Strong performance at Henkel sees sales and profits rise

By Katie Nichol

- Last updated on GMT

Related tags Organic growth Henkel

Germany-based Henkel reported a 7.8 per cent increase in first quarter sales aided by an ‘impressive sales performance’ in its cosmetics and toiletries division.

Sales at the consumer goods company for the first three months of fiscal 2010 came in at €3.5bn, and net income rose 119.8 per cent to reach €266m compared to €121m last year.

Board chairman Kasper Rorsted said that the company’s good performance was due to its continuing efforts in adapting structures and reducing costs as well as improved performances across all three business sectors.

“Laundry and Home Care and Cosmetics and Toiletries continued their successful development of recent quarters while Adhesive Technologies also returned to robust rates of sales growth,” ​he said.

‘Impressive sales performance’ in Cosmetics and Toiletries

Despite a highly competitive market environment, the company’s Cosmetics and Toiletries sector recorded a 5.5 per cent increase in organic sales compared to the previous year.

The division represents 23.1 per cent of the company’s total sales, and achieved organic sales of €812m for the quarter. This increase was outshone by the rise in operating profit, however, which Henkel said hit the one billion mark for the first time in a first quarter, rising 10.1 per cent.

According to Henkel, the strong sales performance was helped by the record results reported by the Hair Cosmetics segment, buoyed by the launch of several new products.

New launches were seen across all three sub-segments of Hair Cosmetics, including the launch of the Gliss Shea Cashmere line and Syoss Color line, helping the company expand its market share.

On a geographical basis, Cosmetics and Toiletries recorded double digit rates of increase across the board, according to Henkel, with the growth regions of Asia-Pacific, Eastern Europe, Latin America and Africa and the Middle East performing particularly well.

Future outlook

Looking ahead to the full financial year; Henkel expects its encouraging start to continue.

“We are looking forward to a noticeable improvement in our results of more than 15 per cent for the full fiscal year versus 2009,” ​said Rorsted.

The company said that despite its estimation that market conditions will remain fragile, it is confident of again outperforming its relevant markets in terms of organic sales growth.

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