Henkel’s sales statement had a surprise up its sleeve as the hair business showed a stylish ‘cut’. Outside Europe, hair salons were regionally less closed than expected. Adhesive Technologies and Laundry & Home Care reported the expected pattern. The higher group guidance looks quite good at first sight, but it focuses on adjusted figures.
Figures were ahead our expectations and broadly in line with consensus (+1% beat).
Companies: Henkel AG & Co. KGaA Pref
Flakes seemed to the common denominator at first sight, but the new divisional head will bring more to the table. Referring to his long-standing career in the FMCG industry, his current position looks a bit of a misfit, but the responsibility for USD6.7bn of sales is a strong attribute. If Mr Koenig solves Beauty Care’s growth and profitability issues, he could commend himself for a higher position.
Henkel’s recovery continued in Q4 based on the continued demand for home hygiene products and driven by Adhesive’s sequential recovery. The quarterly organic developments reflect the various containment measures. Our cautious expectations have been beaten, whereas consensus was not met on the profitability level.
The reported organic sales in Laundry & Home Care was a kind of acceleration in Q3, whereas the development in the other divisions look more like a kind of catch-up. However, there were strong FX headwinds burdening the top-line and we assume also on profitability.
Henkel had already released preliminary figures on 9 October and the Q3 release is typically a sales statement with no information on profitability.
Henkel now seems to have some better visibility, which has allowed it to re-instate a FY 2020 guidance. Organic sales growth is above current street expectations, while the EBIT margin is more or less at the mid-point to the provided bandwidth. The new guidance indicates some moderate improvement qoq.
We expect the guidance will be challenged as the normal flu season approaches the Northern Hemisphere and new COVID-19 cases are rising fast.
Six months into the crisis, the effects have intensified although the pattern has not changed compared to Q1: Adhesive Technologies suffered the most followed by Beauty Care. Laundry & Home Care was subdued but still in positive territory. The reported figures were a notch above our expectations, but missed Street expectations at the profitability level.
Henkel increased sales by +4% (organic: +3%) to €18,714m, the gross profit margin weakened 30bp to 47.9% in 2016. EBITDA moved up +8% to €3,345m and net profit attributable to shareholders came in at €2,053m, +7% higher.
Operating CF strongly increased +20% to €2,850m seeing a higher operating basis and a stronger NWC inflow (€281m after €20) due to higher payables as well as other liabilities and provisions. Investing CF (€-4,250m after €-893m) was clearly impacted by acquisition-related cost
Henkel announced its new strategy, Henkel 2020+, which should shape the company to 2020 and beyond.
Helped by the fast-closing of the Sun Products acquisition, the business has already contributed to sales in September. Q3 sales were up +3% to €4,748m, whereas the gross profit margin weakened by 30bp to 48.3%. EBITDA went up +16% to €907m and net profit attributable to shareholders ramped up +19% to €576m.
Operating CF strongly improved (+33% to €1,019m) based on higher profitability and propelled by a stronger NWC inflow (€263m after €174m) mainly due to higher inflows from other liabilities
Stronger FX headwinds (-5%) ate up more than the solid organic performance (+3%), so Q2 sales slightly declined (-1% to €4,654m), but the gross profit margin improved from 48.1% to 49.0%. EBITDA rose +5% to €875m and net income attributable to shareholders increased by +8% to €561m.
Operating CF nearly tripled (€606m after €204m), mainly driven by the NWC meltdown (€-105m after €-359m) enlivened by the swing to payables inflow and lower income tax payments. Investing CF soared up to €-468m (€-1
Henkel plans to acquire US-based Sun Products from Vestar Capital Partners for €3.2bn. Closing of the transaction is subject to regulatory approval.
... but where is the Flesh for Fantasy? Henkel reported good organic growth (+3%) driven by higher volumes, sales came in fairly unchanged at €4,456m and the gross profit margin was a notch weaker (48.5% after 48.8%). EBITDA rose +10% to €831m and net profit attributable to shareholders were up +12% to €525m.
Operating CF was pretty much unchanged at €423m as the higher operating performance was been absorbed by a higher NWC outflow (€-295m after €-210m) stemming from higher inventories and re
Mr Rorsted ended his last full year as Henkel’s CEO with a +10% sales increase (to €18,089m; organic: +3%) and gross profit margin which moved up from 47.0% to 48.2%. EBITDA went up strongly by +17% to €3,105m and net profit attributable to shareholders came in at €1,921m (€1,628m).
Operating CF (+25% to €2,384m) reflected the strong operating performance and was supported by a lower NWC outflow (€-20m after €-178m), seeing better inventory management and a higher inflow from changes in other l
Q3 sales were up +8% (organic: +3%) to €4,590m and the gross profit margin improved from 47.0% to 48.6%. EBITDA increased +11% to €781m and net profit attributable to shareholders came in +10% at €484m.
Operating CF was pretty much unchanged at €769m (€776m), which does not reflect the better operating performance and higher D/A. NWC inflow came down from €220m to €175m primarily driven by a swing in receivables to an inflow. As a percentage of sales, NWC declined from 5.2% to 3.8%. Investing C
Sales rose +14% to €4,695m and the gross profit margin improved from 46.6% to 48.1% in Q2. EBITDA grew strongly by +19% to €832m and net profit attributable to shareholders ramped up +18% to €521m.
Despite the stronger operating performance, operating CF came in fairly unchanged at €204m, clearly suffering from a higher NWC outflow (€-359m after €-297m) mainly burdened by higher receivables. Investing CF (€-198m after €-408m) was helped by significantly lower acquisition costs (€-45m after €-2
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