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DGAP-News: Henkel AG&Co. KGaA: Henkel reconfirms 2013 guidance

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(businesspress24) - DGAP-News: Henkel AG&Co. KGaA / Key word(s): Quarter Results
Henkel AG&Co. KGaA: Henkel reconfirms 2013 guidance

08.05.2013 / 07:37


May 8, 2013

Henkel reconfirms 2013 guidance

Strong earnings growth in first quarter

- Sales rise 0.6% to 4,033 million euros (organic: +2.5%)

- Adjusted operating profit: +8.9% to 600 million euros

- Adjusted EBIT margin: +1.2 percentage points to 14.9%

- Adjusted earnings per preferred share (EPS): +10.3%* to 0.96 euros

- Strong sales growth in emerging markets (organic: +8.2%)

* When applying IAS 19 revised to the prior-year quarter, growth amounts to
12.9 percent.

Düsseldorf - 'We increased both sales and earnings in the first quarter of
2013 despite a challenging market environment with declining markets in
Western Europe and weak global industrial demand,' said Henkel CEO, Kasper
Rorsted. 'Both Laundry&Home Care and Beauty Care outperformed their
relevant markets while our Adhesives business was affected by weaker than
expected demand from industrial customers. Nevertheless, we were able to
substantially improve the profitability of all our business sectors.'

Commenting on fiscal year 2013, Rorsted said: 'We expect the global
economic environment to remain difficult. However, we anticipate industrial
demand to improve during the second half of the year. Given the challenges
in our global market environment, we will continue to further simplify and
accelerate our processes in order to increase our flexibility and

2013 guidance confirmed

Rorsted confirmed Henkel's previously stated outlook for fiscal 2013: 'We
expect organic sales growth for the full fiscal year to be between 3 and 5
percent. We expect our adjusted EBIT margin to increase to around 14.5

percent and adjusted earnings per preferred share to grow by about 10

Sales and earnings performance first quarter 2013

Henkel's sales in the first quarter of 2013 were 4,033 million euros - an
increase of 0.6 percent year on year. Organic sales growth, which excludes
the impact of foreign exchange and acquisitions/divestments, rose by 2.5

Laundry&Home Care registered very strong organic growth of 8.0 percent.
The Beauty Care business sector achieved solid organic sales growth
amounting to 4.0 percent. In the Adhesive Technologies business sector
sales declined organically by 1.2 percent.

After allowing for one-time gains, one-time charges and restructuring
charges, adjusted operating profit improved by 8.9 percent, from 551
million euros to 600 million euros, with all three business sectors
contributing. Reported operating profit (EBIT) was 565 million euros
compared to 538 million euros in the prior-year quarter.

Adjusted return on sales (EBIT margin) showed a significant increase of 1.2
percentage points from 13.7 percent to 14.9 percent. Reported return on
sales amounted to 14.0 percent after 13.4 percent in the prior-year

Henkel's financial result improved by 16 million euros to -30 million euros
due primarily to a better net financial position and improved currency
hedging results. At 24.7 percent, the tax rate remained close to the level
of the prior-year quarter (first quarter 2012: 24.8 percent).
Net income for the quarter rose by 8.9 percent from 370 million euros to
403 million euros. After deducting 10 million euros attributable to
non-controlling interests, quarterly net income amounted to 393 million
euros (prior-year quarter: 361 million euros). Adjusted net income for the
quarter after deducting non-controlling interests was 417 million euros
compared to 369 million euros in the prior-year period. Earnings per
preferred share (EPS) rose from 0.84 euros to 0.91 euros. The adjusted
figure was 0.96 euros compared to 0.85 euros in the first quarter of 2012.
Before applying IAS 19 revised, the comparable prior-year figure was 0.87
euros. Related to this figure, adjusted earnings per preferred share rose
by 10.3 percent.

Net working capital relative to sales improved year on year substantially,
falling to 5.8 percent. Effective March 31, 2013, Henkel's net financial
position has changed from showing a net debt to showing a net cash
investment of 114 million euros. At March 31, 2012, net debt stood at 1,159
million euros.

Business sector performance

The Laundry&Home Care business sector started fiscal 2013 with a very
strong sales and earnings performance, further expanding its positions in
its relevant markets. Sales increased organically by 8.0 percent year on
year. Nominal sales rose by 6.3 percent to 1,177 million euros.

All regions contributed to the very strong business performance achieved.
Once again the emerging markets showed the greatest growth momentum, with
overall organic sales growth in the double-digit range. The regions of
Eastern Europe - driven mainly by a dynamic performance in Russia and
Turkey - and Africa/Middle East likewise recorded double-digit increases.
Sales also grew in the mature markets, despite the ongoing negative market
environment in Southern Europe, Western Europe posted positive sales
growth, with France and Germany performing particularly well. North America
developed positively despite a still declining market.

Adjusted operating profit rose significantly by almost 10 percent to 176
million euros. Adjusted return on sales grew compared to the first quarter
of 2012 by 0.5 percentage points to 15.0 percent. Reported operating profit
came in at 175 million euros compared to 157 million euros in the
prior-year quarter.

The Beauty Care business sector again experienced a very good start to the
year. At 4.0 percent, organic sales growth was once more substantially
above that of the relevant markets, with market share increasing as a
result. Nominal sales rose by 1.4 percent to reach 873 million euros.

