Henkel delivers strong H1 results, notes sharp rise in raw material prices

Henkel has delivered a strong performance in the first half of 2021, achieving double-digit growth in organic sales and earnings, but warned of a sharp rise in raw material prices.

The firm accelerated growth throughout the first half of the year (H1 2021) and adjusted for currency effects, already exceeded the pre-crisis level of 2019.

Despite the impacts of the COVID-19 pandemic that continue to adversely affect the social and economic development of various markets globally, Henkel achieved ‘significant’ sales and earnings growth in H1 2021. Organic sales growth reached 11.3% in the first six months of the year. Group sales amounted to around €10 billion, an increase of 4.7% in nominal terms.

“In the first half of 2021, Henkel continued to be affected by the COVID-19 pandemic,” said the firm’s CEO, Carsten Knobel. “Nevertheless, we achieved double-digit growth in sales and earnings.

“In terms of sales, we have already been able to exceed the pre-crisis level of 2019 adjusted for currency effects. Mainly thanks to the outstanding team spirit and commitment of our employees around the world, as well as our balanced and robust portfolio of successful brands and innovative technologies in the consumer and industrial businesses.”

All business units and regions contributed to organic sales growth in H1 2021. The adhesive technologies business unit achieved the strongest sales growth in the first half of the year. The business unit increased sales organically across all regions and business areas, and overall achieved double-digit growth. Henkel said this development was supported by the significant recovery of the global economy.

Henkel also achieved organic sales growth in its beauty care and laundry and home care divisions. The picture, however, was mixed regarding the individual business areas. In the beauty care unit, growth was driven by the professional business. After weaker growth in 2020 due to the pandemic, growth well into the double digits was achieved.

The consumer goods business, on the other hand, was below the level of the prior-year period in H1 2021, due to a decline in organic sales in the body care category, also a consequence of significant weakening markets.

In the laundry and home care business unit, the growth was mainly driven by the home care business, which achieved significant organic sales growth. The laundry care businesses recorded ‘good’ organic sales growth.

“We continued to make good progress in implementing our strategic growth agenda in the first half of the year,” said Knobel.

“As part of our active portfolio management, further brands and businesses were divested or discontinued as planned. At the same time, we made targeted acquisitions, in particular, to expand our sustainable brands portfolio.

“Our special focus this year is on further strengthening our competitiveness in the areas of innovation, sustainability, and digitalisation, and on further developing our company culture. We progressed very well in these areas in the first half of the year and believe we are well on track in implementing our purposeful growth agenda.”

Looking ahead to the rest of fiscal 2021, Knobel said Henkel is seeing a normalisation in demand in most of its businesses.

“After the recovery in industrial demand began in many regions in the second half of 2020, growth rates are likely to be significantly lower in the second half of 2021, despite a continued economic recovery.

“At the same time, there is still great uncertainty about how the pandemic will develop and how consumption and industrial output will be impacted. In particular, the exceptionally sharp rise in raw material prices and strained supply chains will weigh heavily on the economy in the further course of the year.

“We are working hard and with extensive measures to limit the impact on our business and profitability. At the same time, we will continue to respond flexibly and quickly to changes in our markets and we are consistently driving the implementation of our growth agenda.”

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