Full Year Results 2003
11th February 2004
RECORD RESULTS IN 2003
FURTHER SUSTAINED GROWTH TARGETED IN 2004
Results at a Glance Q4 % change % change Full Year % change % change
actual constant actual constant
exchange exchange exchange exchange
Net Revenues - Old £968m +8 +6 £3,791m +7 +7
Basis
Net Revenues - New £953m +8 +6 £3,713m +7 +7
Basis*
Operating Profit £227m +25 +23 £679m +18 +15
Net Income £167m +19 +18 £489m +20 +17
* After restatement following adoption of FRS 5 Application Note G - see
accounting policy note on page 2
* The Company has adopted the new accounting standard on revenue recognition.
This reclassifies coupons from a marketing expense to a deduction from net
revenues, and has the effect of reducing reported net revenues by £78m in
the full year (2002 £77m) and by £15m in Q4 (2002 £17m). There is no impact
on profits.
* Q4 Net revenues grew by 8% (6% at constant exchange) to £953m and by 7% (7%
constant) to £3,713m for the full year.
* Operating profit increased by 25% in Q4 to £227m and by 18% FY to £679m.
Full Year operating margins improved 160 basis points (bps) to 18.3% behind
a 190bps gross margin improvement partially offset by a substantial
increase in marketing investment.
* Net income grew by 19% in Q4 to £167m, and by 20% in FY to £489m.
* Net cash flow increased 13% to £656m. Net funds were £292m at the year-end,
from a net borrowing position of £105m at year-end 2002.
* The Board is recommending a final dividend of 14 pence to give a total
dividend of 28 pence for the year, an increase of 10% over 2002, in line
with previously communicated policy. The dividend is covered 2.5 times by
2003 net income.
Commenting on these results and prospects for 2004, Bart Becht, Chief Executive
Officer, said
'Reckitt Benckiser did well in 2003. Particularly pleasing was the rate of net
revenue growth, which was one of the strongest since the merger in 1999.
Margins and profits also continued to advance at a healthy pace. Growth was
broad-based. Western Europe continued its strong growth of the last few years,
while North America and Developing Markets growth picked up as the year
progressed.
'For 2004 we are looking to continue our strong organic growth. Our in-going
targets are for net revenue growth of 5% plus and low double digit net income
and EPS growth, both at constant exchange.'
Detailed Operating Review
Adoption of FRS 5 Application Note G.
The Group has adopted Financial Reporting Standard 5 Application Note G in
preparing these financial statements. The new application note provides
guidance for revenue recognition. Accordingly, the Group has restated net
revenues to reclassify coupons from a marketing expense to a deduction from net
revenues. All 2002 comparatives have been restated. To assist comparison with
previous Results Announcements, the results of the Group are presented, in
Appendix 1, before adjustment for this accounting policy change. A restatement
of 2003 by quarter is included in Appendix 2 to assist with comparison.
Reconciliation of Net Revenue 2002 2002 2003 2003
Growth Q4 FY Q4 FY
£m £m £m £m
Net revenue - old basis 899 3,531 968 +8% 3,791 +7%
Accounting Policy adjustment (17) (77) (15) (78)
Net Revenue - new basis 882 3,454 953 +8% 3,713 +7%
The adjustment has no effect on the reported growth rates or profits for the
year or for the quarter. However the adjustment does increase reported
operating margins by around 30bps in both years.
Fourth Quarter 2003
Net Revenues grew by 8% (6% at constant exchange) to £953m. There was no impact
of discontinued or de-consolidated businesses in Q4.
Operating profit for Q4 grew 25% (23% constant) to £227m. Gross margin
increased by 230 bps to 55.0% due to higher margin new products, some
favourable purchase prices of raw and packaging materials and further benefits
from cost optimization programs Squeeze and Xtrim. Marketing investment was
flat in the quarter following the substantial increases in earlier quarters.
Operating margins increased by 320 basis points to 23.8%.
Net income grew 19% (18% constant) to £167m.
