Henkel Announces Slight Recovery of Adhesives Business

Henkel Corporation announced its adhesive technologies business sector improved compared to the first quarter, but due to the volume decreases in major customer industries worldwide, was unable to avoid posting a decline in organic sales of 15.4 percent. Compared to the second quarter 2008-–the period in which the newly acquired National Starch businesses were consolidated for the first time-–sales fell by 12.9 percent to 1,582 million euros. After adjusting for foreign exchange, the decrease was 13.9 percent.

In view of the continuing difficulties encountered in the world economy, the business sector was unable to match the sales realized in the same quarter last year in any of its regions with the exception of Latin America. Organic sales remained 15.4 percent below the level of the prior-year quarter. Compared to the first quarter of 2009, however, this constitutes an improvement of 2.8 percentage points. Due to the decline in volumes and the associated decrease in capacity utilization, operating profit fell by 50.8 percent to 95 million euros. Included in this amount is 4 million euros in consultancy charges resulting from the integration of the National Starch businesses. The early introduction of measures to adapt capacity and reduce costs, as well as the launch of a number of innovative products, served to significantly improve earnings compared to the first quarter.

The electronics segment continued to suffer from the general market weakness affecting the semiconductors industry. For the third quarter of 2009, the company’s expectation for the adhesive technologies business sector is that it will develop similarly to or slightly better than in the second quarter of 2009.

www.henkel.com