Henkel Beats Expectations with a 2.6% Sales Rise

Specialty chemicals group Henkel KGaA beat analyst expectations with strong 2002 sales and earnings, helped by strong demand for consumer brands and a successful restructuring program.

The Duesseldorf-based maker of branded laundry, home care, cosmetics, toiletries and adhesive products reported sales of $10.44 billion for the full year, up 2.6% from 2001. Earnings before interest and taxes increased by 10.6% to $720 million, in line with the company’s target. Net profit excluding minority interests was $470 million almost matching the year-earlier figure of $472 million.

Henkel has recently been divesting non-core units-it sold specialty chemicals units Cognis and Ecolab in November 2001-and is moving further into the cosmetics area, which is seen as resistant to economic swings. Henkel owns brands like Persil washing power, Pritt Stick glue and Loctite Superglue.

For 2003 the company expects 2003 adjusted sales to rise 4% and operating profit to increase in the high single-digit range.

In 2002 Henkel, which depends on 20% of its business from the slumping German economy, managed to shake off the consumer blues with $3.38 billion sales from its laundry and home care division, $2.29 billion from the cosmetics and toiletry division and $1.42 billion from the consumer and craftsmen adhesives section. Profitability in all its main divisions saw double-digit growth, the company said.