Henkel AG & Co. KGaA

EANS-News: Henkel AG & Co. KGaA
Henkel continues solid performance in Q2

  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
quarterly report/Henkel

Subtitle: Organic sales growth of around 5 percent expected for full fiscal 2011

Düsseldorf (euro adhoc) - August 10, 2011

Organic sales growth of around 5 percent expected for full fiscal 2011

Henkel continues solid performance in Q2

 • Sales increase of 1.6 percent to 3,953 million euros (organic: + 6.3%)
 • Adjusted* operating profit: plus 8.0 percent to 514 million euros
 • Adjusted* EBIT margin: plus 0.8 percentage points to 13.0 percent
 • Adjusted* earnings per preferred share (EPS): plus 8.2 percent to 0.79
 • Growth regions post another double-digit increase (organic: + 11.6%)
 • Market environment characterized by rise in raw material prices and intense

Düsseldorf, Germany - "Henkel continued its  solid  performance  in  the  second
quarter, despite the challenging market environment. We  achieved  high  organic
sales growth and outperformed once again our relevant markets," said CEO  Kasper
Rorsted. "All our business sectors contributed to this growth, and with  double-
digit increases in our growth regions we improved the share of  total  sales  in
these markets to 42 percent. Despite higher raw  material  prices,  we  improved
our profitability in all business sectors. This was driven by increased  selling
prices across all our business sectors, by our strong  brands  and  innovations,
as well as by measures to further enhance our efficiency."

For the fiscal  year  2011,  Rorsted  provided  the  following  guidance:  "With
intense competition continuing, an increase in raw material prices  and  growing
uncertainties in the markets, the economic environment will remain  challenging.
Against this background, we will  further  adapt  our  structures  in  order  to
respond more quickly and flexibly to changes in our markets and maintain  strict
cost control." Henkel also slightly raised its expectations  for  organic  sales
growth in 2011: "We are confident that  we  will  again  grow  faster  than  our
relevant markets in 2011 and now expect an organic  sales  growth  of  around  5
percent. In line with our previous guidance we expect our adjusted  EBIT  margin
to increase to around 13 percent and adjusted earnings per  preferred  share  by
about 10 percent," Rorsted added.

Henkel´s sales in the second quarter of 2011 increased to 3,953  million  euros,
a rise of 1.6 percent compared to the figure for the prior-year  quarter.  After
adjusting for foreign exchange, sales improved by 6.0 percent. At  6.3  percent,
organic  sales,   which   exclude   the   impact   of   foreign   exchange   and
acquisitions/divestments, again showed a strong  increase.  All  three  business
sectors  contributed  to  this  positive  development.  Laundry  &   Home   Care
registered organic sales growth of 3.7 percent. With  organic  sales  growth  of
5.4 percent, the Cosmetics/Toiletries business  sector  clearly  outperformed  a
very strong prior-year quarter. Adhesive  Technologies  significantly  surpassed
an already successful prior-year quarter with  organic  growth  of  8.9  percent
both price and volume driven. Henkel was thus  able  to  further  expand  global
market share in  all  three  business  sectors,  with  the  consumer  businesses
achieving historic highs.

After allowing for one-time gains, one-time charges and  restructuring  charges,
adjusted operating profit improved by 8.0 percent, from  476  million  euros  to
514 million euros, with  all  three  business  sectors  contributing.  Operating
profit (EBIT) increased by 27.5 percent, from 421 million euros to  537  million
euros, positively impacted by the one-time gain  of  48  million  euros  arising
from the sale of the branded consumer goods business in India.

Despite the  influence  of  higher  prices  for  raw  materials  and  packaging,
adjusted return on sales (EBIT margin) rose by 0.8 percentage points, from  12.2
percent to 13.0 percent. Return on sales rose to 13.6  percent,  following  10.8
percent in the comparative prior-year period.

Financial result eased from -35 million euros to -41 million  euros,  due  to  a
decline in the balance arising from currency hedging activities.  The  tax  rate
amounted to 24.4 percent (prior-year quarter: 27.5 percent).

Net income for the quarter rose by 33.9 percent, from 280 million euros  to  375
million euros. After deduction of non-controlling interests totaling  9  million
euros quarterly net income amounted to 366 million  euros  (prior-year  quarter:
273  million  euros).  Adjusted  quarterly  net  income  after   non-controlling
interests amounted to 343 million euros compared to 315  million  euros  in  the
second quarter of 2010. Earnings per preferred share (EPS) rose from 0.63  euros
to 0.85 euros. The adjusted figure was 0.79 euros compared to 0.73 euros in  the
prior-year quarter.

Further improvement was made in the management of net working capital.  Compared
to the prior year, the ratio of net working capital to  sales  improved  by  0.3
percentage points to 8.4 percent. Net debt as of June 30, 2011 amounted  to  2.2
billion euros.

