"In a market environment that remains extraordinarily challenging, we continued to drive our strategy execution and achieved clear double-digit sales growth. It is particularly gratifying that all business units and regions contributed to this strong business performance, which was driven, in particular, by the clear double-digit increase in sales achieved by the Adhesive Technologies business unit in the third quarter," said Henkel CEO Carsten Knobel.
"The double-digit sales growth in the third quarter is further proof of the strength of our robust and balanced portfolio of successful brands and innovative technologies. In addition, we have consistently driven forward the implementation of our portfolio optimization measures, continued our strict cost management and worked on further efficiency improvements. Moreover, as we merge our two consumer businesses, we are ahead of our planned schedule in implementing the new structures. This strong performance is the achievement of our global team whose outstanding commitment is critical to the long-term success of Henkel in these challenging times."
Sales performance
Henkel's double-digit sales growth in the third quarter was driven predominantly by the Adhesive Technologies business unit. All business areas recorded significant or double-digit organic sales increases. This performance was driven by double-digit increases in all regions, with particular contributions from the Packaging & Consumer Goods and Automotive & Metal business areas.
The Beauty Care business unit achieved positive organic sales growth in the third quarter, despite implementing the announced portfolio measures. In the Consumer business area, the Hair Cosmetics category recorded very strong organic sales growth and the Hair Styling business generated double-digit organic sales growth, thus continuing the recovery of recent quarters following the pandemic-related decline. Organic sales performance was strong in both the Hair Colorants and Hair Care businesses, driven in particular by the emerging markets. In the third quarter, the Professional business area was able to build on its strong performance in the first half of the year and showed good organic sales growth, driven in particular by a double-digit increase in the emerging markets.
The Laundry & Home Care business unit generated significant organic sales growth, driven mainly by the Laundry Care business area.
Outlook for the Henkel Group
Looking ahead to the rest of fiscal 2022, Knobel commented: "We are operating in a business environment which is characterized by a high degree of volatility and uncertainty. In this overall inflationary environment with increased raw material and energy costs, we delivered a strong business performance in the first nine months. Against this background, we are raising our full year 2022 guidance for sales and earnings."
Henkel now expects organic sales growth at Group level of +7.0 to +8.0 percent in fiscal 2022 (previously: +5.5 to +7.5 percent) and adjusted return on sales (EBIT margin) in the range of?10.0 to 11.0 percent (previously: 9.0 to 11.0 percent).
In addition, Henkel has the following expectations for 2022:
- Restructuring expenses in the range of 450 to 500 million euros (unchanged)
- Cash outflows for investments in property, plant and equipment and intangible assets of around 650 million euros (previously: around 700 million euros)
The guidance continues to be based on the assumptions that there will be no new widespread pandemic-related business and production closures in industry and retail and that the effects of the war in Ukraine will not worsen significantly. In addition, our guidance is based on the assumption that there will be no production shutdowns in industry due to a gas shortage in Europe.
Source: 124 Communications Consulting