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Henkel offers conservative 2018 outlook as Q4'17 EPS tops expectations

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Henkel offers conservative 2018 outlook as Q4'17 EPS tops expectations

Henkel AG & Co. KGaA, the maker of Loctite adhesives, Persil laundry detergents and Schwarzkopf hair products, on Feb. 22 delivered fourth-quarter earnings that surpassed expectations but offered a conservative outlook for 2018.

The Düsseldorf, Germany-based household products maker said in a statement that it expected adjusted earnings per preferred share to increase by between 5% and 8% in 2018, reflecting uncertainties in currency markets, "especially the U.S. dollar trend."

In the fourth quarter ended Dec. 31, 2017, Henkel reported adjusted earnings per preferred share rose 6.3% year over year to €1.35, up from €1.27 in the same period a year earlier and ahead of a mean consensus of analysts' estimates compiled by S&P Capital IQ for normalized EPS of €1.31.

For full year 2017, adjusted earnings per preferred share climbed 9.1% year over year to €5.85 from €5.36 in 2016. Adjusted net income climbed to €2.53 billion from €2.32 billion.

Sales in the fourth quarter increased to €4.89 billion from €4.86 billion, an increase of 3.2% year over year on an organic basis. For 2017, sales gained 3.1% year over year on an organic basis to €20.03 billion from €18.71 billion, the first time that Henkel's annual sales exceeded €20 billion.

The company forecast organic sales growth of 2% to 4% in 2018.

It also predicted its adjusted return on sales would increase to more than 17.5%. It posted an EBIT margin of 17.3% in 2017, a rise of 40 basis points year over year.