19th April 2004
STRONG START TO 2004
The following is the text for the Reckitt Benckiser conference call to be given
today by Bart Becht, Chief Executive Officer, and Colin Day, Chief Financial
Officer, at 1400 hrs London time. The purpose of the call is to update the
market on the progress of the business in the first quarter of 2004.
Commenting on the position, Bart Becht said
'Reckitt Benckiser made a strong start to 2004. Net revenue growth was around
12% at constant exchange with profit growth substantially ahead of that rate.
Strong net revenue growth came behind the continued success of our product
innovations such as Vanish Oxi Action and Lysol Ready Brush, and was further
helped by favorable flu and pest season conditions in the first quarter. These
results position us well to reach our full year targets of net revenue growth
of 5% plus and net income growth of low double digits, both at constant
exchange.'
Update on Q1.
The first quarter saw strong underlying growth for the business, continuing
recent trends. Net revenue growth at constant exchange in the quarter was
around 12% (2003 base £848m).
Exchange had an adverse impact on net revenues in Q1 due to a weakening US
Dollar. This had an impact of around 4% points on net revenue growth.
Profitability benefited from improvement in gross margins partially offset by
an increase in media and marketing support behind new initiatives. Cash
generation continued to be strong, resulting in lower interest charges. The tax
rate was maintained at 26%. The Company looks for the Q1 net income growth rate
to be over 20%, well ahead of the full year target rate of low double digits
(2003 base £82m).
Full Year Targets
The full year targets announced in February are net revenue growth of 5% plus,
and net income growth of low double digits both at constant exchange. These
targets remain unchanged.
The full results for Q1 2004 will be released on 13th May 2004.
NEW PRESENTATION OF REGIONAL RESULTS
* The Group announces that, following the internal management reorganization
announced in 2003, it will publish 2004 results aligned with this new
management structure, being Europe, North America & Australia and
Developing Markets. The Group views these Areas as separate management
entities, each with different risks and rewards, and therefore it is
appropriate to use these Areas for external commentary on the Group's
performance. The new presentation will also comply with International
Accounting Standards, which the Group will adopt in 2005.
* Europe now includes Eastern Europe, which was previously within Rest of
World, in addition to Western Europe. This Area therefore better reflects
the changing status of the wider Europe with enlargement of the EU. North
America & Australia now includes Australia/New Zealand, previously within
Asia Pacific. This Area shares common consumer and business
characteristics. At the same time, the small but growing US Suboxone
business has been reclassified from Europe to North America & Australia as
it may become material in 2004/05. Developing Markets combines Latin
America together with Asia and Africa/Middle East and therefore brings into
a single Area all the Group's developing markets.
* For information, the segmental results for 2003 by quarter are restated in
the new Area format in the table below. These results will form the
comparatives for the 2004 results.
2003 Restated - new area basis
Q1 Q2 Q3 Q4 Full Year
Net revenues - by geographical £m £m £m £m £m
area
Europe 444 498 494 473 1,909
North America & Australia 272 285 313 327 1,197
Developing Markets 132 160 162 153 607
Total 848 943 969 953 3,713
Operating profit - by
geographical area
Europe 83 109 107 126 425
North America & Australia 37 40 64 88 229
Developing Markets 0 8 8 11 27
Corporate (3) 6 (7) 2 (2)
Total 117 163 172 227 679
Operating margin - by
geographical area
Europe 18.7% 21.9% 21.7% 26.6% 22.3%
North America & Australia 13.6% 14.0% 20.4% 26.9% 19.1%
Developing Markets - 5.0% 4.9% 7.2% 4.4%
Total 13.8% 17.3% 17.8% 23.8% 18.3%
For further information
Reckitt Benckiser Switchboard +44 (0)1753 217 800
Tom Corran SVP Investor & Corporate Communications
Elvira Luykx Corporate Communications Manager Press Calls
Mark Wilson Investor Relations Manager Analyst / Investors Calls
PR Agency
Tim Spratt Financial Dynamics +44 (0)207 837 3113
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