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DGAP-News: Henkel AG&Co. KGaA:

ID: 1281806
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(businesspress24) - DGAP-News: Henkel AG&Co. KGaA / Key word(s): Quarter Results
Henkel AG&Co. KGaA:

12.11.2013 / 07:33


November 12, 2013

Significant increase in earnings and profitability

Henkel reports strong performance in third quarter

- Solid organic sales growth of 4.2%
- Sales impacted by foreign exchange effects: 4,184 million euros (-2.6%)
- Adjusted operating profit: +6.5% to 672 million euros
- Adjusted EBIT margin: +1.4 percentage points to 16.1%
- Adjusted EPS again with double-digit growth: +11.1%*
- Very strong organic sales growth in emerging markets

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

Düsseldorf - 'Despite an increasingly challenging market environment,
Henkel continued its strong performance in the third quarter and was able
to accelerate organic growth quarter by quarter in 2013. We significantly
increased both earnings and profitability - with our EBIT margin exceeding
16 percent for the first time,' said Henkel CEO Kasper Rorsted. 'We
achieved solid organic sales growth with all our business sectors and
regions contributing. The emerging markets once again showed a particularly
dynamic development. However, foreign exchange effects negatively impacted
reported sales.'

Looking at the remainder of the year, Rorsted stated: 'The economic
environment will remain difficult. Therefore we will continue to adapt our
processes and structures in order to further improve our flexibility and
efficiency in this volatile market environment.'

2013 guidance confirmed - higher margin expected

'As previously stated, we expect organic sales growth to be between 3 and 5
percent in the full fiscal year and adjusted earnings per preferred share

(EPS) to increase by about 10 percent. For our adjusted EBIT margin, we are
raising our forecast from about 14.5 percent to about 15 percent,' Kasper
Rorsted said.

Sales and earnings performance in the third quarter 2013

Henkel generated sales of 4,184 million euros in the third quarter of 2013.
This was below the prior-year figure due to negative foreign exchange
effects amounting to 6.7 percent. Nominally, sales decreased by 2.6
percent. Organic sales growth, which excludes the impact of foreign
exchange and acquisitions/divestments, reached solid 4.2 percent, with all
business sectors contributing.

Laundry&Home Care recorded strong organic sales growth of 5.5 percent.
Beauty Care achieved a solid organic growth rate of 3.1 percent. Adhesive
Technologies also registered solid growth with organic sales rising by 4.2
percent versus the prior-year quarter.

After allowing for one-time gains, one-time charges and restructuring
charges, adjusted operating profit improved by 6.5 percent, from 631
million euros to 672 million euros, with all three business sectors
contributing. Reported operating profit (EBIT) was 649 million euros
compared to 586 million euros in the third quarter of 2012.

Adjusted return on sales (EBIT margin) rose by 1.4 percentage points, from
14.7 to 16.1 percent. Reported return on sales amounted to 15.5 percent
compared to 13.6 percent in the prior-year quarter.

Henkel's financial result improved by 27 million euros to -25 million
euros, due primarily to a stronger net financial position and an improved
result from currency hedging activities. The tax rate was at 24.8 percent
compared to 24.7 percent for the prior-year quarter.

Net income for the quarter rose by 16.7 percent, from 402 million euros to
469 million euros. After deducting 11 million euros attributable to
non-controlling interests, quarterly net income amounted to 458 million
euros (prior-year quarter: 390 million euros). Adjusted net income for the
quarter after deducting non-controlling interests was 476 million euros
compared to 422 million euros in the same period of 2012. Earnings per
preferred share (EPS) rose from 0.90 euros to 1.06 euros. The adjusted
figure was 1.10 euros compared to 0.97 euros in the prior-year quarter.
Before application of IAS 19 revised, prior-year EPS was 0.99 euros.
Compared to this figure, adjusted earnings per preferred share increased by
11.1 percent.

The ratio of net working capital to sales further improved year-on-year,
decreasing to 4.5 percent. The net financial position as of September 30,
2013, changed from a net debt figure to a net investment of 485 million
euros. As of September 30, 2012, Henkel reported a net debt of 612 million

Business performance January through September 2013

At 12,503 million euros, sales in the first nine months of fiscal 2013
remained at the level of the prior-year period. Organic sales, which
excludes the impact of foreign exchange and acquisitions/divestments,
registered solid growth of 3.6 percent. Adjusted operating profit rose by
7.8 percent, from 1,791 million euros to 1,932 million euros, with all
business sectors contributing. Adjusted return on sales (EBIT margin)
increased from 14.3 to 15.5 percent.

Adjusted net income for the nine months after deducting non-controlling
interests grew by 12.6 percent, from 1,203 million euros to 1,354 million
euros. Adjusted earnings per preferred share (EPS) amounted to 3.13 euros,
showing a significant increase of 12.6 percent compared to the 2.78 euros
registered in the first nine months of 2012. Before application of IAS 19
revised, prior-year EPS was 2.83 euros. Compared to this figure, the
increase in EPS was 10.6 percent.

Business sector performance in the third quarter 2013

Laundry&Home Care achieved strong organic sales growth and an excellent
increase in adjusted return on sales in the third quarter, thus continuing
its profitable growth path. Nominally, sales amounted to 1,167 million
euros compared to 1,194 million euros in the prior-year quarter.