Full Year 2003
Net revenues grew by 7% (7% constant) to £3,713m. Net revenues from continuing
operations rose by 8% (7% constant).
Operating profit increased 18% (15% constant) to £679m. Gross margins rose 190
bps to 53.3% as a result of higher margin new products, favourable purchase
prices on raw and packaging materials, savings from the cost optimization
programs Squeeze and Xtrim. Marketing investment increased substantially in the
year with media investment increasing to 11.5% of net revenues (10.9%).
Operating margins increased by 160 bps to 18.3%.
Net income grew by 20% (17% constant) to £489m. Net interest expense of £19m
(2002 £32m) was lower due to the strong cash inflow over the past year reducing
the level of net borrowings.
Category Review at constant exchange rates
Fabric Care Full Year (FY) net revenues grew 11% to £1,017m driven by fabric
treatment behind the success of Vanish Oxi Action in Western Europe and
emerging markets, and the success of Spray 'n' Wash in-wash in North America.
The success of Vanish Oxi Action has allowed Reckitt Benckiser to build a
strong franchise in the category in 11 Western European markets, where Vanish
was not previously represented. Calgon Water Softener grew behind performance
in Rest of World and Woolite Fine Fabric advanced due to progress in Western
Europe.
Q4 net revenues grew 9% to £251m.
Surface Care FY net revenues improved 5% to £748m. The main growth drivers were
disinfectant sprays and multipurpose cleaners and lavatory care. Disinfectant
sprays grew behind the launch of Lysol Neutra Air in North America and Dettol
disinfectant spray in Western Europe and Asia Pacific. Multipurpose cleaners
grew behind Lysol sanitizing wipes in North America, and the launch of the
Dettol Ready Mop in Western Europe. The recovery in Latin America saw strong
growth for Veja multipurpose cleaner in Brazil. Lavatory care grew behind a
number of initiatives including Lysol/Harpic 2-in-1 in North America and Europe
and the initial launch of Lysol Ready Brush in North America.
Q4 net revenues rose 8% to £191m.
Dishwashing FY net revenues grew 7% to £535m benefiting from the success of the
launch of Finish/Calgonit 3-in-1 Brilliant across Europe and Electrasol Gel and
Gelpacs in North America. The roll-out of Finish/Calgonit Protector provided
incremental growth across Europe.
Q4 net revenues improved 3% to £139m.
Home Care FY net revenues rose 5% to £540m with both air care and pest control
showing growth. Air care grew in Western Europe behind the launch of Airwick
Decosphere and Airwick electrical oils. Air care growth recovered in North
America in the second half behind success for Airwick Decosphere and the launch
of Airwick Nite Light. Pest control grew behind the launch of Mortein
Professional in Australia, and recovery in Latin America, Asia and Rest of
World.
Q4 net revenues improved 4% to £146m.
Health & Personal Care FY net revenues grew 17% to £539m. The main growth
drivers were depilatories, antiseptics and health care. Depilatories grew
behind the success of Veet Express roll-on and Wax Strips for sensitive skin,
plus continuing growth for Veet Mousse in Western Europe and the launch and
subsequent roll-out of Veet in the USA. Dettol antiseptic performed well, most
notably in Asia Pacific and Rest of World, behind increased investment and a
number of new initiatives. The Health Care business performed strongly with
notable growth on Gaviscon in the UK and Continental Europe, and the initial
success of Suboxone in North America.
Q4 net revenues rose 13% to £128m.
Core Household FY net revenues therefore rose by 9% to £3,379m. Other household
FY net revenues declined by 16% to £140m. Total household net FY revenues
improved by 7% to £3,519m.
Food FY net revenues rose by 7% to £194m. This growth came behind the
successful introduction of French's Gourmayo flavoured mayonnaise and Cheddar
Fried Onions together with good growth for French's yellow mustard.
Q4 net revenues grew 2% to £62m.
