German Henkel's turnover and net profit were up considerably, mostly thanks to more sales in emerging markets and favourable exchange rate fluctuations.
Very strong second quarter
The German manufacturer of consumer products like Schwarzkopf, Persil and Pritt managed a 13.5 % turnover increase to 4.7 billion euro in the past quarter, although it was only a 2.4 % organic growth. Net profit grew 18 % to 521 million euro.
"In a persistently challenging market environment, Henkel delivered overall a solid performance in the second quarter. We again achieved double-digit growth for both sales and earnings. The main drivers were solid organic sales growth, last year’s acquisitions and, above all, the strong US dollar. Organic sales in emerging markets were strong, once again making an above-average contribution to growth,” said Henkel CEO Kasper Rorsted.
The Eastern European and Latin American emerging markets are indeed Henkel's growth engine at this point as North American turnover only grew slightly, while Western European sales leveled off. The Personal Care and Adhesive Technologies branches mainly grew thanks to price increases, while turnover increases in the Laundry & Home Care business came on the back of volume growth.
2015 forecast confirmed
"In the first half of 2015 we were able to increase sales by almost 1.1 billion euros to more than 9.1 billion euros. With organic sales growth of 3.0 percent, an adjusted EBIT margin of 16.2 percent and adjusted EPS growth of 12.3 percent we are on track to reach our full year guidance", Rorsted looked back on the past 6 months.
However, the CEO does still feel the economic difficulties all around the world will persist for the time begin. "Market volatility will remain high. In this context, agility and flexibility are key success factors. We will therefore continue to adapt, further simplify and accelerate our structures and processes in line with the changing market conditions."
Nevertheless, Rorsted confirmed the 2015 forecast. "We expect to achieve organic sales growth of 3 to 5 percent in 2015. We expect adjusted return on sales to increase to around 16 percent and anticipate an increase in adjusted earnings per preferred share of approximately 10 percent."