Henkel reports healthy growth from cosmetics and toiletries arm

For the fourth quarter the company reported organic sales up by 5.8 per cent to €3.73bn, a figure that incorporated cosmetic and toiletry sales of €0.80bn, up 4.1 per cent compared to the corresponding quarter in 2009.

For the full financial year 2010 total organic sales were up 7.0 per cent to €15.1bn, while cosmetic and toiletry sales for the period were up by 4.8 per cent to €3.27bn.

Net income for the full year improved by 82 per cent, from €628k in 2009 to reach €1.14bn in 2010. The company also reported that for the full year 2010 EBIT margin gained 2.3 percentage points on the performance in 2009 to reach 12.3 per cent.

Improved market position and profits​

“We have improved the market positions of all our business sectors and have further strengthened our top brands. We have also been able to further expand our positions in the emerging markets,”​ said Henkel CEO Kasper Rorsted.

Commenting on the performance for the cosmetics and toiletries business, the company said that yearly organic sales growth of 4.8 per cent was and ‘encouraging growth trend’, particularly in view of the fact that the global market is currently stagnant.

From a geographical perspective, the company said that the main sales growth for the cosmetics division was achieved in Europe and emerging markets, where double-digit growth was recorded.

Significant growth came from the markets of Germany, together with the emerging markets of Eastern Europe, Latin America,, as well as Africa/Middle East but in contrast aggressive pricing and a slow consumer market meant that sales declined in North America.

Anti-ageing, hair styling and colourants big winners​

On a category basis, the company said the hair care cosmetics achieved ‘particularly’ strong growth, mainly from innovations in colourants and hair styling products that helped to increase market share.

In the skin care business, the focus remained on the development of anti-aging products, underlined by the introduction of the new sub-line Novagen under the Diadermine umbrella.

Looking forward to 2011, the company underlined that the economic conditions remained challenging, particularly in view of the rising spectra of increasing raw materials costs.

However, despite this, Henkel is sticking to forecasts of organic sales growth of 3-5 per cent over the course of 2011, while predicting that the EBIT margin will be around 13 per cent.