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Henkel AG & Co. KGaA

EANS-News: Henkel AG & Co. KGaA /

Düsseldorf (euro adhoc) -

Henkel affected by economic downturn
  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
companies/finances/shares/stock market/Henkel
Düsseldorf, May 6, 2009
Q1 results burdened by fall in demand among key industrial customers
Henkel affected by economic downturn
. Sales increase of 3.1 percent to 3,258 million euros
    . Organic sales decline of 7.0 percent
    . Adjusted operating profit fell 26.1 percent to 235 million euros
    . Adjusted earnings per preferred share declined 39.2 percent to 0.31 euros
"At the beginning of this new financial year, Henkel too has  felt  the  effects
of the persistently adverse economic climate, with our businesses 
turning  in  a very mixed set of results for the  first  quarter  of 
2009,"  commented  Kasper Rorsted, Chairman of the  Henkel  
Management  Board.  "Our  two  consumer  goods business sectors, 
Laundry & Home Care  and  Cosmetics/Toiletries,  continued  to 
perform very well, while the  Adhesive  Technologies  business  
sector  suffered from  the  challenges  encountered  in  major  
customer  industries  worldwide." Rorsted continued: "We are 
dissatisfied with our start to fiscal 2009.  However, we are 
convinced that, as a result of our early introduction of  
countermeasures and based on our solid financial  position,  we  will
emerge  from  this  still difficult economic environment stronger 
than before."
In its first quarter of 2009, Henkel increased sales compared to the 
prior-year quarter by 3.1 percent to 3,258 million  euros.  The  rise
is  attributable  to Henkel's acquisition of  the  National  Starch  
businesses  in  April  2008.  In organic terms, or adjusted for 
foreign  exchange  and  acquisitions/divestments, sales decreased by 
7.0 percent within a difficult  overall  market  environment. After 
adjusting for foreign exchange, the increase  in  sales  amounted  to
3.8 percent. Business development at the company's three business 
sectors  was  very mixed. While the consumer goods business sectors 
Laundry &  Home  Care  and,  in particular, Cosmetics/Toiletries, 
continued to perform very well,  with  organic growth  rates  of  0.4
percent  and  3.5  percent  respectively,  the  Adhesive Technologies
business sector suffered from the challenges encountered  in  major 
customer industries worldwide. This was  reflected  in  an  organic  
decline  in sales of 18.2 percent.
Due  primarily  to  the  significant  decrease  in  earnings  at  the
Adhesive Technologies business sector, operating profit (EBIT) fell 
by 31.7 percent  from 320 million euros in the first quarter of  2008
to  218  million  euros.  After adjusting  for  one-time  
gains/charges  and  restructuring  charges,   adjusted operating 
profit ("adjusted EBIT") decreased by 26.1 percent  from  318  
million euros in the prior-year quarter to 235 million euros.
The EBIT margin  amounted  to  6.7  percent,  while  the  adjusted  
EBIT  margin declined  from  10.1  percent  to  7.2  percent.  Both  
results   are   largely attributable  to  the  significant  decrease 
in   profits   at   the   Adhesive Technologies business sector.
As a result of the sale of Henkel's  stake  in  Ecolab  in  November 
2008,  the investment result fell from 19 million euros to 0 million 
euros.  Net  interest expense increased by 14 million euros from -38 
million  euros  to  -52  million euros. This is primarily due to 
higher net debt arising from  the  financing  of the purchase price 
for the acquisition of the National  Starch  businesses.  The 
financial result consequently decreased further, from -19 million 
euros  to  -52 million euros. The tax rate amounted to 27.1 percent.
With the lower EBIT and the decrease in the financial result, net  
earnings  for the quarter fell by 45.7 percent from 223 million euros
to  121  million  euros. After minority interests totaling 4 million 
euros, net earnings for the  quarter amounted to 117 million euros 
(prior-year quarter: 219 million euros).  Adjusted quarterly net 
earnings after minority interests were 130 million euros  compared to
218 million euros in the first quarter of the  previous  year.  
Earnings  per preferred share eased from 0.51 euros to 0.28 euros.  
The  adjusted  figure  was 0.31 euros compared to 0.51 euros in the 
prior-year quarter.
