Henkel Shares Fall After It Warns on Raw-Material Costs, Supply-Chain Issues -- Update
12 Août 2021 - 10:47AM
Dow Jones News
By Ed Frankl
Shares in Henkel AG fell Thursday after it warned that
raw-material costs and supply-chain issues would weigh heavily on
the second half of the year, amid a mixed picture for full-year
guidance.
At 0810 GMT, shares in the German chemicals and consumer-goods
company were down 2.8% at EUR85.98.
Despite raising its 2021 organic-sales outlook, Henkel ticked
down its earnings before interest and taxes margin guidance to
13.5%-14.5% from 14.0%-15.0% previously, and kept its
earnings-per-share outlook.
Growth rates are likely to be significantly lower in the second
half of 2021, even after the recovery in industrial demand and a
continued economic recovery, the maker of Persil and Schwarzkopf
said.
"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.
Mr. Knobel said the company was engaged in extensive measures to
limit the impact on its business and profitability.
"There is still great uncertainty about how the pandemic will
develop and how consumption and industrial output will be
impacted," he said.
Henkel now says its 2021 organic sales growth will be between 6%
and 8%, from previous guidance of 4%-6% and earnings-per-share will
increase in the high single-digit to mid-teen-percentage range at
constant exchange rates.
The Dusseldorf-based company's industrial adhesive technologies
unit achieved strongest sales growth of more than 20% in 1H, as
industrial demand rebounded, though in Henkel's consumer-goods
business, sales were below the level of the prior-year period, the
company said.
Weaker margins seem most acute in Henkel's beauty & laundry
and home divisions, the company's "perennial drags," according to
analysts at Jefferies.
But overall, first-half earnings before interest and taxes rose
to 1.30 billion euros ($1.53 billion) from EUR1.09 billion a year
earlier.
Adjusted EBIT rose to EUR1.43 billion from EUR1.19 billion a
year earlier.
Sales for the six months to the end of June rose 11% to EUR9.93
billion. For the second quarter, organic sales growth was 15% at
EUR4.96 billion.
Despite continuing to be affected by the coronavirus, sales
exceeded pre-pandemic levels of 2019 when adjusted for currency
effects, Henkel said.
Write to Ed Frankl at edward.frankl@dowjones.com
(END) Dow Jones Newswires
August 12, 2021 04:40 ET (08:40 GMT)
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