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Abonner Henkel AG & Co. KGaA

Henkel AG & Co. KGaA

Henkel with significant sales growth in third quarter

Düsseldorf (euro adhoc) -

Strategic priorities & financial targets 2012: improvement to 14 
percent EBIT
 margin
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
banking/budget/companies/finances/industry/Henkel
. Strong sales growth of 12.0 percent
. Growth regions: sales plus 24.1 percent
    . Organic sales growth: 3.5 percent
    . Adjusted operating profit (EBIT): plus 6.3 percent
    . Adjusted earnings per preferred share: plus 3.5 percent
"Despite continuing  challenging  market  conditions  we  again  
generated  good organic sales growth in the third quarter,"  said  
Henkel  CEO  Kasper  Rorsted. "All our business sectors contributed 
to this  growth,  each  outperforming  its relevant markets. Once 
again, it was particularly our businesses in  the  growth regions 
that  supported  this  positive  development.  The  integration  of  
the National Starch businesses, which were major  contributors  to  
the  substantial rise in total  sales,  continues  on  schedule."  
Regarding  Henkel's  financial targets for 2012 Rorsted emphasized: 
"We are committed to  further  accelerating profitable growth. By 
focusing even stronger on our strategic priorities in  the future, we
have set a clear course to achieving our medium-term targets."
In the third quarter of 2008, Henkel increased total sales by  12.0  
percent  to 3,760 million euros. This considerable rise  is  
attributable  to  good  organic growth and the acquisition of the 
National Starch  businesses.  After  adjusting for foreign exchange, 
sales even rose by 15.8  percent.  In  organic  terms,  or adjusted 
for foreign exchange and acquisitions/divestments, sales  increased  
by 3.5 percent, with all business sectors contributing. The organic 
improvement  in sales in the growth regions was  again  in  the  
double-digit  percentage  range while performance in the mature 
markets was sluggish.
Operating profit (EBIT) was primarily impacted once again in the  
quarter  under review by restructuring charges. These totaled 181 
million euros compared  to  9 million euros in the same quarter of 
the previous  year,  and  are  particularly attributable to the  
global efficiency enhancement program and  the  integration of the 
National Starch businesses. As a result, EBIT  declined  to  191  
million euros. Conversely operating profit, adjusted for 
restructuring  costs  and  one- time gains and charges ("adjusted 
EBIT"), rose from 368  million  euros  to  391 million euros (+6.3 
percent).
EBIT margin was 5.1 percent, while the adjusted EBIT margin decreased
from  11.0 percent to 10.4 percent. This is due  primarily  to  the  
heavy  impact  of  raw material price increases on the Laundry & Home
Care  and  Adhesive  Technologies business sectors. Investment 
result, mainly attributable to  Henkel's  stake  in Ecolab, rose by 2
million euros to 24 million euros while net  interest  expense 
increased by 28 million euros from -44 million euros to -72 million 
euros.  This is largely the result of higher net debt arising from 
payment  of  the  purchase price for the National Starch  businesses.
The  financial  result  consequently decreased from -22 million euros
to -48 million euros. The tax rate amounted  to 25.2 percent.
Due to lower EBIT and  the  increase  in  the  negative  financial  
result,  net earnings for  the  quarter  decreased  to  107  million 
euros.  After  minority interests totaling 6 million euros, net 
earnings for  the  quarter  amounted  to 101 million euros. At 251 
million euros, adjusted quarterly net  earnings  after minority 
interests were 2.4 percent above the  prior-year  level.  Earnings  
per preferred share decreased to 0.23 euros while the adjusted figure
increased  by 3.5 percent to 0.59 euros.
Business Sector Performance
Organic sales generated by the Laundry & Home Care business sector 
increased  by a good 3.4 percent. At 1,068 million  euros,  sales  
overall  were  1.4  percent above the level for the previous year. 
The foreign exchange impact  amounted  to a negative 2.1 percent. 
Although operating profit fell from  126  million  euros to 117 
million euros, this was nevertheless the  highest  quarterly  total  
this year. Again in this quarter, the operating profit reflects the 
increase  in  raw material prices that led to a  substantial  rise  
in  input  costs.  These  were partially offset by price increases 
and  countermeasures  introduced  to  reduce costs and increase 
efficiency. Included for the first time  in  Laundry  &  Home Care's 
operating profit is 3 million euros in expenses  previously  
attributable to the former Corporate Research function. In the 
Laundry segment,  the  company achieved the highest increases in 
organic sales in its growth regions. Here  the biggest brand, Persil,
was the main growth driver, benefiting  from  innovations such as 
Persil Gold Plus launched in  a  number  of  countries  in  Central  
and Eastern Europe. Sales generated in  North  America  by  Purex,  
Henkel's  second largest global detergent brand, again registered an 
increase.  The  improvement in the organic sales of the  Home  Care  
business  was  also  due  primarily  to performance in the growth 
regions, especially Eastern Europe.  By  contrast  the Western 
European market remained difficult, despite the successful launch  of
a number of new products such as the WC rim block product WC Frisch 
