Henkel AG & Co. KGaA

EANS-News: Henkel AG & Co. KGaA
Henkel makes a good start to the year

Substantial increase in sales and profits in the first quarter

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annual result/Company Information/Earnings/Financial Figures/Balance Sheet/Further Education/Marketing/New Products/Finance,

Subtitle: Substantial increase in sales and profits in the first quarter

Düsseldorf (euro adhoc) - Düsseldorf, May 5, 2010

@@start.t2@@• Sales increase by 7.8 percent to 3,512 million euros
      • Organic sales growth of 8.8 percent
      • Adjusted operating profit: plus 79.1 percent to 421 million euros
      • Adjusted EBIT margin: plus 4.8 percentage points to 12.0 percent
      • Adjusted earnings per preferred share (EPS): plus 93.5 percent@@end@@

"Henkel has made a good start to the fiscal year, with all our business  sectors contributing. Despite the persistently challenging environment, Laundry  &  Home Care and Cosmetics/Toiletries continued their successful development  of  recent quarters, while Adhesive Technologies also returned to  robust  rates  of  sales growth," said Kasper Rorsted, Chairman of the Henkel Management  Board,  adding: "Once again our strong brands made a  further  major  contribution   to  Henkel´s gratifying Q1 results. However, this very good performance is also down  to  our efforts in adapting our structures and reducing  our  costs,  coupled  with  the good progress we have made in the implementation of  our  strategic  priorities. Now we are looking forward to a noticeable improvement in our  results  of  more than 15 percent for the full fiscal year versus 2009."

In the first quarter of 2010, Henkel generated sales of 3,512 million euros.  In a recovering market environment, this constitutes an   increase  of  7.8  percent compared to the figure for the prior-year quarter. After adjusting  for  foreign exchange, sales rose by 7.5   percent.  Organically,  i.e.  after  adjusting  for foreign exchange, acquisitions and divestments, the increase was  a  substantial 8.8 percent, representing  the  first  significant  rise  against  a   prior-year period for four quarters. And it was a development to which  all  the  company´s business sectors contributed. Laundry  &   Home  Care  again  turned  in  a  very positive performance with organic growth at 3.6 percent.  And  having  increased sales organically by  5.5  percent,  the  Cosmetics/Toiletries  business   sector outstripped both the high levels of growth achieved in recent quarters  and  the overall rate of market expansion. Against a prior-year quarter weakened  by  the impact of  the  crisis,   Adhesive  Technologies  reported  double-digit  organic growth amounting to a highly encouraging 14.5 percent.

Due primarily to the substantial improvement posted  by  Adhesive   Technologies, operating profit (EBIT) increased by 93.3 percent, from 218  million  euros  to 422 million euros. After allowing for restructuring charges (31  million  euros) and one-time gains (32 million euros), adjusted  operating  profit  improved  by 79.1 percent, from 235 million euros to 421 million euros.

Return on sales (EBIT margin) increased significantly, from 6.7 percent to  12.0 percent. Adjusted return on  sales  rose  from  7.2 percent  to  likewise  12.0 percent.

Financial result decreased slightly  from  -52  million  euros  to   -54  million euros, with the positive effect of reducing net debt being  more  than  canceled out by higher interest paid. At 27.7 percent, the tax rate  was  slightly  above the level of the previous year.

Due to the increased EBIT, net income for the quarter  rose  by   119.8  percent, from 121 million euros to 266 million  euros.  After deducting  non-controlling interests totaling 7 million euros, net income for the quarter amounted  to  259 million euros (prior-year quarter: 117 million euros).  Adjusted  quarterly  net income after non-controlling interests amounted to 258  million  euros  compared to 130 million euros in the prior-year quarter.  Earnings  per   preferred  share (EPS) increased from 0.28 euros to 0.60 euros.  The adjusted  figure  was  also 0.60 euros compared to 0.31 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 4.7 percentage points, to 8.5 percent.

Net debt versus prior-year quarter has undergone a substantial reduction of  1.4 billion euros to 2.7 billions euros.

