Henkel takes earnings hit from raw material prices
Reuters
Published Nov 08, 2021 06:39
Updated Nov 08, 2021 09:28
BERLIN (Reuters) - German consumer goods group Henkel trimmed its full-year earnings outlook on Monday saying it could not fully compensate for a spike in raw material prices, pushing its shares down more than 5%.
"Tight supply chains and rising raw material and transport costs are proving to be particularly challenging," Chief Executive Carsten Knobel said in a statement.
The maker of Persil detergent and Schwarzkopf hair care products said it still expects 2021 organic sales growth of 6-8% after third-quarter sales rose an organic 3.5% to 5.1 billion euros ($5.89 billion), in line with average analyst forecasts.
But it trimmed its forecast for 2021 adjusted earnings per preferred share at constant exchange rates to a percentage rise in the high single digits, from a previous range of high single-digits to mid-teens.
It said it now expects an adjusted operating earnings margin of around 13.5% of sales compared to a previous 13.5-14.5%.
Henkel's shares were down 4.8% at 0907 GMT, making it the biggest faller on the German blue-chip index.
The company expects the rising costs from raw materials to last into 2022, particularly the first half of the year, Knobel told analysts.
Henkel is raising prices to compensate and expects to continue to do so next year, finance chief Marco Swoboda said.
In addition to the impact of higher raw material prices, Henkel said it also expected changes in exchange rates to adversely affect earnings.
Henkel's adhesives unit, which supplies the automotive and electronics industries and accounts for almost half of sales, reported organic sales growth of 7%, even though it said the automotive and metals business saw a slight contraction.
The laundry and home care unit saw sales rise 2%, but the beauty care business reported a 3% fall, mainly due to a drop in the body care category, even as sales were strong for professional hair care products.
Get The App
Written By: Reuters
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.