CEO Kasper Rorsted: "2010 will be an important step to achieving our 2012
targets."
DUESSELDORF, Germany and ROCKY HILL, Conn., Nov. 10, 2010 /CNW/ --
-- Sales increase by 13.7 percent to 3,961 million euros
-- Organic sales growth of 6.5 percent
-- Share of sales of emerging markets: plus 3 percentage points to 42
percent
-- Adjusted operating profit: plus 27.0 percent to 517 million euros
-- Adjusted EBIT margin: plus 1.3 percentage points to 13.0 percent
-- Adjusted earnings per preferred share (EPS): plus 35.6 percent to 0.80
euros
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<p>In the third quarter of 2010, Henkel posted sales of <span class="xn-money">3,961 million euros</span>. In an overall positive market environment, this represents an increase of 13.7 percent above the level of the prior-year quarter. After adjusting for foreign exchange, sales improved by 6.4 percent. Organically, i.e. after adjusting for foreign exchange, acquisitions and divestments, the increase was 6.5 percent, representing another significant rise versus the prior-year period. This positive development was supported by all the company's business sectors. Following a slight decline in organic sales development in the second quarter of 2010, Laundry & Home Care recorded growth of 3.4 percent. Cosmetics/Toiletries once again substantially outperformed market growth with an increase of 4.6 percent. With growth of 9.7 percent driven by both price and volumes, Adhesive Technologies achieved an almost double-digit improvement versus the prior-year quarter.</p>
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(Logo: http://photos.prnewswire.com/prnh/20091111/HENKELLOGO )
(Logo: http://www.newscom.com/cgi-bin/prnh/20091111/HENKELLOGO )
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<p>"In the third quarter, we further extended our recent successes with results even better than the good performance we have shown in recent quarters. This is the first quarter that we have ever achieved an adjusted EBIT margin of 13 percent," said Kasper Rorsted, Chairman of the Henkel Management Board. "I would particularly like to emphasize the fact that all our regions and business sectors made a positive contribution to this success in a persistently challenging environment. Growth was once again given major impetus by our strong brands and successful innovations. However, the adaptation of our cost structures and further progress in the pursuit of our strategic priorities were also important contributory factors."</p>
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<p>Looking at the current fiscal year as a whole, Rorsted said: "We expect to achieve an adjusted EBIT margin of well above 12.0 percent for 2010, accompanied by an improvement in adjusted earnings per preferred share of more than 45 percent. 2010 is likely to be the most successful fiscal year in our corporate history, taking us an important step closer to our 2012 financial targets."</p>
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<p>Operating profit (EBIT) rose by 73.0 percent, from <span class="xn-money">290 million euros</span> to <span class="xn-money">501 million euros</span>. This is primarily due to the substantial improvement attained by Adhesive Technologies, which was able to maintain a significant rate of increase in earnings. After allowing for one-time gains (<span class="xn-money">10 million euros</span>) and restructuring charges (<span class="xn-money">26 million euros</span>), adjusted operating profit improved by 27.0 percent, from <span class="xn-money">407 million euros</span> to <span class="xn-money">517 million euros</span>.</p>
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<p>Return on sales (EBIT margin) increased significantly, from 8.3 percent to 12.7 percent. Adjusted return on sales rose from 11.7 percent to 13.0 percent.</p>
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<p>The company's financial result improved from -40 million euros to -37 million euros due to lower net debt. The tax rate was 26.1 percent.</p>
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<p>Thanks to the increase in EBIT, net income for the quarter rose by 90.6 percent, from <span class="xn-money">180 million euros</span> to <span class="xn-money">343 million euros</span>. After deducting non-controlling interests totaling <span class="xn-money">6 million euros</span>, net income for the quarter came in at <span class="xn-money">337 million euros</span> (prior-year quarter: <span class="xn-money">172 million euros</span>). Adjusted quarterly net income after non-controlling interests amounted to <span class="xn-money">349 million euros</span> compared to <span class="xn-money">256 million euros</span> in the third quarter of 2009. Earnings per preferred share (EPS) doubled from <span class="xn-money">0.39 euros</span> to <span class="xn-money">0.78 euros</span>. The adjusted figure was <span class="xn-money">0.80 euros</span> compared to <span class="xn-money">0.59 euros</span> in the prior-year quarter.</p>
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<p>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 2.5 percentage points, decreasing to 7.8 percent. Due in particular to the substantial rise in net income, our debt coverage ratio increased in the period under review to close to 56 percent.</p>
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Sales and profits forecast 2010
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<p>In view of the economic forecasts for the current year, Henkel anticipates that the world economy will grow by around 3.5 percent.</p>
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<p>Henkel is confident of again outperforming its relevant markets in terms of organic sales growth. A number of measures have been introduced and implemented on the operational side, from which Henkel expects additional 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 the company's strictly disciplined cost management approach. These factors will, together with the expected increase in sales, positively influence our results. Compared to the levels in 2009, Henkel expects the adjusted EBIT margin to gratifyingly increase to a figure well above 12.0 percent and an improvement in adjusted earnings per preferred share of more than 45 percent.</p>
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About Henkel
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<p>Henkel markets a wide range of well-known consumer and industrial brands in <span class="xn-location">North America</span>, including Dial® soaps, Purex® laundry detergents, Right Guard® antiperspirants, got2b® hair gels, and Loctite® adhesives. Visit <a href="http://www.henkelna.com">www.henkelna.com</a> for more information.</p>
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<p>Henkel operates worldwide with leading brands and technologies in three business areas: Laundry & Home Care, Cosmetics/Toiletries and Adhesive Technologies. Founded in 1876, Henkel holds globally leading market positions both in the consumer and industrial businesses with well-known brands such as Persil, Schwarzkopf and Loctite. Henkel employs about 50,000 people and reported sales of <span class="xn-money">$18.86 billion</span> and adjusted operating profit of <span class="xn-money">$1.84 billion</span> in fiscal 2009. Henkel's preferred shares are listed in the German stock index DAX and the company ranks among the Fortune Global 500.</p>
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<p>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.</p>
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Contact
Cindy Demers (North America)
Tel. 480-754-4090
[email protected]
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Wulf Kluppelholz (International)
Tel. +49 211 797 - 1875
Fax +49 211 798 - 4040
For further information: Cindy Demers (North America), +1-480-754-4090, [email protected], or Wulf Kluppelholz (International), +49 211 797 - 1875, Fax, +49 211 798 - 4040
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