BERLIN (Reuters) – German consumer goods group Henkel raised its full-year sales outlook on Thursday as its business rebounded above the pre-crisis level of 2019 in the first half of this year, but expressed concern about rising prices for raw materials.
Henkel said it now expected 2021 sales to rise an organic 6-8%, up from a previous 4-6% forecast, and confirmed it expected earnings per preferred share to rise in the high single-digit to mid-teens percentage range.
However, it slightly lowered its forecast for its operating earnings margin to 13.5-14.5% of sales from a previous 14-15%.
“The exceptionally sharp rise in raw material prices and strained supply chains will weigh heavily on the economy in the further course of the year,” Chief Executive Carsten Knobel said in a statement.
Second-quarter sales rose an organic 15% to 4.96 billion euros ($5.82 billion), just shy of average analyst consensus for 4.98 billion.
The adhesives unit, which supplies the automotive and electronics industries and accounts for almost half of sales, recorded organic growth of 28.5%, helped by the recovery of the global economy across all regions and business areas.
Henkel, which makes Schwarzkopf hair care products, said its beauty care business saw sales jump 8.2% in the second quarter as hair salons reopened after coronavirus lockdowns.
Henkel, which has plans to divest or discontinue brands and categories worth around 500 million euros by the end of 2021, said it had already reached around 350 million euros of the target, mainly in the consumer business.
German rival Beiersdorf’s last week also reported that sales rose above pre-pandemic levels as demand for adhesives and its dermatological brands roared back, pushing its shares up.
($1 = 0.8516 euros)
(Reporting by Emma Thomasson; Editing by Tomasz Janowski and Caroline Copley)
