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Henkel Reports Strong 2010 Financials

Henkel delivered record results in 2010, as noted in the company’s recently released Q4 and full year 2010 financial reports. It saw sales increase by 11.2% to €15.1 million, and organic sales grew 7%.

“2010 was an excellent year for Henkel. For the first time, we closed a financial year with an adjusted EBIT margin above 12%,” said Henkel CEO Kasper Rorsted. “We have improved the market positions of all our business sectors and have further strengthened our top brands. We have also been able to further expand our positions in the emerging markets. With these strong results, we are well on track to achieving our 2012 financial targets.”

Looking forward to fiscal 2011, Rorsted said, “The economic conditions remain challenging, especially in view of the highly competitive environment in which we operate, and rising raw material costs. We will continue to respond quickly and decisively to changes in our markets and continue the transformation process in our company. We are confident that we will once again outperform our markets in 2011 and expect to achieve organic growth of between 3–5%.”

Henkel’s sales in fiscal 2010 were €15,092 million euros, an increase of 11.2% versus the prior-year figure. After adjusting for foreign exchange, sales improved by 6.4%. In organic terms, i.e. adjusted for both foreign exchange and acquisitions/divestments, sales grew by 7%, a relatively strong growth after 2009 which was impacted by the financial crisis. This strong performance was supported by all Henkel business sectors.

The cosmetics/toiletries business sector continued its encouraging growth trend, registering organic growth of 4.8% and thus substantially outperforming the market. The division increased its sales by 8.6%, to €3,269 million.

From a regional perspective, growth was achieved especially in Western Europe, with a strong increase in sales particularly in Germany. Sales in the emerging markets also expanded, with double-digit growth rates being achieved in Africa/Middle East, Latin America and Eastern Europe. By contrast, sales in North America declined.

The hair cosmetics business achieved particularly strong growth. Due to the launch of a series of successful innovations market shares in the hair care, colorants and hair styling segments were significantly expanded to new record highs. In addition to the global expansion of the Syoss brand in new markets and categories, particularly the innovation Perfect Mousse drove growth in the colorants segment.

The body care business was characterized by innovations and further product launches under its core brands. The Fa brand saw the launch of the Active Pearls series. In North America, one of the region’s most successful body care innovations of 2010 was launched in the form of the Dial NutriSkin series. In order to further develop the global market for men’s products, Henkel also launched its US brand Right Guard in Germany and Eastern Europe.

In the skin care business, the focus remained on the development of innovative anti-aging products. The introduction of the new sub-line Novagen under the Diadermine umbrella brand contributed to the enhancement of the brand’s position in the anti-aging segment.

In the oral care business, good results were achieved with the new Theramed variants.

The hair salon business likewise contributed to the growth dynamics of the business sector and further extended its position as the global number three in a persistently difficult market environment. Following the successful relaunch of the ammonia-free colorant, the Essensity brand saw the introduction of a completely new line of hair care and styling products. With innovative products, such as the styling powder launched under the top styling brand Osis, the hair salon segment was able to both attract new customers and strengthen business with existing clients.

In the fourth quarter of 2010, Henkel increased sales compared to the prior-year period by 11.5% to €3,729 million. After adjusting for foreign exchange, sales rose by 5.7%. Organic sales growth came in at 5.8%.

Click here for more information on this financial report.

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