• Organic Sales Growth: 3.3% at the group level; Adhesive technologies grew by 3.7%, and consumer brands by 2.7%.

• Revenue: Approximately EUR 5.5 billion, around 1% above the prior year quarter.

• Adjusted EBIT Margin Guidance: 13.5% to 14.5% for the group; 16% to 17% for adhesives; 13% to 14% for consumer brands.

• Adjusted EPS Growth Guidance: Expected to end the year in the upper half of the range from +20% to +30% at constant currencies.

• Gross Margin: Continued strong performance in Q3, supporting increased investments in brands and businesses.

• Regional Performance: Europe achieved 0.7% organic growth; Latin America 6.1%; India, Middle East, Africa nearly 20%; Asia Pacific 6.4%.

• Acquisitions and Divestments Impact: Increased sales by 1.2% on a net basis.

• FX Effects: Negative impact of 3.6% on sales.

• Hair Business Performance: High single-digit organic sales increase for the fifth consecutive quarter.

• Mobility & Electronics Growth: 3.9% organic sales growth, driven by double-digit growth in electronics.

• Packaging & Consumer Goods Growth: 2.7% organic sales growth, supported by strong volume development.

• Craftsmen, Construction & Professional Growth: 4.5% organic sales increase.

• Laundry & Home Care Growth: 0.9% organic sales growth, driven by significant growth in home care.

• Hair Business Growth: Almost 7% organic sales growth, supported by strong performance in Styling.

• Warning! GuruFocus has detected 6 Warning Signs with HELKF.

Release Date: November 06, 2024

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Henkel AG & Co KGaA (HELKF) reported strong organic sales growth of 3.3% at the group level, with adhesive technologies growing by 3.7% and consumer brands by 2.7%.

• The company achieved continued strong gross and EBIT margins in Q3, allowing for increased investment in brands and businesses.

• Henkel's adhesive technologies business outperformed relevant markets, driven by customer-centric innovations and sustainability-focused solutions.

• The consumer brands segment saw high single-digit organic sales growth in the hair business for the fifth consecutive quarter, supported by volume growth and market share gains.

• Henkel reiterated its full-year guidance and expressed confidence in reaching the upper half of the ranges for both adjusted EBIT margin and adjusted EPS growth.

Negative Points

• The consumer brands segment experienced a volume decline, with volumes remaining below the prior year quarter, impacted by ongoing portfolio optimization measures.

• North America showed a decline in both business units, reflecting a challenging market environment and the impact of portfolio optimization in consumer brands.

• The company faced headwinds from foreign exchange effects, which negatively impacted sales by 3.6%.

• The automotive segment within adhesive technologies showed signs of weakness, reflecting a slowdown in market demand.

• Henkel anticipates lower profitability levels in the second half of the year compared to the first half, due to increasing direct material costs and higher marketing investments.