Ad-hoc Announcements

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Based on the business development in the first three months of 2022 and the current assumptions regarding the business performance in the remainder of the year, particularly the significant increase in raw material costs and logistics services as well as effects in connection with the decision to exit business activities in Russia, the Management Board of Henkel AG & Co. KGaA today decided to update its outlook for fiscal 2022.

Sales development in the first quarter of 2022

Based on preliminary figures, Henkel generated total sales of around 5.3 billion euros in the first quarter. This corresponds to significant organic sales growth of 7.1 percent.

Sales growth in the first quarter was driven primarily by Adhesive Technologies, which achieved double-digit organic sales growth of +10.7 percent in the first quarter based on preliminary figures. Growth was achieved across all business areas.

Based on preliminary figures, the Beauty Care business unit recorded a slight decline in organic sales of -1.2 percent. The Hair Salon business achieved double-digit organic sales growth. The consumer business was, as expected, below the level of the previous year, in particular due to the implementation of the portfolio measures announced for 2022.

According to preliminary figures, the Laundry & Home Care business unit achieved a very strong organic sales increase of +4.9 percent, driven by significant growth in the laundry business area. By contrast, the home care business area recorded a slight decline in organic sales in the first quarter.

Updated outlook for fiscal 2022

The extraordinarily tense situation on the raw material markets and in global supply chains has been worsened by the war in Ukraine. As a result, prices for direct materials and logistics have once again increased significantly and stronger than previously anticipated. In addition, Henkel announced in mid-April that it would be exiting its business activities in Russia. In addition, Henkel has now decided to exit its business activities in Belarus as well. This affects total annual sales of around one billion euros.

With regard to material prices, Henkel now anticipates an increase in the mid-twenties’ percentage range for the full year compared to the average for 2021. Previously, an increase in the low teen percentage range had been anticipated.

Henkel now expects organic sales growth at Group level in fiscal 2022 of +3.5 to +5.5 percent (previously: +2.0 to +4.0 percent).

The overall stronger organic sales growth will be primarily driven by the Adhesive Technologies business unit, for which Henkel now expects organic sales growth in the range of +8.0 to +10.0 percent (previously: +5.0 to +7.0 percent), mainly due to passing on of higher raw material and logistics costs in form of higher prices. Expectations for organic sales growth in the Beauty Care and Laundry & Home Care business units remain unchanged. For Beauty Care, organic sales are expected to develop by -5.0 to -3.0 percent. As announced, the decline is mainly due to measures already decided and being implemented to improve the portfolio, including the discontinuation of activities that will not be part of the future core business. For Laundry & Home Care, Henkel continues to expect organic sales growth in the range of +2.0 to +4.0 percent. In light of the decision to discontinue Henkel‘s businesses in Russia and Belarus, those countries will be excluded from organic sales growth of Henkel from the second quarter onwards.

In addition to the effects of exiting business activities in Russia and Belarus, significantly rising prices for direct materials and logistics, which cannot fully be offset in this fiscal year, are having a greater impact on earnings than previously expected.

A lower adjusted* return on sales (EBIT margin) in the range of 9.0 to 11.0 percent (previously: 11.5 to 13.5 percent) is now assumed for the Henkel Group. For the Adhesive Technologies business sector, Henkel expects an adjusted return on sales in the range of 13.0 to 15.0 percent (previously: 15.0 to 17.0 percent), for Beauty Care in the range of 5.0 to 7.0 percent (previously: 7.5 to 10.0 percent) and for Laundry & Home Care in the range of 7.0 to 9.0 percent (previously: 10.5 to 13.0 percent).

For adjusted* earnings per preferred share ‏(EPS) at constant exchange rates, Henkel expects a decline in the range of -35 to -15 percent (previously: -15 to +5 percent).

_{* Adjusted for one-time expenses and income, and for restructuring expenses.}

This new outlook is based on the assumption that the effects of the war in Ukraine will not worsen significantly and that there will be no new widespread business and production closures in industry and retail due to the COVID 19 pandemic.

In addition, the exit of business activities in Russia and Belarus may result in adjustable special charges, most of which are non-cash. These are mainly dependent on the type, timing, and duration of implementation.

Henkel will publish its statement for the first quarter 2022 on May 5, 2022.