Geographic Analysis at constant exchange
Western Europe: 47% of net revenues
FY net revenues grew by 7% to £1,733m. This strong performance was due to the
success of fabric treatment, automatic dishwashing, depilatories and
healthcare. Fabric treatment grew behind the success of Vanish Oxi Action.
Dishwashing grew due to the success of Finish/Calgonit 3-in-1 Brilliant and
Protector. Depilatories grew as a result of the new initiatives, Express
roll-on and Wax strips for sensitive skin. Healthcare grew behind the success
of Gaviscon in a widening number of Western European markets. Full-year
operating margins increased by 110 bps to 23.5% due to substantial gross margin
expansion, resulting from higher margin new products, lower input costs and
cost optimization initiatives, partially offset by substantial increases in
marketing investment. Operating profits increased by 13% to £408m.
Q4 Net revenues grew 7% to £435m and operating profits by 21% to £123m.
Operating margin improved by 310bps to 28.3%.
North America: 27% of net revenues.
FY Net revenues grew 5% to £1,018m. The growth came from the success of
disinfectant sprays and multipurpose cleaners, automatic dishwashing,
depilatories and food. Disinfectant spray and multipurpose cleaner growth came
from the launch of Lysol Neutra Air and Lysol sanitizing wipes respectively.
Automatic dishwashing growth came behind continuing success for Electrasol Gel
and Gelpacs. Depilatories grew strongly as distribution and market share built
following the launch of Veet in 2002. Food grew behind the success of French's
Gourmayo, and market share gains for French's yellow mustard. North American
operating margins increased by 110 bps to 18.3% due to significant gross margin
expansion, arising from new products, lower input costs and cost optimization
benefits, offset by substantially increased marketing investment particularly
earlier in the year. Operating profit increased 11% to £186m.
Q4 Net revenues grew 7% to £274m and operating profits by 23% to £75m.
Operating margins improved by 450bps to 27.4%.
Latin America: 4% of net revenues.
FY Net revenues increased by 16% to £166m. Strong growth in local currencies
has accelerated through the year, behind better growth for fabric treatment,
air care, pest control and multipurpose cleaners. FY operating profit was £1m
(2002 £1m loss).
Q4 Net revenues rose 25% to £50m and operating profit was £4m (2002 £3m).
Asia Pacific: 12% of net revenues.
FY Net revenues increased by 8% to £436m. Key drivers of growth were fabric
treatment, antiseptics, lavatory care and pest control. Fabric treatment growth
came behind the success of Vanish Oxi Action. Antiseptic growth came from the
launch of Dettol disinfectant spray in certain markets, and from Dettol liquid
and personal care products responding to higher investment, and from the SARS
effect earlier in the year. Harpic lavatory care grew behind higher investment
and new advertising. Operating margins improved by 280 bps to 11.5%. Operating
profits increased 32% to £50m.
Q4 Net revenues were 1% lower at £108m and operating profits were 6% lower at £
15m.
Rest of World: 10% of net revenues.
FY Net revenues grew 9% to £360m. Growth came from fabric treatment,
antiseptics, water softener and lavatory care. Key drivers of growth were the
launch of Vanish Oxi Action and Dettol disinfectant spray, plus strong organic
growth behind higher marketing investment. Operating margins increased by
240bps to 10.0%. Operating profit increased 50% to £36m.
Q4 Net revenues increased 2% to £86m and operating profit improved by 14% to £
8m.
New Initiatives : Q1 2004
Reckitt Benckiser is today announcing a number of new initiatives for the first
quarter of 2004.
Fabric Care. Roll-out of Vanish Oxi success into new forms, Vanish Oxi gel and
Vanish Oxi Carpet Cleaner.
Surface Care. Lysol and Harpic Ready Brush. Lysol disinfectant spray green
apple, Lysol multipurpose cleaner green apple.
Automatic Dishwashing. Electrasol with Jet Dry Action tabs, gel and gelpacs.
Also Electrasol Green Apple fragrance.
