Henkel AG & Co. KGaA

Henkel maintains high pace of innovation

Good start for Henkel in a challenging environment

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industry/stock market/Henkel

Duesseldorf (euro adhoc) - Düsseldorf, May 7, 2008 Henkel maintains high pace of innovation

Good start for Henkel in a challenging environment

@@start.t2@@. Robust organic sales growth of 3.3 percent
      . Operating profit (EBIT) adjusted for foreign exchange: plus 2.5 percent
      . Earnings per preferred share (EPS): plus 6.3 percent
      . Growth regions: 16.2 percent organic sales growth

"We made a  good  start  to  the  fiscal  year  within  a  challenging  economic@@end@@

environment. Our robust organic sales growth, achieved  despite  a   sluggish  US market and a  strong  prior-year  quarter,  is   encouraging.  All  our  business sectors have contributed to this," said Kasper Rorsted, Chief Executive  Officer of Henkel. "Development in our growth regions  was  again  dynamic.  I  am  very confident that we will meet the targets we have set ourselves for  fiscal   2008. We expect the acquisition and integration of the National Starch  businesses  to further  boost  growth.  In  addition,  the   implementation    of    our    'Global Excellence' efficiency enhancement program is proceeding on schedule."

In the first quarter of  2008,  Henkel  increased  sales  adjusted   for  foreign exchange by 1.7 percent. Organic sales, i.e. adjusted for foreign  exchange  and acquisitions/ divestments, increased by 3.3 percent and was within the  3  to  4 percentage range of Henkel's guidance given at the beginning of  the  year.  All business sectors contributed to this performance. Overall, sales  fell  slightly to 3,162 million euros in the first quarter of  2008,  mainly  as  a   result  of unfavorable movements in foreign exchange.

At 320 million euros, operating profit (EBIT) was roughly at the high level  of the previous year (-0.9 percent). After adjusting  for   foreign  exchange,  EBIT growth amounted to 2.5 percent. The substantial increase in raw material  costs, which Henkel was unable to  completely  offset,  had  a  particularly  negative influence.

Return on sales (EBIT) amounted to 10.1 percent,  0.1  percentage   points  above the level  of  the  prior-year  quarter.  Income  from participations  remained constant at 19 million euros. The net interest result  improved  by  11  million euros from -49 million euros to -38 million euros, due to lower  net  debt.  The overall financial result therefore improved by 11 million euros to  -19   million euros. The tax rate decreased from 28.3 percent to 25.9 percent.

Due to the improved financial result and  lower  taxes,  net   earnings  for  the quarter increased by 6.2 percent to 223 million euros. After minority  interests amounting to 4 million euros, net earnings for  the  quarter  were  219  million euros (+6.8 percent). Earnings per preferred share increased by 6.3  percent  to 0.51 euros.

Business Sector Performance

The Laundry & Home Care business sector achieved organic growth of   2.8  percent despite the exceptionally high growth rate  of  11.9   percent  achieved  in  the prior-year quarter thanks to the  Persil   brand  centennial.  At  1,031  million euros, total sales were 3.5 percent below the prior-year figure, reflecting  the 6.3 percent negative impact  of  foreign  exchange  and  divestments.  Operating profit decreased from 117 million euros to 104 million euros.  This   was  mainly due  to  the  substantial  increase  in    raw    material costs,    which    even countermeasures were unable to offset. The Laundry segment  experienced  further organic expansion despite the strong prior-year base. This was due  particularly to an increase in fabric softener sales following the  successful  launch  of  a range of new fragrances. Universal  detergents  continued  to  perform   well  in Eastern Europe. The  Home  Care  segment  posted   significant  growth  with  its European  dishwashing    detergents     undergoing    significant    expansion.    Air fresheners also proved to be a  growth  driver  in  North  America,  with  sales benefiting   from  a  successful  product  innovation    featuring    automatically alternating fragrances.

