Henkel reports a strong 2017, driven by Latin America

By Simon Pitman

- Last updated on GMT

Henkel reports a strong 2017, driven by Latin America

Related tags Organic sales growth United states Latin america Henkel

Global personal and home care provider Henkel has reported strong growth for its 2017 results, with gains driven by its exposure to new markets, including Latin America.

The company said that group sales grew by a nominal rate of 7.0% and an organic rate of 3.0% during the full reporting year, to reach 20.3 billion ($24.4bn), breaking the all-important €20 billion mark for the first time in the company’s history.

Adjusted net income, which did not include the financing for a number of acquisitions that took place in 2017 amounting to $2 billion in value, saw profits rise by 9.1% to reach €2.53 million, compared to €2.32 million in 2016.

New markets lead the way

Although sales increased organically in all regions, the rate of growth was more subdued in the mainstay Western European market, which meant that sales in mature markets grew by 1.5% during the year.

However, the performance was boosted by the emerging markets, highlighted by organic sales growth of 4.4% in Latin America, 5.9% growth in the Asia Pacific region and 6.0% growth in Eastern Europe.

Currently Henkel has exposure in 12 countries in the Latin American region, with headquarters in Buenos Aires, Argentina and another major operation in Huixquilucan State, in Mexico.

Beauty Care business

The company’s three principal business divisions cover adhesive technologies, laundry and home care, together with Beauty, which actually saw the slowest performance.

While adhesives registered organic sales growth of 5.0% and laundry and home care registered 2.0% growth, the beauty care division notched up a more modest organic sales increase of 0.5%.

On a nominal level, sales increased by 0.8% to reach €3.86 billion, with adjusted operating profit growing by 2.7% to €665 million.

Henkel’s growth strategy

“Through to 2020 and beyond, we are pursuing a compelling ambition for Henkel. We want our company to generate sustainable profitable growth and to become more customer-focused, innovative, agile, and digital,”​ said Henkel CEO Hans Van Bylen.

Specific to beauty care, Van Bylen pointed out that innovations in coloration and styling were key to driving growth and market gain, with the launch of first influencer brand in the US, #myidentity, had also boosted the division.

“Going forward, we will continue to focus on sustainable profitable growth with attractive returns. We are committed to deliver on our financial ambition 2020,” ​said Van Bylen.

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