1st Quarter Results

7th May 2003 Strong Start to 2003 Q1 supports confidence in achieving full year targets Results at a Glance Q1 % change % change £m actual exch constant exch Net Revenue £874m +2% +6% Operating Profit £117m +8% +7% Net Income £82m +17% +15% * Net revenues grew by 6% at constant exchange (2% at actual exchange) to £ 874m. For continuing operations net revenue growth was over 6% at constant exchange (3% at actual exchange). * Operating profit increased by 8% at actual exchange to £117m. Operating margin rose by 80 basis points (bps) to 13.4% behind a gross margin increase of 260 bps to 53.4% and after a substantial further increase in marketing, mainly media, investment behind recent product innovations. * Net income increased 17% at actual exchange to £82m. * Strong cash generation saw net borrowings reversed to a net cash position of £20m. Net Working Capital was reduced by a further £67m * These results were driven by the success of recent initiatives such as: Vanish Oxi Action, Calgon AquaPro, Lysol NeutraAir, Harpic 2-in-1, Calgonit /Finish 3-in-1 Total and Protector, Electrasol Gelpacs and Veet Aquasystem and Mousse. Commenting on these results, Bart Becht, Chief Executive Officer, said 'Reckitt Benckiser made a strong start to 2003. Net revenue growth from continuing operations was over 6% at constant exchange. All regions contributed, with continuing growth in the established markets of Western Europe and North America and improvement in emerging markets. Profit growth was well ahead of this rate, with profitability benefiting from strong improvement in gross margins, partially offset by an increase in media and marketing support for new initiatives. 'This performance, backed by the strength of our innovation program, supports our confidence in achieving our targets for the full year of 4%-6% growth in net revenues and low double digit growth in net income, both at constant exchange. ' Detailed Operating Review Q1 Net revenues grew 2% (6% constant) to £874m. Net revenues from continuing operations grew by 3% (6% constant). Gross margin increased by 260 bps to 53.4% due to favourable long-term contracts, higher margin new products and savings from ongoing cost optimization programs, Squeeze and Xtrim. Marketing investment was higher in total, with media investment particularly increased by more than 20% to a level of over 11% of net revenues. Operating margins increased by 80 basis points to 13.4%. Operating profit grew 8% (7% constant) to £117m. Net income was £82m, an increase of 17% (15% constant). Category Review at constant exchange rates. Fabric Care. Net revenues grew by 6% to £232m. Fabric Treatment contributed strongly due to the initial success of Vanish Oxi Action in a number of launch markets in Western Europe and Australia New Zealand. Calgon AquaPro created growth in water softeners in Western Europe. Woolite garment care grew strongly in North America and Eastern Europe reflecting investment in the base business and the success of Woolite Black. Surface Care. Net revenues grew by 4% to £189m with good growth for Lysol Disinfectant cleaners in North America, behind the launch of Lysol NeutraAir, and for Dettol surface cleaners in Western Europe. Lavatory cleaners saw strong growth for Harpic 2-in-1 in Western Europe and Australia, and for the base Harpic business in Asia and Rest of World. Multi-Purpose Cleaners have grown steadily. Dishwashing. Net revenues grew 15% to £140m. Calgonit/Finish automatic dishwashing grew strongly in Western Europe behind the continuing success of 3-in-1 Total, and the successful launch of Protector in certain markets. Sales in North America were encouraging with the increasing success of Electrasol Gels and Gelpacs leading to further share gains. Automatic Dishwashing net revenues are also growing strongly in Eastern Europe and Australia New Zealand. Home Care. Net revenues grew by 2% to £128m. Air Care grew albeit at somewhat slower rates than in recent years in Western Europe behind Air Wick Click Spray, and the initial success of Decosphere. In North America, category growth was down, following the enormous growth of recent years. Pest Control growth has not yet resumed, predominantly affected by Latin America. Health & Personal Care. Net revenues grew 17% to £117m. Veet Depilatories grew strongly across all regions behind the success of Veet Mousse and Veet Aquasystem. Dettol antiseptic grew strongly in Asia Pacific and Africa Middle East, responding to media and marketing investment on the base business. UK Health Care grew steadily with good results for recent Lemsip innovations and continuing growth for Gaviscon. Core Household. Net revenues grew 8% to £806m. Food. Net revenues grew strongly by 12% to £38m with good performance across the portfolio, particularly behind the recently launched initiatives of French's Gourmayo, which is already brand leader in the flavored gourmayo sector, and French's new Cheddar flavoured fried onions. Geographical Analysis at constant exchange for continuing operations. Western Europe 47% of net revenues Net revenues grew 6% to £408m. The major contributors were Automatic Dishwashing, Fabric Treatment, Air Care and Depilatories. Calgonit/Finish 3-in-1 Total continued its success. Vanish Oxi Action was successfully launched in selected markets and has shown strong growth. Air Wick grew behind recent initiatives, notably Click Spray and Decosphere. Veet Depilatories grew behind the success of Aqua System and Mousse across the region. Woolite Fine Fabric increased net revenues. Operating margins were in line with year ago at 19.6% with good gross margin expansion offset by higher marketing investment in support of the phasing of new initiatives in Q1. Operating profit increased by 7% to £80m. North America 29% of net revenues Net revenues grew 6% to £255m. The portfolio performed strongly, but particular success came in Automatic Dishwashing and Disinfectant Cleaners. Electrasol automatic dishwashing grew net revenues and share in Q1 behind Electrasol Gel and Gelpacs. Lysol Disinfecting Cleaner grew mainly behind the launch of Neutra Air. Air Wick gained share but was held back by lower category growth. Food net revenues grew strongly, with good growth across the portfolio but particularly from French's Gourmayo and Cheddar Fried Onions. Operating margins improved by 170bps to 11.4% due to strong gross margin improvement. Operating profit increased 26% to £29m. Latin America 4% of net revenues Net revenues grew 3% to £32m in the face of difficult market and economic conditions. Net revenues at actual exchange, affected by substantial devaluation in a number of regional currencies, were down 32%. Local currency growth in Mexico and Argentina has improved but market conditions remain difficult in Brazil and Venezuela. Despite this, operating losses were contained at £3m. Asia Pacific 11% of net revenues Net revenues grew 8% to £98m. In Australia New Zealand growth came across the portfolio but particularly from Fabric Treatment, behind Oxi Action, Veet depilatories and disinfecting cleaners. In Asia, there was strong growth in Korea and Malaysia Singapore, and the recovery in India continued following the successful restructuring last year. Operating profits for the region increased 60% to £8m with operating margins expanding 390bps to 8.2%. Rest of World 9% of net revenues Net revenues grew 7% to £81m. Eastern Europe grew steadily behind the continuing success of Calgonit Automatic Dishwashing, Calgon Water Softener, Vanish Fabric Treatment and Veet Depilatories. Africa Middle East grew due to success for Dettol Antiseptic, with more investment supporting the base business, Air Wick Air Care and Harpic Lavatory Care. Operating margins were in line with year ago at 7.4% and operating profit was level at £6m. Financial Review Non-operating items. There were no non-operating items in Q1 2003 (Q1 2001 none). Net interest halved to £6m due to lower net borrowings, resulting from strong cash inflow in 2002 and in Q1 2003. Tax on profit for the quarter was £29m. The tax rate for the period is 27% (2002 27%) in line with the expected full year tax rate for 2003. Net working capital (stock, short-term debtors and short-term creditors other than borrowings) reduced by £67m to £558m negative in the quarter. Net debt of £105m at December 2002 was converted into net cash of £20m at March 2003 reflecting cash generation of £125m in Q1 2003. Half Year Results. The Company