Henkel : Quarterly Statement Q3 2022 ‏ (193.51 KB)

Quarterly statement Q3 2022

July-September

Outlook for fiscal 2022 raised

Henkel successfully maintains growth momentum with double-digit sales increase in the third quarter

• Group reports organic sales growth of +11.3% to new all-time high of around
  6 billion euros, nominal +17.3%, with all three business units contributing:
• • Adhesive Technologies achieves double-digit organic sales growth of +16.8%, nominal +22.6%
  • Beauty Care reports positive organic sales growth of +0.9%, nominal +8.4%
  • Laundry & Home Care generates significant organic sales growth of +7.3%, nominal +13.2%
• Double-digitsales growth in emerging markets, very strong growth in mature markets
• Merger of Laundry & Home Care and Beauty Care into Consumer Brands ahead of plan
• Outlook for fiscal 2022: Raised guidance for sales and earnings based on continued strong business performance

Düsseldorf, November 8, 2022 - Henkel successfully maintained its growth momentum in the third quarter of fiscal 2022 and achieved Group sales of around 6 billion euros. This represents a new all-time high for quarterly sales and equates to double-digit organic growth of +11.3 percent, driven by double-digit price developments in all business units and across all regions. Volumes were down overall year on year due to the consumer businesses. In nominal terms, sales grew by +17.3 percent.

"In a market environment that remains extraordinarily challenging, we continued to drive our strategy execution and achieved clear double-digit sales growth. It is particularly gratifying that all business units and regions contributed to this strong business performance, which was driven, in particular, by the clear double-digit increase in sales achieved by the Adhesive Technologies business unit in the third quarter," said Henkel CEO Carsten Knobel.

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"The double-digit sales growth in the third quarter is further proof of the strength of our robust and balanced portfolio of successful brands and innovative technologies. In addition, we have consistently driven forward the implementation of our portfolio optimization measures, continued our strict cost management and worked on further efficiency improve- ments. Moreover, as we merge our two consumer businesses, we are ahead of our planned schedule in implementing the new structures. This strong performance is the achievement of our global team whose outstanding commitment is critical to the long-term success of Hen- kel in these challenging times."

Henkel's double-digit sales growth in the third quarter was driven predominantly by the Adhesive Technologies business unit. All business areas recorded significant or double-digit organic sales increases.

The Beauty Care business unit achieved positive organic sales growth in the third quarter, despite implementing the announced portfolio measures. Both the Professional and Consumer business areas contributed to this performance.

The Laundry & Home Care business unit generated significant organic sales growth, driven mainly by the Laundry Care business area.

In regional terms, sales increased organically in all regions in the third quarter. The Group's strong sales performance was mainly driven by the emerging markets, where all regions showed double-digit organic growth rates.

Looking ahead to the rest of fiscal 2022, Knobel commented: "We are operating in a business environment which is characterized by a high degree of volatility and uncertainty. In this overall inflationary environment with increased raw material and energy costs, we delivered a strong business performance in the first nine months. Against this background, we are raising our full year 2022 guidance for sales and earnings."

At Group level, Henkel now expects organic sales growth of +7.0 to +8.0 percent (previously: +5.5 to +7.5 percent) and adjusted return on sales (EBIT margin) in the range of 10.0 and 11.0 percent (previously: 9.0 and 11.0 percent). For adjusted earnings per preferred share (EPS) at constant exchange rates, Henkel now expects a decline in the range of -25 to -15 percent (previously: -35 and -15 percent).

Group sales performance

In the third quarter of 2022, Group sales increased nominally by +17.3 percent to 5,976 million euros. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales increased by +11.3 percent. At Group level, the increase was driven by price, while volume developments differed among the business units. Acquisitions and divestments reduced sales by -0.6percent. By contrast, foreign exchange effects had a positive impact of

+6.6 percent on sales.

In the first nine months of 2022, sales increased nominally by +12.5 percent to 16,889 million euros. In organic terms, Henkel generated a significant sales growth of +9.7 percent, which was driven by price, while volumes declined.

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Group sales performance1

in million euros		Q3/2022		1-9/2022
Sales		5,976		16,889
Change versus previous year		17.3%		12.5%
Foreign exchange2		6.6%		3.9%
Adjusted for foreign exchange		10.7%		8.6%
Acquisitions/divestments3		-0.6%		-1.1%
Organic		11.3%		9.7%
Of which price		14.7%		11.6%
Of which volume		-3.4%		-1.9%

1. All individual figures have been commercially rounded. Addition may result in deviations from the totals indicated.
2. Including the effects of the application of IAS 29 (Financial Reporting in Hyperinflationary Economies) for Turkey.
3. Including the effects of the announced exit from business activities in Russia and Belarus.

The emerging markets posted double-digit organic sales growth of +18.6 percent in the third quarter. The mature markets recorded organic sales growth of +5.6 percent. Sales in the Eastern Europe region increased by +25.2 percent. In the third quarter of 2022, we achieved organic sales growth of +13.2 percent in the Africa/Middle East region and

+22.5 percent in the Latin America region. Organic sales development in the Asia-Pacific region amounted to +13.0 percent. In the Western Europe region, we achieved strong organic sales growth of +3.9 percent. The North America region generated a significant organic sales increase of +7.1 percent.

