EANS-News: Henkel AG & Co. KGaA / Henkel makes a good start to the year

Substantial increase in sales and profits in the first quarter

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Subtitle: Substantial increase in sales and profits in the first
quarter

Düsseldorf (euro adhoc) - Düsseldorf, May 5, 2010

• Sales increase by 7.8 percent to 3,512 million euros
• Organic sales growth of 8.8 percent
• Adjusted operating profit: plus 79.1 percent to 421 million euros
• Adjusted EBIT margin: plus 4.8 percentage points to 12.0 percent
• Adjusted earnings per preferred share (EPS): plus 93.5 percent

"Henkel has made a good start to the fiscal year, with all our
business sectors contributing. Despite the persistently challenging
environment, Laundry & Home Care and Cosmetics/Toiletries continued
their successful development of recent quarters, while Adhesive
Technologies also returned to robust rates of sales growth," said
Kasper Rorsted, Chairman of the Henkel Management Board, adding:
"Once again our strong brands made a further major contribution
to Henkel´s gratifying Q1 results. However, this very good
performance is also down to our efforts in adapting our structures
and reducing our costs, coupled with the good progress we have
made in the implementation of our strategic priorities. Now we are
looking forward to a noticeable improvement in our results of more
than 15 percent for the full fiscal year versus 2009."

In the first quarter of 2010, Henkel generated sales of 3,512 million
euros. In a recovering market environment, this constitutes an
increase of 7.8 percent compared to the figure for the prior-year
quarter. After adjusting for foreign exchange, sales rose by 7.5
percent. Organically, i.e. after adjusting for foreign exchange,
acquisitions and divestments, the increase was a substantial 8.8
percent, representing the first significant rise against a
prior-year period for four quarters. And it was a development to
which all the company´s business sectors contributed. Laundry &
Home Care again turned in a very positive performance with
organic growth at 3.6 percent. And having increased sales
organically by 5.5 percent, the Cosmetics/Toiletries business
sector outstripped both the high levels of growth achieved in recent
quarters and the overall rate of market expansion. Against a
prior-year quarter weakened by the impact of the crisis,
Adhesive Technologies reported double-digit organic growth
amounting to a highly encouraging 14.5 percent.

Due primarily to the substantial improvement posted by Adhesive
Technologies, operating profit (EBIT) increased by 93.3 percent, from
218 million euros to 422 million euros. After allowing for
restructuring charges (31 million euros) and one-time gains (32
million euros), adjusted operating profit improved by 79.1
percent, from 235 million euros to 421 million euros.

Return on sales (EBIT margin) increased significantly, from 6.7
percent to 12.0 percent. Adjusted return on sales rose from 7.2
percent to likewise 12.0 percent.

Financial result decreased slightly from -52 million euros to
-54 million euros, with the positive effect of reducing net debt
being more than canceled out by higher interest paid. At 27.7
percent, the tax rate was slightly above the level of the previous
year.

Due to the increased EBIT, net income for the quarter rose by
119.8 percent, from 121 million euros to 266 million euros. After
deducting non-controlling interests totaling 7 million euros, net
income for the quarter amounted to 259 million euros (prior-year
quarter: 117 million euros). Adjusted quarterly net income after
non-controlling interests amounted to 258 million euros compared
to 130 million euros in the prior-year quarter. Earnings per
preferred share (EPS) increased from 0.28 euros to 0.60 euros. The
adjusted figure was also 0.60 euros compared to 0.31 euros in the
prior-year quarter. Good progress was also made in the management of
net working capital. Compared to the prior-year period, the ratio
of net working capital to sales improved by 4.7 percentage points,
to 8.5 percent.

Net debt versus prior-year quarter has undergone a substantial
reduction of 1.4 billion euros to 2.7 billions euros.

