In the third quarter of 2007, Henkel reported sales of 3,358 million euros, an increase of 3.0 percent above the level of the prior-year period. Organic sales growth, i.e. growth adjusted for foreign exchange and acquisitions/divestments, was a highly gratifying 6.0 percent. All business sectors again contributed to this positive development. Laundry & Home Care posted a good 4.3 percent in organic growth. Cosmetics/Toiletries continued its positive trend, achieving a particularly dynamic 7.3 percent increase. And in the Adhesives Technologies business sector, the organic growth rate was a strong 6.4 percent.

“Developments during the third quarter have brought us considerable success. We were particularly pleased with our strong organic sales growth, to which once again all our business sectors contributed, and with the substantial improvement in earnings. There was also further dynamic expansion in the sales generated in our growth regions,” said Ulrich Lehner, Chairman of the Management Board of Henkel KGaA. “In view of this encouraging business performance, we now expect our organic sales growth rate for 2007 to be in the range of 5 to 6 percent. We further anticipate an increase in operating profit – adjusted for foreign exchange – in excess of organic sales growth.”

Operating profit (EBIT) was 359 million euros, an increase compared to the prior-year quarter of 12.0 percent, or 13.0 percent after adjusting for foreign exchange.

At 10.7 percent, return on sales (EBIT) was 0.9 percentage points above the level of the prior-year quarter. Return on capital employed (ROCE) increased by 1.9 percentage points to 16.3 percent, due in particular to the improvement in EBIT. Net income from participations increased by 9 million euros to 22 million euros. Net interest declined by 8 million euros to –44 million euros. Overall, net financial items improved slightly by 1 million euros to –22 million euros. The tax rate, at 27.3 percent, remained at the level of the prior-year quarter.

Net earnings for the quarter increased by 12.9 percent to 245 million euros due to the higher EBIT. After minority interests amounting to 7 million euros, net earnings for the quarter were 238 million euros (+12.8 percent). Earnings per preferred share increased by 12.2 percent to 0.55 euros.

Regional Performance
Sales in the Europe/Africa/Middle East region rose to 2,171 million euros, an increase of 5.2 percent – or 5.1 percent after adjusting for foreign exchange – to which all business sectors contributed. In Eastern Europe, sales grew again in the double-digit percentage range. In Western Europe, the divestment of various marginal activities resulted in the absence of the associated sales. However, the core business was further expanded. At 65 percent, the region’s share of total consolidated sales was slightly above the level of the previous year. Due to foreign exchange effects, sales in the North America region decreased by 6.0 percent, although increasing by 0.8 percent after foreign exchange. Boosted by successful innovations, the Cosmetics/Toiletries business sector posted gratifying growth in this region. With sales totaling 667 million euros, the region’s share of total sales was 20 percent. Sales of the Latin America region amounted to 175 million euros, an increase of 5.5 percent, and 8.6 percent after adjusting for foreign exchange. All business sectors participated in these positive developments, with Cosmetics/Toiletries and Adhesives Technologies reporting particularly strong expansion. The share of sales of the region remained at 5 percent. Business development in the Asia-Pacific region was again very encouraging. At 282 million euros, sales were 7.7 percent higher than in the prior-year quarter, and 9.1 percent up after adjusting for foreign exchange. The Adhesives Technologies and Laundry & Home Care business sectors recorded particularly high growth rates. At 8 percent, the share of sales accounted for by the region likewise remained unchanged.

Major Participation
Ecolab Inc., St. Paul, Minnesota, in which Henkel has a 29.6 percent stake, reported sales of 1,413 million US dollars in the third quarter of 2007, an increase of 10.5 percent compared to the previous year. Net earnings for the quarter rose by 3.4 percent to 114.0 million US dollars. The market value of this participation as of September 30, 2007, amounted to around 2.4 billion euros.

Updated Sales and Profit Forecast 2007
In view of the encouraging business developments observed in the first nine months, Henkel now expects to achieve an organic sales growth rate (after adjusting for foreign exchange and acquisitions/divestments) of 5 to 6 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.

Henkel in North America
Henkel markets a wide range of well-known consumer and industrial brands in North America, including Dial® soap, Purex® laundry detergent, Right Guard® antiperspirants, got2b® hair gels, Duck® brand duct tape, and Loctite® adhesives. 

This information 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.