Henkel posts Q3 organic sales growth of 4.2%

Highlights:

- Solid organic sales growth of 4.2%
- Sales impacted by foreign exchange effects: 4,184 million euros (-2.6%)
- Adjusted operating profit: +6.5% to 672 million euros
- Adjusted EBIT margin: +1.4 percentage points to 16.1%
- Adjusted EPS again with double-digit growth: +11.1%
- Very strong organic sales growth in emerging markets

“Despite an increasingly challenging market environment, Henkel continued its strong performance in the third quarter and was able to accelerate organic growth quarter by quarter in 2013. We significantly increased both earnings and profitability – with our EBIT margin exceeding 16 percent for the first time,” said Henkel CEO Kasper Rorsted.

“We achieved solid organic sales growth with all our business sectors and regions contributing. The emerging markets once again showed a particularly dynamic development. However, foreign exchange effects negatively impacted reported sales.”

Looking at the remainder of the year, Rorsted stated: “The economic environment will remain difficult. Therefore we will continue to adapt our processes and structures in order to further improve our flexibility and efficiency in this volatile market environment.”

2013 guidance confirmed – higher margin expected

“As previously stated, we expect organic sales growth to be between 3 and 5 percent in the full fiscal year and adjusted earnings per preferred share (EPS) to increase by about 10 percent. For our adjusted EBIT margin, we are raising our forecast from about 14.5 percent to about 15 percent,” Kasper Rorsted said.

Sales and earnings performance in the third quarter 2013

Henkel generated sales of 4,184 million euros in the third quarter of 2013. This was below the prior-year figure due to negative foreign exchange effects amounting to 6.7 percent. Nominally, sales decreased by 2.6 percent. Organic sales growth, which excludes the impact of foreign exchange and acquisitions/divestments, reached solid 4.2 percent, with all business sectors contributing.

Laundry & Home Care recorded strong organic sales growth of 5.5 percent. Beauty Care achieved a solid organic growth rate of 3.1 percent. Adhesive Technologies also registered solid growth with organic sales rising by 4.2 percent versus the prior-year quarter.

After allowing for one-time gains, one-time charges and restructuring charges, adjusted operating profit improved by 6.5 percent, from 631 million euros to 672 million euros, with all three business sectors contributing. Reported operating profit (EBIT) was 649 million euros compared to 586 million euros in the third quarter of 2012.

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