20.02.2014
Henkel AG & Co. KGaA DE0006048432
DGAP-News: Henkel AG & Co. KGaA:
DGAP-News: Henkel AG & Co. KGaA / Key word(s): Final Results
Henkel AG & Co. KGaA:
20.02.2014 / 07:37
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February 20, 2014
Henkel delivers on 2013 financial targets
Strong performance in a challenging environment
- Solid organic sales growth of 3.5%
- Sales impacted by foreign exchange effects: 16,355 million euros
(-0.9%)
- Adjusted operating profit: +7.8% to 2,516 million euros
- Adjusted EBIT margin: +1.3 percentage points to 15.4%
- Adjusted earnings per preferred share grow double-digit: +10.0%*
- Proposed dividend: +28.4% to 1.22 euros per preferred share
* When applying IAS 19 revised to the prior year, growth amounts to 12.1
percent.
Düsseldorf - '2013 was a very successful year for Henkel. Despite a
challenging and highly competitive market environment, we achieved our
financial targets and made significant progress in implementing our
strategy 2016,' said Henkel CEO Kasper Rorsted. 'We achieved profitable
growth and increased market share in all our business units. All regions
contributed to the solid organic sales growth. As in previous years,
emerging markets showed a very strong development. In these countries,
however, foreign exchange effects had a stronger impact on reported sales.'
Looking at the fiscal year 2014, Rorsted said: 'The economic environment
remains challenging and we expect persisting foreign exchange effects,
particularly in the first half of the year. Thus, we will continue to
further simplify and improve our processes and structures, making us more
flexible and more efficient. We are focused on implementing our strategy in
order to deliver on our ambitious financial targets for 2016.'
'For the full fiscal year 2014 we expect organic sales growth to be between
3 and 5 percent. We expect our adjusted EBIT margin to increase to around
15.5 percent and adjusted earnings per preferred share to increase in the
high single digits,' Rorsted said, summarizing the financial targets for
2014.
Commenting on the proposed increase of Henkel's dividend payout ratio,
Rorsted said: 'We want our shareholders to benefit from our improved
performance. Our significantly increased profitability and financial
strength allow us to raise the dividend payout ratio from around 25 percent
currently to 30 percent for 2013. In the future, the ratio should be
between 25 percent and 35 percent of net income after non-controlling
interests and adjusted for exceptional items. The dividend increase will
not impact our strategic flexibility or our conservative financial
strategy.'
Sales and earnings performance 2013
At 16,355 million euros, sales in the fiscal year 2013 remained slightly
below the prior-year level. Organic sales growth, which excludes the impact
of foreign exchange and acquisitions/divestments, reached a solid 3.5
percent. This growth was driven by both price and volume, with the rate of
increase accelerating in the course of the year. Organic growth in the
first half year amounted to 3.2 percent, rising to 3.8 percent in the
second half.
In all business units, sales rose organically and market shares increased
further in relevant markets. The Laundry & Home Care business unit showed
very strong organic sales growth of 5.7 percent. Solid organic sales growth
of 3.0 percent was achieved by the Beauty Care business unit. At 2.7
percent, the Adhesive Technologies business unit likewise showed a solid
increase in organic sales.
After allowing for one-time charges, one-time gains and restructuring
charges, adjusted operating profit (EBIT) rose by 7.8 percent, from 2,335
million euros to 2,516 million euros, with all three business units
contributing. Reported operating profit (EBIT) amounted to 2,285 million
euros compared to 2,199 million euros in the previous year.
Adjusted return on sales (EBIT margin) rose by 1.3 percentage points, from
14.1 percent to 15.4 percent. Reported return on sales amounted to 14.0
percent compared to 13.3 percent in the previous year.
Financial result improved by 68 million euros to -113 million euros, due
primarily to a stronger net financial position and an improved result from
currency-hedging activities. Moreover, net interest expense for pension
obligations declined. The tax rate was 25.2 percent compared to 24.4
percent in the previous year.
