Economic news

Henkel to Lose Sales Momentum in 2023 after Last Year's Jump

BERLIN, March 7 (Reuters) - Germany's Henkel said on Tuesday that it expects slower industrial and consumer demand to curtail sales growth this year after price increases helped organic sales to jump 8.8% in 2022.

Shares in the consumer goods company opened 2.5% lower on Tuesday in response to the announcement.

Henkel forecast organic sales to grow between 1% and 3% from the 22.39 billion euros ($23.91 billion) reached in 2022.

Despite the increase in sales, Henkel posted a 13.7% drop in adjusted earnings before interest and tax (EBIT) to 2.3 billion euros in 2022.

"We succeeded in partially compensating the dramatic rise in raw material and logistics costs through higher prices and continued efficiency improvements," said Chief Executive Carsten Knobel, adding that 2022 had been "very challenging".

The 2022 results exclude sales in Russia since the beginning of the second quarter, the company said. Henkel announced its exit from the country last year after Russia's invasion of Ukraine.

The maker of Persil detergents and Schwarzkopf haircare products said it would focus on efficiency this year and aim to increase adjusted return on sales to 10%-12% from 8.1% in 2022.

"This won't reassure shareholders," Bernstein analysts said in a note on the figures. "Organic growth guidance of 1% to 3% for 2023 is in line with consensus at 1.2%, but the lowest in the sector."

The consumer goods sector is suffering from high inflation and rising energy costs. Beiersdorf, one of Henkel's main competitors, said last week that it expected organic sales growth to slow to a mid-single-digit range this year.

Henkel said it plans to propose an unchanged dividend of 1.85 euros per preferred share and 1.83 euros per ordinary share for 2022.

CEO Knobel merged the ailing cosmetics business with the detergents division last year in an effort to grow the business and cut costs.

($1 = 0.9362 euros)

Reporting by Matthias Inverardi; Writing by Friederike Heine; Editing by Miranda Murray, Kirsti Knolle and Muralikumar Anantharaman

Source: Reuters

To leave a comment you must or Join us

More news

Back to economic news list

By visiting our website and services, you agree to the conditions of use of cookies. Learn more
I agree