EANS-News: Henkel AG & Co. KGaA Henkel delivers sales and earnings at record
levels
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annual report/annual result/Henkel, Press Conference
Düsseldorf (euro adhoc) - March 8, 2012
Ambitious 2011 targets achieved
Henkel delivers sales and earnings at record levels
Sales increase of 3.4% to 15,605 million euros (organic: +5.9%)
Adjusted* operating profit: plus 9.0% to 2,029 million euros
Adjusted* EBIT margin: plus 0.7 percentage points to 13.0%
Adjusted* earnings per preferred share (EPS): plus 11.3% to 3.14 euros
Double-digit increase in emerging markets (organic: +10.8%)
Higher dividend proposed: plus 11.1% to 0.80 euros per preferred share
2012 financial targets reconfirmed
Düsseldorf - "2011 was another very successful year for Henkel. Despite major
challenges in a volatile economic environment, we fully achieved our ambitious
targets - and even overdelivered on some of them. Sales and profits are higher
than ever before," said Henkel CEO Kasper Rorsted. "A major factor driving
Henkel´s strong performance was the further expansion of our position in the
emerging markets, where we once again registered double-digit growth. We made
considerable progress in 2011, establishing a strong platform for Henkel´s
future. Thus, we are very confident of achieving the targets for fiscal 2012
that we set in 2008."
For the fiscal year 2012, Rorsted provided the following guidance: "The
economic environment remains challenging. It is significantly more volatile
today than in the past. As a consequence we need to constantly adapt in order
to respond quickly and flexibly to changes in our markets. However, we consider
Henkel to be well-positioned. We expect organic sales growth for the full
fiscal year to be between 3 and 5 percent. We also expect to increase our
adjusted EBIT margin to 14 percent and improve adjusted earnings per preferred
share by at least 10 percent."
Operating in a challenging economic environment, Henkel increased sales in
fiscal 2011 to 15,605 million euros, a rise of 3.4 percent compared to the
prior-year figure. Organic sales, which exclude the impact of foreign exchange
and acquisitions/divestments, increased by an even stronger 5.9 percent.
All the company´s business sectors contributed to this positive development,
further expanding their market shares in the relevant markets. Adhesive
Technologies increased sales organically by 8.3 percent to a new high of 7,746
million euros. The Cosmetics/Toiletries business sector continued its strong
growth trend of recent years and, with organic sales growth of 5.4 percent,
grew significantly stronger than the predominantly declining market. Laundry &
Home Care achieved a solid improvement in organic sales of 2.9 percent in a
slightly declining market.
After allowing for one-time gains, one-time charges and restructuring charges,
adjusted operating profit improved by 9.0 percent, from 1,862 million euros to
2,029 million euros, with all three business sectors contributing. Operating
profit (EBIT) totaled 1,857 million euros and was 7.8 percent above the
comparable prior-year level.
Despite the substantial increase in prices on the procurement markets, adjusted
return on sales (EBIT margin) improved 0.7 percentage points, from 12.3 percent
to 13.0 percent, thus achieving Henkel´s guidance. Return on sales came in at
11.9 percent, following 11.4 percent in the previous year.
Financial result improved by 16 million euros to -155 million euros, due
primarily to lower net debt. The tax rate was 24.6 percent, 1.8 percentage
points lower than prior year.
Adjusted net income for the year after deducting non-controlling interests rose
by 11.4 percent compared to the previous year, from 1,217 million euros to
1,356 million euros. Net income for 2011 was 1,283 million euros compared to
1,143 million euros in 2010. After deducting non-controlling interests of 30
million euros, net income for the year came in at 1,253 million euros (previous
year: 1,118 million euros). Adjusted earnings per preferred share (EPS) rose by
11.3 percent to 3.14 euros compared to 2.82 euros in the previous year. The
nominal figure was 2.90 euros versus 2.59 euros in 2010.
The Management Board, Supervisory Board and Shareholders´ Committee will be
proposing to the Henkel Annual General Meeting to increase the dividend per
preferred share to 0.80 (previous year: 0.72) euros and the dividend per
ordinary share to 0.78 (previous year: 0.70) euros.
