Henkel managed to live up to its (increased) forecasts: last year, like-for-like sales rose 4.2% to 21.54 billion euros and operating profit even by 10.2 % to 2.56 billion. In absolute terms, sales did fall, for which the German FMCG giant mainly referred to the situation in Russia.
Mixed report
When announcing its quarterly results in November, Henkel increased its forecasts as it had no problems passing on higher costs to consumers. At + 4.2 %, organic sales growth was indeed at the top of the then expected range (+ 3.5 – 4.5 %). The Adhesive Technologies division accounted for + 3.2 %, even though sales declined 4 % in absolute terms. Consumer brands were able to add 6.1 % (again: 3.3 % lower in absolute terms, due to exchange rate effects and lower volumes).
Henkel recently invested heavily in efficiency measures, and these paid off, CEO Carsten Knobel explained. “Positive selling price developments”, as price increases are nowadays called, and measures to make the supply chain more efficient also contributed to the double-digit profit growth. Indeed, the EBIT margin increased by as much as 150 basis points to 11.9 %. The Consumer Brands branch merger is progressing better than expected, according to Knobel, and was further strengthened by “targeted acquisitions”.
For the upcoming 2024 financial year, organic sales growth would be lower than in the last financial year (at + 2.0 to 4.0 %), but the EBIT margin should rise further to above 12 %. In “key areas”, the Germans expect increased demand, but high inflation and increased interest rates could be a problem.