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• Merger of Laundry & Home Care and Beauty Care into one business unit “Consumer Brands” planned
• New mid- to long-term financial ambition announced:
  • Organic sales growth of 3 to 4 percent, EBIT margin* of around 16 percent,
    Earnings growth per preferred share (EPS)* in the mid to high single-digit percentage range (at constant exchange rates, incl. M&A)
• Share buyback program with a total volume of up to 1 billion euros
• Preliminary results for fiscal 2021 disclosed:
  • Organic sales growth +7.8 percent, EBIT margin* 13.4 percent, Earnings per preferred share ‏(EPS)* +9.2 percent at constant exchange rates
• Outlook for fiscal 2022 published:
  • Organic sales growth 2 to 4 percent, EBIT margin* 11.5 to 13.5 percent, Earnings per preferred share ‏(EPS)* development in the range between -15 and +5 percent ‏(at constant exchange rates), reflecting high level of market uncertainty and volatility

At its meeting today, the Management Board of Henkel AG & Co. KGaA decided, with the necessary approval of the Shareholders' Committee, several strategic measures to further strengthen the competitiveness and future business development of the company within the framework of its long-term agenda for purposeful growth:

Henkel intends to merge Laundry & Home Care and Beauty Care into one single business unit "Consumer Brands", to sustainably strengthen the growth and margin profile of the consumer goods businesses. With sales of around 10 billion euros, the new, integrated business unit will provide a strong multi-category platform for future growth. Therefore, the portfolio will be consistently focused on strategic core businesses and products with attractive growth and margin potential – beyond the active portfolio management measures completed by the end of 2021. First measures relating to the Beauty Care portfolio will be already implemented in the course of 2022. Significant synergies are also expected in the course of the integration. These, as well as the expenses for restructuring measures will be specified at a later date.

Based on the planned merger, Henkel has defined a new mid- to long-term financial ambition: Henkel is now pursuing organic sales growth of 3 to 4 percent and an adjusted EBIT margin of around 16 percent. In addition, Henkel is targeting growth in adjusted earnings per preferred share (EPS) in the mid to high single-digit percentage range (at constant exchange rates and including M&A) and is placing a continued focus on expanding free cash flow.

For its Adhesive Technologies business unit, Henkel’s financial ambition is to achieve organic sales growth in the range of 3 to 5 percent and an adjusted EBIT margin in the high-teens percentage. For the new Consumer Brands business unit, Henkel is pursuing organic sales growth of 3 to 4 percent and a mid-teens percentage adjusted EBIT margin.

The Management Board also resolved to launch a share buyback program with a total value of up to 1 billion euros. Henkel preferred shares (ISIN DE0006048432 // WKN 604843) with a total value of up to 800 million euros and ordinary shares (ISIN DE0006048408 // WKN 604840) with a total value of up to 200 million euros are to be repurchased (for each excluding additional costs). Based on current stock market prices, this corresponds to a share of about 3 percent of the company's capital stock.

The program is expected to start during the month of February 2022 and to be carried out until March 31, 2023 at the latest, with the involvement of a bank via the stock market. The Management Board is thus making use of the authorization granted by the Annual General Meeting on April 8, 2019 to purchase treasury shares of up to 10 percent of the capital stock. Henkel intends to hold the repurchased shares initially as treasury shares, reserving the right to cancel them and reduce the capital stock accordingly. Henkel will provide information on the start and progress of the share buyback program by appropriate publications and on its website and reserves the right to interrupt and resume or discontinue the share buyback program at any time. In this context, Henkel reconfirms that acquisitions in both future business units remain an integral part of its strategy.

Henkel also announced the key points of its sales and earnings development in fiscal 2021 on a preliminary basis: Henkel Group sales in fiscal 2021 were 20,066 million euros. Organic sales growth was 7.8 percent. On a preliminary basis, the Adhesive Technologies business unit achieved double-digit organic growth of 13.4 percent in 2021. Sales in the business unit amounted to 9,641 million euros. Organic growth in the Beauty Care business unit was 1.4 percent. Here, sales amounted to 3,678 million euros. Organic growth of Laundry & Home Care was 3.9 percent. Sales of this business unit amounted to 6,605 million euros.

In fiscal 2021, adjusted return on sales ‏(EBIT margin) for Henkel on a preliminary basis was 13.4 percent. The Adhesive Technologies business unit achieved an adjusted return on sales of 16.2 percent. The Beauty Care business unit closed fiscal 2021 with an adjusted return on sales of 9.5 percent, while the adjusted return on sales of the Laundry & Home Care business unit was 13.7 percent (in each case on a preliminary basis).

Preliminary adjusted earnings per preferred share ‏(EPS) in fiscal 2021 were 4.56 euros (+9.2 percent at constant exchange rates).

At its meeting today, the Management Board also approved the planning and the outlook for fiscal 2022 – in its current structure with three business units. In the context of the current assessment of the market environment, in particular the continuing tense situation in the markets for raw materials as well as in the supply chains and the related significant price increases were taken into account.