The ratio of net working capital to sales was 7.3 percent, slightly above the
prior-year level. Net debt as of December 31, 2011 was 1,677 million euros, 666
million euros below the prior-year level.
Business sector performance
Laundry & Home Care achieved an increase in organic sales of 2.9 percent, thus
substantially outstripping its slightly declining relevant markets. Average
selling prices rose by 1.6 percent, while volume increase contributed 1.3
percent to organic sales growth. Nominally, sales declined slightly by 0.3
percent to 4,304 million euros. The increase in market shares was mainly driven
by the positive development in both Europe and North America.
All regions contributed to the solid business performance achieved. Western
Europe posted an increase in organic sales, benefiting from a solid performance
in Germany. In North America, a slight increase in sales was achieved in an
intensely competitive and appreciably declining market. Developments in the
emerging markets were strong across the board.
Adjusted operating profit rose by 1.4 percent to 570 million euros. Adjusted
return on sales increased by 0.2 percentage points to 13.2 percent. Fiscal 2011
was generally characterized by high raw material price increases. However,
through product price increases, particularly in the second half of the year,
and ongoing measures to reduce costs and increase efficiency in both production
and supply chain, the negative impact caused by the strong rise in material
costs was extensively offset. Due to higher restructuring charges, nominal
operating profit amounted to 511 million euros versus 542 million euros in the
previous year.
Again in 2011, the Cosmetics/Toiletries business sector continued its strong
growth path of recent years and, with organic growth of 5.4 percent, once more
significantly outperformed its relevant markets. The foundation for this
success was again provided by a strong innovation program. Nominally, sales
rose by 4.0 percent, reaching 3,399 million euros.
The business sector generated growth in all regions, with emerging markets
growing double-digits. The strongest rises were once again posted by the
emerging markets of Africa/Middle East, Latin America and Asia (excluding
Japan). Solid growth was also achieved in Eastern Europe. Sales likewise
increased in the mature markets in all regions. The mature markets in Asia-
Pacific experienced very strong growth. In Western Europe and, in particular,
North America, the growth achieved was higher than that of the relevant
markets.
Adjusted operating profit significantly increased versus prior year, by 10.5
percent to 482 million euros, the business sector´s highest earnings figure to
date. As a result, adjusted return on sales rose by 0.9 percentage points to
14.2 percent, likewise reaching a new high. The foundation for this was
provided partly by measures to reduce costs and increase efficiency, which
helped to overcompensate the negative impact caused by the increase in material
costs. In addition, the strict cost management approach contributed to margin
improvement. Operating profit increased compared to the previous year by 14.6
percent to 471 million euros, likewise reaching a new high.
2011 saw the Adhesive Technologies business sector continue its profitable
growth trend. In an increasingly difficult economic environment, sales improved
nominally by 6.0 percent to a new high of 7,746 million euros. At 8.3 percent,
organic growth was once again significantly higher than that of the relevant
markets. This very strong performance was achieved through both price and
volume increases.
With growth in the mid-single-digit percentage range, the mature markets of
Western Europe and North America showed strong expansion overall. In the
emerging markets, Henkel again generated disproportionate growth in the double-
digit range, with the highest rates of increase occurring in the Eastern Europe
region.
Once again, adjusted operating profit rose significantly compared to the prior
year, by 14.7 percent to 1,075 million euros. As a result, adjusted return on
sales improved by 1.1 percentage points to another new high of 13.9 percent.
With an EBIT of 1,002 million euros, operating profit passed the 1 billion euro
mark for the first time.
Regional performance
In the highly competitive market environment of Western Europe, sales increased
by 2.8 percent to 5,624 million euros. Organic sales growth amounted to 2.3
percent, driven primarily by expansion in Germany and France. Sales in Eastern
Europe rose by 6.2 percent to 2,813 million euros. Organic sales growth here
was an impressive 10.3 percent, generated primarily by the businesses in Turkey
and the adhesives business in Russia. Growth in the Africa/Middle East region
was adversely affected by the political unrest in some countries. Sales rose
nominally by 3.7 percent to 934 million euros, although organic sales growth
did pass the double-digit mark with a 10.0 percent increase, achieved as a
result of double-digit growth rates in the United Arab Emirates, Saudi Arabia
and Algeria.
