Henkel posts losses after divestment from Russian

Admin I Monday, March 04, 2024

 

BERLIN – The German chemical and consumer goods firm, Henkel, posted on Monday a drop in full-year sales, as foreign exchange rates and the sell off of its Russian business negatively impacted its balance sheet.

For the 12-month period, Henkel recorded adjusted operating income at €2.556 million ($2.77 million), higher than €2.319 billion last year, mainly due to positive selling price developments.

Excluding items, however, return on sales or adjusted EBIT margin was 11.9%, up from previous year’s 10.4%. Group sales amounted €21.514 billion, down 3.9% from prior year.

Foreign exchange effects negatively impacted the sales development by negative 4.3%. At negative 3.9%, acquisitions and divestments had a negative impact on sales, which was mainly due to the divestment of the business activities in Russia.

In April 2023, Henkel sold its business in Russia to a consortium of local financial investors for around €600 million. The board will pay an unchanged annual dividend of €1.83 per share.

Looking ahead, for the full year, citing a projected moderate global economic output and increase in demand, the group expects adjusted return on sales of 12% to 13.5%.

Henkel expects the annual translation of sales in foreign currencies to have a negative impact in the mid-single-digit rate range, whereas prices for direct materials are projected to remain flat versus the annual average for 2023.