Henkel profits up despite 5% drop in sales
German consumer products and cosmetics group Henkel achieved a sharp increase in profits in second quarter this year despite a 5% downturn in sales overall to €3.4bn.
German consumer products and cosmetics group Henkel achieved a sharp increase in profits in second quarter this year despite a 5% downturn in sales overall to €3.4bn. Operating profits more than doubled €279m from €113m in the same quarter of 2008 and in the April-June period net earnings shot up from €38m to €143m. The sharp rise was due mainly to the high costs of restructuring last year.
Organic growth in the company’s cosmetics and body care segment was 3.5% despite a strong comparative second quarter in 2008. Growth remained strong in eastern Europe, Asia and Latin America while sales in western Europe rose 1.5% to €790m with operating profits up about 2.8% at €100m. Hair care also proved a high performing area with market share expanding in all areas. The Syoss brand was a strong runner together with Hairactive shampoo for men. The Dial body care range did well in the US.
Despite the expectation that economic conditions will remain difficult Henkel expects organic growth to continue at rates above market average supported by improved raw material costs and a reduction in costs associated with restructuring.