Sales performance by region1

		Western		Eastern		Africa/		North		Latin		Asia-
		Europe		Europe		Middle		America		America		Pacific
in million euros						East
Sales² July-
September 2022	1,533	1,001	344	1,548	413	1,071
Sales² July-
September 2021	1,491	842	299	1,264	306	856
Change versus
previous year		2.9%		18.9%		15.2%		22.5%		34.9%		25.2%
Organic	3.9%	25.2%	13.2%	7.1%	22.5%	13.0%
Proportion of
Group
sales 2022	26%	17%	6%	26%	7%	18%
Proportion of
Group
sales 2021		29%		17%		6%		25%		6%		17%

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

Corporate Henkel

Group

65

5,976

35 5,092

• 17.3%
• 11.3%

1%	100%
1%	100%

In the first nine months of 2022, organic sales growth in the emerging markets amounted to +14.8 percent, while the mature markets recorded an increase of +5.5 percent.

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Sales performance by region1

		Western		Eastern		Africa/		North		Latin		Asia-
		Europe		Europe		Middle		America		America		Pacific
in million euros						East
Sales² January-
September 2022	4,593	2,668	976	4,421	1,146	2,910
Sales² January-
September 2021	4,520	2,362	919	3,737	888	2,498
Change versus
previous year		1.6%		12.9%		6.3%		18.3%		29.0%		16.5%
Organic	2.7%	23.8%	6.5%	8.5%	18.8%	8.5%
Proportion of
Group
sales 2022	27%	16%	6%	26%	7%	17%
Proportion of
Group
sales 2021		30%		16%		6%		25%		6%		17%

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

Corporate Henkel

Group

175

16,889

96 15,019

• 12.5%
• 9.7%

1%	100%
1%	100%

Sales performance Adhesive Technologies

Sales in the Adhesive Technologies business unit increased nominally by +22.6 percent to 2,995 million euros in the third quarter of 2022. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales grew by +16.8 percent. We achieved double-digit increases in prices, while volume performance was slightly positive. Acquisitions/divestments reduced sales by -1.9 percent, whereas foreign exchange effects had a positive effect of +7.7 percent.

In the first nine months of 2022, the Adhesive Technologies business unit increased sales nominally by +17.6 percent to 8,462 million euros. Organically, we achieved sales growth of +13.7 percent. Price development was consistently strong in all regions and business areas.

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Sales performance Adhesive Technologies1

in million euros		Q3/2022		1-9/2022
Sales		2,995		8,462
Proportion of Group sales		50%		50%
Change versus previous year		22.6%		17.6%
Foreign exchange2		7.7%		5.0%
Adjusted for foreign exchange		14.9%		12.6%
Acquisitions/divestments3		-1.9%		-1.1%
Organic		16.8%		13.7%
Of which price		15.8%		13.2%
Of which volume		1.0%		0.5%

1. All individual figures have been commercially rounded. Addition may result in deviations from the totals indicated.
2. Including the effects of the application of IAS 29 (Financial Reporting in Hyperinflationary Economies) for Turkey.
3. Including the effects of the announced exit from business activities in Russia and Belarus.

The Adhesive Technologies business unit achieved double-digit organic sales growth in the third quarter, which was driven by all business areas. Year on year, organic sales growth in Automotive & Metals was in the double digits. The global shortage of semiconductors in the automotive sector had less of an impact on business performance than in the previous quarters. The Packaging & Consumer Goods business area continued its strong growth momentum and also achieved double-digit sales growth in all businesses, with the Consumer Goods business recording the strongest increase. The Electronics & Industrials business area generated significant organic sales growth, driven in particular by double-digit growth in In- dustrials. Organic sales growth in the Craftsmen, Construction & Professional business area was significant compared to the third quarter of the prior year. The General Manufacturing & Maintenance and Consumer & Craftsmen businesses achieved double-digit and significant growth respectively, while the Construction business recorded positive organic sales growth.

From a regional perspective, the sales growth generated by Adhesive Technologies in the emerging markets compared to the third quarter of the prior year was in the double digits. This performance was driven by double-digit increases in all regions, with particular contributions from the Packaging & Consumer Goods and Automotive & Metal business areas.

The mature markets also achieved double-digit organic sales growth in all regions. Within the regions of North America and Western Europe, the Automotive & Metals business area recorded the strongest growth. In the mature markets of the Asia-Pacific region, double-digit growth was driven in particular by the Electronics & Industrial and Packaging & Consumer Goods business areas.

Sales performance Beauty Care

In the third quarter of 2022, sales in the Beauty Care business unit increased nominally by +8.4 percent to 1,013 million euros. Organically (i.e. adjusted for foreign exchange and acquisitions/divestments), sales were up +0.9 percent compared to the prior-year level. Volumes declined, whereas the business unit recorded double-digit price increases. Foreign exchange effects increased sales by +5.9 percent, and acquisitions/divestments by a further +1.6 percent.

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