Henkel Announces First-Quarter Financial Report

Henkel Reports First Quarter Financial Results Henkel increased Group-level sales to approximately EUR 5.3 billion in the first quarter of 2022, operating in an extremely challenging market environment. Organic sales grew significantly by 7.1%, driven by strong pricing performance. Henkel CEO Carsten Knobel: "Strong sales performance is evidence of our growth agenda as well as the commitment of our employees worldwide, and we want to express our gratitude to them. Despite extremely difficult conditions, we are advancing with our clear strategy for 'Purposeful Growth'. The Adhesive Technologies business unit is a global leader delivering innovative solutions across numerous key industries with a clear focus on future trends such as mobility, connectivity and sustainability. Henkel is combining our consumer business units, Laundry & Home Care and Beauty Care, to establish Henkel Consumer Brands, a multi-category platform with approximately EUR 10 billion in sales. We target launching the Consumer Brands business unit by early 2023 at the latest. This will provide us with a broader foundation to manage portfolio optimization more consistently and to move our operations to a higher growth and margin profile," he said. Henkel expects Group-level organic sales growth between 3.5% and 5.5% for the 2022 financial year.

Adhesive Technologies Sales Performance

All business areas of Adhesive Technologies contributed to sales growth achieved in the first quarter. Looking at regional distribution, the Adhesive Technologies business unit demonstrated double-digit organic sales growth rates in emerging markets. Organic sales growth in developed markets showed overall strength, supported by double-digit increases in North America region sales.

Beauty Care Sales Performance

In the first quarter of 2022, organic sales performance in the Consumer business area fell below the first quarter of the prior year due to announced portfolio measures. Portfolio measures also include discontinuation of activities that will not be part of core operations in the future. Sales growth in the first quarter was generally good in emerging markets. In developed markets, organic sales performance was generally below the prior-year level.

Laundry & Home Care Sales Performance

The Laundry Care business area delivered significant organic sales growth in the first quarter, primarily driven by notable development in performance detergents and fabric softener categories. In emerging markets, double-digit organic sales growth was achieved in the first quarter thanks to contributions from Eastern Europe and Latin America regions, both recording increases in the double-digit percentage range. Organic sales development was generally positive in developed markets, supported by strong performance in North America and double-digit growth in developed markets of the Asia-Pacific region.

Outlook for Henkel Group

Based on business development in the first three months of 2022 and current assumptions regarding business performance for the remainder of the year, particularly significant increases in raw material and logistics service costs and effects related to the decision to exit commercial activities in Russia, the Henkel Management Board updated its targets for the 2022 financial year. The overall expected stronger sales growth will primarily be achieved through the Adhesive Technologies business unit, which Henkel currently expects to achieve organic sales growth between 8.0% and 10.0% (previous guidance: between 5.0% and 7.0%) — reflecting higher raw material and logistics costs. Organic sales growth expectations for Beauty Care and Laundry & Home Care business units remain unchanged. For Beauty Care, organic sales are expected to change between -5.0% and -3.0%. As explained, this decline results from measures already decided or implemented to improve the portfolio. Portfolio measures also include discontinuation of activities that will not be part of core operations in the future. Henkel continues to expect organic sales growth between 2.0% and 4.0% for Laundry & Home Care. In light of Henkel's decision to discontinue operations in Russia and Belarus, these countries will be excluded from Henkel's organic sales and growth figures starting from the second quarter.