German consumer goods maker Henkel AG & Co. KGaA (HENOY, HENKY) reported Tuesday that its second-quarter adjusted earnings per preferred share decreased 9.5 percent to 1.43 euros from 1.58 euros last year.
Adjusted operating profit or EBIT fell 8.6 percent to 846 million euros from 926 million euros in the second quarter 2018. Adjusted EBIT margin was 16.5 percent, down 1.5 percentage points from last year.
Sales for the quarter were 5.12 billion euros, almost at prior-year level. Organic sales edged down 0.4 percent.
The company said its segments generated mixed performance in increasingly difficult market environment amid significant decline in demand in key industries such as the automotive industry. Adhesive Technologies and Laundry & Home Care delivered good performance, while Beauty Care was below expectations.
In the first half of 2019, Henkel achieved a slightly positive organic sales development, while margin decreased.
Looking ahead, Henkel now said it does not anticipate industrial demand to increase in the second half of the year, in contrast to previous expectations. Also, Beauty Care business unit would develop below initial expectations in the course of the year.
Due to these, the company trimmed its fiscal 2019 forecast, and now anticipates Group an organic sales growth of 0 to 2 percent, compared to previous outlook of organic sales growth of between 2 and 4 percent.
The company now expects Adhesive Technologies’ organic sales growth of between negative 1 and positive 1 percent. For Beauty Care, Henkel anticipates an organic sales development of negative 2 to 0 percent. For both segments, the company previously expected organic growth in the range of 2 to 4 percent.
For Laundry & Home Care, Henkel continues to expect organic growth in the range of 2 to 4 percent.
Henkel continues to expect adjusted return on sales on Group level in the range of 16 to 17 percent.
For adjusted earnings per preferred share, Henkel now anticipates a development in the mid- to high single-digit percentage range below prior year at constant exchange rates. The company earlier expected mid-single-digit percentage range below prior year at constant exchange rates.
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