Cosmetics help drive strong year for Henkel

By Simon Pitman

- Last updated on GMT

Cosmetics led the way for German consumer goods company Henkel, as
new launches and expansion into new market help to boost figures.

The company reported that in 2006 its sales were €12.74bn, an increase of 6.4 per cent over the figure in 2005, and well above current industry growth rates in Europe, particularly the slower German retail market.

Organic sales, which take into account foreign exchange and acquisitions, came in at 6 per cent, a figure that was affected by the strength of the Euro.

Ulrich Lehner, company chairman, said that the results reflected the introduction of numerous innovative new products and focused market investments.

"We have also further enhanced the attractiveness of our portfolio and expanded our presence in the important growth regions,"​ he said.

Profitability increased significantly for the company, with operating profit up 11.7 per cent to €1.298bn, off the back of a positive balance of exceptional items that appeared on the balance for the company's fourth quarter.

Net earnings increased 13.1 per cent to reach to reach €871m, leading the management to increase its dividends to €1.50 per preffered share, up from €1.36 the previous year.

The company, which is involved in the laundery and home care, technologies and consumer and craftsmen adhesive markets, stressed that its second biggest division - cosmetics and toiletries - posted well above average results for the business as a whole.

Sales for the division rose by 8.9 per cent to €2.86bn, representing organic growth of 4.1 per cent compared to the previous year. Operating profits for the division came in at €359m, an increase of 11.7 per cent.

These figures compared favourably to the company's biggest division, laundery & home care, where sales rose 0.7 per cent to reach €4.117bn and operating profit was up 3.7 per cent to €449m.

Looking ahead to 2007, the company is expecting to achieve organic sales growth of 3 - 4 per cent and also expects the rise in organic sales growth to exceed this figure.

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