• Henkel expects organic sales growth for the Group in the range of 2 to 4 percent in 2022.
  • For the Adhesive Technologies business unit, Henkel expects organic sales growth in the range between 5 and 7 percent.
  • For the Beauty Care business unit, negative organic sales growth in the range between -5 and -3 percent is expected. The decrease is mainly due to measures already decided and in implementation to improve the portfolio, including the discontinuation of activities that will not be part of the future core business, amounting to around 5 percent of the business unit’s sales in 2021.
  • For Laundry & Home Care, Henkel expects organic growth between 2 and 4 percent.
• Henkel expects prices for direct materials to increase in the low double-digit percentage range in 2022 compared to the annual average for 2021.
• Adjusted return on sales ‏(EBIT margin) for the Group is expected to be between 11.5 and 13.5 percent.
  • For Adhesive Technologies Henkel expects adjusted return on sales between 15 and 17 percent, for Beauty Care between 7.5 and 10 percent, and for Laundry & Home Care in the range of 10.5 to 13 percent.
• Adjusted earnings per preferred share ‏(EPS) are expected to develop in the range between -15 and +5 percent at constant exchange rates, reflecting high level of market uncertainty and volatility

In this respect, the outlook for fiscal 2022 differs from the current consensus for 2022 for the Group (Vara Research, January 19, 2022): Organic sales growth 4.0 percent; adjusted return on sales 13.6 percent; adjusted earnings per preferred share at 4.79 euros, corresponding to a nominal increase of +5.0 percent compared with the preliminary result 2021.

Further details on the business development in the past year, the implementation and future design of the company's growth agenda, and the outlook for fiscal 2022 will be presented at the analysts' and press conference on February 23, 2022.

Further information on the integration process of the two business units as well as the planned portfolio measures, including expected synergies and restructuring expenses, will – from today's perspective – be published together with the figures for the first quarter on May 5, 2022.

_{* Adjusted for one-time expenses and income, and for restructuring}

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Based on preliminary figures, in a continued challenging economic environment Henkel expects organic sales growth ‏(excluding the impact of currency effects and acquisitions/divestments) in the first three months of fiscal 2021 of in total around 7 percent, which is significantly above the current market expectation of around 3.5 percent ‏(source: Visible Alpha).

Against the background of the recovery in industrial demand in the first quarter and based on preliminary figures, the Adhesive Technologies business unit is expected to achieve an organic sales growth of around 12.5 percent. Henkel expects the Beauty Care business unit to record a positive organic sales growth of around 1.0 percent, in particular affected by pandemic-related market headwinds. Despite core mature markets of Laundry & Home Care starting to slow down, preliminary figures for this business unit indicate strong organic sales growth of around 3.5 percent in the first quarter.

Henkel will provide further details and background in the quarterly statement for the first quarter of 2021 on May 6, 2021. 

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Based on the business development in the first nine months of 2020 and the current assumptions regarding the business performance in the fourth quarter, the Management Board of Henkel AG & Co. KGaA today approved a new outlook for fiscal 2020.

As a result of the dynamic spread of the COVID-19 pandemic and the high level of uncertainty about the impact and development of the global economy in the course of the year, the Management Board of Henkel AG & Co. KGaA had decided on April 7, 2020, to no longer maintain the forecast for fiscal 2020 that was given in the Annual Report 2019.

Due to the effects of the COVID-19 pandemic, current forecasts anticipate a strongly negative development of the global economy in 2020. The new outlook is based on the assumption that the industrial demand and business activity in areas of importance to Henkel in the fourth quarter will be below prior year but will not deteriorate significantly. The decisive factor in this context will be the future development of global infection rates and the development of pandemic-related restrictions. In this context, Henkel assumes that there will be no far-reaching lockdowns in the core regions essential for the company in the fourth quarter of 2020.

Taking these developments into account, Henkel expects organic sales growth of between -1.0 and -2.0 percent at Group level in fiscal 2020.

For the Adhesive Technologies business unit, which is likely to be significantly impacted by a sharp decline in general industrial demand and, in particular, in the automotive industry, Henkel anticipates organic sales growth in the range between -5.5 and -6.5 percent. For the Beauty Care business unit, Henkel currently anticipates organic sales growth in the range between -2.0 and -3.0 percent. A significant decline in the Hair Salon business due to the pandemic, particularly in the first half, will have an impact on this business unit in the full fiscal year. For Laundry & Home Care, Henkel expects organic sales growth in the range between +4.5 and +5.5 percent.

At Group level, Henkel expects to achieve an adjusted return on sales (EBIT margin) in the range between 13.0 and 13.5 percent. For the Adhesive Technologies business unit, Henkel expects an EBIT margin in the range between 14.5 and 15.0 percent, for Beauty Care in the range between 10.0 and 10.5 percent and for Laundry & Home Care in the range between 15.0 and 15.5 percent.

The decline in sales in the industrial and Hair Salon businesses due to the pandemic will have a negative impact on the adjusted EBIT margin. As announced at the beginning of the year, Henkel is also increasing investments in marketing and advertising, as well as in digitalization and IT.

Adjusted earnings per preferred share ‏(EPS) at constant exchange rates are expected to decline in the range between -18 and -22 percent.

Preliminary sales development in the third quarter

Based on preliminary figures, Henkel delivered organic sales growth, which excludes the impact of currency effects and acquisitions/divestments, of +3.9 percent.

Based on preliminary figures, the Adhesive Technologies business unit achieved positive organic sales growth of +1.3 percent in the third quarter. Compared to the second quarter, a recovery in demand was recorded across all business areas.