Adjusted net income after deducting non-controlling interests rose by 12.1
percent, from 1,573 million euros to 1,764 million euros. Reported net
income increased by 6.5 percent, from 1,526 million euros in the previous
year to 1,625 million euros. After deduction of non-controlling interests
of 36 million euros, net income was 1,589 million euros (previous year:
1,480 million euros). Earnings per preferred share (EPS) rose from 3.42
euros to 3.67 euros. The adjusted figure was 4.07 euros compared to 3.63
euros in the previous year. Before application of IAS 19 revised, the
prior-year figure was 3.70 euros. Compared to this figure, adjusted
earnings per preferred share increased by 10.0 percent.
The Management Board, Supervisory Board and Shareholders' Committee propose
that the Annual General Meeting approves a 28.4 percent higher dividend per
preferred share of 1.22 euros (previous year: 0.95 euros) and a 29.0
percent increased dividend per ordinary share of 1.20 euros (previous year:
0.93 euros). The payout ratio would then amount to 30.0 percent.
The ratio of net working capital to sales once again improved
significantly, ending the year at 2.3 percent, 1.5 percentage points below
the level at the end of 2012. As of December 31, 2013, the net financial
position changed from a net debt to a net cash position of 959 million
euros. Net debt as of December 31, 2012 amounted to 85 million euros.
Business unit performance
In the fiscal year 2013, the Laundry & Home Care business unit continued
its profitable growth trend of the previous years. With a strong organic
sales plus of 5.7 percent, growth was significantly above that of its
relevant markets, which were slightly negative overall. Nominally, sales
rose by 0.5 percent to 4,580 million euros.
The strong organic growth was generated exclusively in emerging markets,
where sales improved double-digit overall. Eastern Europe showed a very
strong sales increase, mainly driven by double-digit growth in Turkey.
Double-digit growth rates were achieved once again in the Africa/Middle
East region, despite persistent political and social unrest. Strong sales
expansion was recorded in Latin America, mainly due to very strong growth
in Mexico. Sales in Asia-Pacific increased double-digit.
Sales in mature markets declined slightly in a difficult economic
environment. In Western Europe, strong performance in France and solid
growth in Germany offset sales declines in Southern Europe. In North
America, sales in an intensely competitive and still declining market were
slightly below the level of the previous year.
Adjusted operating profit increased by 8.5 percent to 714 million euros.
Adjusted return on sales improved by an excellent 1.1 percentage points to
an all-time high of 15.6 percent for the full year. Reported operating
profit amounted to 682 million euros compared to 621 million euros in the
previous year.
The Beauty Care business unit posted solid organic sales growth of 3.0
percent in the fiscal year 2013, thus continuing to build on the profitable
growth of the previous years. Organic growth was again considerably higher
than the negative development of the relevant markets. Nominal sales
amounted to 3,510 million euros, compared to 3,542 million euros in the
previous year.
Business development in the emerging markets was particularly successful,
with Asia (excluding Japan) standing out through double-digit growth thanks
to substantial business expansion in China. Continuing the successful trend
of the recent years, the Africa/Middle East region likewise posted
double-digit growth rates, despite political instability. Sales growth in
Latin America and Eastern Europe was also solid.
Organic sales in mature markets showed an overall increase. The solid sales
growth in North America is particularly noteworthy. Positive sales growth
was achieved in Western Europe despite weak economic development -
particularly in Southern Europe - and in the face of a declining market. By
contrast, sales in the mature markets of the Asia-Pacific region fell short
of the previous year's level.
Adjusted operating profit rose year-on-year by 2.1 percent to 525 million
euros. This is the highest earnings figure ever posted by the business
unit. Adjusted return on sales rose by a strong 0.5 percentage point to
15.0 percent, also a new high. Reported operating profit amounted to 474
million euros compared to 483 million euros in the previous year.
The Adhesive Technologies business unit continued its profitable growth
trend in the fiscal year 2013. At 2.7 percent, organic growth was slightly
above overall market expansion. Nominally, sales amounted to 8,117 million
euros, following 8,256 million euros in the previous year.
The increase in organic sales was due primarily to the business unit's
strong performance in emerging markets. Performance in Latin America was
particularly dynamic with double-digit sales growth. The Eastern Europe
region likewise recorded a strong sales increase. The Asia-Pacific region
(excluding Japan) posted a solid performance, while the Africa/Middle East
region showed a positive development.
