Henkel reports sales and profit gains, with cosmetics powering ahead

By Simon Pitman

- Last updated on GMT

Related tags Organic sales growth Marketing

Henkel reports significant gains for its first financial quarter, a result that was driven by major revenue increase in both its cosmetics division and emerging markets.

Sales for the quarter increased by 8.9 per cent to €3.82bn, which represented an organic increase of 7.2 percent – a figure that illustrated the impact of currency exchange against a strong Euro currency.

The increase represented strong gains across all the company’s business sectors – cosmetics/toiletries, home care and adhesives – a result that also out-performed each of the relevant business categories.

“Despite the challenging market environment, Henkel reports a solid start to the financial year. We achieved very good organic sales growth, once again outperforming our relevant markets,”​ said Henkel CEO Kasper Rorsted.

Expectations raised for organic sales

Given the strong performance, Rorsted also stated his belief that the company was on track to achieve the targets that were set at the start of the year, and added that the forecast was being slightly raised for organic full year sales, towards the upper end of the 3 to 5 percent guidance.

The company also said that it expected to offset continuing price increases for raw materials and energy through the successful implementation of cost saving measures.

Net income for the quarter rose by 9.0 per cent to €290m, while the adjusted EBIT margin rose by 0.4 per cent to 13.0 per cent.

Emerging markets score double-digit sales growth

In the cosmetics and toiletries division sales grew by 7.7 per cent to reach €821m, which represented an organic increase of 5.7 per cent, but still well above the average market growth rate.

All geographic regions contributed to the growth, with the emerging markets of Eastern Europe, Latin America and Asia all notching up double-digit increases, a performance that helped to up the operating profit for the division by 12.6 percent to €112m.

Likewise the home care business sales rise by 2.2 per cent to €1.07bn, while a continued strong recovery in the manufacturing segment helped to drive a sales increase in the adhesives technology business of 14.1 per cent to €1.88bn.

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