Henkel delivered an overall good performance in fiscal 2025, achieving organic sales growth of 0.9% and increasing its adjusted EBIT margin by 50 basis points to 14.8%, according to the company's annual results released March 11, 2026. Group sales totaled approximately 20.5 billion euros, a nominal decline of 5.1% year-on-year, primarily due to significant negative foreign exchange effects of 4.2% and the impact of acquisitions and divestments, including the sale of the Retailer Brands business in North America. Adjusted earnings per preferred share at constant exchange rates rose by 4.7% to 5.33 euros.
Henkel CEO Carsten Knobel highlighted the challenging environment, including military conflicts, geopolitical tensions, and trade tariff disputes, which weakened consumer sentiment and industrial demand. Despite these headwinds, the company successfully progressed its purposeful growth agenda. The merger of consumer businesses into the Consumer Brands unit was completed ahead of schedule, exceeding the originally targeted annual savings of 525 million euros. The adjusted return on sales for Consumer Brands improved from 8.3% in 2022 to 14.5% in 2025, a gain of 6.2 percentage points over three years.
In the Adhesive Technologies business unit, organic sales grew 1.5%, driven by the Mobility & Electronics business area. Adjusted return on sales increased slightly to 16.7%. Consumer Brands posted organic sales growth of 0.3%, led by the Hair business area, with adjusted return on sales rising significantly to 14.5%. Free cash flow amounted to 1.85 billion euros, and the company proposed a dividend increase of 1.5% to 2.07 euros per preferred share, maintaining a payout ratio of 37.9% within the target range.
Henkel continued active portfolio management, divesting the Retailer Brands business and making strategic acquisitions. The company agreed to acquire ATP Adhesive Systems AG, a Swiss-based specialty tapes provider, and in February 2026, agreed to acquire Stahl Group, a global player in high-performance specialty coatings. Additionally, in early March, Henkel signed an agreement to acquire 'Not Your Mother's,' a fast-growing hair care brand in North America. These transactions represent a combined additional sales volume of around 1.2 billion euros and are expected to enhance growth potential.
Innovation remained a key focus. Henkel launched new products such as Schwarzkopf's Creme Supreme hair coloration with micro-bonding technology and opened an Inspiration Center in Shanghai with an investment of 60 million euros. The company also made progress in sustainability, reducing absolute Scope 1, 2, and 3 greenhouse gas emissions by 29% since 2021 and achieving an A rating in the CDP Climate category for the first time. In digitalization, Henkel leveraged AI across applications, including a generative AI-supported TV commercial for Persil and AI-driven simulation in battery manufacturing.
Looking ahead to fiscal 2026, Henkel expects organic sales growth of 1.0% to 3.0%, with Adhesive Technologies growing 1.0% to 3.0% and Consumer Brands growing 0.5% to 2.5%. Adjusted EBIT margin is forecasted in the range of 14.5% to 16.0%, and adjusted earnings per preferred share at constant exchange rates are expected to increase in the low to high single-digit percentage range. The company noted that the start of 2026 may be somewhat softer but anticipates overall top- and bottom-line growth.