According to the preliminary figures, Beauty Care delivered very strong organic sales growth of +4.3 percent. While the development of the Hair Salon business was below the level of the prior-year quarter despite a recovery, the retail business achieved significant organic sales growth in the third quarter.

Thanks to continued strong demand for Laundry & Home Care products as well as catch-up effects from the second quarter, preliminary figures for this business unit also indicate significant organic sales growth in the third quarter of +7.7 percent.

Henkel will publish its statement for the third quarter 2020 on November 10, 2020.

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Impact on business performance in 2020 due to COVID-19 currently not predictable

As the dynamic development of the COVID-19 pandemic impacts the global economy, a reliable and realistic evaluation of the future business performance of Henkel is currently not possible. As a consequence, the Management Board of Henkel AG & Co. KGaA has decided today that the forecast for fiscal 2020 published in the Annual Report 2019 will no longer be upheld.

Across all business units and functions, Henkel is responding to the crisis triggered by the COVID-19 pandemic with specific measures. Nevertheless, it is currently not possible to predict with sufficient reliability over what period and to what extent Henkel will face further impacts in fiscal 2020, and to what extent these can be offset by countermeasures. The health and safety of our employees, customers and businesspartners have the highest priority.

As soon as it is possible to make a sufficiently reliable evaluation of the future business performance in 2020, Henkel will publish a corresponding forecast.

The development of Henkel in the first quarter of 2020 is already impacted by the effects of the COVID-19 pandemic. Based on preliminary results, Henkel expects overall organic sales growth for the Group of -0.9 percent in the first quarter of 2020.

For the Adhesive Technologies business unit, Henkel expects organic sales growth of -4.1 percent for the first quarter. In this business, demand declined particularly in the automotive industry. Thanks to strong demand for Laundry & Home Care products, Henkel expects that the business unit has achieved organic sales growth of 5.5 percent in the first quarter. Beauty Care is expected to report a decline in organic sales of -3.9 percent. While the hair salon business was significantly impacted by the closure of hairdressing stores ordered by many authorities, the organic sales growth of the retail business compared to the previous year was stable.

Henkel will publish its financial results for the first quarter of 2020 on May 11, 2020.

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At its meeting today, the Management Board of Henkel AG & Co. KGaA approved the planning as well as the outlook for fiscal 2020, which is below the current market expectations for 2020. 

For the business units Beauty Care and Laundry & Home Care, the company expects good organic sales growth, while growth in the Adhesive Technologies business unit will presumably be impacted by the uncertainty in industrial demand. Overall, Henkel expects on Group level organic sales growth of 0 to 2 percent. For the current fiscal year 2019, Henkel from today’s perspective expects the organic sales development to be approximately stable. 

In view of an uncertain industrial environment and investments in marketing and advertising as well as digitalization and IT expected to increase versus 2019 in order to sustainably strengthen the business in the long-term, Henkel expects earnings to be negatively impacted in the fiscal year 2020. 

The adjusted EBIT margin for 2020 is expected to reach around 15 percent compared to an expected EBIT margin of around 16.2 percent in 2019.

From today's perspective, Henkel expects adjusted earnings per preferred share ‏(EPS) in 2020 to decrease by a mid to high single-digit percentage at constant exchange rates compared to an expected figure of around 5.45 euros in fiscal 2019.

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In today’s meeting, the Supervisory Board of Henkel Management AG, has, in alignment with the Shareholders’ Committee, resolved to terminate Hans Van Bylen’s appointment as Chairman of the Management Board of Henkel Management AG as personally liable partner of Henkel AG & Co. KGaA by mutual agreement as of December 31, 2019. For personal reasons, Hans Van Bylen will not be available for a further term after about 35 years with the company.

As of January 1, 2020, Carsten Knobel, currently member of the Management Board and responsible for Finance, Purchasing and Integrated Business Solutions, has been appointed as Chairman of the Management Board of Henkel Management AG. Carsten Knobel’s successor as CFO will be decided in due course.

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Investing in brands, technologies, innovation and digitalization

To capture growth opportunities mainly in its consumer businesses and accelerate the digital transformation, the Management Board has decided today in its meeting to step up investments by around 300 million euros annually from 2019 onwards. Around two thirds of this amount will be invested in Henkel’s brands, technologies and innovations while around one third will additionally fund the digital transformation across the entire company.

Outlook 2019

Reflecting the increased growth investments from 2019 onwards, Henkel expects an organic sales growth of 2 to 4 percent in 2019. For the adjusted* EBIT margin, Henkel expects a range of 16 to 17 percent and an adjusted* earnings per preferred share (EPS) development in the mid-single digit percentage range below prior year on constant exchange rates.

Mid- to long-term financial ambition for 2020 and beyond

Henkel’s continued commitment to generate sustainable profitable growth and attractive returns is reflected in the company’s expanded mid- to long-term financial ambition for 2020 and beyond: Henkel expects organic sales growth of 2 to 4 percent, an adjusted* earnings per preferred share (EPS) growth in the mid- to high-single-digit percentage range on constant exchange rates and will continue to focus on free cash flow expansion.

