(310) 990-8397

Henkel Raises Earnings Outlook After Reporting Sales for First Quarter

Henkel has achieved group sales of around €5.3 billion and generated strong organic sales growth of 3% in the first quarter of 2024. The company reports that the increase was driven by a positive price development in both business units. Volume development at group level, which is still being impacted by the portfolio measures in the Consumer Brands business unit, showed a further sequential improvement compared to the fourth quarter of 2023. In nominal terms, sales were down -5.2% compared to the prior-year quarter – predominantly due to the sale of the business activities in Russia and to negative foreign exchange effects.

“We had a very good start to the year. In addition, we were able to close the acquisitions of Seal for Life Industries and Vidal Sassoon in China faster than anticipated and will thus further strengthen our businesses,” said Carsten Knobel, CEO of Henkel. “In light of these developments, we significantly raised our sales and earnings outlook for 2024 last week. This demonstrates: We have a clear strategy which we are executing on stringently. We deliver on what we have promised. And we are on the right track for further profitable growth.”

Henkel reports that the positive organic sales increase of the Adhesive Technologies business unit in the first quarter was primarily driven by strong organic sales growth in the Mobility & Electronics business area. Strong organic sales growth in the Consumer Brands business unit was fueled by all business areas, with a particular contribution coming from the Hair business.

Group Sales Performance

Group sales in the first quarter of 2024 totaled €5,317 million, a nominal decrease of -5.2% compared to the prior-year quarter (€5,609 million). Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by 3%. The strong organic sales growth at group level was driven by pricing. Acquisitions/divestments reduced sales by -4.3%. Foreign exchange effects had a further negative impact of -3.9% on sales development.

Organic sales growth in the Europe region amounted to 2.5% in the first quarter. In the IMEA region, sales increased organically by 26.9%. The North America region posted a negative organic sales development of -3.0%. In Latin America, sales were organically -2.7% below the prior-year quarter. The Asia-Pacific region achieved organic sales growth of 3.5%.

Adhesive Technologies

The Adhesive Technologies business unit achieved sales of €2,677 million in the first quarter of 2024, representing a nominal decrease of -4.1% compared to the prior-year quarter (€2,791 million). Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by 1.3% compared to the first quarter of 2023. Both price and volume showed a positive development. Foreign exchange effects reduced sales by -3.8%. Acquisitions/divestments had a further negative effect of -1.7%.

The positive organic sales development of the Adhesive Technologies business unit in the first quarter was primarily fueled by the Mobility & Electronics business area, which achieved a strong increase of 3.7%. This growth was driven by the Automotive and Electronics businesses. The Industrial business showed a positive development. In a continuously challenging market environment, the Packaging & Consumer Goods business area recorded an overall flat organic sales development of -0.2%, which was supported by a positive volume development. The Packaging business achieved positive growth, benefiting from first signs of improvement in demand. The Consumer Goods business recorded a slight decline compared to a very strong prior-year quarter. Organic sales growth in the Craftsmen, Construction & Professional business area was at 0.3% versus the prior-year quarter. This was particularly supported by the Construction business, which achieved good growth. The General Manufacturing & Maintenance business showed an overall negative performance; according to the company this was primarily due to the currently challenging market environment.

From a regional perspective, the organic sales performance of the Adhesive Technologies business unit was mixed. In Europe, sales overall were organically below the prior-year quarter, even though the Craftsmen, Construction & Professional business area achieved positive organic growth. While North America recorded a positive organic sales increase in the Mobility & Electronics business area, overall sales performance in the region was below that of the prior-year quarter. The IMEA region achieved double-digit organic sales increase, with all business areas contributing with double-digit growth rates. Latin America posted a negative organic sales development in all business areas. By contrast, sales growth in the Asia-Pacific region was very strong – mainly driven by a significantly positive development in China, which was supported by first signs of a stabilizing market environment following the challenging conditions encountered in the prior year.

Consumer Brands

In the Consumer Brands business unit, sales in the first quarter of 2024 totaled €2,605, a nominal decrease of -6.0% versus the prior-year quarter. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by 5.2%. Pricing in the business unit remained very strong compared to the first quarter of 2023. Volumes declined slightly, particularly due to the impacts of the ongoing portfolio measures. Foreign exchange effects had a negative impact of -4.0% on sales. Acquisitions/divestments reduced sales by a further -7.2%.

In the first quarter, the Laundry & Home Care business area generated very strong organic sales growth of 4.6%. The Hair business area achieved very strong organic sales growth of 6.9%. business achieved very strong organic sales growth. The Other Consumer Businesses posted a strong organic sales increase of 3.4%.

Outlook 

The guidance for fiscal 2024, which was published on March 4, 2024, was raised as of May 3. For the current year, Henkel now expects organic sales growth of 2.5% to 4.5% (previously: 2.0% to 4.0%). For Adhesive Technologies, organic sales growth is still expected in the range of 2.0% to 4.0%. For Consumer Brands, the company now anticipates an organic sales increase of 3.0% to 5.0% (previously: 2.0% to 4.0%).

Learn more about Henkel at www.henkel.com

Source link

Thank You

We will get back to you as soon as possible