Henkel has reported a good start to the fiscal year, achieving organic sales growth of 7.7% in the first quarter of 2021.
Despite the impact of the COVID-19 pandemic that continues to adversely affect the social and economic environment in numerous markets, Henkel’s group sales reached around €5 billion, an increase of 0.8% in nominal terms, although this represents a significant impact by currency headwinds, according to the group.
“We achieved a very good business performance in Q1, to which all our business units contributed,” said Henkel’s CEO, Carsten Knobel.
“With industrial demand recovering at a stronger rate than originally expected, we are optimistic about business development over the rest of the year, despite the continued uncertainty in our markets. Following the strong start to the year, we have today raised our sales and earnings guidance.”
The significant increase in sales in Q1 was driven by Henkel’s adhesive technologies business unit, which saw a strong recovery across all business areas and regions, generating double-digit organic sales growth.
Its beauty care and laundry home care consumer businesses also generated organic sales growth.
“From a regional perspective, the very good sales performance in Q1 was driven primarily by the emerging markets, with all regions posting double-digit organic growth rates,” said Knobel.
“Henkel’s performance in Q1 is testament to our robust and balanced portfolio with successful brands and innovative technologies for our customers in the industrial and consumer business.
“At the same time, the very good development overall in Q1 is also the result of our strong global team, which – in this unprecedented and challenging time for all of us – is showing enormous commitment as it continues to contribute to the long-term success of Henkel.”
Organic sales development in Henkel’s consumer business area was positive compared to the same period last year. Its hair cosmetics category continued the positive trend from the final quarter of 2020 with a strong performance in Q1 2021. Hair colourants posted double-digit growth, while haircare sales were also strong.
Hair styling sales were down on the prior year figures due to weaker consumer demand related to the pandemic. In terms of organic sales development, body care also fell short of the strong growth generated in Q1 2020, due to mainly declining demand in key markets.
Looking ahead to the rest of the fiscal year 2021, Knobel commented: “After a strong start to the year, we have raised our guidance and now expect higher growth in both sales and earnings for the full year.
“At group level, Henkel now anticipates organic sales growth of 4-6% and an adjusted return on sales in the range of 14-15%. For adjusted earnings per preferred share at constant exchange rates, Henkel now expects an increase in the high single-digit to mid-teens percentage range
“Nevertheless, there is still great uncertainty as to how the pandemic will develop and how consumption and industrial output will be impacted. We will continue to respond flexibly and quickly to changes in our markets. At the same time, we are vigorously driving the implementation of our growth agenda.
“Our focus is on two areas: firstly, we want to expand our competitive edge by further strengthening innovation, sustainability and digitalisation. Secondly, we want to further enhance our company culture. With our strategic framework for purposeful growth and our strong global team, we are well prepared to emerge stronger from the crisis and to shape our future.”