JEDDAH — Henkel, which operates worldwide with leading brands and technologies in three business units – Laundry & Home Care, Beauty Care and Adhesive Technologies, recorded a 17.3 percent increase in sales in the Middle East/Africa region last year to 1,329 million euros. Organic sales growth came in at 6.8 percent, with each of the business units making an important contribution, the company said in a statement on Sunday.
At 18,089 million euros, Henkel’s sales in the fiscal year 2015 were significantly above the level of the previous year. All business units reported solid organic sales growth and overall Henkel increased market shares in the relevant markets.
Sales in the emerging markets of Eastern Europe, Africa/Middle East, Latin America and Asia (excluding Japan) increased substantially year on year to 7,797 million euros. Organically, sales improved by 5.9 percent, with all business units contributing. The emerging markets again made an above-average contribution to organic sales growth. Due to currency effects, the share of sales from emerging markets declined slightly to 43 percent. Sales in mature markets increased organically by 0.7 percent to 10,164 million euros.
“2015 was an excellent year for Henkel. We recorded double-digit growth rates in sales, profits, earnings per share and our proposed dividends. All three business units delivered solid organic growth and significantly improved their profits,” said Henkel CEO Kasper Rorsted. “Emerging markets continued to be the main growth drivers contributing to our good performance. We also achieved further organic sales growth in mature markets.”
“Despite the difficult economic environment, we delivered a strong financial performance, continued to successfully implement our strategy and laid a strong foundation for our future. After three years of our four-year strategy cycle, we are well on track to meet our main targets for 2016,” said Rorsted summarizing Henkel’s development.
Henkel expects to generate organic sales growth of 2 to 4 percent in the fiscal year 2016. Henkel expects that each business unit will generate organic sales growth within this range. Henkel furthermore expects a slight increase in the share of sales from its emerging markets. For adjusted return on sales, Henkel expects an increase versus the prior year to approximately 16.5 percent.
The adjusted return on sales of the individual business units is expected to be at or above the level of the previous year. Henkel expects an increase in adjusted earnings per preferred share of between 8 and 11 percent.
Looking at the current fiscal year and the 2016 financial targets, Rorsted said: “The economic and political environment remains challenging.
Therefore we will continue to adapt our processes and structures to the markets, further increasing our efficiency and competitiveness. For the full fiscal year 2016 we expect organic sales growth of 2 to 4 percent. We expect our adjusted EBIT margin to rise to approximately 16.5 percent and adjusted earnings per preferred share to grow between 8 and 11 percent in fiscal 2016. With an average annual growth of adjusted earnings per preferred share of 9.7 percent in the period from 2013 to 2015 we are well on track and fully committed to reach our 10 percent CAGR target for the current strategy cycle.”
The Management Board, Supervisory Board and Shareholders’ Committee will propose to the Annual General Meeting on April 11, 2016 an increase in the dividend per preferred share of 12.2 percent to 1.47 euros (previous year: 1.31 euros) and an increase in the dividend per ordinary share of 12.4 percent to 1.45 euros (previous year: 1.29 euros). This would give a payout ratio of 30.2 percent. — SG
