Henkel (HEN) Q1 2025 earnings summary

Executive summary

• Q1 2025 organic sales declined 1.0%, with nominal sales at €5.2 billion, reflecting challenging macroeconomic and geopolitical conditions, especially in North America.

• Adhesive Technologies achieved 1.1% organic sales growth, driven by Mobility & Electronics, while Consumer Brands declined 3.5% due to muted sentiment, destocking, and supply chain issues.

• The divestment of the Retailer Brands business in North America was completed ahead of schedule, finalizing the Consumer Brands portfolio optimization.

• Margins remained strong, with gross and EBIT margins improving, and the company reaffirmed its midterm ambition for 3%-4% organic sales growth and mid-teens adjusted EBIT margin.

• 2025 outlook remains unchanged despite increased macroeconomic and geopolitical volatility.

Financial highlights

• Group sales for Q1 2025 were €5.2 billion, down 1.4% year-over-year; organic sales declined 1.0%.

• Adhesive Technologies sales: €2.7 billion (+1.4% nominal, +1.1% organic); Consumer Brands: €2.5 billion (-4.6% nominal, -3.5% organic).

• Pricing contributed +1.4% to group sales, while volumes were negative; acquisitions/divestments added 1.1%, FX was a 1.4% headwind.

• Gross margin in Consumer Brands improved by 1,100 basis points over two years; adjusted EBIT margin increased by 520 basis points.

• No substantial changes in net assets or financial position compared to December 31, 2024.

Outlook and guidance

• 2025 group organic sales growth expected at 1.5%-3.5%; Adhesive Technologies at 2%-4%, Consumer Brands at 1%-3%.

• Adjusted EBIT margin guidance: group 14%-15.5%, Adhesive Technologies 16%-17.5%, Consumer Brands 13.5%-15%.

• Adjusted EPS growth at constant currencies expected in the low- to high-single-digit percentage range.

• Restructuring expenses of €200–250 million and capex of €650–750 million expected.

• Top-line acceleration and stronger second half anticipated, driven by innovation launches and resolved supply chain issues.