Reckitt Benckiser Group Plc · LSE:RKT
Reckitt Benckiser — FY2023 Earnings Presentation
32 slides from Reckitt Benckiser's earnings presentation, Feb 22, 2024
Slide 1: Delivering for a Cleaner, Healthier World: FY 2023 Results
DELIVERING FOR A CLEANER, HEALTHIER WORLD FY 2023 RESULTS
Slide 2: Disclaimer
FY 2023 RESULTS DISCLAIMER Cautionary note concerning forward-looking statements This presentation contains statements with respect to the financial condition, results of operations and business of Reckitt Benckiser Group plc and the Reckitt group of companies (the "Group") and certain of the plans
Slide 3: ell
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Slide 4: Agenda
FY 2023 RESULTS AGENDA = ae Key Financial messages review and outlook
Slide 5: Key Messages
FY 2023 RESULTS KEY MESSAGES @i) A year of progress in 2023 s <4 (o Clear priorities @) Enduring framework for value creation
Slide 6: 2023 - A Year of Progress
FY 2023 RESULTS 2023 - A YEAR OF PROGRESS OOOO HW Good trading performance in Health and Hygiene Innovation platforms prove they can deliver meaningful growth through premiumisation, household penetration and category creation Gross margins returned to historical levels Increased investments behind
Slide 7: Hygiene Highlights
FY 2023 RESULTS HYGIENE HIGHLIGHTS Auto Dishwash +11% LFL NR CAGR vs 2019 Surface & Disinfection s 0 Pack fill rate WA Category Category Premiumisation +10 0 creation creation + 0 FY 2023 LFL NR CAGR vs 2019 premiumisation Air Care Ah LFL NR CAGR vs 2019 Share of markets recognised as top +87Osps ti
Slide 8: Health Highlights
FY 2023 RESULTS HEALTH HIGHLIGHTS Attractive categories Broadening shoulders of our brands Executing with excellence oTc 11% r LFL NR CAGR vs 2019 —)\ Prioritised supply . activities £ Germ Protection Household Category f penetration creation + [') ya premiumisation LFL NR CAGR vs 2019 LFL NR CAGR v
Slide 9: Nutrition Highlights
FY 2023 RESULTS NUTRITION HIGHLIGHTS North America nutrition rebasing Portfolio premiumisation 45% Hypoallergenic = S, Share of hospital contracts (2021: 30%) ‘Cir {thins} Evolving regulatory environment (2) S Safety first, quality always Operating with resilience in new environment Future fit suppl
Slide 10: Clear Priorities
FY 2023 RESULTS CLEAR PRIORITIES Win in market +44% of core CMUs gaining / holding share Working to get to or above 60% target Product superiority Leveraging data driven insights Bringing new scientifically grounded innovations to consumers Executional excellence Across Sales, Supply and Marketing E
Slide 11: We Have an Enduring Framework for Value Creation
WE HAVE AN ENDURING FRAMEWORK FOR VALUE CREATION i Share i f Grow AOP ahead of net revenue i MSD net revenue growth Sustainable dividend growth buybacks
Slide 12: We Have an Enduring Framework for Value Creation
FY 2023 RESULTS WE HAVE AN ENDURING FRAMEWORK FOR VALUE CREATION @) @) ®) @) MSD AOP h Ss inabl Sh evene «=O header dividend = buybacks growth net revenue growth growth TD +f? +2%T0+4% ON TRACK a + MSD Hygiene and Health + Second half weighted A + Nutrition Rebasing 2024 2024 TARGETS 2x RETURNS IN 2
Slide 13: Jeff Carr
JEFF CARR ¥
Slide 14: Group Summary: A Year of Progress
FY 2023 RESULTS GROUP SUMMARY: A YEAR OF PROGRESS X= Net revenue Gross profit margin LFL NR growth LFL NR growth +359 1.9)% £14,607M 60.0% ° 0 e 0 ' ° IFRS net revenue growth: +1.1% +220bps vs 2022 Volume Volume Adjusted operating profit (AOP) IFRS operating profit (4.3)% (4.3)% £3,373M £2,531M 23.1
Slide 15: Quarterly Volume Trends by GBU
FY 2023 RESULTS QUARTERLY VOLUME TRENDS BY GBU +1.2% +0.3% (0.1)% (2.2)% | (10.4)% (14.3)% (15.7)% Qi Q2 Q3 Q4 Ql Q2 Q3 Q4 Ql Q2 Q3 Q4 . . . . Decline from lapping of prior Gi) Improving sequentially | | | Ore sesenslity due to @&) year US supply shortage and Developing Markets acy
Slide 16: Group Margins: Gross Margin Expansion and Increased BEI
FY 2023 RESULTS GROUP MARGINS: GROSS MARGIN EXPANSION AND INCREASED BEI £m FY 2023 FY 2022 Change Change Actual FX Constant FX Net Revenue 14,607 14,453 +1.1% +3.7% LFL growth +3.5% +7.6% Gross Margin % 60.0% 57.8% +220bps Brand Equity Investment (1,908) (1,712) +11.4% +13.2% BEI % B.1% 11.8% (130)b
Slide 17: Hygiene: Broad-Based Growth
FY 2023 RESULTS HYGIENE: BROAD-BASED GROWTH xc LFL NR growth LFL NR growth : : Swe £6,189 & +5] % +52 % revenue r £5,960m Volume Volume Adjusted 6 0 % 2 fi of operating 1 2ObM +4.7% vs 2022 ° 0 e 0 profit (AOP) ! at constant FX Price/Mix Price/Mix #11.1% +1.8% arin 20.1% (30)bps vs 2022 Calculations
