Finance
Henkel bets on innovation as profits rise
Published by Global Banking and Finance Review
Posted on August 7, 2025
2 min readLast updated: January 22, 2026
Global Banking and Finance Review
Company
Published by Global Banking and Finance Review
Posted on August 7, 2025
2 min readLast updated: January 22, 2026
Henkel leverages innovation to boost profits and adjust sales forecasts amid rising costs and economic uncertainty.
By Bartosz Dabrowski and Matthias Inverardi
(Reuters) -Germany's Henkel on Thursday said it was betting on innovative products that help the consumer goods and adhesives maker save costs, as it raised the lower end of its adjusted return on sales forecast range.
The maker of Persil laundry detergent and Schwarzkopf hair products said the strategy was helping it raise prices at a time when consumers are increasingly watching their spending amid increasing global economic uncertainty.
"Better contributions due to innovations are putting us in a position to charge higher prices in some cases," CEO Carsten Knobel said on a call with reporters.
Knobel said the company's hair business along with its electronics and industrial business were growing at the fastest pace.
"It is precisely these things that enable us to achieve significantly higher gross margins," he said.
Henkel merged its beauty care, laundry, and home care brands under one consumer brands division in 2022.
Knobel said the company is well on track to reach or even exceed the savings of 525 million euros targeted at its consumer brands unit by the end of 2025.
Henkel forecast full-year adjusted earnings before interest and tax (EBIT) margin in the 14.5-15.5% range, up from 14.0-15.5% previously.
However, it said that the challenging macroeconomic environment was hampering organic growth. It expects its organic sales to grow between 1% and 2% this year, having previously forecast organic sales growth between 1.5% and 3.5%.
Henkel said its updated outlook continues to take into account the currently foreseeable effects of the global tariff agreements.
European consumer goods companies are revamping their businesses to try to cushion the blow of rising costs, uncertainty over U.S. trade policy, and waning consumer confidence.
The group's adjusted EBIT margin in the first half came in at 15.5%, up from 14.9% a year ago, and beating the analysts' average estimate of 15.1% in a Vara Research poll.
Henkel shares were up 2.7% as of 1005 GMT.
(Reporting by Matthias Inverardi and Bartosz Dabrowski, editing by Milla Nissi-Prussak and Matt Scuffham)
Henkel is focusing on innovative products that help save costs, allowing the company to raise prices despite consumers being cautious with spending.
Henkel forecasts its full-year adjusted EBIT margin to be in the range of 14.5-15.5%, an increase from the previous forecast of 14.0-15.5%.
The challenging macroeconomic environment is hampering Henkel's organic growth, with expectations for organic sales growth between 1% and 2% this year.
Henkel's hair business, along with its electronics and industrial sectors, are growing at the fastest pace, contributing to higher gross margins.
Henkel is on track to reach or exceed its target of 525 million euros in savings for its consumer brands unit by the end of 2025.
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