German chemical and consumer goods company Henkel AG & Co. KGaA (HENOY.PK) announced on Tuesday that its first-half profit soared, driven by robust sales growth. The firm also reaffirmed its recently revised fiscal 2024 outlook.
Net income attributable to shareholders for the first half surged 82.4% to €1.03 billion, compared to €564 million in the same period last year. Earnings per preferred share also saw a notable increase, rising to €2.46 from €1.35. On an adjusted basis, earnings per preferred share climbed to €2.78 from €2.13 in the prior-year period.
Adjusted operating profit (EBIT) rose significantly by 28.4%, reaching €1.61 billion, up from €1.25 billion last year. The strong increase in gross margin was a key contributor to this rise.
The adjusted EBIT margin improved substantially, increasing by 340 basis points to 14.9%, compared to 11.5% a year ago.
Despite a persistently challenging market environment, Henkel achieved Group sales of €10.81 billion, a slight decline of 1% from €10.93 billion last year, mainly due to the divestment of its business activities in Russia.
However, for the second quarter, nominal sales grew by 3.4%, reaching €5.50 billion from €5.32 billion in the previous year. Organically, Henkel reported good sales growth of 2.9% for the first half and 2.8% for the second quarter.
In terms of outlook, Henkel revised its fiscal 2024 forecast upward in mid-July, buoyed by the strong performance in the first half. The company now expects adjusted earnings per preferred share to grow between 20% and 30% at constant exchange rates for the year.
The Group's adjusted EBIT margin is projected to fall between 13.5% and 14.5%. For the current fiscal year, Henkel continues to anticipate organic sales growth of 2.5% to 4.5%.
Looking ahead, Henkel is confident about reaching its mid- to long-term financial ambitions ahead of schedule. The company projects mid-term organic sales growth of 3% to 4%, an adjusted EBIT margin of around 16%, and adjusted earnings per preferred share growth in the mid- to high single-digit percentage range at constant exchange rates, including acquisitions.
