--- title: "Henkel AG and Co. Earnings Call Signals Growth Momentum" type: "News" locale: "en" url: "https://longbridge.com/en/news/295159958.md" description: "Henkel AG reported Q2 earnings with strong organic growth acceleration, reaching 7.4% in the quarter, driven by price increases and volume gains. Despite a 0.5% nominal sales decline due to currency headwinds, adjusted EBIT margin improved to 15.7%. Management highlighted an accelerated €5bn M&A strategy and solid cash flow generation but cautioned that raw material pressures may squeeze H2 margins." datetime: "2026-08-07T00:23:15.000Z" locales: - [zh-CN](https://longbridge.com/zh-CN/news/295159958.md) - [en](https://longbridge.com/en/news/295159958.md) - [zh-HK](https://longbridge.com/zh-HK/news/295159958.md) generator: "portal-rs" --- # Henkel AG and Co. Earnings Call Signals Growth Momentum Henkel AG and CO. ((HENKY)) has held its Q2 earnings call. Read on for the main highlights of the call. ### Claim 55% Off TipRanks - Unlock powerful investing tools with TipRanks Premium to make smarter, more confident investment decisions - Subscribe to TipRanks Smart Investor Newsletter, and discover new investing opportunities with data-backed stock picks Henkel AG and Co. struck an upbeat tone in its latest earnings call, emphasizing strong organic growth, margin resilience and rising earnings per share despite currency headwinds and cost inflation. Management highlighted accelerating momentum in the second quarter and a stepped‑up M&A strategy, while cautioning that raw‑material pressures and macro volatility could squeeze margins in the second half. ## Solid Group Organic Growth and Q2 Acceleration Henkel reported group organic net sales growth of 3.2% in the first half of 2026, with a clear acceleration in the second quarter where organic growth reached about 7.4%. Both price increases of 1.1% and a 2.1% volume contribution supported the performance, signaling demand strength beyond mere pricing. ## Strong Adhesive Technologies Performance Adhesive Technologies remained the engine of the group, generating €5.5bn in sales with 4.5% organic growth in the first half. The segment’s adjusted EBIT margin reached 17.7%, driven by 1.8% pricing and 2.8% volume gains, with Mobility & Electronics up 7.8% and Packaging & Consumer Goods up 4.7% organically. ## Resilient Consumer Brands Results Consumer Brands delivered €4.7bn in sales and 1.7% organic growth, while sustaining a solid 15.3% adjusted EBIT margin. Haircare posted more than 4% organic growth, with Hair at 4.2%, and key Laundry labels such as Persil and Perwoll together achieved around 5% organic sales growth. ## Improved Profitability and EPS Growth At group level, adjusted EBIT edged up to €1.6bn, corresponding to a 15.7% adjusted EBIT margin, confirming improved profitability. Adjusted earnings per preferred share climbed to €2.86, a 7% increase at constant currencies, with adjusted net income after minorities around €1.2bn. ## Positive Cash Generation Free cash flow reached about €600m in the first half, roughly €130m higher than a year earlier. Management attributed the improvement mainly to stronger operating cash flow, underscoring the cash generative nature of the business despite investment and cost pressures. ## Accelerated M&A Strategy with Immediate Scale Henkel detailed an accelerated M&A program totaling about €5bn across both business units to boost scale and capabilities. Four of five announced deals have closed, including OLAPLEX, ATP Adhesive Systems, Not Your Mother’s and Wetherby Laroc, with Stahl expected in the second half and pro forma 2025 sales of €1.6bn rising toward €2bn by 2030. ## Strategic Investments and Innovation The company is also investing in its industrial footprint and innovation pipeline, including a new smart factory in Yantai costing around €120m that operates at net‑zero from day one. Additional application and co‑innovation centers, such as those in India, support technologies like cool‑roof solutions and specialized bonding, for example in the Sagrada Familia project. ## Market Share Gains in Fabric Care In Fabric Care, Henkel reported around 50 basis points of market share gains in the first half of 2026. Management linked the share increase to its premiumization strategy