Q1 SUSTAINS STRONG GROWTH MOMENTUM
15 April 2002
Q1 SUSTAINS STRONG GROWTH MOMENTUM
On Track to Deliver Full Year Targets
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 progress of the business in the first quarter of 2002.
Commenting on the position, Bart Becht said
'Reckitt Benckiser made a strong start to the year. While emerging markets
continued to show little momentum, this was more than offset by very good
growth in Western Europe and North America behind new product initiatives. Net,
we are on track to deliver on our full year targets of net revenue growth of 4%
to 6% and net income growth of 12% to 15%, both at constant exchange.'
Update on Q1.
The first quarter saw further strong underlying growth for the business,
continuing the trends seen in the second half of 2001. For the total Company,
net revenue growth at constant exchange in the first quarter is expected to be
around 7% (2001 base £817m). Of this 7% growth, roughly 2.5% points will come
from the 2001 acquisitions in Korea and Indonesia that were not included in Q1
2001. Exchange rates have been adverse in Q1, reducing the 7% constant exchange
rate growth in net revenues by 2.5% points to below 5% at actual exchange.
Profitability benefited from strong improvement in gross margins, driven by
product mix and by savings from both Squeeze 2-50 and X-trim projects together
with some favorable raw and packaging material prices. This was somewhat offset
by an increase in marketing support for new initiatives. Cash generation was
strong. Lower interest charges and a lower tax rate both contributed to net
income growth. Consequently, the Company looks for the Q1 normalized net income
growth rate to be materially ahead of the full year target of 12% to 15% (2001
base £58m).
The full results for Q1 2002 will be released on 7th May 2002.
Note: FRS 19 Restatement.
With effect from 1 January 2002, Reckitt Benckiser has adopted Financial
Reporting Standard 19 'Accounting for Deferred Tax'. Prior year comparatives
have been restated to comply with FRS 19. The effect of this restatement is to
reduce profit after tax for Q1 2001 by £4m from £58m to £54m. Earnings per
share have been restated from 8.2p to 7.7p basic, and on a fully diluted basis
from 8.1p to 7.6p. Note that these restatements are accounting adjustments and
do not affect real cash flow. A full schedule of restatements for the four
quarters of 2001 for FRS 19 will be attached to the Q1 results press release on
May 7th.
For Further Information
Tom Corran Reckitt Benckiser telephone +44 (0) 1753 217 800
SVP investor relations & corporate communications
Lydia Wilhelm Reckitt Benckiser telephone +44 (0) 1753 217 800
Investor Relations Manager
Tim Spratt Financial Dynamics telephone +44 (0) 207 269 7000
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