3-Aktiv.
With organic sales growth of 3.4 percent versus  a  strong  
prior-year  quarter, the Cosmetics/Toiletries business sector  was  
able  to  maintain  the  positive trend of the last few quarters 
within  a  substantially  more  difficult  market environment. In  
addition  to  another  highly  positive  performance  in  North 
America, the businesses in Eastern Europe, Asia and Latin  America  
also  posted strong growth. At 770 million euros, nominal sales were 
slightly higher than  in the prior-year quarter, with growth after 
adjusting for foreign exchange  coming in at 3.3 percent. Operating 
profit rose to 96 million  euros.  After  adjusting for foreign 
exchange it rose by 4.1 percent, despite further increases in  input 
costs. In addition, operating profit this quarter also includes  for 
the  first time  expenses  of  2  million  euros  previously  
attributable  to  the  former Corporate  Research  function.  Without
the  latter  item,   operating   profit increased by 6.3 percent. The
Hair Cosmetics segment continued to  perform  well with further  
expansion  in  its  market  positions  in  all  its  categories  - 
Colorants, Care and Styling. Major contributing factors in this 
regard were  the international relaunch of the Gliss brand and the 
introduction of the Taft  line Power with Cashmere Touch. In the 
Colorants  category,  the  focus  was  on  the relaunch of Brillance 
and the introduction  of  the  new  ten-minute  coloration product 
Coloriste. The Body  Care  business  continued  to  develop  
positively, particularly in the US where the innovations under the 
brands Dial and Dial  for Men were among the most successful new 
products launched in 2008. In Europe,  Fa Deodorants in particular 
continued their positive growth trend.  The  Skin  Care business 
further expanded its market position thanks to the good performance  
of the Diadermine brand, with the  focus  this  time  on  the  launch
of  the  Age ExCellium Gold line. The emphasis in Oral  Care  was  on
the  relaunch  of  the international brand Theramed, supported by - 
among others - the  launch  of  the innovative Theramed 2in1 
OxyWhite. The Hair Salon  business  continued  to  post very good 
growth, supported in particular by product innovations under the  
OSiS brand, Bonacure Time Restore, and the further expansion of the 
IGORA brand.
Sales of the Adhesive Technologies business sector rose by  31.8  
percent  after adjusting for foreign exchange. This is primarily due 
to the acquisition of  the Adhesives and Electronic Materials 
businesses of National Starch. Nominal  sales growth was 26.2 percent
rising to  1,860  million  euros,  with  organic  growth coming in at
3.6 percent. Operating profit rose  to  169  million  euros.  After 
adjusting for foreign exchange the  increase  was  8.1  percent.  
Earnings  were impacted by 19 million euros in charges incurred 
through the integration of  the National Starch businesses, and by 
expenses of 2 million euros  reassigned  from the former Corporate 
Research function. Moreover, raw material prices  continued to rise. 
The capacity underutilization that arose from a decline in  volumes  
in Europe and North America could not  be  fully  replenished.  The  
Craftsmen  and Consumer segment was adversely affected by the 
difficult  conditions  prevailing in North America and Western 
Europe.  However,  there  were  further  successful developments in  
Eastern  Europe  and  Latin  America.  The  Building  Adhesives 
business continued to exhibit strong growth supported  by,  in  
particular,  its good performance in Eastern Europe and the Middle  
East.  The  Industry  segment benefited significantly from the 
acquisition of the National  Starch  businesses while organic sales 
remained roughly at the prior-year level. In  the  declining markets 
of Western Europe and North America, the business was  unable  to  
reach the sales figures of the prior-year quarter and has been 
negatively impacted  by the  current  difficulties  in  the  
automotive  industry.  The   products   for industrial maintenance, 
repair  and  overhaul  under  the  Loctite  brand  again posted 
positive results. Within the metals segment,  the  business  
particularly expanded its market shares in Eastern Europe and Asia. 
The  performance  of  the National Starch businesses eased slightly 
overall  in  the  face  of  a  market- related slowdown.
Regional Performance
Organic sales in the Europe/Africa/Middle East region increased by 
3.7  percent, with all business sectors contributing. After adjusting
for  foreign  exchange, sales rose by 7.9 percent. At  2,319  million
euros,  sales  overall  were  6.8 percent above the level of the 
previous year. Double-digit organic growth  rates were again achieved
in Eastern Europe and Africa/Middle East, while  development in 
Western Europe including Germany underwent a  slight  decline.  
Overall,  the share of total sales accounted  for  by  the  region  
amounted  to  62  percent. Organic sales of the North America region 
increased by 0.3 percent. As a  result of the difficult prevailing 
market environment in  this  region,  organic  sales both of the 
Adhesive Technologies business  sector  and   Laundry  &  Home  Care 
underwent a slight decline. The Cosmetics/Toiletries  business  
sector,  on  the other hand, performed well. The weakness of the US 
dollar  produced  a  negative foreign exchange impact of 10.5 
percent. After adjusting for  foreign  exchange, sales rose by 19.6 
