German consumer goods company, Henkel, is bracing itself for a potential slowdown in sales growth in 2023. Despite a significant 8.8% increase in organic sales in 2022, the company predicts a decline in both industrial and consumer demand this year. Nonetheless, Henkel is determined to sustain its upward trajectory by forecasting a modest organic sales growth of 1% to 3%, building upon the 22.39 billion euros ($23.91 billion) it achieved in 2022.

However, the positive sales figures are somewhat overshadowed by a notable 13.7% decrease in adjusted earnings before interest and tax (EBIT) to 2.3 billion euros in 2022. This drop can be attributed to rising material costs, heightened logistics expenses, and increasing energy prices.

Henkel, recognized for its popular brands such as Persil detergents and Schwarzkopf haircare products, intends to bolster its efficiency in the coming year. The company aims to elevate its adjusted return on sales from 8.1% in 2022 to a range of 10-12%. Furthermore, Henkel plans to propose an unchanged dividend of 1.85 euros per preferred share and 1.83 euros per ordinary share for the year 2022.

To stimulate growth and reduce costs, Chief Executive Carsten Knobel merged Henkel’s struggling cosmetics business with its detergents division in the previous year. This consolidation aimed to streamline operations and exploit synergies between the two sectors.

Despite anticipated slower demand posing challenges for Henkel, the company remains resolute in optimizing its operations and sustaining profitability amidst market fluctuations. With its well-established brands and unwavering commitment to efficiency, Henkel is well-positioned to navigate the evolving consumer landscape successfully.

Useful links:
1. Henkel Business Divisions
2. Henkel Brands and Businesses