Recyclate Targets Have Stalled
Consumer goods giant Henkel made significantly less money in 2022, but significantly more sales due to price factors. However, the figures for recyclate use in packaging went down.
Persil manufacturer Henkel posted a drop in earnings for 2022. Adjusted earnings before interest and taxes (Ebit) fell 13.7 percent to 2.3 billion euros, the consumer goods group announced on March 7. Below the line, Henkel achieved net income of 1.3 billion euros. This is around 23 percent less than in the previous year. That’s the lowest profit in more than a decade.
The company struggled with two billion euros in additional costs for freight, raw materials and energy in 2022, as much as between 2010 and 2020 combined. At the same time, many consumers were buying more cautiously in the face of inflation: For everyday goods, they turned more to private labels. As a result, the profit margin fell to 10.4 percent. Group sales in the fiscal year reached around 22 billion euros. This corresponds with a nominal growth of 11.6 percent.
Henkel has also published its 32nd Sustainability Report. In it, the consumer goods group provides information on its performance and progress in implementing its sustainability strategy and targets. “There is probably hardly a year in the recent history of our company in which the overall framework conditions were so challenging,” said Carsten Knobel, Chairman of the Management Board of Henkel, on the occasion of the publication of the Sustainability Report. But he added that it is all the more important to keep a firm eye on sustainability, especially in difficult times.
Henkel continues to work on avoiding and reducing packaging materials, especially for its consumer goods, and keeping them in economic cycles for as long as possible, the Düsseldorf-based company emphasizes. By 2025, 100 percent of packaging is to be designed for reuse and recycling. In 2022, the proportion could be increased by just one percentage point to around 87 percent. At the end of 2021, the proportion was already at 86 percent. Henkel also aims to increase the proportion of recycled plastic in its consumer goods packaging, but has come no closer to achieving this goal. In 2022, the proportion of recycled material was reported approximately at 16 percent. This is a decrease compared to the previous year. According to the last Sustainability Report, in 2021, the recyclate share was at 18 percent.
In response to an inquiry by Packaging 360°, a company spokeswoman explained the reasons for the decline: “High-quality recyclate of the quality required by Henkel as a globally active consumer goods manufacturer is currently not available in sufficient quantities in the current competitive situation, especially not worldwide.” The company would not have been able to pass on to customers such high prices for the kind of premium recyclate Henkel uses. “In addition, we have seen a decline in sales volumes for our brands with high recycled content.” The spokeswoman stressed that the 16 percent figure referred to the global use of recyclate. “Depending on the region and recycling infrastructure, this percentage can vary greatly. In Europe, for example, we already use nearly 30 percent recyclate for our consumer goods packaging.”
By 2025, Henkel also aims to reduce its waste volume by 50 percent per ton of product compared to 2010. In 2022, the company could report a 43 percent reduction. By 2030, Henkel aims to achieve closed-loop management of waste materials in its production.
Henkel also made progress in protecting natural resources last year, the report says. As part of its supplier management, the company works with selected strategic suppliers to ensure the procurement of sustainable raw materials. In 2022, for example, Henkel was able to increase the traceability rate for palm-based raw materials to the mill from 84 to 89 percent compared to the previous year.