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Henkel AG & Co. KGaA

EANS-News: Henkel recovery continues through third quarter

Düsseldorf (euro adhoc) -

Consumer businesses continue their successful course – Adhesives 
business further improved versus previous quarters
  Corporate news transmitted by euro adhoc. The issuer/originator is solely
  responsible for the content of this announcement.
quarterly report/9-month report/Henkel
Subtitle: Consumer businesses continue their successful course – 
Adhesives business further improved versus previous quarters
Düsseldorf, November 11, 2009 Consumer
businesses continue their successful course - Adhesives business 
further improved versus previous quarters
Henkel recovery continues through third quarter
• Sales down 7.3 percent to 3,485 million euros
    • Decline in organic sales reduced to 2.5 percent
   • Operating profit up 191 million euros to 290 million euros
   • Adjusted operating profit down 1.5 percent to 385 million euros
"In the third quarter, we were again able to continue our  positive  
performance of recent quarters", says Kasper Rorsted,  Chairman  of  
the  Henkel  Management Board.  "We  achieved  excellent  results  at
Laundry  &  Home  Care,  and  our Cosmetics/Toiletries business 
sector was also able  to  once  again  exceed  the very good 
performance of  the  previous  quarters.  There  was  also  a  
further improvement in the results of the Adhesive Technologies 
business sector  in  the course of the year, albeit on a lower level 
than in the previous year."  Rorsted continued: "The encouraging 
results registered  in  this  last  quarter  reflect both the 
stabilization in our markets and our programs on  structural  and  
cost alignment."
In the third quarter of 2009, Henkel generated sales of 3,485 million
euros.  In a still difficult market environment, this represents a 
decrease of 7.3  percent compared to the figure for the prior-year 
quarter. In organic terms, i.e.  after adjusting  for  foreign  
exchange  and  acquisitions/divestments,  sales  showed another 
improvement compared to the first two quarters of this year,  coming 
in just 2.5 percent below  the  level  of  the  third  quarter  of  
2008.  However, performance of the company´s three business sectors 
continued  to  show  a  very mixed picture. Laundry & Home Care again
performed well, posting an increase  in organic sales of 2.4 percent.
Cosmetics/Toiletries saw  organic  sales  rise  by 3.7 percent,  
again  outstripping  the  already  very  good  figures  of  recent 
quarters. Due to the volume decline encountered in  major  customer  
industries, Adhesive Technologies registered a decrease in organic  
sales  of  7.6  percent. Compared to the second quarter, however, the
drop in organic sales has halved.
Due primarily to the burden of restructuring  charges  on  the  
results  of  the prior-year quarter, operating profit (EBIT) 
increased by 51.8 percent, from  191 million euros to 290 million 
euros.  After  adjusting  for  one-time  gains  and charges and 
restructuring charges totaling 95 million euros, adjusted  operating 
profit ("adjusted EBIT") decreased slightly by 1.5  percent,  from  
391  million euros to 385 million euros.
Return on sales (EBIT margin) was 8.3 percent, while adjusted  return
on  sales ("adjusted EBIT margin") increased from 10.4 percent to 
11.0 percent.
The investment result fell from 24 million euros to 0 million euros 
due  to  the sale of the company´s stake in Ecolab in November  2008.
Net  interest  expense improved by 32 million euros, from -72  
million  euros  to  -40  million  euros, largely attributable to 
lower interest rates  compared  to  the  previous  year. 
Consequently, the financial result  improved  from  -48  million  
euros  to  -40 million euros. The tax rate amounted to 28.0 percent.
Due to the increased EBIT, net earnings for the quarter rose  by  
68.2  percent, from 107 million euros to 180 million euros. After 
deducting minority  interests of 8 million euros, quarterly net 
earnings totaled 172  million  euros  compared to 101 million euros 
in the third  quarter  of  2008.   Adjusted  quarterly  net earnings 
after minority interests amounted  to  240  million  euros  versus  
251 million euros in the prior-year quarter. Earnings per preferred 
share  increased from 0.23 euros to 0.39 euros. The adjusted figure 
was 0.55  euros  compared  to 0.59 euros in the prior-year quarter.
Thanks to a strong cash flow performance, net debt was further 
reduced  compared to the end of the second quarter of 2009  by  some 
700  million  euros  to  3.2 billion euros.  Good progress was also  
made  with  regard  to  working  capital management: compared to the 
prior-year period, the ratio of net working  capital to sales 
improved from 12.8 percent to 10.3 percent.
