UPDATE 1-Henkel lifts margin goal on emerging market demand for glues, detergents

Tue Nov 12, 2013 2:41am EST

* Q3 sales 4.18 bln eur vs Rtrs poll avg 4.34 bln

* Q3 adj EBIT 672 mln eur vs poll avg 659 mln

* Sees 2013 adj EBIT margin 15 pct vs previous 14.5 pct

* Shares indicated up 1 pct in pre-market trade

FRANKFURT, Nov 12 (Reuters) - German consumer goods group Henkel raised its profit margin outlook for the year after demand for washing powders and industrial adhesives in emerging markets helped to offset currency headwinds in the third quarter.

Henkel said adhesives, which account for half its business, were driven by Latin America, eastern Europe and Asia, reaching an adjusted return on sales of 17.8 percent for the first time, while sales at its laundry and home care unit rose 5.5 percent.

Adhesives rivals 3M, Sika, ITW and local peer Beiersdorf have all reported rises in third-quarter sales and profits as a recovery in construction and automotive markets picks up pace.

As a whole, Henkel, which makes Persil washing powder and Schwarzkopf hair products, on Tuesday reported third quarter adjusted earnings before interest and tax (EBIT) of 672 million euros ($901 million), above the average for 659 million euros in a Reuters poll.

The group now expects an adjusted EBIT margin of about 15 percent for the year, up from a previous forecast of 14.5 percent.

Henkel's third quarter sales unexpectedly fell to 4.18 billion euros, against the average forecast for 4.34 billion as currency effects took their toll.

Stripping out the impact from weak currencies, such as the Japanese yen, U.S. dollar and Russian rouble, sales would have risen 4.2 percent.

The group has previously announced a longer term goal to increase sales to 20 billion euros, half of which should come from emerging markets, by the end of 2016. About 45 percent of its sales come from emerging markets now.

Comments (0)
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.