EANS-News: Henkel AG & Co. KGaA / Henkel shows positive trend in Q2

Consumer businesses report continued success – slight recovery of
Adhesives business

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companies/finances/industry/shares/Henkel

Düsseldorf (euro adhoc) - . Sales fall 5.0 percent to 3,485 million
euros . Organic sales decline 5.3 percent . Operating profit
increases from 113 million euros to 279 million euros . Adjusted
operating profit decreases 17.2 percent to 308 million euros

"Again in the second quarter of 2009, Henkel felt the effects of the
continuing world economic recession. Nevertheless, all our business
sectors were again able to outstrip their relevant markets," said
Kasper Rorsted, Chairman of the Henkel Management Board. "Our
Laundry & Home Care business sector actually surpassed the good
results of the first quarter, while Cosmetics/Toiletries again
showed a very positive performance. Compared to the first
quarter, we also registered an improvement at Adhesive
Technologies." Rorsted continued: "These developments are
attributable to the countermeasures we were able to put in place
early on. Hence we remain firmly convinced 2009 will not be a
lost year. Rather, it will be a major step toward achieving
our long-term objectives."

In a persistently difficult market environment, Henkel achieved sales
of 3,485 million euros in the second quarter of 2009, 5.0 percent
less than in the prior- year period. Organic sales, i.e. sales after
adjusting for foreign exchange and acquisitions/ divestments, were
5.3 percent below the level of the second quarter of 2008, but
improved slightly compared to the first quarter of this year.
Against this background, developments at the company's three
business sectors continued to show a very mixed picture. The
consumer goods businesses Laundry & Home Care and
Cosmetics/Toiletries were able to successfully continue their
positive trend with organic growth rates of 6.3 percent and 3.5
percent respectively. The Adhesive Technologies business sector
improved compared to the first quarter, but due to the volume
decreases in major customer industries worldwide, was unable to
avoid posting a decline in organic sales of 15.4 percent.

Due primarily to the restructuring charges burden on the results of
the prior- year quarter, operating profit (EBIT) increased by
145 percent, from 113 million euros to 279 million euros. After
adjusting for one-time gains/charges and restructuring charges,
adjusted operating profit ("adjusted EBIT") decreased by 17.2
percent, from 372 million euros to 308 million euros. This is
largely attributable to the decrease in earnings at Adhesive
Technologies.

The EBIT margin was 8.0 percent, while the adjusted EBIT margin
decreased from 10.1 percent to 8.7 percent.

The company's investment result fell from 24 million euros to -4
million euros. This decline is essentially due to the sale of
Henkel's participation in Ecolab in November 2008. Net interest
expense improved by 28 million euros from -84 million euros to
-56 million euros, mainly as a result of lower interest rates
compared to the previous year. The financial result remained stable
overall at -60 million euros. The tax rate was 31.5 percent.

Due to increased EBIT, net earnings for the quarter rose by 257
percent, from 42 million euros to 150 million euros. After
minority interests totaling 7 million euros, net earnings for the
quarter were 143 million euros (second quarter of 2008: 38
million euros). Adjusted quarterly net earnings after minority
interests were 162 million euros compared to 227 million euros in
the first quarter of the previous year. Earnings per preferred share
increased from 0.09 euros to 0.33 euros. The adjusted figure was
0.37 euros compared to 0.52 euros in the prior-year quarter.

