Henkel holds course in second quarter

Organic sales growth again outpaces market developments

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companies/Second quarter

Düsseldorf (euro adhoc) - Düsseldorf, August 1, 2007
Organic sales growth again outpaces market developments

Henkel holds course in second quarter

. Sales increased by 1.9 percent to 3,293 million euros
. Organic sales grew 4.3 percent
. Adjusted operating profit (EBIT) up 6.4 percent to 345 million euros
. Continued dynamic expansion in the growth regions

"We have continued our good start to the current fiscal year with further

success in the second quarter. All our business sectors
reported organic growth outpacing developments in our markets. We
were also able to harness the continuing dynamism prevalent in the
growth regions in order to further expand our market positions,"
said Ulrich Lehner, Chairman of the Management Board of Henkel
KGaA. "Thanks to successful developments in the first half year,
we anticipate achieving an increase in organic sales of 4 to 5
percent for full fiscal 2007. We also continue to expect an
increase in operating profit - adjusted for foreign exchange - in
excess of organic sales growth."

Düsseldorf - In the second quarter of 2007, Henkel reported sales
of 3,293 million euros, an increase of 1.9 percent compared to the
prior-year quarter. The rise in organic sales, i.e. growth
adjusted for foreign exchange and acquisitions/divestments, was
4.3 percent, with all business sectors contributing.
Following a very strong first quarter which was boosted by
special marketing activities initiated to celebrate the Persil
centennial, organic growth in the Laundry & Home Care business
sector normalized at 3.1 percent. Sales growth at
Cosmetics/Toiletries amounted to 4.3 percent. Adhesives
Technologies, which had benefited from building sector activity
in the first quarter due to favorable weather conditions, turned in
the strongest performance with a rise of 4.8 percent. This business
sector was established on April 1, 2007, as a result of the merger
of the previously separately run Consumer and Craftsmen Adhesives
and Henkel Technologies business sectors.

Operating profit (EBIT) decreased by 5.5 percent to 339 million
euros, and by 3.6 percent after adjusting for foreign exchange. The
figure for the prior-year quarter included one-time gains amounting
to 41 million euros arising from the divestment of the
insulating glass sealant and rubber-to-metal bonding chemicals
businesses, while this quarter's results included a gain of 8
million euros from the sale of land in Turkey. In addition,
Henkel increased its restructuring charges from 6 million euros in
the prior-year quarter to 14 million euros in this quarter. After
adjusting for these items, EBIT rose by 6.4 percent, from 324
million euros to 345 million euros.

At 10.3 percent, return on sales (EBIT) fell by 0.8 percentage points
below the level of the previous year's quarter. After adjusting
for the above items, return on sales increased by 0.5 percentage
points, from 10.0 percent to 10.5 percent. Return on capital
employed (ROCE) amounted to 15.4 percent. Net income from
participations increased by 3 million euros to 24 million
euros, due primarily to the results of our Ecolab participation.
Net interest expense improved by 11 million euros to -37 million
euros, mainly due to higher income from the fund assets covering
our German pension obligations. Overall, net financial items
increased by 14 million euros to -13 million euros. The tax rate
was 26.7 percent.

Due to lower EBIT, quarterly net earnings fell by 3.6 percent to
239 million euros. After minority interests amounting to 5 million
euros, net earnings for the quarter were 234 million euros (-3.7
percent). Earnings per preferred share amounted to 0.54 euros (-5.3
percent). Business Sector Performance

Organic sales of the Laundry & Home Care business sector rose by
3.1 percent, while foreign exchange rates and
acquisitions/divestments had a negative effect of -3.4 percent.
Registering double-digit percentage growth rates, sales in Eastern
Europe remained very buoyant, while in Western Europe the
exceptionally high growth rate of the first quarter normalized as
expected. Operating profit increased by 2.8 percent to 111 million
euros; after adjusting for foreign exchange, the rise was 5.7
percent. The growth in sales in the Laundry segment was largely
the result of the good performance generated by heavy-duty
detergents and fabric softeners. As part of the campaign to
celebrate the Persil centennial, new "Persil 100 - Better than
ever!" was launched onto the German market. In Eastern Europe, the
aromatherapy line of the fabric softener Silan was expanded through
the inclusion of new fragrances. The Home Care segment
benefited from a number of successful innovations. Europe, for
example, saw the launch of new gel toilet cleaner Bref Jumbo
with anti-bacterial cleaning power, and a further variant was added
to the Clin range of window cleaners. In North America, the
first bath cleaner under the Soft Scrub brand was introduced into
the market.

The Cosmetics/Toiletries business sector achieved organic
sales growth amounting to 4.3 percent. This was once again
significantly above the relevant market growth rate, re-affirming
the successful trend of preceding quarters. Aside from continuing
good developments in Western Europe, the business sector performed
particularly well in Eastern Europe and Latin America. This was
also reflected in the operating profit figure which showed an
increase of 3.0 percent to 98 million euros; after adjusting for
foreign exchange, the rise was 4.7 percent. The Hair Cosmetics
business continued to achieve significant growth. The company's
market positions in all the relevant categories - colorants,
care and styling - were further expanded through the launch of
numerous innovations, achieving record levels in Europe. The Body
Care business showed further appreciable growth, due in particular
to the good development of the two major brands Fa and Dial, both
of which increased sales thanks to successful innovations and
portfolio extensions. The Skin Care business profited from the
market debut of the anti-age innovation Diadermine 3D Wrinkle

Filler Pen and the relaunch of the Aok brand in Germany. In the Oral Care
segment, the focus was on the launch of the new Freshness variants to the
Theramed line. The Hair Salon business also continued to develop very
positively, benefiting from the introduction into the market of various new
products plus a range of relaunch activities.