will release results for the six months to 30 June 2003 on Tuesday 26 August 2003. For further information Tom Corran SVP Investor Relations & Corporate Communications Telephone: +44 (0) 1753 217 800 Mark Wilson Investor Relations Manager Telephone: +44 (0) 1753 217 800 Tim Spratt Financial Dynamics Telephone: +44 (0) 207 831 3113 The Group at a Glance (unaudited) Quarter Ended March 31 2003 2002 £m £m From total ordinary activities Net revenues 874 855 Net revenues growth 2% 5% Gross margin 53.4% 50.8% EBITDA 139 128 EBITDA margin 15.9% 15.0% EBIT 117 108 EBIT margin 13.4% 12.6% Profit before tax 111 96 PBT margin 12.7% 11.2% Net Income 82 70 Net Income margin 9.4% 8.2% EPS 11.6p 10.0p EPS, diluted 11.3p 9.7p From continuing operations Net revenues 874 849 Net revenues growth 3% 5% EBITDA 139 127 EBITDA margin 15.9% 15.0% EBIT 117 107 EBIT margin 13.4% 12.6% Selected Financial Information (unaudited) Group Balance Sheet Data March 31, December 31, 2003 2002 £m £m Net working capital* (558) (491) Net cash / (borrowings) 20 (105) * Defined as stock, short term debtors and short term creditors excluding borrowings. Group profit and loss account (unaudited) Quarter Ended March 31 2003 2002 % change £m £m Net revenues from continuing operations 874 849 3% Discontinued and de-consolidated operations - 6 Total net revenues 874 855 2% Cost of sales (407) (421) (3%) Gross profit 467 434 8% Net operating expenses (350) (326) 7% Operating profit from continuing operations 117 107 9% Discontinued and de-consolidated operations - 1 Total operating profit 117 108 8% Non-operating items Profit on disposal of business - - Profit on ordinary activities before 117 108 8% interest Net interest expense (6) (12) (50%) Profit on ordinary activities before 111 96 16% taxation Tax on profit on ordinary activities (29) (26) 12% Profit on ordinary activities after taxation 82 70 17% Attributable to equity minority interests 0 0 Profit for the period 82 70 17% Earnings per ordinary share: On profit for the period 11.6p 10.0p On profit for the period, diluted 11.3p 9.7p Average common shares outstanding: Basic 705.9 703.1 Diluted 755.6 755.2 Segmental Analysis (unaudited) Analyses by geographical area and product segment of net revenues and operating profit are set out below. The figures for each geographic area show the net revenues and profit made by companies located in that area. Quarter Ended March 31 2003 2002 % change £m £m exch. rates actual const. Net revenues - by geographical area Western Europe 408 361 13% 6% North America 255 268 (5%) 6% Latin America 32 47 (32%) 3% Asia Pacific 98 94 4% 8% Rest of World 81 79 3% 7% 874 849 3% 6% Discontinued and de-consolidated - 6 - - operations 874 855 2% 6% Operating profit - by geographical area Western Europe 80 72 11% 7% North America 29 26 12% 26% Latin America (3) (2) (50%) (200%) Asia Pacific 8 4 100% 60% Rest of World 6 6 0% 0% Corporate (3) 1 117 107 9% 8% Discontinued and de-consolidated - 1 - - operations 117 108 8% 7% Operating margin - by geographical area % % Western Europe 19.6 19.9 North America 11.4 9.7 Latin America (9.4) (4.3) Asia Pacific 8.2 4.3 Rest of World 7.4 7.6 Corporate - - 13.4 12.6 Discontinued and de-consolidated - 16.7 operations 13.4 12.6 Segmental Analysis (continued) Quarter Ended March 31 2003 2002 % change £m £m exch. Rates Actual Const. Net revenues - by product segment Household and Health & Personal Care 836 811 3% 6% Food 38 38 0% 12% 874 849 3% 6% Discontinued and de-consolidated - 6 - - operations 874 855 2% 6% Operating profit - by product segment Household and Health & Personal Care 119 105 13% 11% Food 1 1 0 0% Corporate (3) 1 - - 117 107 9% 8% Discontinued and de-consolidated - 1 - - operations 117 108 8% 7% Operating margin - by product segment % % Household and Health & Personal Care 14.2 12.9 Food 2.6 2.6 Corporate - - 13.4 12.6 Discontinued and de-consolidated - 16.7 operations 13.4 12.6 Net revenues - Household and Health & Personal Care Fabric Care 232 216 7% 6% Surface Care 189 200 (6%) 4% Dishwashing 140 119 18% 15% Home Care 128 134 (4%) 2% Health & Personal Care 117 99 18% 17% Core Business 806 768 5% 8% Other Household 30 43 (30%) (29%) 836 811 3% 6% 1 2

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