Henkel : reports strong performance in second quarter

'Henkeldeliveredastrongperformanceinthesecondquarter,reachingnewhighsinquarterlysales,adjustedoperatingprofitandEBITmarginaswellasearningsperpreferredshare.Allthreebusinessunitscontributedtothispositivedevelopment,'saidHenkelCEOHansVanBylen.'Salesgrewsignificantlytoaround5.1billioneuros.WefurtherimprovedouradjustedoperatingprofitaswellasouradjustedEBITmargin.Adjustedearningsperpreferredsharegrewdouble-digit.Thisisastrongperformanceinahighlychallengingmarketenvironment.'

'Weexpectanoverallvolatileanduncertainmarketenvironmentthroughouttheyear.Currencyfluctuationsarelikelytocontinueandweanticipatethedifficultconditionsintheconsumergoodsmarketstopersist.Wearefullycommittedtocontinueoursuccessfuldevelopmentandimplementourstrategicpriorities,'saidHansVanBylen.

'Forthefullfiscalyear2017,weconfirmourguidance.Weexpectorganicsalesgrowthof2to4percent.WeexpectouradjustedEBITmargintoincreasetomorethan17.0percentandadjustedearningsperpreferredsharetogrowbetween7and9percent.'

Sales and earnings performance in the second quarter 2017

At 5,098 million euros, sales in the second quarter 2017 reached a new all-time high and grew nominally by 9.6 percent compared to the prior-year quarter. Acquisitions and divestments accounted for 7.4 percent of this growth, mainly as a result of the acquisition of The Sun Products Corporation. Foreign exchange effects were overall neutral. Organic sales, which exclude the impact of foreign exchange effects and acquisitions/divestments, showed a good increase of 2.2 percent.

The AdhesiveTechnologies business unit posted strong organic sales growth of 3.4 percent. In the BeautyCare business unit, organic sales were at the level of the prior-year quarter. The Laundry&HomeCare business unit reported a good increase in organic sales of 2.1 percent.

The emergingmarkets again made an above-average contribution to the organic growth of the Group, showing a very strong increase in organic sales of 4.7 percent. The maturemarkets registered positive organic sales growth of 0.5 percent.

In a continuously challenging market environment characterized by high promotional and pricing pressure, the WesternEurope region reported a slightly negative organic sales growth of -1.2 percent. All other regions were able to grow sales organically: In EasternEurope, sales grew by 5.2 percent. Africa/MiddleEast posted sales growth of 1.1 percent. Sales in NorthAmerica increased by 3.2 percent. LatinAmerica achieved sales growth of 6.1 percent and in the Asia-Pacific region, sales grew by 4.8 percent.

Adjustedoperatingprofit (EBIT) improved by 11.0 percent to 909 million euros. All three business units contributed to this increase.

Adjustedreturnonsales (EBIT) rose by 0.2 percentage points to 17.8 percent.

Adjustedearningsperpreferredshare (EPS) grew by 10.7 percent from 1.40 euros to 1.55 euros.

Networkingcapital as a percentage of sales improved by 0.1 percentage points to 5.2 percent.

Business unit performance

The AdhesiveTechnologies business unit generated strong organicsalesgrowth of 3.4 percent in the second quarter. In nominal terms, sales grew by 3.5 percent to a new high of 2,370 million euros. Adjustedoperatingprofit increased by 6.6 percent and reached 455 million euros. Adjusted return on sales recorded a very strong increase, reaching a new record level at 19.2 percent.

In the BeautyCare business unit, organicsales were at the level of the prior-year quarter. Nominally, sales grew by 0.9 percent to 997 million euros. Adjustedoperatingprofit showed a very strong increase of 4.3 percent and reached 180 million euros. Adjusted return on sales recorded a very strong growth to 18.0 percent, an all-time high.

The Laundry&HomeCare business unit generated good organicsalesgrowth of 2.1 percent in the second quarter. Nominally, sales increased by 26.6 percent to 1,703 million euros compared to the prior-year quarter. Adjustedoperatingprofit grew by 22.2 percent to 298 million euros. The acquisition of The Sun Products Corporation contributed significantly to both sales and operating profit. Adjusted return on sales was at 17.5 percent.

Compelling acquisitions further strengthening portfolio

With the successful closing of the acquisitions of the global Darex Packaging Technologies business and the Sonderhoff Group at the beginning of the third quarter, Henkel further strengthened its Adhesive Technologies business and complemented its technology portfolio.

Strong business performance in the first half of 2017

For the first time, half-year sales exceeded 10 billion euros and increased by 11.5 percent to 10,162 million euros. Organic sales growth - i.e. adjusted for foreign exchange and acquisitions/divestments - showed a strong increase of 3.1 percent. All three business units contributed to this performance.

Adjustedoperatingprofit rose by 12.3 percent from 1,570 million euros to 1,763 million euros.

Adjustedreturnonsales improved from 17.2 percent to 17.4 percent.

Adjustedearningsperpreferredshare grew by 10.9 percent or 29 eurocents from 2.67 euros to 2.96 euros.

In the first half of 2017, the AdhesiveTechnologies business unit generated very strong organic sales growth of 4.4 percent. Adjusted return on sales recorded a very strong increase, reaching 18.6 percent. The BeautyCare business unit showed a positive organic sales growth of 1.1 percent. Adjusted return on sales recorded a strong growth to 17.4 percent. The Laundry&HomeCare business unit generated good organic sales growth of 2.5 percent. Adjusted return on sales was at 17.4 percent.

Effective June 30, 2017, Henkel's netfinancialposition showed a balance of -2,342 million euros (December 31, 2016: -2,301 million euros).

Outlook for 2017 confirmed

Henkel confirms the outlook for the fiscal year 2017. Henkel expects to generate organic sales growth of 2 to 4 percent and anticipates that each business unit will generate organic sales growth within this range. For adjusted return on sales (EBIT), Henkel expects an increase versus the prior year to more than 17.0 percent. Henkel expects an increase in adjusted earnings per preferred share (EPS) of between
7 and 9 percent.

* 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, 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.