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Henkel AG & Co. KGaA

EANS-News: Henkel AG & Co. KGaA
Henkel shows positive trend in Q2

Düsseldorf (euro adhoc) -

Consumer businesses report continued success – slight recovery of 
Adhesives business
  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
companies/finances/industry/shares/Henkel
. Sales fall 5.0 percent to 3,485 million
euros    . Organic sales decline 5.3 percent    . Operating profit 
increases from 113 million euros to 279 million euros    . Adjusted 
operating profit decreases 17.2 percent to 308 million euros
"Again in the second quarter of 2009, Henkel felt the effects of the 
continuing world economic recession. Nevertheless, all  our  business
sectors  were  again able to outstrip their relevant markets," said 
Kasper Rorsted, Chairman  of  the Henkel Management Board. "Our 
Laundry  &  Home  Care  business  sector  actually surpassed the good
results of  the  first  quarter,  while  Cosmetics/Toiletries again 
showed a very positive performance. Compared  to  the  first  
quarter,  we also registered an improvement at  Adhesive  
Technologies."  Rorsted  continued: "These developments are 
attributable to the countermeasures we were able to  put in place 
early on. Hence we remain firmly convinced 2009  will  not  be  a  
lost year.  Rather,  it  will  be  a  major  step  toward  achieving 
our   long-term objectives."
In a persistently difficult market environment, Henkel achieved sales
of  3,485 million euros in the second quarter of 2009, 5.0 percent 
less than in the prior- year period. Organic sales, i.e. sales after 
adjusting for foreign exchange  and acquisitions/ divestments, were 
5.3  percent  below  the  level  of  the  second quarter of 2008, but
improved slightly compared to the  first  quarter  of  this year. 
Against this background, developments  at  the  company's  three  
business sectors continued to show a very mixed picture. The  
consumer  goods  businesses Laundry & Home Care and 
Cosmetics/Toiletries were able to successfully  continue their 
positive trend with organic growth rates of 6.3 percent  and  3.5  
percent respectively. The Adhesive Technologies business  sector  
improved  compared  to the first quarter, but due to the volume 
decreases in major customer  industries worldwide, was unable to 
avoid posting  a  decline  in  organic  sales  of  15.4 percent.
Due primarily to the restructuring charges burden on the results of  
the  prior- year quarter, operating  profit  (EBIT)  increased  by  
145  percent,  from  113 million euros to 279 million euros. After 
adjusting for  one-time  gains/charges and  restructuring  charges,  
adjusted  operating   profit   ("adjusted   EBIT") decreased by 17.2 
percent, from 372 million euros to 308 million euros. This  is 
largely attributable to the decrease in earnings at Adhesive 
Technologies.
The EBIT margin was 8.0 percent, while the adjusted EBIT margin  
decreased  from 10.1 percent to 8.7 percent.
The company's investment result fell from 24 million euros to -4 
million  euros. This decline is essentially due to the sale of 
Henkel's participation in  Ecolab in November 2008. Net interest 
expense improved by 28  million  euros  from  -84 million euros to 
-56 million euros, mainly as a result of lower  interest  rates 
compared to the previous year. The financial result remained stable  
overall  at -60 million euros. The tax rate was 31.5 percent.
Due to increased EBIT, net earnings for the quarter rose by  257  
percent,  from 42 million euros to 150 million  euros.  After  
minority  interests  totaling  7 million euros, net earnings for the 
quarter  were  143  million  euros  (second quarter of 2008: 38  
million  euros).  Adjusted  quarterly  net  earnings  after minority 
interests were 162 million euros compared to 227 million euros  in  
the first quarter of the previous year. Earnings per preferred share 
increased  from 0.09 euros to 0.33 euros. The adjusted figure was 
0.37 euros  compared  to  0.52 euros in the prior-year quarter.
Business Sector Performance
The Laundry & Home  Care  business  sector's  organic  sales  
increased  by  6.3 percent, the highest rise since the first  quarter
of  2007.  Foreign  exchange exerted a negative impact of 1.9 
percent.  Nominally,  sales  increased  by  4.4 percent  to  1,058  
million  euros.  The  growth  regions  of  Eastern   Europe, 
Africa/Middle East and Latin America continued to deliver  strong  
sales  growth with, in some cases, double-digit rates of increase. 
Following a sluggish  start to the year, a gratifying rise in organic
sales was also registered  in  Western Europe and North America. 
