BERLIN (Reuters) - German consumer goods group Henkel trimmed its full-year earnings outlook on Monday saying it could not fully compensate for a spike in raw material prices, pushing its shares down more than 5%.
"Tight supply chains and rising raw material and transport costs are proving to be particularly challenging," Chief Executive Carsten Knobel said in a statement.
The maker of Persil detergent and Schwarzkopf hair care products said it still expects 2021 organic sales growth of 6-8% after third-quarter sales rose an organic 3.5% to 5.1 billion euros ($5.89 billion), in line with average analyst forecasts.
But it trimmed its forecast for 2021 adjusted earnings per preferred share at constant exchange rates to a percentage rise in the high single digits, from a previous range of high single-digits to mid-teens.
It said it now expects an adjusted operating earnings margin of around 13.5% of sales compared to a previous 13.5-14.5%.
Henkel's shares were down 4.8% at 0907 GMT, making it the biggest faller on the German blue-chip index.
The company expects the rising costs from raw materials to last into 2022, particularly the first half of the year, Knobel told analysts.
Henkel is raising prices to compensate and expects to continue to do so next year, finance chief Marco Swoboda said.
In addition to the impact of higher raw material prices, Henkel said it also expected changes in exchange rates to adversely affect earnings.
Henkel's adhesives unit, which supplies the automotive and electronics industries and accounts for almost half of sales, reported organic sales growth of 7%, even though it said the automotive and metals business saw a slight contraction.
The laundry and home care unit saw sales rise 2%, but the beauty care business reported a 3% fall, mainly due to a drop in the body care category, even as sales were strong for professional hair care products.