The  Cosmetics/Toiletries  business    sector    continued    its    very positive performance, with organic sales growth of 6.1 percent once   again  significantly outperforming the relevant markets. Compared to the  prior-year  quarter,  sales increased nominally by 0.6 percent to 708 million  euros,  and  by  4.4  percent after adjusting for foreign exchange. In addition to  further  good  development in Eastern Europe, Latin America and Asia-Pacific, strong growth was   registered particularly in the large Western European and US markets. After  adjusting  for foreign exchange, operating profit significantly increased by 13.4  percent,  in nominal terms it improved by 8.0 percent to 89 million euros. As a  result,  the EBIT margin also strongly increased by 0.8 percent to  12.5  percent.  The Hair Cosmetics segment again reported  strong  growth.  The  major   relaunch  of  the Schauma brand and the première of the Taft Power line contributed  significantly to this development. Market positions in all three categories - Colorants,  Care and Styling - were further markedly  expanded.  The  Body  Care  segment  again performed well with strong support coming from  the  two  major  brands  Fa  and Dial. The Skin Care segment developed very well,  supported  by  the Diadermine brand with its new product  lines.  The  Oral  Care   segment  underwent  further growth, particularly as a result of the launch  of  Theramed  Titan  Fresh.  The Hair Salon segment also posted a very good growth rate in all regions.

Organic sales of  the  Adhesives  Technologies  business  sector   increased  2.4 percent. The comparable figure  in  the  previous   year  was  a  very  high  9.1 percent, arising from strong growth in the construction  sector.  This  in  turn was due to the mild weather at the time. Negative foreign exchange  effects  and the divestment of the water treatment business resulted in  sales  declining  to 1,364 million  euros,  3.0  percent  below  the  comparable   prior-year  figure. Despite the significant increase in raw material costs,  operating  profit  rose 2.3 percent to 153 million euros. After  adjusting  for  foreign  exchange,  the increase was 6.4 percent. This development  was  due  primarily  to  implemented countermeasures and an increased focus on businesses offering higher levels  of profitability. In the Craftsmen and Consumer segment, sales  in  Western  Europe and North America were below the levels of the previous year  due  to  declining markets. The strongest growth was  again  achieved  by  the  Building  Adhesives segment, with the business performing particularly well in  Eastern  Europe  and Middle East/North Africa. Henkel is further expanding its production   capacities in these regions in order to be able to cover  the   growing  demand  encountered there. The Industry segment developed well overall. The one  exception  was  the North America business which turned in a weaker performance  due  to  prevailing market conditions. Particularly strong results were achieved with  products for industrial maintenance, repair  and  overhaul  applications   under  the  Loctite brand. The packaging adhesives business received a boost through the  innovative hotmelt adhesives under the Technomelt Supra brand.

Regional Performance

Organic sales in the Europe/Africa/Middle East region increased by 4.2  percent, with all the business sectors contributing.  Foreign   exchange  and  divestments had a negative impact of 4.1 percent. Overall, sales  remained  roughly  at  the level of the previous year with a total  of  2,119  million  euros.  In  Eastern Europe, sales once again  underwent  a  double-digit  percentage  increase,  but Western Europe  including  Germany  was  unable  to  maintain  the   good  growth momentum of the prior-year quarter. Overall,  the   region  accounted  for  a  67 percent share of total sales. Sales in the North  America  region  decreased  by 3.1  percent  in  organic   terms.  Due  to  the  prevailing  market  conditions, Adhesives Technologies  and  Laundry  &  Home  Care  experienced  only   sluggish growth. The weakness of the US dollar led to a negative foreign exchange  effect of 11.1 percent. With sales of 559 million euros, this region accounted  for  an 18 percent share of total   sales.  The  Latin  America  region  posted  a  sales increase of 3.1 percent to 169 million euros, with growth  after  adjusting  for foreign exchange coming in at 8.8 percent. Organic sales rose  by   8.9  percent, with all business sectors  contributing.  The  share   of  sales  of  the  region remained unchanged at 5 percent. Business in the  Asia-Pacific  region  likewise developed well. Sales increased  by  3.8  percent  to  256  million  euros,  and organic growth, again supported by all the business  sectors,  amounted  to   9.4 percent. The region's share of total sales was 8 percent.

