Henkel delivers strong increase in Q3 sales and earnings
- Sales: +8.4% to 4,590 million euros (organic: +3.2%)
- Operating profit*: +12.3% to 778 million euros
- EBIT margin*: +0.5 percentage points to 16.9%
- Earnings per preferred share* (EPS): +11.1% to 1.30 euros
- Strong organic sales growth in emerging markets: +6.5%
“Despite a persistently challenging market environment, Henkel delivered a strong performance in the third quarter. We significantly increased both sales and earnings across all business units. Organic sales in emerging markets were strong, once again making an above average contribution to growth. Mature markets showed a positive development, driven especially by the solid performance in North America. Here we grew our business for the third consecutive quarter,” said Henkel CEO Kasper Rorsted. “Adjusted operating profit and adjusted EBIT margin reached record levels in the third quarter and all business units reported a higher adjusted EBIT and adjusted EBIT margin than in the previous year.”
“The strong third quarter performance in challenging and volatile markets demonstrates our ability to adjust to the difficult economic environment. Agility and flexibility remain key success factors for us, confirming our strategy of adapting and further simplifying our structures and processes in line with the changing market conditions.”
Guidance for EPS growth raised
Henkel specified the outlook for organic sales growth and raised its guidance for EPS growth for the fiscal year 2015: “We now expect to achieve organic sales growth of around 3 percent in 2015. We continue to expect our adjusted EBIT margin to increase to around 16 percent and now anticipate an increase in adjusted earnings per preferred share of more than 10 percent.”
Sales and earnings performance in the third quarter 2015
In the third quarter of 2015, sales rose significantly by 8.4 percent to 4,590 million euros. Adjusted for positive foreign exchange effects of 2.3 percent, sales improved by 6.1 percent. Organically – i.e. adjusted for foreign exchange and acquisitions/divestments – sales rose by 3.2 percent.
The Laundry & Home Care business unit recorded strong organic sales growth of 5.5 percent. In theBeauty Care business unit, organic sales rose by a solid 2.1 percent. The Adhesive Technologiesbusiness unit also posted a solid improvement in organic sales of 2.3 percent.
After one-time charges, one-time gains and restructuring charges, adjusted operating profit improved by 12.3 percent from 693 million euros to 778 million euros. Reported operating profit (EBIT) grew by 10.4 percent from 603 million euros to 666 million euros.Adjusted return on sales increased by 0.5 percentage points to 16.9 percent. Reported return on sales rose by 0.3 percentage points to 14.5 percent.
Henkel’s financial result of -11 million euros was at the level of the prior-year quarter. The tax rateamounted to 24.6 percent (prior-year quarter: 24.0 percent).
Adjusted net income for the quarter after deducting non-controlling interests increased by 11.0 percent, from 508 million euros to 564 million euros. Reported net income for the quarter grew by 9.8 percent, from 450 million euros to 494 million euros. After deducting 10 million euros attributable to non-controlling interests, quarterly net income increased to 484 million euros (prior-year quarter: 440 million euros).
Henkel launches 4 new TEROSON paint refinement products for the Automotive Aftermarket
Henkel Adhesive Technologies India Private Limited (a fully owned subsidiary of Henkel AG & Co. KGaA), the leading solution provider for adhesives, sealants and functional coatings, has launched 4 TEROSON® products for the automotive aftermarket, namely TEROSON® WX 157 (Heavy Cut HP), TEROSON® WX 150 (Fast Cut), TEROSON® WX 175 Glaze HP and TEROSON® WX 180 Polish Wax. These are rubbing and polishing compounds that help remove scratches and sanding marks, give excellent glossy final finish and give protection to painted surface with an easy application process.
Henkel’s Automotive Aftermarket business offers solutions for vehicles’ body repair, mechanical repair, speciality coatings for body protection and aesthetic improvement to match the original OEM standards. Henkel works with leading OEMs across the globe to provide vehicle manufacturing solutions, and brings the same quality and reliability to the aftermarket customers too.
Pradhyumna Ingle, Business Director, General Industry division of Henkel Adhesives Technologies India Pvt Ltd said “We, at Henkel, are extremely focused on creating value for our customers through increased productivity, cost savings and high quality. These new TEROSON® products for the automotive aftermarket will help vehicle repair professionals restore the original high paint gloss of vehicles, reduce the turnaround time and provide better coverage using less quantity.”
