Henkel strengthens Hair Cosmetics business in the USA DUSSELDORF, Germany / COSTA MESA, California, December 22 /PRNewswire/ -- Further expansion in Cosmetics The Henkel Group is to further strengthen its hair cosmetics business through acquisition of the business of US company Advanced Research Laboratories (ARL) headquartered in California. ARL is a strong innovator active in hair cosmetics, offering fashion-led and ethnic hairstyling products under leading brand g�t2b(r) . This acquisition will push Henkel up to third position in the US hairstyling market. The Henkel Group has acquired the business of Advanced Research Laboratories (ARL), Costa Mesa, California/USA. ARL has a workforce of 181 employees and develops and markets hair care and styling products primarily in the USA, Canada and Mexico. The company has succeeded in generating double-digit percentage sales growth rates in recent years and has gained a leading position in the styling segment. For fiscal 2003, ARL expects projected net sales totalling approx. US$133 million and an operating profit (EBIT) of around US$25 million. The return on sales (EBIT) is expected to be around 19%. The transaction will be immediately earnings enhancing for Henkel both before and after goodwill amortization. The acquisition is to be financed from existing liquid funds. "ARL ideally complements our existing hair cosmetics business in the USA," explained Uwe Specht, Executive Vice President of Henkel's Cosmetics/Toiletries business sector. "The acquisition will take Henkel a significant step forward in the American hair cosmetics market." Chief Executive Officer and co-founder of ARL, Thomas Parr, said: "We are delighted to become part of a major, internationally successful company. This development will secure and further enhance the long-term growth perspective of our brands." Henkel intends to combine the acquired ARL business with its California based Schwarzkopf & Dep business. Thomas Parr will be President and General Manager of these combined businesses. The acquisition is subject to regulatory approval and other customary closing conditions. The acquisition is anticipated to be completed in the beginning of 2004. About ARL: ARL headquartered in Costa Mesa, California/USA, with subsidiaries in Mexico and Canada is a privately owned company that has been developing and marketing innovative and high-quality hair cosmetics for more than 20 years. ARL's best known brands are g�t2b(r), Citr� Shine(r), Smooth'N Shine(r) and Zero Frizz(r). The company expects sales revenues of approx. US$160 million (according to US-GAAP) for the current year and realizes around 70 percent of its sales in the USA. For further information on ARL, go to www.advreslab.com. About Henkel: To date, Henkel has been represented in the American hair cosmetics market by Schwarzkopf & Dep (Los Angeles/California), a division of the subsidiary Henkel Corp.. With brands such as L.A. Looks(r) and Dep(r), Henkel is the market leader in the hair gel segment and holds a strong position in the overall hair styling market. Henkel, headquartered in D�sseldorf, Germany, is a leader with brands and technologies that make people's lives easier, better and more beautiful. The Henkel Group operates in three strategic business areas: Home Care, Personal Care, and Adhesives, Sealants and Surface Treatment. In fiscal 2002, the Henkel Group generated sales of 9.66 billion euros and an operating profit (EBIT) of 666 million euros. 50,000 people work for the Henkel Group worldwide. Henkel Brands and Technologies are available in 126 countries around the world. For further information on Henkel, go to www.henkel.com. This information contains forward-looking statements based on the current beliefs and estimates of Henkel's management. They are not guarantees of future performance. These forward-looking statements are subject to certain risks and uncertainties that could cause the Company's actual results or performance to be materially different from those expressed or implied by such statements. Many of these risks and uncertainties relate to factors that are beyond Henkel's ability to control or estimate precisely, such as future market and economic conditions and the behaviour of other market participants. Henkel does not intend nor assume any obligation to update these forward-looking statements. DATASOURCE: Henkel KGaA Henkel Group: Corporate Communications: Ernst Primosch, Phone: +49-211-797-3533, Fax: +49-211-798-9208, Lars Witteck, Phone: +49-211-797-2606, Fax: +49-211-798-9208, Simone Gleumes, Phone: +49-211-797-4463, Fax: +49-211-798-9208, press@henkel.com, press.henkel.com

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