Henkel Continues Solid Performance in Q3

DUESSELDORF, Germany and ROCKY HILL, Conn., Nov. 9, 2011 /PRNewswire/ --

• Sales increase of 1.7 percent to 4,028 million euros (organic: +6.5%)
• Adjusted* operating profit: plus 4.7 percent to 541 million euros
• Adjusted* EBIT margin: plus 0.4 percentage points to 13.4 percent
• All business sectors delivered substantial margin increases
• Adjusted* earnings per preferred share (EPS): plus 6.3 percent to 0.85 euros
• Further double-digit increase in the growth regions (organic: +10.9%)

"Henkel continued its solid performance in the third quarter. Despite the challenging market environment, we outperformed once again our relevant markets in terms of organic sales growth," said Henkel CEO Kasper Rorsted. "All our business sectors contributed to this growth, and with further double-digit increases in our growth regions, we improved their share to 43 percent of our total sales. Despite higher raw material prices, we managed to improve profitability in all our business sectors."

(Logo:  http://photos.prnewswire.com/prnh/20091111/HENKELLOGO )

For the full fiscal year 2011, Rorsted provided the following guidance: "The economic environment remains challenging. In addition to intense competition and high raw material prices, the debt crisis in the eurozone is bringing additional uncertainty into the markets. Against this background, we will continue to 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 guidance for organic sales growth in 2011: "We now expect organic sales growth for the full fiscal year to be between 5 and 6 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 third quarter of 2011 increased to 4,028 million euros, a rise of 1.7 percent compared with the prior-year quarter. After adjusting for foreign exchange, sales improved by 5.7 percent. At 6.5 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 performance: Laundry & Home Care registered encouraging organic growth of 3.8 percent, driven exclusively by price. The strong organic sales growth at the Cosmetics/Toiletries business sector was 5.6 percent, achieved through significant volume increases. Adhesive Technologies attained strong organic sales growth of 8.7 percent generated through both volume increases and implemented price increases. As a result, Henkel was able to further expand global market share in all three business sectors.

After allowing for one-time charges, one-time gains and restructuring charges, adjusted operating profit improved by 4.7 percent, from 517 million euros to 541 million euros, with all three business sectors contributing. Operating profit (EBIT) totaled 451 million euros compared to 501 million euros in the same quarter of 2010.

Despite the influence of higher prices for raw materials and packaging, adjusted return on sales (EBIT margin) rose by 0.4 percentage points, from 13.0 percent to 13.4 percent. Return on sales came in at 11.2 percent, following 12.7 percent in the comparative prior-year period.

Business performance from January through September 2011

In the first nine months of fiscal 2011, Henkel increased sales versus the prior-year period by 3.9 percent to 11,804 million euros. After adjusting for foreign exchange, sales improved by 6.2 percent. At 6.6 percent, organic sales growth also came in significantly above the level of the prior-year period. Adjusted operating profit rose by 8.0 percent, from 1,414 million euros to 1,528 million euros, with the Cosmetics/Toiletries and Adhesive Technologies business sectors making a particularly significant contribution. Operating profit (EBIT) increased by 5.5 percent, from 1,344 million euros to 1,418 million euros. Adjusted return on sales (EBIT margin) improved from 12.4 percent to 12.9 percent. Return on sales rose from 11.8 percent to 12.0 percent.

Sales and profits forecast 2011

Following the first three quarters, Henkel is confident of again outperforming its relevant markets in terms of organic sales growth. The company now expects an increase in organic sales of between 5 and 6 percent (previous outlook: around 5 percent). 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 around 10 percent. This guidance is based on increases achieved 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 effect on its earnings arising from increased raw material costs.

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, forecast 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.

Henkel in North America

Henkel markets a wide range of well-known consumer and industrial brands in North America, including Dial® soaps, Purex® laundry detergents, Right Guard® antiperspirants, got2b® hair gels, and Loctite® adhesives. Visit www.henkelna.com for more information.

Contact
Cindy Demers (North America)
Ph: 480-754-4090
E-mail: [email protected]

Wulf Kluppelholz (International)
Ph:  +49 211 797 - 1875
Fax:  +49 211 798 - 4040
E-mail: [email protected]

SOURCE Henkel Corporation