German consumer goods firm Henkel cuts full-year outlook

Source: Xinhua| 2019-08-13 20:14:24|Editor: Shi Yinglun
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BERLIN, Aug. 13 (Xinhua) -- With around 5.1 billion euros (5.7 billion U.S. dollars), sales of Henkel stagnated in the second quarter of 2019 compared to the same period last year, the German consumer goods giant announced on Tuesday.

Henkel has to lower its full-year outlook for sales and earnings, since the company was not expecting industrial demand to increase in the second half year of this year "in contrast to previous expectations", it said.

"The development in the second quarter was mainly characterized by a significant decline in demand in key industries such as the automotive industry," said Henkel CEO Hans Van Bylen.

This development had "particularly affected" Henkel's industrial business, Van Bylen said.

Currently, Henkel is expecting sales, excluding currency effects as well as acquisitions and divestments, to grow by between 0 and 2 percent in the second half of 2019, instead of 2 and 4 percent as previously expected.

In the second quarter of 2019, earnings before interest and taxes (EBIT) of Henkel amounted to 846 million euros, a year-on-year decline of 8.6 percent.

Henkel's shampoo and skin care business, or officially Beauty Care segment, saw sales decline year on year by 2.4 percent in the second quarter.

"The development of the Beauty Care Retail business was significantly below our expectations," Van Bylen said.

Operational profits in the Beauty Care segment decreased by more than one third year on year in the second quarter of 2019, it announced.

Business in the segment had been affected by "not satisfying developments in mature markets such as North America and Western Europe", Van Bylen said.

In addition, the Beauty Care business had been impacted by "ongoing stock adjustments" in China while "marketing and sales expenses were higher overall", according to Van Bylen.

Sales in Henkel's important segment of Adhesive Technologies, the company's glue business, stood almost at prior-year levels and amounted to 2.4 billion euros.

"Particularly positive" had been the development of Adhesive Technologies' business with the aerospace industry, which had recorded double-digit growth in Q2 2019, according to Henkel.

Investors reacted negatively after the publishing of Henkel's Q2 figures. Its shares slumped more than 5 percent and were the biggest loser in the German stock index DAX on Tuesday morning.