Henkel lowers forecast after weakest quarter in 10 years | Progresiv

Henkel has lowered its profit and sales forecast for the full year after reporting its first quarterly sales decline since 2009. The group said it was hurt by weaker consumer demand for its beauty products and by lower industrial demand for its adhesives brand.

For the second quarter, sales edged down 0.4% to 5.12 billion euros, with adjusted operating profit sliding by 8.6% to €846m, and net profit down 7.3% to 558 million euros.

The company was hurt by 3.2% dip in sales to €1bn at its Beauty Care business (-2.4% organic basis), and a 0.4% decline to 2.42 billion euros at its Adhesives business (-1.2% organic), which was partially offset by a 1.4% increase to 1.67 billion euros at its Laundry & Home Care operations (+2% organic).

Beauty Care sales were hurt by weakness in Western and North America, as well as inventory issues in China.  However, the professional haircare segment continued to grow strongly and CEO Hans van Bylen also pointed to increased demand for Got2b styling products.

For the year, Henkel now expects organic sales to be flat to up 2%, compared to a previous forecast of 2%-4% growth. It also expects adjusted earnings per share to fall by a mid- to high single-digit percentage, compared to an outlook for mid-single-digit percentage fall.

The company said the laundry & home care division is still expected to grow by 2%-4%, helped by the relaunch of Persil, which is expected to get a further boost from the launch of new products. (www.kamcity.com)