Reckitt Benckiser PLC
16 July 2001
16 July 2001
Good Q2 for Reckitt Benckiser
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 1400hrs London time. The purpose of the call is to
update the market on progress of the business in the second quarter and first
half of 2001.
Commenting on the position, Bart Becht said
'Q2 was a good quarter for Reckitt Benckiser across all categories and
geographies. The Company's growth strategy, the success of many of its new
product launches, the increased investment in its brands and better in-market
execution are all contributing to the good growth. Results in the first half
were expected to be ahead of the full year target growth rates but the
strength of our performance so far means that we are somewhat ahead of where
we expected to be. We will therefore revisit the full year targets at the time
of the half-year results in August.'
Update on Q2
The second quarter saw further strong underlying growth with net revenue
growth from continuing operations expected to be in the range of 5% to 6% at
constant exchange (2000 base £785m).
Total reported net revenue growth for the quarter also includes the first
contribution from two recent acquisitions, which are performing in line with
expectations, as well as the effect of previous disposals treated as
discontinued businesses. The effect of these combined is to increase net
revenue growth by less than 1%. Exchange rates on translation of overseas
results into sterling will add over 2% to reported growth.
As a result, total reported net revenue growth for total operations at actual
exchange is expected to be in the range of 8% to 9% for the quarter on the
base of £807m reported in 2000.
Profitability continues to benefit from this strong top line growth and
delivery of merger savings, offset by higher marketing investment.
Consequently the Company looks for Q2 normalized net income growth to be
around 18% for the total company at actual rates (2000 base of £71m), and
comfortably above the target rate for the full year of 18% on a continuing
operations basis at constant exchange.
Half Year
This will bring net revenue growth from continuing operations for the first
half of the year to a range of 6% to 7% at constant exchange.
Total reported net revenue growth for the half year is expected to be around
9% on a base of £1,555m reported in 2000. This includes the effect of the new
acquisitions offset by the discontinued businesses which combined reduce the
rate of growth by less than 1% while exchange will increase the reported
growth rate by 3%.
Normalized net income growth in the first half is expected to be above 20% for
the total company at actual rates (2000 base of £116m) and comfortably above
the target rate for the full year of 18% on a continuing operations basis at
constant exchange.
Outlook for Full Year
In the light of these strong results, Reckitt Benckiser is reviewing its
previously communicated targets of 4% net revenue growth and 18% net income
growth (both at constant exchange on continuing operations). The Company has
already indicated that it will likely exceed the net revenue target for the
full year. The outcome of the review will be communicated with the half year
results.
For Further Information
Tom Corran telephone +44 1753 446 548
SVP Investor Relations & Corporate Communications
Lydia Wilhelm telephone +44 1753 446 550
Investor Relations Manager
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