Business sector performance

In the first quarter of 2010, the Laundry & Home Care business sector
increased sales by 3.5 percent to 1,049 million euros. Organic
growth amounted to 3.6 percent. This gratifying rise in sales was
due not only to performance in the emerging economies but also,
and to a high degree, to a sales improvement in the mature
markets Western Europe and North America. The organic improvement
was exclusively volume-driven. Significantly outpacing the rise
in sales, operating profit increased by 41.2 percent to 151 million
euros. Included in this figure is a gain of 15 million euros from
the sale of licensing rights. Successful measures geared to
reducing cost and enhancing efficiency also again contributed
noticeably to the increase in income. At 14.4 percent, return on
sales improved by a substantial 3.8 percentage points compared to
the prior- year quarter. In the Laundry segment, positive
developments in sales came from successes in the growth regions of
Africa/Middle East and Latin America, with Western Europe also
contributing. These developments were further aided by the success
of a number of innovations. One example is Henkel´s Persil
Hygiene Rinser, which was launched in a number of countries in
Western Europe. And Eastern European markets saw the rollout of
Persil Gold Plus Active, an innovative product that reduces the
amount of energy required per laundry wash. The Home Care business
made a disproportionate contribution to the rise in sales. The
geographic breakdown shows that Henkel registered growth momentum in
virtually all its regions, particularly in Africa/Middle East, Asia
and North America. In North America the focus was on the launch of
products under the Soft Scrub brand for gentle surface cleaning
in the bathroom and kitchen. Suitable for removing a wide range
of soil types, they reduce the amount of effort required and
accelerate the cleaning process on all surfaces.

The first quarter of 2010 saw the Cosmetics/Toiletries business
sector continue unerringly along its successful growth path.
In an unrelenting, highly competitive market environment, it
posted a strong 5.5 percent rise in organic sales against already
high prior-year levels. Registering double-digit rates of increase
across the board, the growth regions of Asia-Pacific,
Africa/Middle East, Latin America and Eastern Europe turned in
excellent results, and a significant contribution to growth also
came from the mature markets of Western Europe. This highly
impressive sales performance was supported by a rigorous and
ongoing innovation offensive which led to the launch of
numerous new products. At 10.1 percent, the rise in operating
profit far outstripped the increase in sales, with the 100 million
euro mark being reached for the first time in a first quarter.
Return on sales improved by 0.5 percentage points to 13.1 percent.
The Hair Cosmetics segment reported a remarkably positive set of
figures, expanding its market shares and posting record results in
all three of its subsegments. The Hair Care business developed
exceptionally well as a result of a relaunch of the Schauma
Volume series with push-up effect, accompanied by the
introduction of the new Gliss Shea Cashmere line. In the
Colorants business, priority was given to the launch of the Syoss
Color line and driving forward the further successful expansion of
Essential Colors. In the Styling business, the introduction of the
Taft Volume line for tired hair contributed to a positive overall
performance. The focus in the Body Care segment was on a number
of innovations launched around the world. In Europe, the Fa brand
was extended by the new deodorant line Active Pearls and the body
wash series Fa Yogurt Smoothies. In the USA, the introduction into
the market of NutriSkin under the Dial brand also helped generate
further growth momentum. The priority in the Skin Care business was
on expanding the anti-aging line Diadermine Lift+. The Oral Care
segment successfully strengthened the Theramed 2in1 series with the
launch of the new freshness variant 16h Xtra Fresh. And in the Hair
Salon business, Schwarzkopf Professional returned to a good level
of growth in the first quarter, expanding its market share in
a continuing difficult market environment. The main impetus here was
provided by a number of high-performing innovations in the colorants
category.

