11.08.2016
Henkel AG & Co. KGaA DE0006048432
DGAP-News: Henkel AG & Co. KGaA:
DGAP-News: Henkel AG & Co. KGaA / Key word(s): Quarter Results
Henkel AG & Co. KGaA:
11.08.2016 / 07:31
The issuer is solely responsible for the content of this announcement.
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August 11, 2016
Henkel continues successful development in an increasingly challenging
environment
Henkel delivers strong second-quarter performance
- Sales at 4,654 million euros: organic +3.2% (nominal: -0.9%)
- Emerging markets sales growth: organic +6.1%
- Operating profit*: +6.6% to 819 million euros
- Earnings per preferred share* (EPS): +8.5% to 1.40 euros
- Very strong EBIT margin* improvement: +120 basis points to 17.6%
- Guidance for full year EBIT margin* raised
*Adjusted for one-time charges/gains and restructuring charges.
Düsseldorf - "Henkel delivered a strong business performance in the second
quarter. We generated solid organic sales growth, supported by a strong
development in the emerging markets and a positive development in the
mature markets. We were also able to significantly increase both earnings
and profitability. Adjusted earnings per preferred share grew by 8.5
percent to 1.40 euros and adjusted return on sales rose to 17.6 percent,
representing new record levels for Henkel. The successful development of
Henkel was driven by all three business units," said Henkel CEO Hans Van
Bylen. "I would like to thank our global team which contributed to the
strong performance in the second quarter."
"We are also very excited about the acquisition of The Sun Products
Corporation which we agreed on in the second quarter. This will be a
step-change for our position in North America, one of the most important
regions for Henkel worldwide. Upon closing of this transaction, we will
reach the No. 2 position in the US laundry care market."
Commenting on the current fiscal year, Van Bylen said: "We are facing a
market environment which is becoming increasingly challenging, with
moderate global economic growth, slowing growth dynamics, high
uncertainties in the markets and unfavorable foreign exchange developments.
We are committed to reaching our ambitious targets and will focus on
leveraging our innovation capabilities, our strong brands and our leading
market positions."
Guidance for full year adjusted EBIT margin raised
"For the full fiscal year 2016, we continue to expect organic sales growth
of 2 to 4 percent and our adjusted earnings per preferred share to grow
between 8 and 11 percent. For adjusted EBIT margin, we now anticipate an
increase to more than 16.5 percent. We had previously expected this figure
to reach approximately 16.5 percent," said Hans Van Bylen.
Sales and earnings performance in the second quarter 2016
In the second quarter of 2016, Henkel generated organic sales growth - i.e.
adjusted for foreign exchange and acquisitions/divestments - of 3.2
percent. Nominally, sales decreased by 0.9 percent to 4,654 million euros
due to a negative foreign exchange impact of 5.3 percent.
The Laundry & Home Care business unit recorded strong organic sales growth
of 5.3 percent. The Beauty Care business unit posted a solid improvement in
organic sales of 2.1 percent. The Adhesive Technologies business unit
likewise reported a solid increase in organic sales of 2.6 percent.
After allowing for one-time charges and gains and restructuring charges,
adjusted operating profit (EBIT) rose by 6.6 percent from 768 million euros
to 819 million euros. Reported operating profit grew by 5.8 percent from
715 million euros to 757 million euros.
Adjusted return on sales (EBIT margin) showed an increase of 1.2 percentage
points to 17.6 percent. Reported return on sales rose from 15.2 percent to
16.3 percent.
Henkel's financial result improved from -11 million euros in the second
quarter of 2015 to -1 million euros this time. This is attributable both to
the improvement in the net interest result and an improvement in the
foreign exchange result. The reported tax rate was 24.3 percent; in the
prior-year quarter it was 24.6 percent.
Adjusted net income for the quarter after deducting non-controlling
interests grew by 8.8 percent from 558 million euros to 607 million euros.
Reported net income for the quarter increased by 7.7 percent from 531
million euros to 572 million euros. After deducting 11 million euros
attributable to non-controlling interests, quarterly net income amounted to
561 million euros (prior-year quarter: 521 million euros).
Adjusted earnings per preferred share (EPS) rose by 8.5 percent from 1.29
euros to 1.40 euros. Reported EPS increased from 1.20 euros to 1.30 euros.
