Henkel 1H2020: Shuttered salons sent sales down 6 percent

Henkel 1H2020: Shuttered salons sent sales down 6 percent

THE WHAT? Henkel recorded sales of €9,485 million In the first half of 2020, some 6 percent below 2019 levels. Operating profit also plummeted 27.5 percent, hitting €1,191 million with an EBIT margin of 12.6 percent, some 370 basis points below the prior-year period.

THE DETAILS The German manufacturer of Schwarzkopf said that sales in its Beauty Care division were significantly impacted by widespread salon closures, although its Laundry & Home Care showed strong development thanks to increased hygiene awareness.

Sales were down across all regions except Eastern Europe and Africa/Middle East, which registered organic growth of 3.1 percent and 4.2 percent respectively.

Henkel remained upbeat, however, reiterating that the growth agenda it presented back in March would ‘help to win the 20s for Henkel’.

THE WHY? Henkel CEO, Carsten Knobel, explains, “In the first half of 2020, Henkel was substantially impacted by the significant global economic downturn and the sharp decline in demand across many industries… The breadth of our portfolio in the consumer and industrial businesses helped us to balance the impact of the crisis on our overall sales and earnings performance: In the first six months of 2020, we achieved sales of around €9.5 billion, an operating profit of €1.2 billion and 12.6 percent EBIT margin. We paid out the full dividend for 2019 to shareholders, and we were able to generate a very strong free cash flow and further improve our net financial position. During the crisis we did not introduce short-time working, apply for government aid or reduce our workforce due to the pandemic. In summary, we delivered an overall robust performance in an exceptionally challenging environment.”

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