Increase in dividends proposed 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

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finances/Henkel

Düsseldorf (euro adhoc) - "Once again, we achieved a good performance
in 2007. Our organic sales growth and further increase in profits
were encouraging. All our business sectors contributed to this
success and we maintained sales momentum in our growth regions,"
commented Ulrich Lehner, Chairman of the Management Board of Henkel
KGaA. "These results demonstrate the effectiveness of our strategy of
focusing on our core businesses while striving for innovation
leadership in each of our markets."

Düsseldorf - Today Henkel published its annual report for fiscal
2007. Sales increased 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 5.8 percent.

Operating profit (EBIT) increased 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 financial result improved by 28 million euros to -94 million
euros, due primarily to the absence of the impairment loss of 26
million euros incurred in the previous year from our participation in
Lion Corporation which was sold in November 2006. At 24.7 percent,
the tax rate was 1.2 percentage points below the level of the
previous year.

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).

Capital expenditures on property, plant and equipment in 2007 totaled
470 million euros, and free cash flow amounted to 769 million euros.
Net working capital was reduced by 1.8 percentage points to 11.5
percent of sales.

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.

Business Sector Performance

Sales of the Laundry & Home Care business sector increased by 0.8
percent to 4,148 million euros, despite the divestment of a number of
marginal businesses in the past fiscal year. Organic sales growth was
5.5 percent, generated primarily in the Europe/Africa/Middle East
region, with the highest growth rates occurring in Eastern Europe. In
Western Europe, particularly the "Best Ever" campaign, initiated both
to celebrate the Persil centennial and to relaunch the company´s
other premium European detergent brands, yielded positive results.
Operating profit rose by 2.1 percent to 459 million euros, and by 4.5
percent after adjusting for foreign exchange. Growth in the Laundry
segment was mainly driven by sales of heavy-duty detergents and
fabric softeners. The Persil centennial activities contributed
particularly to the good development of the heavy-duty detergents
business. Henkel´s most important detergent brand was again improved
in terms of performance, fragrance experience and design esthetics.
The fabric softener brands Vernel and Silan benefited noticeably from
the successful introduction of further new fine fragrances. Major
contributions to the good sales performance of the Home Care business
were made by the dishwashing and WC products. The results posted in
the machine dishwashing sector were boosted by innovations such as
Somat 7 which, in addition to the functions of Somat 5, also contains
a cleaning booster and an activator for improved results at low
temperatures. Hand dishwashing detergents continued their good
development in Europe; especially in the growth regions.

Sales of the Cosmetics/Toiletries business sector reached a new
record high, above market volume, with organic sales growth of 5.8
percent. Before adjusting for foreign exchange and the sale of the
Morris fine fragrance business, sales increased nominally by 3.7
percent to 2,972 million euros, with business in Western Europe
growing substantially faster than that of the overall market.
Double-digit percentage growth rates were again achieved in Eastern
Europe. The Middle East and Latin America regions likewise generated
sales increases. Sales performance in North America was characterized
by expansion of the Dial business and the successful integration of
the Right Guard brands portfolio. Operating profit improved by 3.8
percent to 372 million euros, and by 6.6 percent after adjusting for
foreign exchange. The Hair Cosmetics business posted a substantial
increase in sales with market share expanding to new record levels.
This performance was driven by our top brands in our strategic
business units Colorants, Hair Care and Styling which attracted
further market interest with numerous new product launches. Among the
newcomers were the Brillance Fashion Collection in the colorants
business, the extension of the Palette line by Golden Gloss Browns,
and Men Perfect, the first men´s colorant from Schwarzkopf. The Body
Care business likewise continued to perform well, supported in
particular by the ongoing success of the innovation offensive driving
the two major brands Fa and Dial. Right Guard also made significant
inroads into the US deodorant market. The Skin Care business profited
from the success of its most important brand, Diadermine, with its
anti-age innovations and the new premium line Diadermine Age
ExCellium, enabling it to expand its market positions across Europe.
In the Oral Care segment, the focus was on the new freshness variants
of Theramed 2in1 and the international launch of Theramed Titan
Fresh. In the Hair Salon business, which holds the number 3 position
worldwide, the emphasis was on the care series Bonacure, the relaunch
of the exclusive hair care brand SEAH, and the introduction of
BlondMe, the first fully comprehensive concept comprising coloration,
care and styling components for the individual blonde.

