Net income at Henkel surges by 82.3 percent in Q1

 

BERLIN – Henkel, the German chemical and consumer goods conglomerate, posted significantly higher profits for its first half on Tuesday, boosted by sales growth. The company also said it was sticking with its recently revised fiscal 2024 outlook.

For the first half, net income attributable to shareholders surged 82.4% to €1.03 billion ($1.13 billion) from last year’s €564 million. Earnings per preferred share increased significantly to €2.46 from the previous year’s €1.35. Adjusted earnings per preferred share were €2.78, compared to €2.13 in the prior-year period.

Adjusted operating profit or adjusted Earnings Before Interest and Taxes (EBIT) increased significantly by 28.4% to €1.61 billion from €1.25 billion last year, in particular as a result of the strong increase in gross margin. Adjusted EBIT margin increased by 340 basis points to 14.9% from 11.5% a year ago.

In a persistently challenging market environment, Henkel achieved group sales of €10.81 billion, down 1% from the prior year’s €10.93 billion, negatively impacted by the divestment of the business activities in Russia.

However, Henkel now achieved nominal sales growth of 3.4% in the second quarter to €5.50 billion from last year’s €5.32 billion. In organic terms, Henkel achieved good sales growth of 2.9% in the first half, and 2.8% in the second quarter.

Regarding the outlook, Henkel said it raised the fiscal 2024 outlook in mid-July as it is confident about the remainder of the year following the strong business performance in the first half of the year.

For the year, the company now expects adjusted earnings per preferred share to increase in the range of 20% to 30% at constant exchange rates. Adjusted EBIT margin at group level is now expected to be in the range of 13.5% to 14.5%. For the current fiscal year, Henkel continues to expect organic sales growth of 2.5% to 4.5%.

Henkel further expects mid- to long-term financial ambition already to be reached mid-term. For the group, the company projects mid-term organic sales growth of 3% to 4%, adjusted EBIT margin of around 16%, and adjusted earnings per preferred share growth in the mid- to high single-digit percentage range at constant exchange rates and including acquisitions.