percent, with the acquired National Starch businesses  making a major
contribution. With sales of 727 million euros, the share of total  
sales accounted for by this region was 19 percent. Sales of the Latin
America  region increased by a highly  respectable  12.4  percent,  
with  all  business  sectors contributing. After adjusting for 
foreign exchange,  growth  was  24.8  percent. And this was again 
primarily due  to  the  additional  sales  generated  by  the 
National Starch businesses. At 215 million  euros,  the  share  of  
total  sales accounted for by this region was 6 percent. In the 
Asia-Pacific region,  organic sales exceeded the prior-year quarter 
by 3.8 percent, and by 65.8 percent  after adjusting for  foreign  
exchange.  Here  again,  all  business  sectors  made  a 
contribution. At 437 million euros, sales were 54.7  percent  above  
the  prior- year quarter. The  rise  is  primarily  due  to  the  
acquired  National  Starch businesses.  The share  of  sales  
accounted  for  by  this  region  grew  three percentage points to 11
percent. In the growth regions of Eastern Europe, Africa, Middle 
East, Latin America  and Asia (excluding Japan), sales increased by 
24.1 percent to 1,448 million  euros, corresponding to a share of 
consolidated sales of 39  percent.  After  adjusting for foreign 
exchange, sales rose by 27.6 percent while organic  growth  amounted 
to a highly respectable 13.5 percent, with all business sectors 
contributing.
Major Participation
Henkel has a 29.3 percent stake in Ecolab Inc., St.  Paul,  
Minnesota,  USA.  In the third quarter of 2008, Ecolab Inc.  
generated  sales  of  1,626  million  US dollars. This corresponds to
a rise  of  15.1  percent.  Net  earnings  for  the quarter increased
by 10.7  percent  to  126.2  million  US  dollars  versus  the 
previous year. The market value of this participation as of September
30,  2008, amounted to around 2.5 billion euros.
Updated Sales and Profit Forecast 2008
Given the business developments of the first nine  months  of  2008  
and  taking into account the National Starch businesses acquired as 
of April 3,  Henkel  has specified its sales and profit forecast for 
full fiscal 2008 as follows:
Henkel expects to achieve organic sales  growth  (after  adjusting  
for  foreign exchange and acquisitions/divestments) of 3 to 5 
percent.
Henkel expects to increase operating profit adjusted for  
restructuring  charges and one-time gains and charges ("adjusted 
EBIT")  by  around  10  percent  (2007 base: 1,370 million euros).
Henkel  expects  to  increase  earnings  per  preferred   share   
adjusted   for restructuring charges and one-time gains and charges  
("adjusted  EPS")  in  the low 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. Not included in this
forecast are any influences arising from the sale  in  part or in 
whole of our stake in  Ecolab,  the  purchase  price  allocation  for
the acquired National Starch businesses that still has to be carried 
out,  and  the tax effects relating to a possible Ecolab transaction,
the acquisition  and  the restructuring charges.
Financial targets for 2012: Strategic priorities for profitable 
growth defined
Henkel's financial targets for 2012 entail a further increase in  
organic  sales accompanied by disproportionate increases in both 
operating profit and  earnings per share. By focusing even stronger 
on its  strategic  priorities  Henkel  will further accelerate its 
profitable growth.
Margin improvement is to be achieved primarily by an even greater 
focus  on  the company's core business. Henkel  has  defined  a  
number  of  measures  in  this regard, aligned to achieving a 
substantially higher level of utilization of  its existing  business 
potential.  Within  this  context,   portfolio   and   brand 
management, innovations  and  efficiency  improvements  play  a  
major  role.  A significant contribution  is  also  anticipated  from
the  integration  of  the National Starch businesses and the 
implementation  of  the  "Global  Excellence" program announced in 
February of this year.
Moreover, Henkel intends to further focus on its customers through  
establishing direct  contacts  and  developing  joint  strategies.  
This  will  also  involve expanding value-added services and 
leveraging Henkel's capabilities  to  satisfy customer needs.
A further major factor in Henkel's future success lies in  the  
ongoing  further development of its more than 55,000 employees around
the  world.  Here,  Henkel will be focusing on increasing its 
performance  orientation  and  enhancing  its approach to diversity 
as a strategic competitive advantage.
The financial targets 2012 in detail have been defined as follows:
. Average organic sales growth: 3 - 5 percent
    . Adjusted return on sales (EBIT margin): 14 percent by 2012
    . Average growth in adjusted earnings per preferred share: > 10 percent
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
Phone: +49-211-797-2606
Wulf Klüppelholz
Phone: +49-211-797-1875
Fax: +49-211-798-9208 
press@henkel.com
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 third quarter, please go to: 
http://www.henkel.com/ir
[pic]
end of announcement                               euro adhoc

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
Börse Hamburg / free trade
Börse Stuttgart / free trade
Börse Düsseldorf / free trade
Börse Hannover / free trade
Börse München / free trade
Börse Berlin / regulated dealing

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