Reckitt BenckiserBusiness Case StudyFinance Presentation

Presented by: Karen Duong

Date: May 2011

Reckitt Benckiser – Business Case Study

• Business Overview

• Annual Report and Financial Statements

• Comparison Ratios

• Questions

Business Overview

Vision

Passionately delivering ever better solutions in household cleaning and health & personal care

to customers and consumers wherever they may befor the ultimate purpose of creating shareholder value

Business Overview – Geographic Areas

Reckitt Benckiser is a truly global company: - Operations in 60+ countries - Sales in c. 200 countries world-wide - 49 Manufacturing facilities world-wide - c. 25,000 employees

UK listed. Top 25 of FTSE 100Market Cap £25bn

Business Overview – Categories

• Health & Personal Care

• Fabric Care

• Surface Care

• Dishwashing

• Home Care

Business Overview – Market Position

WORLD No.1Category BrandSurface Care Cillit Bang, LysolGerm Protection Dettol, LysolFabric Treatment VanishDepilatories VeetAutomatic Dishwashing Finish/CalgonitSore Throat (medicated) StrepsilsWater Softeners CalgonLavatory Care Harpic/LysolFood French’sSexual Wellbeing DurexFootcare Scholl

WORLD No.2Category BrandAir Care AirwickPest Control MorteinGarment Care WooliteCougn relief Mucinex

REGIONAL No.1/No.2Category BrandAnalgesics Nurofen (Europe)Cold/Flu Lemsip (UK)Upper GI Gaviscon (Europe)

Powerbrands are the key driver of RB’s growth

• Powerbrands are 69% of RB net revenues

40 46 51 53 57 58 61 62 70 69

0

10

20

30

40

50

60

70

% o

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Po

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rbra

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2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

Business Overview - Summary

• Geographical segments:− Europe

− North America / Australia & New Zealand

− Developing Markets

• Category segments:− Health & Personal Care

− Fabric Care

− Surface Care

− Dishwashing

− Home Care

• 19 Power Brands− Increasingly the focus of the business

− Makes up +69% of company net revenue

Annual Report and Financial Statements

Reports available online

Annual Report available at: http://www.reckittbenckiser.com – Investors & media

Annual Report and Financial StatementsContents:

Financial Statements – Independent Audit Report

the Group financial statements give a trueand fair view, in accordance with IFRS…

In our (‘PwC’) opinion…

Financial Statements – Group Income Statementfor the year ended 31 December 2010

Income Statement

Net Revenue

less: Cost of Goods Sold

= Gross Margin

less: Marketing expense and commercial overheads

= Operating Profit

less: Interest and Tax

= Net Income for the year

Financial Statements – Group Balance Sheetas at 31 December 2010

Balance Sheet

Non-current assets

plus: Current Assets

= Total Assets

Current Liabilities

plus: Non-Current Liabilities

= Total Liabilities

Total Assets

less: Total Liabilities

= Net assets

= Total equity

Financial Statements – Group Cash Flow Statementfor the year ended 31 December 2010

Cash Flow Statement

Net cash flows from:

Operating activities

plus: Investing activities

plus: Financing activities

= Net cash flow for the year

Annual Report and Financial Statements - Summary

• Independent Audit Report− independent third party opinion about the Company’s Financial Statements

• Income Statement (Profit & Loss)− records the Company’s financial performance between two points in time

• Balance Sheet− captures the Company’s financial position at a single point in time

− difference between market capitalisation and balance sheet equity is internally generated goodwill

• Cash Flow Statement− operating activities

− investing activities

− financing activities

Comparison Ratios

Comparison Ratios

Why use ratios?

• Understand business trends over time;

• Used as ‘key performance indicators’ to measure business performance;

• Understand where problems may exist - and how to fix them;

• Drive accountability; and

• Benchmark against competitors.

Key Performance Indicators (KPIs)

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

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

Total business continues to perform strongly 11th straight year of above industry average growth

3.0 3.1 3.4 3.5 3.7 3.9 4.14.9

5.3

6.6

7.88.5

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 340

408489

577669

786905

1,143

1,418

1661

0

200

400

600

800

1,000

1,200

1,400

1,600

1,800

1999 2010

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

Comparison Ratios - Summary

• KPI’s

− Net Revenue growth

− Gross Margin %

− Powerbrands % of Net Revenue

− Media Investment % of Net Revenue

Any Questions?