Business performance January through June 2011

In the first six months of fiscal 2011, Henkel increased sales versus the prior-
year period  by  a  substantial  5.1  percent  to  7,776  million  euros.  After
adjusting for foreign exchange, sales improved by 6.4 percent. At  6.7  percent,
organic sales growth was also clearly above the level of the prior-year  period.
Adjusted operating profit increased by 9.9 percent, from 897  million  euros  to
987 million euros. This positive development was driven  in  particular  by  the
Cosmetics/Toiletries  and  Adhesive  Technologies  business  sectors.  Operating
profit (EBIT) increased by 14.7 percent, from 843 million euros to  967  million
euros. Adjusted return on sales (EBIT margin)  improved  from  12.1  percent  to
12.7 percent. In nominal terms, return on sales rose from 11.4 percent  to  12.4
Net income for the half year rose by 21.8 percent, from  546  million  euros  to
665 million euros. After deduction  of  non-controlling  interests  totaling  14
million euros half-yearly net income amounted to 651 million  euros  (prior-year
period: 532 million euros). Earnings per preferred  share  (EPS)  improved  from
1.23 euros to 1.51 euros, while the adjusted figure rose by 14.3  percent,  from
1.33 euros to 1.52 euros.

Business sector performance in the second quarter 2011

The Laundry & Home Care business sector increased organic sales by 3.7  percent.
This significant rise, achieved despite the further contraction of the  relevant
markets, was due to continuing strong volume growth of 2.9 percent and  a  price
effect of 0.8 percent compared to  the  prior-year  quarter,  positive  for  the
first time since the third quarter of 2009. In nominal terms, sales came  in  at
1,076 million euros compared to 1,086 million in the prior-year quarter.

Despite mixed market developments, all the regions contributed  to  the  organic
growth achieved. Particularly positive momentum came from the growth regions  of
Eastern Europe  and  Africa/Middle  East.  Some  markets  in  this  region  have
nevertheless not yet fully recovered from their political upheavals. In  Tunisia
and Egypt particularly, Henkel could not  yet  fully  achieve  the  double-digit
growth rates of the past, although business in these countries did experience  a
significant revival. Sales in North  America  increased  substantially,  despite
the markets undergoing further contraction. Sales growth was  also  achieved  in
Western Europe - due particularly to further  strong  growth  in  Germany.  This
positive performance in contracting markets  resulted  in  a  historic  high  of
Henkel´s global market share.

Adjusted operating profit  increased  by  2.8  percent  to  140  million  euros.
Adjusted return on sales improved by 0.5  percentage  points  to  13.0  percent.
Both these key financials were therefore well above the level of the  prior-year
quarter, although the significant increase in raw material  prices  during  this
quarter exerted a particularly negative effect. Operating profit  rose  by  14.8
percent to 157 million euros. Included in this figure is  a  gain  arising  from
the disposal of Henkel´s branded consumer goods business in India.

The Cosmetics/Toiletries  business  sector  posted  a  substantial  increase  in
organic sales of 5.4 percent in the second quarter, continuing the  sequence  of
very good performances in  recent  periods.  Once  again,  the  rate  of  growth
outstripped that of the relevant markets and volumes experienced  a  significant
rise. Driven by strong innovations, the business  sector  succeeded  in  further
expanding its market shares, with new  record  levels  once  again  the  result.
Moreover, higher average  selling  prices  were  also  achieved,  leading  to  a
positive price effect for the first time in four quarters. Sales came in at  881
million euros, 1.9 percent above the figure for the prior-year quarter.

As in previous quarters, particular impetus came from the excellent  performance
achieved in the growth regions of  Eastern  Europe,  Africa/Middle  East,  Latin
America and Asia. Overall, we were once  again  able  to  expand  sales  in  the
emerging markets with double-digit increases. However,  sales  growth  was  also
achieved in the mature markets. In North America particularly, Henkel  generated
a significant improvement in sales thanks to a number of new  product  launches.
Business performance in the mature markets of Asia-Pacific  was  similarly  very
good. Sales in Western Europe remained below the strong  levels  of  the  prior-
year quarter.

Adjusted operating profit rose by a substantial  11.0  percent  to  124  million
euros. Adjusted return on sales improved by  1.2  percentage  points  to  a  new
record of 14.1 percent.  Once more, cost reductions and efficiency  enhancements
made a substantial contribution to  the  increase  in  earnings.  Again  in  the
second quarter, the business sector succeeded in offsetting the increase in  raw
material and packaging prices. Operating profit rose  by  24.7  percent  to  140
million euros, with the one-time gain from the  sale  of  the  branded  consumer
goods business in India making a positive contribution.

Once again in the second quarter of 2011,  the  Adhesive  Technologies  business
sector significantly outperformed its  relevant  markets,  increasing  sales  to
1,963 million euros, an improvement of 3.9  percent  versus  an  already  strong
prior-year quarter. Both volume improvements and selling price increases  played
their part in this positive development. Organic growth came in at 8.9 percent.

