Henkel Guides for Subdued 2023 After 2022 Operating Profit Tumbles

By Ed Frankl

Henkel AG on Tuesday flagged a tough 2023 outlook, based on continued inflationary headwinds, after operating profit tumbled in 2022.

The German consumer-goods company said labor-cost increases and continued high energy and commodity costs, alongside elevated prices for direct materials, would mean it expects organic sales growth of between 1% and 3% in 2023, well down from 8.8% in 2022.

Its adjusted return on sales is expected at 10%-12% and adjusted earnings per preferred share would be between 10% below and 10% above 2022's level.

The outlook came after Henkel said 2022 operating profit was 2.32 billion euros ($2.48 billion), tumbling from EUR2.67 billion in 2021, as higher prices for raw materials and logistics weighed on profitability. Meanwhile, adjusted earnings per share fell 18% at constant exchange rates to EUR3.90.

Sales were up 12% at EUR22.40 billion, driven by price increases. Sales at adhesive technologies grew by double digits, and by 6% at laundry and home, but declined slightly at beauty care. The latter two units are now part of a new consumer brands unit, which is now live, Henkel said.

The Dusseldorf-based company declared a dividend of EUR1.85 per preferred shares, stable compared with the prior year, and EUR1.83 per ordinary share.

Henkel's business activities in Russia, which it said it would exit last year after the country's invasion of Ukraine, are expected to be divested by the end of the first quarter of 2023, it said.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

March 07, 2023 02:11 ET (07:11 GMT)

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