Henkel AG & Co. KGaA

EANS-News: Henkel AG & Co. KGaA /

@@start.t1@@--------------------------------------------------------------------------------   Corporate news transmitted by euro adhoc. The issuer/originator is solely   responsible for the content of this announcement. --------------------------------------------------------------------------------@@end@@

Company Information/quarterly report/9-month report

Düsseldorf (euro adhoc) - Düsseldorf, November 10, 2010

Henkel reports outstanding third quarter results

@@start.t2@@CEO Kasper Rorsted: "2010 will be an                  important step to achieving our
2012 targets"


      • Sales increase by 13.7 percent to 3,961 million euros
      • Organic sales growth of 6.5 percent
      • Share of sales of emerging markets: plus 3 percentage points to 42 percent
      • Adjusted operating profit: plus 27.0 percent to 517 million euros
      • Adjusted EBIT margin: plus 1.3 percentage points to 13.0 percent
      • Adjusted earnings per preferred share (EPS): plus 35.6 percent to 0.80
         euros

"In the third quarter, we further extended our  recent  successes  with  results
even better than the good performance we have shown in recent quarters. This  is
the first quarter that we have ever achieved  an  adjusted  EBIT  margin  of  13
percent," said Kasper Rorsted, Chairman of the Henkel  Management  Board.        "I
would particularly like to emphasize the fact that all our regions and  business@@end@@

sectors  made  a  positive  contribution  to  this  success  in  a   persistently challenging environment. Growth was  once  again  given major  impetus  by  our strong brands and successful innovations. However, the adaptation  of  our  cost structures and further progress in the pursuit of our strategic priorities  were also important contributory factors."

Looking at the current fiscal year as a  whole,  Rorsted  said:  "We expect  to achieve  an  adjusted  EBIT  margin  of  well  above  12.0 percent  for    2010, accompanied by an improvement in adjusted earnings per preferred share  of  more than 45 percent. 2010 is likely to be the most successful  fiscal  year  in  our corporate history, taking us an important step  closer  to  our  2012   financial targets."

In the third quarter of 2010, Henkel posted sales of 3,961 million euros. In  an overall positive  market  environment,  this   represents  an  increase  of  13.7 percent above the level of the prior-year quarter. After adjusting  for  foreign exchange, sales improved by 6.4 percent. Organically, i.e. after  adjusting  for foreign exchange, acquisitions and divestments, the increase  was   6.5  percent, representing  another  significant  rise  versus  the   prior-year  period.  This positive development was  supported  by   all  the  company´s  business  sectors. Following a slight decline in organic sales development in  the  second  quarter of    2010,     Laundry    &    Home    Care    recorded    growth    of    3.4    percent. Cosmetics/Toiletries once again substantially outperformed  market   growth  with an increase of 4.6 percent. With growth of 9.7 percent driven by both price  and volumes, Adhesive  Technologies  achieved   an  almost  double-digit  improvement versus the prior-year quarter.

Operating profit (EBIT) rose by 73.0 percent, from  290  million   euros  to  501 million euros. This is primarily due to the substantial improvement attained  by Adhesive Technologies,  which   was  able  to  maintain  a  significant  rate  of increase in earnings. After allowing for one-time gains (10 million  euros)  and restructuring charges (26 million euros), adjusted operating profit improved  by 27.0 percent, from 407 million euros to 517 million euros.

Return on sales (EBIT margin) increased significantly, from 8.3 percent to  12.7 percent. Adjusted return on sales rose from 11.7 percent to 13.0 percent.

The company´s financial result improved from -40 million euros  to   -37  million euros due to lower net debt. The tax rate was 26.1 percent.

Thanks to the increase in  EBIT,  net  income  for  the  quarter   rose  by  90.6 percent, from 180 million euros to  343  million   euros.  After  deducting  non- controlling interests totaling 6 million euros, net income for the quarter  came in at 337 million euros  (prior-year  quarter:  172  million  euros).    Adjusted quarterly net income after non-controlling interests  amounted  to   349  million euros compared to 256 million euros in the third quarter of 2009.  Earnings  per preferred share (EPS) doubled from  0.39   euros  to  0.78  euros.  The  adjusted figure was 0.80 euros compared to 0.59 euros in the prior-year quarter.