TEROSON® brand has a complete range of solutions, and the different variants under this brand cater to key application areas such as body coating, direct glazing, body sealant application and polishing of an automobile.
TEROSON® WX 157 (Heavy Cut HP) is a rubbing compound that removes 1500-2000 grit sanding marks. It contains high grade polishing minerals for rapid elimination of sanding marks and providing excellent gloss. It also helps to make sure that compound does not burn during high intensity polishing. The balanced composition of ingredients ensure minimal dust residues and clean work place. The compound is versatile and suitable for all original and repair coatings; thus, reducing the risk of error.
Teroson® WX 150 (Fast Cut) is a rubbing compound that removes 2000 grit sanding marks. It contains high grade polishing minerals for rapid elimination of light sanding marks and providing high gloss. The balanced composition of ingredients ensure minimal dust residues and a clean work place. This compound is versatile, suitable for all original and repair coatings; thus, reducing the risk of error. It is better suited for lighter paint errors and light scratches.
Teroson® WX 175 Glaze HP is a haze and swirl marks remover that helps remove swirl marks formed during rubbing process; thus, giving it a perfect finish glaze. It contains high grade polishing minerals for hologram free mirror finish. The optimized solid content and binder ratio in it accounts for low dust contamination and cleaner work place. The compound is versatile and suitable for all coatings; thus reducing risk of error.
Teroson® WX 180 Polish Wax is a glaze, protective wax that gives high gloss and protects painted surface with natural wax. It gives original wet look to the car’s paint and ensures long-term protection of paint gloss with deep shine and high gloss. The compound is easy to apply and gives a perfect mirror finish.
Henkel Adhesive Technologies expands expertise in surface treatment
Henkel Adhesive Technologies is further driving its innovation capabilities and leadership forward. As part of its innovation strategy, the Henkel business unit is continuously strengthening its technical scouting and engagement with promising start-up companies. The most recent result is the signing of a joint development agreement with US-based DropWise Technologies Corp.
DropWise, founded in 2014, is headquartered in Cambridge, MA. The start-up company has developed technology, intellectual property and lab-scale manufacturing know how for a novel method of hydrophobic coating applications. The partnership will enable Henkel further expanding its leading position in the global surface treatment business and driving growth with new applications.
“Collaborating with promising start-ups that provide access to cutting-edge future technologies is an integral part of our innovation strategy”, explains Mike Olosky, Corporate Senior Vice President and Global Head of Innovation & New Business Development, Henkel Adhesive Technologies. “Together with DropWise we can combine their unique technologies with our global market access and know-how in coatings to generate profitable growth for both partners in the future.”
Increasing efficiency and lifetime in industrial heat generation
The global coatings market is rapidly changing with increasing demands for new technologies that offer additional functionalities and improved sustainability. Henkel Adhesive Technologies is aiming to drive the transition as first mover and to meet future customer requirements at an early stage. DropWise´s innovation will enable a durable polymer surface with unique properties that offers improved heat transfer.
The DropWise application process is based on an initiated chemical vapor deposition (iCVD) technique which allows the coating to be applied for OEM or retrofit applications. Using just a very small amount of polymer precursors, a chemical reaction is carried out that covalently grafts an ultra-thin polymer film to any metal surface, such as stainless steel, titanium, copper, aluminum, and even polymers and ceramics. One example use of DropWise’s hydrophobic coating is in condensing heat exchangers, where the technology increases the efficiency by eliminating the insulating film of liquid that typically builds up on the surface. Target applications include industrial heat exchangers such as steam condensers in power plants, heating-ventilation and automotive air-conditioning as well as chemical processes. Increasing the efficiency of these systems allows for reductions in fuel consumption, emissions and coolant water use, particularly for thermal power plants, which are the largest contributors to global emissions and second largest consumers of water.
“We are very excited to be partnering with a global leader in metal surface treatment,” says Adam Paxson, CEO of DropWise. “Henkel’s deep technical expertise and strong track record of bringing new innovations to their customers will enable us to fast-track commercialization in key market areas.” DropWise is commercializing the technology out of two laboratories at Massachusetts Institute of Technology (MIT) which has a strong track record of bringing material science-based innovation to the market. Henkel Adhesive Technologies is closely working with MIT to directly interact with start-ups and entrepreneurs.