Henkel Boosts Profit Goal as Persil Emerging Market Sales Jump
Henkel raised this year’s profit guidance after a bigger-than-expected jump in sales of laundry products such as Persil in emerging markets.
Growth in adjusted earnings per share will now exceed Henkel’s 10 per cent goal, the Duesseldorf, Germany-based company said in a statement on Wednesday, without being specific.
Third- quarter adjusted earnings before interest and taxes rose 12 per cent to €778 million, beating a €761 million estimate in an analyst survey.
“Henkel has appeared to defy a lacklustre western European performance to drive impressive growth,” London-based Exane BNP Paribas analyst Jeff Stent wrote in a note to clients. “As to the driver behind this growth, it is principally emerging markets.”
Chief Executive Officer Kasper Rorsted has also countered increased discounting in the US by rolling out a premium detergent line known as Persil ProClean. That has helped boost profitability in a market dominated by Procter & Gamble. The Danish CEO has a 2016 sales target of €20 billion, with about half to come from emerging markets to tap growth of more than 10 percent growth in eastern Europe and Asia.
Rorsted said third-quarter results shows Henkel is resilient to “challenging and volatile markets.” The shares jumped 4.7 percent to €100.15, the biggest increase in more than a month. That values Henkel at €30 billion.
“This was a good quarter in absolute terms, but an excellent quarter relative to expectations,” London-based Bernstein analyst Andrew Wood said in a note to clients.
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