Dividend payout ratio

In addition, the Management Board has decided to increase the target range for the dividend payout ratio of net income after non-controlling interests and adjusted for exceptional items to 30 to 40 percent from fiscal year 2019 onwards (current range: 25 to 35 percent).

Today’s Management Board resolutions are subject to approval from the Supervisory Board and the Shareholders’ Committee respectively.

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

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In the first quarter 2018, delivery difficulties in North America adversely affected Henkel's consumer goods businesses. The problems in the supply chain are due to a change in the transportation and logistics systems used by Henkel’s consumer goods businesses in North America.

Henkel expects the business performance in the first quarter to be affected by these delivery difficulties. At the same time, Henkel confirms its full-year outlook 2018 for the Group.

The causes of the delivery difficulties in the North American consumer goods businesses have been identified and are currently being solved. Henkel expects to return to its usual service level in the course of the second quarter. The Adhesive Technologies business as well as the Hair Professional business are not affected and show a very good development.

Based on current forecast, Henkel expects that the Laundry & Home Care and Beauty Care business units will close the first quarter with negative organic sales growth due to the delivery difficulties in North America. In contrast, the Adhesive Technologies business unit, which generates around half of Group sales, continues to show strong development. Overall, organic sales growth for the Group in the first quarter of 2018 is expected to be slightly positive.

Despite a slow start to the year, Henkel confirms its Group outlook for full fiscal 2018. Organic growth should still be in the range of 2 to 4 percent, while Henkel expects for the Beauty Care business unit positive organic sales growth below this range. In respect of adjusted return on sales ‏(EBIT), Henkel expects an increase to more than 17.5 percent. Adjusted earnings per preferred share should increase by between 5 and 8 percent. 

Henkel will publish the results of its first quarter on May 9, 2018.

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On March 2, 2017 Henkel has entered into exclusive negotiations with GCP Applied Technologies, Inc. Cambridge, MA/USA ‏(„GCP“) to acquire the global Darex Packaging Technologies business and has submitted a binding offer on a cash and debt free basis of 1,050 million US dollars ‏(around 995 million euros).

Darex supplies high-performance sealants and coatings for the metal packaging industry around the world. It serves various global customers producing beverage, food or aerosol cans, ensuring with its solutions the highest quality standards for many best-known brands. In fiscal 2016, Darex Packaging Technologies generated sales of around 300 million US dollars ‏(around 285 million euros). Darex has about 700 employees and 20 sites in 19 countries.

In connection with this binding offer, GCP will begin a consultation process with the relevant Works Councils and Labor Unions. Upon completion of that process, it is intended to enter into a definitive purchase and sale agreement in respect of the proposed sale. The proposed transaction will also be subject to customary closing conditions, including regulatory approvals.

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Henkel has signed on June 24, 2016 an agreement to acquire all shares in the laundry and homecare company The Sun Products Corporation, based in Wilton, Connecticut, USA, from a fund of Vestar Capital Partners. The transaction is valued ‏(purchase price including debt) at around 3.2 billion euros ‏(3.6 billion US dollars).

The Sun Product Corporation has a portfolio of leading laundry care brands, such as all® and Sun® as well as the fabric conditioner Snuggle®. The company also develops and manufactures laundry brands for leading retailers in North America. In fiscal 2015, the company generated sales of about 1.4 billion euros ‏(1.6 billion US dollars) in the USA and Canada. Sun Products employs approximately 2,000 people and has two production sites and one R&D center in the USA.

The closing of the transaction is subject to approval from cartel authorities and other customary closing conditions.

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In today’s meeting, the Supervisory Board of Henkel Management AG in alignment with the Shareholder’s Committee agreed unanimously and by mutual agreement to Kasper Rorsted’s request to prematurely terminate his position as Chairman of the Management Board of the Henkel Management AG as personally liable partner of Henkel AG & Co. KGaA as of April 30, 2016.

As of May 1, 2016 Hans Van Bylen, member of the Management Board and responsible for Henkel’s Beauty Care business, has been appointed as Chairman of the Management Board of the Henkel Management AG. The successor of Hans Van Bylen will be announced in due course.

The change in the Management Board at this point in time will assure that the newly appointed CEO Hans Van Bylen will lead the development of and will be responsible for the next strategy cycle 2017-2020 which will be communicated by end of this year.

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Henkel AG & Co. KGaA signed an agreement with funds advised by BC Partners on June 5, 2014 to acquire all shares in the Spotless Group SAS, Neuilly-sur-Seine, France. The Spotless Group mainly operates in the areas of laundry aids ‏(laundry sheets, stain removers, fabric dyes), insect control and household care in Western Europe. In the fiscal year 2013, the company, having about 470 employees, generated sales of about 280 million euros. The transaction, including debt, is valued at 940 million euros.