Home Care. Airwick Aroma Oils range. Airwick Crystal Air Design range. Mortein
Professional outdoor spray. Mortein Power Booster Coils.
Health & Personal Care. Veet Rasera Bladeless Razor kit.
Food. Frank's Red Hot Chile & Lime Sauce.
Financial Review - Full Year
Net Interest. The net interest expense of £19m (2002 £32m) was lower due to
strong cash generation over the past year reducing the group's indebtedness.
Tax. The tax rate for the period was 26%.
Net Working Capital (defined as net current liabilities excluding current asset
investments, cash and short term borrowings) reduced at the year end by £87m
compared to year-end 2002 to minus £578m.
Cash Flow. Operating cash flow increased 18% to £886m, due to higher operating
profit and net working capital improvements.
Net cash flow from operations increased by 13% to £656m. Net interest payments
were lower at £25m (£30m).
Gross capital expenditure was lower than prior year at £71m (£93m), This was
offset by proceeds from disposal of fixed assets of £12m (£34m) to give net
capital expenditure in line with last year at £59m.
Acquisition of intangible assets during the year of £85m (£6m) related
principally to the buying-in of distribution rights to the Company's healthcare
brands in certain European and North American markets, and to the acquisition
of a local brand in home care in Latin America. Tax paid increased to £146m (£
102m).
Net Funds at the year-end were £292m (2002 year-end net borrowings of £105m),
an improvement of £397m due to strong operating cash inflow, working capital
release and improved cash management. The Company's net funds position
consisted of cash of £59m (£40m) and short-term investments of £724m (£379m)
offset by the convertible capital bond of £192m (£193m) and other borrowings of
£299m (£331m).
Balance Sheet. At the end of 2003, the Group had shareholders' funds of £1,470m
(£1,201m), an increase of 22%. Net funds were £292m (Net borrowings of £105m).
Total capital employed in the business was £1,182m (£1,313m) a decrease of 10%.
The Company's financial ratios improved significantly during the year. Interest
cover was 36 times (18x).
Dividends
The Directors recommend a final dividend of 14 pence per share, an increase of
9%, to give a full year dividend of 28 pence per share, an overall increase of
10%. This is in line with the previously communicated policy to increase the
dividend once the dividend cover of the group reached the average of the
industry peer group. This dividend will be covered 2.5 times by net income for
the year 2003, broadly in line with the peer group. The dividend, if approved
by shareholders at the AGM on 13th May 2004, will be paid on 27th May to
shareholders on the register on 5th March. The ex dividend date will be 3rd
March 2004.
Share Buyback
Between 24th November and 10th December 2003, the group purchased 1,945,000
shares for cancellation at a cost of £25m as part of its ongoing share buyback
program.
Basis of Comparatives
* Actual. The actual results in the financial statements below include 2002
fully restated for FRS 5 Application note G.
* Continuing Operations. This adjusts comparisons to exclude the following
businesses which have been treated as discontinued or de-consolidated:
* The results of the Group's subsidiary in Zimbabwe which have been excluded
from the consolidated Group results with effect from 1st July 2002. The
effect of this is that net revenues of £13m in the first half of 2002 are
shown under discontinued and de-consolidated operations. The resulting
operating profit impact in H1 2002 was £1m.
* An agency agreement under which the Group sold third party products in one
category in one European market (Bayer pest control products in Italy) was
terminated with effect from the end of 2002. This is shown as discontinued
in the full year results. This has no impact on net revenues, but
reclassifies operating profit by £2m in FY 2002 into discontinued
operations. No income was recorded in 2003.
* Constant Exchange. Movements of exchange rates relative to sterling affect
actual results as reported. The constant exchange rate basis adjusts
comparatives to exclude such movements and show the underlying growth.
