Henkel’s profits surge but sales fall in second quarter

While sales for the Germany-based company fell 5 per cent to €3.485m for the quarter, operating profits shot up 145 per cent to €279m.

This, the company explained, was mainly due to the very low operating profits in the second quarter last year when figures were hit hard by restructuring costs.

Accounting for these one-off effects, operating profit for the quarter decreased 17.2 per cent which Henkel said was down to poor performance in the adhesives sector.

Cosmetics up slightly on last year ​

Cosmetics and toiletries revenues increased slightly (1.5 per cent) which in organic sales translates to a 3.5 per cent increase, according to the company.

Operating profit for the sector also increased to €100m from €98m in the previous year – an increase of 2.8 per cent.

According to Henkel, this amounts to a positive performance illustrating the company’s ability to outperform the market in the sector.

Brands that performed particularly well in the period were the Dial Body washes, in particular the antioxidant body wash and the odour control body wash for men rolled out in the US.

Like the majority of its competitors, emerging markets are the growth areas for Henkel, but the company was quick to point out that in its developed markets growth was ‘noteworthy’.

In Europe/Africa/Middle East sales were down 3.7 per cent on last year; although, much of this was due to a double digit drop in adhesives revenues while laundry and homecare and cosmetics and toiletries showed sales increases in the region.

In the US, both cosmetics and toiletries and adhesives posted a drop in sales while laundry and home care increased.

Looking to the future, the company said it expects a slight deceleration in the third quarter for the consumers businesses although actual predictions have not been made due to ‘continuing uncertainties’.

In addition, Henkel expects operational changes and a decrease in raw material prices to help increase operating profit.