beginner's guide to reckitt benckiser

8/3/2019 Beginner's Guide to Reckitt Benckiser

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Recki! Benckiser

Introduction : Who We Are


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A world leader in household, health and personal care

! UK listed. Top 25 of FTSE 100, market cap C 25bn! 2010 net revenue of 8.45bn! Over 15 million consumer units sold a day, 5.5 billion a year

Our 19 Powerbrands are Global No 1 or 2 in all of our fast-growing categories

! Represent 69% of RB net revenue! Driven by innovations - on average, 30% of our net revenue is products developed in last 3 years

A track record of outperformance delivering the fastest growth and returns for investors:

! Since 2000 revenues have more than doubled and market cap has quadrupled! 11 years above industry-average growth

A global business made up of multinational teams

!6 different nationalities in our executive committee of 9 and 49 nationalities amongst the Top 400

! Operations in 60+ countries, sales in nearly 200 countries! 49 manufacturing facilities world-wide! C 25,000 employees


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Net revenue (bn) Adj.* net income (m)

2010: +15% @ constant (+17% @ actual)

Total business continues to perform stronglyFull Year 2010 analysis

3.0 3.13.4 3.5

3.7 3.94.1

4.95.3

6.6

7.8

8.5

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

9.0

1999 2010

NOTE:Net income adjusted to exclude the impact of exceptional items

2004 restated following the adoption of IFRS2010 net revenue growth excludes the acquisition of SSL

2010: +5% LFL ex-RBPTotal Group: +6% LFL

200275

340408

489577

669786

905

1,143

1,418

1661

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1999 2010


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Performance versus the competition

3 year view

Company Net Revenue Growth% CAGR 2008-10

Net Income / EPS Growth% CAGR 2008-10

Procter & Gamble +3% +3%

Colgate +6% +9%

Clorox +4% +3%

Henkel +2% +10%

Unilever +5% +3%

Peer Group Average +4% +6%

Reckitt Benckiser +8% +22%

Source: RB, company data, analyst forecastsNet revenue growth at constant FX and adjusted to exclude mergers/acquisitions/disposals and major corporate restructurings

Underlying NR / NI growth 2008-2010


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RB Colgate Clorox Henkel P&G Sara Lee Unilever Peer

Average

FTSE100 S&P 500

170%

89%

34%

114%

35%

-5%

121%

80%

52%

13%

-20

80

180

Translated into outstanding returns for investors

TSR: RB vs peer group and key indices

Source: DatastreamMeasured from 1 January 2005 to 31 December 2010


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History 1823 Benckiser founded in Ludwigshafen Germany! 1996 Benckiser detergents relocated to the Netherlands;

incorporated as Benckiser NV

! 1997 Benckiser NV listed on Amsterdam & New York Exchanges 1840 Reckitt & Sons founded in Hull, UK! 1888 Reckitt & Sons listed on London Stock Exchange! 1938 Reckitt & Sons merge with J&J Colman to form Reckitt & Colman plc

Dec 1999 Reckitt & Colman merges with Benckiser to create Reckitt Benckiser plc. Listed onLondon Stock Exchange

Feb 2006 Reckitt Benckiser plc acquires Boots Healthcare International, doubling its presence inHealth & Personal Care

Jan 2008 Reckitt Benckiser completes acquisition of Adams Therapeutics Inc in USA, includingMucinex, No.1 in US cough relief

Nov 2010 RB completes acquisition of SSL International gaining Durex the No1 condom brand inthe world and Scholl the No1 foot care brand in the world


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Geographical analysis @ Jan 2011

41%

27%

22%

9% 1%

Europe NA & ANZ

Developing Markets Pharmaceuticals

SSL

% of net revenue % of operating profit

37%

27%

12%

24%

Europe NA & ANZ Developing Markets Pharmaceuticals


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Growth by AreaNet revenue trend: 2006-2010 (in m, & % LFL growth)

