Henkel reported robust organic sales growth and a significant earnings increase for the first half of 2024, despite facing a challenging economic environment. The company continued its profitable growth trajectory, with CEO Carsten Knobel stating, “Our strong performance in the first half demonstrates that our strategic focus on purposeful growth is yielding concrete results.”
Knobel highlighted that both business units contributed to the growth, with the successful merger of the consumer businesses and strategic initiatives positively impacting sales, gross margin, and earnings. The Adhesive Technologies business also saw benefits from a closer alignment with customer needs, which has driven Henkel’s positive development.
Additionally, the company reported strong free cash flow, exceeding the already high levels from the first half of 2023, enabling further investments in brands, technologies, and innovations. Henkel also continues to prioritize sustainability and digitalization efforts to strengthen its competitive position.
Following the robust performance in the first half of the year, Henkel raised its earnings outlook for fiscal 2024 in mid-July. “We are confident about the remainder of the year and have adjusted our mid- to long-term financial targets accordingly. We believe we are on track for further profitable growth,” Knobel added.
Updated Outlook for Fiscal 2024
Henkel revised its financial outlook for 2024 on July 17, raising its earnings expectations due to higher profit projections in the Consumer Brands business unit, despite increased marketing investments to support innovations. The company also anticipates higher direct material costs in the second half of the year. Henkel now expects Group-level organic sales growth between 2.5% and 4.5% for 2024, with the Adhesive Technologies business unit expected to grow organically by 2.0% to 4.0%, and the Consumer Brands unit by 3.0% to 5.0%. The adjusted return on sales (EBIT margin) at the Group level is now forecasted to be between 13.5% and 14.5%, up from the previous estimate of 13.0% to 14.0%.
Financial Performance in First Half of 2024
Henkel reported Group sales of €10,813 million for the first half of 2024, a nominal decline of 1.0%. However, the company achieved nominal sales growth in the second quarter, with sales of €5,496 million, marking a 3.4% increase. Organic sales growth for the first half was 2.9%. The Adhesive Technologies business unit posted a 2.0% organic sales increase, driven by strong performance in the Mobility & Electronics and Craftsmen, Construction & Professional sectors. The Consumer Brands unit saw a 4.3% organic sales rise, supported by positive price developments across all business areas.
Regionally, Henkel experienced mixed results. The Europe region saw 1.8% organic sales growth, while the IMEA region achieved a substantial 21.0% increase. North America recorded a slight decline of 1.6%, and Latin America remained flat. The Asia/Pacific region posted 5.5% organic sales growth.
Business Unit Performance
The Adhesive Technologies business generated sales of €5,475 million in the first half of 2024, remaining stable compared to the previous year. Organic sales growth was driven by a 0.2% price increase and a 1.8% volume rise, with notable contributions from the Mobility & Electronics sector. The Consumer Brands unit generated sales of €5,266 million, with a 4.3% organic increase, driven primarily by a 5.1% price component, though volumes declined slightly by 0.9% due to ongoing portfolio optimization.
Strategic Initiatives
Henkel continues to push forward with its growth agenda, focusing on integrating its Consumer Brands unit following the merger of its Laundry & Home Care and Beauty Care businesses. The integration is expected to yield savings of €525 million by the end of 2026.
Henkel’s strong performance in the first half of 2024, supported by strategic initiatives and a favorable market environment, positions the company for continued growth in the remainder of the year.
