEO Kasper Rorsted.
Referring to Henkel’s performance in the first six months of 2015, Rorsted stated: “In the first half of 2015 we were able to increase sales by almost 1.1 billion euros to more than 9.1 billion euros. With organic sales growth of 3.0 percent, an adjusted EBIT margin of 16.2 percent and adjusted EPS growth of 12.3 percent we are on track to reach our full year guidance.”
Commenting on the fiscal year 2015, Rorsted said: “We expect the current difficult global economic environment to persist. Market volatility will remain high. In this context, agility and flexibility are key success factors. We will therefore continue to adapt, further simplify and accelerate our structures and processes in line with the changing market conditions.”
Guidance for 2015 confirmed
Despite the challenging environment, Rorsted confirmed the outlook for the full year: “We expect to achieve organic sales growth of 3 to 5 percent in 2015. We expect adjusted return on sales to increase to around 16 percent and anticipate an increase in adjusted earnings per preferred share of approximately 10 percent.”
Sales and earnings performance in the second quarter 2015
In the second quarter of 2015, sales once again rose double-digit by 13.5 percent to 4,695 million euros. Adjusted for positive foreign exchange effects of 7.3 percent, sales improved by 6.2 percent. Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales rose by 2.4 percent.
The Laundry & Home Care business unit recorded solid organic sales growth of 4.3 percent. In the Beauty Care business unit a positive increase in organic sales of 1.9 percent was achieved. The Adhesive Technologies business unit also posted a positive improvement in organic sales of 1.7 percent.
After one-time gains, one-time charges and restructuring charges, adjusted operating profit improved by 14.0 percent, from 674 million euros to 768 million euros. Reported operating profit (EBIT) grew by 21.4 percent, from 589 million euros to 715 million euros.
Adjusted return on sales increased by 0.1 percentage points to 16.4 percent. Reported return on sales rose by 1.0 percentage points from 14.2 percent to 15.2 percent.
Henkel’s financial result of -11 million euros was at the level of the prior-year quarter. The tax rate amounted to 24.6 percent (prior-year quarter: 22.8 percent).
Adjusted net income for the quarter, after deducting non-controlling interests, increased by 11.8 percent from 499 million euros to 558 million euros. Reported net income for the quarter grew by 19.1 percent from 446 million euros to 531 million euros. After deducting 10 million euros attributable to non-controlling interests, quarterly net income increased to 521 million euros (prior-year quarter: 441 million euros).
Adjusted earnings per preferred share (EPS) rose by 11.2 percent from 1.16 euros to 1.29 euros. Reported EPS increased from 1.02 euros to 1.20 euros.
Net working capital relative to sales increased year-on-year by 0.6 percentage points to 6.6 percent. The rise is primarily due to acquisitions and foreign exchange effects.
Good business performance in the first half year 2015
In the first half of 2015 Henkel’s sales increased significantly by 1,059 million euros to 9,125 million euros. This was an increase of 13.1 percent compared to the first half year 2014. Adjusted for foreign exchange, sales grew by 6.5 percent. Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales increased by 3.0 percent, with all of Henkel’s business units contributing with a solid performance.
Adjusted operating profit grew by 182 million euros from 1,293 million euros to 1,475 million euros (+14.0 percent). Adjusted return on sales increased from 16.0 to 16.2 percent.
Adjusted net income for the half year, after deducting non-controlling interests, rose by 12.3 percent from 951 million euros to 1,068 million euros.
Adjusted earnings per preferred share (EPS) rose by 12.3 percent or 0.27 euros from 2.20 euros to 2.47 euros.
Henkel’s net financial position as of June 30, 2015 was -634 million euros (December 31, 2014: -153 million euros). The change versus year-end 2014 is mainly due to the dividend payout.
* Adjusted for one-time charges/gains and restructuring charges
This document contains forward-looking statements which are based on the current estimates and assumptions made by the corporate management of Henkel AG & Co. KGaA. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate, forecast and similar formulations. Such statements are not to be understood as in any way guaranteeing that those expectations will turn out to be accurate. Future performance and the results actually achieved by Henkel AG & Co. KGaA and its affiliated companies depend on a number of risks and uncertainties and may therefore differ materially from forward-looking statements. Many of these factors are outside Henkel’s control and cannot be accurately estimated in advance, such as the future economic environment and the actions of competitors and others involved in the marketplace. Henkel neither plans nor undertakes to update forward-looking statements.