Henkel’s stock plunged 8% after announcing it expected lower profit margins this year as raw material prices rose due to the war in Ukraine.
The German group of consumer goods now expects that the margin of adjusted profits before taxes and interest will be 9% -11% from the previous estimate of 11.5% -13.5%.
Adjusted earnings per share for the full year are now expected to fall 15% -35%, from the previous estimate of a rise of 5% to a fall of 15%.
The company now expects additional raw material costs for the whole year at around 2 billion euros, almost double what it expected at the end of January.
However, it announced that it expects higher sales growth than previously targeted, as first-quarter sales increased due to higher prices and a small drop in volumes.
According to preliminary data, the company’s sales increased by 7.1% to 5.3 billion euros in the quarter.
Henkel is now aiming for 3.5% -5.5% organic growth for the year 2022, up from a previous estimate of 2% -4%.
Source: Capital
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