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OFFON

HENKEL AG & CO. KGAA

(HEN3)
  Report
Delayed Quote. Delayed Xetra - 12/03 11:35:08 am
70.44 EUR   -0.42%
12/01HENKEL VORZUEGE : Bernstein sticks Neutral
MD
11/30HENKEL VORZUEGE : JP Morgan gives a Neutral rating
MD
11/29HENKEL : adhesives gain RecyClass approval for recyclability
PU
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Weak consumer market hits Henkel despite higher forecast

11/14/2017 | 05:37am EST
A logo of consumer goods group Henkel is pictured in Duesseldorf

LONDON/BERLIN (Reuters) - Weakness in its global laundry and beauty business pushed Henkel's (>> Henkel) third-quarter results below forecasts, sending its shares down 3 percent on Tuesday.

LONDON/BERLIN (Reuters) - Weakness in its global laundry and beauty business pushed Henkel's (>> Henkel) third-quarter results below forecasts, sending its shares down 3 percent on Tuesday.

The maker of Persil detergent, Schwarzkopf beauty products and Loctite adhesives has been grappling with a decline in the overall laundry market in Western Europe and competition in its beauty business.

For the third quarter, Henkel's earnings before interest and taxes (EBIT) adjusted for one-offs rose 7 percent to 897 million euros (£803 million), below the 907 million forecast by analysts.

Sales of 4.98 billion euros showed organic growth of 3 percent, missing the 5.1 billion forecast by analysts.

Berenberg analyst James Targett said the stock decline was driven by concerns that Henkel's margin improvement was coming from reduced selling and marketing expenses, which may harm sales over time, as well as questions over the impact of rising raw material costs.

"It doesn't help that organic growth isn't particularly high in laundry and beauty but that is broadly in line with expectations," Targett said. "I think the concerns are overdone."

He pointed out that Henkel discussed its savings as being driven by sustainable cost efficiencies rather than advertising cuts, and that the company was comfortable in its ability to pass on the rising costs.

ADHESIVES AHEAD

Henkel raised its full-year forecast for earnings per preferred share to around 9 percent from 7-9 percent while keeping its forecast for 2-4 percent underlying sales growth.

By business unit, it said adhesives would grow 4 to 5 percent, laundry and home care around 2 percent and beauty care zero to 1 percent.

It also warned that difficult conditions in the consumer goods market were likely to persist and said "currency effects will have an increasingly negative impact".

Henkel shares were down 3.5 percent at 1008 GMT.

The consumer goods industry is having to adapt to growing demand for healthier products and niche names, along with the rise of online shopping and subscription services. Rival Unilever also reported a weak third quarter.

Henkel reported 0.5 percent sales growth in its beauty business, with home care sales up 1.8 percent and adhesives up 4.9 percent, an improvement on a 3.4 percent rise in the second quarter.

Henkel last month bought Zotos International from Japan's Shiseido (>> Shiseido Company, Limited) for $485 million to expand in the U.S. professional hair care sector.

(Reporting by Emma Thomasson; editing by Ludwig Burger/Jason Neely/Alexander Smith)

By Martinne Geller and Emma Thomasson

Stocks treated in this article : Henkel, Shiseido Company, Limited

ę Reuters 2017
Stocks mentioned in the article
ChangeLast1st jan.
AMP LIMITED 0.53% 0.945 End-of-day quote.-39.42%
HENKEL AG & CO. KGAA -0.42% 70.44 Delayed Quote.-23.68%
JASON CO., LTD. 0.65% 462 End-of-day quote.-30.84%
SHISEIDO COMPANY, LIMITED 2.99% 6655 End-of-day quote.-6.74%
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Analyst Recommendations on HENKEL AG & CO. KGAA
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Financials
Sales 2021 19 958 M 22 579 M 22 579 M
Net income 2021 1 723 M 1 949 M 1 949 M
Net Debt 2021 379 M 429 M 429 M
P/E ratio 2021 17,4x
Yield 2021 2,65%
Capitalization 29 550 M 33 355 M 33 429 M
EV / Sales 2021 1,50x
EV / Sales 2022 1,39x
Nbr of Employees 52 750
Free-Float 62,7%
Chart HENKEL AG & CO. KGAA
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Henkel AG & Co. KGaA Technical Analysis Chart | HEN3 | DE0006048432 | MarketScreener
Technical analysis trends HENKEL AG & CO. KGAA
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TrendsBearishBearishBearish
Income Statement Evolution
Consensus
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Mean consensus OUTPERFORM
Number of Analysts 23
Last Close Price 70,44 €
Average target price 90,27 €
Spread / Average Target 28,1%
EPS Revisions
Managers and Directors
Carsten Knobel Chairman-Management Board
Marco Swoboda Chief Financial Officer & Executive VP-Finance
Simone Bagel-Trah Chairman-Supervisory Board
Thomas Gerd Kuehn Chief Compliance Officer & General Counsel
Michael Kaschke Member-Supervisory Board