For Further Information
Tom Corran Reckitt Benckiser plc +44 (0)1753 217 800
Senior Vice President, Investor Relations & Corporate Communications
Mark Wilson Reckitt Benckiser plc +44 (0)1753 217 800
Investor Relations
Manager
Tim Spratt Financial Dynamics +44 (0) 207 831 3113
The preliminary results for the year ended 31 December 2003 are unaudited. The
financial information set out in the announcement does not constitute the
Company's statutory accounts for the years ended 31 December 2003 or 31
December 2002. The financial information for the year ended 31 December 2002 is
derived from the statutory accounts for that year which have been delivered to
the Registrar of Companies. The auditors reported on those accounts; their
report was unqualified and did not contain a statement under either Section 237
(2) or Section 237 (3) of the Companies Act 1985. The statutory accounts for
the year ended 31 December 2003 will be finalised on the basis of the financial
information presented by the directors in this preliminary announcement and
will be delivered to the Registrar of Companies following the Company's Annual
General Meeting.
The Group at a Glance (unaudited)
Quarter Ended Dec 31 Year Ended Dec 31
2003 2002 # 2003 2002 #
£m £m £m £m
From total ordinary
activities
953 882 Net revenues 3,713 3,454
8% 0% Net revenues growth 7% 3%
55.0% 52.7% Gross margin 53.3% 51.4%
249 205 EBITDA 768 659
26.1% 23.2% EBITDA margin 20.7% 19.1%
227 182 EBIT 679 577
23.8% 20.6% EBIT margin 18.3% 16.7%
224 178 Profit before tax 660 545
23.5% 20.2% PBT margin 17.8% 15.8%
167 140 Net Income 489 408
17.5% 15.9% Net Income margin 13.2% 11.8%
23.6 19.9 EPS 69.2 58.0
22.4 18.9 EPS, diluted 66.2 55.7
# Restated following the adoption of Amendment to Financial Reporting Standard
5 'Reporting the substance of transactions': Revenue recognition - see page 2.
Group profit and loss account
(unaudited)
Quarter Ended Dec 31 Year Ended Dec 31
2003 2002 # % change 2003 2002 # %
change
£m £m £m £m
953 882 8% Net revenues from continuing 3,713 3,441 8%
operations
- - Discontinued and de-consolidated - 13
operations
953 882 8% Total net revenues 3,713 3,454 7%
(429) (417) 3% Cost of sales (1,735) (1,678) 3%
524 465 13% Gross profit 1,978 1,776 11%
(297) (283) 5% Net operating expenses (1,299) (1,199) 8%
227 182 25% Operating profit from continuing 679 574 18%
operations
- 0 Discontinued and de-consolidated - 3
operations
227 182 25% Total operating profit 679 577 18%
- - Non-operating items - -
227 182 25% Profit on ordinary activities 679 577 18%
before interest
(3) (4) (25%) Net interest expense (19) (32) (41%)
224 178 26% Profit on ordinary activities 660 545 21%
before taxation
(57) (38) 50% Tax on profit on ordinary (171) (137) 25%
activities
167 140 19% Profit on ordinary activities 489 408 20%
after taxation
0 0 Attributable to equity minority 0 0
interests
167 140 19% Profit for the period 489 408 20%
(99) (91) 9% Ordinary Dividends (198) (181) 9%
68 49 39% Retained profit for the period 291 227 28%
Earnings per ordinary share
(pence):
23.6 19.9 19% On profit for the period 69.2 58.0 19%
22.4 18.9 19% On profit for the period, 66.2 55.7 19%
diluted
Average common shares
outstanding (millions):
708.3 705.6 Basic 706.9 704.4
760.0 757.3 Diluted 758.1 756.5
# Restated following the adoption of Amendment to Financial Reporting Standard
5 'Reporting the substance of transactions': Revenue recognition - see page 2.
