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Henkel Posts Strong Q3 2010

Henkel reported a sales increase of 13.7% to €3.9 million, representing organic sales growth of 6.5%, in the third quarter 2010. Additionally, Henkel’s share of sales of emerging markets increased 3 percentage points to 42%, and its adjusted operating profit grew 27% to €517 million.

“In the third quarter, we further extended our recent successes with results even better than the good performance we have shown in recent quarters,” said Kasper Rorsted, chairman of the Henkel management board. “I would particularly like to emphasize the fact that all our regions and business sectors made a positive contribution to this success in a persistently challenging environment. Growth was once again given major impetus by our strong brands and successful innovations. However, the adaptation of our cost structures and further progress in the pursuit of our strategic priorities were also important contributory factors.”

In the first nine months of fiscal 2010, Henkel increased sales versus the prior-year period by 11.1% to €11.3 million within an expanding market environment. After adjusting for foreign exchange, sales improved by 6.6%. At 7.3%, organic sales growth also came in appreciably above the level of the prior-year period.

The cosmetics/toiletries business sector continued the excellent sales and profit performance of previous quarters.  With organic growth of 4.6% to €845 million, it significantly exceeded the sales levels achieved in the prior-year period. The business sector continued to generate steady growth momentum in Western Europe, while developments in North America were stable. Performance in the growth regions of Asia (excluding Japan), Africa/Middle East, Latin America and Eastern Europe was somewhat above-average, with organic sales growth in the double-digit percentage range right across the board.  Operating profit rose by 13.4% to €113 million, and by 7.3% after adjusting for foreign exchange. As a result, there was also an improvement in return on sales for this quarter. At 13.4%, it was 0.4% points above the level for the prior-year quarter. Adjusted for restructuring charges and one-time gains, return on sales rose by an even better 0.6 percentage points to 13.6%, representing a new high for the cosmetics/toiletries business sector.

The hair cosmetics segment continued to perform very well, expanding its market share and posting record results in all categories. In addition to the launch of the Schauma Silk Comb range, the hair care business also pursued the relaunch of Gliss Kur Oil Nutritive as one of its headline activities. In the colorants business, the focus was on continuing the successful roll-out of the Syoss Color line and the introduction of the first permanent foam colorant in the form of Perfect Mousse. In the styling category, the relaunch of Taft and the new sub-line Taft Ultra with Argon Oil likewise contributed to the good results achieved. In the third quarter, the body care business was characterized by the expansion of the innovation offensives at its core brands.

In Western and Eastern Europe, the high-performance deodorant brand for men, Right Guard, was able to establish a position for itself in a challenging and competitive environment.  Meanwhile, the focus with respect to Fa was on the introduction of the innovative Mystic Moments range.  Market share in North America was substantially increased with the successful launch of Right Guard Total Defense 5. The chief activities pursued in the skin care segment related to the launch of the new sub-line Novagen under the Diadermine brand. The priority in the oral care segment was on expanding the successful Theramed 2-in-1 series through the inclusion of the innovative Power Clean & White line. The positive growth trend in the hair salon sub-segment continued in the third quarter, supported by the relaunch of the cross-segment brand Essensity. In a persistently difficult market environment, the business was therefore able to further consolidate its good market position and gain additional market share.

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