3/8/2012, Düsseldorf / Germany

 

Ambitious 2011 targets achieved

 

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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

“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.

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.

* 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

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