Henkel posts 2.2% rise in Q4 op profit to €325m

27 February 2008 09:00  [Source: ICIS news]

MUMBAI (ICIS news)--Henkel posted 2.2% year-on-year rise in fourth-quarter earnings before interest and tax (EBIT) to €325m ($485m) on strong performance by all business segments, the German chemical company said on Wednesday.

“All our business sectors contributed to this success and we maintained sales momentum in our growth regions,” said chairman Ulrich Lehner.

For the fourth quarter, the company’s sales were €3.19bn, up 3.8% from a year ago, and its net earnings were up 11.8% to €247m, the company said.

In the adhesives technologies segment, which reported the highest earnings among all segments, the company’s EBIT for the quarter rose about 23% to €146m and its sales were up 1.5% to €1.39bn, the company said.

“The building adhesives segment realised the strongest growth [within adhesives technologies], with eastern Europe once again generating much of the momentum,’ it said.

Henkel recently received clearance from the European Commission for its takeover of the former adhesives and electronic materials business of ICI acquired in January by Akzo Nobel.

For full-year 2007, the company’s EBIT rose 3.5% to €1.34bn on net sales up 2.6% at €13.07bn. Full-year net earnings were €941m, up 8%.

“These results demonstrate the effectiveness of our strategy of focusing on our core businesses while striving for innovation leadership in each of our markets,” Lehner said.

In adhesives technologies, full-year EBIT was €621m, up about 7% from a year ago on sales up 3.6% at €5.71bn.

Major revenue increases in the segment were posted in eastern Europe, Africa/Middle East, Latin America and Asia-Pacific, the company said.

Henkel expects to grow more strongly than the markets and achieve sales growth of 3-4% in 2008, it said. It is implementing a cost control drive to help boost longer-term profitability.

“The initiative, with a volume of about €500m, is designed to generate annual savings of around €150m from 2011,” Henkel said.

“Based on experience from similar programmes, these measures could result in the reduction of about 3,000 jobs,” it added.

Henkel's shares were up 4.16% at €31.83 on Frankfurt’s Xetra exchange at 08:26 GMT on Thursday.

($1 = €0.67)

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Author: Isha Jha
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