Slide 18: Health: Strong Growth Across OTC and Intimate Wellness
FY 2023 RESULTS HEALTH: STRONG GROWTH ACROSS OTC AND INTIMATE WELLNESS axa» LFL NR growth LFL NR growth % 2.0)9 seme £6, 062M = +J.U/0 e % revenue r £5,992m Volume Volume Adjusted 0 3 % 2 2 of operating 1 690M +6.3% vs 2022 ° 0 e 0 profit (AOP) ! at constant FX Price/Mix Price/Mix +5.3% +0.2% a 4h:
Slide 19: Nutrition: US Nutrition Rebasing
FY 2023 RESULTS NUTRITION: US NUTRITION REBASING axa» LFL NR growth LFL NR growth " 14.8)%) Swe £2, 410M (4.0) 0 4. % revenue I £2,501m Volume Volume Adjusted 10 0 of 14 3 of operating PAATM (22.4)% vs 2022 e 0 e 0 profit (AOP) at constant FX Price/Mix Price/Mix +6.0% (0.5)% a |: i) Calculations of
Slide 20: US Nutrition Rebasing
FY 2023 RESULTS US NUTRITION REBASING Reckitt US Nutrition Non-WIC Volume Share! Jan 2021 Dec 2023 Reckitt US Nutrition Non-WIC Value Share’ Jan 2021 Dec 2023 20
Slide 21: Nutrition - NA Volume Growth Offset by DVM Market Challenges
NUTRITION - NA VOLUME GROWTH OFFSET BY DVM MARKET CHALLENGES Volume (2023 vs 2021) (s2%) (17.6)% (2023 ve 2021) +23.9% +22.0% (e023 ve 2021) +32.1% (44%) +18.0% DEVELOPING MARKETS VOLUME DECLINE IN LINE WITH MARKET DECLINES
Slide 22: Adjusted EPS - Growth in AOP Offset by Tax and FX
FY 2023 RESULTS ADJUSTED EPS - GROWTH IN AOP OFFSET BY TAX AND FX +3.4p +4.5p a L | Oo), — (10.7), (0.4)p FY 2022 AOP Finance expense / Tax FX Dilution FY 2023 (constant FX) NCI / Associates Calculations of adjusted measures are presented within the FY 2023 results announcement
Slide 23: Strong Free Cash Flow Generation
FY 2023 RESULTS STRONG FREE CASH FLOW GENERATION £m Adjusted operating profit Depreciation, share-based payments and gain on disposal of fixed assets (net of proceeds) Capital expenditure Movement in working capital and provisions Cash flow in relation to adjusting items Interest paid Tax paid Free
Slide 24: Shannon Eisenhardt, Chief Financial Officer Designate
reckitt SHANNON EISENHARDT Chief Financial Officer Designate
Slide 25: 2024 Outlook and Guidance
FY 2023 RESULTS 2024 OUTLOOK AND GUIDANCE tant ROP GROWTH AKEAD 2A TD +4 —voceocm OF NR GROWTH Adjusted net finance expense ~ Capex as % of net revenue “A Adjusted tax rate @e30om-£320m G)a%-35% «= @) 25% - 26% Calculations of adjusted measures are presented within the FY 2023 results announcement
Slide 26: 2024 Revenue and Profit Growth Second Half Weighted
FY 2023 RESULTS 2024 REVENUE AND PROFIT GROWTH SECOND HALF WEIGHTED @ 3 HEALTH NUTRITION Growth more back half Low teens NR decline in H1 (lapping weighted (Q1 23 OTC retailer high prior year market shares) inventory rebuild in Europe) Return to NR growth late in the year
Slide 27: Leverage Reduced
FY 2023 RESULTS LEVERAGE REDUCED Net Debt / Adjusted EBITDA POOTUTETTTTTITTTTITTEE ETT T TTT T TTT TTT TTT Te rere errr eerrrerer err rre eerie r errr erie etree etree tii > £(2.3)on La £1.5bn £0.1bn FY 2022 Free cash flow Dividends & share buybacks FX & other Calculations of adjusted measures: ‘are
Slide 28: Capital Allocation Priorities
FY 2023 RESULTS CAPITAL ALLOCATION PRIORITIES al Investment in organic growth {0} Strong free cash conversion &> Progressive dividend policy (a) Target single A credit rating (leverage at around 2.0x) 3=| Manage the portfolio for value creation gate Return cash to shareholders ONGOING SHARE BUYBACK
Slide 29: Increased Cash Returns
FY 2023 RESULTS INCREASED CASH RETURNS +247 FREE CASH FLOW NET DEBT Strong free cash Target single generation A credit rating +11% in 2023 Leverage reduced from 2.1x to 1.9x in 2023 DIVIDENDS t Progressive dividend policy +5% in 2023 SHARE BUYBACKS 1 New £1bn 12-month share buyback programme commenc
Slide 30: We Have an Enduring Framework for Value Creation
FY 2023 RESULTS WE HAVE AN ENDURING FRAMEWORK FOR VALUE CREATION @) @) ®) @) MSD AOP h Ss inabl Sh evene «=O header dividend = buybacks growth net revenue growth growth TD +f? +2%T0+4% ON TRACK a + MSD Hygiene and Health + Second half weighted A + Nutrition Rebasing 2024 2024 TARGETS 2x RETURNS IN 2
Slide 31: Kris Licht, Chief Executive Officer
Q reckitt KRIS LICHT Chief Executive Officer
Slide 32: Recap - Key Messages
FY 2023 RESULTS RECAP - KEY MESSAGES 7 S on @i) 9 @ A year of progress Clear priorities Enduring framework in 2023 for value creation
Reckitt Benckiser Group — FY2023 Earnings Presentation on 6ix