2012 financial targets reconfirmed - despite cost pressure in 2011
DUESSELDORF, Germany and ROCKY HILL, Conn., Feb. 24, 2011 /CNW/ --
-- Sales increase by 11.2 percent to 15,092 million euros
-- Organic sales growth of 7.0 percent
-- Share of sales of emerging markets: plus 3 percentage points to 41
-- Adjusted* operating profit: plus 36.5 percent to 1,862 million euros
-- Adjusted* EBIT margin: plus 2.3 percentage points to 12.3 percent
-- Adjusted* earnings per preferred share (EPS): plus 47.6 percent to
-- Significantly higher dividends proposed: plus 35.8 percent to 0.72
"2010 was an excellent year for Henkel. For the first time, we closed a financial year with an adjusted EBIT margin above 12 percent," said Henkel CEO Kasper Rorsted. "We have improved the market positions of all our business sectors and have further strengthened our top brands. We have also been able to further expand our positions in the emerging markets. With these strong results, we are well on track to achieving our 2012 financial targets."
(Logo: http://photos.prnewswire.com/prnh/20091111/HENKELLOGO )
Looking forward to fiscal 2011, Rorsted said, "The economic conditions remain challenging, especially in view of the highly competitive environment in which we operate, and rising raw material costs. We will continue to respond quickly and decisively to changes in our markets and continue the transformation process in our company. We are confident that we will once again outperform our markets in 2011 and expect to achieve organic growth of between 3 and 5 percent. We anticipate realizing an increase in our adjusted EBIT margin to around 13 percent and a rise in adjusted earnings per preferred share of around 10 percent."
Henkel's sales in fiscal 2010 were 15,092 million euros, an increase of 11.2 percent versus the prior-year figure. After adjusting for foreign exchange, sales improved by 6.4 percent. In organic terms, i.e. adjusted for both foreign exchange and acquisitions/divestments, sales grew by 7.0 - a relatively strong growth after 2009 which was impacted by the financial crisis. This strong performance was supported by all Henkel business sectors. Adhesive Technologies performed exceptionally well, reporting an increase in sales of 11.8 percent. The Cosmetics/Toiletries business sector continued its encouraging growth trend, registering growth of 4.8 percent and thus substantially outperforming the stagnating market. Laundry & Home Care achieved organic sales growth of 1.5 percent in a slightly declining market. In North America, Henkel markets a range of well-known consumer and industrial brands, including Dial® soaps, Purex® laundry detergents, Right Guard® antiperspirants, and Loctite® adhesives.
Operating profit (EBIT) increased by 59.5 percent, from 1,080 million euros to 1,723 million euros. After allowing for one time gains (59 million euros), one-time charges (14 million euros) and restructuring charges (184 million euros), adjusted operating profit improved by 36.5 percent, from 1,364 million euros to 1,862 million euros. All three business sectors contributed to the increasing profitability in 2010.
Return on sales (EBIT margin) grew significantly, from 8.0 percent to 11.4 percent. Adjusted return on sales rose from 10.0 percent to 12.3 percent.
The company's financial result improved from -195 million euros to -171 million euros. The rise in returns on pension plan assets had a particularly beneficial effect on the net interest result, as did the further decrease in net debt from 2.8 to 2.3 billion euros, which helped to reduce interest expenses. The tax rate was 26.4 percent (previous year: 29.0 percent).
Net income improved by 82.0 percent, from 628 to 1,143 million euros. After deducting non-controlling interests of 25 million euros, net income attributable to shareholders of Henkel AG & Co. KGaA was 1,118 million euros (previous year: 602 million euros). Adjusted net income after deducting non-controlling interests increased by 47.9 percent to 1,217 million euros. Earnings per preferred share (EPS) rose from 1.40 euros to 2.59 euros. The adjusted figure was 2.82 euros compared to 1.91 euros in the previous year.
The Management Board, Supervisory Board and Shareholders' Committee will be proposing to Henkel's Annual General Meeting to approve significantly higher dividends of 0.72 euros per preferred share and 0.70 euros per ordinary share.
Once again, 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 a further 0.9 percentage points to 6.9 percent. After coming in at 1,462 million euros in the previous year, the level of free cash flow was again very strong at 1,508 million euros.
Fourth quarter 2010
In the fourth quarter of 2010, Henkel increased sales compared to the prior-year period by 11.5 percent to 3,729 million euros. After adjusting for foreign exchange, sales rose by 5.7 percent. Organic sales growth came in at 5.8 percent. Operating profit increased by 29.0 percent, from 293 million euros to 379 million euros. After allowing for one-time gains (16 million euros), one-time charges (5 million euros) and restructuring charges (80 million euros), adjusted operating profit improved by 8.2 percent, from 414 million euros to 448 million euros. Return on sales (EBIT margin) increased from 8.8 percent to 10.2 percent. Adjusted return on sales amounted to 12.0 percent after 12.4 percent in the fourth quarter of 2009. Quarterly net income improved from 177 million euros to 254 million euros. After deducting non-controlling interests of 5 million euros, net income for the period totaled 249 million euros (previous year: 170 million euros). Earnings per preferred share (EPS) increased from 0.39 euros to 0.58 euros, while the adjusted figure rose from 0.64 euros to 0.69 euros.
Sales and profits forecast 2011
In view of the economic forecasts for the current year, Henkel anticipates that the global gross domestic product will increase by around 3 percent. Henkel is confident to once again outperform its relevant markets in terms of organic sales, expecting an increase within the range of 3 to 5 percent. This forecast is based on the company's strong competitive position, which has been consolidated and further strengthened in recent years. Henkel has introduced a number of measures which have had a positive impact on its cost structure. In 2011 the company intends to further adapt its structures to the constantly changing market conditions as continuation of our commitment to strict cost discipline. All these factors, together with the expected increase in sales, will positively influence earnings development. Taking the 2010 results as its basis, Henkel anticipates achieving an increase to around 13 percent (2010: 12.3 percent) in adjusted return on sales (EBIT) and an increase in adjusted earnings per preferred share of around 10 percent (2010: 2.82 euros).
* Adjusted for one-time charges/gains and restructuring charges
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.
Cindy Demers (North America)
Wulf Kluppelholz (International)
Phone: +49 (0)211 797-1875
Fax: +49 (0)211 798-4040
For further information: Cindy Demers (North America), +1-480-754-4090, firstname.lastname@example.org, or Wulf Kluppelholz (International), +49 (0)211 797-1875, or Fax: +49 (0)211 798-4040, email@example.com Web Site: http://www.henkelna.com