* Q2 sales of 4.2 bln euros meet analysts' expectations
* Q2 adjusted EBIT 609 mln euros vs poll avg 590 mln
* 2012 EPS target increased to 15 pct from 10 pct
* Expects moderate sales decline in southern Europe
* Shares up 1.6 percent in early trading
FRANKFURT, Aug 1 German consumer goods group
Henkel said there was no end in sight to falling
sales in southern Europe as it reported second-quarter results
boosted by price rises and increased its outlook for earnings
per share in 2012.
Henkel, whose brands range from Schwarzkopf hair products to
Loctite glue, said that organic sales in western Europe, which
includes Greece, Spain, Italy and Portugal, were down 0.1
percent in the second quarter and that it expected sales to
decline moderately in southern Europe over the next few
"What we are seeing is a market in decline, no matter the
price level," Chief Executive Kasper Rorsted said, dismissing
the suggestion that Henkel could introduce new cheaper lines or
smaller packaging sizes.
Its industrial division, which serves the transport, metal
and electronics industries, is coming off worse in the region
than the market for consumer products such as laundry
detergents. "Even in a crisis, people still have to do their
washing," Rorsted said.
Other consumer goods companies are also feeling the pain in
the region, with Procter & Gamble warning on profit and
Reckitt Benckiser also suffering from tough trading in
Shares in Henkel rose 1.6 percent to 59.41 euros ($73.17) by
0957 GMT after it raised its target for adjusted earnings per
share (EPS) growth in 2012 to 15 percent, from a previous goal
of at least 10 percent.
"We have long seen the 2012 earnings per share target to be
far too low, so the new target now looks more reasonable, and we
still believe there is good potential for further increases
and/or over-delivery," Bernstein analyst Andrew Wood said in a
note to clients. He had pencilled in 23 percent EPS growth
before Wednesday's statement.
Price rises in all areas from detergents to toiletries and
adhesives helped to boost sales by 4 percent in the second
quarter, resulting in adjusted operating profit of 609 million
euros ($750 million), above the average forecast of 590 million
euros in a Reuters poll of analysts.
Overall, the group, which also makes Right Guard deodorants
and Persil in most of Europe, reported total second-quarter
sales of 4.21 billion euros, matching expectations.
It confirmed its other targets for 2012, for sales to rise
by between 3 percent and 5 percent, with an adjusted return on
sales of 14 percent.
German rival Beiersdorf, which makes Nivea
skincare cream, is due to report second-quarter results on