Henkel anticipates good news from fiscal 2010 results
SHANGHAI - Henkel, the German maker of household products, said on Tuesday that it anticipates the current financial year will bring a noticeable improvement in its results, with substantially higher earnings reported from its laundry, homecare and cosmetic sectors.
According to its latest report, in fiscal 2009, Henkel generated sales of 13.57 billion euros, amounting to a decrease of 3.9 percent compared with the previous year. However, developments at the company's three business sectors continued to show a very mixed picture.
While the consumer goods businesses of laundry and home care and cosmetics and toiletries continued to perform very well with growth rates of 2.9 percent and 3.5 percent respectively, sales of the adhesive technologies business sector decreased by 10.2 percent due to the difficulties encountered in major customer industries worldwide, it said.
While the recovery of the economy and financial markets are still fragile, the company still expects that its sales growth will outperform its competitors.
"For Henkel - and the world economy as a whole - 2009 will go down as a challenging year. Nevertheless, we have made good progress towards achieving our 2012 financial targets as proven by our outstanding results in the fourth quarter of 2009," said Kasper Rorsted, chairman of the Henkel management board. "Our laundry and homecare and cosmetics and toiletries businesses have expanded their market positions and further increased their profitability. In the course of the year, our adhesive technologies business has rebounded well from the effects of the economic crisis.
"Our results reflect the tireless efforts to adapt our structures and reduce our costs. We have shown that, even in adverse market conditions, we can act quickly and decisively."
In the fourth quarter of 2009, Henkel was able to continue the positive development of its consumer goods businesses from previous quarters, while its adhesive technologies business sector performed noticeably better than expected.
Its fourth quarter sales amounted to 3.34 billion euros compared with 3.54 billion euros in a year ago period.
Due to the gain from the sale of its Ecolab stake in 2008, net earnings for the quarter decreased by 684 million euros to 177 million euros. After deduction of minority interests to the amount of 7 million euros, quarterly net earnings came in at 170 million euros.
The company regards the mildly encouraging market conditions prevailing in the real economy and on the financial markets as still fragile.
However, the company said it is confident of again outperforming its relevant markets in terms of organic sales growth, with a number of measures already introduced on the operational side from which Henkel expects further positive momentum to develop.
For example, the company anticipates additional contributions to profitability to emanate from the synergies arising from the integration of the National Starch businesses and its strict cost discipline. It says all these factors will positively influence the development of adjusted operating profit and adjusted earnings per preferred share.
Henkel expects both measures to undergo a noticeable improvement of more than 10 percent compared with the levels of 2009.
China Daily
(China Daily 03/10/2010 page14)
