Henkel delivers strong organic sales growth in the third quarter and provides new guidance

Mumbai: Despite the challenges posed to the economy due to the ongoing corona crisis, Henkel delivered strong organic growth of 3.9 percent in the third quarter. Sales figures reached 5 billion euros and all business units contributed to the good performance.

Commenting on the results,Carsten Knobel, Henkel CEO said, “The organic sales development in the third quarter reflects our robust, diversified portfolio with successful brands and innovative technologies for our customers in the industrial and consumer goods business. We are particularly pleased that all our business units showed a positive development. This was partly due to catch-up effects from the second quarter, which was heavily burdened by the corona pandemic. We expect to feel the negative effects of the pandemic in the fourth quarter as well, but in our forecast for the year we are not assuming a further extensive lockdown, as we saw in many countries especially in the second quarter. All in all, we are convinced to be on the right track with our strategic focus on purposeful growth and to emerge stronger from the crisis. Our special thanks go to our employees around the world, whose great commitment is making a decisive contribution to this."

Based on the preliminary business performance in the first nine months of 2020, Henkel has provided a new guidance for fiscal 2020, following the withdrawal of its full-year guidance in April 2020 due to the high level of uncertainty caused by the COVID-19pandemic.

For the Group, Henkel now expects organic sales growth of between -1.0and -2.0percent in fiscal 2020. Despite strict cost control, the earnings development in the full year will be relatively more affected than the sales side, due to the significant decline in demand in the industrial business and the Hair Salon business, as well as higher growth investments in marketing, advertising, digitalization and IT. On Group level, Henkel thus expects an adjusted EBIT margin in the range between 13.0and 13.5percent. Adjusted earnings per preferred share (EPS) are expected to decrease in the range between 

-18 and -22 percentat constant exchange rates.

Preliminary sales development in the third quarter

Based on preliminary figures, Henkel delivered organic sales growth, which excludes the impact of currency effects and acquisitions/divestments, of +3.9 percent.

Based on preliminary figures,the Adhesive Technologies business unit achievedpositive organic sales growth of +1.3 percent in the third quarter. Compared to the second quarter, a recovery in demand was recorded across all business areas.

According to the preliminary figures, Beauty Caredeliveredvery strong organic sales growth of +4.3 percent. While the development of the Hair Salon business was below the level of the prior-year quarter despite a recovery, the retail business achieved significant organic sales growth in the third quarter. 

Thanks to continued strong demand for Laundry & Home Care productsas well as catch-up effects from the second quarter, preliminary figures for this business unit also indicate significant organic sales growth in the third quarter of +7.7 percent. 

Henkel will publish its statement for the third quarter 2020 on November 10, 2020.

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