Sales of the Adhesive Technologies business sector exceeded by 12.4
percent the level of the first quarter of 2009, rising to 1,651
million euros. And in organic terms, revenues increased by an even
more respectable 14.5 percent, due in large part to substantial
volume increases. All businesses and regions contributed to this
exceptional expansion in sales: the growth regions of Asia- Pacific,
Africa/Middle East, Latin America and Eastern Europe once
again performed above average, and there were also substantial
increases in sales in the mature markets Western Europe and North
America. Operating profit likewise underwent a significant
improvement - compared to the prior-year quarter it almost
quadrupled, coming in at 185 million euros. The basis for this
very strong increase was provided by measures introduced in the last
financial year aligned to optimizing earnings. Return on sales
rose by a substantial 8 percentage points to 11.2 percent. After
adjusting for the disposal of the adhesive tapes business in
North America, the Adhesives for Craftsmen, Consumers and
Building business posted further growth, with all segments
contributing. Substantial improvements versus the prior-year
quarter were achieved in North America and Africa/Middle East
especially. After considerable market-related declines in the
previous year, the Transport and Metal business registered
significant increases in sales in the quarter under review. Business
with customers in the metals industry and, in particular,
sales to the automotive sector were significantly higher than in
the first quarter of 2009. The General Industry business also
showed an improvement compared to the prior- year period, with the
highest growth rates being achieved in North America,
Asia-Pacific and Africa/Middle East. The Packaging, Consumer
Goods and Construction Adhesives business likewise made gains, with
sales in the regions of Asia-Pacific and Africa/Middle East
substantially above the levels of the first quarter of 2009.
However, the strongest growth rate was achieved by the Electronics
business. Here, not only were sales in all the growth regions
significantly above the levels of the prior-year quarter, the
regions of Western Europe and North America also developed
exceptionally well.

Regional performance

In the Europe/Africa/Middle East region, sales improved
organically by 6.0 percent compared to the first quarter of 2009,
coming in at 2,139 million euros, with all three business sectors
contributing. Africa/Middle East once again realized double-digit
organic growth, while developments in Eastern Europe continued
in the positive single-digit range. Western Europe including
Germany returned to growth in the mid single-digit range after
an organic decline in sales in the fourth quarter of 2009. The share
of total Group sales attributable to the region as a whole remained
unchanged at 61 percent. After a decrease in the fourth quarter of
2009, sales in the North America region improved organically by
7.9 percent compared to the prior-year quarter, closing at 645
million euros. Sales of the Laundry & Home Care and
Adhesive Technologies business sectors developed exceptionally well.
The region´s share of Group sales declined, ending the period
at 18 percent. Meanwhile, the successful development of the Latin
America region continued unabated. Here, organic sales increased
by 10.6 percent to 216 million euros, with all business sectors
contributing. At 6 percent, the share of Group sales attributable
to the region remained constant. Sales in the Asia-Pacific region
continued to recover compared to the fourth quarter of 2009,
growing organically by 27.6 percent versus the prior-year quarter
and ending the period at 462 million euros. Strong sales
increases in the Adhesive Technologies and
Cosmetics/Toiletries business sectors contrasted with stagnation at
Laundry & Home Care. The share of total sales accounted for by this
region rose to 13 percent. In the growth regions of Eastern
Europe, Africa/Middle East, Latin America and Asia (excluding
Japan), sales increased by 17.2 percent to 1,339 million euros.
Compared to the prior-year quarter, organic growth amounted to
14.2 percent, which was also an improvement over the figure for
the fourth quarter of 2009. All our business sectors contributed
to this achievement, particularly Adhesive Technologies and
Cosmetics/Toiletries which each recorded double-digit organic growth
rates. The share of sales of the growth regions increased from
35 to 38 percent.

Sales and profits forecast 2010

In Henkel´s estimation, the overall mildly positive market conditions
currently prevailing in the real economy and in the financial
markets remain fragile. Based on the forecasts for the current
year, Henkel expects the world economy to grow by around 3
percent, but without any anticipation of a sustained upturn.

Henkel is confident of again outperforming its relevant markets in
terms of organic sales growth. A number of measures have already
been introduced on the operational side, from which Henkel
expects further positive momentum to develop. For example, it
anticipates further contributions to profit arising both from the
synergies created through the integration of the National Starch
businesses and from a strictly disciplined cost management approach.
All these factors will positively influence the development of
adjusted operating profit (EBIT) and adjusted earnings per
preferred share (EPS). Following the very successful start made
to the new financial year, Henkel expects both these metrics to
show a noticeable improvement of more than 15 percent compared to
the figures for 2009.

This document 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 and
similar formulations. 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 forward-looking
statements.

Contact:
Lars Witteck
Wulf Klüppelholz
Phone: +49-211-797-2606
Phone: +49-211-797-1875
Fax: +49-211-798-4040

Photo material available for downloading at http://henkel.com/press.
For more detailed facts and figures relating to the first quarter of
2010, please go to: http://www.henkel.com/ir.

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
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