In the growth regions of Eastern Europe, Africa, Middle East, Latin America  and Asia (excluding Japan), sales rose by 10.0 percent to 1,101 million euros.  This corresponds to a share of  total  sales   of  35  percent.  After  adjusting  for foreign exchange, sales rose by 14.6 percent. Organic growth  amounted  to  16.2 percent, with all business sectors contributing.

Major Participation

Ecolab Inc., St. Paul, Minnesota, USA, in which Henkel has a 29.4 percent stake, reported sales of 1,458 million US dollars in the first quarter of 2008, an increase of 16.2 percent compared to the previous year. Net earnings for the quarter rose by 15.0 percent to 102.9 million US dollars. The market value of this participation as of March 31, 2008, amounted to around 2.0 billion euros.

Updated Sales and Profit Forecast 2008

Henkel is confident it will be able to meet the previously announced sales  and profit targets excluding the National Starch businesses.

Taking into account the National Starch  businesses  acquired  as  of April  3, 2008, Henkel's sales and profit forecast now reads as follows:

Henkel expects to achieve organic sales  growth  (after  adjusting   for  foreign exchange and acquisitions/divestments) of 3 to 4 percent.

Henkel expects to increase operating profit adjusted for   restructuring  charges and one-time gains and charges ("adjusted   EBIT")  in  the  mid-teen  percentage range (2007 base: 1,370 million euros).

Henkel expects earnings per preferred share adjusted for   restructuring  charges and one-time gains and charges ("adjusted EPS") to increase in the  mid  single- digit percentage range (2007 base: 2.19 euros).

Included  in  this  forecast  are  initial  savings  arising  from   the  "Global Excellence" efficiency enhancement program and the integration of  the  National Starch businesses.

This information contains forward-looking statements  which  are   based  on  the current estimates and assumptions made by the corporate management of Henkel  AG & Co. KGaA. Forward-looking statements are characterized by  the  use  of  words such as expect, intend, plan, predict, assume,  believe,  estimate,  anticipate, etc. Such statements are not to be understood as in any  way  guaranteeing that those expectations will turn out to be  accurate.  Future   performance  and  the results actually achieved by Henkel AG & Co. KGaA and its  affiliated  companies depend on  a  number  of  risks   and  uncertainties  and  may  therefore  differ materially from the   forward-looking  statements.  Many  of  these  factors  are outside Henkel's control and cannot be accurately estimated in advance, such as the future economic environment  and  the  actions  of   competitors  and  others involved in the marketplace. Henkel neither plans nor undertakes to  update  any forward-looking statements.

Press Contacts:

Lars Witteck                         Wulf Klüppelholz
Phone: +49-211-797-2606        Phone: +49-211-797-1875
Fax: +49-211-798-9208          Fax: +49-211-798-9208

Henkel AG & Co. KGaA

Head of Corporate Communications: Ernst Primosch, Corporate Vice President

Photo material available for download at http://henkel.com/press. For further details on the figures for the first quarter, please go to: http://www.henkel.com/ir

press@henkel.com

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ots Originaltext: Henkel AG & Co. KGaA
Im Internet recherchierbar: http://www.presseportal.ch

Further inquiry note:
Irene Honisch
Assistent Corporate Communications
Tel.: +49 (0)211 797-5668
E-Mail: irene.honisch@henkel.com

Branche: Consumer Goods
ISIN:      DE0006048432
WKN:        604843
Index:    DAX, CDAX, HDAX, Prime All Share
Börsen:  Börse Frankfurt / regulated dealing/prime standard
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              Börse Berlin / regulated dealing



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