Henkel reports 7.8 percent growth for FY2021; details purposeful growth agenda

THE WHAT? Henkel has reported a 7.8 percent organic group sales growth for FY2021, to around 20.1 billion euros.

THE DETAILS The company saw a particularly positive effect thanks to the ‘significant recovery’ in demand in industrial and Hair Salon businesses.

Looking at its consumer goods business, demand in many categories returned to more normal patterns compared to the previous year (2020), when demand was particularly strong for hygiene and cleaning products as well as hair colorants and less so for styling products.

Henkel highlighted that the impact of significantly increasing raw material and logistics prices as well as currency effects weighed on profitability in fiscal 2021.

Geographically, the emerging markets achieved double-digit organic sales growth of 15.4 percent, while the businesses in the mature markets recorded a good organic sales performance of 2.5 percent.

The Beauty Care business unit saw a 2 percent sales decline in FY2021, to 3,678 million euros, while organically, sales increased by 1.4 percent.

According to Henkel, “While the significant recovery in the hair salon business had a positive effect, the consumer business was impacted by a normalization of demand in the body care category and recorded a declining development.”

THE WHY? Henkel was able to more than offset the impact on its earnings thanks to higher sales volumes, successful price increases, active cost management and ongoing structural adjustments.

The company drilled down on its Purposeful Growth agenda, which saw it announce plans to merge the units Laundry & Home Care and Beauty Care into one new business unit: Henkel Consumer Brands.

Henkel says, “With the new business unit, Henkel will build one multi-category platform for the complete consumer business under one roof, including many iconic brands such as Persil and Schwarzkopf as well as the Hair Professional business. The new business unit will have around 10 billion euros in sales. The merger is designed to drive growth and profitability for the consumer business and the company.”