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Henkel KGaA

Henkel holds course in second quarter

Düsseldorf (euro adhoc) -

Organic sales growth again outpaces market developments
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
companies/Second quarter
Düsseldorf, August 1, 2007
Organic sales growth again outpaces market developments
Henkel holds course in second quarter
. Sales increased by 1.9 percent to 3,293 million euros
    . Organic sales grew 4.3 percent
    . Adjusted operating profit (EBIT) up 6.4 percent to 345 million euros
    . Continued dynamic expansion in the growth regions
"We have continued our good start  to  the  current  fiscal  year  with  further
success in the second  quarter.   All  our  business  sectors  
reported  organic growth outpacing developments in our markets.  We 
were also able to harness  the continuing dynamism prevalent in the 
growth regions in order to  further  expand our market positions," 
said Ulrich Lehner, Chairman of the Management  Board  of Henkel 
KGaA.  "Thanks to successful developments in  the  first  half  year,
we anticipate achieving an increase in organic sales of 4 to  5  
percent  for  full fiscal 2007.  We also continue to expect  an  
increase  in  operating  profit  - adjusted for foreign exchange - in
excess of organic sales growth."
Düsseldorf - In the second quarter of  2007,  Henkel  reported  sales
of  3,293 million euros, an increase of 1.9 percent compared to  the 
prior-year  quarter. The rise in organic  sales,  i.e.  growth  
adjusted  for  foreign  exchange  and acquisitions/divestments,  was 
4.3   percent,   with   all   business   sectors contributing. 
Following a  very  strong  first  quarter  which  was  boosted  by 
special marketing activities  initiated  to  celebrate  the  Persil  
centennial, organic growth in the Laundry & Home Care  business  
sector  normalized  at  3.1 percent.   Sales  growth  at  
Cosmetics/Toiletries  amounted  to  4.3   percent. Adhesives 
Technologies, which had benefited from  building  sector  activity  
in the first quarter due to favorable weather conditions, turned in  
the  strongest performance with a rise of 4.8 percent. This business 
sector was established  on April 1, 2007, as a result of  the  merger
of  the  previously  separately  run Consumer and Craftsmen Adhesives
and Henkel Technologies business sectors.
Operating profit (EBIT) decreased by 5.5 percent to 339 million  
euros,  and  by 3.6 percent after adjusting for foreign exchange. The
figure for the  prior-year quarter included one-time gains amounting 
to 41 million euros arising  from  the divestment  of  the  
insulating  glass  sealant  and   rubber-to-metal   bonding chemicals
businesses, while this quarter's results included a gain of 8  
million euros from the sale of  land  in  Turkey.  In  addition,  
Henkel  increased  its restructuring charges from 6 million euros  in
the  prior-year  quarter  to  14 million euros in this quarter. After
adjusting for these  items,  EBIT  rose  by 6.4 percent, from 324 
million euros to 345 million euros.
At 10.3 percent, return on sales (EBIT) fell by 0.8 percentage points
below  the level of the previous year's quarter.  After  adjusting  
for  the  above  items, return on sales increased by 0.5 percentage 
points, from 10.0  percent  to  10.5 percent. Return on capital 
employed (ROCE) amounted to 15.4 percent. Net  income from 
participations increased by 3  million  euros  to  24  million  
euros,  due primarily to the results of  our  Ecolab  participation. 
Net  interest  expense improved by 11 million euros to -37 million 
euros, mainly due to  higher  income from the fund assets covering  
our  German  pension  obligations.  Overall,  net financial items 
increased by 14 million euros to  -13  million  euros.  The  tax rate
was 26.7 percent.
Due to lower EBIT, quarterly net earnings fell by 3.6  percent  to  
239  million euros. After minority interests amounting to 5 million 
euros, net  earnings  for the quarter were 234 million euros (-3.7 
percent). Earnings per preferred  share amounted to 0.54 euros (-5.3 
percent). Business Sector Performance
Organic sales of the Laundry & Home Care business sector rose  by  
3.1  percent, while foreign exchange rates and 
acquisitions/divestments had a negative  effect of    -3.4 percent. 
