8/1/2012, Düsseldorf / Germany


Good performance continued through second quarter 2012


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Henkel reports strong increase in sales and earnings

  • Sales rise 6.4 percent to 4,206 million euros (organic: + 4.0%)
  • Adjusted* operating profit: + 18.6 percent to 609 million euros
  • Adjusted* EBIT margin: + 1.5 percentage points to 14.5 percent
  • Adjusted* earnings per preferred share (EPS): + 22.8 percent to 0.97 euros
  • Emerging markets again primary success drivers (organic sales: + 8.1%)
  • Targets for 2012 confirmed; EPS growth outlook raised from at least 10 percent to around 15 percent

“Henkel continued its good performance in the second quarter, despite a difficult market environment. We generated profitable growth in all our business sectors and posted a substantial increase in our EBIT margin,” said Henkel CEO Kasper Rorsted. “The solid results achieved in the second quarter also reflect our persistent focus on our strategic priorities. We have thus taken an important step towards achieving our targets for 2012.”

Looking at the full fiscal year 2012, Rorsted said: “We expect that the very volatile environment with uncertainties in our markets will persist. In particular, the effects of the debt and financial crises in a number of countries will continue to be a challenge. Hence, we will continue to analyze, adapt and further improve our processes and structures.”

Guidance for 2012 confirmed – Outlook for EPS growth raised

“Based on our solid performance in this first half year, we are confident of achieving our targets for 2012. We expect organic sales growth to be between 3 and 5 percent and to increase adjusted EBIT margin to 14 percent. For adjusted earnings per preferred share, we have raised our growth outlook from at least 10 percent to around 15 percent,” Rorsted added.

Henkel’s sales in the second quarter of 2012 were 4,206 million euros, an increase of 6.4 percent compared to the figure for the prior-year quarter. Organic sales, which exclude the impact of foreign exchange and acquisitions/divestments, rose by 4.0 percent, a solid increase compared to the prior-year quarter.

All three business sectors contributed to this positive development: Laundry & Home Care registered strong organic growth of 5.1 percent; organic sales growth at the Cosmetics/Toiletries business sector reached a solid 2.8 percent; and the Adhesive Technologies business sector also generated solid organic sales growth amounting to 3.6 percent.

After allowing for one-time gains, one-time charges and restructuring charges, adjusted operating profit improved by 18.6 percent, from 514 million euros to 609 million euros, with all three business sectors contributing. Reported operating profit (EBIT) increased by 8.5 percent, from 537 million euros to 583 million euros.

Adjusted return on sales (EBIT margin) increased significantly by 1.5 percentage points, from 13.0 percent to 14.5 percent. Reported return on sales was 13.9 percent, following 13.6 percent in the comparative prior-year period.

The company’s financial result improved versus the prior-year quarter by 6 million euros to –35 million euros. At 24.8 percent, the tax rate was slightly above the level of the previous year (24.4 percent).

Net income for the quarter rose by 9.9 percent, from 375 million euros to 412 million euros. After deducting 11 million euros attributable to non-controlling interests, quarterly net income amounted to 401 million euros (prior-year quarter: 366 million euros). Adjusted quarterly net income after deducting non-controlling interests amounted to 420 million euros compared to 343 million euros in the prior-year quarter. Earnings per preferred share (EPS) rose from 0.85 euros to 0.92 euros. The adjusted figure was 0.97 euros compared to 0.79 euros in the prior-year quarter.

Further good progress was made in the management of net working capital. Compared to the prior-year period, the ratio of net working capital to sales improved by 0.9 percentage points to 7.5 percent. Net debt was reduced to 1,269 million euros as of June 30, 2012 (June 30, 2011: 1,959 million euros).

Business performance January through June 2012

In the first six months of fiscal 2012, Henkel increased sales versus the prior-year period by a strong 5.6 percent to 8,214 million euros. Organic sales also showed solid growth of 4.3 percent versus the first half of 2011. Adjusted operating profit rose by 17.6 percent, from 987 million euros to 1,160 million euros, with all three business sectors contributing to the positive performance. Adjusted return on sales (EBIT margin) improved from 12.7 percent to 14.1 percent.

Net income for the half year rose by 21.8 percent, from 671 million euros to 817 million euros. After deducting 20 million euros attributable to non-controlling interests, half-yearly net income amounted to 797 million euros (prior-year period: 657 million euros). Adjusted earnings per preferred share (EPS) rose by 21.1 percent, from 1.52 euros to 1.84 euros.

* 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

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