The strong organic sales growth recorded in the Laundry&Home Care
business was entirely driven by the emerging markets, which again achieved
a double-digit increase. Despite continuing unrest, sales in the
Africa/Middle East region rose double-digit. Eastern Europe posted strong
sales growth, driven primarily by the continued very dynamic performance in
Turkey. In Latin America sales also recorded a strong increase, with Mexico
making a major contribution. In the mature markets, which were still
declining and characterized by tough promotional and pricing competition,
organic sales remained slightly below the level of the prior-year quarter.
In Western Europe, growth was again impacted by the weakness of the
Southern European markets, which compensated the solid performance in
Germany. In North America, sales in a continuing declining market were
slightly below the level of the prior-year quarter.

Adjusted operating profit increased by 7.6 percent to 186 million euros.
This resulted in adjusted return on sales increasing to 15.9 percent
against 14.5 percent in the third quarter of 2012. Reported operating
profit (EBIT) rose to 185 million euros compared to 168 million euros in
the prior-year quarter.

In the third quarter of 2013, Beauty Care posted a solid increase in both
organic sales and adjusted return on sales. At 3.1 percent, organic sales
increase was once again higher than the growth rate in relevant markets,
leading to further market share gains. Nominally, sales amounted to 886
million euros compared to 908 million euros in the third quarter of 2012.
Once again, the emerging markets reported double-digit growth rates and
were the main driver of Beauty Care's solid organic sales performance. Asia
(excluding Japan) and Latin America showed particularly strong momentum.
With very strong growth, the regions of Africa/Middle East as well as
Eastern Europe also contributed to this development. In the mature markets,
which again were characterized by negative market development, a further
increase in promotional activity and rising price pressures, organic sales
were slightly below the level of the prior-year quarter. In North America,
however, solid sales growth was achieved, despite declining markets. Sales
in Western Europe remained stable in what continued to be a difficult
market environment.

Adjusted operating profit for the third quarter amounted to 132 million
euros. Adjusted return on sales (EBIT margin) improved by 0.2 percentage
points to 14.9 percent. Reported operating profit increased by 7.5 percent
year-on-year, to 122 million euros.

In the third quarter, Adhesive Technologies achieved a solid increase in
organic sales and an excellent improvement in adjusted return on sales.
Nominally, revenues grew to 2,095 million euros. Organic sales growth
compared to the same quarter of the previous year was 4.2 percent.

Sales in the emerging markets showed strong organic development in the
Adhesive Technologies business. Thanks in particular to the dynamic
development in Brazil, the Latin America region once again achieved the
strongest growth with double-digit percentage increase. The business also
benefited from strong growth in Eastern Europe. Asia (excluding Japan)
registered a solid increase in sales year-on-year. The Africa/Middle East
region recorded positive business development. Despite the difficult market
environment, the mature markets showed a solid organic sales performance
with the highest growth coming from Western Europe. A solid increase in
sales versus the prior-year quarter was once again achieved in North

Adjusted operating profit showed a very strong increase of 8.2 percent to
373 million euros. Adjusted return on sales reached 17.8 percent for the
first time and, with a plus of 1.8 percentage points, demonstrated an
excellent performance. Reported operating profit grew by 11.2 percent, from
329 million euros to 365 million euros.

Regional performance across the Group in the third quarter

In a highly competitive market environment, Henkel's organic sales in the
Western Europe region increased by 0.7 percent, offsetting the effects of
the recession in Southern Europe. Total sales amounted to 1,415 million
euros. In Eastern Europe, sales grew organically by 6.2 percent, with
Russia and Turkey making a major contribution to this solid performance.
Sales in the region totaled to 822 million euros. Business in Africa/Middle
East continued to be affected by political and social unrest in some
countries. However, the region again posted double-digit organic sales
growth of 23.1 percent, with major contributions coming from both Laundry&Home Care and Beauty Care. Sales in the region totaled to 255 million

Sales in North America increased organically by 2.2 percent supported by
the solid performance of Beauty Care and Adhesive Technologies. Total sales
in the region amounted to 756 million euros. Latin America achieved an
increase in organic sales of 12.5 percent, with business performance in
Brazil making a major contribution. Total sales in the region amounted to
269 million euros. In Asia-Pacific, sales grew organically by 1.8 percent.
Strong performance in the rapidly growing markets of this region,
especially China, was partially offset by declining sales in Japan. Sales
in the region totaled 631 million euros.

Sales growth was again particularly driven by Henkel's performance in the
emerging markets of Eastern Europe, Africa/Middle East, Latin America and
Asia (excluding Japan). Organically, sales increased by 9.1 percent, with
all three business sectors contributing. With total sales amounting to
1,865 million euros, the share of revenues coming from emerging markets was
45 percent (prior-year quarter: 44percent).
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 specifies its guidance for adjusted return
on sales (EBIT) from about 14.5 percent to about 15 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

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
Tel. +49 211 797 - 2606
Fax +49 211 798 - 4040
Email: lars.witteck(at)

Wulf Klüppelholz
Tel. +49 211 797 - 1875
Fax +49 211 798 - 4040
E-Mail: wulf.klueppelholz(at)

Henkel AG&Co. KGaA

The report for the third quarter of 2013 and other information 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


12.11.2013 Dissemination of a Corporate News, transmitted by DGAP - a
company of EQS Group AG.
The issuer is solely responsible for the content of this announcement.

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Language: English
Company: Henkel AG&Co. KGaA
Henkel Str. 67
40191 Düsseldorf
Phone: +49 (0)211 797-0
Fax: +49 (0)211 798-4008
E-mail: press(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
239258 12.11.2013

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Date: 11/12/2013 - 07:33
Language: English
News-ID 1281806
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Firma: Henkel AG&Co. KGaA
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