Registering double-digit percentage growth rates,  sales  in Eastern 
Europe remained very buoyant, while in Western Europe the  
exceptionally high growth rate of the first quarter normalized as 
expected.  Operating  profit increased by 2.8 percent to 111  million
euros;  after  adjusting  for  foreign exchange, the rise was 5.7 
percent. The growth in sales in the  Laundry  segment was  largely  
the  result  of  the  good  performance  generated  by  heavy-duty 
detergents and fabric softeners. As  part  of  the  campaign  to  
celebrate  the Persil centennial, new "Persil 100 - Better than 
ever!" was  launched  onto  the German market. In Eastern Europe, the
aromatherapy line of the  fabric  softener Silan was expanded through
the  inclusion  of  new  fragrances.  The  Home  Care segment 
benefited from a number of successful innovations. Europe, for  
example, saw the launch  of  new  gel  toilet  cleaner  Bref  Jumbo  
with  anti-bacterial cleaning power, and a further variant was added 
to  the  Clin  range  of  window cleaners. In North America, the 
first bath cleaner under the  Soft  Scrub  brand was introduced into 
the market.
The  Cosmetics/Toiletries  business  sector  achieved   organic   
sales   growth amounting to 4.3 percent. This was once again 
significantly above  the  relevant market growth rate, re-affirming 
the successful  trend  of  preceding  quarters. Aside from continuing
good developments in Western Europe, the  business  sector performed 
particularly well in Eastern Europe and Latin America. This  was  
also reflected in the operating  profit  figure  which  showed  an  
increase  of  3.0 percent to 98 million euros; after adjusting for 
foreign exchange, the rise  was 4.7 percent. The  Hair  Cosmetics  
business  continued  to  achieve  significant growth. The  company's 
market  positions  in  all  the  relevant  categories  - colorants, 
care and styling -  were  further  expanded  through  the  launch  of
numerous innovations, achieving record levels in Europe. The Body 
Care  business showed further appreciable growth, due in particular 
to the good development  of the two major brands Fa and Dial,  both  
of  which  increased  sales  thanks  to successful  innovations  and 
portfolio  extensions.  The  Skin  Care   business profited from the 
market debut of the anti-age innovation Diadermine 3D  Wrinkle
Filler Pen and the relaunch of the Aok  brand  in  Germany.  In  the  Oral  Care
segment, the focus was on the launch  of  the  new  Freshness  variants  to  the
Theramed  line.  The  Hair  Salon  business  also  continued  to  develop   very
positively, benefiting from the introduction into  the  market  of  various  new
products plus a range of relaunch activities.
With organic sales growing by 4.8 percent, Adhesives Technologies continued  its
positive  development.  Double-digit  percentage   growth   rates   
were   again registered in Eastern Europe, Africa/Middle East and 
Asia-Pacific, with  Western Europe and Latin America also performing 
well. Business  developments  in  North America were rather more 
sluggish due to market conditions,  especially  in  the construction 
sector.  Operating profit for the prior-year quarter included  one- 
time divestment gains amounting to 41 million euros. Compared  to  
that  quarter EBIT fell by 13.7 percent, or  by  11.7  percent  after
adjusting  for  foreign exchange.  Without  this  exceptional  item, 
however,  a  substantial  rise  in operating profit was achieved, 
with positive results  particularly  from  strict cost management, 
economies of  scale  arising  from  the  strong  organic  sales 
growth achieved, and implemented price increases. In the Consumer and
Craftsmen segment, the company's instant adhesives were again  its  
strongest  performers. As in the recent past, growth in the Building 
Adhesives segment was again  above average, benefiting both from 
further brisk building activity in Eastern  Europe and  sustained  
recovery  in  important  Western  European  sales  markets.  The 
Industry segment also continued  to  exhibit  very  good  growth.  
The  business operating under  the  Loctite  brand  for  industrial  
maintenance,  repair  and overhaul performed  very  well.  In  our  
North  American  automotive  business, weakening due to the sluggish 
market,  the  measures  initiated  brought  their first  successes.  
