In the second quarter of 2007, Henkel reported sales of 3,293 million euros, an increase of 1.9 percent compared to the prior-year quarter.  The rise in organic sales, i.e. growth adjusted for foreign exchange and acquisitions/divestments, was 4.3 percent, with all business sectors contributing. Following a very strong first quarter which was boosted by special marketing activities initiated to celebrate the Persil detergent centennial, organic growth in the Laundry & Home Care business sector normalized at 3.1 percent.  Sales growth at Cosmetics/Toiletries amounted to 4.3 percent.  Adhesives Technologies, which had benefited from building sector activity in the first quarter due to favorable weather conditions, turned in the strongest performance with a rise of 4.8 percent. This business sector was established on April 1, 2007, as a result of the merger of the previously separately run Consumer and Craftsmen Adhesives and Henkel Technologies business sectors.

“We have continued our good start to the current fiscal year with further success in the second quarter.  All our business sectors reported organic growth outpacing developments in our markets.  We were also able to harness the continuing dynamism prevalent in the growth regions in order to further expand our market positions,” said Ulrich Lehner, Chairman of the Management Board of Henkel KGaA.  “Thanks to successful developments in the first half year, we anticipate achieving an increase in organic sales of 4 to 5 percent for full fiscal 2007.  We also continue to expect an increase in operating profit – adjusted for foreign exchange – in excess of organic sales growth.”

Operating profit (EBIT) decreased by 5.5 percent to 339 million euros, and by 3.6 percent after adjusting for foreign exchange. The figure for the prior-year quarter included one-time gains amounting to 41 million euros arising from the divestment of the insulating glass sealant and rubber-to-metal bonding chemicals businesses, while this quarter’s results included a gain of 8 million euros from the sale of land in Turkey. In addition, Henkel increased its restructuring charges from 6 million euros in the prior-year quarter to 14 million euros in this quarter. After adjusting for these items, EBIT rose by 6.4 percent, from 324 million euros to 345 million euros.

At 10.3 percent, return on sales (EBIT) fell by 0.8 percentage points below the level of the previous year’s quarter. After adjusting for the above items, return on sales increased by 0.5 percentage points, from 10.0 percent to 10.5 percent. Return on capital employed (ROCE) amounted to 15.4 percent. Net income from participations increased by 3 million euros to 24 million euros, due primarily to the results of our Ecolab participation. Net interest expense improved by 11 million euros to -37 million euros, mainly due to higher income from the fund assets covering our German pension obligations. Overall, net financial items increased by 14 million euros to -13 million euros. The tax rate was 26.7 percent.

Due to lower EBIT, quarterly net earnings fell by 3.6 percent to 239 million euros. After minority interests amounting to 5 million euros, net earnings for the quarter were 234 million euros (-3.7 percent). Earnings per preferred share amounted to 0.54 euros (-5.3 percent).

Regional Performance
Sales in the Europe/Africa/Middle East region came in at 2,111 million euros, a rise of 4.3 percent or 4.4 percent after adjusting for foreign exchange. All business sectors contributed to this growth. In Eastern Europe, sales again increased in the double-digit percentage range, while in Western Europe the growth dynamism of the first quarter slackened somewhat. There was also an absence of sales volume due to the divestment of various marginal business activities. At 64 percent, the share of sales accounted for by this region remained at roughly the same level as in the previous year. Due primarily to foreign exchange effects, sales of the North America region fell by 7.7 percent; after adjusting for foreign exchange, the decline was just 1.1 percent. The cosmetics business in North America exhibited gratifying growth supported by successful innovations. With sales of 646 million euros, the region’s share of total sales amounted to 20 percent. The Latin America region registered sales of 178 million euros, an increase of 5.2 percent or 7.8 percent after adjusting for foreign exchange. This growth was generated primarily by the Cosmetics/Toiletries and Adhesives Technologies business sectors. The share of sales attributable to the region remained unchanged at 5 percent. Henkel’s businesses in the Asia-Pacific region performed exceptionally well. At 298 million euros, sales rose significantly by 8.4 percent, increasing further to 11.4 percent after adjusting for foreign exchange. Here, the Adhesives Technologies business sector exhibited a particularly high growth rate. The region’s share of total sales increased slightly to 9 percent.

Overall, the highly encouraging developments encountered in the growth regions of Eastern Europe, the Middle East, Africa, Latin America and Asia-Pacific continued through the second quarter, with Henkel once again achieving a double-digit percentage increase in sales in these markets.

Major Participation
Ecolab Inc., St. Paul, Minnesota, in which Henkel has a 29.6 percent stake, reported sales of 1,362 million US dollars in the second quarter of 2007, an increase of 11.1 percent compared to the previous year. Net earnings for the quarter rose by 18.4 percent to 110.3 million US dollars. The market value of this participation as of June 30, 2007, amounted to around 2.3 billion euros.

Updated Sales and Profit Forecast 2007
Taking into account the encouraging business developments observed in the first half of the year, Henkel now expects to achieve an organic growth rate (after adjusting for foreign exchange and acquisitions/divestments) of 4 to 5 percent for the full fiscal year.

Henkel continues to expect an increase in operating profit (EBIT) – adjusted for foreign exchange – in excess of organic sales growth.

Henkel likewise expects an increase in earnings per preferred share (EPS) in excess of organic sales growth.

This document contains forward-looking statements which are based on the current estimates and assumptions made by the corporate management of Henkel KGaA. Forward-looking statements are characterized by the use of words such as expect, intend, plan, predict, assume, believe, estimate, anticipate, etc. 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 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 any forward-looking statements.