and ongoing product innovation, indicating competitive traction in Laundry despite challenging conditions in some regions. ## Foreign Exchange Headwind and Nominal Sales Decline Despite solid organic growth, reported nominal sales slipped 0.5% year on year to €10.3bn, reflecting significant currency pressure. Foreign exchange effects of almost minus 4%, largely from a weaker U.S. dollar and related currencies, masked the underlying operational progress. ## Raw Material Cost Pressure and H2 Margin Risk Management flagged more pronounced raw‑material price headwinds in the second half of 2026, with direct materials still expected to rise by a high‑single‑digit percentage. As a result, Henkel anticipates that adjusted EBIT margins will soften in the second half compared with the first, even after further pricing measures. ## One‑off Charges and Restructuring Costs Reported EBIT fell below the prior‑year level to €1.4bn, mainly due to non‑recurring expenses linked to the strategic transformation. These included about €68m of transaction costs and €128m of restructuring charges tied to production, logistics and go‑to‑market changes. ## Higher Financial Leverage and Interest Impact Henkel’s net financial position moved to minus €1.9bn, reflecting cash outflows for acquisitions and the completion of its share buyback program. The increased leverage contributed to an adjusted financial result of minus €54m, highlighting a higher interest burden alongside the growth agenda. ## Working Capital and Acquisition‑Related Inventory Effects Net working capital rose by 100 basis points to 7% of sales, partly because of inventories linked to recent acquisitions and some forward buying. Management also noted that adhesives growth in the second quarter was aided by working‑day and forward‑buying effects worth about 70 to 75 basis points and roughly 100 basis points respectively in the first half. ## Regional and Category Weaknesses Not all regions and categories performed evenly, with Europe and Latin America sales still below prior‑year levels, although Europe showed improvement in the second quarter. Laundry & Home Care encountered tougher trading in some markets, with sell‑out data indicating share losses in the U.S. and Europe, and certain consumer areas such as Body Care in Europe underperforming. ## Guidance and Forward‑Looking Outlook Henkel lifted its full‑year 2026 organic net sales guidance to 1.5% to 3.5%, with Adhesive Technologies targeted at 2% to 4% and Consumer Brands unchanged, while keeping adjusted EBIT margin guidance at 14.5% to 16% and EPS growth in the low‑ to high‑single‑digit range. Management expects about €700m of sales from recent acquisitions and an initial roughly 1% uplift to adjusted EPS in 2026, ramping significantly by 2030, yet continues to warn of softer second‑half margins as raw‑material pressures intensify. Henkel’s earnings call painted a picture of a company balancing robust underlying growth, disciplined margin management and aggressive portfolio expansion against clear macro and cost challenges. For investors, the story is one of strong operational traction and strategic ambition, tempered by near‑term margin risks from inflation, FX and integration costs but supported by a more confident top‑line outlook. ### Related Stocks - [HEN.DE](https://longbridge.com/en/quote/HEN.DE.md) - [OLPX.US](https://longbridge.com/en/quote/OLPX.US.md) - [RSL2.DE](https://longbridge.com/en/quote/RSL2.DE.md) - [HEN3.DE](https://longbridge.com/en/quote/HEN3.DE.md) ## Related News & Research - [HEN: Upgraded 2026 outlook follows strong H1 growth, margin gains, and major acquisitions](https://longbridge.com/en/news/295060595.md) - [Henkel FY26 H1 EBIT rises 0.3% to EUR 1.62 billion; sales climb 3.2% to EUR 10.3 billion](https://longbridge.com/en/news/295059249.md) - [Ulta Beauty (ULTA) Broadens Prestige Hair Care With New Exclusive Partnerships](https://longbridge.com/en/news/297085082.md) - [Gold by Gold CEO Patrick Schein sells 458,000 shares at EUR 4.9 each](https://longbridge.com/en/news/297163594.md) - [Vincent Medical Grows Revenue as New China Plant Weighs on Profit](https://longbridge.com/en/news/296888628.md) --- > **Disclaimer: This article is for reference only and does not constitute any investment advice.**