Group balance sheet
As at December 31 (unaudited)
2003 2002
£m £m
Fixed assets:
Intangible assets 1,746 1,764
Tangible assets 502 525
2,248 2,289
Current assets:
Stocks 224 230
Debtors due within one year 480 489
Debtors due after more than one year 85 85
Investments 724 379
Cash at bank and in hand 59 40
1,572 1,223
Current liabilities:
Creditors due within one year:
Borrowings (172) (106)
Other (1,282) (1,210)
(1,454) (1,316)
Net current assets / (liabilities) 118 (93)
Total assets less current liabilities 2,366 2,196
Non-current liabilities:
Creditors due after more than one year:
Borrowings (127) (225)
Other (165) (163)
Convertible capital bonds (192) (193)
(484) (581)
Provisions for liabilities and charges (408) (407)
Equity minority interests (4) (7)
Net Assets 1,470 1,201
Capital and reserves:
Called up share capital (including non-equity capital 79 78
of £5m)
Share premium account 227 197
Capital Redemption Reserve 0 -
Merger reserve 142 142
Profit and loss account 1,022 784
Total shareholders' funds (including non-equity 1,470 1,201
shareholders' funds of £5m)
Group cash flow statement
For the year ended December 31 (unaudited)
Reconciliation of operating profit to operating cash flow
2003 2002
£m £m
Operating activities:
Operating profit 679 577
Non-cash items:
Depreciation and amortisation 89 82
Loss on sale of fixed assets 3 6
Decrease/(increase) in stocks 6 (18)
Decrease in debtors 16 60
Increase in creditors 93 66
Reorganisation and merger integration costs paid - (21)
Cash flow from operating activities 886 752
Cash Flow Statement
Cash flow from operating activities 886 752
Return on investments and servicing of finance (25) (30)
Taxation (146) (102)
Capital expenditure and financial investment
Purchase of intangible fixed assets (85) (6)
Purchase of tangible fixed assets (71) (93)
Disposal of tangible fixed assets 12 34
(144) (65)
Acquisitions and disposals
Acquisition of businesses (8) (47)
Equity dividends paid (189) (181)
Cash inflow before use of liquid resources and 374 327
financing
Management of liquid resources (348) (293)
Financing (10) (59)
Increase/(decrease) in cash in year 16 (25)
Reconciliation of net cash flow to movement in debt
Increase/(decrease) in cash in year 16 (25)
Cash outflow from decrease in debt 15 74
Cash outflow from increase in liquid resources 348 293
Changes in net debt resulting from cash flows 379 342
Conversion of convertible capital bonds 1
Exchange differences 17 20
Movement in net debt in year 397 362
Net debt at beginning of year (105) (467)
Net funds/(debt) at end of year 292 (105)
Reconciliation of operating cash flow to net cash flow from ordinary operations
Operating cash flow 886 773
(excluding reorganisation and merger integration costs
paid)
Return on investments and servicing of finance (25) (30)
Taxation (146) (102)
Capital expenditure (net, excluding intangible assets) (59) (59)
Net cash flow from ordinary operations 656 582
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 Dec 31 Year Ended Dec 31
2003 2002 # % change 2003 2002 # % change
£m £m Exch. rates £m £m Exch. rates
Actual Const. Actual Const.
Net revenues - by
geographical area
435 381 14% 7% Western Europe 1,733 1,502 15% 7%
274 275 0% 7% North America 1,018 1,043 (2%) 5%
50 38 32% 25% Latin America 166 167 (1%) 16%
108 106 2% (1%) Asia Pacific 436 401 9% 8%
86 82 5% 2% Rest of World 360 328 10% 9%
953 882 8% 6% 3,713 3,441 8% 7%
- - - - Discontinued and - 13 - -
de-consolidated
operations
953 882 8% 6% 3,713 3,454 7% 7%
Operating profit - by
geographical area
123 96 28% 21% Western Europe 408 337 21% 13%
75 63 19% 23% North America 186 179 4% 11%
4 3 33% 100% Latin America 1 (1) - -
15 15 0% (6%) Asia Pacific 50 35 43% 32%
8 7 14% 14% Rest of World 36 25 44% 50%
2 (2) - - Corporate (2) (1) - -
227 182 25% 23% 679 574 18% 16%
- 0 - - Discontinued and - 3 - -
de-consolidated
operations
227 182 25% 23% 679 577 18% 15%
% % Operating margin - by % %
geographical area
28.3% 25.2% Western Europe 23.5% 22.4%
27.4% 22.9% North America 18.3% 17.2%
8.0% 7.9% Latin America 0.6% (0.6%)
13.9% 14.2% Asia Pacific 11.5% 8.7%
9.3% 8.5% Rest of World 10.0% 7.6%
Corporate
23.8% 20.6% 18.3% 16.7%
Discontinued and
de-consolidated
operations
23.8% 20.6% 18.3% 16.7%
# Restated following the adoption of Amendment to Financial Reporting Standard
5 'Reporting the substance of transactions': Revenue recognition - see page 2.