CAGR: +4%

2010: +x% 2010: +x%2010: +x%2010: +x%2010: +x% 2010: +x%

CAGR: +8%CAGR: +38%CAGR: +7%CAGR: +15%CAGR: +6%

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

Europe NAA DvM Base RBP Group ex-SSL

2010: +0% 2010: +3% 2010: +18% 2010: +5% 2010: +24% 2010: +6%


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A Clear & Consistent Strategy3 strategic drivers: Focus on Powerbrands, Innovate & Invest

To drive above industry average growth and convert into profit & cash

Disproportionate focus on Powerbrands in high growth categories Have a strong new product development pipeline: ~ 35% NR from NPD in last 3 yrs Invest behind our brands & innovations with marketing: 11.7%, HY 2010 Convert into interesting profit & cash flow via margin expansion and net working capital controls

Critical competitive strength is to employ, engage and retain people with the right attitude


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Driven by powerbrand leaders in growth categoriesDe!ol & Lysolglobal #1 germ kill

Veetglobal #1 depilatory

Clearasila leader in clear skin treatment

Strepsilsglobal #1 medicated sore throat

Mucinexglobal #2 cough relief

Nurofenlocal leader analgesics

Durexglobal # 1 sexual wellbeing

Gavisconlocal leader stomach remedies

Finishglobal #1 automatic dishwashing

Vanishglobal #1 fabric treatment

Schollglobal #1 foot care

Calgonglobal #1 water softener

Wooliteglobal #2 garment care

Bangwith Lysol & Dettol global #1multipurpose cleaners

Harpicwith Lysol global #1 toilet care

Air Wickglobal #2 air care

Mo"einglobal #2 pest control

Frenchsglobal #1 mustard


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Powerbrands are the key driver of RBs growth

Powerbrands are 69% of RBnet revenues

40 46 51 53 57 5861

62 70 69

0

10

20

30

40

50

60

70

%o

fNRfromPow

erbrands

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010


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0

400

800

1,200

1,600

2,000

2,400

H&PC Fabric Surface Home Dishwashing

Growth by categoryNet revenue trend: 2006-2010 (in m, & LFL growth %)

CAGR: +6%CAGR: +3%CAGR: +12% CAGR: +4%CAGR: +9%

2010*: +6% 2010: -1% 2010: +4% 2010: +8% 2010: +3%

NOTE:

Excludes the acquisition of SSL


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Geographical Roll Out = Globalising Power Brands

Increase in Number of Countries 1999-2010

9 57

1999 2010

11 71

26 75

1999 2010

0 72


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Cost Optimisationand reduced resource use / waste / climate change emissions

Squeeze & Xtrim


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A Clear Strategy for Profitable Growth Employ, engage and retain the right people and culture

1. right principles and attitudes2. concerned with speedy decision and

action

3. concerned with making the bestdecision, knowing the best decision is

not a compromise decision

4. conflict is OK; consensus is OK only ifit leads to the best decision

1. right process and rules

2. concerned that everyone every wherehas had plenty of time to consider/consult before a decision is taken

3. concerned that the decision is based onconsensus / alignment of all parties most

of the time

4. conflict is bad; negotiation/consensus is

good


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Leadership in Corporate Responsibility

Global top-10% in Dow Jones Sustainability World Index (DJSI World) 2009

ENVIRONMENT

Carbon Disclosure Project 2009 - CDP Global 500 Report, PricewaterhouseCoopers(PwC):

! In top 12 companies globally in terms of carbon reduction performance the only company fromour sector

! RB one of only eight of those top 12 companies also in the Carbon Disclosure Leadership Index Pioneering Carbon20 climate change programme: 20% reduction by 2020 in carbon

emissions

! 5.75% reduction of our products average total carbon footprint in Year 1, so! avoiding 1.5 million tonnes CO2 p.a. (equivalent to taking c. 450,000 family cars off the road)

The only carbon neutral manufacturer in our sector (absolute emissions reduction + treeplanting)

COMMUNITY

Global partnership with Save the Children:! 4million raised since 2003! Raising 10m by 2020 to create 1 Million Brighter Lives for children

beginner's guide to reckitt benckiser

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