Henkel Posts Strong Organic Sales Growth in Second Quarter, Along with Improved Margins and Higher Profitability

Henkel Chief Executive Officer Hans Van Bylen stated: "Henkel has made good progress in the second quarter with strong organic growth momentum, despite notable negative currency effects and rising material prices. We achieved record quarterly sales, further increased our EBIT margin, and reached the highest adjusted profitability achieved in a quarter to date." Bylen continued: "The Adhesive Technologies business unit realized strong organic growth, while the Laundry and Home Care business unit posted good growth. The Beauty Care business unit also showed positive progress. We achieved organic sales growth across all regions, including very strong performance in emerging markets and progress in developed markets. Our North American consumer business units have resumed growth as service levels have normalized back to normal." Hans Van Bylen continued his remarks: "Like in the first quarter, we faced notable currency headwinds and rising material prices in the second quarter. Currency movements impacted our reported sales negatively by 6.1%, equivalent to approximately EUR 310 million. Similarly, our operating profit and earnings per share were affected by currency movements. Excluding the effects of currency fluctuations, we achieved strong operational earnings per share (EPS) growth of 7.7%."

Updated Outlook for Fiscal Year 2018

Henkel updated its targets for fiscal year 2018. The company confirms its expectation of organic sales growth in the range of 2% to 4% for the Henkel Group. For the Henkel Adhesive Technologies business unit, Henkel expects organic sales growth in the range of 4% to 5%, higher than the previously expected range of 2% to 4%. For the Laundry and Home Care business unit, Henkel continues to expect growth in the range of 2% to 4%. For the Beauty Care business unit, Henkel confirms its expectation of positive organic sales growth in the range of 0% to 2%. For adjusted operating profit (EBIT) over a one-year period, Henkel is updating its forecast from a level above 17.5% to a level of 18%. All three business units are expected to contribute to this positive performance. Henkel is adjusting its expectation for preferred earnings per share to reflect developments in currency and material prices, now expecting an increase in the range of 3% to 6%, differing from the previously forecast range of 5% to 8%. On this matter, Hans Van Bylen stated: "This outlook underscores our continuing focus on sustainable profitable growth, and we remain committed to executing our strategic priorities."

Sales and Profit Performance in the Second Quarter of 2018

Sales in the second quarter of 2018 reached EUR 5.143 billion, an all-time high, and grew nominally by 0.9% compared to the second quarter of the previous year. Excluding the effects of currency movements, acquisitions and divestitures, organic sales increased by a strong 3.5%. The contribution from acquisitions and divestitures was at the 3.5% level. This resulted in growth of 7%. The negative impact of currency movements on sales was -6.1%. The Adhesive Technologies business unit reported strong organic sales growth of 5.2%. In the Beauty Care business unit, organic sales were 0.4% above the level of the second quarter of the previous year. The Laundry and Home Care business unit achieved good organic sales growth of 2.9%. Sales growth was also supported by double-digit increases in digital sales at the group level and significant strong performance in the consumer business units. Emerging markets made an above-average contribution to the Group's organic growth with very strong organic sales growth of 5.4%. Developed markets achieved good organic sales growth of 2.2%. Western Europe showed steady progress with organic sales growth of 0.1%, while Eastern Europe achieved organic growth of 8.2%. In Africa/Middle East, sales grew organically by 4.7%. North America showed organic sales growth of 4.9%, while Latin America achieved organic growth of 6.3%. In the Asia-Pacific region, sales experienced organic growth of 1.9%.