Henkel sales rises 4.8% in first quarter

"Henkel had a good start to the fiscal year in spite of a challenging and volatile market environment. We achieved solid organic growth and substantially improved our profitability," said Henkel CEO Kasper Rorsted. "All of our business sectors contributed to this achievement. Once again our emerging markets registered a strong development. Thus, we are confident of achieving our targets for 2012."

For the fiscal year 2012, Rorsted stated: "We expect that volatility and uncertainty will continue to influence our markets. Therefore, we will continue to adapt our structures and processes so that we can respond more quickly and flexibly than our competitors."

2012 guidance confirmed

Henkel confirmed its guidance for fiscal 2012. "We continue to expect organic sales growth to be between 3 and 5 percent. For our adjusted EBIT margin we anticipate an increase to 14 percent and for adjusted earnings per preferred share we expect an improvement of at least 10 percent."

Henkel’s sales in the first quarter of 2012 were at 4,008 million euros, an increase of 4.8 percent compared to the figure for the prior-year quarter. Organic sales, which exclude the impact of foreign exchange and acquisitions/divestments, again rose by 4.7 percent, a solid increase compared to the prior-year quarter.

All three business sectors contributed to this development: The Laundry & Home Care business sector reported a solid organic growth rate of 4.5 percent, with Cosmetics/Toiletries also posting solid organic growth of 4.0 percent. The Adhesive Technologies business sector generated strong organic sales growth of 5.6 percent. This solid performance was supported in all three business sectors by price increases Henkel was able to implement thanks to its innovations and strong brands.

After allowing for one-time gains, one-time charges and restructuring charges, adjusted operating profit improved by 16.6 percent, from 473 million euros to 551 million euros, with all three business sectors contributing. Reported operating profit (EBIT) increased by 25.2 percent, from 430 million euros to 538 million euros.

Business sector performance: Cosmetics/Toiletries

The Cosmetics/Toiletries business sector continued its long-term upward trend in terms of profitable growth. Sales exceeded the prior-year quarter by 4.9 percent, reaching 861 million euros. In a weak market environment characterized by persistently high competitive activity, organic sales rose once again with an increase of 4.0 percent.

This solid sales performance was supported by all regions. Once again, the strongest momentum came from the emerging markets. Particularly the Africa/Middle East region and the growth markets in Asia achieved double-digit growth. The mature markets saw a continuation of their upward trend, with further growth being especially achieved in Western Europe, despite a weak market environment.

Adjusted operating profit in the Cosmetics/Toiletries business sector once again improved substantially compared to the prior-year quarter, with an increase of 9.3 percent to 124 million euros. At 14.4 percent, adjusted return on sales exceeded once more the figure for the first quarter of 2011 and grew by 0.6 percentage points. Operating profit rose by 7.1 percent to 120 million euros.