Henkel Shares Tumble After Cutting 2022 Earnings Margin Outlook

   By Ed Frankl and Joshua Kirby 
 

Henkel AG shares dived Friday after it said it expects a lower earnings margin this year, as raw-material prices surge on the war in Ukraine.

Shares were down 8.0% to EUR58.12 at 0730 GMT.

The German consumer-goods company now expects an adjusted earnings before interest and taxes margin of 9%-11%, from 11.5%-13.5% previously.

Full-year adjusted earnings per share is now expected to decline 15%-35%, from between a positive rise of 5% and a decline of 15% previously, Henkel said.

The new outlook is due to rising raw-material prices and higher logistics costs stemming from the Russia-Ukraine war, as well as the effects of exiting operations in Russia and Belarus following the invasion, the Dusseldorf-based company said.

"Due to these developments, we now expect significantly higher pressure on our earnings for the rest of the year than at the beginning of the year," Chief Executive Carsten Knobel said.

The company now sees additional raw-material costs for the full year at around 2 billion euros ($2.10 billion), twice as much as had been assumed at the end of January.

The company nevertheless said it expects higher sales growth for the year than previously targeted, after first-quarter sales rose on higher prices and with a slight decline in volumes, it said.

According to preliminary figures, the company's sales rose by 7.1% to around EUR5.3 billion in the quarter.

Henkel said it is now aiming for full-year organic growth between 3.5% and 5.5% in fiscal 2022, compared with a previous targeted range of 2% to 4%.

The company will set out full first-quarter results on May 5.

Write to Ed Frankl at [e-mail]

(END) Dow Jones Newswires

April 29, 2022 03:56 ET (07:56 GMT)

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