Sales of the Adhesives Technologies business sector increased by 3.6
percent to 5,711 million euros. Organic sales rose by 6.5 percent
with the result that 2007 again saw us grow faster than the market.
Major revenue increases were posted in Eastern Europe, Africa/Middle
East, Latin America and Asia-Pacific. While good growth was also
achieved in Western Europe, sales in North America were below the
level of the previous year due to prevailing market conditions.
Operating profit rose to 621 million euros, 7.3 percent above the
level of the previous year, while profit growth after adjusting for
foreign exchange amounted to 10.4 percent. Sales of the Craftsmen and
Consumer business again slightly increased with the power and
assembly adhesives of the international Pattex brand as the primary
growth drivers. Loctite instant adhesives continued to perform very
well. The Building Adhesives segment realized the strongest growth,
with Eastern Europe once again generating much of the momentum. With
newly established production facilities, the company succeeded in
meeting the rapidly growing demand for its products. Aside from the
tile adhesives and waterproofing products of the Ceresit brand,
product systems for the thermal insulation of buildings also
exhibited dynamic growth. The Industry business segment likewise
continued to grow successfully, supported in particular by market
developments in Asia-Pacific, Eastern Europe and Latin America. The
highest growth rates were achieved in the electronics sector, which
benefited from the boom in memory modules and the trend toward
inexpensive mobile phones, and in the industrial maintenance, repair
and overhaul business under the Loctite brand. Despite the weakness
of the US automotive market, the associated Henkel business underwent
worldwide expansion thanks in major part to its innovative adhesives
and sealants marketed under the Teroson brand, designed to increase
crash safety while reducing noise and weight.

Regional Performance

In the regional breakdown, Europe/Africa/Middle East showed a
significant increase in sales of 5.4 percent to 8,480 million euros,
with all the business sectors contributing. After adjusting for
foreign exchange, the increase was 6.0 percent. The growth posted by
Eastern Europe and Africa/Middle East was above average, and sales in
Western Europe including Germany were also increased. Organic sales
growth amounted to 7.4 percent. Overall, the region´s share of total
sales increased from 63 to 65 percent. Due to adverse foreign
exchange rate movements, sales in the North America region fell by
6.8 percent to 2,557 million euros. After adjusting for foreign
exchange, sales increased by 1.4 percent, while organic growth
amounted to 0.7 percent, the main contribution coming from the
Cosmetics/Toiletries business sector. The region´s share of total
sales was 20 percent. The Latin America region recorded an increase
in sales of 4.3 percent to 691 million euros. Adjusted for foreign
exchange, the region´s sales rose by 9.4 percent with organic growth
at 7.7 percent, with all the business sectors contributing to the
improvement. The region´s share of total sales remained unchanged at
5 percent. Business results in the Asia-Pacific region were similarly
positive with sales rising by 6.0 percent to 1,103 million euros, and
by 9.7 percent after adjusting for foreign exchange. Organic sales
growth amounted to 7.7 percent. The Adhesives Technologies business
sector in particular was able to benefit from the strong growth
dynamics of the region, which again accounted for 8 percent of total
sales.

Henkel´s performance in the growth regions of Eastern Europe, Africa,
Middle East, Latin America and Asia (excluding Japan) was again good
with an above-average increase in sales of 12.4 percent to a total of
4,388 million euros, to which all the business sectors again
contributed. After adjusting for foreign exchange, total sales growth
amounted to 15.3 percent and organic sales rose by 15.1 percent.

Fourth quarter 2007

Sales for the fourth quarter amounted to 3,186 million euros. Organic
sales growth was 3.8 percent. At 323 million euros, operating profit
maintained the high level of the previous year. After adjusting for
exceptional gains and restructuring charges, EBIT came in at 325
million euros, 2.2 percent above the prior-year. Net earnings for the
quarter were increased by 11.8 percent to 247 million euros; earnings
per preferred share rose by 6 eurocents to 0.57 euros (+11.8
percent).

Major Participation

Ecolab Inc., St. Paul, Minnesota, USA, in which Henkel holds a 29.5
percent stake, reported sales of 5,470 million US dollars for fiscal
2007, an increase of 11.7 percent compared to the previous year. Net
earnings for the year rose by 15.9 percent to 427 million US dollars.
The market value of this participation as of December 31, 2007 was
2,529 million euros (previous year: 2,495 million euros).

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.

This information 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.

Henkel KGaA

Head of Corporate Communications
Ernst Primosch, Corporate Vice President

Press Contact:
Henkel Corporate Communications

Lars Witteck Wulf Klüppelholz
Phone: +49-211-797-2606 Phone: +49-211-797-1875
Fax: +49-211-798-9208 Fax: +49-211-798-9208

press@henkel.com

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

Further detailed information on the facts and figures for the full
year 2007 can be found at: http://henkel.com/ir

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

Further inquiry note:

Wulf Klüppelholz

Tel.: +49 (0)211 797-1875

E-Mail: wulf.klueppelholz@henkel.com

Branche: Consumer Goods
ISIN: DE0006048408
WKN: 604840
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