Henkel Forecasts Slower Growth in 2024

Henkel, the German chemical and consumer-goods company, is expecting a slowdown in organic sales growth for the year ahead. This projection is based on the anticipation of stable material prices and the impact of currency translation on sales.

Strong Performance in 2023

In 2023, Henkel reported sales of 21.51 billion euros, showing a 4.2% increase organically, despite a 3.9% decrease in reported terms due to foreign exchange movements and business divestments. The adhesive technologies unit saw organic sales growth of 3.2% to EUR10.79 billion, driven by various sectors including mobility, electronics, craftsmen, and construction. Meanwhile, the consumer brands unit recorded a significant 6.1% organic sales growth to EUR10.57 billion, fueled by the success of laundry, home care, and hair products.

Outlook for 2024

While pleased with the performance in 2023, Henkel’s Chief Executive Carsten Knobel emphasized that the company is preparing for a more challenging year ahead. The forecast for organic sales growth in 2024 is set at 2% to 4%, a decrease from the previous year’s figures.

Factors Affecting Growth

Henkel expects prices for direct materials to remain steady, mirroring the levels seen in 2023. Additionally, the translation of sales in foreign currencies is predicted to have a negative impact in the mid-single-digit percentage range.

Henkel remains optimistic about navigating these challenges and continuing to deliver value to its customers in the year ahead.

Henkel Reports 2023 Financial Results

In what was deemed a persistently challenging market environment, Henkel faced various obstacles in 2023. Foreign exchange effects took a toll on sales by 4.3%, while acquisitions and divestments also impacted its top-line performance.

Financial Performance Highlights

  • Adjusted return on sales rose to 11.9% in 2023 from 10.4% in the previous year.
  • Adjusted earnings per preferred share increased by 20% at constant exchange rates to EUR4.35.

Dividend Proposal and Expectations

Henkel announced it will propose a dividend of EUR1.85 per preferred share and EUR1.83 per ordinary share at the upcoming annual general meeting on April 22, mirroring the previous year’s payout.

According to estimates from 18 analysts from Vara Research, the group was projected to achieve annual sales of EUR21.50 billion, an adjusted return on sales of 12%, and adjusted earnings per preferred share of EUR4.35.

Forecast and Outlook

In its initial forecast, Henkel had anticipated organic sales growth of 3.5% to 4.5% for 2023, with an adjusted return on sales between 11.5% and 12.5%, and adjusted earnings per preferred share to rise by 15% to 25% at constant exchange rates.

Looking ahead, the company now predicts an adjusted return on sales ranging between 12% and 13.5%, with adjusted earnings per preferred share expected to increase by 5% to 20% at constant exchange rates for the current year.

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