Organic sales in mature markets were above the level of the previous year.
North America posted a positive performance. Sales were stable in Western
Europe despite the difficult economic conditions. However, sales in the
mature markets of Asia fell short of the previous year's level.
Adjusted operating profit rose by 9.9 percent to a new high of 1,370
million euros. Adjusted return on sales increased significantly, by 1.8
percentage points to 16.9 percent, likewise a new high. Operating profit
rose by 6.7 percent to 1,271 million euros.
Regional performance
Organically, sales increased in all regions. In a highly competitive market
environment, sales in Western Europe were slightly below the level of the
previous year at 5,580 million euros. Organically, sales rose by 0.2
percent, compensating for the effects of the recession in Southern Europe.
Sales in Eastern Europe increased by 1.6 percent to 3,034 million euros.
The organic sales growth of 6.0 percent was driven primarily by the
businesses in Turkey and Russia. Despite negative foreign exchange effects,
sales in the Africa/Middle East region increased nominally by 0.3 percent
to 1,080 million euros. Despite the political and social unrest in some
countries, organic sales showed an increase of 17.6 percent. The business
units Laundry & Home Care and Beauty Care made a particularly important
contribution to this performance.
Due to negative foreign currency effects, sales in North America decreased
by 3.2 percent to 2,928 million euros. Organically, sales grew by 1.0
percent, despite fierce promotional and price competition in our consumer
businesses. In Latin America, sales remained constant at 1,061 million
euros. Organically, sales rose by 8.7 percent, with business performance in
Mexico and Brazil making a particular contribution. At 2,524 million euros,
sales in Asia-Pacific were 2.8 percent below the prior-year figure due to
negative currency effects. The region exhibited solid development with an
organic sales growth rate of 3.3 percent, supported particularly by growth
in China and India.
Sales in the emerging markets of Eastern Europe, Africa/Middle East, Latin
America and Asia (excluding Japan) increased nominally by 1.6 percent to
7,230 million euros in the year under review. Organically, sales rose by
8.3 percent, with all business units contributing. The share of sales from
emerging markets increased from 43 to 44 percent.
Fourth quarter 2013
At 3,852 million euros, sales in the fourth quarter of 2013 were 3.7
percent below the prior-year figure. By contrast, organic sales increased
by a solid 3.3 percent. Operating profit adjusted for one-time charges,
one-time gains and restructuring charges rose by 7.5 percent, from 544
million euros to 584 million euros. Reported operating profit (EBIT)
amounted to 464 million euros compared to 492 million euros in the
prior-year quarter.
Adjusted return on sales (EBIT margin) rose by 1.6 percentage points, from
13.6 to 15.2 percent. Reported return on sales was at 12.1 percent,
following 12.3 percent in the same prior-year period. Adjusted net income
after deducting non-controlling interests rose by 10.8 percent
year-on-year, from 370 million euros to 410 million euros. Net income for
the quarter amounted to 321 million euros compared to 349 million euros in
the previous year. After deduction of non-controlling interests of 1
million euros, net income was 320 million euros (previous year: 335 million
euros). Earnings per preferred share (EPS) were at 0.74 euros compared to
0.77 euros in the fourth quarter of 2012. Adjusted, the figure showed a
10.6 percent increase versus prior year, from 0.85 euros to 0.94 euros.
Before application of IAS 19 revised, the prior-year figure was 0.87 euros.
Compared to that, adjusted earnings per preferred share grew by 8.0
percent.
Progress on strategy implementation
In the fiscal year 2013, Henkel significantly moved forward in the
implementation of its strategy for 2016. Major progress was made with
respect to all four strategic priorities: Outperform, Globalize, Simplify
and Inspire.