Business Sector Performance
The Laundry & Home Care business sector  posted  organic  sales  
growth  of  0.4 percent, with foreign exchange having a  negative  
impact  of  2.1  percent.  In nominal terms, sales fell by 1.7 
percent to 1,013  million  euros.  Due  to  the difficult market 
environment, sales in Western Europe  and  North  America  fell below
the figure for the same period  last  year.  In  the  regions  of  
Eastern Europe, Africa/Middle East and Latin America, on the  other  
hand,  the  company posted organic sales growth with, in  most  
cases,  double-digit  growth  rates. Operating profit rose by 7.9 
percent to 107 million euros. After  adjusting  for foreign exchange,
it rose even by 9.6 percent,  with  contributions  coming  not only 
from price increases but also from successful measures to reduce  
cost  and enhance efficiency. The decrease in material prices that 
began  toward  the  end of 2008 also continued through  the  first  
quarter  of  2009.  In  the  Laundry segment, sales growth was once 
again driven by  Henkel's  heavy-duty  detergents and fabric 
softeners. Sales growth  was  again  supported  in  this  quarter  by
innovations such as the cold  power  formula  launched  under  
Henkel's  premium detergent brands in Western Europe.  With  this  
innovation,  excellent  laundry power is assured even at low 
temperatures, enabling  consumers  to  save  energy and therefore 
reduce the burden on the environment as  they  do  their  washing. 
Sales of the Home Care segment matched the level of the previous 
year.  Henkel's dishwashing detergents and WC  cleaners  performed  
particularly  well.  Of  the dishwashing products, the company's two 
major brands Pril and Somat  once  again succeeded in growing faster 
than the category average.
Despite the increasingly difficult market conditions and a  very  
strong  prior- year quarter, the Cosmetics/Toiletries business sector
continued  the  positive trend of recent years, registering organic 
sales growth  of  3.5  percent.  Once again it was successful in 
outpacing the growth of its relevant  markets.  Apart from Western 
Europe, all the regions  contributed  to  the  organic  improvement 
achieved, with the  regions  of  Eastern  Europe,  Asia  and  Latin  
America  in particular continuing to generate strong growth. In 
nominal  terms,  sales  rose by 1.7 percent to 720 million euros. 
Operating profit reached 91 million  euros, an increase of 4.1 
percent, rising to 4.8 percent after  adjusting  for  foreign 
exchange.  The  Hair  Cosmetics  segment  succeeded  in  expanding  
the   market positions of all its categories. The Hair Care and 
Colorants  businesses  turned in a particularly positive performance,
aided by  the  international  launch  of the new Schauma line Q10, 
the introduction of the new hair care brand Syoss  and also the 
launch of the new  colorant  brand  Essential  Colors.  The  Body  
Care segment continued its very encouraging performance in the  USA  
under  the  Dial brand. This was based in particular on line  
extensions  and  the  launch  of  a number of new body wash products.
In Europe, the Fa brand  specifically  ensured a successful start to 
the year: in the deodorants business, the  positive  trend of the 
previous year was extended through the launch of new  products  for  
both women and men. In the Skin Care segment, the focus was on the 
launch of the  new Diadermine line Dr. Caspari and also the relaunch 
of the Diadermine  core  range Lift Plus Triple Lifting. In the Oral 
Care segment,  the  new  Theramed  variant Oxy White generated 
positive impetus. Against the background of an  increasingly serious 
slowdown in the global professional hairdressing market,  Henkel's  
Hair Salon segment significantly outperformed  its  sector.  At  the 
center  of  its activities were the continuing rollout  of  the  new 
brand  Essensity  and  the launch of the styling line Silhouette 
Gold.
Sales of the Adhesive Technologies business sector increased by 7.7  
percent  to 1,469 million euros, or by 7.2 percent after  adjusting  
for  foreign  exchange. The rise is due to  the  acquisition  of  the
National  Starch  businesses.  In organic terms, sales were 18.2 
percent  below  the  figure  for  the  prior-year quarter. In view of
the continuing challenges encountered in the world  economy, the 
business sector was unable to match the sales realized in the  same  
quarter last year in any of its regions, with the exception of  Latin
America.  Due  to the  strong  decline  in  volumes  and  the  
associated  decrease  in   capacity utilization, operating  profit  
fell  by  68.6  percent  to  47  million  euros. Included in this 
figure is  a  charge  of  4  million  euros  arising  from  the 
integration of the National Starch businesses. In the  Adhesives  for
Craftsmen and Consumers segment, the reluctance to spend  among  
consumers  and  inventory reductions pursued by the business sector's
customers had a negative  effect  on business. This led to a 
shortfall versus the  prior-year  results.  The  general trend toward
postponement of construction projects had an adverse effect on  the 
performance of the Building  Adhesives  segment.  However,  with  
strong  growth still taking place in the Middle East  region,  this  
segment  only  suffered  a slight decline. Business in Eastern Europe
remained  at  the  prior-year  level. The Packaging, Consumer  Goods 
and  Construction  Adhesives  segment  benefited significantly from 
the acquisition of the National Starch  businesses  and  also proved 
to be more stable in this difficult economic climate.  However, here 
too the slight decline in demand for consumer goods impacted  
business  development. The effects of the  global  downturn  facing  
the  customer  industries  of  the business sector were particularly 
noticeable in the business  results  generated by its Specialty 
Adhesives  and  Surface  Treatment  segment,  with  significant 
reductions in volume occurring particularly  in  its  operations  
involving  the automotive industry, manufacturers of durable goods 
and the metal industry.  The Electronics segment  has  been  
strengthened  for  the  long  term  through  the acquisition of the 
National  Starch  businesses.  However,  the  general  market 
weakness in the semiconductors sector has had a  significantly  
negative  effect on business performance.
