Henkel's Performance in 2024 Is Strong, with Sales of 21.6 Billion Euros

On March 11, the German consumer goods giant Henkel released its 2024 financial results, with full-year sales reaching 21.586 billion euros, a nominal increase of 0.3% over the previous year. Foreign exchange effects had a negative impact on sales of -1.8%. Adjusted for foreign exchange effects, sales increased by 2.1%. Thanks to good prices and positive volume development, organic growth adjusted for foreign exchange effects and acquisitions/divestitures reached 2.6%.

In addition, adjusted operating profit (adjusted EBIT) increased significantly by 20.9% to 3.089 billion euros (previous year: 2.556 billion euros). The adjusted return on sales (adjusted EBIT margin) also increased significantly year-on-year, reaching 14.3% (2023: 11.9%). Adjusted earnings per preferred share increased significantly by 23.2% to 5.36 euros (previous year: 4.35 euros). At constant exchange rates, adjusted earnings per preferred share increased by 25.1%. Henkel also proposes a dividend increase of more than 10% and a new share buyback of 1 billion euros.
By division, sales in the Adhesive Technologies business unit totaled 10.97 billion euros in fiscal 2024, a nominal increase of 1.7% year-on-year. Acquisitions/divestitures contributed 1.1% to sales growth, despite a negative exchange rate effect of -1.8%. Sales increased by 2.4% on an organic basis, driven by the Mobility and Electronics business areas, strong volume growth in the second half of the year and increased demand in some key end markets. Prices were flat compared to the previous year. Adjusted operating profit of 1.817 billion euros increased by double digits year-on-year, a new high for the business unit. Adjusted return on sales increased significantly by 190 basis points year-on-year to 16.6%.

Sales in the Consumer Brands business unit totaled 10.467 billion euros in the reporting year, nominally down 0.9% from the previous year. Foreign exchange effects led to a 1.8% decrease in sales. Acquisitions/divestitures also had a negative impact of -2.0% on sales, mainly due to the strategic divestment of the Group in Russia in April 2023. Sales increased by 3.0% on an organic basis, driven mainly by the Hair Care business area, very strong price trends, while the decline in volumes was mainly due to continued portfolio optimization measures. Adjusted operating profit was €1.419 billion, significantly higher than in the previous year (€1.115 billion). The adjusted return on sales reached 13.6%, a significant increase of 300 basis points compared with the previous year.

Henkel expects a slow start to the fiscal year 2025, but also an acceleration in sales growth on an organic basis. Group sales will increase by 1.5% to 3.5% on an organic basis in fiscal 2025. This is reflected in an organic growth rate of 2.0% to 4.0% in the Adhesive Technologies business unit and 1.0% to 3.0% in the Consumer Brands business unit.

The Group's adjusted return on sales (adjusted EBIT margin) is expected to be between 14.0% and 15.5%. Among them, the adjusted return on sales of the Adhesive Technologies department is expected to be between 16.0% and 17.5%, and the adjusted return on sales of the Consumer Brands department is expected to be between 13.5% and 15.0%.