Good progress was also made in the management of net working   capital.  Compared to the prior-year period, the ratio of net working capital to sales improved  by 2.5 percentage points, decreasing to 7.8  percent.  Due  in  particular  to  the substantial rise in net income, our debt coverage ratio increased in the  period under review to close to 56 percent.

Business performance January through September 2010

In the first nine months of fiscal  2010,  Henkel  increased  sales   versus  the prior-year period by 11.1 percent to 11,363 million euros within  an  expanding market environment. After adjusting for foreign exchange, sales improved by  6.6 percent. At 7.3 percent, organic sales growth also  came  in  appreciably  above the level of the prior-year period. Operating profit (EBIT)  increased  by  70.9 percent, from 787 million euros to 1,344 million euros. This was   primarily  due to the substantial improvement  shown  by  the   Adhesive  Technologies  business sector following the heavy impact it suffered from the crisis in the first half- year 2009. After allowing for restructuring charges (104 million euros) and one- time charges (9 million euros) and gains (43 million euros), adjusted  operating profit improved by 48.8 percent, from 950 million euros to 1,414 million  euros. Return on sales (EBIT margin) increased significantly, from 7.7 percent to  11.8 percent. Adjusted return on sales rose from 9.3 percent to 12.4 percent,

Due to the increased EBIT, net income for the nine months almost doubled, from 451 million euros to 889 million euros. After deducting non-controlling minority interests of 20 million euros, net income for the period totaled 869 million euros (previous year: 432 million euros). Earnings per preferred share (EPS) more than doubled from 1.00 euros to 2.01 euros, while the adjusted figure rose from 1.27 euros to 2.13 euros.

Business sector performance in the third quarter

The Laundry & Home Care business sector increased sales by 8.4 percent to  1,123 million euros. The foreign exchange impact amounted to a positive  5.4  percent. Strong price and promotional competition continued  in  all  relevant  markets, leading to a decline in prices of 5.6 percent compared  to  the  previous  year. However, thanks to very strong volume growth of 9.0 percent, organic sales  rose by 3.4 percent compared to the prior-year quarter. One of the  main  drivers of the organic sales growth achieved was again the Africa/Middle East region  which registered a double-digit percentage increase. Western Europe  also  recorded  a substantial rise in sales, driven in particular by strong business  developments in Germany. Sales in North America declined  slightly  in  the  face  of  strong competitive pressures. In the other regions, the business  sector   succeeded  in maintaining the sales levels of the prior-year quarter, with market share  gains ensuing as a result. Operating profit rose by 1.4 percent to 139 million  euros. At 13.6 percent, adjusted return on sales was slightly below the high  level  of the prior-year quarter which was positively influenced by both  a  high  selling price level and lower material prices. However, compared to the second  quarter, adjusted return on sales improved by more than  one percentage  point,  despite continuous pressure on gross margin due to further increases in material  prices and still declining selling price levels.  In the Laundry business segment,  the strongest growth momentum was  generated  by  the  heavy-duty  detergents,  with Persil  doing  especially  well.  Products  of  the  Weisser  Riese   brand  also performed very well, particularly the Intensive Color powder  and  gel  variants with their active color power.    The   positive  trend  with  respect  to  fabric softeners continued, supported by further innovations.  In Western  Europe,  for example, a fabric softener with innovative fresh pearls was launched  under   the Vernel brand, combining wash-protective properties with long-lasting and  drier- resistant fragrances. The continuing   positive  developments  in  organic  sales registered by the Home Care business were further boosted in particular  by  the results generated by the company´s dish-washing products.  In the machine   dish- washing segment, the products Somat 9 and Somat Perfect Gel made  an  especially strong contribution to the gratifying performance achieved.  Henkel's hand dish- washing products   experienced  similarly  encouraging  growth  rates.    Positive sales momentum was also generated by the WC products business  with  the   launch of the first WC rim block with four active pearls.

