Henkel increases sales and earnings

Business results reflect National Starch acquisition and Ecolab sale

--------------------------------------------------------------------------------
ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
the content of this announcement.
--------------------------------------------------------------------------------

banking/companies/currencies/finances/industry/shares/stock
market/Henkel

Düsseldorf (euro adhoc) - • Strong sales growth of 8.1 percent
to 14.1 billion euros

• Organic sales growth of 3.0 percent
• Adjusted operating profit*: +9.1 percent to 1,495 million euros
• Adjusted earnings per preferred share*: +3.2 percent to 2.26 euros
• Sales in growth regions: +3 percentage points to 37 percent of total
• Proposed dividends kept at prior-year levels

"Despite the difficult economic environment, we sustained our very
good position in 2008. Once again, all our business sectors were able
to outperform their respective markets, with our businesses in the
emerging markets making a particularly strong contribution," said
Henkel CEO Kasper Rorsted. "At the beginning of 2008, we initiated a
global efficiency enhancement program in early response to the
increasing economic difficulties encountered in the market. With this
and the acquisition of the National Starch businesses, we have been
able to sustainably strengthen our competitiveness. Moreover, our
heightened focus on our strategic priorities is already beginning to
yield benefits." Rorsted continued: "We know that 2009 is not going
to be an easy year. At the moment it is difficult to predict how the
economy as a whole is going to develop. However, we are well equipped
and confident we will emerge from this difficult economic environment
with our position strengthened."

In fiscal 2008, Henkel increased sales by 8.1 percent to 14,131
million euros. This substantial increase is mainly attributable to
Henkel´s acquisition of the National Starch businesses in April 2008.
After adjusting for foreign exchange, sales rose by 11.6 percent.
Organic sales growth, i.e. adjusted for foreign exchange and
acquisitions/divestments, was a good 3.0 percent, falling within the
range of our forecast for the year as a whole. All the company´s
business sectors contributed to this organic growth, with Laundry &
Home Care and Cosmetics/Toiletries showing a stronger dynamic. Total
organic growth resulted from a 3.2 percent increase derived from
price effects and a volume decline of 0.2 percent.

Operating profit (EBIT) was primarily impacted in the year under
review by restructuring charges arising from the global efficiency
enhancement program and the integration of the National Starch
businesses. Normal restructuring charges included, these expenses
totaled 663 million euros compared to 34 million euros in the
previous year. As a result, EBIT declined to 779 million euros.
Conversely, operating profit adjusted for one-time gains/charges and
restructuring charges ("adjusted EBIT") rose from 1,370 million euros
to 1,460 million euros (+6.6 percent). This increase was again mainly
due to the consolidation of the National Starch businesses. Included
in this figure is a charge of 35 million euros for amortization of
intangible assets measured at fair value, identified in the course of
the purchase price allocation for the acquisition of the National
Starch businesses. The rise in adjusted EBIT before amortization due
to purchase price allocation, i.e. the basis for the forecast of
approximately 10 percent specified by Henkel in November, came in at
9.1 percent, totaling 1,495 million euros.

The EBIT margin was 5.5 percent, while the adjusted EBIT margin
decreased from 10.5 percent to 10.3 percent, largely due to the
impact of the substantial rise in raw material prices on the two
business sectors Laundry & Home Care and Adhesive Technologies.
Before amortization of intangible assets arising from the acquisition
of the National Starch businesses, return on sales rose 0.1
percentage points to 10.6 percent.

The financial result for 2008 reflects a gain of 1,042 million euros
arising from the sale of the company´s stake in Ecolab Inc. This
resulted in a rise in net financial income of 942 million euros, from
-94 million euros to 848 million euros. Net interest result was
affected by borrowings to finance the purchase price for the National
Starch businesses, resulting in an increase of 97 million euros to
-275 million euros. At 24.2 percent, the tax rate was slightly below
the level of the previous year.

Net earnings for the year increased by 292 million euros to 1,233
million euros due to the considerable increase in financial income.
After deducting minority interests of 12 million euros, net earnings
totaled 1,221 million euros. Adjusted net earnings after minority
interests increased by 4 million euros to 945 million euros. Earnings
per preferred share rose from 2.14 euros to 2.83 euros. After
adjustment, EPS remained at the prior-year level of 2.19 euros, while
the figure before amortization after purchase price allocation was
2.26 euros.