Net working capital related to sales improved year on year by 1.3
percentage points to 5.3 percent.
Strong business performance in the first half of 2016
In the first half of 2016, Henkel generated organic sales growth - i.e.
adjusted for foreign exchange and acquisitions/divestments - of 3.1
percent, with all Henkel's business units contributing. Nominally, sales
slightly decreased by 0.2 percent to 9,110 million euros due to negative
foreign exchange effects.
Adjusted operating profit rose by 6.4 percent from 1,475 million euros to
1,570 million euros; adjusted return on sales improved from 16.2 percent to
17.2 percent. After deducting non-controlling interests, adjusted net
income for the half year rose by 8.2 percent from 1,068 million euros to
1,156 million euros.
Adjusted earnings per preferred share (EPS) grew by 8.1 percent or 20
eurocents from 2.47 euros to 2.67 euros.
Effective June 30, 2016, Henkel's net financial position showed a balance
of -118 million euros (December 31, 2015: 335 million euros). The change
compared to the end of 2015 was mainly due to dividends paid and payments
for acquisitions.
Business unit performance in the second quarter 2016
The second quarter of 2016 saw the Laundry & Home Care business unit
successfully extend its profitable growth path. Sales grew organically by
5.3 percent year on year, once again outperforming the relevant markets.
Nominally, sales increased by 2.4 percent to 1,345 million euros (prior-
year quarter: 1,314 million euros).
The strong organic improvement was mainly driven by business growth in the
emerging markets. In Asia (excluding Japan), the business unit achieved
double-digit growth. Posting a very strong increase in sales, the regions
of Eastern Europe and Latin America contributed to the good performance
reported. The Africa/Middle East region posted very strong growth under the
challenging conditions of a still difficult market environment. Sales
growth in the mature markets was solid. Sales in the North America region
experienced a very strong increase year on year. Western Europe posted a
positive sales performance in an intensely competitive environment.
Adjusted operating profit at the Laundry & Home Care business unit
increased by a very strong 8.4 percent to 244 million euros. At 18.1
percent, adjusted return on sales improved by an excellent 1.0 percentage
points versus the second quarter of 2015. Reported operating profit
increased by 10.3 percent from 198 million euros to 218 million euros.
The Beauty Care business unit also successfully extended its long-
established path of profitable growth in the second quarter of 2016.
Organically, sales rose by 2.1 percent. Nominally, sales amounted to 988
million euros after 1,006 million euros in the prior-year quarter.
The business unit continued its successful development in emerging markets
with very strong organic sales growth. In particular, Eastern Europe and
Latin America contributed double-digit sales growth to the good results
achieved. Sales in the Africa/Middle East region were below the level of
the second quarter 2015, while the Asia region (excluding Japan) was able
to achieve strong growth. Sales performance in the mature markets was
slightly below the level of the prior-year quarter. Due to persistently
intense crowding-out competition and strong price pressure, sales in
Western Europe and in the mature markets of the Asia-Pacific region were
below the level of the second quarter of 2015. North America recorded solid
organic sales growth.
Adjusted operating profit of the Beauty Care business unit showed a solid
growth of 3.6 percent to 172 million euros. There was a very strong
improvement in adjusted return on sales of 0.9 percentage points, taking it
to a new high of 17.4 percent. Reported operating profit grew by 2.0
percent to 162 million euros.
The Adhesive Technologies business unit generated solid organic sales
growth of 2.6 percent in the second quarter. Nominally, sales amounted to
2,290 million euros after 2,343 million euros in the prior-year quarter.
The emerging markets continued their successful performance with further
solid organic sales growth. Both Latin America and Eastern Europe
experienced double-digit organic sales growth. Sales in Africa/Middle East
showed a solid growth rate. In the Asia region (excluding Japan), sales
were slightly below the level of the prior-year quarter, due particularly
to weakening economic growth in China. Sales performance in the mature
markets was positive as a whole. The businesses in Western Europe achieved
solid sales growth. However, sales in the mature markets of the Asia-
Pacific region remained below the level of the second quarter of 2015. In
North America, sales were just below the level of the prior-year quarter.
Adjusted operating profit at the Adhesive Technologies business unit
increased year on year by a very strong 7.1 percent to 426 million euros.
