Germany's Henkel said on Tuesday that it expects slower industrial and consumer demand to curtail sales growth this year after price increases helped organic sales to jump 8.8% in 2022.
Shares in the consumer goods company opened 2.5% lower on Tuesday in response to the announcement.
Henkel forecast organic sales to grow between 1% and 3% from the €22.39 billion ($23.91 billion) reached in 2022.
Despite the increase in sales, Henkel posted a 13.7% drop in adjusted earnings before interest and tax (EBIT) to €2.3 billion in 2022.
"We succeeded in partially compensating the dramatic rise in raw material and logistics costs through higher prices and continued efficiency improvements," said Carsten Knobel, chief executive adding that 2022 had been "very challenging".
Exit From Russia
The 2022 results exclude sales in Russia since the beginning of the second quarter, the company said.
Henkel announced its exit from the country last year after Russia's invasion of Ukraine.
The maker of Persil detergents and Schwarzkopf haircare products said it would focus on efficiency this year and aim to increase adjusted return on sales to 10%-12% from 8.1% in 2022.
"This won't reassure shareholders," Bernstein analysts said in a note on the figures. "Organic growth guidance of 1% to 3% for 2023 is in line with consensus at 1.2%, but the lowest in the sector."
Read More: Henkel Spins Off Its Russia Business
Consumer Goods Sector
The consumer goods sector is suffering from high inflation and rising energy costs.
Beiersdorf, one of Henkel's main competitors, said last week that it expected organic sales growth to slow to a mid-single-digit range this year.
Read More: Beiersdorf Sees Slower Sales This Year After Bumper 2022
Henkel said it plans to propose an unchanged dividend of €1.85 per preferred share and €1.83 per ordinary share for 2022.
CEO Knobel merged the ailing cosmetics business with the detergents division last year in an effort to grow the business and cut costs.
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