Henkel, the multinational consumer goods and adhesives giant, has reported positive financial results for the first half (H1) of 2024, showing robust organic sales growth and an improvement in earnings despite a challenging economic environment.
The company's group sales reached €10.8bn ($11.79bn), reflecting an organic growth of 2.9%.
However, on a nominal basis, sales saw a slight decline of 1.0%, largely due to the divestment of business activities in Russia and the impact of currency fluctuations.
Despite these challenges, Henkel's operating profit (earnings before interest and taxes/EBIT) surged by 28.4% to €1.61bn, with the EBIT margin improving by 340 basis points to 14.9%.
Henkel's earnings per preferred share (EPS) also saw an increase, rising by 32.9% at constant exchange rates to €2.78.
Free cash flow remained strong at €800m, surpassing the previous year's H1 performance.
Business unit performance
Henkel’s two primary business units - Adhesive Technologies and Consumer Brands - both contributed to the company's growth.
The Adhesive Technologies unit, which generated sales of €5.48bn, experienced a 2.0% organic increase, driven by the Mobility & Electronics and Craftsmen, Construction & Professional sectors.
Adjusted operating profit for this unit rose by 21.8% to €933m, with an improved EBIT margin of 17.0%.
The Consumer Brands unit meanwhile, which includes Henkel's integrated Laundry & Home Care and Beauty Care businesses, reported €5.27bn in sales, marking a 4.3% organic growth rise.
The unit benefited from strong performances in the Hair and Home Care categories, with adjusted operating profit rising by 34.8% to €753m and an EBIT margin of 14.3%.
Regional sales overview
Regionally, Henkel's performance varied.
Europe saw organic growth of 1.8% while the India, Middle East, and Africa region recorded a significant 21.0% growth.
North America and Central America faced challenges, with organic sales declining by 1.6% and remaining flat at 0.0%, respectively.
In contrast, the Asia-Pacific region showed strong growth with a 5.5% increase.
Strategic outlook
Following the performance in the first half, Henkel has raised its earnings outlook for full-year 2024.
The company now anticipates organic sales growth of 2.5% to 4.5%, with an adjusted return on sales expected to be between 13.5% and 14.5%.
Additionally, EPS is projected to increase by 20.0% to 30.0% at constant exchange rates.
Henkel said it remains focused on its strategic growth agenda, with continued investments in brands, technologies, and innovations.
The company is also driving forward its initiatives in sustainability and digitalisation to enhance its competitive position in the global market.
