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Henkel AG & Co. KGaA

EANS-News: Henkel AG & Co. KGaA /

Düsseldorf (euro adhoc) -

Henkel reports substantial increase in sales and earnings in the 
second quarter
  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
Annual Reports/annual result/Company Information/Earnings/Financial
Figures/Balance Sheet/Further Education/New Products/quarterly report
Subtitle: Henkel reports substantial increase in sales and earnings 
in the second quarter
Düsseldorf, August 4, 2010
Sales and profits forecast for 2010 further upgraded
Henkel reports substantial increase in sales and earnings in the 
second quarter
• Sales increase by 11.6 percent to 3,890 million euros
    • Organic sales growth of 6.8 percent
    • Share of sales of growth regions: plus 3 percentage points to 41 percent
    • Adjusted operating profit: plus 54.5 percent to 476 million euros
    • Adjusted EBIT margin: plus 3.5 percentage points to 12.2 percent
    • Adjusted earnings per preferred share (EPS): plus 97.1 percent to 0.73
      euros
"Following a very good start to fiscal 2010, we have  now  seen  our 
operations continue their successful development in the second 
quarter, with  our  Adhesive Technologies and Cosmetics/Toiletries 
business  sectors  making  a  particularly strong contribution. In 
addition,  the  share  of  sales  generated  within  the growth 
regions reached 41 percent," said Kasper Rorsted, Chairman of the  
Henkel Management Board, adding: "Our excellent performance in the 
second  quarter  was once again due to our strong brands and  
successful  innovations.  However,  our continuing focus  on  
implementing  more  efficient  structures,  stricter  cost 
management, and the progress made in the pursuit  of  our  strategic 
priorities have also contributed substantially to the very  good  
results  achieved.  As  a consequence we are now looking  forward  to
an  improvement  of  more  than  25 percent in earnings versus 2009."
In the second quarter of 2010, Henkel generated sales of  3,890  
million  euros. In a stabilizing market environment,  this  was  an  
increase  of  11.6  percent compared to the figure for the prior-year
quarter. After adjusting  for  foreign exchange, sales improved by 
6.0 percent. Organically, i.e. after  adjusting  for foreign exchange
and acquisitions/divestments, a  further  significant  increase in 
sales of 6.8 percent was achieved compared to the  prior-year  
quarter.  This follows on from strong sales growth in the first 
quarter of 2010. This  positive development was driven by the  
Adhesive  Technologies  and  Cosmetics/Toiletries business sectors. 
With a 13.6  percent  increase,  Adhesive  Technologies  again 
achieved a double-digit organic  growth  rate.  Cosmetics/Toiletries 
once  more substantially outperformed market growth with  an  organic
improvement  of  5.0 percent. The Laundry &  Home  Care  business  
sector  achieved  positive  volume growth although, due to 
intensified promotional and price competition,  recorded a decline in
organic sales of minus 1.5 percent.
Due primarily to the substantial improvement posted  by  Adhesive  
Technologies, operating profit (EBIT) increased by 51.2 percent, from
279  million  euros  to 421 million euros. After allowing for 
one-time charges (9 million  euros),  one- time gains   (1 million 
euros) and restructuring  charges  (47  million  euros), adjusted 
operating profit improved by 54.5 percent, from 308  million  euros  
to 476 million euros.
Return on sales (EBIT margin) increased significantly, from 8.0 
percent to  10.8 percent, and adjusted return on  sales  even  rose  
from  8.7  percent  to  12.2 percent.
The company´s financial result improved from -60 million euros  to  
-35  million euros. This is attributable to the lower net  debt  
figure,  accompanied  by  an improvement in results from currency 
hedging  transactions.  The  tax  rate  was 27.5 percent.
Due to the increased EBIT, net income for the  quarter  rose  by  
86.7  percent, from 150 million euros to 280 million  euros.  After  
deducting  non-controlling interests totaling 7 million euros, net 
income for the quarter came  in  at  273 million euros (prior-year 
quarter: 143 million euros).  Adjusted  quarterly  net income after 
non-controlling interests amounted to 315  million  euros  compared 
to 162 million euros in the prior-year quarter.  Earnings  per  
preferred  share (EPS) increased substantially, from 0.33 euros to 
0.63 euros. Adjusted  earnings per preferred share almost doubled, 
reaching  0.73  euros  versus  0.37  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 3.0 percentage points to 8.7 percent.
