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Henkel expects flat sales, lower profit margin in FY'20

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Henkel expects flat sales, lower profit margin in FY'20

Henkel AG & Co. KGaA is expecting to see weak organic sales and a drop in adjusted EBIT margin in fiscal 2020 as it continues to predict difficult market conditions next year.

The company said its fiscal 2020 earnings will be negatively affected by the uncertain industrial environment, as well as higher investments in marketing, advertising and digitalization.

For the year ending Dec. 31, 2020, the German household products maker expects organic sales growth of flat to 2% and adjusted EBIT margin of around 15%, compared to the expected 16.2% in 2019. It forecasts good organic sales growth for its beauty care and laundry and home care businesses, but it noted that its adhesive technologies unit will presumably be impacted by uncertain industrial demand.

Henkel also expects adjusted EPS in 2020 to dip by a mid- to high-single-digit percentage at constant exchange rates compared to its projected EPS of about €5.45 in 2019.

Meanwhile, the company said it expects fiscal 2019 results to be in line with market expectations as well as its full-year outlook. It expects organic sales for the year to be approximately stable.

The maker of Schwarzkopf hair care products and Persil laundry detergent recorded profit drops throughout the year as sales struggled across its business segments.