May 12, 2020
Henkel launches more hygiene products during pandemic
May 12, 2020
German consumer goods group Henkel said on Monday it is launching more hygiene-related products in response to the coronavirus pandemic after it reported a big jump in first-quarter sales of detergents, soap and household cleaners.
Henkel, which makes Dial soap and Persil detergent, expects demand for such products to persist even as the crisis ebbs, Carsten Knobel, Henkel’s former finance chief who took over as chief executive in January, told analysts.
Henkel has already ramped up its supply of soap by 30% and started selling new products such as Persil Hygiene in Mexico, anti-bacterial dishwasher fluid in Egypt and Turkey, and hand sanitiser under its Pril brand, Knobel said.
However, the company expects a tough second-quarter as its adhesives unit continues to be hard hit by a contraction in the automotive industry and its beauty care business suffers from the closure of hair salons around the world.
Henkel said group first-quarter sales fell 0.8% to 4.9 billion euros ($5.31 billion), just short of average analyst forecasts for 4.96 billion, and a decline of 0.9% after stripping out the effect of currencies and acquisitions.
Henkel shares were down 0.28% at 0811 GMT.
Organic sales at the laundry and home care business jumped 5.5%, helped by products such as Pril washing-up liquid and Persil, which competes with Procter & Gamble’s Tide.
Procter & Gamble last month reported its best U.S. sales growth in decades thanks to consumers stockpiling cleaning essentials in lockdowns against the coronavirus.
Henkel said that sales of adhesives fell 4.1%, with finance chief Marco Swoboda warning of a worse second quarter for the unit as automotive production was only gradually starting up again around the world.
Beauty care sales fell 3.9%, with a good performance in the body care category, particularly the Dial soap brand, partially offsetting the effects of salon closures.
Knobel noted that although salons were gradually reopening, they were operating at lower capacity than before the crisis due to social distancing and hygiene rules, with Henkel offering them disinfectant products.
Henkel’s beauty unit had been struggling before the coronavirus crisis took hold and the group had announced plans sell or discontinue some brands in its consumer businesses by 2021 while looking for acquisition opportunities.
Henkel is sticking to those divestment plans although it is adjusting the process given the current market volatility to make sure it maximises the value of businesses, Swoboda said.
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