Business sector performance

In the first quarter of 2010, the Laundry & Home Care business sector increased sales by 3.5 percent to 1,049 million euros.  Organic   growth  amounted  to  3.6 percent. This gratifying rise in sales was due not only to  performance  in  the emerging economies but also, and to a high degree, to  a  sales  improvement  in the mature markets Western Europe and North  America.  The  organic  improvement was exclusively  volume-driven.  Significantly  outpacing  the  rise in  sales, operating profit increased by 41.2 percent to 151  million euros.  Included  in this figure is a gain of 15 million euros from the  sale  of  licensing  rights. Successful measures geared to reducing cost and enhancing efficiency also  again contributed noticeably to the increase in income. At  14.4  percent,  return  on sales improved by a substantial 3.8 percentage points  compared  to   the  prior- year quarter. In the Laundry segment, positive developments in sales  came  from successes in the growth regions of Africa/Middle East and  Latin  America,  with Western Europe also contributing. These developments were further aided  by  the success of a number of innovations.  One  example  is  Henkel´s  Persil   Hygiene Rinser, which was launched in a number  of  countries  in   Western  Europe.  And Eastern European markets  saw  the  rollout  of Persil  Gold  Plus  Active,  an innovative product that reduces the amount of energy required per laundry  wash. The Home Care business made a  disproportionate  contribution  to  the  rise  in sales. The geographic breakdown shows that Henkel registered growth momentum  in virtually all its regions, particularly in Africa/Middle East,  Asia and  North America. In North America the focus was on the  launch  of products  under  the Soft Scrub brand for gentle  surface  cleaning   in  the  bathroom  and  kitchen. Suitable for removing a wide range of soil types,  they  reduce  the  amount  of effort required and accelerate the cleaning process on all surfaces.

The first quarter of 2010 saw the Cosmetics/Toiletries business sector  continue unerringly  along  its  successful  growth  path.     In  an  unrelenting,  highly competitive market environment, it posted a strong 5.5 percent rise  in  organic sales against already high prior-year levels. Registering double-digit rates  of increase across the board, the growth  regions  of  Asia-Pacific,   Africa/Middle East, Latin America and Eastern  Europe  turned  in   excellent  results,  and  a significant contribution to growth also came from the mature markets of  Western Europe. This highly impressive sales performance was  supported  by  a  rigorous and ongoing innovation offensive  which  led  to  the  launch  of   numerous  new products. At 10.1 percent, the rise in  operating   profit  far  outstripped  the increase in sales, with the 100 million euro mark being reached  for  the  first time in a first quarter. Return on sales improved by 0.5  percentage  points  to 13.1 percent. The Hair Cosmetics segment reported a remarkably positive  set  of figures, expanding its market shares and posting record results in all three  of its subsegments. The Hair  Care  business  developed   exceptionally  well  as  a result of  a  relaunch  of  the  Schauma   Volume  series  with  push-up  effect, accompanied by the introduction of the new Gliss  Shea  Cashmere  line.  In  the Colorants business, priority was given to the launch of  the  Syoss   Color  line and driving forward the further successful expansion  of Essential  Colors.  In the Styling business, the introduction of the Taft Volume line  for  tired  hair contributed to a positive overall performance.  The  focus  in  the  Body  Care segment was on a number of innovations launched around  the  world.  In  Europe, the Fa brand was extended by the new deodorant line Active Pearls and  the  body wash series Fa Yogurt Smoothies. In the USA, the introduction  into   the  market of NutriSkin under the Dial brand also helped generate further growth  momentum. The priority in the Skin Care business was on  expanding  the  anti-aging  line Diadermine Lift+. The Oral Care segment successfully strengthened  the  Theramed 2in1 series with the launch of the new freshness variant 16h Xtra Fresh. And  in the Hair Salon business, Schwarzkopf Professional returned to a  good  level   of growth in the  first  quarter,  expanding  its  market  share  in a  continuing difficult market environment. The main impetus here was provided by a number  of high-performing innovations in the colorants category.

