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Henkel Cleaning Products Boost Offsets Coronavirus-Hit Divisions

Henkel has reported a big jump in first-quarter sales of laundry detergents and household cleaners but a fall in adhesives and in beauty care after hair salons closed because of coronavirus lockdowns.

Overall sales for the group that makes Persil detergent and Schwarzkopf shampoo fell 0.8% to €4.9 billion, just short of average analyst forecasts for €4.96 billion, a decline of 0.9% after stripping out the effect of currencies and acquisitions.

Home Care

Organic sales at its laundry and home care business jumped 5.5%, helped by products such as Pril washing-up liquid and core brand Persil, which competes with Procter & Gamble's Tide.

Procter & Gamble last month reported its best U.S. sales growth in decades thanks to consumers stockpiling cleaning essentials in lockdowns against the coronavirus.

Henkel said that sales of adhesives fell 4.1%, mainly because of a big fall in demand from the automotive industry.

Beauty Care

The beauty care unit's sales fell 3.9%, hurt by forced closures of hair salons across the globe to contain the spread of the coronavirus, though this was partially offset by a good performance in the body care category, particularly the Dial soap brand.

Henkel's beauty business had been struggling before the coronavirus crisis took hold and the group had announced plans sell or discontinue some brands in its consumer businesses by 2021 while looking for acquisition opportunities.

“We are currently facing a very challenging situation," commented Henkel CEO Carsten Knobel. "The COVID-19 pandemic has affected all areas of life and also hit the global economy very hard. Nevertheless, we achieved an overall robust sales performance in the first quarter.

"At the same time, we have done everything possible to continue our business activities, despite these difficult circumstances, and to continue serving our customers. We have also launched a global solidarity program with product donations and financial support. And finally, in the first quarter we initialised the implementation of our new strategic framework."

News by Reuters, edited by ESM. Click subscribe to sign up to ESM: European Supermarket Magazine.

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