All the regions and business segments contributed to this  substantial  rise  in
sales. Once again,  the  growth  regions  generated  particular  momentum,  with
Africa/Middle East, Eastern Europe  and  Asia  registering  the  highest  growth
rates. However, the mature markets also saw an increase in sales.

Adjusted operating profit again improved  significantly  versus  the  prior-year
quarter, by  9.0  percent  to  278  million  euros.  Adjusted  return  on  sales
therefore also rose, by 0.7 percentage points to a new  high  of  14.2  percent.
Although further steep rises in raw material  and  packaging  prices  exerted  a
distinctly negative  effect,  the  ensuing  cost  increases  were  significantly
outweighed  by  further  efficiency  enhancement  measures  and  selling   price
increases.  Compared to the prior-year quarter, operating profit  rose  by  21.1
percent to 269 million euros. Included in  this  figure  is  the  one-time  gain
arising from the disposal of the company´s roofing  membrane  business  operated
under the Wolfin brand.

Regional performance

In the Western Europe region, sales grew by 2.4 percent to 1,425 million  euros;
the organic improvement was  1.5  percent.   Positive  growth  rates  posted  by
Adhesive Technologies and Laundry  &  Home  Care  compensated  for  the  decline
registered by the Cosmetics/Toiletries business sector.  Sales  in  the  Eastern
Europe region rose by 7.3 percent to 729  million  euros.   Organic  growth  was
even higher at 11.0 percent. All three  business  sectors  contributed  to  this
improvement, particularly  Adhesive  Technologies  with  a  double-digit  growth
rate. Expansion in the Africa/Middle East region continued  to  be  hampered  by
political unrest in some  countries.  Sales  there  totaled  231  million  euros
compared to 236 million euros in the comparable period  of  the  previous  year.
Organically, however, sales rose by 9.5  percent,  supported  in  particular  by
Adhesive Technologies and Cosmetics/Toiletries. Sales  generated  in  the  North
America region decreased by 5.2 percent  to  676  million  euros,  with  foreign
exchange effects exerting major  negative  impact.  Organically,  on  the  other
hand, sales increased by 6.1  percent  with  support  from  all  three  business
sectors. The region of Latin America recorded a sales increase  of  5.0  percent
to 272 million euros. Organic growth came in at  9.6  percent,  with  all  three
business sectors contributing. The Asia-Pacific region registered  sales  growth
of 4.8 percent to 587 million euros. In organic terms, sales again saw a double-
digit rise of 12.1 percent, supported in  particular  by  Adhesive  Technologies
and Cosmetics/Toiletries. Developments in Japan only  exerted  an  influence  on
local sales growth.

In the growth regions of Eastern Europe, Africa/Middle East, Latin  America  and
Asia (excluding Japan), sales rose  by  4.7  percent  to  1,674  million  euros.
Organic growth  amounted  to  11.6  percent,  keeping  it  in  the  double-digit
percentage range. Particularly Adhesive  Technologies  and  Cosmetics/Toiletries
contributed to this growth. The  share  of  sales  attributable  to  the  growth
regions increased from 41 percent in the prior-year quarter to 42  percent  this

Sales and profits forecast 2011

Following a solid first half year, Henkel is confident  of  again  outperforming
its relevant markets in terms of organic sales growth. For fiscal  2011,  Henkel
now expects an increase in organic sales of around  5  percent  (previously:  at
the upper end of the 3 to 5 percent range). Henkel confirms its forecast for  an
adjusted return on sales (EBIT) of around 13 percent (2010:  12.3  percent)  and
an improvement in adjusted earnings per preferred share  of  about  10  percent.
This guidance is based on increases in Henkel´s selling prices and  the  ongoing
adaptation of its structures  to  the  constantly  changing  market  conditions.
Through these activities and the maintenance  of  its  strict  cost  discipline,
Henkel intends to more than offset the effects of increased raw  material  costs
on its earnings.

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.


Lars Witteck                            Wulf Klüppelholz
Tel.  +49 211 797 - 2606                Tel. +49 211 797 - 1875
Fax   +49 211 798 - 4040                Fax  +49 211 798 - 4040

Henkel AG & Co. KGaA
The report for the second quarter of 2011 and other information with download
material and the link to the teleconference broadcast can be found in our press
folder on the internet at:


Further inquiry note:
Irene Honisch
Corporate Communications
Tel.: +49 (0)211 797-5668
E-Mail: irene.honisch@henkel.com

end of announcement                               euro adhoc 

company:     Henkel AG & Co. KGaA
             Henkelstr. 67
             D-40191 Düsseldorf
phone:       +49 (0)211 797-0
FAX:         +49 (0)211 798-4008
WWW:      http://www.henkel.com
sector:      Consumer Goods
ISIN:        DE0006048432, DE0006048408
indexes:     DAX, CDAX, HDAX, Prime All Share
stockmarkets: regulated dealing/prime standard: Frankfurt, free trade: Hamburg,
             Stuttgart, Düsseldorf, Hannover, München, regulated dealing: Berlin 
language:   English

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