“Despite the challenging market environment, Henkel reports a solid start to the financial year.  We achieved very good organic sales growth, once again outperforming our relevant markets,” said Henkel CEO Kasper Rorsted. “All our business sectors contributed to this success and with continued double-digit growth rates we were able to further expand our position in the emerging markets. We are fully committed to our strategic priorities and remain confident of being able to achieve our 2012 targets.”

For the fiscal year 2011, Rorsted provided the following guidance: “With intense competition and rising raw material costs, the economic environment will remain challenging. We will need to continue reviewing our structures to ensure our long-term international competitiveness.” Henkel has slightly raised its expectations for organic sales growth: “We are confident that we will again outperform our relevant markets in 2011 and now expect an increase in organic sales at the upper end of the 3 to 5 percent range. We expect ? in line with our previous guidance ? increasing our adjusted EBIT margin to around 13 percent and improving adjusted earnings per preferred share by about 10 percent,” Rorsted added.

Henkel’s sales in the first quarter of 2011 came in at 3,823 million euros, an increase of 8.9 percent compared to the figure for the prior-year quarter. After adjusting for foreign exchange, sales improved by 6.8 percent. At 7.2 percent, organic sales ? that is to say sales adjusted for foreign exchange and acquisitions/divestments ? again increased significantly. This positive development was supported by all Henkel business sectors. Due in particular to strong volume increases, Laundry & Home Care generated growth of 1.6 percent. With organic sales growth of 5.7 percent, the Cosmetics/Toiletries business sector outstripped a very strong prior- year quarter and again significantly exceeded growth in the relevant markets. With both price and volume driven organic growth of 11.5 percent, Adhesive Technologies significantly outstripped an already strong prior-year quarter. As a result, Henkel further expanded its global market shares in all three business sectors.

After allowing for one-time gains, one-time charges and restructuring charges, adjusted operating profit improved by 12.1 percent, from 421 million euros to 473 million euros. Operating profit (EBIT) increased by 1.9 percent, from 422 million euros to 430 million euros.

Adjusted return on sales (EBIT margin) grew by 0.4 percentage points, from 12.0 percent to 12.4 percent. Return on sales came in at 11.2 percent following 12.0 percent in the prior-year period.

Financial result improved from ?54 million euros to ?37 million euros due to lower net debt and an increased balance arising from currency hedging activities. The tax rate was 26.2 percent (prior-year quarter: 27.7 percent).

Net income for the quarter rose by 9.0 percent, from 266 million euros to 290 million euros. After deducting non-controlling interests totaling 7 million euros, net income for the quarter came in at 285 million euros (prior-year quarter: 259 million euros). Adjusted net income for the quarter after non-controlling interests increased by an appreciable 20.4 percent, from 265 million euros to 319 million euros. Earnings per preferred share (EPS) rose from 0.60 euros to 0.66 euros. The adjusted figure was 0.73 euros compared to 0.60 euros in the prior-year quarter.

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 0.6 percentage points to 7.9 percent. Net debt was reduced to 2.1 billion euros.

Business sector performance

Despite the continuing intensity of the competitive environment, the Laundry & Home Care business sector increased nominal sales by 2.2 percent to 1,072 million euros. Organically, sales rose by 1.6 percent, supported primarily by strong volume growth of 4.8 percent against a downturn in pricing levels.

Regional development was very mixed. Eastern Europe posted high organic growth, as did Latin America, the latter due in particular to the launch of Persil in Mexico. Growth rates in the Africa/Middle East region were lower than in past periods as a result of political unrest in some of the countries of importance to Henkel. However, the situation improved substantially toward the end of the quarter. In North America, sales decreased due to declining markets and persistently strong competitive pressures. By contrast, Western Europe registered a significant improvement in sales, driven in particular by strong growth in Germany and France. This resulted in a further increase in market share in Western Europe.

Operating profit totaled 100 million euros, compared to 151 million euros in the prior-year quarter, with the restructuring charges incurred for further production site optimization having a particular impact. Due to increased material costs and a decline in selling price levels, adjusted operating profit at 133 million euros and adjusted return on sales at 12.4 percent also remained slightly below the levels of the first quarter 2010.

Cosmetics/Toiletries started with a very strong quarter to fiscal 2011. Sales exceeded the already strong prior-year period by 7.7 percent and reached 821 million euros. In organic terms, sales increased by 5.7 percent and was once more well above that of the relevant markets. This successful development was due to the consistent pursuance of the business sector’s innovation offensive with numerous new product launches.

All regions and businesses contributed to this growth. Eastern Europe, Latin America and Asia’s emerging markets achieved again double-digit growth rates. Western Europe and North America likewise made a very good start to the year. Due to successful innovations sales in both regions were significantly increased and market shares expanded.

Operating profit rose by 12.6 percent to 112 million euros. Adju