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Abonner Henkel AG & Co. KGaA

Henkel AG & Co. KGaA

Henkel maintains high pace of innovation

Duesseldorf (euro adhoc) -

Good start for Henkel in a challenging environment
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
industry/stock market/Henkel
Düsseldorf, May 7, 2008
Henkel maintains high pace of innovation
Good start for Henkel in a challenging environment
. Robust organic sales growth of 3.3 percent
    . Operating profit (EBIT) adjusted for foreign exchange: plus 2.5 percent
    . Earnings per preferred share (EPS): plus 6.3 percent
    . Growth regions: 16.2 percent organic sales growth
"We made a  good  start  to  the  fiscal  year  within  a  challenging  economic
environment. Our robust organic sales growth, achieved  despite  a  
sluggish  US market and a  strong  prior-year  quarter,  is  
encouraging.  All  our  business sectors have contributed to this," 
said Kasper Rorsted, Chief Executive  Officer of Henkel. "Development
in our growth regions  was  again  dynamic.  I  am  very confident 
that we will meet the targets we have set ourselves for  fiscal  
2008. We expect the acquisition and integration of the National 
Starch  businesses  to further  boost  growth.  In  addition,  the  
implementation   of   our   'Global Excellence' efficiency 
enhancement program is proceeding on schedule."
In the first quarter of  2008,  Henkel  increased  sales  adjusted  
for  foreign exchange by 1.7 percent. Organic sales, i.e. adjusted 
for foreign  exchange  and acquisitions/ divestments, increased by 
3.3 percent and was within the  3  to  4 percentage range of Henkel's
guidance given at the beginning of  the  year.  All business sectors 
contributed to this performance. Overall, sales  fell  slightly to 
3,162 million euros in the first quarter of  2008,  mainly  as  a  
result  of unfavorable movements in foreign exchange.
At 320 million euros, operating profit (EBIT) was roughly at the high
level  of the previous year (-0.9 percent). After adjusting  for  
foreign  exchange,  EBIT growth amounted to 2.5 percent. The 
substantial increase in raw material  costs, which Henkel was unable 
to  completely  offset,  had  a  particularly  negative influence.
Return on sales (EBIT) amounted to 10.1 percent,  0.1  percentage  
points  above the level  of  the  prior-year  quarter.  Income  from 
participations  remained constant at 19 million euros. The net 
interest result  improved  by  11  million euros from -49 million 
euros to -38 million euros, due to lower  net  debt.  The overall 
financial result therefore improved by 11 million euros to  -19  
million euros. The tax rate decreased from 28.3 percent to 25.9 
percent.
Due to the improved financial result and  lower  taxes,  net  
earnings  for  the quarter increased by 6.2 percent to 223 million 
euros. After minority  interests amounting to 4 million euros, net 
earnings for  the  quarter  were  219  million euros (+6.8 percent). 
Earnings per preferred share increased by 6.3  percent  to 0.51 
euros.
Business Sector Performance
The Laundry & Home Care business sector achieved organic growth of  
2.8  percent despite the exceptionally high growth rate  of  11.9  
percent  achieved  in  the prior-year quarter thanks to the  Persil  
brand  centennial.  At  1,031  million euros, total sales were 3.5 
percent below the prior-year figure, reflecting  the 6.3 percent 
negative impact  of  foreign  exchange  and  divestments.  Operating 
profit decreased from 117 million euros to 104 million euros.  This  
was  mainly due  to  the  substantial  increase  in   raw   material 
costs,   which   even countermeasures were unable to offset. The 
Laundry segment  experienced  further organic expansion despite the 
strong prior-year base. This was due  particularly to an increase in 
fabric softener sales following the  successful  launch  of  a range 
of new fragrances. Universal  detergents  continued  to  perform  
well  in Eastern Europe. The  Home  Care  segment  posted  
significant  growth  with  its European  dishwashing   detergents   
undergoing   significant   expansion.   Air fresheners also proved to
be a  growth  driver  in  North  America,  with  sales benefiting  
from  a  successful  product  innovation   featuring   automatically 
alternating fragrances.
The  Cosmetics/Toiletries  business   sector   continued   its   very
positive performance, with organic sales growth of 6.1 percent once  
again  significantly outperforming the relevant markets. Compared to 
the  prior-year  quarter,  sales increased nominally by 0.6 percent 
to 708 million  euros,  and  by  4.4  percent after adjusting for 
foreign exchange. In addition to  further  good  development in 
Eastern Europe, Latin America and Asia-Pacific, strong growth was  
registered particularly in the large Western European and US markets.
After  adjusting  for foreign exchange, operating profit 
significantly increased by 13.4  percent,  in nominal terms it 
improved by 8.0 percent to 89 million euros. As a  result,  the EBIT 
margin also strongly increased by 0.8 percent to  12.5  percent.  The
Hair Cosmetics segment again reported  strong  growth.  The  major  
relaunch  of  the Schauma brand and the première of the Taft Power 
line contributed  significantly to this development. Market positions
in all three categories - Colorants,  Care and Styling - were further
markedly  expanded.  The  Body  Care  segment  again performed well 
with strong support coming from  the  two  major  brands  Fa  and 
Dial. The Skin Care segment developed very well,  supported  by  the 
Diadermine brand with its new product  lines.  The  Oral  Care  
