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Henkel holds course
Düsseldorf (ots) - Henkel holds its course despite the weak
economic situation. Sales in the first half-year amounted to EUR 6.7
billion, operating profit (EBIT) was at EUR 463 million and net
earnings for the half-year at EUR 260 million. The positive
development was due to the improved business performance compared to
the first quarter.
In the first half-year 2001, the Henkel Group generated sales of
EUR 6.7 billion. This represents an 8.1 percent increase over the
previous year's figure (EUR 6.2 billion). Organic growth accounted
for 2.5 percent, foreign exchange factors contributed 1.1 percent to
the rise in sales, and a net gain from acquisitions and divestments
provided a plus of 4.5 percent. At EUR 463 million, operating profit
(EBIT) remained at last year's level (EUR 462 million) despite a loss
of EUR 28 million caused by the devaluation of the Turkish lira. The
return on capital employed (ROCE) was 13.3 percent. Net earnings for
the half-year amounted to EUR 260 million. This represents a 6.1
percent increase with respect to last year (EUR 245 million).
Earnings per share rose 7.6 percent to EUR 1.69 (previous year: EUR
All business sectors contributed to the increase in European sales
including Africa and the Middle East. Operating profit for the region
improved despite the economic crisis in Turkey. In the USA and
Canada, sales increased above average due to the acquisitions of
Dexter (Adhesives) and Atofina (Surface Technologies). The sales
increase in Latin America resulted from the takeover of the
heavy-duty detergents business of Colgate in Mexico. Sales growth
achieved in Asia-Pacific was due to the acquisition of Dexter and
good performance from Cosmetics.
Development of business sectors
The Adhesives business sector increased sales by 10.7 percent to
EUR 1.6 billion. Operating profit decreased by 16.2 percent to EUR
109 million. This decrease has a number
of causes, including the rather sluggish business situation in
Germany, the crisis in Turkey, product forgeries in Brazil and the
fall in demand in Japan. Sales of consumer and craftsmen adhesives
remained at the previous year's level. Pritt and the adhesive tapes
business (Manco) in the USA performed well.
Sales of engineering adhesives rose 28.0 percent during the first
half-year. This was primarily due to the acquisition of the specialty
polymers business of Dexter. There was further organic growth in the
existing businesses in Europe and Latin America.
Industrial and packaging adhesives registered strong sales growth
of 8.5 percent. Market share gains were achieved in North America and
Asia with respect to adhesives for the graphic arts industry and
Sales of the business sector Cosmetics/Toiletries increased by 7.4
percent to EUR 1.1 billion. Operating profit rose by 6.3 percent to
EUR 68 million. Market shares were gained in Germany, Benelux, Italy,
Russia and Latin America. The Yamahatsu acquisition, in Japan,
contributed 1.1 percent to the rise in sales. The rise in operating
profit came from very good performance of the businesses in Germany,
Russia and Benelux.
The brand-name products business produced a 7.1 percent increase
in sales for the first half-year. Sales of hair cosmetics rose by
The main growth drivers were colorants, which performed
particularly well in Japan and continued along their upward growth
curve in Europe. The styling and hair care segments likewise showed
good sales growth thanks to the launch of further product lines.
Sales in body care increased by 3.0 percent. The Fa brand was
additionally strengthened by the launch of the Wellness series.
Sales in facial care products were slightly higher than last year.
Diadermine and Aok performed well as a result of new product
Sales in oral care matched the level of the previous year. The
innovative tube product Theramed Perfekt was successfully introduced
in a number of European countries.
Hair Salon sales (Schwarzkopf Professional) grew 8.3 percent.
The Laundry & Home Care business sector increased sales by 12.9
percent to EUR 1.5 billion in the first half-year. Operating profit
rose by 9.4 percent to EUR 105 million. This positive development is
due in particular to business performance in Germany, Italy and the
Sales growth (23.1 percent) was mainly driven by heavy-duty
detergents, while sales in special detergents fell 1.7 percent with
respect to last year.
Household cleaners registered a sales increase of 3.1 percent and
expanded their European market leadership.
Of the 6.0 percent sales increase registered in Industrial and
Institutional Hygiene/Surface Technologies, 3.0 percent were
contributed by the acquisitions Atofina and Vagnone & Boeri.
Operating profit decreased by 6.3 percent to EUR 75 million. This
was mainly due to price increases for raw materials (Industrial and
Institutional Hygiene) and the significant downturn in economic
activitity in North America (Surface Technologies).
Sales of Industrial and Institutional Hygiene increased by 4.3
percent with respect to last year. Sales of Surface Technologies were
up 8.2 percent on the previous year.
The Chemical Products business sector, now an independent legal
entity under the name Cognis, increased sales by 4.0 percent to EUR
1.5 billion. Operating profit rose by 3.6 percent to EUR 116 million.
The increase was achieved despite an appreciable downturn in
economic activity, particularly in the USA. The rise in operating
profit, achieved despite the restructuring program implemented in the
USA (EUR 15 million) and the negative effects of the Turkish crisis,
is particularly gratifying.
Ecolab Inc., St. Paul, Minnesota, USA, in which Henkel holds a
participating interest of 25.3 percent, registered a growth in sales
of 7.3 percent to US$ 1,177 million in the first half of the year.
Net earnings for the half-year rose 1.7 percent to US$ 93 million.
The Clorox Company, Oakland, California, USA, in which Henkel
holds a participating interest of 26.6 percent, reported sales for
its 2000/2001 fiscal year of US$ 3,903 million, 2.2 percent down on
the previous year. At US$ 323 million, net earnings dropped by 18
percent with respect to last year.
By June 30, 2001, the Henkel Group had close to 61,000 employees.
The proportion of Henkel personnel working outside Germany was 74
In June 2001, Henkel announced a worldwide employee share program
due to start in September. All employees of the Henkel Group will
then be able to purchase Henkel preferred shares at favorable
conditions. For every euro that an employee invests, Henkel will add
another EUR 0.50. The shares must be held for a minimum of three
The deterioration of the economic environment and the volatile
currency situation in certain emerging countries make a forecast
difficult. In view of the economic slowdown exhibited in virtually
all regions, Henkel expects the business situation for Adhesives and
Industrial and Institutional Hygiene/Surface Technologies to remain
difficult in the second half of the year.
Henkel anticipates, however, an improvement in sales and profits
in its branded consumer businesses.
Henkel is confident of achieving a respectable increase in sales
for fiscal 2001 as a whole. Operating profit, net earnings for the
year and earnings per share should either reach or slightly exceed
the level of the previous year.
ots Originaltext: Henkel Corporate Communications
Henkel Corporate Communications