Henkel's Q1 2024 earnings call [1] presented a company exceeding expectations, confidently raising its full-year guidance. However, a closer look at the Consumer Brands portfolio adjustments reveals a potential volume surge in the second half of the year.

Henkel is discontinuing less profitable products, impacting reported volume figures. The Q1 call suggested a significant volume drag in the first half, diminishing in the second. If the impact continues at the Q1 rate of 200 basis points, a substantial positive swing is needed in the second half to meet the full-year target.

This potential volume acceleration raises questions about Henkel's expectations for consumer demand, the pace of portfolio adjustments, and the accuracy of initial estimates.

Potential Volume Swing

Assuming a 200 basis point volume drag from portfolio adjustments in Q1 and Q2, the following table shows the required volume surge in the second half to achieve Henkel's full-year targets.

Reference: Calculated based on Q1 2024 earnings call transcript [1].

Consumer Volume Growth Trends

The chart below illustrates the potential volume trends in Henkel's Consumer Brands segment, highlighting the anticipated surge in the second half of the year.

Reference: Hypothetical data based on Q1 2024 earnings call transcript [1].

Henkel's strategic focus on innovation and brand equity is evident. Recent introductions like the dual-bond complex in Kenra Hair Care demonstrate a commitment to science-backed solutions, potentially driving a volume comeback.

The volume wave in Henkel's Consumer Brands segment deserves attention. It could significantly impact the company's consumer business and overall growth.

"Fun Fact: Henkel's Loctite brand, known for its adhesives, played a vital role in the Apollo 11 mission. Loctite products were used to secure critical components on the lunar module, ensuring its successful operation on the moon."

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