Henkel Full-Year Report 2023
Strong business performance in a challenging environment
Overall, Henkel delivered a strong business performance in a very challenging market environment. Group sales amounted to 21,514 million euros in fiscal 2023. This corresponds to very strong organic sales growth of 4.2 percent, driven by both Adhesive Technologies and Consumer Brands.
Even more importantly, we made very good progress in restoring our profitability. Adjusted’ operating profit (adjusted EBIT) increased by 10.2 percent to 2,556 million euros. At 11.9 percent, adjusted1 return on sales (adjusted EBIT margin) was significantly higher than in the previous year. This improvement was supported by strong pricing to further compensate for the elevated input costs. The savings from the Consumer Brands merger and continued portfolio measures also contributed substantially to this positive development. Adjusted1 earnings per share (EPS) rose by 20.0 percent at constant exchange rates.
At the same time, we put a strong emphasis on investing in growth, for example by stepping up marketing activities in the consumer business to further strengthen brand equity, and by promoting strong innovations in both business units.
Looking more closely at the performance of our business units, sales of Adhesive Technologies amounted to 10,790 million euros, reflecting strong organic sales growth of 3.2 percent. This was driven by very strong pricing. Volumes declined overall, in particular due to continued subdued demand in some key end markets. In the course of the year we saw sequential volume development improvement, turning again into positive development in the fourth quarter. Adjusted return on sales increased by 110 basis points compared to the previous year and reached 14.7 percent. The significant increase was achieved primarily through price increases, as well as measures to reduce costs and increase efficiency in order to continue to compensate for still high material prices.
Our Consumer Brands unit reached 10,565 million euros in sales and delivered very strong organic sales growth of 6.1 percent. This development was driven by a double-digit price increase, while volumes declined, also due to continued portfolio optimization measures. However, volume development showed a clear sequential improvement in the second half of the year. Adjusted return on sales reached 10.6 percent, an increase of 220 basis points compared to the previous year. This increase was supported by pricing measures to compen- sate for the continued high direct material costs, by ongoing measures to reduce costs and enhance production and supply chain efficiency, by savings generated from the creation of the integrated Consumer Brands business unit and by portfolio optimization measures.
