Henkel AG & Co. KGaA

Henkel with significant sales growth in third quarter

Strategic priorities & financial targets 2012: improvement to 14 percent EBIT margin

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banking/budget/companies/finances/industry/Henkel

Düsseldorf (euro adhoc) - . 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:

@@start.t2@@. 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@@end@@

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

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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
              Börse Hamburg / free trade
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              Börse Berlin / regulated dealing



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