Business Sector Performance

The Laundry & Home Care business sector's organic sales
increased by 6.3 percent, the highest rise since the first quarter
of 2007. Foreign exchange exerted a negative impact of 1.9
percent. Nominally, sales increased by 4.4 percent to 1,058
million euros. The growth regions of Eastern Europe,
Africa/Middle East and Latin America continued to deliver strong
sales growth with, in some cases, double-digit rates of increase.
Following a sluggish start to the year, a gratifying rise in organic
sales was also registered in Western Europe and North America.
Operating profit rose by 28.8 percent to 119 million euros. After
adjusting for foreign exchange, earnings rose by an even more
respectable 34.1 percent. This highly encouraging development was
attributable not only to a further relaxation in raw material prices
but also sales price increases and measures successfully
introduced to reduce costs and enhance efficiency. Sales
reported by the Laundry segment showed a substantial rise. In
particular, the biggest brands Persil and Purex posted
disproportionate organic improvement. The launch of Purex Complete
3-in-1 in the USA proved a great success. These innovative
laundry sheets combine the performance of a detergent along with
heat-activated softener and anti-static ingredients that are
released in the drier to prevent electrostatic accumulation in the
wash load. Sales of the Home Care segment likewise continued to
follow an upward trend, with the fastest rates of increase
occurring in Eastern Europe and Africa/Middle East. The
company's largest dishwashing detergent brand Pril achieved
double-digit increases in organic sales in both regions. And
the launch of Somat 9 in the machine dishwashing category also
produced encouraging results.

Despite a very strong prior-year quarter, the
Cosmetics/Toiletries business sector continued the positive trend of
recent years, registering organic sales growth of 3.5 percent.
Consequently, this business sector significantly outperformed
its relevant markets, which exhibited negative development overall
in a very difficult economic environment. Particularly in the
regions of Eastern Europe, Asia and Latin America, growth remained
strong. The increase achieved in Western Europe was also
noteworthy. In nominal terms, sales rose by 1.5 percent to 790
million euros. Operating profit reached 100 million euros, an
increase of 2.8 percent, rising to 4.2 percent after adjusting for
foreign exchange. The Hair Cosmetics segment continued to perform
very well, further expanding the market positions of all its
categories. The Hair Care and Colorants businesses turned in a
particularly positive performance, aided by the continuing
roll-out of the new brand Syoss, the new Gliss line Asia
Straight and the new Schauma Shampoo Hairactive for Men. The positive
trend in the Colorants category continued with the support of
the Essential Colors innovation and the market launch of Palette 10
Minutes Coloration. In the Body Care segment, the Dial brand in the
USA continued to do very well, supported in particular by the launch
of a number of new body wash products. Also very successful in
this segment was the Fa brand which generated significant revenue
and market share increases in Europe following the introduction of
the shower products Cream & Oil and Fresh & Oil. In the Skin Care
segment, the focus was on the launch of the new Diadermine
series Dr. Caspari. In the Oral Care segment, the launch of the
new Theramed variant Arctic White generated positive momentum.
Against the background of an increasingly negative development in
the global professional hairdressing market, Henkel's Hair
Salon segment significantly outperformed its market. Here, the
focus was on the relaunch of Bonacure, the introduction of two new
sublines from Igora and the ongoing roll- out of the Essensity
brand.

With the markets stabilizing and sales below the prior-year
quarter the Adhesive Technologies business sector was able to
substantially improve the quality of its results compared to the
first quarter of 2009. Compared to the second quarter 2008 - the
period in which the newly acquired National Starch businesses
were consolidated for the first time - sales fell by 12.9 percent to
1,582 million euros. After adjusting for foreign exchange, the
decrease was 13.9 percent. In view of the continuing difficulties
encountered in the world economy, the business sector was unable
to match the sales realized in the same quarter last year in any of
its regions with the exception of Latin America. Organic sales
remained 15.4 percent below the level of the prior-year quarter.
Compared to the first quarter of 2009, however, this constitutes an
improvement of 2.8 percentage points. Due to the decline in
volumes and the associated decrease in capacity utilization,
operating profit fell by 50.8 percent to 95 million euros.
Included in this amount is 4 million euros in consultancy
charges resulting from the integration of the National Starch
businesses. The early introduction of measures to adapt capacity and
reduce costs, as well as the launch of a number of innovative
products, served to significantly improve earnings compared to the
first quarter. The performance of the Adhesives for Craftsmen and
Consumers segment was impacted by the continuing recession in the
building industry and particularly the slump in demand encountered
in the UK, Spain and the USA. The generally lower level of
construction activity also adversely influenced developments in the
Building Adhesives segment, although business in the Middle East
region continued to improve. The decline in the Packaging,
Consumer Goods and Construction Adhesives segment was relatively
minor. However, here too the slight fall in demand for consumer
goods affected business performance. The global reduction in
manufacturing output among major industrial customers again
significantly impacted the development of the Specialty
Adhesives and Surface Treatment segment. However, particularly
in this difficult environment, Henkel has benefited from its
acknowledged position as a supplier of innovative problem
solutions. As a case in point, the company's metal pretreatment
product TecTalis received the PACE Award as the ecologically and
economically most significant innovation of 2008 among
automotive suppliers. The Electronics segment continued to suffer
from the general market weakness affecting the semiconductors
industry.

