Henkel : Quarterly Statement Q1 2021 ‏ (156.2 KB)

Quarterly statement Q1 2021

January-March

Guidance for fiscal 2021 raised: higher sales and earnings growth expected

Henkel reports strong start to fiscal 2021

• Group sales show significant organic growth of +7.7 percent to around 5 billion euros, nominal growth of +0.8 percent adversely affected by currency headwinds
• All business units report organic sales growth:
• • Adhesive Technologies with double-digit organic sales growth of +13.0 percent, nominal +6.7 percent
  • Beauty Care reports good organic sales growth of +2.3 percent, nominal -1.1 percent
  • Laundry & Home Care records very strong organic sales growth of +4.1 percent, nominal -5.6 percent
• Emerging markets with double-digit organic sales growth of +18.5 percent, mature markets grow +0.5 percent
• Henkel raises guidance for fiscal 2021:
• • Organic sales growth: +4.0 to +6.0 percent
  • EBIT margin*: 14.0 to 15.0 percent
  • Earnings per preferred share (EPS)∗: Increase in the high single-digit to mid-teens percentage range at constant exchange rates

Düsseldorf, May 6, 2021 - Henkel reports a very good start to fiscal 2021 overall, achieving significant organic sales growth of +7.7 percent in the first quarter - despite the impacts of the global coronavirus crisis that continue to adversely affect the social and economic environment in numerous markets around the world. Group sales reached around 5 billion euros, an increase of +0.8 percent in nominal terms, significantly impacted by currency headwinds.

"We achieved a very good business performance in the first quarter, to which all our business units contributed. With industrial demand recovering at a stronger rate than originally ex- pected, we are optimistic about business development over the rest of the year, despite the

• Adjusted for one-time expenses and income, and for restructuring expenses.

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continued uncertainty in our markets. Following the strong start to the year, we have today raised our sales and earnings guidance," said Henkel CEO Carsten Knobel.

"The significant increase in sales in the first quarter was in particular driven by our Adhesive Technologies business unit, which saw a strong recovery across all business areas and regions, generating double-digit organic sales growth. Our Beauty Care and Laundry & Home Care consumer businesses also generated organic sales growth. From a regional perspective, the very good sales performance in the first quarter was driven primarily by the emerging markets, with all regions posting double-digit organic growth rates," Knobel added. "Henkel's performance in the first quarter is testament to our robust and balanced portfolio with successful brands and innovative technologies for our customers in the industrial and consumer busi- nesses. At the same time, the very good development overall in the first quarter is also the result of our strong global team, which - in this unprecedented and challenging time for all of us - is showing enormous commitment as it continues to contribute to the long-term success of Henkel."

The Adhesive Technologies business unit registered significant recovery across all business areas and regions, achieving double-digit organic sales growth overall of +13.0 percent.

The Beauty Care business unit, which was affected by pandemic-related market headwinds in the first quarter, generated good organic sales growth of +2.3 percent. The Consumer business area posted a positive performance compared to the same quarter last year. Our Professional business area was also able to achieve organic sales growth, despite the ongoing impact of official closures of hair salons in numerous countries. This was due particularly to the relatively low basis for comparison, with the prior-year quarter having already been heavily impacted by the COVID-19 pandemic.

Despite core mature markets of Laundry & Home Care starting to slow down in the first quarter, the business unit was able to achieve very strong organic sales growth of +4.1 per- cent, thus continuing its successful development. Both the Home Care business area and the emerging markets posted double-digit growth.

Looking ahead to the rest of fiscal 2021, Knobel said: "After the strong start to the year, we have raised our guidance and now expect higher growth in both sales and earnings for the full year. At Group level, Henkel now anticipates organic sales growth of +4.0 to +6.0 percent and an adjusted return on sales (EBIT margin) in the range of 14.0 to 15.0 percent. For adjusted earnings per preferred share (EPS) at constant exchange rates, Henkel now expects an increase in the high single-digit to mid-teens percentage range."

"Nevertheless, there is still great uncertainty as to how the pandemic will develop and how consumption and industrial output will be impacted. We will continue to respond flexibly and quickly to changes in our markets. At the same time, we are vigorously driving the implementation of our growth agenda. Our focus is on two areas: Firstly, we want to expand our competitive edge by further strengthening innovation, sustainability and digitalization. Secondly, we want to further enhance our company culture. With our strategic framework for purposeful growth and our strong global team, we are well prepared to emerge stronger from the crisis and to shape our future."

