BERLIN — Henkel AG registered a fall in fourth-quarter earnings, dampened by higher raw material costs and currency effects.
Its net profits in the three months ended Dec. 31 decreased 13.4 percent to 399 million euros, or $430.5 million. Meanwhile, group sales for the maker of Dial, Persil and Loctite rose 2.27 percent to 4.9 billion euros, or $5.29 billion.
For full-year 2016, the Düsseldorf, Germany-based company reported record levels for sales and earnings, boosted by acquisitions and divestments, including the purchase of Sun Products Corp., which was completed in September and marked the second-largest acquisition in Henkel’s history. Full-year net income for the company rose 6.9 percent to 2.05 billion euros, or $2.27 billion.
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Adjusted operating profit, including one-time charges, gains and restructuring costs, improved 8.5 percent to 3.17 billion euros, or $3.51 billion, a record high, according to Henkel. All three of the company’s business units — beauty care, laundry and home care, and adhesive technologies — contributed to the uptick.
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Total group sales increased 3.5 percent in reported terms and 3.1 percent on an organic basis to 18.7 billion euros, or $20.7 billion.
The firm’s beauty division, which includes brands such as Schwarzkopf, Fa and Syoss, posted a 6.1 percent gain in adjusted operating profit to 647 million euros, or $716.2 million. The branch’s sales reached 3.83 billion euros, or $4.23 billion, a rise of 2.1 percent in organic terms, which was above market growth, Henkel said. Emerging markets powered the positive performance, while mature markets slumped slightly, hit by price and promotional pressures.
Dollar figures are calculated at average exchange for the period to which they refer.
Looking toward fiscal year 2017, Henkel chief executive officer Hans Van Bylen said in a statement: “We expect the highly volatile and uncertain market environment to continue. Nevertheless, based on our clear strategic direction, our strong global team and our innovative brands and technologies with leading market positions, we are well-positioned for further profitable growth.”
Van Bylen said he anticipated organic sales growth of 2 percent to 4 percent, an adjusted EBIT margin above 17 percent, and adjusted earnings per preferred share to grow between 7 percent and 9 percent this year.