The acquisition is subject to approval from antitrust authorities and is expected to be completed in the first quarter of 2015 at the latest.

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The Management Board of Henkel AG & Co. KGaA has decided in its today’s meeting to propose to the Annual General Meeting, depending on Henkel’s asset and profit positions as well as its financial requirements, a future dividend payout ratio of between 25 percent and 35 percent of net income after non-controlling interests and adjusted for exceptional items instead of currently about 25 percent. For the financial year 2013, a dividend payout ratio of about 30 percent will be proposed. Today’s Management Board resolution is subject to approval from the Supervisory Board and the Shareholders’ Committee.

Henkel will publish its results for the financial year 2013 on February 20, 2014.

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With its strong business performance in the fourth quarter of 2009 Henkel further continued the positive trend of the prior quarters. Main contributors to these good results were the Laundry & Home Care and Adhesive Technologies business sectors which both developed better than expected. Adjusted return on sales ‏(EBIT) further increased in the fourth quarter to 12.4 percent. As a result, Henkel concluded the 2009 recession year better than anticipated and, with the following preliminary figures, clearly exceeded the analysts’ earnings estimates as known to Henkel at the current time.

According to preliminary figures, Henkel generated sales in fiscal 2009 of around 13.57 billion euros. In organic terms, that is to say adjusted for foreign exchange and acquisitions/divestments, sales decreased by 3.5 percent compared to the prior-year level. Operating profit ‏(EBIT) increased from 779 million euros to 1,080 million euros. Included in this figure are one-time gains/charges and restructuring charges of 284 million euros. Adjusted operating profit ‏(EBIT) decreased from 1,460 million euros to 1,364 million euros. Earnings per preferred share ‏(EPS) amounted to 1.40 euros. Adjusted earnings per preferred share declined from 2.19 euros to 1.91 euros.

At around 4.13 billion euros, sales of the Laundry & Home Care business sector were slightly below the prior-year level. Organic sales growth was 2.9 percent. Operating profit ‏(EBIT) was at 501 million euros. Adjusted operating profit ‏(EBIT) increased considerably from 450 million euros to 530 million euros. Having generated overall stables sales of around 3.01 billion euros and organic sales growth of 3.5 percent, the Cosmetics/Toiletries business sector generated operating profit ‏(EBIT) of 387 million euros in fiscal 2009. Adjusted operating profit ‏(EBIT) increased to 387 million euros from 379 million euros in the previous year. The Adhesive Technologies business sector registered a decrease in sales in fiscal 2009 to some 6.22 billion euros. In organic terms, sales decreased by 10.2 percent. Operating profit ‏(EBIT) was at 290 million euros. Adjusted operating profit ‏(EBIT) decreased from 680 million euros to 506 million euros.

For fiscal 2010 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). Henkel expects both adjusted operating profit ‏(EBIT) and adjusted earnings per preferred share ‏(EPS) to improve noticeably compared to the prior-year figures.

Henkel will be publishing precise figures on the fourth quarter performance and on fiscal 2009 in its Annual Report, which is due to be published on February 25, 2010.

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Henkel AG & Co. KGaA announces preliminary figures for third quarter 2009. The positive development of Henkel’s consumer businesses in previous quarters continued during the third quarter of 2009. There was also a further improvement in the results of the Adhesive Technologies business sector, albeit on a significantly lower level than in the previous year.

The following preliminary figures exceed the consensus estimates of the analysts as known to Henkel at the current time.

According to preliminary figures, Henkel generated sales in the third quarter of 2009 amounting to around 3.49 billion euros. In the prior-year quarter, sales came in at 3.76 billion euros. In organic terms, that is to say adjusted for foreign exchange and acquisitions/divestments, sales decreased by 2.5 percent compared to the level of the prior-year quarter. Operating profit ‏(EBIT) amounted to 290 million euros. Included in this figure are one-time charges and restructuring charges of 95 million euros. After adjusting for these items, adjusted operating profit ‏(“adjusted EBIT”) fell slightly from 391 million euros to 385 million euros.

At around 1.04 billion euros, sales of the Laundry & Home Care business sector were just below the level of the prior-year quarter. Organic sales growth was 2.4 percent. Operating profit ‏(EBIT) increased from 117 million euros to 137 million euros. Having generated slightly lower sales of around 760 million euros and organic sales growth of 3.7 percent, the Cosmetics/Toiletries business sector posted an improved operating profit ‏(EBIT) of 100 million euros compared to 96 million euros in the same quarter of the previous year.

Due to the volume declines suffered by major customer industries, the Adhesive Technologies business sector registered a decrease in sales to some 1.63 billion euros. In organic terms, sales decreased by 7.6 percent. Operating profit ‏(EBIT) declined from 169 million euros to 89 million euros. Adjusted operating profit amounted to 150 million euros.

The earnings development in the third quarter reflects both the stabilization in Henkel’s markets and programs on structural and cost alignment. However, it can not be expected to again achieve the strong past quarter results in the fourth quarter.

