Henkel 'not satisfied' with start of 2009

By Katie Bird

- Last updated on GMT

Related tags: Organic growth, Henkel

A respectable performance from Henkel’s cosmetics and laundry sectors could not make up for struggles in the company’s adhesives business.

Preliminary figures for the start of 2009 show organic sales decrease of around 7 per cent.

Factoring in the acquisition of National Starch makes total sales more respectable, rising 3 per cent to around €3.25bn.

However, this has not stopped the company’s operating profit from taking a knock and the company estimates it has dropped from about €320m to €215m.

Cosmetics reports organic growth

In contrast, the cosmetics and toiletries, and the laundry and homecare sectors both achieved organic sales growth.

Cosmetics and toiletries sales grew by about 3 per cent and operating profit increase from €87m to €90m, and laundry and homecare’s operating profit increase from €100m to €105m.

However, these performances could not offset the substantial drop in operating profit (€150m to €45m) experienced in the adhesives technology business.

The sector, which was already under strain at the end of 2008, suffered a drop in organic sales of approximately 19 per cent.

Again, factoring in the National Starch acquisition improves the figures with total sales increasing 7 per cent to €1.46bn.

CEO Kasper Rorsted puts the performance of the adhesives sector down to a decline in demand from the automotive, electronics and metal processing industries which have been severely affected by the recession.

Henkel ‘Not satisfied’

Commenting on the preliminary results Rorsted said: “We are certainly not satisfied with our start into the year 2009.”

Bernstein Research analyst Andrew Wood went a step further describing the results as "truly terrible" and suggesting that Henkel had decided to inform the market of the figures before the formal May 6 reporting date because they were so poor.

However, the Henkel CEO believes the company has introduced appropriate countermeasures to the slowdown in the economic environment.

“We have taken the necessary measures and have the necessary financial strength to emerge from the continuing difficult economic environment further strengthened,”​ he said.

Related topics: Business & Financial

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