Segmental Analysis (continued)
Quarter Ended Dec 31 Year Ended Dec 31
2003 2002 # % change 2003 2002 # % change
£m £m Exch. rates £m £m Exch. Rates
Actual Const. Actual Const.
Net revenues - by
product segment
891 816 9% 7% Household and Health & 3,519 3,245 8% 7%
Personal Care
62 66 (6%) 2% Food 194 196 (1%) 7%
953 882 8% 6% 3,713 3,441 8% 7%
- - - - Discontinued and - 13 - -
de-consolidated
operations
953 882 8% 6% 3,713 3,454 7% 7%
Operating profit - by product
segment
202 161 25% 22% Household and Health & 639 533 20% 16%
Personal Care
23 23 0% 5% Food 42 42 0% 8%
2 (2) - - Corporate (2) (1) - -
227 182 25% 23% 679 574 18% 16%
- 0 - - Discontinued and - 3 - -
de-consolidated
operations
227 182 25% 23% 679 577 18% 15%
% % Operating margin - by % %
product segment
22.7% 19.7% Household and Health & 18.2% 16.4%
Personal Care
37.1% 34.8% Food 21.6% 21.4%
- - Corporate - -
23.8% 20.6% 18.3% 16.7%
- - Discontinued and - -
de-consolidated
operations
23.8% 20.6% 18.3% 16.7%
Net revenues - Household and
Health & Personal Care
251 220 14% 9% Fabric Care 1,017 884 15% 11%
191 177 8% 8% Surface Care 748 738 1% 5%
139 129 8% 3% Dishwashing 535 480 11% 7%
146 139 5% 4% Home Care 540 523 3% 5%
128 111 15% 13% Health & Personal Care 539 453 19% 17%
855 776 10% 8% Core Business 3,379 3,078 10% 9%
36 40 (10%) (12%) Other Household 140 167 (16%) (16%)
891 816 9% 7% Net Revenues - 3,519 3,245 8% 7%
continuing operations
# Restated following the adoption of Amendment to Financial Reporting Standard
5 'Reporting the substance of transactions': Revenue recognition - see page 2.
Earnings per ordinary share
For the year ended December 31, (unaudited)
The reconciliation between profit for the year and the weighted average number
of shares used in the calculation of the diluted earnings per share is set out
below:
2003 2002
Profit Average Earnings Profit Average Earnings
for the number of per for number of per
year £m shares share the shares share
pence year £ pence
m
Profit attributable to 489 706,887,749 69.2 408 704,352,704 58.0
shareholders
Dilution for Executive 11,307,188 11,788,985
options outstanding and
Executive Restricted
Share Plan
Dilution for Employee 1,247,501 1,459,933
Sharesave Scheme options
outstanding
Dilution for convertible 13 38,655,773 13 38,929,275
capital bonds
outstanding*
On a diluted basis 502 758,098,211 66.2 421 756,530,987 55.7
* After the appropriate tax adjustment, the profit adjustments represent the
coupon on the convertible capital bonds. The earnings per share impact reflects
the effect of that profit and the assumption of the issue of shares on
conversion of the bonds.
