Henkel Achieves Organic Growth and Profitability Gains in 2025 Amid Global Challenges

Henkel delivered an overall good performance in a challenging fiscal 2025, which was characterized by moderate global economic growth in a complex geopolitical environment. Group sales in fiscal 2025 amounted to around 20.5 billion euros with organic growth of 0.9 percent, while the adjusted EBIT margin increased by 50 basis points to 14.8 percent. Adjusted earnings per preferred share at constant exchange rates rose by 4.7 percent. CEO Carsten Knobel noted the business environment has been marked by major challenges including military conflicts, geopolitical tensions, and trade conflicts, which weakened consumer sentiment and industrial demand. Despite these difficulties, the company successfully moved forward, achieving or exceeding key targets and driving the transformation of the company.

The company increased sales organically and further improved profitability in both business units, Adhesive Technologies and Consumer Brands, primarily through further innovations, continued cost-saving measures and efficiency improvements as well as stronger growth in high-margin areas. The margin increase in the Consumer Brands business unit was driven by the completed integration process, continued savings and the further valorization of the product portfolio. Henkel has continued to invest in the future of both divisions in strengthening brands, innovation, sustainability, and digitalization. Over the past three months, the company agreed acquisitions in both business units with a combined sales volume of around 1.2 billion euros to strengthen businesses and expand growth potential. The results for 2025 demonstrate the company is on the right path with its strategy for sustainable, purposeful growth, effectively positioning the company for the future.

Group sales in fiscal 2025 totaled 20,495 million euros, with organic sales growth positive at 0.9 percent. The Adhesive Technologies business unit generated good organic sales growth of 1.5 percent, driven particularly by the Mobility & Electronics business area. The Consumer Brands business unit posted positive organic sales growth of 0.3 percent, driven particularly by the Hair business area. Adjusted operating profit was at 3,026 million euros, below the prior year level primarily due to significantly negative foreign exchange effects. Adjusted return on sales in the year under review was higher year on year at 14.8 percent. The Management Board, Supervisory Board and Shareholders’ Committee will propose a dividend increase of 1.5 percent compared to the previous year, amounting to 2.07 euros per preferred share.

The merger of the consumer goods businesses into the Consumer Brands business unit, announced at the beginning of 2022, was completed at the end of fiscal year 2025. The originally targeted annual savings of 525 million euros were exceeded by the end of fiscal year 2025, completing the integration one year earlier than originally planned. The importance of consolidating the consumer businesses becomes clear when looking at performance over the past three years. In fiscal year 2022, the combined adjusted return on sales of the related businesses stood at 8.3 percent. By the end of fiscal 2025, it had increased to 14.5 percent, representing an improvement of 6.2 percentage points over three years.

As part of active portfolio management, Henkel has further developed its portfolio by discontinuing or divesting activities and making acquisitions. With divesting its Retailer Brands business in North America, successfully completed in spring 2025, Henkel finalized the portfolio measures announced at the start of the merger. Since the beginning of 2022, Henkel has sold or discontinued brands and activities with total sales of slightly more than 1 billion euros. Expanding the portfolio through targeted acquisitions is also integral to Henkel's growth agenda. In 2025, Henkel signed an agreement to acquire ATP Adhesive Systems AG, a leading provider of high-performance, water-based specialty tapes. In February 2026, Henkel agreed to acquire the Dutch-based Stahl Group, a global player in high-performance specialty coatings for flexible materials. In early March, Henkel signed an agreement to acquire “Not Your Mother’s”, one of the leading consumer hair care and styling brands in North America.

In 2025, Henkel launched numerous innovations addressing important trends and creating value for customers and consumers. One example is the new Creme Supreme hair coloration from Schwarzkopf, a technology that strengthens and nourishes the hair structure through micro-bonding. The “House of Hair” concept plays an important role in developing innovations in the Hair category, consolidating main areas of the hair cosmetics business in Hamburg. Innovation is also a central success factor for the Adhesive Technologies business unit, with Henkel continuing to invest consistently to position itself successfully in the competitive environment. A key focus is the expansion of its network of state-of-the-art research and innovation centers, including the Inspiration Center opened in Shanghai in 2025 with an investment of 60 million euros.

One of Henkel’s sustainability priorities continues to be the reduction of emissions along the value chain. By 2045, the company aims to reduce its absolute Scope 1, 2 and 3 greenhouse gas emissions by 90 percent compared to the base year 2021 and achieve net-zero. Across all three scope categories, Henkel made progress last year and has already reduced its emissions by 29 percent since the base year 2021. The company has also achieved improvements in sustainable supply chains, with the share of palm-based ingredients that are responsibly sourced and certified now reaching 98 percent. Henkel received an A rating in the Climate category of the 2025 CDP assessment for the first time and further improved its performance in the latest EcoVadis assessment, again awarded Gold.

Henkel has made further progress in digitalization, with rapid advances in artificial intelligence being the dominant topic in 2025. AI technologies are implemented in many practical applications across both industrial and consumer goods businesses. In 2025, Henkel launched its first generative, AI-supported TV commercial in Germany, bringing Persil's iconic White Lady into a new era. AI is also used in automation of processes in adhesives development laboratories and in battery manufacturing, where Henkel uses AI-supported simulation and innovative debonding solutions to help customers reduce development times and costs.

Following moderate growth momentum over the past fiscal year, global economic output is expected to continue to grow at a subdued pace in 2026. Global economic development is expected to remain shaped by ongoing geopolitical uncertainties and an overall elevated price level. Considering these assumptions, Henkel expects to generate organic sales growth of between 1.0 and 3.0 percent in fiscal 2026. Adjusted return on sales is expected in the range of 14.5 to 16.0 percent. For adjusted earnings per preferred share at constant exchange rates, an increase in the low- to high-single-digit percentage range is expected.