Henkel has released its financial report for the third quarter of 2023. Group sales in the third quarter reached 5.44 billion euros ($5.8 billion), experiencing a nominal decrease of 9% compared to the same quarter of the previous year. This decline can be attributed to effects from acquisitions, divestments, and foreign exchange, which reduced sales by 5.5% and 6.3%, respectively. However, when adjusted for foreign exchange and acquisitions/divestments, organic sales increased by 2.8%. This growth was primarily driven by strong pricing in both business units, although volumes declined year on year.
The regions contributing to the organic sales growth were Europe, North America, Latin America, and IMEA (India, Middle East, and Africa). However, the Asia-Pacific region experienced negative organic sales development, mainly due to a strained market environment in China.
The Consumer Brands business unit, which includes various consumer products, recorded sales of 2.695 billion euros ($2.88 billion) in the third quarter, representing a nominal decrease of 7.6% compared to the previous year. However, when adjusted for foreign exchange and acquisitions/divestments, organic sales increased by 6.2 percent. This growth was driven by a double-digit increase in prices, although volumes decreased due to ongoing portfolio optimization measures.
The Hair business area achieved significant organic sales growth of 8.9% in the third quarter. The Consumer business within this area experienced double-digit growth, driven by the Hair Styling and Hair Care categories. The Professional business also saw strong organic sales growth.
The Other Consumer Businesses showed a slightly negative organic sales development of 0.6% in the third quarter, partly due to portfolio measures.
From a regional perspective, the Consumer Brands business unit achieved good organic sales growth in Europe, with the Hair business area being the primary driver. The North America region recorded very strong organic sales growth across all business areas. Latin America also experienced robust organic sales growth, mainly driven by the Hair business area. The IMEA region achieved double-digit organic sales growth, with contributions from both the Laundry & Home Care and Hair business areas. However, the Asia-Pacific region witnessed below-average organic sales development, primarily due to muted market development, particularly in China.
Considering the positive performance in the third quarter, Henkel has revised its outlook for fiscal year 2023. The company now expects organic sales growth in the range of 3.5% to 4.5% for the Henkel Group as a whole, with the Adhesive Technologies business unit anticipated to achieve growth in the range of 2.5% to 3.5%, and the Consumer Brands business unit expected to achieve growth in the range of 5.0 to 6.0 percent. These revised figures reflect an upward adjustment from the previous outlook.
