Henkel (HEN) Q3 2024 earnings summary

Executive summary

• Achieved strong organic sales growth of 3.3% at group level in Q3 2024, driven by both Adhesive Technologies (3.7%) and Consumer Brands (2.7%), with positive price and volume trends despite a challenging market environment.

• Pricing remained resilient, especially in Consumer Brands, and both price and volume contributed to growth.

• Gross and EBIT margins remained strong, enabling increased investments in brands, innovation, and sustainability initiatives.

• Portfolio optimization in Consumer Brands progressed, with discontinuations expected to conclude by year-end.

• Full-year guidance reiterated, with confidence in reaching the upper half of adjusted EBIT margin and EPS growth ranges.

Financial highlights

• Q3 2024 nominal sales reached €5.5 billion, up 1% year-over-year; organic growth was 3.3% after adjusting for FX and M&A.

• Acquisitions contributed 1.2% to sales, while currency effects were a -3.6% headwind.

• Regional organic sales growth: IMEA 19.6%, Asia-Pacific 6.4%, Latin America 6.1%, Europe 0.7%, North America -1.7%.

• For the first nine months, sales totaled €16.3 billion, down 0.4% nominally but up 3.0% organically year-over-year.

• Adjusted EBIT margin guidance for the group remains at 13.5%-14.5%; adhesives at 16%-17%, Consumer Brands at 13%-14%.

Outlook and guidance

• Full-year organic sales growth expected at 2.5%-4.5% for the group, 2%-4% for Adhesive Technologies, and 3%-5% for Consumer Brands.

• Adjusted EPS growth at constant currencies expected in the upper half of the +20% to +30% range.

• Volume development in both businesses expected to improve sequentially in Q4.

• Portfolio discontinuations in Consumer Brands to conclude by year-end, supporting positive volume outlook for 2025.

• Profitability in H2 expected to be lower than H1 due to higher material costs and increased marketing, but above prior year H2.