Henkel reports sales growth of 3.5% for fiscal 2016

At 18.7 billion euros (Bt694 billion), Henkel Group sales reached a new record level and grew by 3.5 per cent. Organic sales growth, which excludes the impact of foreign exchange and acquisitions and divestments, increased by 3.1 per cent. Additionally, for the first time, the company reached an adjusted operating profit of more than 3 billion euros.
All business units reported solid organic sales growth, Henkel said.
The adhesive-technologies business unit achieved organic sales growth of 2.8 per cent. Sales in the beauty care business unit grew organically by 2.1 per cent and the laundry and home care business unit recorded organic sales growth of 4.7 per cent.
In September 2016, Henkel closed the acquisition of Sun Products, the second-largest acquisition in the company’s history. This acquisition propels Henkel to a No 2 position in the United States, the world’s largest laundry and home care market, as well as in Canada.
Emerging markets generated total sales of 7.8 billion euros and organic growth of 6.8 per cent. The company also achieved organic sales growth in its mature markets.
In the Asia-Pacific region, sales grew organically by 3.2 per cent. Nominal sales increased by 3.6 per cent to 3.246 billion euros.
Adjusted earnings per preferred share grew by 9.8 per cent from 4.88 euros to 5.36 euros and reached a new record level. Reported earnings per preferred share rose from 4.44 euros to 4.74 euros.
The management board, supervisory board and shareholders’ committee will propose to the annual general meeting on April 6 an increase in the dividend per preferred share of 10.2 per cent to 1.62 euros (compared with 1.47 euros in the previous year) and an increase in the dividend per ordinary share of 10.3 per cent to 1.60 euros (previous year: 1.45 euros). This would be the highest dividend in the company’s history and equal a pay-out ratio of 30.3 per cent.
Henkel chief executive officer Hans Van Bylen said: “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.”
Erik Edelmann, president of Henkel Thailand, added: “In 2016, we continued to work closely with our customers and value-chain partners to set a new benchmark in innovation and sustainability in the adhesives and beauty care industries.
“Going forward, in line with Henkel’s strategic priorities for 2020 and beyond, we will focus on driving growth, accelerating digitalisation across all our businesses and functions, increasing agility in our organisation and teams, and funding our growth through targeted initiatives.”
Henkel expects to generate organic sales growth of 2-4 per cent in fiscal year 2017 and that each business unit will generate organic sales growth within this range. For adjusted return on sales (earnings before interest and taxes), Henkel expects an increase over the prior year to more than 17.0 per cent. Henkel expects an increase in adjusted earnings per preferred share of between 7 and 9 per cent.