Reckitt Benckiser PLC
9 April 2001
9 April 2001
Reckitt Benckiser Conference Call
Underlying Q1 Net Revenue Growth at 7% to 8% Indicated
Full Year Targets Confirmed with Increasing Confidence
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 hours London time. The purpose of the call is to
update the market on progress of the business in the first quarter of 2001 and
to confirm the targets for the full year communicated with the Company's final
results on 28 February.
Commenting on the position, Bart Becht, Chief Executive Officer, said
'Reckitt Benckiser made a strong start to 2001 building on the momentum
established in 2000 behind the Company's new growth strategy. The success of
an increasing number of new product launches, the significant improvements in
in-market execution in major markets behind the higher marketing investment,
and the continuing good performance in developing markets all contributed to
the broad-based growth in Q1. This good performance gives us increasing
confidence in our targets for the full year.'
Update on First Quarter
The First Quarter saw underlying growth of the business continuing.
Specifically, Q1 net revenue growth is expected to be in the range of 7% to 8%
at constant exchange on continuing operations (2000 base £726m).
These Q1 results will be affected, in comparison with 2000, by discontinued
businesses and by exchange rate movements. Discontinued business will reduce
reported net revenue growth by around 3 percentage points, while exchange
rates will increase it by around 4 percentage points.
As a result, reported net revenue growth for total operations at actual
exchange is expected to be up to 9% in Q1 on the base of £748m reported in
2000.
Profitability has been favorably affected by strong top line growth, continued
steady improvement in gross margins, and further delivery of the promised
merger savings partially offset by higher marketing investment. As a result,
the Company looks for Q1 normalized net income to grow somewhat faster than
the full year target growth of 18% at constant exchange on continuing
operations (2000 base £46m).
The recently announced acquisitions in Indonesia (Tiga Roda) and in Korea
(Oxy) have now been completed and will be consolidated beginning with Q2 2001.
Outlook for Full Year
Despite the strong Q1 numbers, Reckitt Benckiser today confirmed its
previously communicated full year targets although it indicates that its 4%
full year growth target for net revenues on continuing operations at constant
exchange may prove somewhat conservative. The target for net income remains
18% on continuing operations at constant exchange, and for net working capital
the target remains a reduction of £50m.
Confidence in the full year outturn is also supported by a growing list of new
initiatives for 2001. The Company today announced a number of new initiatives
for Q2
* Roll out of Airwick air care, Mortein pest control and Mr. Sheen
furniture care in most of Eastern Europe
* Roll-out of Mortein pest control into Mexico
* Launch of furniture wipes and glass cleaning wipes in Europe and North
America
* Launch of Lysol disinfectant spray and trigger spray fabric refresher in
North America
The Q1 results will be announced on 10 May 2001 to coincide with the Reckitt
Benckiser Annual General Meeting.
For Further Information
Tom Corran telephone +44 1753 446 548
Senior Vice President, Investor Relations & Corporate Communications
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