Consumer goods – Henkel becomes more pessimistic – economy

Henkel is becoming more pessimistic for the current year. The consumer goods business is burdened with high costs of raw materials and transportation. The Düsseldorf-based company’s profit figures for 2021 are now expected to be in the lower end of the previous forecast range. Henkel now expects to be in the lower end of the initial forecast ranges despite significant sales growth in the profit forecast for 2021, as the company announced.

“Tense supply chains and rising raw material and transport costs pose particular challenges,” CEO Carsten Knobel said on Monday. The continued sharp rise in costs is weighing more heavily on the economy than expected. In addition, there is still a high level of uncertainty regarding the course of the pandemic and its impact on consumption and industry.

In the third quarter, the maker of Pritt, Loctite and Persil increased sales 1.9% to around five billion euros. Organically, that is to say arithmetically corrected for currency effects as well as acquisitions and sales, sales increased by 3.5%. The group benefited from price increases, the quantities sold remained virtually unchanged.

The adhesives activity shows a clear increase, with in particular a demand for products from the electronics and packaging industries. Competitor Beiersdorf was also able to grow significantly in the Tesa business during the quarter.

On the other hand, things were less round for the Henkel group for cosmetics, which recorded a decline in its sales. Here, customers had resorted to body care products a year ago during the Corona crisis, and now the demand for soap items has normalized. In the detergents business linked to Persil, Henkel was able to grow organically during the quarter. Product prices have also increased significantly here. Business with the auto industry, which currently suffers from a shortage of chips, and with metals declined slightly.

Henkel CEO Knobel now expects organic sales growth of six to eight percent for the full year. The adjusted return on sales, the EBIT margin, is expected to be 13.5%. Previously, he had promised a range of 13.5 to 14.5%. For adjusted earnings per preferred share (EPS) at constant exchange rates, Henkel now expects the high single-digit percentage range to increase. Competitor Beiersdorf expects sales to grow organically by eight to ten percent for the full year. The Hamburg-based company wants to offset rising raw material prices with savings and price increases for its own products.

Related Articles

Back to top button