Henkel will be publishing precise figures on the third quarter performance and the outlook in its quarterly report, which is due to come out on November 11, 2009.

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The start of 2009 saw the challenging world economic situation continue and this was reflected in Henkel’s business performance. While the Laundry & Home Care and Cosmetics/Toiletries businesses continue to develop very successfully, the Adhesive Technologies business sector has been affected by the worldwide difficult situation of major industry segments.

According to preliminary figures the effects of the worldwide economic crisis have resulted in an organic sales decrease of around 7 percent. Operating profit ‏(EBIT) declined from 320 million euros to about 215 million euros, while total sales increased by around 3 percent to about 3.25 billion euros. This increase is mainly due to the acquisition of the National Starch businesses.

Sales of the Adhesive Technologies business sector decreased organically by about 19 percent. Total sales increased by around 7 percent to about 1.46 billion euros due to the businesses acquired from National Starch, while operating profit ‏(EBIT) decreased from 150 million euros to about 45 million euros. In contrast, the Laundry & Home Care business sector increased operating profit ‏(EBIT) from 100 million euros to about 105 million euros. At 1.01 billion euros, sales were slightly below prior-year level. Organically, sales increased slightly. The Cosmetics/Toiletries business sector increased sales organically by a good 3 percent. With sales slightly up to about 720 million euros, operating profit ‏(EBIT) also increased disproportionately from 87 million euros to around 90 million euros.

Henkel will inform in more detail on the development in the first quarter when publishing its Q1 report on May 6, 2009.

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On November 12, 2008, Henkel has - as a result of the public offering of its stake in Ecolab Inc., St. Paul/Minnesota, USA, and the share buy back by Ecolab – agreed to sell in total approximately 67.1 million shares of Ecolab common stock. Henkel will receive aggregate proceeds of approximately 2.0 billion US dollars ‏(about 1.6 billion euros) before taxes and expenses.

In addition, the underwriters in the offering have an over-allotment option to purchase a total of approximately 5.6 million additional shares of common stock from Henkel. If the shares in the over-allotment option are sold, Henkel will receive additional aggregate proceeds of approximately 170 million US dollars ‏(about 135 million euros) before taxes and expenses.

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On November 10, 2008 Henkel entered into agreements with Ecolab Inc., St. Paul/Minnesota, USA, intended to facilitate the divestiture of its stake in Ecolab.

Ecolab has agreed to assist in the marketing of an underwritten public offering of Henkel’s stake. The registration statement will be filed today. In addition, Ecolab has agreed to repurchase at least 300 million US dollars of stock from Henkel.

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I. Fiscal 2007

Henkel increases sales and profits

• Sales up 2.6 percent to 13.07 billion euros
• Organic sales growth of 5.8 percent
• Operating profit ‏(EBIT): up 3.5 percent to 1,344 million euros
• Net earnings for the year: up 8.0 percent to 941 million euros

Today Henkel published its annual report for fiscal 2007. Sales improved by 2.6 percent to 13,074 million euros, with all the company’s business sectors contributing. Organic sales, i.e. sales after adjusting for foreign exchange and acquisitions/divestments, were increased by a 5.8 percent.

The operating profit ‏(EBIT) improved by 3.5 percent to 1,344 million euros, thus outstripping sales growth. After adjusting for foreign exchange, the increase was 5.8 percent, again with all the business sectors contributing. Return on sales ‏(EBIT) increased by 0.1 percentage points to 10.3 percent. After adjusting for exceptional gains and restructuring charges, operating profit ‏(EBIT) rose by 8.2 percent to 1,370 million euros with the corresponding return on sales figure improving 0.6 percentage points to 10.5 percent.

Net earnings for the year increased by 8.0 percent to 941 million euros. After deducting minority interests of 20 million euros, net earnings were 921 million euros ‏(+7.7 percent). Earnings per preferred share increased from 1.99 euros to 2.14 euros ‏(+7.5 percent).

In view of the earnings performance, the Management Board, the Supervisory Board and the Shareholders’ Committee will be proposing to the Annual General Meeting that it approve an increase in dividends from 0.50 euros to 0.53 euros per preferred share and from 0.48 euros to 0.51 euros per ordinary share.

Outlook

Henkel intends once again to grow stronger than its markets and expects to achieve organic sales growth ‏(i.e. after adjusting for foreign exchange and acquisitions/ divestments) of 3 to 4 percent in 2008. Henkel expects an increase in operating profit ‏(EBIT) – adjusted for foreign exchange – in excess of organic sales growth. Henkel likewise expects an increase in earnings per preferred share ‏(EPS) in excess of organic sales growth.

This outlook does not take into account the effects of the planned acquisition of the Adhesives and Electronic Materials businesses of National Starch.

