Sunday , April 18 2021

Henkel slows down due to call effect

Dusseldorf – The problem is caused by currency fluctuations in the Henkel consumer goods group, which is heavily involved in emerging markets. The company was able to increase its sales slightly due to the weakness of the Turkish lira or Russian rubles in the third quarter only.

Sales were € 5 billion, up 1.1%. Organically, the exchange rate effect and adjustment of the receivables – Henkel increased by 2.7%. In terms of operating profit, Henkel continued to grow and CEO Hans Van Bylen worked to cut costs.

Pritt and Persil makers announced on Thursday that their adjusted operating profit (EBIT) increased 3.3% to € 926 million. Henkel therefore met market expectations. Düsseldorf has also confirmed its annual forecast.

"With negative currency effects and rising material prices, we were able to further increase sales, profitability and profitability in a challenging market environment," Van Bylen said. In particular, adhesive business, which accounts for nearly half of sales, increased organic sales by 3.8% in the third quarter.

But considering the acquisition and currency effects, the revenue is stuck here. In addition, the growth rate slowed down. For example, in the business that supplies the construction, electrical and automotive industries, Henkel reported an organic sales growth of 5.2% in the second quarter.

Henkel has been on record for many years and has relied heavily on global growth areas, along with adhesives, detergents and cosmetics. However, in many countries, national currencies are declining due to political and economic uncertainties such as Turkey.

This also corresponds to Henkel's balance sheet. In the first nine months, the development of the currency will cost the group more than € 900 million, Van Bylen predicted. It also dropped to some 15 billion 15 million euros during this period.

The Hamburg-based Beiersdorf Group, where Henkel competes primarily in cosmetics and adhesives, increased its sales by 2.3% for the first nine months of 2018. But Beiersdorf also created currency fluctuations in South America.

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