segment  underwent  further growth, particularly as a result of the 
launch  of  Theramed  Titan  Fresh.  The Hair Salon segment also 
posted a very good growth rate in all regions.
Organic sales of  the  Adhesives  Technologies  business  sector  
increased  2.4 percent. The comparable figure  in  the  previous  
year  was  a  very  high  9.1 percent, arising from strong growth in 
the construction  sector.  This  in  turn was due to the mild weather
at the time. Negative foreign exchange  effects  and the divestment 
of the water treatment business resulted in  sales  declining  to 
1,364 million  euros,  3.0  percent  below  the  comparable  
prior-year  figure. Despite the significant increase in raw material 
costs,  operating  profit  rose 2.3 percent to 153 million euros. 
After  adjusting  for  foreign  exchange,  the increase was 6.4 
percent. This development  was  due  primarily  to  implemented 
countermeasures and an increased focus on businesses offering higher 
levels  of profitability. In the Craftsmen and Consumer segment, 
sales  in  Western  Europe and North America were below the levels of
the previous year  due  to  declining markets. The strongest growth 
was  again  achieved  by  the  Building  Adhesives segment, with the 
business performing particularly well in  Eastern  Europe  and Middle
East/North Africa. Henkel is further expanding its production  
capacities in these regions in order to be able to cover  the  
growing  demand  encountered there. The Industry segment developed 
well overall. The one  exception  was  the North America business 
which turned in a weaker performance  due  to  prevailing market 
conditions. Particularly strong results were achieved with  products 
for industrial maintenance, repair  and  overhaul  applications  
under  the  Loctite brand. The packaging adhesives business received 
a boost through the  innovative hotmelt adhesives under the 
Technomelt Supra brand.
Regional Performance
Organic sales in the Europe/Africa/Middle East region increased by 
4.2  percent, with all the business sectors contributing.  Foreign  
exchange  and  divestments had a negative impact of 4.1 percent. 
Overall, sales  remained  roughly  at  the level of the previous year
with a total  of  2,119  million  euros.  In  Eastern Europe, sales 
once again  underwent  a  double-digit  percentage  increase,  but 
Western Europe  including  Germany  was  unable  to  maintain  the  
good  growth momentum of the prior-year quarter. Overall,  the  
region  accounted  for  a  67 percent share of total sales. Sales in 
the North  America  region  decreased  by 3.1  percent  in  organic  
terms.  Due  to  the  prevailing  market  conditions, Adhesives 
Technologies  and  Laundry  &  Home  Care  experienced  only  
sluggish growth. The weakness of the US dollar led to a negative 
foreign exchange  effect of 11.1 percent. With sales of 559 million 
euros, this region accounted  for  an 18 percent share of total  
sales.  The  Latin  America  region  posted  a  sales increase of 3.1
percent to 169 million euros, with growth  after  adjusting  for 
foreign exchange coming in at 8.8 percent. Organic sales rose  by  
8.9  percent, with all business sectors  contributing.  The  share  
of  sales  of  the  region remained unchanged at 5 percent. Business 
in the  Asia-Pacific  region  likewise developed well. Sales 
increased  by  3.8  percent  to  256  million  euros,  and organic 
growth, again supported by all the business  sectors,  amounted  to  
9.4 percent. The region's share of total sales was 8 percent.
In the growth regions of Eastern Europe, Africa, Middle East, Latin 
America  and Asia (excluding Japan), sales rose by 10.0 percent to 
1,101 million euros.  This corresponds to a share of  total  sales  
of  35  percent.  After  adjusting  for foreign exchange, sales rose 
by 14.6 percent. Organic growth  amounted  to  16.2 percent, with all
business sectors contributing.
Major Participation
Ecolab Inc., St. Paul, Minnesota, USA, in which Henkel has a 29.4 
percent stake, reported sales of 1,458 million US dollars in the 
first quarter of 2008, an increase of 16.2 percent compared to the 
previous year. Net earnings for the quarter rose by 15.0 percent to 
102.9 million US dollars. The market value of this participation as 
of March 31, 2008, amounted to around 2.0 billion euros.
Updated Sales and Profit Forecast 2008
Henkel is confident it will be able to meet the previously announced 
sales  and profit targets excluding the National Starch businesses.
Taking into account the National Starch  businesses  acquired  as  of
April  3, 2008, Henkel's sales and profit forecast now reads as 
follows:
Henkel expects to achieve organic sales  growth  (after  adjusting  
for  foreign exchange and acquisitions/divestments) of 3 to 4 
percent.
Henkel expects to increase operating profit adjusted for  
restructuring  charges and one-time gains and charges ("adjusted  
EBIT")  in  the  mid-teen  percentage range (2007 base: 1,370 million
euros).
Henkel expects earnings per preferred share adjusted for  
restructuring  charges and one-time gains and charges ("adjusted 
EPS") to increase in the  mid  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.
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                Wulf Klüppelholz
Phone: +49-211-797-2606     Phone: +49-211-797-1875
Fax: +49-211-798-9208       Fax: +49-211-798-9208
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 first quarter, please go to: 
http://www.henkel.com/ir
press@henkel.com
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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
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