Henkel Revenue and Adjusted Profits Up on Emerging Market Growth

By Monica Houston-Waesch

FRANKFURT--German consumer products maker Henkel & Co. KGaA (HEN.XE) said revenue and adjusted earnings improved in the third quarter, due to above-average growth in emerging markets.

"We increased organic sales in all our business units and further improved our profitability," Henkel Chief Executive Kasper Rorsted said, referring to sales adjusted for currency effects and acquisitions.

Adjusted earnings before interest and tax rose to 693 million euro ($864 million), up 3.1% from EUR672 million in the third quarter of 2013, and above analysts' expectations of EUR674 million. Henkel makes Schwarzkopf hair care products, Persil laundry detergent and other goods.

Revenue rose to EUR4.24 billion, up 1.2% from the year earlier quarter, amid improvement in its three units, laundry & home care, beauty care and adhesive technologies.

Despite a challenging outlook in Russia and the Middle East, the company affirmed its outlook for a 3%-5% rise in organic sales this year. It tweaked its EBIT margin guidance higher, to just under 16.0% from a previous forecast of 15.5%.

That compares favorably to others in the industry.

Earlier this month, German peer Beiersdorf AG (BIE.XE), which makes products such as Nivea skin cream, confirmed its outlook for 2014--a slightly better EBIT margin and sales growth of 4% to 6%. But rivals elsewhere, such as L'Oreal SA (OR.FR), reported sluggish revenue growth for the quarter, hit by weakness in western Europe, and said 2014 will be its weakest year since 2009. Likewise, the maker of Dove products, Unilever NV (UN), cited slowing global demand in the quarter.

Write to Monica Houston-Waesch at [e-mail]

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