The Cosmetics/Toiletries business  sector  continued  the  excellent sales  and profit performance of previous quarters.  With organic growth of 4.6 percent  to 845 million euros, it significantly exceeded the sales  levels  achieved  in  an already    strong     prior-year    period.    The    rate    of    growth    posted    by Cosmetics/Toiletries was once again above  that  of  the  relevant   markets  and resulted from strong performance in both the mature   markets  and  the  emerging economies. The business sector continued to generate steady growth  momentum  in Western Europe, while developments in North America were stable. Performance  in the growth regions of Asia (excluding Japan), Africa/Middle East, Latin  America and Eastern Europe was somewhat above-average, with organic sales growth in  the double-digit percentage range right across the board. Operating profit rose  by 13.4 percent to 113 million euros,  and  by 7.3  percent  after  adjusting  for foreign exchange. As a result, there was also an improvement in return on  sales for this quarter. At 13.4 percent, it was 0.4 percentage points above the  level for the prior-year quarter. Adjusted  for  restructuring  charges  and   one-time gains, return on sales rose by an even better  0.6   percentage  points  to  13.6 percent, representing a new high for the Cosmetics/Toiletries  business  sector. The Hair Cosmetics segment continued to perform very well, expanding its  market share and posting record results in all categories. In addition  to  the   launch of the Schauma Silk  Comb  range,  the  Hair  Care  business   also  pursued  the relaunch of Gliss Kur Oil Nutritive as one of its headline  activities.  In  the Colorants business, the focus was on continuing the successful roll-out  of  the Syoss Color line and the introduction of the first permanent  foam  colorant  in the form of Perfect Mousse. In the Styling category, the relaunch  of  Taft  and the new sub-line Taft Ultra with Argon Oil  likewise  contributed  to the  good results  achieved.  In  the  third  quarter,  the    Body     Care    business    was characterized by the expansion of the innovation offensives at its core  brands. In Western and Eastern Europe, the high-performance  deodorant  brand  for  men, Right Guard, was able to establish a position for itself in  a  challenging and competitive environment.  Meanwhile, the focus with respect to   Fa  was  on  the introduction of the innovative Mystic Moments   range.    Market  share  in  North America was substantially increased with the successful launch  of  Right  Guard Total Defense 5. The chief activities pursued in the Skin Care  segment  related to the launch of the new sub-line  Novagen  under  the  Diadermine  brand.   The priority in the Oral Care segment was on expanding the successful Theramed  2in1 series through the inclusion of the innovative Power Clean  &  White  line.  The positive growth trend in the  Hair  Salon subsegment  continued  in  the  third quarter, supported by the relaunch of the cross-segment brand  Essensity.  In  a persistently difficult market environment, the business was  therefore  able  to further consolidate its good market position and gain additional market share.

The Adhesive  Technologies  business  sector  succeeded  in   generating  further profitable growth in the third quarter. Sales exceeded the level  of  the  still crisis-affected prior-year quarter by  a  substantial  19.3  percent,  reaching 1,945 million euros and outpacing market growth in all regions.    Organic  sales rose by 9.7 percent.  With  price  levels  only  slightly  higher,  the  growth performance and the market share gains that came with it were largely driven  by volume  increases.  All  the  businesses  and  regions     contributed    to    this essentially positive development. The   emerging  economies  of  Asia  (excluding Japan), Africa/Middle East, Latin  America  and  Eastern  Europe  continued  to exhibit above-average increases in sales, with overall  organic  growth  in   the double-digit percentage range. There were also substantial   increases  in  sales in the mature markets of Western Europe  and   North  America.  Operating  profit tripled compared to the prior-year quarter,  reaching  a  record  mark  of  268 million  euros.  Return on  sales  likewise  increased  significantly  by    8.3 percentage points to a new high of 13.8 percent. And  this  development  is  all the more notable, as rising raw material and packaging prices  in   this  quarter had a considerably greater adverse effect than in the   previous  quarters.    The Adhesives for Craftsmen, Consumers and Building  segment  continued  to  develop well in all regions. Both our business serving craftsmen and consumers  and  our activities   involving  the  construction  industry  contributed  to  the  growth achieved.  Substantial  increases  compared  to  the  prior-year   quarter    were registered in Latin America and Eastern  Europe.  The significant  improvements seen in the Transport and Metal business continued  unabated.    Particularly  in Asia-Pacific, Latin America and Eastern Europe, the sales  figures  posted  were substantially higher than in the prior-year quarter.  Double-digit growth  rates were also generated in the regions of  North  America  and   Europe/Africa/Middle East.  The  General  Industry    segment    also   continued    to    perform    very encouragingly.  Indeed,  it  was   here  that  the  strongest  sales  growth  was achieved from within the business sector in the period under  review,  with  all regions contributing to, in  some  cases,  substantial  double-digit   percentage revenue growth rates. There  was  also  a  further   increase  in  sales  in  the Packaging, Consumer Goods  and   Construction  Adhesives  business,  the  highest growth rates being achieved in Asia-Pacific, Latin America and  Western  Europe. The Electronics  business  continued  to  benefit  from  the  continuing strong recovery taking place in  the  semiconductor  industry.    All Henkel´s  regions contributed to the appreciable growth achieved, with Europe  and  North  America performing particularly well.

