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07.11.2007 – 07:41

Henkel AG & Co. KGaA

Henkel posts a strong third quarter

Düsseldorf (euro adhoc) -

Marked rise in sales and earnings
  ots.CorporateNews transmitted by euro adhoc. The issuer is responsible for
  the content of this announcement.
companies/Henkel
•       Sales increase of 3.0 percent to
3,358 million euros
•       Strong organic sales growth of 6.0 percent
•       Operating profit (EBIT): +12.0 percent to 359 million euros
•       Net earnings for the quarter: +12.9 percent to 245 million euros
"Developments during the third quarter have brought us considerable 
success. We were particularly pleased with our strong organic sales 
growth, to which once again all our business sectors contributed, and
with the substantial improvement in earnings. There was also further 
dynamic expansion in the sales generated in our growth regions," said
Ulrich Lehner, Chairman of the Management Board of Henkel KGaA. "In 
view of this encouraging business performance, we now expect our 
organic sales growth rate for 2007 to be in the range of 5 to 6 
percent. We further anticipate an increase in operating profit - 
adjusted for foreign exchange - in excess of organic sales growth."
Düsseldorf - In the third quarter of 2007, Henkel reported sales of 
3,358 million euros, an increase of 3.0 percent above the level of 
the prior-year period. Organic sales growth, i.e. growth adjusted for
foreign exchange and acquisitions/divestments, was a highly 
gratifying 6.0 percent. All business sectors again contributed to 
this positive development. Laundry & Home Care posted a good 4.3 
percent in organic growth. Cosmetics/Toiletries continued its 
positive trend, achieving a particularly dynamic 7.3 percent 
increase. And in the Adhesives Technologies business sector, the 
organic growth rate was a strong 6.4 percent.
Operating profit (EBIT) was 359 million euros, an increase compared 
to the prior-year quarter of 12.0 percent, or 13.0 percent after 
adjusting for foreign exchange.
At 10.7 percent, return on sales (EBIT) was 0.9 percentage points 
above the level of the prior-year quarter. Return on capital employed
(ROCE) increased by 1.9 percentage points to 16.3 percent, due in 
particular to the improvement in EBIT. Net income from participations
increased by 9 million euros to 22 million euros. Net interest 
declined by 8 million euros to -44 million euros. Overall, net 
financial items improved slightly by 1 million euros to -22 million 
euros. The tax rate, at 27.3 percent, remained at the level of the 
prior-year quarter.
Net earnings for the quarter increased by 12.9 percent to 245 million
euros due to the higher EBIT. After minority interests amounting to 7
million euros, net earnings for the quarter were 238 million euros 
(+12.8 percent). Earnings per preferred share increased by 12.2 
percent to 0.55 euros.
Business Sector Performance
Organic sales of the Laundry & Home Care business sector rose by 4.3 
percent. Foreign exchange rates and acquisitions/divestments had a 
negative effect of 4.0 percent. Sales generated in the 
Europe/Africa/Middle East region were further increased, due mainly 
to the very good performance in Eastern Europe producing double-digit
growth rates. Operating profit improved by 0.7 percent to 126 million
euros, or - after adjusting for foreign exchange - 1.9 percent above 
the high level of the prior-year quarter. Sales growth in the Laundry
segment was driven by continuing good performance in the heavy-duty 
detergent and fabric softener businesses. This was complemented by 
the launch of innovative products such as the Liquid Circle Bottle 
from Persil - a new container concept offering significantly improved
handling - and further additions to the fabric softener line marketed
under the successful Vernel brand. The Home Care segment benefited 
from good sales performance of the dishwashing detergent business, 
particularly its Somat brand. Sales in bath and toilet cleaners also 
expanded strongly in Eastern Europe. Bref Power universal cleaner, a 
new all-purpose cleaning product offering an improved power 
formulation suitable for applications throughout the entire 
household, was launched onto the market.
With an organic sales growth rate of 7.3 percent, the 
Cosmetics/Toiletries business sector significantly outpaced its 
relevant markets, adding impetus to the positive trend registered 
during the first two quarters. Sustained good performance in its core
markets was further augmented by particularly positive results in 
Eastern Europe and Latin America. As a consequence, operating profit 
improved by 6.4 percent to 95 million euros. After adjusting for 
foreign exchange, the growth rate amounted to 8.7 percent. The Hair 
Cosmetics business continued to generate significant growth. Its 
market shares in Europe hit new highs in all categories - i.e. 
colorants, care and styling. The Body Care business again performed 
well, due particularly to launches of new products under its two 
major brands Fa and Dial. In the deodorants segment, the relaunch of 
the Right Guard brand in the UK had a significant impact on the 
market. The Skin Care business benefited from the performance of its 
most important brand Diadermine, enabling its market positions to be 
