“Henkel continued to deliver strong business performance in the third quarter. Sales, adjusted EBIT and adjusted earnings per preferred share reached new highs. The successful development and the high quality of earnings was driven by all three business units and the strong commitment of our global team,” said Henkel CEO Hans Van Bylen.
“In the third quarter, we were also able to successfully close the acquisition of Sun Products and secure its financing at favorable conditions. This is the second largest transaction in our company history, elevating Henkel to the No. 2 position in the US laundry care market and adding a range of attractive and well-established brands to our portfolio.”
Commenting on the current fiscal year, Van Bylen said: “We expect the overall challenging and uncertain market environment to persist in 2016. We will continue to focus on leveraging our successful brands, leading market positions and strong innovation capabilities to achieve our ambitious targets.”
Henkel confirmed the outlook for the current fiscal year: “For the full fiscal year 2016, we expect organic sales growth of 2 to 4%. We expect our adjusted EBIT margin to rise to more than 16.5% and adjusted earnings per preferred share to grow between 8 and 11%,” said Van Bylen.
Organic sales growth was driven by the solid performance of all business units. The Laundry & Home Care business unit recorded organic sales growth of 4.0%. The Beauty Care business unit posted an improvement in organic sales of 2.6%. The Adhesive Technologies business unit reported an increase in organic sales of 2.5%.
After allowing for one-time charges and gains and restructuring charges, adjusted operating profit (EBIT) rose by 7.6% from €778 million to €837 million. Reported operating profit grew by 16.4% from €666 million to €775 million.
Adjusted return on sales (EBIT margin) showed an increase of 0.7% to 17.6%. Reported return on sales rose from 14.5% to 16.3%. Henkel’s financial result was at -€15 million and, due to acquisitions, below the level of the prior-year quarter.
In the first nine month of 2016, Henkel generated organic sales growth – i.e. adjusted for foreign exchange and acquisitions/divestments – of 3.0%, with all business units contributing. Nominally, sales increased by 1.0% to €13,858 million.
Adjusted operating profit rose by 6.9% from €2,253 million to €2,407 million; adjusted return on sales improved from 16.4% to 17.4%. After deducting non-controlling interests, adjusted net income for the first nine months rose by 8.6% from €1,632 million to €1,772 million.
Effective Sept. 30, 2016, Henkel’s net financial position showed a balance of -€2,661 million euros (Dec. 31, 2015: €335 million euros). The change compared to the end of 2015 was mainly due to payments for acquisitions and dividends paid.