Adjusted return on sales improved by an excellent 1.6 percentage points to
a new high of 18.6 percent. Reported operating profit rose by 3.7 percent
to 403 million euros.
Regional performance in the second quarter 2016
In a highly competitive market environment, Henkel's sales in the Western
Europe region increased organically by 1.1 percent. In particular, the
countries of Southern Europe along with the UK posted very strong
performance, while sales in France and Benelux decreased. Nominally, sales
in the region increased by 1.4 percent to 1,585 million euros. In Eastern
Europe, sales grew organically by 9.7 percent in a challenging market
environment. The main contribution to this performance came from the
businesses in Russia, Turkey and Poland. Nominal sales in the region
totaled 698 million euros (prior-year quarter: 707 million euros). Growth
in the Africa/Middle East region continued to be impacted by the
geopolitical unrest prevailing in some countries. Nevertheless, organic
sales growth was at 4.4 percent. Nominal sales amounted to 333 million
euros after 342 million euros in the second quarter of 2015.
Sales in the North America region increased organically by 1.8 percent. At
932 million euros, nominal sales were at prior-year level (prior-year
quarter: 934 million euros). Organic sales in Latin America increased
double-digit by 11.0 percent, with business performance in Mexico making a
significant contribution to this improvement. Nominal sales amounted to 266
million euros following 292 million euros in the prior-year quarter. Sales
in the Asia-Pacific region grew organically by 0.4 percent. This positive
organic improvement resulted primarily from business performance in India
and South Korea, while performance in China declined. At 808 million euros,
nominal sales were below the level of the second quarter of 2015 (826
million euros).
With an increase in organic sales - driven by all three business units - of
6.1 percent, the emerging markets again made an above-average contribution
to the organic growth of the Group. Due to negative foreign exchange
effects, nominal sales decreased by 4.0 percent to 1,964 million euros.
Hence, at 42 percent, the share of Group sales from emerging markets was
slightly below the level of the second quarter of 2015. In the mature
markets, sales grew organically by 1.0 percent to 2,659 million euros.
Outlook for the Henkel Group in 2016
Henkel has updated its guidance for fiscal 2016. Henkel continues to expect
to generate organic sales growth of 2 to 4 percent, with each business unit
generating growth within this range. Regarding the share of sales from
emerging markets, Henkel now anticipates a slight decrease compared to the
prior-year level due to foreign exchange effects. For adjusted return on
sales (EBIT), Henkel now expects an increase to more than 16.5 percent and
the adjusted return on sales of each individual business unit is expected
to be above the level of the previous year. Henkel continues to expect an
increase in adjusted earnings per preferred share of between 8 and 11
percent.
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.
Contact:
Investors & Analysts
Renata Casaro
Tel.: +49 211 797 - 1631
E-mail: [email protected]
Dr. Eva Sewing
Tel.: +49 211 797 - 5277
E-mail: [email protected]
Christopher Huesgen
Tel.: +49 211 797 - 4314
E-mail: [email protected]
Ewa Penczek
Tel.: +49 211 797 - 7151
E-mail: [email protected]
Press & Media
Lars Witteck
Tel.: +49 211 797 - 2606
E-Mail: [email protected]
Wulf Klüppelholz
Tel.: +49 211 797 - 1875
E-Mail: [email protected]
Hanna Philipps
Tel.: +49 211 797 - 3626
E-Mail: [email protected]
The report for the second quarter of 2016 and other information with
download material and the link to the teleconference broadcast can be found
on the internet at:
www.henkel.com/ir
www.henkel.com/press
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11.08.2016 Dissemination of a Corporate News, transmitted by DGAP - a
service of EQS Group AG.
The issuer is solely responsible for the content of this announcement.
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Language: English
Company: Henkel AG & Co. KGaA
Henkel Str. 67
40191 Düsseldorf
Germany
Phone: +49 (0)211 797-0
Fax: +49 (0)211 798-4008
E-mail: [email protected]
Internet: www.henkel.de
ISIN: DE0006048432, DE0006048408
WKN: 604843, 604840
Indices: DAX
Listed: Regulated Market in Berlin, Dusseldorf, Frankfurt (Prime
Standard), Hamburg, Hanover, Munich, Stuttgart; Regulated
Unofficial Market in Tradegate Exchange
End of News DGAP News Service
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