Based on this earnings performance, the Management Board, Supervisory
Board and Shareholders´ Committee will be proposing to Henkel´s
Annual General Meeting that it approve unchanged dividends of 0.53
euros per preferred share and 0.51 euros per ordinary share.

Business Sector Performance

Sales in the Laundry & Home Care business sector rose organically by
a gratifying 3.8 percent, outstripping the rate of expansion in its
markets. Nominal sales rose by 0.6 percent to 4,172 million euros,
with foreign exchange having a negative effect. The rise was
primarily price-driven. Growth came mainly from the Europe/
Africa/Middle East region, with Eastern Europe generating the primary
impetus. In Western Europe, on the other hand, sales remained below
the 2007 level. Aside from the high prior-year base generated by the
pan-European "Best Ever" campaign and Persil´s brand centennial, this
decline was also due to price increases implemented. Until well into
the second half of the year the steep rise in raw material and energy
prices burdened profits. However, with the aid of a number of global
measures to reduce cost and enhance efficiency, and through own price
increases this negative effect could largely be compensated.
Nevertheless, operating profit fell by 4.2 percent to 439 million
euros, and by 2.0 percent after adjusting for foreign exchange. Also
included in the operating profit calculations are expenses of 14
million euros previously attributable to the former Corporate
Research function. Sales growth in the Laundry segment was driven
primarily by Henkel´s heavy-duty detergents and fabric softeners,
with the biggest brand, Persil, generating high rates of increase
particularly in Eastern Europe and Africa/Middle East. In the fabric
softeners category, the sales increase was mainly due to results in
the European and North American markets, the successful launch of
Vernel Crystals and Purex Natural Elements having a particularly
positive effect. The encouraging sales performance of the Home Care
segment was especially helped by the company's dishwashing and WC
products. In the machine dishwashing category, growth was mainly
driven by activities in Europe, while the hand-dishwashing detergents
business enjoyed particular success in Africa/Middle East, with Pril
generating double-digit growth rates in a number of major countries
in that region. The fourth quarter saw the launch in Germany and
Switzerland of Terra Activ, a new brand that, by using mainly
ingredients based on renewable raw materials, offers high
environmental compatibility coupled with exceptional product
performance.

With organic sales growth of 4.7 percent, the Cosmetics/Toiletries
business sector significantly outpaced its markets. In nominal terms,
sales rose by 1.5 percent to 3,016 million euros, reflecting both the
absence of marginal activities, divested to streamline the portfolio,
and the impact of adverse foreign exchange movements. Operating
profit increased to 376 million euros. After adjusting for foreign
exchange, operating profit was 4.1 percent above the prior-year,
despite containing an additional 7 million euros in expenses relating
to the former Corporate Research function. The Hair Cosmetics
business once again raised its market shares to new record levels,
with major contributions coming from its leading brands and numerous
innovations in the coloration, hair care and styling segments. The
successful launch of the Coloriste brand, the relaunch of the
Brillance brand and the performance of the Palette Permanent Natural
line were among the more prominent factors driving this achievement.
In the hair care category, the Gliss Kur brand and a comprehensive
Schauma relaunch contributed to this very positive performance. In
the styling segment, Henkel´s Taft brand consolidated its clear lead
in the European market. The basis for positive developments in the
Body Care business was provided by the new Fa Rice Dry series under
the Fa brand and the relaunch of the Fa Yogurt range. Dial brand
business performance was boosted by the introduction of various new
lines and the launch of the first body care series in the US
featuring yogurt proteins. The biggest contribution to the Skin Care
business was made by the Diadermine brand with its successful
anti-aging innovations. The good results of the Oral Care business
were achieved on the basis of Henkel´s core brand Theramed, with the
innovative Theramed 2in1 OxiWhite for exceptional teeth whiteness and
fresh breath having been launched. In the Hair Salon business,
Schwarzkopf Professional was able to expand its worldwide market
position by once again posting strong growth. Innovations such as
Igora Absolutes and the further rollout of the Blond Me brand were
among the major contributors to this success.

