OREANDA-NEWS. “Henkel delivered a strong performance in the second quarter, reaching new highs in quarterly sales, adjusted operating profit and EBIT margin as well as earnings per preferred share. All three business units contributed to this positive development,” said Henkel CEO Hans Van Bylen. “Sales grew significantly to around 5.1 billion euros. We further improved our adjusted operating profit as well as our adjusted EBIT margin. Adjusted earnings per preferred share grew double-digit. This is a strong performance in a highly challenging market environment.”

“We expect an overall volatile and uncertain market environment throughout the year. Currency fluctuations are likely to continue and we anticipate the difficult conditions in the consumer goods markets to persist. We are fully committed to continue our successful development and implement our strategic priorities,” said Hans Van Bylen.

“For the full fiscal year 2017, we confirm our guidance. We expect organic sales growth of 2 to 4 percent. We expect our adjusted EBIT margin to increase to more than 17.0 percent and adjusted earnings per preferred share to grow between 7 and 9 percent.”

Sales and earnings performance in the second quarter 2017

At 5,098 million euros, sales in the second quarter 2017 reached a new all-time high and grew nominally by 9.6 percent compared to the prior-year quarter. Acquisitions and divestments accounted for 7.4 percent of this growth, mainly as a result of the acquisition of The Sun Products Corporation. Foreign exchange effects were overall neutral. Organic sales, which exclude the impact of foreign exchange effects and acquisitions/divestments, showed a good increase of 2.2 percent.

The Adhesive Technologies business unit posted strong organic sales growth of 3.4 percent. In the Beauty Care business unit, organic sales were at the level of the prior-year quarter. The Laundry & Home Care business unit reported a good increase in organic sales of 2.1 percent.

The emerging markets again made an above-average contribution to the organic growth of the Group, showing a very strong increase in organic sales of 4.7 percent. The mature markets registered positive organic sales growth of 0.5 percent.

In a continuously challenging market environment characterized by high promotional and pricing pressure, the Western Europe region reported a slightly negative organic sales growth of -1.2 percent. All other regions were able to grow sales organically: In Eastern Europe, sales grew by 5.2 percent. Africa/Middle East posted sales growth of 1.1 percent. Sales in North America increased by 3.2 percent. Latin America achieved sales growth of 6.1 percent and in the Asia-Pacific region, sales grew by 4.8 percent.

Adjusted operating profit (EBIT) improved by 11.0 percent to 909 million euros. All three business units contributed to this increase.

Adjusted return on sales (EBIT) rose by 0.2 percentage points to 17.8 percent.

Adjusted earnings per preferred share (EPS) grew by 10.7 percent from 1.40 euros to 1.55 euros.

Net working capital as a percentage of sales improved by 0.1 percentage points to 5.2 percent.

Business unit performance

The Adhesive Technologies business unit generated strong organic sales growth of 3.4 percent in the second quarter. In nominal terms, sales grew by 3.5 percent to a new high of 2,370 million euros. Adjusted operating profit increased by 6.6 percent and reached 455 million euros. Adjusted return on sales recorded a very strong increase, reaching a new record level at 19.2 percent.

In the Beauty Care business unit, organic sales were at the level of the prior-year quarter. Nominally, sales grew by 0.9 percent to 997 million euros. Adjusted operating profit showed a very strong increase of 4.3 percent and reached 180 million euros. Adjusted return on sales recorded a very strong growth to 18.0 percent, an all-time high.

The Laundry & Home Care business unit generated good organic sales growth of 2.1 percent in the second quarter. Nominally, sales increased by 26.6 percent to 1,703 million euros compared to the prior-year quarter. Adjusted operating profit grew by 22.2 percent to 298 million euros. The acquisition of The Sun Products Corporation contributed significantly to both sales and operating profit. Adjusted return on sales was at 17.5 percent.

Compelling acquisitions further strengthening portfolio

With the successful closing of the acquisitions of the global Darex Packaging Technologies business and the Sonderhoff Group at the beginning of the third quarter, Henkel further strengthened its Adhesive Technologies business and complemented its technology portfolio.

Strong business performance in the first half of 2017

For the first time, half-year sales exceeded 10 billion euros and increased by 11.5 percent to 10,162 million euros. Organic sales growth – i.e. adjusted for foreign exchange and acquisitions/divestments – showed a strong increase of 3.1 percent. All three business units contributed to this performance.