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A-Brands

Henkel Sees Sales Grow In H1, Input Cost Headwinds Impact Earnings

Consumer goods giant Henkel has posted 8.9% year-on-year growth in organic sales, to €10.9 billion, in the the first half of its financial year, driven by good performance across all business units and regions.

However, a sharp rise in material and logistics costs impacted the company’s earnings, with operating profit declining by 18.5% to €1.2 billion.

EBIT margin stood at 10.7%, down 370 basis points.

Henkel CEO Carsten Knobel, commented, “In a very challenging environment, sales performance in the first six months exceeded the previous expectations for the full year, while earnings developed in line with our group guidance for fiscal 2022.”

Growth Drivers

Sales growth in the first half of the year was mainly driven by the company’s Adhesive Technologies business unit, which saw a double-digit organic growth of 12.2%, Henkel noted.

The Beauty Care business unit reported organic sales growth of 0.4%, while the Hair Salon business achieved double-digit organic sales growth.

Performance of the consumer business was below the level of the previous year, mainly due to measures implemented by the company to improve the portfolio.

The Laundry and Home Care unit saw organic sales growth of 7.4%, boosted by double-digit growth in the laundry business.

The Home Care business witnessed positive organic sales growth in the first half.

Knobel stated, “With our Adhesive Technologies business, we are a global leader in providing innovative solutions, focusing on future trends such as mobility, connectivity and sustainability. By combining the Laundry and Home Care and Beauty Care consumer businesses, we are now creating a multicategory platform with sales of around €10 billion.”

Regional Performance

In Western Europe, organic sales increased by 2.2%, while Eastern Europe saw 23.2% growth.

In Africa/Middle East, organic sales increased by 3.2% and North America reported 9.2% growth. Latin America recorded organic sales growth of 16.9%.

Asia-Pacific region witnessed an increase of 6.1% in this period.

Outlook

For full-year 2022, Henkel raised its organic sales growth forecast to 4.5% - 6.5% from its previous guidance of 3.5% - 5.5%.

Adjusted EBIT margin at group level is expected to remain unchanged between 9.0% - 11.0%, the company added.

Read More: Henkel First-Quarter Sales Growth Driven By Adhesives, Home Care

© 2022 European Supermarket Magazine – your source for the latest A-Brands news. Article by Dayeeta Das. Click subscribe to sign up to ESM: European Supermarket Magazine.

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