Operating profit rose by 28.8 percent to  119  million euros. After 
adjusting for foreign exchange,  earnings  rose  by  an  even  more 
respectable 34.1 percent. This highly encouraging development  was  
attributable not only to a further relaxation in raw material prices 
but  also  sales  price increases and measures successfully  
introduced  to  reduce  costs  and  enhance efficiency. Sales 
reported by the Laundry segment showed a substantial rise.  In 
particular, the biggest brands Persil and Purex posted 
disproportionate  organic improvement. The launch of Purex Complete 
3-in-1  in  the  USA  proved  a  great success. These innovative 
laundry sheets combine the performance of a  detergent along  with  
heat-activated  softener  and  anti-static  ingredients  that   are 
released in the drier to prevent electrostatic accumulation in  the  
wash  load. Sales of the Home Care segment likewise continued to  
follow  an  upward  trend, with  the  fastest  rates  of  increase  
occurring   in   Eastern   Europe   and Africa/Middle East. The  
company's  largest  dishwashing  detergent  brand  Pril achieved 
double-digit increases in  organic  sales  in  both  regions.  And  
the launch of Somat 9 in the machine dishwashing category also 
produced  encouraging results.
Despite 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.  
Consequently,  this  business  sector   significantly outperformed 
its relevant markets, which exhibited negative development  overall 
in a very  difficult  economic  environment.  Particularly  in  the  
regions  of Eastern Europe, Asia and Latin America, growth  remained 
strong.  The  increase achieved in Western Europe was also 
noteworthy. In nominal terms, sales rose  by 1.5 percent to 790 
million euros. Operating profit reached  100  million  euros, an 
increase of 2.8 percent, rising to 4.2 percent after  adjusting  for 
foreign exchange. The Hair Cosmetics segment continued to  perform  
very  well,  further expanding the market  positions  of  all  its  
categories.  The  Hair  Care  and Colorants businesses turned in a 
particularly  positive  performance,  aided  by the continuing 
roll-out of  the  new  brand  Syoss,  the  new  Gliss  line  Asia 
Straight and the new Schauma Shampoo Hairactive for Men. The positive
trend  in the Colorants category continued  with  the  support  of  
the  Essential  Colors innovation and the market launch of Palette 10
Minutes Coloration. In  the  Body Care segment, the Dial brand in the
USA continued to do very well, supported  in particular by the launch
of a number  of  new  body  wash  products.  Also  very successful in
this segment was the Fa brand which generated significant  revenue 
and market share increases in Europe following the introduction  of  
the  shower products Cream & Oil and Fresh & Oil. In the Skin Care 
segment,  the  focus  was on the launch of the new  Diadermine  
series  Dr.  Caspari.  In  the  Oral  Care segment, the launch of the
new Theramed variant Arctic White generated  positive momentum. 
Against the background of an increasingly negative development in  
the global  professional  hairdressing   market,   Henkel's   Hair   
Salon   segment significantly outperformed its market. Here, the 
focus was on  the  relaunch  of Bonacure, the introduction of two new
sublines from Igora and the ongoing  roll- out of the Essensity 
brand.
With the  markets  stabilizing  and  sales  below  the  prior-year  
quarter  the Adhesive Technologies business sector was  able  to  
substantially  improve  the quality of its results compared to the 
first quarter of 2009.  Compared  to  the second quarter 2008 - the 
period in which the  newly  acquired  National  Starch businesses 
were consolidated for the first time - sales fell by 12.9 percent  to
1,582 million euros. After adjusting for  foreign  exchange,  the  
decrease  was 13.9 percent. In view of the continuing difficulties 
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. Organic sales 
remained 15.4 percent below the level of the  prior-year  quarter. 
Compared to the first quarter of 2009, however, this constitutes an  
improvement of 2.8 percentage points. Due to the  decline  in  
volumes  and  the  associated decrease in capacity utilization, 
operating profit fell by 50.8  percent  to  95 million euros. 
Included in  this  amount  is  4  million  euros  in  consultancy 
charges resulting from the integration of the National  Starch  
businesses.  The early introduction of measures to adapt capacity and
reduce costs,  as  well  as the launch of a number of innovative 
products, served to  significantly  improve earnings compared to the 
first quarter. The performance  of  the  Adhesives  for Craftsmen and
Consumers segment was impacted by the continuing recession in  the 
building industry and particularly the slump in demand encountered  
in  the  UK, Spain and the USA. The generally  lower  level  of  
construction  activity  also adversely influenced developments in the
Building  Adhesives  segment,  although business in the Middle East 
region continued to  improve.  The  decline  in  the Packaging, 
Consumer Goods and  Construction  Adhesives  segment  was  relatively
minor. However, here too the slight fall in demand for consumer  
goods  affected business performance. The global reduction in 
manufacturing output  among  major industrial  customers  again  
significantly  impacted  the  development  of  the Specialty 
Adhesives and Surface  Treatment  segment.  However,  particularly  
in this difficult environment, Henkel has benefited from its 
acknowledged  position as a supplier  of  innovative  problem  
solutions.  As  a  case  in  point,  the company's metal pretreatment
product TecTalis received the  PACE  Award  as  the ecologically  and
economically  most  significant  innovation  of  2008   among 
automotive suppliers. The Electronics  segment  continued  to  suffer
from  the general market weakness affecting the semiconductors 
industry.
