Henkel Eyes Higher Sales, Wider Margin as Prices Drive Growth

By Joshua Kirby

Henkel AG & Co. lifted its expectations for the year after higher prices boosted sales in the third quarter.

The German consumer-goods and chemicals group made sales of 5.44 billion euros ($5.83 billion) between July and September, in line with expectations, per a FactSet poll of analysts. This represents a 2.8% organic increase on year, said the company, which owns consumer brands like detergent Persil and cosmetics label Schwarzkopf, alongside a division making industrial sealants and adhesives.

Nominally, sales were 9% lower on year, a result of foreign-exchange effects and other moves including a withdrawal from Russia, Henkel said. Organically, growth was driven by higher prices, especially in the consumer division, while volumes sank in both businesses.

"Volume development was negative but showed a noticeable improvement compared to the second quarter," the company said.

Henkel now expects a slightly higher range in its sales growth for the year, it said, forecasting organic growth of 3.5%-4.5% from 2.5%-4.5% previously. Similarly, the operating margin should stand at 11.5%-12.5%, versus a previous forecast of 11.0%-12.5%, Henkel said.

Last year, Henkel made sales of EUR22.4 billion, with an operating margin of 8.1%.

"We have continued to consistently drive our strategic priorities in both business units in the third quarter. Thus, we remain on track to generate further growth," Chief Executive Carsten Knobel said.

Write to Joshua Kirby at [e-mail]; @joshualeokirby

(END) Dow Jones Newswires

November 09, 2023 02:04 ET (07:04 GMT)

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