Business sector performance
In the second  quarter  of  2010,  the  Laundry  &  Home  Care  
business  sector increased sales by 2.7 percent to 1,086  million  
euros.  The  foreign  exchange impact amounted to a positive 4.6  
percent.  However,  intense  promotional  and price competition led 
to a fall in prices  of  4.7  percent.  Hence,  despite  a 
substantial increase in volume of 3.2 percent, organic  sales  
declined  by  1.5 percent compared to the prior-year quarter. The 
highest rate of  organic  growth was achieved in the region  of  
Africa/Middle  East.  In  North  America,  sales decreased due to  
strong  competitive  pressures.  However,  in  all  the  other 
regions, sales were largely held at the level  of  the  previous  
year,  despite declining markets in most cases, enabling Henkel to 
either defend or expand  its market shares. Operating profit rose 
markedly, up 15.4 percent  to  137  million euros, the  increase  in 
material  prices  being  successfully  offset  through further cost 
savings in procurement and production. At 12.6 percent,  return  on 
sales improved by 1.4 percentage points versus  the  prior-year.  
Sales  of  the Laundry Care  business  benefited  from  a  number  of
successful  innovations. Eastern Europe, for example, saw the launch 
of Persil Gold with  "Fresh  Pearls" from  Silan,  which  combines  
outstanding  cleaning  power  with  a  freshening fragrance. The 
innovative stain removal product Transpirex was  introduced  into the
Spanish market  under  the  Neutrex  brand.  The  Home  Care  
business  also launched a number of high-performance innovations onto
the market in the  period under review. In Eastern Europe, a new 
hand-dishwashing product  was  introduced under the Pur brand, which 
- with its especially viscous  and  extra-strong  Pur Max gel formula
- is able to remove even  the  most  stubborn  dirt  with  small 
dosages. The new WC product Bref Power Active was launched onto the  
markets  of Western and Eastern Europe offering four active 
components: a cleaning foam,  an anti-limescale formulation, a 
special dirt protection formula which prevents re- contamination, and
an extra-fresh fragrance.
Despite  high  prior-year  figures,  the  Cosmetics/Toiletries  
business  sector posted strong organic sales growth of 5.0 percent to
865 million  euros  in  the second quarter of 2010, significantly 
outperforming  the  relevant  markets  and continuing the highly 
successful trend  of  recent  quarters.  This  growth  was primarily 
due to an ongoing innovation  offensive.  Record  market  shares  
were again registered in Europe.  The  growth  regions  of  Asia  
(excluding  Japan), Africa/Middle East, Latin America and Eastern 
Europe made a particularly  strong contribution to this continuing 
good performance  with,  again,  a  double-digit improvement.  While 
a  slight  decline  was  observed  in  North   America,   a 
substantial increase in sales was once more achieved in Western  
Europe.  Worthy of particular mention is the robust improvement in 
sales  achieved  in  Germany. With advertising investment 
significantly higher, operating profit  (EBIT)  rose in the quarter 
under review by 12.4 percent to  112  million  euros.  Return  on 
sales improved by 0.3 percentage points to  13.0  percent,  a  new  
high  for  a second quarter. The Hair Cosmetics  segment  continued  
to  perform  very  well, expanding its market shares and posting 
record results in  all  categories.  The Hair Care category benefited
from the launch of the Schauma line Intensiv  Anti- Schuppen 
(Intensive Anti-Dandruff), and the introduction of the  Syoss  
Moisture series. In the Colorants business, the focus was on the 
further successful roll- out of the Syoss Color line and the  
introduction  of  Palette  Intensive  Color Creme Gelée Royale and  
Diadem  Gelée  Royale.  In  the  Styling  category,  new product  
launches  from  Got2b  and  Taft  Power  &  Touch  contributed  to  
the gratifying performance achieved. In addition to a successful 
launch  of  new  Fa 3D Protect and the relaunch of Dial4Men, the Body
Care  segment  also  benefited from further significant  growth  
momentum  generated  by  the  introduction  in Western and Eastern 
Europe of the innovative, high-performance  men´s  deodorant brand 
Right Guard. In the Skin Care segment, the focus was on  the  
relaunch  of the Diadermine line Reactivance for mature skin. In the 
Oral Care  segment,  the focus was on the relaunch of the  successful
series  Theramed  2in1.  The  Hair Salon segment again generated good
sales growth in the second  quarter  compared to prior-year. As a 
result, the business was able to gain further market  shares in a 
persistently difficult operating environment. The successful 
relaunches  of the styling brand OSiS and the cross-segment  brand  
Essensity  were  among  the main activities pursued.
The Adhesive Technologies  business  sector  saw  the  
extraordinarily  positive developments of the first quarter continue 
through the second quarter.  With  an increase of 19.5 percent to 
1,890 million euros, sales were significantly  above the level of the
prior-year quarter. Organically, sales rose  by  13.6  percent, this 
growth being generated in particular by volume increases that were 
able  to more than offset the slight reduction in price levels. All  
Henkel´s  businesses and regions contributed to this positive  
development.  The  growth  regions  of Asia (excluding Japan), 
Africa/Middle East, Latin  America  and  Eastern  Europe continued to
exhibit  above-average  improvements  in  sales.  Yet  the  mature 
markets of Western Europe and North  America  also  posted  highly  
satisfactory double-digit growth. Despite  material  price  increases
operating  profit  and return on sales developed well, reflecting 
both an increase in sales volume  and an improved cost structure. 
