11/9/2011, Düsseldorf / Germany


Organic sales growth between 5 and 6 percent expected for full fiscal 2011


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Henkel continues solid performance in Q3

  • 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.”

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.

At –37 million euros, the financial result remained at the level of the prior-year quarter. The tax rate amounted to 24.2 percent (prior-year quarter: 26.1 percent).

Adjusted quarterly net income after deducting non-controlling interests amounted to 366 million euros compared to 349 million euros in the third quarter of 2010, a rise of 4.9 percent. Net income for the quarter was 314 million euros compared to 343 million euros in the prior-year quarter. After deducting non-controlling interests of 7 million euros, net income for the quarter totaled 307 million euros (prior-year quarter: 337 million euros). Adjusted earnings per preferred share (EPS) rose by 6.3 percent to 0.85 euros compared to 0.80 euros in the prior-year quarter. The nominal figure was 0.71 euros compared to 0.78 euros in the third quarter of 2010.

The ratio of net working capital to sales was 8.0 percent, about the same as in the prior-year quarter. Net debt as of September 30, 2011 amounted to 1,859 million euros, some 1 billion euros below the level of the previous year and falling below the 2 billion euro mark for the first time since the acquisition of the National Starch businesses in 2008.

* Adjusted for one-time charges/gains and restructuring charges

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 AG & Co. KGaA

Press Kit

The press release and other information for the third quarter of 2011 with download material and the link to the teleconference broadcast can be found in our press folder.