Business Sector Performance
Laundry & Home Care increased sales  in  organic  terms  by  2.4  
percent,  with foreign exchange having a negative impact of  5.3  
percent.  In  nominal  terms, sales decreased by 2.9 percent to 1,035
million euros. The generally  gratifying increase in organic sales 
was attributable to  the  growth  regions  of  Eastern Europe, 
Africa/Middle East and  Latin  America  which,  in  some  cases,  
posted double-digit percentage improvements. In Western Europe and  
North  America,  on the other hand, the difficult market environment 
impeded  sales  performance  to the extent that neither region was 
able to attain the sales level of the  prior-
year  quarter.  Nevertheless,  operating  profit  rose  significantly,  by  17.0
percent to 137 million euros. After adjusting for  foreign  exchange,  the  rise
was an even more encouraging 23.7 percent.  Return  on  sales  improved  by  2.2
percentage   points   to   13.2   percent.   The   Laundry   segment   made    a
disproportionately high contribution to the rise  in  sales,  with  
the  biggest boost to growth again coming from Eastern Europe  and  
Africa/Middle  East.  The good  sales  performance  posted  was  also
due  to  a  number  of   successful innovations such as Persil  
ActicPower,  the  most  advanced  laundry  detergent available under 
the premium Persil brand. Persil ActicPower requires  just  half the 
previous quantity per wash  and  develops  its  laundry  power  at  
just  15 degrees Celsius. In the USA, Henkel´s innovation Purex 
3-in-1 also continued  to perform very well. The Home Care segment 
likewise turned  in  a  positive  sales performance, with the growth 
regions of Eastern Europe  and  Africa/Middle  East again  leading  
the  way.  Here,  Henkel´s  dishwashing  products  continued  to 
generate particular success.
With organic sales growth of 3.7 percent,  Cosmetics/Toiletries  
maintained  its consistently strong  development  in  the  third  
quarter.  Once  again  it  was successful in outpacing the growth of 
its relevant markets as they continued  to bear the impact of the 
economic downturn. The contributions made by  the  growth regions of 
Eastern Europe, Asia-Pacific  and  Latin  America  were  particularly
noticeable, with Western Europe also posting an  organic  sales  
increase.  This encouraging sales performance was also reflected in  
an  increase  in  operating profit of  3.3  percent  to  99  million 
euros.  After  adjusting  for  foreign exchange, growth  was  even  
6.8  percent,  with  marketing  spend  also  having
increased. Return on sales rose by 0.5 percentage points to  13.0  percent.  The
Hair Cosmetics segment produced another good  set  of  results.  The  Hair  Care
business developed very well as a result of the  further  roll-out  of  the  new
Syoss brand and the introduction of the new variants Schwarzkopf Gliss Kur  Hair
Active  and  Schauma  Hair  Activator.  Product  launches  including  those   of
Essential Color and Poly Palette  10  Minutes  Coloration  greatly  boosted  the
results posted by the Colorants  category.  The  Styling  segment  
continued  to garner success, this time with innovations in the Got2b
series and the new  Drei Wetter Taft line 10 Carat Gloss. In  the  
Body  Care  segment,  the  Dial  brand consolidated its ongoing 
success in the USA, with the  body  wash  product  Dial Anti-Oxidant 
having developed into one of the most successful launches  in  this 
market segment. In Europe too,  the  shower  gels/body  wash  
products  marketed under the Fa brand continued to perform very well,
achieving one of the  fastest growth rates in this category. In the 
Skin Care business, the focus was  on  the launch of new Diadermine  
3D  Wrinkle  Expert,  specially  formulated  for  deep wrinkles. In 
the Oral Care segment, the  launch  of  the  new  Theramed  variant 
Arctic White created further positive  momentum.  Despite  
increasingly  adverse market conditions,  Henkel´s  Hair  Salon  
business  was  able  to  successfully consolidate its position and 
win important new  customers.  The  focus  in  this segment was on 
the relaunch of Bonacure Time Restore  and  the  introduction  of new
products in the form of the sublines Igora Color 10 and Seah Cashmere
Cream Shampoo.
The third quarter saw the Adhesive Technologies  business  sector  
make  further progress along the road to recovery embarked upon in 
the  second  quarter,  with the quality of its earnings significantly
improving.  Organic  sales  were  7.6 percent below the  figure  for 
the  prior-year  quarter.  After  adjusting  for foreign exchange,  
the  decrease  was  9.9  percent.  In  nominal  terms,  sales 
declined by 12.4 percent to 1,630 million euros. However,  in  all  
regions  the rates of decline have been reduced compared to those of 
recent  quarters.   The regions of Latin America  and  Africa/Middle 
East  have  again  begun  to  show moderate growth  in  sales  
adjusted  for  foreign  exchange.  Operating  profit decreased by 
47.0 percent. Included in this figure are one-time  charges  of  24 
million euros of valuation losses on assets held  for  sale,  and  
restructuring charges amounting to 37 million euros. Consequently, 
adjusted  operating  profit ("adjusted EBIT") only decreased by 20.6 
percent to 150 million euros.  Compared to the previous quarter it 
actually increased  by  32.0  percent.  Reflected  in this 
improvement are the accelerated  process  of  synergy  realization  
arising from the integration  of  the  National  Starch  businesses, 
and  the  benefits accruing from the "Global Excellence" program. 
