Reckitt Benckiser Group Plc · LSE:RKT
Reckitt Benckiser — FY2003 Earnings Presentation
36 slides from Reckitt Benckiser's earnings presentation, Feb 11, 2004
Slide 1: 2003: Full Year Results
2003 : Full Year Results 11 February 2004
Slide 2: Summary - February 2003
Summary - February 2003 •• 2003 2003 :Building :Building Sustained Sustained Momentum Momentum –– Exciting Exciting new new products products –– Continued Continued focus focus on on Power Power Brands Brands –– More More brand brand building building investment investment –– Continued Continued mar
Slide 3: So How Did We Do?
So How Did We Do? •• 2003 2003 :Building :Building Sustained Sustained Momentum Momentum –– Exciting Exciting new new products products 4 –– Continued Continued focus focus on on Power Power Brands Brands 4 –– More More brand brand building building investment investment 4 –– Continued Continued mar
Slide 4: Straight Years of Consistent Growth
4 Straight Years of Consistent Growth Net Revenues Net Income
Slide 5: Volume Driven
Volume Driven H1 H1 FY FY Like Like for for Like Like NR NR growth growth +7 +7 +7 +7 ...of ...of which which volume volume +5 +5 +6 +6 …of …of which which mix mix +2 +2 +1 +1 …of …of which which price price -- 00 -- 00 •• Volume Volume clearly clearly rising rising strongly strongly •• accounting a
Slide 6: Innovation & Power Brands Driven
Innovation & Power Brands Driven Power brands % of Net Revenues AN L002 AN) Target 2006 Innovation now at the evel where we want It tc be - around 40% Power brands +12% In 2003 excluding migration) well anead of total company and market Brana Migrations proceeding well
Slide 7: Power Brands - Veet 1999
Power Brands -Veet 1999
Slide 8: Power Brands - Veet 2003
Power Brands -Veet 2003
Slide 9: Power Brands - Vanish 1999
Power Brands -Vanish 1999 Vanish Same Product Different Brand
Slide 10: Power Brands - Vanish 2003
Power Brands -Vanish 2003 Vanish Same Product Different Brand
Slide 11: Market Share Driven
Market Share Driven MAT % Total RB defined World : All Categories Combined 32 5 30.6 30.f 2003 30 | ~~ 2003 2002 25 T T T T ] JF VA MJ JA 50 ND
Slide 12: Accounting Policy Change
Accounting Policy Change ELECTRASOL Automatic Dishwasher ~ 3 Detergent Tabs, Gel, 9 §<*" Powder of Zin! Tabs ‘ Ny p Hi i 1 vO Ny D 5 51700100 85" '¢ vm a 62658 —~ Consumer coupons deducted above net revenue. — Full Year effect 2003 £78m 2002 £77m — Gross Margin lower c.90bps in both years > oy elt i
Slide 13: Targets Exceeded for Year
Targets Exceeded for Year 2003 Q4 & FY : Profit & Loss Account 2002 2002 2003 2003 %ch %ch %ch %ch £m £m £m £m actual actual constant constant Q4 Q4 Net Net Revenues Revenues 882 882 953 953 +8 +8 +6 +6 Operating Operating Profit Profit 182 182 227 227 +25 +25 +23 +23 Net Net Income Income 140 140 1
Slide 14: Consistent Margin Progression
Consistent Margin Progression Gross Margin 9 Operating Margin 045 ss ol 53.3 927 7 50; hi «48.5 54 47.7 46 14+ P 134 12000 M007 m7007 W003
Slide 15: After substantially higher investment
After substantially higher investment particularly Media Media % Net Revenue’ ~ Investment has been 2 substantially stepped up hz 2002 & HT 2003 > Media now running at 11.57% of netrevenues (2002 10.97%) 1999 eVU0 e001 e002 e003
Slide 16: All Regions Contributing to Growth
All Regions Contributing to Growth Regional Analysis FY 2003 at constant exchange Net Revenues Profits rm ”*cn rm ”*cn vvestern Europe) 1,/99 +f 405 #15 North America 1,016 ne) 155 +11 Latin America 166 P15 1 - ASla Pacific 456 +S 20 FOL nest of Worid 360 +9 36 +90 Corporate (2 Total Operations 93,/
Slide 17: Operating Margin Progress in All Regions
Operating Margin Progress in All Regions 2003 : Regional Operating Margins 297 "| 20; | 18.3 8.3 15} al s | | F ; | 16 | aL iL. = at 5 = = 12000 12007 mw 2002 2003
Slide 18: All Categories Contributing to Growth
All Categories Contributing to Growth Category Analysis 2003 at constant exchange 4 7och Full Year ‘”~cn rm Lm 201 +3 1,017 +11 Suitace Care 11 tS {40 +S Vishwasning KJ FS 939 +f nome Care 146 +4 940 +) niealtn & Personal Care iLO P13 909 ae : Lore Housenolda GUD a2} 3,9/9 +9 Otner 35 (12) 140 (16)
