Henkel posts highest-ever profit in 2012 thanks to emerging market gains


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Henkel posts highest-ever profit in 2012 thanks to emerging market gains

Related tags Hair care products United arab emirates

It seems the emerging markets are helping out the personal care players once more as German giant Henkel posted its highest-ever profit in 2012.

The maker of Schwarzkopf hair care products says that it expects earnings to rise to another record this year following the 2012 result, with emerging markets and cost controls driving the gains.

Kasper Rorsted, CEO stated, "2012 was the most successful year for Henkel so far: we achieved excellent results in a highly volatile and competitive market environment and met or exceeded all financial targets."

The numbers

In the fourth quarter, the company's net income increased to 357 million euros from 212 million euros in the previous year.

The group also reported fourth-quarter sales of 4 billion euros and adjusted earnings before interest and tax (EBIT) of 544 million, in line with expectations, giving full-year totals of 16.5 billion euros and 2.33 billion.

Henkel said a strong performance in emerging markets such as Turkey, Russia, the United Arab Emirates, China and India made up for the tough trading climate currently in Europe.

In comparison

Compare this with some of its rivals such as Unilever which also said it is benefitting from strong sales of its hair care products and soaps in emerging markets, and it is clear to see where the opportunities lie at present.

Henkel's share of sales from emerging markets rose to 43 per cent from 42 per cent the previous year; similar to German competitor Beiersdorf who sees emerging markets account for almost half of its business.

However, unlike Beiersdorf, Henkel has announced it will increase its dividend to 0.95 euros per preferred share, compared with a forecast 0.91; the Nivea skin care maker opting not to do so.

Having spent years reducing its debt following its 3.7 billion euro buy of National Starch in 2008, Henkel is back on the acquisition trail.

It bought several Polish home-care brands from rival PZ Cussons for 46.6 million pounds ($70 million) last month and said in November takeovers would be a key part of plans to increase sales to 20 billion euros by 2016.

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