Regional performance

In the Europe/Africa/Middle East  region,  sales  improved   organically  by  5.3 percent compared to the third quarter  of  2009, coming  in  at  2,342  million euros, with all three business sectors contributing. In Africa/Middle  East  and Eastern Europe, organic growth was in the high  single-digit  percentage  range. Western Europe including Germany posted  an  organic  growth  rate  in  the   mid single-digits, as it had done in the first two quarters of 2010. At 733  million euros, sales of the  North  America  region  grew   organically  by  4.2  percent compared to the prior-year quarter. Sales of the Adhesive Technologies  business sector developed particularly well, while sales at Laundry & Home Care  declined slightly and those of the Cosmetics/ Toiletries business sector   remained  flat. Meanwhile, the successful development of  the  Latin America  region  continued unabated. Here, organic sales increased by 10.8 percent to  259  million  euros, with all business sectors   contributing.  In  the  Asia-Pacific  region,  growth remained double-digit at 14.9 percent, with  organic  sales  coming  in  at   579 million euros in the wake of gratifying increases in sales   posted  by  Adhesive Technologies and Cosmetics/Toiletries. In the growth regions of Eastern  Europe, Africa/Middle East, Latin America and Asia  (excluding  Japan),  sales  rose  by 20.7 percent to  1,656 million  euros.  Compared  to  the  prior-year  quarter, organic growth amounted to 10.1 percent, keeping it in the  double-digit   range. The increase was supported in particular by higher sales generated  by  Adhesive Technologies and Cosmetics/Toiletries.  The share of sales attributable  to  the growth regions increased from 39 to 42 percent.

Sales and profits forecast 2010

In view of the economic forecasts for the current year, Henkel anticipates  that the world economy will grow by around 3.5 percent.

Henkel is confident of again outperforming its  relevant  markets  in terms  of organic sales growth. A number of measures have been introduced and  implemented on the operational side, from which Henkel expects additional positive  momentum to develop. For example, it anticipates further contributions to profit  arising both from the synergies created through the integration of the  National  Starch businesses  and  from  the  company´s  strictly  disciplined    cost   management approach. These factors will, together with  the  expected increase  in  sales, positively influence our  results.  Compared  to the  levels  in  2009,  Henkel expects the adjusted EBIT margin to   gratifyingly  increase  to  a  figure  well above 12.0 percent and an improvement in adjusted earnings per  preferred  share of more than 45 percent.

This document  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 and similar formulations. 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 forward-looking statements.

Contact
Lars Witteck        Wulf Klüppelholz

@@start.t3@@Tel.  +49 211 797 - 2606      Tel.  +49 211 797 - 1875
Fax    +49 211 798 - 4040      Fax    +49 211 798 - 4040

Henkel AG & Co. KGaA

Photo material available for downloading at http://www.henkel.com/press. For@@end@@

more detailed facts and figures relating to the third quarter of 2010, please go to: http://www.henkel.com/ir.

press@henkel.com

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Further inquiry note: Irene Honisch 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:  Frankfurt / regulated dealing/prime standard
              Hamburg / free trade
              Stuttgart / free trade
              Düsseldorf / free trade
              Hannover / free trade
              München / free trade
              Berlin / regulated dealing



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