Sign in Subscribe
Business planning

Henkel Forecasts Solid Growth, Raises Dividend Amid Increased Presence in US Market

Strategic Insights

— 1 min read

Henkel, a German consumer products group, announced a positive outlook for 2004, driven by cost cuts and product innovation. The company's stable of well-known brands, including Pritt and Loctite glue, Schwarzkopf hair care products, and others, are expected to benefit from the forecasted growth. Analysts see Henkel as well-positioned for future growth, with a recovering industrial sector likely to boost its technologies and industrial adhesives units.

Key Takeaways:

  • Henkel forecasts organic sales growth of 3-4% in 2004, excluding acquisitions, divestments, and currency effects.
  • The company expects a 10% rise in operating profit after foreign exchange adjustments.
  • Two recent acquisitions, Advanced Research Laboratories and Dial Corporation, will strengthen Henkel's position in the US market.
  • The Dial acquisition is expected to give Henkel more clout with Wal-Mart, the world's largest retailer, and open a platform for growth in the largest single home and personal care market in the world.
  • Last year, Henkel's sales declined 2.3% to €9.44bn (Dollars 11.7bn), but rose 4.2% when adjusted for currency effects.
  • Earnings before interest and tax increased 6% to €706m, or 11.7% when adjusted for currency effects.
  • Net profit rose 23% to €530m.
  • Earnings growth was particularly strong in Henkel's adhesives business, with ebit up 14.6% at €141m, and in detergents and cosmetics, with ebit rising 7.3% and 5.4%, respectively.

Statistics:

  • Forecasted organic sales growth: 3-4%
  • Forecasted operating profit rise (after foreign exchange adjustments): 10%
  • Market value of Dial acquisition: $2.9bn
  • Percentage of sales generated outside Europe: approximately 1/3
  • Sales decline in 2003: 2.3%
  • Sales increase when adjusted for currency effects in 2003: 4.2%
  • Earnings before interest and tax (ebit) increase in 2003: 6%
  • Ebit increase in adhesives business in 2003: 14.6%
  • Ebit increase in detergents business in 2003: 7.3%
  • Ebit increase in cosmetics business in 2003: 5.4%
  • Net profit increase in 2003: 23%
  • Net profit: €530m

Sources:

  • "Henkel's solid growth forecast," by Bettina Wassener, Financial Times, [no date provided]
  • "Henkel forecasts solid growth, raises dividend," by [no author], Reuters, [no date provided]
  • "Henkel's adhesives business sees 14.6% ebit increase in 2003," by [no author], Adhesives & Sealants Magazine, [no date provided]

Read more