After a leap in sales in 2022, the consumer goods group Henkel expects a significantly slower pace of growth in the current year.

"Henkel assumes that industrial demand will be more subdued than in the previous year and that growth momentum in consumer demand will slow down," the Düsseldorf-based manufacturer of Pritt and Persil admitted on Tuesday. Henkel expects organic sales growth of between 1.0 and 3.0 percent for 2023 - in 2022, the Group had still achieved 8.8 percent with the help of price increases. The adjusted return on sales (adjusted EBIT margin) is expected to be in the range of 10.0 to 12.0 percent. In 2022, it had shrunk significantly to 10.4% (previous year: 13.4%). Less than a year after the announcement, Henkel also held out the prospect of completing its withdrawal from Russia.

"We have succeeded in partially offsetting the dramatic rise in raw material and logistics costs through higher prices and continued efficiency improvements," said Henkel CEO Carsten Knobel. Last year, sales climbed to 22.39 billion euros - corresponding to organic growth of 8.8 percent. However, high material prices and logistics costs as well as rising energy prices put pressure on profits - the adjusted operating result (adjusted EBIT) fell by 13.7 percent to 2.3 billion euros. The bottom line was a profit attributable to Henkel shareholders of 1.2 (1.6) billion euros. Shareholders are to receive an unchanged dividend of 1.85 euros per preferred share and 1.83 euros per ordinary share for 2022.

Thanks to price increases and savings, competitor Beiersdorf had absorbed the higher costs in 2022 and thus achieved one of the best financial years in its recent history. With sales increasing organically by a good ten percent to 8.8 billion euros, the Nivea manufacturer's operating profit before special items jumped by almost a fifth to around 1.2 billion euros in 2022. For 2023, the Hamburg-based company is aiming for a return slightly above that of the previous year.

Henkel is starting the new year with a new structure. Group CEO Knobel has merged the struggling cosmetics business with the detergents division. He wants to use the new division to make Henkel more powerful - but also to cut costs.

"With the new division, Henkel is creating a multi-category platform for future growth with sales of around 11 billion euros in 2022," explained the Group. In the medium term, the new structure is expected to generate gross savings - before reinvestments - of around 500 million euros.

THE LONG GOODBYE - HENKEL WANTS TO TURN ITS BACK ON RUSSIA

Henkel announced its withdrawal from Russia last April. However, this has still not been completed. Knobel recently held out the prospect of selling the Russian business to a group of Russian investors in the first quarter. It is assumed that the business activities in Russia will be sold by the end of the first quarter of 2023, it has now been announced. Henkel has been active in Russia for more than 30 years and most recently operated eleven production sites there. The Group has spun off its Russian activities, which operate under the name Lab Industries.

(Report by Matthias Inverardi; edited by Ralf Banser. If you have any questions, please contact our editorial team at berlin.newsroom@thomsonreuters.com (for politics and the economy) or frankfurt.newsroom@thomsonreuters.com (for companies and markets).)