Sales in the Adhesive Technologies business sector increased by 17.3
percent to 6,700 million euros, or by 22.1 percent after adjusting
for foreign exchange. The rise is mainly attributable to the
acquisition of the National Starch businesses. Organic sales growth
was 1.3 percent. While developments in the growth regions were again
very encouraging, sales in the mature markets of Western Europe and
North America were below the level of the previous year due to
significant deterioration in business activity. Operating profit
increased to 658 million euros, 6.0 percent above the prior-year
figure, the rise after adjusting for foreign exchange amounted to
10.8 percent. Earnings were impacted by 36 million euros in charges
incurred through the integration of the National Starch businesses,
and by expenses of 10 million euros relating to the former Corporate
Research function. The substantial rise in raw material prices also
had an appreciable impact which could only be partly offset through
price increases and formulation adjustments. In the Adhesives for
Craftsmen and Consumers business, sales once again increased
slightly, despite the difficult market conditions. The main growth
drivers here were the bonding adhesives of the international Pattex
brand and a number of innovations launched in the Loctite instant
adhesives range. Growth of the Building Adhesives segment continued
unabated with the biggest boost again coming from the regions of
Eastern Europe and Africa/Middle East. The Packaging, Consumer Goods
and Construction Adhesives business was significantly strengthened as
a result of the acquisition of the National Starch operations.
Especially good growth was achieved with the Liofol adhesives for
flexible packaging and with adhesives for consumer goods. The
Specialty Adhesives and Surface Treatment business showed mixed
developments, with the overall results slightly below those of the
previous year due to prevailing market conditions. There was a
decline in the company´s automotive business, this development being
selectively countered by Henkel through the launch of various new
products. The Electronics business likewise benefited substantially
from the merger with the National Starch operations. However,
consumer reluctance to purchase new electronic goods had an adverse
effect on the sector as a whole, despite the encouraging performance
of products used in the assembly of printed circuit boards.

Regional Performance

In the regional breakdown too, the acquisition of the National Starch
businesses had a positive effect, promoting further sales growth in
all regions. Europe/Africa/Middle East posted a significant sales
increase of 4.5 percent to 8,863 million euros. Organic sales growth
in this region was a good 3.7 percent, with all three business
sectors making similar contributions. Eastern Europe and
Africa/Middle East again achieved substantial double-digit growth
rates. By contrast, sales in Western Europe underwent a slight
decline. The share of sales accounted for by the region as a whole
was 63 percent, due primarily to the smaller share of sales generated
there by the National Starch businesses. Sales in North America rose
by 5.6 percent to 2,700 million euros. The increase after adjusting
for foreign exchange was 13.3 percent. In organic terms, and
specifically after adjusting for the National Starch businesses,
sales underwent a slight decrease of 1.4 percent, the results of the
Adhesive Technologies business sector suffering significantly in the
second half of the year as world economic conditions deteriorated. By
contrast, Laundry & Home Care and Cosmetics/Toiletries posted further
increases in organic sales within a difficult market environment. The
share of sales accounted for by this region was 19 percent. Latin
America continued to perform very well, posting an increase in sales
of 12.8 percent to 780 million euros. After adjusting for foreign
exchange, sales in this region grew by 18.5 percent in total, and by
10.7 percent in organic terms, with all our business sectors
contributing. The share of total Group sales attributable to Latin
America remained constant at 5 percent. In the Asia-Pacific region,
sales grew by 40.1 percent to 1,545 million euros, and by 47.0
percent after adjusting for foreign exchange. The rise is mainly
attributable to the acquired National Starch businesses. Organic
sales growth amounted to 2.2 percent, with the Adhesive Technologies
business sector in particular again feeling the effects of the
economic downturn in the second half of the year. Because of the high
share accounted for by the National Starch businesses in this region,
its share of total Group sales increased significantly, from 8 to 11
percent. The growth regions of Eastern Europe, Africa, Middle East,
Latin America and Asia (excluding Japan) posted an increase in sales
of 17.8 percent to 5,167 million euros. After adjusting for foreign
exchange, growth amounted to 22.4 percent. Organic growth came in at
a strong 12.9 percent, with all the business sectors contributing.
The share of sales attributable to these regions therefore rose from
34 to 37 percent.