Slide 19: Category Highlights
Category Highlights •• Fabric Fabric Care Care Vanish Vanish Oxi Oxi Action Action :: Europe, Europe, Asia, Asia, ROW. ROW. Spray Spray ‘n’Wash ‘n’Wash North North America America behind behind In-wash In-wash Calgon Calgon & & Woolite Woolite :: ROW ROW •• Surface Surface Care Care Disinfectant Dis
Slide 20: Fixed Cost Leverage Is Working
Fixed Cost Leverage Is Working D0 4 i) 0 - - Fixed Costs being held below A5 fate of net revenue increase 0 | [-S0bDps In 2003) AQ - 3) 30 - > Funds increasing marketing Investment (+60bps) “aay 20 5 | > Operating Margin +160bps: 7 | 10 += _| : : : 999 2000 2001 2002 20035 » Operating Margin MFixed
Slide 21: Strong Cash Flow
Strong Cash Flow Operating & Net Cash Flow £m 0005 336 (90> 0005 999 2000 2001 2002 2003
Slide 22: Net Fund Position Built Up
Net Fund Position Built Up Year End Net Debt position. 1999 2000 2001 2002 2003 «= Acquisitions £141m £128m £362m £397m 292 Cash Generation Over £1.2bn generated since 2000 Generation now running at >£30m a month after increased dividend and share buybacks
Slide 23: Balance Sheet Position Strengthened
a Position Strengthened 2500 9 2000 » 1900 4 1000 4 00 4 2002 00 + Balance oni BB rengthenea - aept ellminatea Dorrowing Capacily o s AT =r. 1bn avaliable FY £005
Slide 24: Returning Cash to Shareholders
Returning Cash to Shareholders •• Dividend Dividend increase increase :: 28 28 pence pence for for full full year year –– +10%: +10%: cost cost of of total total dividend dividend £198m £198m •• Rolling Rolling Share Share Buy Buy Back Back –– financed financed out out of of free free cash cash flow
Slide 25: 2004: Building Sustained Momentum
2004 •• 2004 2004 :Building :Building Sustained Sustained Momentum Momentum –– Exciting Exciting new new products products –– Continued Continued focus focus on on Power Power Brands Brands –– More More brand brand building building investment investment –– Continued Continued margin margin expansio
Slide 26: Targets for 2004
Targets for 2004 •• Net Net Revenue Revenue Growth Growth of of 5% 5% plus plus –– at at constant constant exchange exchange –– Base Base £3,713m £3,713m •• Net Net Income Income & & EPS EPS Growth: Growth: low low double double digit digit % % –– at at constant constant exchange exchange –– Base Ba
Slide 27: How Are We Going to Get There?
How Are We Going to Get There ? •• Above Above industry industry average average net net revenue revenue growth growth –– Focus Focus on on Power Power brands brands in in high high growth growth categories categories –– innovation innovation –– investment investment •• Leverage Leverage net net rev
Slide 28: More New Products: Fabric Care
More New ge Bi C Fabric Care - a fanish Produ iCcts
Slide 29: More new products
More new products Lysol / Harpic Ready Brush
Slide 30: More New Products
More New Products
Slide 31: More New Products: Home Care
more New Rroduets me Care
Slide 32: More New Products
Mo New Products JTTIE A Mortein POWER BOOSTER Mortein PROFESSIONAL ase PECHOROLOT ws
Slide 33: More New Products: Health & Personal Care
More He Products Health & Personal Care | W@ VeeE an a % w Rasera ; rE 17 ae { ~€ a 3 Rasen Hasse wr eee (> (ZF S D -Y Dsame ~ _ iS
Slide 34: Margin Optimisation
Margin Optimisation N ™ 10- Reckitt Benckiser | a 16.3 16.7 19.6 14.4 1.9 Gad. 7 1999 2000 2001 2002 2003 Peer Group
Slide 35: Gross Margin Expansion
hd ) Gross Margin Expansion T T T T T T T T T T 93 2000 2000 2000 2000 2001 e001 AOD 001 2002 2002 e002 202 0d AUS 200s 204 Me a m Mt a of i T “ T a OR Mt T “ a T # J o e Input Costs : No Major Changes expected eg Oll Price Rise offset by weakness OT US > Squeeze / Xtrim on course Projects identifie
Slide 36: Summary
Summary •• 2004 2004 :Building :Building Sustained Sustained Momentum Momentum –– Exciting Exciting new new products products –– Continued Continued focus focus on on Power Power Brands Brands –– More More brand brand building building investment investment –– Continued Continued margin margin expan
Reckitt Benckiser Group — FY2003 Earnings Presentation on 6ix