HENKEL IM FOKUS: Kein Licht am Ende des Tunnels - Weichenstellung im Frühjahr

DÜSSELDORF (dpa-AFX) - Carsten Knobel faces difficult tasks after being promoted from CFO to head of the consumer goods group Henkel (Henkel vz). The solid development of the Dax group with steady growth in sales and profits has recently been scratched. As early as March, Knobel plans to present the new medium-term strategy and thereby set the course for the coming years. In the beauty care business in particular, he faces major challenges. What is going on in the group, what analysts are saying and how the stock last went
The year 2019 ended with another damper for Henkel investors. For the first time in years, the expected growth has failed and shareholders also have to accept a decline in profits. It doesn't look much better for 2020. The currently weakening industry is likely to continue to weigh on the high-margin adhesives division, which accounts for around half of Henkel's business. The results will therefore continue to fall in the current year, with sales only growing at best in the best case. Higher investments depress profits. All in all, Henkel expects operating profitability to be weaker than it has been for years.
The cyclical adhesives division is currently suffering from the weakness in the auto industry. Management does not expect any improvement at first. The cosmetics business continues to struggle with the high competitive pressure, especially in Western Europe, and problems in China. The smallest division therefore lost revenue and earnings in the end. Countermeasures such as the introduction of new products, for which Henkel can charge more money, have so far been only partially effective.
Henkel's balance sheet in the past few years has therefore been mixed. In the medium term, the Düsseldorf-based company had set itself the goal of achieving average growth of 2 to 4 percent under its own steam by 2020. At best, the group reaches the lower half of the range. Profitability, a key element of Henkel's success in recent years, has also declined significantly recently.
Knobel's task now is to get Henkel back on a growth path. At the beginning of March, he wants to set the course for the coming years at an investor day in London. Critics see a need for action especially in the cosmetics business. Market observers complain that the area is quite small compared to international competitors.
Simone Bagel-Trah, chairwoman of the powerful shareholders' committee and the supervisory board, recently admitted in an interview that the division was currently lagging behind expectations and that "homework" still had to be done there. For example, in the markets in which the group is represented with its hair and skin care brands such as Schwarzkopf, Henkel must be one of the "leading providers", she gave Knobel the new task.
WHAT ANALYTES SAY:

Henkel is currently waiting to see analysts. David Varga from Metzler Bank estimates that Henkel will spend significantly more money than the 300 million euros communicated annually to drive growth. Virginie Roumage by Bryan Garnier notes in a study from mid-December that Henkel had underestimated the amount of work involved in the consumer goods business and that more effort was needed than was expected a year ago.
Henkel is trying to do the right thing by increasing growth investments, wrote James Edwardes Jones of the RBC analysis company. However, he complained about the poor view of the future and the unclear effectiveness of the additional investments.
However, Henkel is not alone with the problems. This is also how other competitors, such as the British Reckitt Benckiser, are struggling with growth problems. The Dutch Unilever recently also backtracked in terms of growth targets. Jeremy Fialko of the investment bank HSBC therefore stated that 2019 was a disappointing year in the consumer goods sector, and the conditions for 2020 would also be similarly difficult. The companies would now have to concentrate on their sales instead of the margins as before. Given the weak end markets, this should not be easy.
Knobel could soon offer an opportunity for Henkel to open up new growth opportunities in the cosmetics sector. Because the competitor Coty checks the sale of well-known brands such as Wella. Henkel had been interested in Wella in the past. Analyst Iain Simpson from the British bank Barclays had campaigned for a takeover. Alternatively, Henkel could part with the cosmetics business, which has been weakening for years.
But Wella is no longer as attractive as a takeover target as it was in the past. Jörg Philipp Frey from Warburg Research recently even explicitly warned against such a takeover. The combination of two shrinking brands usually only accelerate sales erosion,