Regional Performance
In the Europe/Africa/Middle East region, organic sales were  3.7  
percent  below the level for the second quarter of 2008. While the  
Laundry  &  Home  Care  and Cosmetics/Toiletries business  sectors  
succeeded  in  generating  a  gratifying increase in sales, Adhesive 
Technologies posted a decline  in  the  double-digit percentage 
range. In Africa/Middle East,  Henkel  once  again  achieved  double-
digit organic growth, while performance in Western Europe including 
Germany  was regressive. The growth rate in Eastern Europe  recovered
slightly  compared  to the first quarter.  Overall,  sales  in  the  
Europe/Africa/Middle  East  region decreased from 2,283 million euros
to 2,113 million euros, giving it a share  of 61 percent of  Group  
revenues.  Organic  sales  in  the  North  America  region decreased 
by 10.2 percent. The difficult  market  environment  led  to  
Adhesive Technologies  posting  a  substantial  decline   in   sales.
Developments   at Cosmetics/Toiletries were slightly regressive. 
However, sales of the  Laundry  & Home Care business sector showed an
encouraging increase.  Total  sales  of  the region amounted to 677 
million euros, resulting in a share of Group revenues  of 19 percent.
Organic sales in the Latin America region increased by 3.9  percent, 
with all business sectors contributing. At  210  million  euros,  the
share  of total sales accounted for by this region was  6  percent.  
In  the  Asia-Pacific region, organic sales decreased compared to the
same quarter last year  by  10.0 percent. A gratifying increase in 
sales  at  the  Cosmetics/Toiletries  business sector was offset by a
significant decline at Adhesive  Technologies.  With  the closure of 
our Laundry & Home Care operations in China at the beginning  of  the
year, sales of this business sector also declined. Total  sales  of  
the  region amounted to 430 million euros, resulting in a share  of  
Group  revenues  of  12 percent. Sales in the growth regions  of  
Eastern  Europe,  Africa/Middle  East, Latin America and Asia 
(excluding Japan) increased organically by  2.3  percent. In  nominal
terms,  sales  fell  by  1.5  percent  to  1,317   million   euros, 
corresponding to a share of consolidated sales of 37.8 percent.
Sales and Profits Forecast 2009 Henkel expects that the difficult 
market conditions  currently  prevailing  both in the real economy 
and also in  the  financial  markets  will  persist  through 2009. 
The general economic climate and its  further  development  remain  
rather difficult to predict. Nevertheless, Henkel is  confident  of  
outperforming  its relevant markets in terms of organic sales  growth
(i.e.  after  adjusting  for foreign exchange and 
acquisitions/divestments). Henkel has introduced  a  number of 
further measures on the operational side,  from  which  the  company 
expects positive momentum to develop. These activities and also 
relief from  easing  raw material prices will support the development
of  operating  profit  (EBIT)  and earnings  per  preferred  share  
(EPS)  -adjusted  in  each  case  for  one-time gains/charges and 
restructuring charges.
For the third  quarter  of  2009  Henkel  expects  its  consumer  
businesses  to continue to perform well - albeit with a degree of 
deceleration.  The  company's expectation for the Adhesive  
Technologies  business  sector  is  that  it  will develop similarly 
to or slightly better than in the second quarter of 2009.
The outlook for the  fourth  quarter  of  2009  is  unclear  due  to 
continuing uncertainties regarding  the  likely  development  of  the
economic  parameters governing  the  markets  of  relevance  for  
Henkel.  This  also   reduces   the reliability of any forecast made 
with respect to the year as a  whole.  As  soon as the markets allow 
properly  reasoned  assumptions,  Henkel  will  communicate 
quantified expectations for full fiscal 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: +49-211-798-4040       Fax: +49-211-798-4040
Full report for the second quarter 2009 and photo material are 
available at http://henkel.com/press.
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: Frankfurt / regulated dealing/prime standard
Hamburg / free trade
Stuttgart / free trade
Düsseldorf / free trade
Hannover / free trade
München / free trade
Berlin / regulated dealing

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