Household products giant Henkel said that its Laundry & Home Care business recorded 'significant growth' in the third quarter of its financial year, as the group posted organic sales growth of 3.9% fo the period.
Despite this, the Persil maker is expecting full-year sales to be down, due to the weaker performance of its Beauty Care business during the coronavirus pandemic.
“Despite the continued challenging economic environment as a result of the corona crisis, based on preliminary sales figures, Henkel delivered a strong organic sales growth of +3.9% in the third quarter," commented Carsten Knobel, Henkel chief executive. "Sales reached around €5 billion and all business units contributed to the good performance."
Sales Performance
Based on preliminary figures, the group's Laundry & Home Care business posted 7.7% growth in the third quarter, driven by strong demand, the group said.
Its Beauty Care arm saw sales up 4.3%, with its Hair Salon business also seeing a rise, although this was still below the third-quarter performance recorded in the previous year.
Its Adhesive Technology arm, meanwhile, posted organic sales growth of 1.3% in the third quarter, with a recovery in demand 'across all business areas', the group said.
"The organic sales development in the third quarter reflects our robust, diversified portfolio with successful brands and innovative technologies for our customers in the industrial and consumer goods business," said Knobel.
"We are particularly pleased that all our business units showed a positive development. This was partly due to catch-up effects from the second quarter, which was heavily burdened by the corona pandemic.
"We expect to feel the negative effects of the pandemic in the fourth quarter as well, but in our forecast for the year we are not assuming a further extensive lockdown, as we saw in many countries especially in the second quarter."
Over the first nine months of the year, Henkel reported total sales of around €14.5 billion, which translates to an overall decline in organic sales of 2.1%.
Its Adhesive Technology business unit reported a 6.8% decline over the first nine months, Beauty Care was down by 4.2%, and its Laundry & Home Care business saw organic sales rise 5.8% over the nine-month period.
Full-Year Outlook
The group expects organic sales growth for the full year to be down between 1% and 2%, based on the assumption that there will not be a repeat of the far-reaching lockdowns that were reported in the second quarter.
"Despite strict cost control, the earnings development in the full year will be relatively more affected than the sales side, due to the significant decline in demand in the industrial business and the Hair Salon business, as well as higher growth investments in marketing, advertising, digitalisation and IT," said Knobel.
© 2020 European Supermarket Magazine – your source for the latest retail news. Article by Stephen Wynne-Jones. Click subscribe to sign up to ESM: The European Supermarket Magazine