With organic sales growing by 4.8 percent, Adhesives Technologies continued its

positive development. Double-digit percentage growth rates
were again registered in Eastern Europe, Africa/Middle East and
Asia-Pacific, with Western Europe and Latin America also performing
well. Business developments in North America were rather more
sluggish due to market conditions, especially in the construction
sector. Operating profit for the prior-year quarter included one-
time divestment gains amounting to 41 million euros. Compared to
that quarter EBIT fell by 13.7 percent, or by 11.7 percent after
adjusting for foreign exchange. Without this exceptional item,
however, a substantial rise in operating profit was achieved,
with positive results particularly from strict cost management,
economies of scale arising from the strong organic sales
growth achieved, and implemented price increases. In the Consumer and
Craftsmen segment, the company's instant adhesives were again its
strongest performers. As in the recent past, growth in the Building
Adhesives segment was again above average, benefiting both from
further brisk building activity in Eastern Europe and sustained
recovery in important Western European sales markets. The
Industry segment also continued to exhibit very good growth.
The business operating under the Loctite brand for industrial
maintenance, repair and overhaul performed very well. In our
North American automotive business, weakening due to the sluggish
market, the measures initiated brought their first successes.
Business activities involving the aircraft and steel
industries continued to exhibit strong growth. Here, Henkel was
able to both expand its market positions with innovative surface
treatment products, and implement price increases.

Regional Performance

Sales in the Europe/Africa/Middle East region came in at 2,111
million euros, a rise of 4.3 percent or 4.4 percent after adjusting
for foreign exchange. All business sectors contributed to this
growth. In Eastern Europe, sales again increased in the
double-digit percentage range, while in Western Europe the
growth dynamism of the first quarter slackened somewhat. There
was also an absence of sales volume due to the divestment of
various marginal business activities. At 64 percent, the share of
sales accounted for by this region remained at roughly the same
level as in the previous year. Due primarily to foreign exchange
effects, sales of the North America region fell by 7.7
percent; after adjusting for foreign exchange, the decline was
just 1.1 percent. The cosmetics business in North America
exhibited gratifying growth supported by successful innovations.
With sales of 646 million euros, the region's share of total
sales amounted to 20 percent. The Latin America region registered
sales of 178 million euros, an increase of 5.2 percent or 7.8
percent after adjusting for foreign exchange. This growth was
generated primarily by the Cosmetics/Toiletries and Adhesives
Technologies business sectors. The share of sales attributable to
the region remained unchanged at 5 percent. Henkel's businesses in
the Asia-Pacific region performed exceptionally well. At 298 million
euros, sales rose significantly by 8.4 percent, increasing further
to 11.4 percent after adjusting for foreign exchange. Here,
the Adhesives Technologies business sector exhibited a
particularly high growth rate. The region's share of total sales
increased slightly to 9 percent.

Overall, the highly encouraging developments encountered in the
growth regions of Eastern Europe, the Middle East, Africa, Latin
America and Asia-Pacific continued through the second quarter, with
Henkel once again achieving a double- digit percentage increase in
sales in these markets.

Major Participation

Ecolab Inc., St. Paul, Minnesota, USA, in which Henkel has a
29.6 percent stake, reported sales of 1,362 million US dollars in
the second quarter of 2007, an increase of 11.1 percent compared
to the previous year. Net earnings for the quarter rose by 18.4
percent to 110.3 million US dollars. The market value of this
participation as of June 30, 2007, amounted to around 2.3 billion
euros.

Updated Sales and Profit Forecast 2007

Taking into account the encouraging business developments observed in
the first half of the year, Henkel now expects to achieve an organic
growth rate (after adjusting for foreign exchange and
acquisitions/divestments) of 4 to 5 percent for the full fiscal
year.

Henkel continues to expect 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 document contains forward-looking statements which are
based on the current estimates and assumptions made by the
corporate management of Henkel 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 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.

Photo material available for downloading at: http://henkel.com/press

Further detailed information on the facts and figures for the second
quarter 2007 can be found in the internet at:
http://www.henkel.com/ir

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end of announcement euro adhoc 01.08.2007 07:37:13
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ots Originaltext: Henkel KGaA
Im Internet recherchierbar: http://www.presseportal.de

Further inquiry note:
Ernst Primosch
Phone: +49-211-797-3533
Fax: +49-211-798-2484

Lars Witteck
Phone: +49-211-797-2606
Fax: +49-211-798-9208

Wulf Klüppelholz
Phone: +49-211-797-1875
Fax: +49-211-798-9208

press@henkel.com

Branche: Consumer Goods
ISIN: DE0006048408
WKN: 604840
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