Henkel Tops Q3 Estimates

Driven by exceptional gains in home care, Henkel's third quarter sales rose 8.4% to $4.9 billion at current exchange rates. Adjusted for positive foreign exchange effects of 2.35%, sales improved 6.1%. Organic sales rose 3.2%.

The laundry & home care business unit recorded strong organic sales growth of 5.5%. In the beauty care business unit, organic sales rose 2.1% The adhesive technologies business unit also posted a solid improvement in organic sales of 2.3%.

After one-time charges, one-time gains and restructuring charges, adjusted operating profit improved 12.3% from $834 million. Reported operating profit (EBIT) grew 10.4% from 603 million euros to $714 million. Adjusted return on sales increased 50 basis points to 16.9%. Reported return on sales rose 30 basis points to 14.5%. Adjusted net income for the quarter after deducting non-controlling interests increased by 11.0% to $605 million. Reported net income for the quarter grew 9.8% to $530 million. After deducting 10 million euros attributable to non-controlling interests, quarterly net income increased to $519 million.

For the nine months, Henkel’s sales surged 11.5% to a record $14.7 billion at current exchange rates. Adjusted for foreign exchange, sales grew 6.4%. Organic sales increased 3.1%, with all three of Henkel’s business units contributing. Adjusted operating profit grew 13.4% to $2.4 billion. Adjusted return on sales increased 30 basis points to 16.4%.

Adjusted net income for the first nine months, after deducting non-controlling interests, rose 11.9% to $1.7 billion.

For the full year, managment expects corporate organic growth of 3%. Organic sales growth in laundry & home care business unit is expected to be 4-5%. In the beauty care business unit, Henkel continues to expect organic sales growth of approximately 2%.