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Henkel
Germany/Chemicals Analyser
Henkel (Hold)
Hold
Recommendation unchanged
Share price: EUR
closing price as of 07/05/2012
Target price: EUR
Target Price unchanged
Reuters/Bloomberg
55.49
52.00
HNKG_p.DE/HEN3 GY
Market capitalisation (EURm) 24,067
Current N° of shares (m) 434
Free float 67%
Daily avg. no. trad. sh. 12 mth 849,665
Daily avg. trad. vol. 12 mth (m) 39
Price high 12 mth (EUR) 56.71
Price low 12 mth (EUR) 36.90
Abs. perf. 1 mth 3.39%
Abs. perf. 3 mth 18.18%
Abs. perf. 12 mth 13.36%
Key financials (EUR) 12/11 12/12e 12/13e
Sales (m) 15,605 16,286 17,020
EBITDA (m) 2,261 2,456 2,570
EBITDA margin 14.5% 15.1% 15.1%
EBIT (m) 1,857 2,052 2,158
EBIT margin 11.9% 12.6% 12.7%
Net Profit (adj.)(m) 1,357 1,477 1,499
ROCE 11.7% 12.3% 12.2%
Net debt/(cash) (m) 1,933 1,002 (132)
Net Debt/Equity 0.2 0.1 0.0
Debt/EBITDA 0.9 0.4 -0.1
Int. cover(EBITDA/Fin. int) 14.6 15.9 24.3
EV/Sales 1.4 1.6 1.5
EV/EBITDA 9.8 10.6 9.7
EV/EBITDA (adj.) 9.1 10.1 9.7
EV/EBIT 11.9 12.7 11.5
P/E (adj.) 14.3 16.3 16.1
P/BV 2.2 2.5 2.2
OpFCF yield 8.0% 7.0% 8.0%
Dividend yield 1.4% 1.6% 1.6%
EPS (adj.) 3.13 3.40 3.46
BVPS 19.92 22.34 24.94
DPS 0.80 0.86 0.88
60 vvdsvdvsdy
55
50
45
40
35
Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11 Jan 12 Feb 12 Mar 12 Apr 12 May 12
Source: Factset
HENKEL Stoxx Chemicals (Rebased)
Shareholders: Henkel family 32%; Treasury shares
1.10%;
Analyst(s):
Nadeshda Demidova, Equinet Bank
nadeshda.demidova@equinet-ag.de
+49 69 58997 434
Q1/12 results preview
The facts: Henkel (HEN3) will publish its Q1/12 results on May 9 th , 2012.
Our analysis:
Forecast Henkel
EUR m Q1/12e Q1/11 yoy cons. 2012e 2011 yoy
Group Sales 4,005 3,823 5% 4,038 16,286 15,605 4%
Laundry & Home Care 1,115 1,072 4% na 4,424 4,304 3%
Cosmetics/Toiletries 855 821 4% na 3,492 3,399 3%
Adhesives Technologies 1,995 1,884 6% na 8,211 7,746 6%
EBITDA 606 533 14% na 2,456 2,261 9%
EBIT adjusted
Laundry & Home Care 150 133 13% na 593 570 4%
in % of sales 13.4% 12.4% 110bps nm 13.4% 13.2% 10bps
Cosmetics/Toiletries 121 113 7% na 489 482 1%
in % of sales 14.1% 13.8% 30bps nm 14.0% 14.2% +-20bps
Adhesives Technologies 279 247 13% na 1,150 1,075 7%
in % of sales 14.0% 13.1% +90bps nm 14.0% 13.9% +20bps
Group EBIT adjusted 535 473 13% 536 2,172 2,029 7%
-EBIT margin adj. 13.4% 12.4% +90bps 13.3% 13.3% 13.0% +40bps
Special It. (expenses) 30 43 -31% 27 120 172 -30%
Group EBIT reported 505 430 17% 509 2,052 1,857 10%
EBT 466 393 19% 479 1,896 1,702 11%
EAT 341 284 20% 355 1,389 1,253 11%
EPS pref.sh. (EUR) 0.80 0.66 20% 0.83 3.22 2.90 11%
Q1/12e results: We expect HEN3‟s sales to increase yoy by 5%, driven by both
consumer-related divisions (Laundry and Cosmetics) and especially by adhesives
business. In Q1/2012e, the room for a profitability improvement should have been
rather limited (please note that from Q1/12, HEN3 accounts “for positive structural
effect arising from the launch of new products” in the price and not in the volume
growth component as previously), due to further increasing input prices, which
most likely could not be passed on to customers (especially in Laundry) owing to
general price pressure. We expect an increase in EBIT adj. margin yoy (+90bps)
and a slight increase qoq by 20bps.
Guidance FY12: For FY2012, HEN3 targets to achieve EBIT adj. margin of 14%
(equinet: 13.3%, consensus 13.6%) with a sales growth of 3-5% yoy (equinet:
4.4%, consensus +5.5%). For EPS adj., HEN3 anticipates an increase of at least
10% yoy (consensus +15%). The 14% target is only achievable with further cost
cuts, which implies the further (acc. to company‟s definition) “ongoing restructuring
one-offs” of around EUR 100m burdening reported figures.
Conclusion & Action: We expect HEN3 to deliver a good start into the year. The
only downside risk for the company is to miss the 2012 guidance to achieve 14%
EBIT adj. margin, which is most likely already anticipated by the market. We
confirm Hold.
Page 23 of 80 European Securities Network
Please refer to important disclaimer on the last page
Source: Henkel, equinet Research