1. Outperform
In 2013, Henkel's three business units continued to gain market shares in
their relevant markets and deliver profitable growth. This successful
development was driven by focusing on top brands, powerful innovations and
a clear focus on customers. The share of sales from Henkel's top 10 brands,
including Persil, Schwarzkopf and Loctite, increased to 57 percent; the
target for 2016 is 60 percent. Strong product innovations across all
business units were a critical success factor for Henkel. In the consumer
businesses (Laundry & Home Care and Beauty Care), 45 percent of sales came
from products launched within the last three years. In the adhesives
business, which predominantly serves industrial customers, 30 percent of
sales were generated with products introduced within the last five years.
In order to move its innovation processes closer to where the company sees
future growth opportunities, Henkel plans to open or expand seven R&D
centers in emerging markets. In 2013, Henkel opened four of these centers
located in India, South Africa, South Korea, and the United Arab Emirates.
The R&D center in Russia was also significantly expanded.
2. Globalize
By 2016, Henkel aims to generate total sales of 20 billion euros - 10
billion euros in emerging markets and 10 billion euros in mature markets.
Emerging markets will continue to drive global economic growth, although
they are also characterized by high volatility and intense competition.
Henkel has a strong foundation in many of these markets. In 2013, emerging
market sales increased to 44 percent of total sales. In order to continue
to successfully drive growth, Henkel intends to strengthen its existing
positions, grow its businesses by expanding into new segments, and
selectively enter new markets. In mature markets, the company holds leading
positions with its strong brands across a broad range of categories. While
sales remained almost flat compared to 2012, Henkel was able to further
increase its profitability in these markets.
3. Simplify
Henkel intends to drive operational excellence with a focus on
standardizing, digitizing and accelerating its processes. In 2013, the
company laid the foundation for improving its cost efficiency and
competitiveness through a broad range of strategic initiatives. Henkel's IT
and its shared services have been combined within a new Integrated Business
Solutions (IBS) organization. This change will enable the company to
advance efficient end-to-end processes based on standardized and scalable
business platforms. Increasing the share of 'eSourcing' has led to an
improvement in cost efficiency and flexibility. In 2013, Henkel prepared
the consolidation of its sourcing activities into eight global sourcing
hubs. It also plans to further standardize its production and logistics
processes as well as its purchasing activities across all business units
and integrate them in a global supply chain organization.
4. Inspire
Henkel's success is built on a strong global team. Henkel employs people
from more than 120 nations. Around 56 percent of its employees work in
emerging markets - not only in manufacturing and supply chain, but a
growing share in managerial and R&D roles. In 2013, the share of female
managers worldwide increased to around 32 percent. Henkel remains committed
to its goal of increasing the share of women in management positions by one
to two percentage points per year. As Henkel becomes more global and
diverse, it is crucial that every leader knows and understands what is
expected of them. Consequently, it developed a set of clear leadership
principles, which were successfully embedded in 2013 all over the world in
a series of workshops for all employees with people responsibility.
Outlook for the Henkel Group 2014
Henkel expects to generate organic sales growth of 3 to 5 percent in the
fiscal year 2014. Henkel anticipates that each business unit will generate
organic sales growth within this range. In line with its 2016 strategy,
Henkel furthermore expects a slight increase in the share of sales from its
emerging markets Compared to the 2013 figures, Henkel expects adjusted
return on sales (EBIT) to rise to around 15.5 percent and an increase in
adjusted earnings per preferred share in the high-single digits.
This document contains forward-looking statements which are based on the
current estimates and assumptions made by the executive 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 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
Lars Witteck
Tel. +49 211 797 - 2606
Fax +49 211 798 - 4040
Email: [email protected]
Wulf Klüppelholz
Tel. +49 211 797 - 1875
Fax +49 211 798 - 4040
Email: [email protected]
Henkel AG & Co. KGaA
For the 2013 annual report and further information with download material
relating to the fiscal year 2013, plus a link for the live webcast of the
press conference covering the fiscal year, go to our press folder at:
http://www.henkel.com/press/press-conference-publication-of-2013-annual-re
port-44117.htm
Current information relating to the publication of our business results is
also available in the new IR area of the Henkel app for iPads. Here you
will find the latest financial news, all annual and quarterly reports,
presentations and other information relating to the company.
https://itunes.apple.com/en/app/henkel/id580146237
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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: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX
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