Regional Performance

In the Europe/Africa/Middle East region, organic sales were 3.7
percent below the level for the second quarter of 2008. While the
Laundry & Home Care and Cosmetics/Toiletries business sectors
succeeded in generating a gratifying increase in sales, Adhesive
Technologies posted a decline in the double-digit percentage
range. In Africa/Middle East, Henkel once again achieved double-
digit organic growth, while performance in Western Europe including
Germany was regressive. The growth rate in Eastern Europe recovered
slightly compared to the first quarter. Overall, sales in the
Europe/Africa/Middle East region decreased from 2,283 million euros
to 2,113 million euros, giving it a share of 61 percent of Group
revenues. Organic sales in the North America region decreased
by 10.2 percent. The difficult market environment led to
Adhesive Technologies posting a substantial decline in sales.
Developments at Cosmetics/Toiletries were slightly regressive.
However, sales of the Laundry & Home Care business sector showed an
encouraging increase. Total sales of the region amounted to 677
million euros, resulting in a share of Group revenues of 19 percent.
Organic sales in the Latin America region increased by 3.9 percent,
with all business sectors contributing. At 210 million euros, the
share of total sales accounted for by this region was 6 percent.
In the Asia-Pacific region, organic sales decreased compared to the
same quarter last year by 10.0 percent. A gratifying increase in
sales at the Cosmetics/Toiletries business sector was offset by a
significant decline at Adhesive Technologies. With the closure of
our Laundry & Home Care operations in China at the beginning of the
year, sales of this business sector also declined. Total sales of
the region amounted to 430 million euros, resulting in a share of
Group revenues of 12 percent. Sales in the growth regions of
Eastern Europe, Africa/Middle East, Latin America and Asia
(excluding Japan) increased organically by 2.3 percent. In nominal
terms, sales fell by 1.5 percent to 1,317 million euros,
corresponding to a share of consolidated sales of 37.8 percent.

Sales and Profits Forecast 2009 Henkel expects that the difficult
market conditions currently prevailing both in the real economy
and also in the financial markets will persist through 2009.
The general economic climate and its further development remain
rather difficult to predict. Nevertheless, Henkel is confident of
outperforming its relevant markets in terms of organic sales growth
(i.e. after adjusting for foreign exchange and
acquisitions/divestments). Henkel has introduced a number of
further measures on the operational side, from which the company
expects positive momentum to develop. These activities and also
relief from easing raw material prices will support the development
of operating profit (EBIT) and earnings per preferred share
(EPS) -adjusted in each case for one-time gains/charges and
restructuring charges.

For the third quarter of 2009 Henkel expects its consumer
businesses to continue to perform well - albeit with a degree of
deceleration. The company's expectation for the Adhesive
Technologies business sector is that it will develop similarly
to or slightly better than in the second quarter of 2009.

The outlook for the fourth quarter of 2009 is unclear due to
continuing uncertainties regarding the likely development of the
economic parameters governing the markets of relevance for
Henkel. This also reduces the reliability of any forecast made
with respect to the year as a whole. As soon as the markets allow
properly reasoned assumptions, Henkel will communicate
quantified expectations for full fiscal 2009. This information
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, etc. 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 any 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

Full report for the second quarter 2009 and photo material are
available at http://henkel.com/press.

press@henkel.com

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ots Originaltext: Henkel AG & Co. KGaA
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:

Irene Honisch

Assistent Corporate Communications

Tel.: +49 (0)211 797-5668

E-Mail: irene.honisch@henkel.com

Branche: Consumer Goods
ISIN: DE0006048432
WKN: 604843
Index: DAX, CDAX, HDAX, Prime All Share
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