The DAX group presented its quarterly figures on Monday.
(Photo: dpa)
Dusseldorf Persil, Pattex and Pritt are likely to become more expensive soon. The manufacturer Henkel assumes this after submitting its quarterly figures on Monday. The head of the Dax group, Carsten Knobel, expects raw material prices to rise by ten to 15 percent – an increase that Henkel has not seen in 15 years.
“We cannot fully compensate for these price increases and have to pass them on to industry and trade,” said Knobel. In the area of adhesives, it is easier to pass the costs on to the industrial partners. Henkel is in negotiations with retailers and details will be announced.
CFO Marco Swoboda stated that he wanted to reduce production costs with a “bundle of measures”. Henkel wants to rely on alternative raw materials or other suppliers.
Despite the efforts, the consumer goods manufacturer only expects a result at the lower end of the forecast range for the full year due to the rising raw material costs. The adjusted return on sales (EBIT margin) should still be around 13.5 percent. So far, Henkel had predicted 13.5 to 14.5 percent, at the beginning of the year even up to 15 percent. The group continues to expect organic sales growth of six to eight percent for 2021.
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Investors were disappointed with the forecasts: Henkel shares fell by more than six percent on Monday. The stocks are threatened with the biggest daily loss since the stock market crash in March 2020. The EBIT margin is at the previous year’s level, but the market has apparently priced in different expectations, according to Knobel.
Henkel had sales of 15 billion euros in the first nine months of the year – a nominal increase of 3.7 percent compared to the same period of the previous year. The organic growth adjusted for exchange rate effects as well as acquisitions and sales is 3.5 percent and thus somewhat higher than the average forecast by analysts. The company does not provide earnings indicators for the third quarter.
Henkel benefits from the adhesives business
The most recent growth driver was the adhesives business, which grew organically by seven percent in the third quarter. With this strongly cyclical division, Henkel generates almost half of its group sales. This was 2.4 billion euros in this division in the past quarter.
Henkel is benefiting from rising demand for packaging and consumer goods, for example. Growth was slowed down by the automotive industry. The decline in production due to the global shortage of semiconductors had a negative impact here.
“We cannot fully compensate for these price increases and have to pass them on to industry and trade.”
(Photo: Thomas Berger for Handelsblatt)
The Laundry & Home cleaning products division had sales of almost 1.7 billion euros in the third quarter – and thus almost two percent more organically. In the laundry detergents business area, Henkel achieved growth with its core brand Persil. The demand for surface cleaners fell. This has returned to normal after increasing at the beginning of the pandemic. Laundry & Home accounts for a third of Henkel’s sales.
The sales of the cosmetics division Beauty Care fell organically by three percent to 0.9 billion euros. Henkel explains this with a normalization in demand for soap products, which had increased in the same period of the previous year due to the pandemic. The hairdressing business, which Henkel supplies with brands such as Schwarzkopf, continued its previous growth in the third quarter. The cosmetics division accounts for around a fifth of sales.
Last year, Henkel and its around 52,000 employees posted declines in sales and operating income during the corona crisis. At that time, the adhesives business in particular suffered from the weakness of important customers such as the automotive industry. But business with hairdressers was also not going well because salons were temporarily closed.
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