German consumer goods group Henkel, the maker of Persil detergent, confirmed on Thursday a forecast it made in December for limited sales growth in 2020 and a decline in profitability as it invests to try to revive its business.
Henkel already said in December it expected profit margins to fall this year as its adhesives business comes under pressure from waning industrial demand. On Thursday, it highlighted uncertainty prevailing in the industrial environment.
The group confirmed it expects organic sales growth of 0-2% in 2020 and a fall in its adjusted earnings before interest and tax (EBIT) margin to about 15% next year, from 16% in 2019.
Carsten Knobel, the former finance chief who took over as chief executive from Hans Van Bylen in January after a string of poor results, is due to present a new strategy later on Thursday.
'Increase Investment'
“At the beginning of 2019, we announced our plan to increase growth investments by around €300 million annually from 2019 onward to strengthen our brands, technologies and innovations as well as to accelerate the digital transformation of Henkel,” Knobel commented.
“We also continued to invest in the expansion and upgrading of manufacturing sites and innovation centres. In addition, we strengthened our different businesses through targeted acquisitions and partnerships with a total volume of almost 600 million euros.”
