Henkel goes on a takeover course

Henkel goes on a takeover course

"We will invest in acquisitions," chief executive kasper rorsted said friday at the presentation of new medium-term financial targets in london. The dusseldorf-based group has significantly reduced its debt since 2008 from around 4 billion to a good 600 million euros. Growth could be accelerated with additional purchases.

According to the new financial targets, henkel would retain all three divisions: adhesives (pritt, pattex), detergents (persil, spee) and cosmetics (schwarzkopf, fa). Chief financial officer carsten knobel put the group’s general financing scope – including for acquisitions – at three billion euros. This still tends to increase. "But we are not buying for the sake of buying, but to generate growth for the future," he said.

In the third quarter of 2012, the traditional company achieved a jump in profits of almost one-third to 409 million euros thanks to price increases and savings. From january to the end of september 2012, henkel earned almost as much as in 2011 as a whole. Quarterly sales rose by 6.6 percent to just under 4.3 billion euros.

"The third quarter was significantly more difficult than previous quarters. Nevertheless, this was the best quarter in henkel’s history," said rorsted in a video. He expressed his conviction that the annual targets for 2012 will be achieved. This includes a margin of 14 percent adjusted for one-time effects and restructuring costs.

Some analysts had expected rorsted to announce a new margin target of 16 percent for 2016. However, the new targets are based on adjusted earnings per preferred share, which are expected to increase by an average of ten percent per year until 2016. Henkel preferred shares were at the bottom of the dax on friday, down at times more than 5 percent.

Group sales to rise to 20 billion euros by the end of 2016. This corresponds to an increase of around one quarter. This medium-term target does not take into account the possibility of a rough acquisition. However, this includes the divestment of marginal activities with a volume of around half a billion euros.

In addition, the 136-year-old company wants to focus even more strongly on rough brands. Sales share of top ten brands to increase from 46 percent this year to 60 percent by 2016. Seven new research centers are planned in the growth regions around the globe that are a particular focus for henkel.

Henkel became the world’s largest adhesives manufacturer in 2008 with the acquisition of the US company national starch. The competitor was taken over at the time for the equivalent of almost four billion euros.

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