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Henkel witness a strong organic sales growth for fiscal 2020

Published on : Monday, October 19, 2020

Henkel has recently announced that it delivers powerful organic sales growth in the third quarter and bestow new guidance for fiscal 2020.

Strong organic sales growth of +3.9 percent in the third quarter

All business units report organic sales growth

Guidance for fiscal 2020:

Organic sales growth: between -1.0 and -2.0 percent

Adjusted EBIT margin*: between 13.0 and 13.5 percent

Adjusted earnings per preferred share (EPS)* at constant exchange rates: decrease in the range between -18 and -22 percent.

Based on the preliminary business performance in the first nine months of 2020, Henkel has provided a new guidance for fiscal 2020, following the withdrawal of its full-year guidance in April 2020 due to the high level of uncertainty caused by the COVID-19 pandemic.

“Despite the continued challenging economic environment as a result of the corona crisis, based on preliminary sales figures, Henkel delivered a strong organic sales growth of plus 3.9 percent in the third quarter. Sales reached around 5 billion euros and all business units contributed to the good performance,” said Henkel CEO Carsten Knobel.

“In Adhesive Technologies, all business areas showed a recovery compared to the second quarter. In the Beauty Care business unit, the Hair Salon business also showed a recovery compared to the second quarter, whereas the retail business achieved significant organic sales growth compared to the prior-year quarter. Laundry & Home Care also recorded significant growth and thus continued its successful development,” Knobel continued.

For the Group, Henkel now expects organic sales growth of between -1.0 and -2.0 percent in fiscal 2020. Despite strict cost control, the earnings development in the full year will be relatively more affected than the sales side, due to the significant decline in demand in the industrial business and the Hair Salon business, as well as higher growth investments in marketing, advertising, digitalization and IT. On Group level, Henkel thus expects an adjusted EBIT margin in the range between 13.0 and 13.5 percent. Adjusted earnings per preferred share (EPS) are expected to decrease in the range between -18 and -22 percent at constant exchange rates.

“The organic sales development in the third quarter reflects our robust, diversified portfolio with successful brands and innovative technologies for our customers in the industrial and consumer goods business. We are particularly pleased that all our business units showed a positive development. This was partly due to catch-up effects from the second quarter, which was heavily burdened by the corona pandemic. We expect to feel the negative effects of the pandemic in the fourth quarter as well, but in our forecast for the year we are not assuming a further extensive lockdown, as we saw in many countries especially in the second quarter. All in all, we are convinced to be on the right track with our strategic focus on purposeful growth and to emerge stronger from the crisis. Our special thanks go to our employees around the world, whose great commitment is making a decisive contribution to this,” summarized Carsten Knobel.

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