II. Divestiture of the stake in Ecolab intended

The Management Board decided – with the approval of the Shareholder’s Committee as of February 27 to undertake the divestiture of all or part of its stake in Ecolab Inc., St. Paul, Minnesota, USA. No final decision has been taken at this time as to the size, the timing and the method of any such divestiture, which would be carried out in accordance with the Stockholder's Agreement between Henkel and Ecolab.

Ecolab, in which Henkel holds a 29.4 percent stake, reported sales of 5,470 million US dollars for fiscal 2007. As of December 31, 2007 the market value of this interest amounted to approx. 3,723 million US dollars ‏(approx. 2.5 bn euros), though no assurance can be given that a divestiture of the stake would yield proceeds in this amount.

III. Measures to increase long-term profitability initiated

Against the background of changing market conditions, especially with regard to ever stronger competition and increasing cost pressure, the Henkel Management Board has decided, with the approval of the Shareholders’ Committee as of February 27, 2008, the basics of an efficiency enhancement program. 

The program, which will be initiated on a worldwide level, is to define projects in all business sectors, regions and functions with the aim to sustainably strengthen both Henkel’s profitability and long-term competitiveness. The initiative, with a volume of about 500 million euros, is designed to generate annual savings of around 150 million euros from 2011. Based on experience from similar programs carried through in the past, these measures could result in the reduction of about 3,000 jobs.

Henkel will finalize the details of the program, following the development of single project ideas and the subsequent discussion with both the works councils and the employees likely to be affected.

Please note that the measures pointed out under II. and III. are not considered in the outlook referred to under I. 

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In addition to our notifications of July 30 and August 6, 2007 we hereby notify that following approval of the Shareholders’ Committee of Henkel KGaA, Düsseldorf, Henkel and Akzo Nobel N.V., Arnhem, The Netherlands, have signed an agreement on a back-to-back transaction on August 13, 2007. Under the terms of this agreement, Henkel will acquire the adhesives and electronic materials businesses of National Starch and Chemical Company, Bridgewater, N.J., USA. National Starch is a subsidiary company of ICI plc, London, UK. The back-to-back transaction is conditional on the successful completion of the takeover of ICI by Akzo Nobel.

The transaction value amounts to 2.7 GBP ‏(close to 4 billion euros). The adhesives/electronic materials business of National Starch had sales of 1.26 billion GBP ‏(approx. 1.85 billion euros) in 2006.

It is intended - subject to approval by Henkel’s Shareholders' Committee - to execute the back-to-back agreement immediately prior to the formal announcement of an offer by Akzo Nobel for ICI.

This transaction is subject to the successful completion of the takeover of ICI by Akzo Nobel.

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In addition to our notification of July 30, 2007 that Henkel and Akzo Nobel, N.V., Arnhem, The Netherlands, have signed an exclusivity agreement and have also negotiated a back-to-back agreement under the terms of which Henkel would acquire the adhesives and electronic materials businesses of National Starch and Chemical Company, Bridgewater, N.J., USA, a subsidiary of Imperial Chemical Industries PLC ‏(ICI), London, UK, we hereby notify that on August 6, 2007 Henkel and Akzo Nobel have reached agreement that the transaction value for those businesses will amount to 2.7 GBP ‏(close to 4 billion euros). The adhesives and electronic materials businesses of National Starch had sales of 1.26 billion GBP ‏(approx. 1.85 billion euros) in 2006.

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The Board of Henkel KGaA, Düsseldorf, Germany, notes the recent speculation regarding talks between Henkel and Akzo Nobel N.V., Arnhem, The Netherlands. Henkel confirms that on July 26, 2007 it has signed an exclusivity agreement with Akzo Nobel. Also Henkel and Akzo Nobel have negotiated an agreement about a back-to-back transaction, the signing of which is still pending. Under such agreement Henkel would acquire the adhesives and electronic materials businesses of National Starch and Chemical Company, Bridgewater, N.J., USA, a subsidiary of ICI plc, London, UK. It is intended - subject to approval by Henkel’s Shareholders' Committee - to execute the back-to-back agreement immediately prior to the formal announcement of an offer by Akzo Nobel for ICI.

The adhesives/electronic materials business of National Starch had sales of 1,26 billion GBP ‏(approx. 1.85 billion euros) in 2006.

Such a back-to-back-transaction is subject to the successful completion of a takeover of ICI by Akzo Nobel. There can be no certainty that such an offer will be made or a takeover will take place.

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The Dial Corporation - an affiliate of Henkel KGaA - and The Gillette Company, a subsidiary of Procter & Gamble, signed a definitive agreement on February 20, 2006, under which Dial will acquire several strong antiperspirant/deodorant brands. These very well-known brands include Right Guard, Soft & Dri and Dry Idea, which Procter & Gamble was required to divest as part of the FTC Consent Decree related to the Procter & Gamble/Gillette merger. The purchase price amounts to about 420 million US dollars. Sales in 2005 of these brands amounted to about 275 million US dollars.

Closing of this transaction, which is still subject to customary approval from the antitrust authorities, is expected before the end of the first quarter of 2006.