Henkel Reports Substantial Increase in Sales and Earnings in the Second
Quarter

    



    DUESSELDORF, Germany and ROCKY HILL, Conn., Aug. 4 /CNW/ --

    --  Sales increase by 11.6 percent to 3,890 million euros
    --  Organic sales growth of 6.8 percent
    --  Share of sales of growth regions: plus 3 percentage points to 41
        percent
    --  Adjusted operating profit: plus 54.5 percent to 476 million euros
    --  Adjusted EBIT margin: plus 3.5 percentage points to 12.2 percent
    --  Adjusted earnings per preferred share (EPS): plus 97.1 percent to 0.73
        euros

    
</pre>
<p>In the second quarter of 2010, Henkel generated sales of <span class="xn-money">3,890 million euros</span>. In a stabilizing market environment, this was an increase of 11.6 percent compared to the figure for the prior-year quarter. After adjusting for foreign exchange, sales improved by 6.0 percent. Organically, i.e. after adjusting for foreign exchange and acquisitions/divestments, a further significant increase in sales of 6.8 percent was achieved compared to the prior-year quarter. This follows on from strong sales growth in the first quarter of 2010. This positive development was driven by the Adhesive Technologies and Cosmetics/Toiletries business sectors. With a 13.6 percent increase, Adhesive Technologies again achieved a double-digit organic growth rate. Cosmetics/Toiletries once more substantially outperformed market growth with an organic improvement of 5.0 percent. The Laundry & Home Care business sector achieved positive volume growth although, due to intensified promotional and price competition, recorded a decline in organic sales of minus 1.5 percent.</p>
<pre>
    

    (Logo:  http://photos.prnewswire.com/prnh/20091111/HENKELLOGO )
    (Logo:  http://www.newscom.com/cgi-bin/prnh/20091111/HENKELLOGO )

    
</pre>
<p>"Following a very good start to fiscal 2010, we have now seen our operations continue their successful development in the second quarter, with our Adhesive Technologies and Cosmetics/Toiletries business sectors making a particularly strong contribution. In addition, the share of sales generated within the growth regions reached 41 percent," said Kasper Rorsted, Chairman of the Henkel Management Board, adding: "Our excellent performance in the second quarter was once again due to our strong brands and successful innovations. However, our continuing focus on implementing more efficient structures, stricter cost management, and the progress made in the pursuit of our strategic priorities have also contributed substantially to the very good results achieved. As a consequence we are now looking forward to an improvement of more than 25 percent in earnings versus 2009."</p>
<p/>
<p>Due primarily to the substantial improvement posted by Adhesive Technologies, operating profit (EBIT) increased by 51.2 percent, from <span class="xn-money">279 million euros</span> to <span class="xn-money">421 million euros</span>. After allowing for one-time charges (<span class="xn-money">9 million euros</span>), one-time gains   (<span class="xn-money">1 million euros</span>) and restructuring charges (<span class="xn-money">47 million euros</span>), adjusted operating profit improved by 54.5 percent, from <span class="xn-money">308 million euros</span> to <span class="xn-money">476 million euros</span>.</p>
<p/>
<p>Return on sales (EBIT margin) increased significantly, from 8.0 percent to 10.8 percent, and adjusted return on sales even rose from 8.7 percent to 12.2 percent.</p>
<p/>
<p>The company's financial result improved from -60 million euros to -35 million euros. This is attributable to the lower net debt figure, accompanied by an improvement in results from currency hedging transactions. The tax rate was 27.5 percent.</p>
<p/>
<p>Due to the increased EBIT, net income for the quarter rose by 86.7 percent, from <span class="xn-money">150 million euros</span> to <span class="xn-money">280 million euros</span>. After deducting non-controlling interests totaling <span class="xn-money">7 million euros</span>, net income for the quarter came in at <span class="xn-money">273 million euros</span> (prior-year quarter: <span class="xn-money">143 million euros</span>). Adjusted quarterly net income after non-controlling interests amounted to <span class="xn-money">315 million euros</span> compared to <span class="xn-money">162 million euros</span> in the prior-year quarter. Earnings per preferred share (EPS) increased substantially, from <span class="xn-money">0.33 euros</span> to <span class="xn-money">0.63 euros</span>. Adjusted earnings per preferred share almost doubled, reaching <span class="xn-money">0.73 euros</span> versus 0.37 in the prior-year quarter.</p>
<p/>
<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 3.0 percentage points to 8.7 percent.</p>
<pre>
    

    Sales and profits forecast 2010

    
</pre>
<p>Looking at the economic forecasts for the current year, Henkel anticipates that the world economy will grow by around 3.5 percent.</p>
<p/>
<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 further positive momentum to ensue. For example, it anticipates further contributions to profit arising both from the synergies created through the integration of the National Starch businesses, backed up by a strictly disciplined cost management approach. These factors and the expected increase in sales will positively influence the development of adjusted operating profit (EBIT) and adjusted earnings per preferred share (EPS). Henkel expects both metrics to undergo a substantial improvement of more than 25 percent compared to the levels of 2009.</p>
<pre>
    

    The complete second quarter 2010 report can be found at
www.henkel.com/press.

    Henkel in North America:
    
</pre>
<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>
<p/>
<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>
<p/>
<p> </p>
<p> </p>
<pre>
    
                     Contact:
           Cindy Demers (North America)
               Phone: [phone]
        E-mail: [email protected]
    
</pre>
<p> </p>
<pre>
    
           Lars Witteck (International)
             Tel. [phone] - 2606
              Fax [phone] - 4040






    

For further information: Cindy Demers (North America), [phone], [email protected], or Lars Witteck (International), Tel: [phone] - 2606 or Fax: [phone] - 4040