Return on sales decreased by  3.6 percentage points to 5.5 percent, 
although adjusted  it  only  declined  by  1.0 percentage  points  to
9.2  percent.  The  performance  of  the  Adhesives  for Craftsmen 
and Consumers and Building Adhesives  segments  improved  compared  
to the second quarter of 2009. In Asia-Pacific, Eastern  Europe  and 
Africa/Middle East, certain significant increases were  achieved  in 
the  Building  Adhesives segment compared to the prior-year quarter. 
Sluggish  consumer  demand  in  the developed countries impacted on 
business performance of the Packaging,  Consumer Goods and 
Construction Adhesives segment. Here, however,  substantial  
increases in sales compared to the  prior-year  quarter  were  
registered  in  the  growth regions of Eastern Europe, Latin America 
and Africa/Middle East. There was  also a slight recovery in various 
industries served by the  Specialty  Adhesives  and Surface Treatment
segment, although sales remained  significantly  below  prior- year 
levels, particularly with respect to the automotive and  metal  
industries. The Electronics segment has experienced a revival due to 
the  recovery  of  the semiconductors industry. This  business  
therefore  succeeded  in  significantly increasing sales versus the 
second  quarter,  thus  substantially  reducing  the rate of decline 
compared to the prior-year quarter.
Regional Performance
In the Europe/Africa/Middle East region, sales further improved 
compared to  the second quarter of 2009, although in organic  terms  
they  were  slightly  -  0.9 percent - below the level of the third 
quarter of 2008.  While  Laundry  &  Home Care and 
Cosmetics/Toiletries were able to  achieve  a  gratifying  increase  
in their respective sales figures,  Adhesive  Technologies  posted  a
single-digit decrease. In Africa/Middle East, Henkel achieved organic
sales  growth  in  the single-digit percentage range, while 
performance  in  Western  Europe  including Germany declined. The 
growth  rates  in  Eastern  Europe  further  recovered  in comparison
to  the  first   two   quarters   of   this   year.   Overall,   the 
Europe/Africa/Middle East region´s sales decreased from 2,319 million
euros  to 2,154 million euros, giving it a share of 62 percent  of  
total  sales.  Organic sales in the North America region declined by 
7.8  percent.  In  a  challenging market environment,  sales  of  
Adhesive  Technologies  decreased  considerably; performance   of   
the   consumer   businesses   Laundry   &   Home   Care   and 
Cosmetics/Toiletries was also slightly down. Overall, sales in this 
region  came in at 628 million euros, representing an 18 percent 
share of  total  sales.  The Latin America region saw organic sales 
increase by 2.7 percent,  driven  by  the consumer businesses and 
particularly Cosmetics/Toiletries which posted a double- digit 
percentage rate of growth. At 209 million euros, the share of total  
sales accounted for by this region remained at 6 percent. In the 
Asia-Pacific  region, organic sales fell by 3.7 percent compared to  
the  third  quarter  of  2008.  A gratifying increase in performance 
at Cosmetics/Toiletries  was  offset  by  the decrease at Laundry & 
Home  Care  arising  from  the  closure  of  its  business operation 
in China at the end of 2008. The  organic  sales  development  of  
the Adhesive Technologies business likewise showed a decline, 
although there was  an improvement compared to the second quarter  of
2009.  Overall,  sales  in  this region came in at 438 million euros,
slightly above the level of the  prior-year quarter. The share of 
total sales accounted for by this region was  12  percent. In the 
growth regions of Eastern Europe, Africa/Middle East, Latin  America 
and Asia (excluding Japan), organic  sales  increased  by  4.1  
percent,  marking  a further improvement compared to the second 
quarter of 2009.  In  nominal  terms, sales fell by 5.2 percent to 
1,372 million euros, a figure that represents  39.4 percent of total 
sales compared to 38.5 percent in the prior-year period.
Sales and Profits Forecast 2009
Despite the recently apparent stabilization of the markets at their 
low level of activity, it remains difficult to assess the overall 
economic situation and how it is likely to develop going forward.
Nevertheless, Henkel is confident of again outperforming its relevant
markets in terms of organic sales growth (i.e. after adjusting for 
foreign exchange and acquisitions/divestments).  A number of measures
have already been introduced on the operational side, from which 
Henkel expects further 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 and charges and
restructuring charges.
Henkel expects its consumer businesses to continue to perform well in
the fourth quarter as they have in the first nine months of this 
year, albeit with a degree of deceleration.  Henkel anticipates that 
the performance of its Adhesive Technologies business sector will be 
an improvement on that of the first nine months.
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
You will find the full report for the third quarter of 2009 and also 
photo material at http://www.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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