Business  activities  involving  the   aircraft   and   steel 
industries continued to exhibit strong growth. Here, Henkel  was  
able  to  both expand its market positions with  innovative  surface 
treatment  products,  and implement price increases.
Regional Performance
Sales in the Europe/Africa/Middle East region came in at 2,111 
million euros,  a rise of 4.3 percent or 4.4 percent after adjusting 
for  foreign  exchange.  All business sectors contributed to this 
growth.  In  Eastern  Europe,  sales  again increased in the 
double-digit percentage range,  while  in  Western  Europe  the 
growth dynamism of the first quarter  slackened  somewhat.  There  
was  also  an absence of sales volume due to  the  divestment  of  
various  marginal  business activities. At 64 percent, the share of  
sales  accounted  for  by  this  region remained at roughly the same 
level as in the previous  year.  Due  primarily  to foreign exchange 
effects,  sales  of  the  North  America  region  fell  by  7.7 
percent; after  adjusting  for  foreign  exchange,  the  decline  was
just  1.1 percent. The cosmetics business in North  America  
exhibited  gratifying  growth supported by successful innovations.  
With  sales  of  646  million  euros,  the region's share of total 
sales amounted to 20 percent. The Latin  America  region registered 
sales of 178 million  euros,  an  increase  of  5.2  percent  or  7.8
percent  after  adjusting  for  foreign  exchange.  This  growth  was
generated primarily  by  the  Cosmetics/Toiletries  and  Adhesives  
Technologies  business sectors. The share of sales attributable to 
the region remained unchanged  at  5 percent. Henkel's businesses in 
the Asia-Pacific region performed  exceptionally well. At 298 million
euros, sales rose significantly by 8.4 percent,  increasing further 
to  11.4  percent  after  adjusting  for  foreign  exchange.  Here,  
the Adhesives Technologies business sector  exhibited  a  
particularly  high  growth rate. The region's share of total sales 
increased slightly to 9 percent.
Overall, the highly encouraging developments encountered in the  
growth  regions of Eastern Europe, the Middle  East,  Africa,  Latin 
America  and  Asia-Pacific continued through the second quarter, with
Henkel once again achieving a double- digit percentage increase in 
sales in these markets.
Major Participation
Ecolab Inc., St. Paul, Minnesota, USA,  in  which  Henkel  has  a  
29.6  percent stake, reported sales of 1,362 million US  dollars  in 
the  second  quarter  of 2007, an increase of 11.1 percent compared 
to the previous  year.  Net  earnings for the quarter rose by 18.4 
percent to 110.3 million  US  dollars.  The  market value of this 
participation as of June 30, 2007, amounted to around 2.3  billion 
euros.
Updated Sales and Profit Forecast 2007
Taking into account the encouraging business developments observed in
the  first half of the year, Henkel now expects to achieve an organic
growth  rate  (after adjusting for foreign exchange and 
acquisitions/divestments) of 4 to  5  percent for the full fiscal 
year.
Henkel continues to expect an increase in operating  profit  (EBIT)  
-  adjusted for foreign exchange - in excess of organic sales growth.
Henkel likewise expects an increase in earnings per  preferred  share
(EPS)  in excess of organic sales growth.
This document  contains  forward-looking  statements  which  are  
based  on  the current estimates and assumptions made by the  
corporate  management  of  Henkel 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 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.
Photo material available for downloading at: http://henkel.com/press
Further detailed information on the facts and figures for the second 
quarter 2007 can be found in the internet at: 
http://www.henkel.com/ir
[pic]
end of announcement                               euro adhoc 01.08.2007 07:37:13

Further inquiry note:

Ernst Primosch
Phone: +49-211-797-3533
Fax: +49-211-798-2484

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

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

press@henkel.com

Branche: Consumer Goods
ISIN: DE0006048408
WKN: 604840
Index: DAX, HDAX, Prime All Share, CDAX
Börsen: Börse Frankfurt / official 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 / official dealing

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