All regions contributed to the solid sales performance achieved. As in
previous quarters, growth in this business sector was driven primarily by
its performance in emerging markets where the organic sales increase was
double-digit. Beauty Care's performance in Asia (excluding Japan) was
particularly dynamic, driven mainly by steady business expansion in China.
The Africa/Middle East region also saw sales growth in the double-digit
percentage range. Sales in the mature markets increased slightly.
Performance in Western Europe was positive, driven by a strong growth in
Germany. Sales growth in North America was solid.

Adjusted operating profit showed a significant year-on-year improvement of
5.2 percent to 130 million euros. Adjusted return on sales likewise
increased significantly with a rise of 0.5 percentage points to 14.9
percent. Reported operating profit grew by 3.0 percent versus prior year to
124 million euros.

The first quarter of 2013 saw the Adhesive Technologies business sector
impacted by the weak performance of some key industrial sectors, especially
in the mature markets. Sales were at 1,944 million euros compared to 2,001
million euros in the prior-year quarter. Organically, sales were 1.2
percent lower compared to the first quarter 2012, with mixed regional

The emerging markets showed solid organic sales increase. Growth in the
Latin America region was strong and the Eastern Europe region also posted
solid sales growth, in spite of slowing growth momentum in the important
construction sector in the wake of the poor weather. Asia (excluding Japan)
exhibited positive sales development overall, with India in particular
generating strong momentum. As overall economic conditions deteriorated,
sales in the mature markets were below the level of the prior-year quarter.
The decline in business activity in Western Europe was particularly marked.
North America and the mature Asian markets were also unable to match the
sales figures of the first quarter 2012.

Once again, adjusted operating profit showed an improvement on prior year
with double-digit growth of 10.8 percent to 320 million euros. Adjusted
return on sales reached 16.5 percent for the first time, representing an
improvement of 2.1 percentage points compared to the first quarter 2012.
Reported operating profit rose by 10.6 percent to 314 million euros.

Regional performance

In the highly competitive market environment of Western Europe, sales
decreased by 1.1 percent to 1,421 million euros. Organically, sales fell by
1.0 percent, due primarily to the recessive environment and the slowdown
encountered in some key industrial sectors. Sales in the Eastern Europe
region rose by 6.3 percent to 718 million euros. Organic growth was 7.3
percent, with the businesses in Russia and Turkey making a particularly
significant contribution. In the Africa/Middle East region, nominal sales
increased by 11.6 percent to 289 million euros. Although growth continued
to be adversely affected by political unrest in some countries, organic
sales improved by 18.2 percent with strong contributions coming from both
Laundry&Home Care and Beauty Care.

In the highly competitive market of the North America region, sales
decreased by 2.3 percent to 729 million euros. Organic sales were 0.4
percent below the figure for the prior-year quarter, mainly as a result of
weaker performance by some key industrial sectors. Sales in the Latin
America region declined nominally by 2.4 percent to 257 million euros, with
organic growth at 4.5 percent. Business activity in Mexico and Brazil was
particularly instrumental in this improvement. In the Asia-Pacific region,
nominal sales fell by 1.5 percent to 580 million euros. Organically,
however, sales improved by 1.3 percent. Although business performance in
the emerging markets, especially China, was solid, this was partially
offset by declining sales in Japan.

Sales growth was again given a particular boost by the emerging markets of
Eastern Europe, Africa/Middle East, Latin America and Asia (excluding
Japan). Nominally, sales there rose by 5.4 percent to 1,728 million euros.
Organic growth came in at 8.2 percent, with all business sectors
contributing. The share of sales attributable to these emerging markets
therefore increased from 41 percent in the prior-year quarter to 43 percent
this time.

Outlook for the Henkel Group in 2013

Henkel expects to generate organic sales growth of between 3 and 5 percent
in fiscal 2013. The company is confident that each business sector will
grow within this range. Henkel confirms its guidance for adjusted return on
sales (EBIT) of about 14.5 percent (2012: 14.1 percent) and assumes that
all business sectors will contribute to the increase over the prior year.
Henkel further expects an increase in adjusted earnings per preferred share
of about 10 percent (2012: 3.70 euros). This guidance is based on
anticipated increases in Henkel's selling prices and the ongoing adaptation
of its structures to the constantly changing market conditions. Through
these activities and the maintenance of its strict cost discipline, Henkel
intends to more than offset the effects of rising raw material costs on its

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, forecast 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.

Lars Witteck Wulf Klüppelholz
Phone +49 211 797 - 2606 Phone +49 211 797 - 1875
Fax +49 211 798 - 4040 Fax +49 211 798 - 4040
E-Mail: lars.witteck(at) E-Mail: wulf.klueppelholz(at)

Henkel AG&Co. KGaA

The report for the first quarter of 2013 with download material and the
link to the teleconference broadcast can be found in our press folder on
the internet at:

End of Corporate News


08.05.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EquityStory AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Henkel AG&Co. KGaA
Henkelstr. 67
40191 Düsseldorf
Phone: +49 (0)211 797-0
Fax: +49 (0)211 798-4008
E-mail: investor.relations(at)
ISIN: DE0006048432, DE0006048408
WKN: 604843, 604840
Indices: DAX
Listed: Regulierter Markt in Berlin, Düsseldorf, Frankfurt (Prime
Standard), Hamburg, Hannover, München, Stuttgart;
Terminbörse EUREX

End of News DGAP News-Service
210209 08.05.2013

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Date: 05/08/2013 - 07:37
Language: English
News-ID 1224641
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Firma: Henkel AG&Co. KGaA
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