Strong Start to 2004

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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