“2015 was a record year for Henkel,” said Rorsted. “Despite a difficult economic environment, we achieved excellent results. We are well on track to meet our main targets for 2016, and we have laid a strong foundation for Henkel’s future.”
Rorsted also highlighted the progress made in implementing the strategy 2016 and provided specific examples on how Henkel had successfully pursued its four strategic priorities: Outperform – Globalize – Simplify – Inspire.
The proposed dividends for both share classes increased by 16 cents to €1.47 euros per preferred share and €1.45 euros per ordinary share. This corresponds to a payout ratio of approximately 30%. The dividends have thus been taken to a new high, with an increase of more than 12% compared to the prior year.
Looking at the current fiscal year, Rorsted emphasized the high degree of uncertainty in the markets: “2016 will be another challenging year. Volatility on the foreign exchange markets will remain, and major currencies, particularly in the emerging markets may further depreciate.”
At the same time – and despite the difficult environment – Rorsted confirmed the outlook for 2016. “We expect organic sales growth of 2% to 4% for the full fiscal year 2016. We expect our EBIT margin to increase to approximately 16.5% and adjusted earnings per preferred share to grow between 8% and 11%.”
Henkel defined ambitious targets in 2012. By the end of 2016, Henkel aims to generate annual sales of €20 billion, with €10 billion coming from mature markets and from emerging markets respectively. In addition, Henkel aims to increase adjusted earnings per preferred share by an average of 10% per year between 2013 and 2016.
In the period from 2013 to 2015, Henkel delivered an average annual growth in adjusted earnings per preferred share of 9.7%. Rorsted reconfirmed the commitment to achieve the 10% CAGR target for the current strategy cycle by the end of 2016.
“For us the key target is adjusted earnings per preferred share,” he said. “It is this figure that shows how well we have coped with the volatility and crises in our markets and from which the dividends to our shareholders are derived.”
Henkel has also made significant progress over the last three years with respect to its sales targets. In 2015, sales in mature markets exceeded €10 billion for the first time. However, currency fluctuations had a negative effect on sales in emerging markets. “In total, we faced substantial currency headwinds over the last three years – primarily in the emerging markets – of around €700 million,” Rorsted said. “Therefore, from today’s perspective the sales target of €20 billion appears unlikely to be met exactly.”