Henkel gives soft growth guidance, as weak North America weighs

Germany’s Henkel gave a soft guidance for 2025 organic sales growth on Tuesday, projecting a slower start to the year due to tough industrial environment and muted consumer sentiment especially in North America.

Preferred shares of the Persil and Schwarzkopf owner fell 9% to the bottom of Europe’s benchmark STOXX 600 index as of 1014 GMT.

Henkel, a rival to market leaders L’Oreal and Procter & Gamble, has been grappling with subdued consumer spending on personal and home care products and weakness in industrial sectors such as automotive and electronics.

Annual sales in North America fell in both its segments, resulting in an organic decline of 1.1%, as challenging industrial markets dragged the adhesives business while its focus on portfolio optimization weighed on consumer brands, CFO Marco Swoboda said in a call with investors.
North America made up 28% of its sales last year.

The Loctite glue maker said it expected organic sales to grow between 1.5% and 3.5% in 2025, after 2.6% growth last year missed analysts’ consensus.

After a slow start, sales growth should accelerate in the course of the year and lead to a stronger second half, it added.

At 2.5%, the midpoint of the outlook range is below the 3% growth estimated by analysts polled by Vara Research.

Henkel expects prices for direct materials to rise in a low to mid-single-digit percentage in 2025, while currency exchange effect will be neutral or negative in low single digits, it said.

It also forecast an annual operating margin of 14% to 15.5%, compared to 14.3% last year.
A potential rise in German defence spending could positively affect Henkel, which supplies adhesives to the aerospace, industrial and automotive segments, CEO Carsten Knobel said during the call.

Germany, however, contributes only marginally to the company’s overall sales, most of which are made in international markets, Knobel added.

Henkel’s shares slumped despite a 10% hike to the annual dividend and an announced share buyback of up to 1 billion euros ($1.1 billion).