Henkel Profit Jumps 14 Percent Boosted by Deals And Dollar
Henkel AG, the maker of Schwarzkopf shampoo and Loctite glue, reported a 14 percent jump in second-quarter profit as a series of deals last year and the dollar’s strength against the euro boosted earnings.
Adjusted earnings before interest and taxes advanced to 768 million euros ($850 million) from 674 million euros, the Dusseldorf-based company said in a statement. The average estimate of six analysts in a Bloomberg survey was 772 million euros. Sales increased 14 percent to 4.7 billion euros.
“The main drivers were solid organic sales growth, last year’s acquisitions and, above all, the strong U.S. dollar,” Chief Executive Officer Kasper Rorsted said in the statement. “We expect the current difficult global economic environment to persist. Market volatility will remain high..”
In the U.S., Henkel this year introduced a high-end line of its Persil detergent and Schwarzkopf Essence Ultime, the shampoo whose marketing campaign features supermodel Claudia Schiffer. CEO Rorsted has been trying to curb discounting in the U.S., where competitor Procter & Gamble Co. dominates the laundry markets. Growth in North America, Henkel’s second-biggest market, is key as he seeks to boost group revenue to 20 billion euros by 2016.
The dollar provided a tailwind, appreciating by almost a quarter against the euro in the 12 months through June 30.
While he has bulked up hair- and homecare offerings with a series of deals in the past year, Rorsted missed out on buying Procter & Gamble’s Wella brand. The U.S. company agreed to sell a 43 percent stake in a series of beauty brands to Coty Inc. for $12.5 billion in July.
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