Sales of the Adhesive Technologies business sector exceeded by 12.4 percent  the level of the first quarter of 2009,  rising  to  1,651   million  euros.  And  in organic terms, revenues increased by an even more respectable 14.5 percent,  due in large part to  substantial   volume  increases.  All  businesses  and  regions contributed to this exceptional expansion in sales: the growth regions of  Asia- Pacific, Africa/Middle  East,  Latin  America  and  Eastern  Europe  once   again performed above average, and there were also substantial increases in  sales  in the mature markets Western Europe and North America. Operating  profit  likewise underwent a significant improvement - compared  to  the  prior-year  quarter  it almost quadrupled, coming in at 185 million  euros.  The  basis  for  this   very strong increase was provided by measures introduced in the last financial  year aligned to optimizing  earnings.  Return  on  sales   rose  by  a  substantial  8 percentage points to 11.2 percent. After adjusting  for  the  disposal  of  the adhesive  tapes  business  in North  America,  the  Adhesives  for    Craftsmen, Consumers and   Building  business  posted  further  growth,  with  all  segments contributing.  Substantial  improvements  versus  the  prior-year   quarter  were achieved in North America and Africa/Middle East especially. After  considerable market-related declines in the previous year, the Transport and  Metal  business registered significant increases in sales in the quarter under review.  Business with customers  in  the  metals  industry  and,  in  particular,   sales  to  the automotive sector were significantly higher than in the first quarter  of  2009. The General Industry business also showed an improvement compared to the  prior- year period, with the highest growth rates  being  achieved  in  North  America, Asia-Pacific  and  Africa/Middle  East.  The  Packaging,  Consumer     Goods    and Construction Adhesives business likewise made gains, with sales in  the  regions of Asia-Pacific and Africa/Middle East substantially above  the  levels  of  the first quarter of 2009. However, the strongest growth rate was  achieved  by  the Electronics business. Here, not only  were  sales  in  all  the  growth  regions significantly above the  levels  of  the  prior-year  quarter,  the   regions  of Western Europe and North America also developed exceptionally well.

Regional performance

In the Europe/Africa/Middle East  region,  sales  improved  
organically  by  6.0 percent compared to the first quarter  of  2009,
coming  in  at  2,139  million euros, with all three business sectors
contributing.  Africa/Middle  East  once again realized  double-digit
organic  growth,  while  developments  in  Eastern Europe continued
in the positive single-digit range.  Western  Europe  including
Germany returned to growth in  the  mid  single-digit  range  after  
an  organic decline in sales in the fourth quarter of 2009. The share
of total  Group  sales attributable to the region as a whole remained
unchanged at 61 percent. After  a decrease in the fourth quarter of  
2009,  sales  in  the  North  America  region improved organically by
7.9 percent compared to the prior-year quarter,  closing at  645  
million  euros.  Sales  of  the  Laundry  &  Home  Care  and    
Adhesive Technologies business sectors developed exceptionally well.
The  region´s  share of Group sales declined,  ending  the  period  
at  18  percent.  Meanwhile,  the successful development of the Latin
America  region  continued  unabated.  Here, organic sales increased
by 10.6 percent to 216 million euros, with all  business sectors
contributing. At 6 percent, the share of  Group  sales  attributable
to the region remained constant. Sales in  the  Asia-Pacific  region
continued  to recover compared to the fourth quarter of  2009,  
growing  organically  by  27.6 percent versus the prior-year quarter
and  ending  the  period  at  462  million euros.    Strong    sales    
increases    in    the    Adhesive      Technologies      and
Cosmetics/Toiletries business sectors contrasted with stagnation  at
Laundry  & Home Care. The share of total sales accounted for by  this
region  rose  to  13 percent. In the growth regions of  Eastern  
Europe,  Africa/Middle  East,  Latin America and Asia (excluding
Japan), sales increased by  17.2  percent  to  1,339 million euros.
Compared to the prior-year quarter, organic  growth  amounted  to
14.2 percent, which was also an improvement  over  the  figure  for  
the  fourth quarter of 2009. All our  business  sectors  contributed
to  this  achievement, particularly Adhesive Technologies and
Cosmetics/Toiletries which each  recorded double-digit organic growth
rates. The share of  sales  of  the  growth  regions increased from
35 to 38 percent.

Sales and profits forecast 2010

In Henkel´s estimation, the overall mildly positive market conditions currently prevailing in the real economy and in  the  financial   markets  remain  fragile. Based on the forecasts for the current year, Henkel expects  the  world  economy to grow by around 3   percent,  but  without  any  anticipation  of  a  sustained upturn.

Henkel is confident of again outperforming its  relevant  markets  in terms  of organic sales growth. A number of measures have already been introduced  on  the operational side,  from  which  Henkel   expects  further  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 a strictly disciplined cost management approach. All  these factors will positively influence the development of adjusted  operating  profit (EBIT) and adjusted earnings per   preferred  share  (EPS).  Following  the  very successful start made to the new  financial  year,  Henkel  expects  both  these metrics to show a noticeable improvement of more than  15  percent  compared  to the figures for 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 Phone: +49-211-797-2606 Phone: +49-211-797-1875 Fax: +49-211-798-4040

Photo material available for downloading at http://henkel.com/press. For more detailed facts and figures relating to the first quarter of 2010, please go to: http://www.henkel.com/ir.

press@henkel.com -----------------------

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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
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