BERLIN — Second-quarter net profits for German consumer goods company Henkel AG rose 3.2 percent to 446 million euros, or $611.7 million, boosted by strong performance in emerging markets.
Group sales for the period fell 3.5 percent to 4.14 billion euros, or $5.68 billion, dampened by currency exchange effects in those same high-performing regions. Organically, sales rose 3.3 percent, with all business segments contributing.
The Düsseldorf-based maker of Schwarzkopf, Persil and Loctite registered a rise in adjusted operating profit (EBIT) of 2.1 percent. After allowing for one-off gains, one-off charges and restructuring charges, the EBIT amounted to 674 million euros, or $924 million.
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All dollar figures are calculated at average exchange rate for the period.
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The firm’s beauty care division, which includes the Schwarzkopf, Dial and Syoss brands, reported sales down 2.8 percent to 897 million euros, or $1.23 billion, for the April to June period, representing a rise of 2.1 percent in organic terms. Adjusted EBIT advanced 5.1 percent to 145 million euros, or $198.9 million.
In the second quarter, Henkel completed the purchase of three U.S. haircare brands — SexyHair, Alterna and Kenra — for 274 million euros, or $375.8 million. The brands hold a reported value of around 1.2 billion euros, or close to $1.61 billion at current exchange, according to the company.
In the first six months of 2014, Henkel’s net earnings rose 8 percent to 902 million euros, or $1.24 billion. Sales for the first half of the year decreased 3 percent to 8.07 billion euros, or $11.06 billion, and adjusted operating profit increased 2.7 percent to 1.29 billion euros, or $1.77 billion.
From January to June, Henkel beauty care sales dipped 2.4 percent to 1.75 billion euros, or $2.4 billion, up 2.6 percent organically. The division’s adjusted EBIT for the period rose 4.1 percent to 279 million euros, or $382.5 million.
Noting that continued political turmoil in the Middle East and the conflict between Russia and Ukraine were likely to have a negative impact on the market environment, Henkel chief executive officer Kasper Rorsted stated that the company anticipated “slower growth of adjusted earnings per preferred share in the second half of this year compared to the first half. A high degree of agility and flexibility will remain key success factors and we will continue to simplify and further accelerate our processes and structures.”
Rorsted also confirmed Henkel’s financial forecast of organic growth between 3 and 5 percent, and an adjusted EBIT margin of around 15.5 percent.