Wood & Panel
Home » Adhesives and Coatings » First Quarter Success: Henkel soars with organic sales growth

First Quarter Success: Henkel soars with organic sales growth

 Wednesday, May 8, 2024

en flag
fr flag
de flag
it flag
es flag
Listen to this news
First Quarter Success: Henkel soars with organic sales growth

During the initial months of 2024, Henkel recorded Group sales of approximately 5.3 billion euros, experiencing robust organic sales growth of 3.0 percent. This growth was primarily fueled by favorable pricing dynamics across both business units. Despite ongoing portfolio adjustments in the Consumer Brands division affecting overall volume performance, there was a notable improvement compared to the final quarter of 2023. However, in nominal figures, sales declined by -5.2 percent compared to the same period last year, largely attributable to divestment activities in Russia and adverse foreign exchange fluctuations.

“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.”

The Adhesive Technologies business unit saw a notable uptick in organic sales during the initial quarter, largely propelled by robust growth in the Mobility & Electronics sector. Similarly, the Consumer Brands business unit experienced significant organic sales expansion, driven by all business areas, notably with a substantial boost from the Hair segment.

Group sales performance
Group sales in the first quarter of 2024 totaled 5,317 million euros, a nominal decrease of -5.2 percent compared to the prior-year quarter (5,609 million euros). Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by 3.0 percent. The strong organic sales growth at Group level was driven by pricing. Acquisitions/divestments reduced sales by -4.3 percent. Foreign exchange effects had a further negative impact of -3.9 percent on sales development.

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

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

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 percent. 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 percent, 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 percent 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, which was primarily due to the currently challenging market environment.

Looking at regional dynamics, the organic sales performance of the Adhesive Technologies business unit varied. In Europe, overall sales experienced organic decline compared to the previous year, although the Craftsmen, Construction & Professional segment achieved positive organic growth. North America witnessed a positive organic sales uptick in the Mobility & Electronics sector, yet overall sales in the region fell short of the previous year.

Conversely, the IMEA region achieved remarkable double-digit organic sales growth, with all business areas contributing to this surge. Latin America, on the other hand, experienced negative organic sales development across all business segments. In contrast, the Asia-Pacific region demonstrated robust sales growth, primarily led by significant positive momentum in China, bolstered by initial signs of market stabilization following the challenges of the preceding year.

For the current year, Henkel now expects organic sales growth of 2.5 to 4.5 percent (previously: 2.0 to 4.0 percent). In case of Adhesive Technologies, organic sales growth is still expected in the range of 2.0 to 4.0 percent. For Consumer Brands, the company now anticipates an organic sales increase of 3.0 to 5.0 percent (previously: 2.0 to 4.0 percent).

Adjusted return on sales (adjusted EBIT margin) at Group level is now expected to be in the range of 13.0 to 14.0 percent (previously: 12.0 to 13.5 percent). For Adhesive Technologies, adjusted return on sales is now anticipated to be between 16.0 and 17.0 percent (previously: 15.0 to 16.5 percent) and for Consumer Brands in the range of 12.0 to 13.0 percent (previously: 11.0 to 12.5 percent).

For adjusted earnings per preferred share (EPS), Henkel now expects an increase in the range of +15.0 to +25.0 percent at constant exchange rates (previously: +5.0 to +20.0 percent).

Henkel has also updated the following expectations:

Acquisitions/Divestments: neutral impact on nominal sales growth
(previously: negative impact in the low single-digit percentage range)
Translation of sales in foreign currencies: negative impact in the low to mid-single-digit percentage range
(previously: negative impact in the mid-single-digit percentage range)

The following expectations for 2024 have remained unchanged:

Prices for direct materials: flat development1
Restructuring expenses of 250 to 300 million euros
Cash outflows from investments in property, plant and equipment and intangible assets of between 650 and 750 million euros

Read more news on Henkel

Tags: , , , , , , , ,


Leave a Reply

Your email address will not be published.

Read Magazine Online

Subscribe to our Newsletters

I want to receive wood industry news and event update from Wood & Panel. I have read Wood & Panel Privacy Notice.

Our Partners