Regional Performance
In the Europe/Africa/Middle East region,  organic  sales  fell  by  
4.6  percent below the figure for the prior-year quarter. While the 
Laundry & Home  Care  and Cosmetics/Toiletries business sectors were 
able  to  slightly  increase  sales, Adhesive Technologies posted a 
decrease in the  double-digit  percentage  range. In Africa/Middle 
East,  Henkel  once  again  generated  a  double-digit  organic 
growth rate,  while  developments  in  Western  Europe  including  
Germany  were regressive. The previously strong growth  rates  
registered  in  Eastern  Europe eased. Overall, the region's sales 
decreased from 2,119 million euros  to  1,996 million euros. The 
share of Group sales was 61 percent.  The  organic  sales  of the 
North America region decreased by 14.1 percent. Due to the difficult 
market environment prevailing in North America,  Laundry  &  Home  
Care  experienced  a slight decline in sales  while  Adhesive  
Technologies  suffered  a  substantial drop.  On  the  other  hand,  
there   were   positive   developments   at   the 
Cosmetics/Toiletries business sector. Total sales of the region 
amounted to  664 million euros, resulting in a share of Group sales 
of  20  percent.  In  organic terms, sales in the Latin America 
region increased by 5.1 percent, with all  the business sectors 
contributing. At 188 million euros, the share  of  total  sales 
accounted for by this region was 6  percent.  In  the  Asia-Pacific  
region,  in organic terms sales decreased compared to the same 
quarter  last  year  by  20.3 percent. A rise in the sales generated 
by  Cosmetics/Toiletries  was  offset  by significant decreases  at  
Adhesive  Technologies  and  the  discontinuation  of Henkel's 
laundry and home care operations in China. Total sales  of  the  
region amounted to 354 million euros, yielding a share of Group sales
of  11  percent. In the growth regions of Eastern Europe, Africa, 
Middle East, Latin America  and Asia (excluding Japan), sales 
increased by 3.8 percent to 1,143  million  euros, corresponding to a
share of consolidated sales of 35.1 percent.  Organic  growth 
amounted to 0.3 percent.
Major Participation Following the sale of its stake in Ecolab  Inc.  
in  November  2008,  Henkel  no longer has any major participations.
Sales and Profits Forecast 2009 Henkel expects that the difficult  
market  conditions  prevailing  in  the  real economy and also in the
financial  markets  will  persist  through  2009.   The general 
economic climate and its further development are difficult  to  
predict. Nevertheless, Henkel is confident of  outperforming  its  
markets  in  terms  of organic  sales  growth  (i.e.  after  
adjusting   for   foreign   exchange   and acquisitions/divestments).
A number of measures have already been introduced  on the operational
side, from which Henkel expects positive  momentum  to  develop. 
These activities and also  relief  from  easing  of  raw  material  
prices  will support the development of operating profit (EBIT) and  
earnings  per  preferred share  (EPS),  as  adjusted  in  each  case 
for  one-time   gains/charges   and restructuring  charges.  As  soon
as  the  markets  allow   properly   reasoned assumptions, Henkel 
will communicate quantified  expectations  for  full  fiscal 2009.
For the second quarter  of  2009  Henkel  expects  its  consumer  
businesses  to continue their strong development of the first quarter
of  the  current  fiscal year. For the Adhesive Technologies business
sector Henkel anticipates a  slight improvement compared with the 
first quarter of 2009.
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.
Contact:
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
Chief Communications Officer:
Ernst Primosch, Corporate Vice President
Photo material available for downloading at http://henkel.com/press. 
For more detailed facts and figures relating to the first quarter of 
2009, 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: Börse Frankfurt / regulated 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 / regulated dealing

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