Henkel has achieved organic sales of around 20.1 billion euros in fiscal 2021. This corresponds to an organic sales growth of 7.8 percent versus 2020. A significant recovery in demand in industrial and Hair Salon businesses had a particularly positive effect. In the consumer goods business, demand in many categories returned to more normal patterns compared to the previous year 2020, when demand was particularly strong for hygiene and cleaning products as well as hair colorants while demand for styling products was less strong. At the same time, the impact of significantly increasing raw material and logistics prices as well as currency effects weighed on profitability in fiscal 2021. Thanks to significantly higher sales volumes, successful price increases, active cost management and ongoing structural adjustments, Henkel was able to more than offset the impact on its earnings. Adjusted operating profit increased by 4.2 percent to 2.7 billion euros. The adjusted return on sales was at 13.4 percent on prior-year level and adjusted earnings per preferred share rose to 4.56 euros. This corresponds to a significant improvement of 9.2 percent at constant exchange rates.
“Overall, we delivered a good business performance in 2021 and consistently drove the implementation of our strategic agenda forward – despite a very challenging market environment with unprecedented disruptions in global supply chains, a shortage of key raw materials as well as overall significantly increasing prices,” said Henkel CEO Carsten Knobel.
“We recorded organic growth across all business units, kept our margin stable and achieved a very strong increase in earnings per preferred share. This is the achievement of our global Henkel team. Together, we managed to advance our Purposeful Growth agenda – even in these challenging times. I would like to thank all employees for their extraordinary engagement. Particularly those that kept our production and business-critical processes running on site.”
Based on these results, Henkel will propose a stable dividend of 1.85 euros per preferred share and 1.83 euros per ordinary share to its shareholders at the upcoming Annual General Meeting. This equals a payout ratio of 40.5 percent, which is slightly above the target range of 30 to 40 percent of adjusted net income after non-controlling interests. The company has paid a stable dividend since the beginning of the COVID-19 pandemic.
In addition, Henkel has announced a share buyback program with a volume of up to 1 billion euros at the end of January 2022 and already started the implementation in February. Henkel plans to buy back preferred shares with a total value of up to 800 million euros and ordinary shares with a total value of up to 200 million euros. The program is expected to be carried out latest until March 31, 2023.
“We are consistently driving the implementation of our strategic agenda and have made very good progress in many key areas. In some areas, however, we see the need for further action. Therefore, we are now taking our agenda for Purposeful Growth to the next level: at the end of January, we announced the merge of our business units Laundry & Home Care and Beauty Care into one new business unit ’Henkel Consumer Brands‘. With that we create a multi-category platform with around 10 billion euros sales. This provides a broader basis to optimize our portfolio even more consistently and bring it to a higher growth and margin profile. That is also reflected in our mid- to long-term financial ambition,” said Carsten Knobel. “In addition, our new Venture Fund II with a volume of 150 million euros and our new 2030+ Sustainability Ambition Framework are providing important impetus in the areas of innovation and sustainability. And the new open and dynamic look of our corporate brand reinforces our purpose.”
The outlook for fiscal 2022, which was already published at the end of January, remains unchanged. Considering high market uncertainty and volatility and the impact of further substantial increases in raw material and logistics costs, the company expects organic sales growth in the range of 2 to 4 percent, and an adjusted return on sales (EBIT margin) between 11.5 and 13.5 percent. At Group level, Henkel expects for adjusted earnings per preferred share (EPS) a development in the range between -15 to +5 percent (at constant exchange rates) in fiscal 2022.
