Germany-based Henkel, a leader in the consumer and industrial sectors, has posted sales of 4.74 billion euros ($5.1 billion) in the third quarter of the year, marking a rise of 3.4 per cent over the same period of 2015.

The sales performance was driven by the solid organic development as well as acquisitions. Organic sales growth – i.e. adjusted for foreign exchange and acquisitions/divestments – was at 2.8 per cent. Adjusted for negative foreign exchange impact of 3.3 per cent, sales increased by 6.7 per cent.

The Laundry & Home Care business unit recorded organic sales growth of 4.0 per cent. The Beauty Care business unit posted an improvement in organic sales of 2.6 per cent. The Adhesive Technologies business unit reported an increase in organic sales of 2.5 per cent.

After allowing for one-time charges and gains and restructuring charges, adjusted operating profit (EBIT) rose by 7.6 per cent from 778 million euros to 837 million euros. Reported operating profit grew by 16.4 per cent from 666 million euros to 775 million euros.

Adjusted return on sales (EBIT margin) showed an increase of 0.7 percentage points to 17.6 per cent. Reported return on sales rose from 14.5 per cent to 16.3 per cent. Henkel’s financial result was at -15 million euros and, due to acquisitions, below the level of the prior-year quarter. The reported tax rate was at 23.2 per cent; in the prior year quarter it was at 24.6 per cent.

Adjusted net income for the quarter after deducting non-controlling interests grew by 9.2 per cent from 564 million euros to 616 million euros. Reported net income for the quarter increased by 18.2 per cent from 494 million euros to 584 million euros.

After deducting 8 million euros attributable to non-controlling interests, quarterly net income amounted to 576 million euros (prior-year quarter: 484 million euros). Adjusted earnings per preferred share (EPS) rose by 9.2 per cent from 1.30 euros to 1.42 euros. Reported EPS increased from 1.12 euros to 1.33 euros. Net working capital related to sales improved year on year by 0.8 percentage points to 5.2 per cent.

The third quarter of 2016 saw the Laundry & Home Care business unit successfully continue its profitable growth path by increasing both sales and EBIT. Sales grew organically by 4.0 per cent year on year. Nominally, sales increased by 12.6 per cent to 1.479 billion euros, also driven by the acquisition of Sun Products. In Africa/Middle East, the business unit achieved double-digit growth.

The Beauty Care business unit also successfully extended its long-established path of profitable growth in the third quarter of 2016. Organically, sales rose by 2.6 per cent. Nominally, sales increased by 0.4 per cent to 968 million euros. Sales in Africa/Middle East showed very strong growth.

The Adhesive Technologies business unit generated solid organic sales growth of 2.5 per cent in the third quarter. Nominally, sales amounted to 2,272 million euros, after 2,279 million euros in the prior-year quarter. Sales in Africa/Middle East were below the level of the prior-year quarter.

Growth in the Africa/Middle East region continued to be impacted by the geopolitical unrest prevailing in some countries. Nevertheless, a strong organic sales growth of 6.9 per cent was achieved. Nominal sales increased by 9.0 per cent to 348 million euros.

“Henkel continued to deliver strong business performance in the third quarter. Sales, adjusted EBIT and adjusted earnings per preferred share reached new highs. The successful development and the high quality of earnings was driven by all three business units and the strong commitment of our global team,” said Henkel CEO Hans Van Bylen.

“In the third quarter, we were also able to successfully close the acquisition of Sun Products and secure its financing at favourable conditions. We expect the overall challenging and uncertain market environment to persist in 2016. We will continue to focus on leveraging our successful brands, leading market positions and strong innovation capabilities to achieve our ambitious targets.

“For the full fiscal year 2016, we expect organic sales growth of 2 to 4 per cent. We expect our adjusted EBIT margin to rise to more than 16.5 per cent and adjusted earnings per preferred share to grow between 8 and 11 per cent,” he added. - TradeArabia News Service