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Henkel Increases Sales And Earnings

November 30, -0001

In fiscal 2008, Henkel’s sales rose 8.1% to $17.9 billion. According to the company, the substantial increase is mainly attributable to its acquisition of National Starch in April 2008. However, all business sectors contributed to this organic growth, with the company’s Laundry & Home Care and Cosmetics/Toiletries showing a better dynamic, said Henkel.

“Despite the difficult economic environment, we sustained our very good position in 2008. Once again, all our business sectors were able to outperform their respective markets, with our businesses in the emerging markets making a particularly strong contribution,” said Henkel chief executive Kasper Rorsted. “At the beginning of 2008, we initiated a global efficiency enhancement program in early response to the increasing economic difficulties encountered in the market. With this and the acquisition of the National Starch businesses, we have been able to sustainably strengthen our competitiveness. Moreover, our heightened focus on strategic priorities is already beginning to yield benefits.”

Mr. Rorsted continued, “We know that 2009 is not going to be an easy year. At the moment it is difficult to predict how the economy as a whole is going to develop. However, we are well equipped and confident we will emerge from this difficult economic environment with our position strengthened.”

The 2008 results also reflect a gain of $1.3 billion from the sale of the company’s 29.3% stake in Ecolab Inc.

Sales in the Laundry & Home Care business sector rose organically by 3.8%, outstripping the rate of expansion in its markets. Sales rose by 0.6% to $5.29 billion, with foreign exchange having a negative effect. The rise was primarily price-driven. Growth came mainly from the Europe/Africa/Middle East region, with Eastern Europe generating the primary impetus. In Western Europe, on the other hand, sales remained below the 2007 level.

With organic sales growth of 4.7%, Henkel’s Cosmetics/Toiletries business
significantly outpaced growth recorded by other segments. Sales rose by 1.5% to $3.8 billion, reflecting both the absence of marginal activities, divested to streamline the portfolio and the impact of the foreign exchange.

In the regional breakdown, the acquisition of the National Starch businesses had a positive effect, promoting further sales growth in all regions. Europe/Africa/Middle East posted a significant sales increase of 4.5% to $11.2 billion. However, sales in Western Europe declined slightly. Sales in North America rose by 5.6% to $3.42 billion. Latin America continued to perform very well, posting an increase in sales of 12.8% to $989 million. In the Asia-Pacific region, sales grew by 40.1% to $1.9 billion.

In the fourth quarter, total company sales rose 11.1% to $4.4 billion. The proceeds from the sale of Ecolab shares amounted to $2.1 billion, said the company in the report.
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