Due to foreign exchange factors, sales of the North America region decreased
slightly, by 0.3 percent to 2,716 million euros. Despite a reluctant consumer
climate in the USA, organic sales growth of the region came in at 4.4 percent.
The Latin America region continued to develop very strongly, posting sales
growth of 8.4 percent to 1,065 million euros. The double-digit organic sales
growth of 11.0 percent was driven in particular by Henkel´s business
performance in Mexico, Brazil and Venezuela. Within Asia-Pacific, the
consequences of the natural disaster in Japan exerted a dampening influence on
regional sales growth. This amounted to 5.9 percent, taking the total to 2,296
million euros. With an organic growth rate of 8.6 percent, however, the region
continued to show a very strong development, driven particularly by double-
digit growth rates in China, India and South Korea.
Sales in the emerging markets of Eastern Europe, Africa/Middle East, Latin
America and Asia (excluding Japan) increased by 6.2 percent to 6,512 million
euros. Organic growth reached 10.8 percent, with contributions coming
particularly from the Adhesive Technologies and Cosmetics/Toiletries business
sectors, both of which posted double-digit increases. The share of Henkel´s
sales accounted for by the emerging markets rose from 41 to 42 percent.
Fourth quarter 2011
In the fourth quarter of 2011, Henkel increased sales versus the prior-year
period by 1.9 percent to 3,800 million euros. Adjusted for foreign exchange,
sales improved by 2.8 percent. Organic sales growth reached 3.8 percent. After
allowing for one-time gains, one-time charges and restructuring charges,
adjusted operating profit rose by 12.3 percent, from 448 million euros to 502
million euros. At 439 million euros, operating profit was 15.8 percent above
the comparable figure for the previous year. Adjusted return on sales (EBIT
margin) improved by 1.2 percentage points, from 12.0 percent to 13.2 percent.
Return on sales came in at 11.5 percent compared to 10.2 percent in the
comparative prior-year period. Adjusted net income for the quarter after
deducting non-controlling interests increased compared to the previous year by
13.2 percent, from 295 million euros to 334 million euros. Net income amounted
to 304 million euros compared to 254 million euros in the previous year. After
deducting non-controlling interests of 9 million euros, quarterly net income
was 295 million euros (prior-year quarter: 249 million euros). Adjusted
earnings per preferred share (EPS) rose by 11.6 percent to 0.77 euros, compared
to 0.69 euros in the previous year. The nominal figure improved from 0.58 euros
to 0.68 euros.
Sales and profits guidance for 2012
The Henkel Group expects to generate organic sales growth of between 3 and 5
percent in fiscal 2012. Henkel is confident of continuing the positive growth
trend posted by its consumer goods businesses, with sales likely to expand in
the low single-digit percentage range. For the Adhesive Technologies business
sector, Henkel expects sales to grow in the mid-single-digit percentage range.
In recent years, Henkel has introduced a number of measures that have had a
positive impact on its cost structure. Also in this year, Henkel intends to
further adapt its structures to the constantly changing market conditions while
maintaining its strict cost discipline. Henkel also aims to counteract the
burden on earnings caused by high raw material costs. These factors, together
with the expected increase in sales, should positively influence earnings
development. Based on the 2011 results, Henkel anticipates achieving an
increase in adjusted return on sales (EBIT) to 14 percent (2011: 13.0 percent)
and an increase in adjusted earnings per preferred share of at least 10
percent.
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.
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
E-Mail: lars.witteck@henkel.com E-Mail: wulf.klueppelholz@henkel.com
Henkel AG & Co. KGaA
The 2011 Annual Report and further information and download material relating
to fiscal 2011 together with the link to the live webcast of the press kit for
fiscal 2011 can be found in our press folder at:
http://www.henkel.com/press/press-conference-annual-and-sustainability-report-
2011-34779.htm
press@henkel.com
Further inquiry note:
Irene Honisch
AsTel.: +49 (0)211 797-5668
E-Mail: irene.honisch@henkel.com
end of announcement euro adhoc
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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: free trade: Hannover, München, Hamburg, Düsseldorf, Stuttgart,
regulated dealing: Berlin, regulated dealing/prime standard:
Frankfurt
language: English