Henkel achieves dynamic Quarter 1 sales performance
Published on : Tuesday, May 12, 2020
Henkel is happy to announce their robust Q1 sales performance despite this hard condition of global economy and challenging market situation.
Henkel’s business performance in the first quarter of fiscal 2020 was impacted by the COVID-19 pandemic. Group sales decreased nominally by -0.8 percent to 4.9 billion euros. Despite the effects of the COVID-19 pandemic, sales were organically only slightly below the level of the previous year with a decrease of -0.9 percent.
“We are currently facing a very challenging situation. 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. In this crisis, the health and safety of our employees, customers and business partners are of the highest priority for us. We have introduced a comprehensive range of protective measures already at an early stage. 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 initialized the implementation of our new strategic framework,” said Henkel CEO Carsten Knobel.
Henkel reported a robust sales performance in a challenging market environment in the first quarter. Adhesive Technologies was impacted primarily by significantly declining demand from the automotive industry. Beauty Care sales were also down year on year. The Hair Salon business suffered considerably from the salon closures enforced in numerous countries. In contrast, organic sales growth in the Branded Consumer Goods business was flat compared to the prior-year quarter. Thanks to strong demand for laundry detergents and household cleaners, Laundry & Home Care achieved very strong organic sales growth.
“As the crisis evolves, we will continue to adapt and respond quickly and flexibly to changes in our markets. I am convinced that, with our dedicated global team, our new strategic framework focusing on purposeful growth, and our strong balance sheet, we are well positioned to deal with this difficult situation and that we will emerge stronger from the crisis,” Knobel added further.
Sales performance Adhesive Technologies
In the first quarter 2020, sales in the Adhesive Technologies business unit decreased nominally by -4.3 percent from 2,309 million euros in the prior-year quarter to 2,209 million euros. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales decreased by -4.1 percent driven by volume. Performance in the first quarter was marked by a significant decrease in industrial production in the wake of the COVID-19 pandemic. Foreign exchange effects reduced sales by -0.3 percent. Acquisitions/divestments did not impact sales performance.
The organic sales development in the individual business areas was influenced to differing degrees by the COVID-19 pandemic. Sales in the Automotive & Metals business area were significantly below the prior-year level, mainly due to production shutdowns in the automotive industry. Sales decreased significantly in the Electronics & Industrials business area, likewise as a result of production shutdowns in the aviation and general industry sectors. The overall decline in the Craftsmen, Construction & Professional business area was partially offset by results from the construction sector. The Packaging & Consumer Goods business area recorded a flat organic sales performance.
The businesses in the emerging markets showed a decline in organic sales development overall. Sales in the Latin America and Africa/Middle East regions and the emerging markets of Asia (excl. Japan) were down year on year. The COVID-19 pandemic had an adverse effect on our businesses in China and India in particular. By contrast, sales in the Eastern Europe region increased significantly. The Packaging & Consumer Goods and Craftsmen, Construction & Professional business areas in Russia were the main contributors to this growth.
The mature markets likewise exhibited negative organic sales development. While positive growth was achieved in the mature markets of the Asia-Pacific region, sales in the North America and Western Europe regions were below the level of the prior-year quarter. This was primarily due to declining developments in the Automotive & Metals and Electronics & Industrials business areas. Within North America the decrease was partially compensated by strong growth in the Packaging & Consumer Goods business area and very strong growth in the Craftsmen, Construction & Professional business area.