Appendix 1
Illustrative Segmental Analysis (unaudited) - As previously reported
For illustrative and comparison purposes, analyses by geographical area and
product segment of net revenues and operating profit are set out below before
reflecting the adoption of the amendment to FRS 5 'Reporting the substance of
transactions': Revenue recognition. The figures for each geographic area show
the net revenues and profit made by companies located in that area.
Quarter Ended Dec 31 Year Ended Dec 31
2003 2002 % change 2003 2002 % change
£m £m Exch. rates £m £m Exch. rates
Actual Const. Actual Const.
Net revenues - by
geographical area
440 386 14% 6% Western Europe 1,749 1,513 16% 7%
284 287 (1%) 6% North America 1,080 1,109 (3%) 5%
50 38 32% 22% Latin America 166 167 (1%) 16%
108 106 2% (1%) Asia Pacific 436 401 9% 8%
86 82 5% 2% Rest of World 360 328 10% 9%
968 899 8% 6% 3,791 3,518 8% 7%
- - - - Discontinued and - 13 - -
de-consolidated
operations
968 899 8% 6% 3,791 3,531 7% 7%
Net revenues - by
product segment
905 831 9% 6% Household and Health & 3,589 3,314 8% 7%
Personal Care
63 68 (7%) 0% Food 202 204 (1%) 7%
968 899 8% 6% 3,791 3,518 8% 7%
- - - - Discontinued and - 13 - -
de-consolidated
operations
968 899 8% 6% 3,791 3,531 7% 7%
Net revenues - Household and
Health & Personal Care
255 223 14% 9% Fabric Care 1,031 895 15% 11%
197 184 7% 7% Surface Care 777 769 1% 5%
141 131 8% 3% Dishwashing 546 490 11% 7%
148 142 4% 3% Home Care 553 537 3% 5%
128 111 15% 12% Health & Personal Care 541 455 19% 17%
869 791 10% 7% Core Business 3,448 3,146 10% 9%
36 40 (10%) (14%) Other Household 141 168 (16%) (16%)
905 831 9% 6% Net Revenues - 3,589 3,314 8% 7%
continuing operations
Appendix 2
Quarterly Results for 2003 Restated for Implementation of FRS5 Note G
2003 Restated - new basis
Q1 Q2 Q3 Q4
Net revenues - by geographical area £m £m £m £m
Western Europe 405 449 444 435
North America 232 242 270 274
Latin America 32 41 43 50
Asia Pacific 98 116 114 108
Rest Of World 81 95 98 86
Total 848 943 969 953
Operating profit - by geographical area
Western Europe 80 104 101 123
North America 29 29 53 75
Latin America (3) (1) 1 4
Asia Pacific 8 14 13 15
Rest Of World 6 11 11 8
Corporate (3) 6 (7) 2
Total 117 163 172 227
Operating margin - by geographical area
Western Europe 19.8% 23.2% 22.7% 28.3%
North America 12.5% 12.0% 19.6% 27.4%
Latin America (9.4%) (2.4%) 2.3% 8.0%
Asia Pacific 8.2% 12.1% 11.4% 13.9%
Rest Of World 7.4% 11.6% 11.2% 9.3%
Corporate - - - -
Total 13.8% 17.3% 17.8% 23.8%
Net revenues - by product segment
Household and Health & Personal Care 813 890 925 891
Food 35 53 44 62
848 943 969 953
Operating profit - by product segment
Household and Health & Personal Care 119 148 170 202
Food 1 9 9 23
Corporate (3) 6 (7) 2
117 163 172 227
Operating margin - by product segment
Household and Health & Personal Care 14.6% 16.6% 18.4% 22.7%
Food 2.9% 17.0% 20.5% 37.1%
13.8% 17.3% 17.8% 23.8%
Net Revenues - Household and Health &
Personal Care
Fabric Care 228 261 277 251
Surface Care 178 180 199 191
Dishwashing 137 128 131 139
Home Care 124 125 145 146
Health & Personal Care 117 155 139 128
Core Business 784 849 891 855
Other Household 29 41 34 36
Net Revenues - continuing operations 813 890 925 891
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