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For its financial status, Henkel reported a solid start to 2014, with organic sales growth of 4.3% for the quarter. The sales were especially assisted by growth in emerging markets, which saw a sales increase of 9.2% for the quarter.
“Despite the continuing difficult market environment, Henkel had a good start to the fiscal year 2014. All our business units reported organic sales growth and improved profitability,” said Henkel CEO Kasper Rorsted. “We delivered a very strong performance in our emerging markets, while we also grew in our mature markets. However, negative foreign exchange effects had an even stronger impact on reported sales than in the previous year.”
In the first quarter of 2014, emerging markets currencies in particular, but also the U.S. dollar, remained under pressure. As a result, sales were at €3.9 billion, 2.6% below the figure for the prior-year quarter. By contrast, organic sales growth, which excludes the impact of foreign exchange and acquisitions/divestments, reached 4.3%.
In the company’s beauty care business unit specifically, sales rose organically by a solid 3%.
Going forward, “We do not expect the foreign exchange situation to improve in the short term,” Rorsted said, commenting on the current fiscal year. “The economic environment will remain challenging with the latest developments in Eastern Europe creating additional uncertainty in the markets. This makes it difficult to forecast economic developments for the year ahead. A high degree of agility and flexibility will remain key to success. We will therefore continue to simplify and accelerate our processes and structures.”
Despite the challenging economic environment, Rorsted confirmed the outlook: “For the fiscal year 2014, we anticipate organic sales growth of 3–5%. We expect our adjusted EBIT margin to increase to around 15.5% and adjusted earnings per preferred share to increase in the high single digits.”