The consumer goods group Henkel increased sales and profits in the first half of the year thanks to higher prices.

Henkel also made a good start to the third quarter, said Group CEO Carsten Knobel on Thursday. The manufacturer of Pritt and Persil is now more optimistic about 2023 and has raised its sales and profit forecast. Knobel now expects organic sales growth of 2.5 to 4.5 percent (previously: 1.0 to 3.0 percent), while the adjusted return on sales (EBIT margin) should be in the range of 11.0 to 12.5 percent (previously: 10.0 to 12.0 percent). Competitor Beiersdorf also raised its sales forecast at the beginning of August.

Knobel now also wants to tighten the price screw in the second half of the year. Henkel had already increased prices across all products by around 12.1 percent from January to June.

Price increases are boosting sales throughout the consumer goods industry. Beiersdorf is also more optimistic about the year thanks to flourishing business with its core brand Nivea. "The positive business development allows us to look to the coming months with confidence, even if we still have to expect headwinds in some areas," said CEO Vincent Warnery. The US giant Procter & Gamble was also able to push through higher prices for its products and is on course for growth.

However, experts warn that consumer goods companies will not be able to increase prices indefinitely. Sales are increasing as a result of higher prices, but this is also happening at the expense of the units sold, said Michael Ashley Schulman from Running Point Capital Advisors. This could lead to a loss of customers, who could turn to cheaper products. In times of high inflation, supermarket chains try to score points with consumers by selling their own brands at low prices. However, Knobel is optimistic that Henkel will be able to avoid this effect. The Group is expecting volume growth in the second half of the year, he said. Henkel shares rose slightly.

(Report by Matthias Inverardi, edited by Hans Seidenstücker. 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).)