Fourth Quarter 2008 In the fourth quarter, sales rose by 11.1 percent
to 3,541 million euros, and by 10.8 percent after adjusting for
foreign exchange. This substantial rise is largely due to the
acquisition of the National Starch businesses. Organic sales growth
was down by 1.2 percent, with positive price effects of 4.8 percent
failing to fully offset the volume decline of 6.0 percent. While the
Laundry & Home Care and Cosmetics/Toiletries business sectors further
contributed to organic growth with increases of 5.4 percent and 3.3
percent respectively, Adhesive Technologies experienced the first
effects of slowing economic development. Here, sales decreased
organically by 9.2 percent. With the exception of Adhesive
Technologies, our business sectors were able to generate double-digit
growth rates in the emerging economies. In the mature markets,
however, our performance declined.

At 155 million euros, operating profit (EBIT) was significantly below
the level of the previous year. This decrease is primarily due to the
restructuring charges incurred in connection with Henkel´s global
efficiency enhancement program and the integration of the National
Starch businesses. Normal restructuring charges included, these
expenses totaled 220 million euros, compared to 2 million euros in
the prior-year quarter. Conversely, operating profit adjusted for
one-time gains/charges and restructuring charges ("adjusted EBIT")
rose by 16.6 percent, from 325 million euros to 379 million euros.
Here, the savings realized from the global efficiency enhancement
program and the integration of the National Starch businesses,
supported by further cost chase measures, generated a positive effect
in the fourth quarter. Also included in this figure is a charge of 35
million euros in amortization arising from purchase price allocation.
Adjusted EBIT before purchase price allocation was 414 million euros.
The EBIT margin in the fourth quarter was 4.4 percent, while the
adjusted EBIT margin rose from 10.2 percent in the previous year to
10.7 percent; before amortization after purchase price allocation it
amounted to 11.7 percent.

Net earnings for the quarter after minority interests increased by
619 million euros to 863 million euros. Earnings per preferred share
rose by 1.43 euros to 2.00 euros, this figure being particularly
affected by the gain from the divestment of Henkel´s stake in Ecolab.
Adjusted earnings per preferred share remained constant at 0.57
euros; before purchase price allocation it amounted to 0.64 euros.

Major Participation In November 2008, Henkel successfully placed its
29.3 percent stake in Ecolab Inc., St. Paul, Minnesota, USA on the
stock exchange. The proceeds from the sale amounted to 1.7 billion
euros.

Sales and Profits Forecast 2009 Henkel expects that the difficult
market conditions prevailing in the real economy and also in the
financial markets will continue during the remainder of 2009. The
general economic climate and its further development are difficult to
predict. Nevertheless, Henkel is confident of outperforming its
markets in terms of organic growth (i.e. growth after adjusting for
foreign exchange and acquisitions/divestments). A number of measures
have already been introduced on the operational side, from which
Henkel expects positive momentum in the course of the year. These and
a further easing of 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. As soon as the markets enable us to make properly reasoned
assumptions, Henkel will communicate quantified expectations.

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: +49-211-798-9208

Henkel AG & Co. KGaA
Head of Corporate Communications:
Ernst Primosch, Corporate Vice President

Photo material available for download at http://henkel.com/press. For
more detailed facts and figures relating to fiscal 2008, please go
to: http://www.henkel.com/ir.

press@henkel.com

end of announcement euro adhoc
--------------------------------------------------------------------------------

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

Further inquiry note:

Irene Honisch

Assistant Corporate Comminications

Tel. +49 211 5668

Branche: Consumer Goods
ISIN: DE0006048432
WKN: 604843
Index: DAX, CDAX, HDAX, Prime All Share
Börsen: Börse Frankfurt / regulated dealing/prime standard
Börse Hamburg / free trade
Börse Stuttgart / free trade
Börse Düsseldorf / free trade
Börse Hannover / free trade
Börse München / free trade
Börse Berlin / regulated dealing