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Group sales performance

Group sales increased nominally by +0.8 percent in the first quarter of 2021, from 4,927 million euros in the first quarter of 2020 to 4,968 million euros. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by +7.7 percent. At Group level, the increase was driven primarily by volume. The contribution from acquisitions and divestments amounted to +0.6 percent. Foreign exchange effects had a strongly negative impact of -7.5 percent on sales.

Group sales performance1

in million euros	Q1/2021
Sales		4,968
Change versus previous year		0.8%
Foreign exchange		-7.5%
Adjusted for foreign exchange		8.3%
Acquisitions/divestments		0.6%
Organic		7.7%
Of which price		1.7%
Of which volume		6.0%

1 All individual figures have been commercially rounded. Addition may result in deviations from the totals indicated.

The emerging markets posted organic sales growth of +18.5 percent in the first quarter. Organic sales development in the mature markets was positive at +0.5 percent. Year on year, organic sales in the Western Europe region were up +0.9 percent. We posted sales growth of +11.7 percent in the Eastern Europe region. Organic sales growth was +21.7 percent in the Africa/Middle East region in the first quarter of 2021. Organic sales performance was flat in the North America region, whereas we achieved organic sales growth of +10.7 percent in the Latin America region. Organic sales growth in the Asia-Pacific region was in the double digits at +24.4 percent.

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Sales performance by region1

		Western	Eastern	Africa/	North	Latin	Asia-		Corporate	Henkel
in million euros		Europe	Europe	Middle	America	America	Pacific				Group
					East
Sales² January-		1,528		742		319		1,234		280		837		30		4,968
March 2021
Sales² January-		1,500	758		349		1,302	292	697	29	4,927
March 2020
Change versus		1.9%		-2.1%		-8.7%	-5.3%		-4.4%	20.1%		-	0.8%
prior-year quarter
Organic		0.9%		11.7%		21.7%		0.0%		10.7%		24.4%		-		7.7%
Proportion of
Group	31%		15%		6%		25%		6%	17%	1%	100%
sales 2021
Proportion of
Group		30%		15%		7%		26%		6%	14%	1%	100%
sales 2020

1. All individual figures have been commercially rounded. Addition may result in deviations from the totals indicated.
2. By location of company.

Sales performance Adhesive Technologies

In the first quarter of 2021, sales in the Adhesive Technologies business unit increased nominally by +6.7 percent from 2,209 million euros in the prior-year quarter to 2,358 million euros. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by +13.0 percent. Performance in the first quarter was driven by significant ongoing recovery in industrial production. Volume growth was in the double-digit range, with price trends on a slightly positive upward curve. Foreign exchange effects reduced sales by -6.7 percent, while acquisitions/divestments increased sales by +0.5 percent.

Sales performance Adhesive Technologies1

in million euros	Q1/2021
Sales		2,358
Proportion of Group sales		47%
Change versus previous year		6.7%
Foreign exchange		-6.7%
Adjusted for foreign exchange		13.5%
Acquisitions/divestments		0.5%
Organic		13.0%
Of which price		0.8%
Of which volume		12.2%

1 All individual figures have been commercially rounded. Addition may result in deviations from the totals indicated.

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All Adhesive Technologies business areas continued their significant recovery in the first quarter compared to the same quarter last year, the latter having already been impacted by the COVID-19 pandemic. Automotive & Metals posted double-digit organic sales growth, due primarily to the strong increase in global automobile production. Electronics & Industrials also generated double-digit organic sales growth, mainly thanks to the performance of our Electronics business, although the Industrials business area also posted a very strong in- crease. Packaging & Consumer Goods reported significant organic sales growth in the first quarter, supported by double-digit percentage increases in our Packaging and Lifestyle busi- nesses. Organic sales growth was also in the double-digit range in Craftsmen, Construction

• Professional, primarily driven by the consumer and craftsmen businesses together with our activities in the mechanical engineering and maintenance segments.

The regional breakdown shows the Adhesive Technologies business unit generating double- digit organic sales growth in the emerging markets. All emerging market regions contributed to this performance across all business areas.

Organic sales development in the mature markets was very strong overall. The North America region posted very strong growth, driven by double-digit organic sales growth in Craftsmen, Construction & Professional and very strong sales growth in Electronics & Industrials. Organic sales growth in the Western Europe region was strong thanks to a double-digit improvement in Craftsmen, Construction & Professional and a very strong increase in Automotive & Metals.

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