Henkel profits from emerging markets

Henkel profits from emerging markets

German Henkel saw its sales and profits rise in the past quarter, thanks to good results in emerging countries. This way the declining demand in Europe was abundantly compensated.

Western Europe in the red

Henkel is depending more and more on emerging countries, as the quarterly results of the German company - famous for brands such as Pritt, Persil and Schwarzkopf - show. The demand for detergents, cosmetics and glues of the German company rose autonomously by 8.2%.

 

Especially in the regions Africa-Middle East (+18.2%) and in Eastern Europe (+7.3%) the organic growth was impressive. Latin America (+4.5%) and Asia-Pacific Ocean (+1.3%) also grew, but Western Europe (-1%) and North America (-0.4%) took a turn for the worse.

 

Despite the large weight of those last two regions in the company, company sales of Henkel did rise slightly by 0.6% to 4.03 billion euro. Organically (not including exchange rate effects) there even was a rise in sales of 2.5%. The operating profit climbed by 8.9% to 600 million euro, net profits rose from 361 to 393 million euro.

 

Glues department is suffering

Especially the bad results of the glues department, with brands such as Pritt and Loctite, stand out: that activity (worth half of company sales) declined by 1.2%, “a consequence of the lower than expected demand of mainly big industrial customers”, said CEO Kasper Rorsted.

 

Better figures were shown at Laundry & Home Care (e.g. Persil) and the branch Beauty Care (e.g. Schwarzkopf, Syoss…): their sales rose organically by 8% and 4%.

 

CEO Rorsted is especially pleased the company has succeeded in improving the profitability of all business activities. He maintains his prediction for 2013: an autonomous rise in sales between 3 and 5%, despite a difficult global economic context. He is convinced the industrial demand will pick up in the second half of the year.

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