further expanded throughout Europe. The primary contributors to this 
success were the relaunch of the Diadermine Lift+ line and the 
introduction of the premium line Diadermine Age ExCellium. In the 
Oral Care business, the focus was on the international launch of 
Theramed Titan Fresh. The Hair Salon business performed very well in 
all regions. Its Bonacure care line posted highly gratifying growth 
rates, while the SEAH brand also achieved further growth after its 
relaunch.
The Adhesives Technologies business sector continued to perform well,
turning in an organic growth rate of 6.4 percent. It again registered
above-average rates of expansion in the growth regions of Eastern 
Europe, Africa/Middle East, Latin America and Asia-Pacific. Business 
in the North America region experienced a slight decline due to 
market conditions. Operating profit increased to 164 million euros, a
rise of 18.5 percent, or 20.4 percent after adjusting for foreign 
exchange. Even after adjusting for the restructuring charges that 
burdened the figures for the prior-year quarter, the business was 
still able to boast a double-digit increase in profit. This 
improvement is essentially attributable to a combination of strong 
organic sales growth, successfully implemented price increases and 
strict cost management. In the Consumer and Craftsmen segment, the 
Loctite instant adhesives once again performed very well, also 
boosted by the international success of the "Hanging Man" advertising
campaign. The highest growth rate was again recorded by the Building 
Adhesives business, registering particularly outstanding successes in
Eastern Europe and the Middle East/North Africa region. The main 
growth drivers were the tile adhesives and the waterproofing products
marketed under the Ceresit brand. The Industry segment continued to 
develop very successfully. Especially high growth rates were achieved
with the Loctite product portfolio for industrial maintenance, repair
and overhaul, and also in the electronics sector where the business 
benefited from the boom in memory devices. Despite the weakness of 
certain regional automobile markets, the company´s automotive 
business expanded worldwide.
Regional Performance
Sales in the Europe/Africa/Middle East region rose to 2,171 million 
euros, an increase of 5.2 percent - or 5.1 percent after adjusting 
for foreign exchange - to which all business sectors contributed. In 
Eastern Europe, sales grew again in the double-digit percentage 
range. In Western Europe, the divestment of various marginal 
activities resulted in the absence of the associated sales. However, 
the core business was further expanded. At 65 percent, the region´s 
share of total consolidated sales was slightly above the level of the
previous year. Due to foreign exchange effects, sales in the North 
America region decreased by 6.0 percent, although increasing by 0.8 
percent after foreign exchange. Boosted by successful innovations, 
the Cosmetics/Toiletries business sector posted gratifying growth in 
this region. With sales totaling 667 million euros, the region´s 
share of total sales was 20 percent. Sales of the Latin America 
region amounted to 175 million euros, an increase of 5.5 percent, and
8.6 percent after adjusting for foreign exchange. All  business 
sectors participated in these positive developments, with 
Cosmetics/Toiletries and Adhesives Technologies reporting 
particularly strong expansion. The share of sales of the region 
remained at 5 percent. Business development in the Asia-Pacific 
region was again very encouraging. At 282 million euros, sales were 
7.7 percent higher than in the prior-year quarter, and 9.1 percent up
after adjusting for foreign exchange. The Adhesives Technologies and 
Laundry & Home Care business sectors recorded particularly high 
growth rates. At 8 percent, the share of sales accounted for by the 
region likewise remained unchanged.
Major Participation Ecolab Inc., St. Paul, Minnesota, USA, in which 
Henkel has a 29.6 percent stake, reported sales of 1,413 million US 
dollars in the third quarter of 2007, an increase of 10.5 percent 
compared to the previous year. Net earnings for the quarter rose by 
3.4 percent to 114.0 million US dollars. The market value of this 
participation as of September 30, 2007, amounted to around 2.4 
billion euros.
Updated Sales and Profit Forecast 2007 In view of the encouraging 
business developments observed in the first nine months, Henkel now 
expects to achieve an organic sales growth rate (after adjusting for 
foreign exchange and acquisitions/divestments) of 5 to 6 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 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.
Photo material available for downloading at: http://henkel.com/press.
Further detailed information on the facts and figures for the third 
quarter 2007 can be found at: http://www.henkel.com/ir
end of announcement                               euro adhoc 07.11.2007 07:39:46

Further inquiry note:

Ernst Primosch Lars Witteck Wulf Klüppelholz
Phone: +49-211-797-3533 Phone: +49-211-797-2606 Phone: +49-211-797-1875
Fax: +49-211-798-2484 Fax: +49-211-798-9208 Fax: +49-211-798-9208

Branche: Consumer Goods
ISIN: DE0006048408
WKN: 604840
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