Operating profit more than doubled compared  to  the prior-year 
quarter, coming in at 222 million euros. Adjusted  EBIT  amounted  to
255 million euros. Return on sales also improved to 11.8 percent, a  
substantial 5.8 percentage points higher than prior-year. Adjusted 
return on sales  actually increased by 6.3 percentage points to a new
high of 13.5  percent.  The  segment Adhesives for Craftsmen, 
Consumers and Building continued  to  develop  well  in all regions. 
Both the business with craftsmen and consumers and also  activities 
involving  the  construction  industry  contributed  to  the  growth 
achieved. Compared to the market-related, rather weak prior-year 
quarterly figures  posted by the Transport and Metal business,  this 
quarter  the  segment  achieved  the strongest rate of sales  growth 
registered  within  the  Adhesive  Technologies business sector. All 
regions contributed  to  this  improvement,  some  of  them posting 
significant double-digit sales growth. In the General Industry  
business too, sales were substantially above the level  of  the  
prior-year  quarter.  In particular, the regions of Asia-Pacific, 
North America and Latin America  posted above-average  results;  
however,  the  Europe/Africa/Middle  East  region  also turned in 
double-digit growth rates. Likewise the Packaging, Consumer Goods  
and Construction Adhesives business saw growth compared to the  
prior-year  quarter, with  activities  involving  laminating  
adhesives  under   the   Liofol   brand performing especially well. 
The  Electronics  segment  also  continued  to  show considerable 
improvement,  with  the  business  generating  further  substantial 
increases compared to the  prior-year  quarter,  primarily  in  
Western  Europe, North America and Latin America. This year, at the 
world´s most important  trade show for the PCB and electronic  
components  industry  in  Las  Vegas,  Henkel´s innovative strength 
within this sector was recognized with two  awards  for  new product 
developments under the Loctite and Hysol brands.
Regional performance
In the Europe/Africa/Middle East  region,  sales  improved  
organically  by  6.3 percent compared to the second quarter of  2009,
coming  in  at  2,307  million euros, with all three business sectors
contributing.  Africa/Middle  East  once again saw double-digit 
organic growth,  while  developments  in  Eastern  Europe continued 
in the upper single-digit  range.  Western  Europe  including  
Germany posted an organic growth rate in the mid single-digits, as it
did in  the  first quarter of 2010. At 714 million euros, sales of 
the North  America  region  grew organically by 1.9 percent compared 
to the  prior-year  quarter.  Sales  of  the Adhesive Technologies 
business sector developed particularly well,  while  sales in the 
Laundry & Home Care and Cosmetics/Toiletries business  sectors  
declined. The successful development of the Latin America region 
continued unabated.  Here organic sales increased by 12.3 percent to 
259 million euros, with all  business sectors contributing. Sales 
continued to recover  in  the  Asia-Pacific  region, with organic 
growth of 16.0 percent compared to prior-year  generating  a  total 
of 560  million  euros.  Encouraging  sales  increases  were  
achieved  by  both
Adhesive  Technologies  and  Cosmetics/Toiletries.  In  the  growth  regions  of
Eastern Europe, Africa/Middle East, Latin America and  Asia  (excluding  Japan),
sales rose by 21.4 percent to 1,598 million euros. Compared  to  the  prior-year
quarter, organic growth amounted to 11.6 percent,  keeping  it  in  the  double-
digit range. All the business sectors contributed to  this  improvement,  albeit
with  the  biggest  contributions  coming   from   Adhesive   Technologies   and
Cosmetics/Toiletries. The share of sales of the growth  regions  increased  from
38 to 41 percent.
Sales and profits forecast 2010
Looking at 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 further positive momentum  to ensue. For example, it 
anticipates further contributions to profit arising  both from the 
synergies created  through  the  integration  of  the  National  
Starch businesses, backed up by a strictly disciplined cost 
management approach.  These factors and the  expected  increase  in  
sales  will  positively  influence  the development of adjusted  
operating  profit  (EBIT)  and  adjusted  earnings  per preferred 
share (EPS). Henkel expects both  metrics  to  undergo  a  
substantial improvement of more than 25 percent compared to the 
levels of 2009.
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
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
more detailed facts and figures relating to the second quarter of 
2010, please go to: http://www.henkel.com/ir.
press@henkel.com
[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: 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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