Henkel to Merge Businesses, Launch EUR1 Billion Share Buyback -- Update

   By Cecilia Butini 
 

Henkel AG & Co. KGaA said Friday that it intends to merge its laundry-and-home-care and beauty-care divisions into one unit to be called Henkel Consumer Brands, and that it will launch a share-buyback program with a total value of up to one billion euros ($1.11 billion).

The German home and personal-care products company also reported preliminary results for 2021, and set targets for 2022 and for the mid-to-long term.

In the mid-to-long term, Henkel said it is pursuing organic sales growth of 3% to 4% and an adjusted margin on earning before interest, taxes, depreciation and amortization of around 16%.

The company added that it is targeting growth in adjusted earnings per share in the mid-to-high single-digit percentage range. The targets are based on the planned division merger, which the company said is expected to generate "significant synergies."

The planned share-buyback program is set to run from February 2022 to March 31, 2023.

Based on preliminary figures, Henkel generated sales of EUR20.07 billion in 2021, with an organic sales growth of 7.8%. Margin on earnings before interest and taxes was 13.4%, while preliminary adjusted earnings per preferred share were EUR4.56, the company said.

Looking at 2022, Henkel said it expects organic sales growth in the range of 2% to 4%, EBIT margin between 11.5% and 13.5%, and adjusted EPS developing in the range between negative 15% and 5% at constant exchange rates, reflecting market uncertainty and volatility.

The outlook mostly comes short of a current consensus provided by Vara Research, which saw group organic sales growth of 4%, an adjusted EBIT margin of 13.6%, and an EPS increase of 5%, Henkel said.

Write to Cecilia Butini at [e-mail]

(END) Dow Jones Newswires

January 28, 2022 03:51 ET (08:51 GMT)

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