In the first quarter of 2022, Henkel increased Group sales to around 5.3 billion euros in a very challenging market environment. Organic sales grew significantly by +7.1 percent, driven primarily by a very strong pricing performance, with a slight decline in volume simultaneously occurring. In nominal terms, sales increased by +6.1 percent.
“This very good sales performance is a testament to our growth agenda as well as the huge dedication of our employees worldwide ¬– and we want to express our gratitude for their great commitment,” said Henkel CEO Carsten Knobel. “However, the macroeconomic environment has continued to deteriorate dramatically since the beginning of the year. The impact of the global coronavirus crisis, accompanied by an extraordinarily tense situation in the raw material markets and global supply chains, has been drastically exacerbated by the war in Ukraine.”
“Despite of these exceptionally difficult circumstances, we are pushing ahead with our clear strategy for purposeful growth. Our Adhesive Technologies business is a global leader in the market, offering innovative solutions in numerous key industries – with a clear focus on future trends such as mobility, connectivity and sustainability. And by merging our consumer businesses Laundry & Home Care and Beauty Care to create Henkel Consumer Brands we are establishing a multi-category platform with around 10 billion euros in sales. We aim to have our future Consumer Brands business in place by early 2023 at the latest. It will offer a broader base to drive the optimization of our portfolio more consistently and advance the business to a higher growth and margin profile,” Carsten Knobel explained.
Sales growth in the first quarter was particularly driven by the Adhesive Technologies business unit, which generated a double-digit organic increase amounting to +10.7 percent, with all its business areas contributing.
Organic sales development in the Beauty Care business unit was slightly negative at -1.2 percent in the first quarter. The Professional business posted a double-digit rise. As expected, results at the Consumer business came in below the level of the previous year, due in particular to the implementation of the portfolio measures announced for 2022.
The Laundry & Home Care business unit generated very strong organic sales growth of +4.9 percent, driven by significant growth in Laundry Care. By contrast, organic sales development in our Home Care business was slightly negative in the first quarter.
Looking ahead to the rest of fiscal 2022, Carsten Knobel commented: “The uncertainty and volatility in our business environment have increased further in the wake of the war in Ukraine. Prices for raw materials and logistics services have once again increased signif-icantly. Against the backdrop of developments of the war in Ukraine, we also decided in mid-April to exit our business operations in Russia. Furthermore, we have also announced to end our activities in Belarus. This affects total annual sales of around 1 billion euros and more than 2,500 employees. Given these developments, we now expect a significantly higher pressure on our earnings for the rest of the year than at the beginning of the year. Therefore we updated our guidance for the year accordingly at the end of April.”
Henkel now expects organic sales growth at Group level of +3.5 to +5.5 percent in fiscal 2022 (previously: +2.0 to +4.0 percent). Adjusted return on sales (EBIT margin) is expected to be in the range of 9.0 to 11.0 percent. For adjusted earnings per preferred share (EPS) at constant exchange rates, Henkel now expects a decline in the range of -35 to -15 percent.
