Henkel: 4.2% increase in sales and adjusted EBIT in 2021

Henkel achieved organic sales of approximately € 20.1 billion in the financial year 2021. This represents an organic increase in sales of 7.8% compared to 2020. The significant recovery in demand in the industrial and hairdressing products sector was particularly positive effect. In the consumer goods sector, demand in many categories returned to more normal standards compared to the previous year 2020, when demand was particularly strong for hygiene and cleaning products as well as hair dyes, while demand for styling products was less strong. .

At the same time, the impact of the significant increase in raw material and logistics prices, as well as the exchange rate effects, weighed on profitability in the year 2021. Thanks to the significantly higher sales volumes, successful price increases, active cost management and continuous adjustments. , Henkel managed to offset even more the impact on its profits. Adjusted operating profit rose 4.2% to 2.7 billion euros. The adjusted return on sales amounted to 13.4 percent at the level of the previous year and the adjusted earnings per preferred share increased to 4.56 euros. This corresponds to a significant improvement of 9.2 percent in fixed exchange rates.

Based on these results, Henkel will propose to its shareholders a fixed dividend of 1.85 euros per preferred share and 1.83 euros per ordinary share at the next Annual General Meeting. This equates to a return of 40.5%, which is slightly above the target range of 30 to 40% of adjusted net profit after non-controlling interests. The company has been paying a fixed dividend since the beginning of the COVID-19 pandemic.

In addition, Henkel has announced a plan to repurchase volume shares up to 1 billion euros at the end of January 2022 and has already started its implementation in February. Henkel plans to buy preferred shares with a total value of up to 800 million euros and common shares with a total value of up to 200 million euros.
The program is expected to be implemented by March 31, 2023 at the latest.

“Overall, we have had good business performance in 2021 and have consistently promoted the implementation of our strategic agenda – despite the very difficult market environment with unprecedented global supply chain disruptions, shortages of basic raw materials, and overall significant price increases,” he said. Henkel CEO Carsten Knobel.

“We have seen organic growth in all business units, we have kept our profit margin stable and we have achieved a very strong increase in earnings per preferred share. This is the achievement of the Henkel global team. Together, we have managed to advance our Targeted Development Agenda “Even in these difficult times. I would like to thank all the employees for their exceptional dedication. Especially those who have maintained our production and our critical business operations in our local facilities.”

“We are consistently advancing the implementation of our strategic agenda and we have made very good progress in many key areas. In some areas, however, we see the need for further action. Therefore, we are now moving our development agenda to the next level. At the end of January, we announced the merger of our Laundry & Home Care and Beauty Care business into a new business unit, Henkel Consumer Brands, creating a multi-category platform with sales of around € 10 billion. a broader basis to optimize our portfolio even more steadily and bring it to a profile of higher growth and profit margin while at the same time reflecting on our medium- and long-term economic ambitions, “said Carsten Knobel.

“In addition, our new € 150 million Venture Fund II fund and the new 2030+ Sustainability Ambition Framework provide significant impetus to innovation and sustainability. And the new open and dynamic emergence of our brand reinforces the purpose. us”.

Sales and profit performance of the Group during the financial year 2021

The sales of the Henkel Group amounted to 20,066,000,000 euros in the financial year 2021. This corresponds to a nominal increase of 4.2% and a significant organic increase in sales of 7.8%. The effect of acquisitions and sales on sales was slightly negative at -0.1 percent. Foreign exchange impacts had a negative impact of -3.5 percent on sales.

Adhesive Technologies recorded a double-digit organic sales growth of 13.4%, mainly due to the significant recovery of industrial demand compared to the previous period, which was significantly affected by the COVID-19 pandemic. The sales of the Beauty Care business unit increased organically by 1.4%. While the recovery in the hairdressing sector had a positive impact, the Beauty Care consumer goods sector was particularly affected by the normalization of demand in the body care category and showed a declining trend. Laundry & Home Care grew strong organic sales by 3.9%, with both Laundry Care and Home Care performing well.

Emerging markets achieved double-digit organic sales growth of 15.4%. Companies in the more mature markets recorded good organic sales performance of 2.5%.

Adjusted operating profit (adjusted EBIT) increased by 4.2 percent to 2,686 million euros in 2021, compared to 2,579 million euros in the fiscal year 2020. Adjusted sales performance (adjusted EBIT margin) reached the level of the previous year , at 13.4 percent.

Adjusted earnings per preferred share increased by 7.0 percent to 4.56 euros (previous year: 4.26 euros).

At fixed exchange rates, adjusted earnings per share were up 9.2 percent.

Net working capital increased to 2.2 percent, an increase of 1.5 percentage points compared to the extremely low 0.7 percent of the previous year. Thus, the net working capital returns to more normal levels. Compared to the pre-crisis level of 2019, it improved by 1.7%.

Free cash flows amounted to € 1,478 million, down from the previous year (2020: € 2,340 million), which was reinforced by the unusually sharp decrease in net working capital under operating cash flows.

The net financial position improved significantly, mainly due to good free cash flows. At 31 December 2021, the net financial position amounted to -292 million euros (31 December 2020: -888 million euros).

Perspectives 2022

The outlook for the financial year 2022, which was already published at the end of January, remains unchanged. Given the high uncertainty and volatility of the market and the impact of further significant increases in raw material costs and logistics, the company expects an organic sales increase of 2 to 4% and an adjusted sales performance (EBIT margin) between 11 , 5 and 13.5%. At Group level, Henkel expects for Adjusted Earnings Per Preference (EPS) a development in the range of -15 to +5 percent (at fixed exchange rates) in the financial year 2022.