1st Quarter Results

RECKITT BENCKISER GROUP PLC - 1st Quarter Results

PR Newswire

London, April 19

* Like-for-like ("LFL") growth excludes the impact of changes in exchangerates, acquisitions, disposals and discontinued operations.

** Scholl footwear is now included within ENA. It was previously includedwithin RUMEA. Net revenue values and growth rates have been restated /calculated based on this reclassification.

Reckitt Benckiser, global Health, Hygiene and Home consumer products group,reports the following results highlights:

Highlights: Q1 (at constant rates)

Commenting on these results, Rakesh Kapoor, Chief Executive Officer, said:

"We are pleased with a strong start to the year, with our Health and Hygienebrands leading RB's growth across all geographies. Growth was driven from acombination of innovations, increased Brand Equity Investments and better inmarket executions. Mucinex and Strepsils have done particularly well, benefittingfrom a higher incidence of flu in the US and Cold, Flu and Sinus innovations.Nurofen and Durex also had a strong performance. In Hygiene, Dettol continuesto grow very strongly in Emerging Market Areas through innovation and categoryexpansion, and Lysol is performing well in the US. The Schiff integration isprogressing well and our revenue growth is well ahead of the US VMS market.

On Suboxone, our patient-preferred sublingual film in the US increased its marketshare to 69%. The generic version of tablets became available during March, andtheir early impact is in line with expectations.

We expect continued challenging market conditions but nonetheless we remainconfident that we can achieve our full year targets of +5-6% total net revenuegrowth 1(ex RBP)while maintaining operating margins. 2"

1 ex RBP, at constant exchange rates

2 ex RBP, adjusted to exclude the impact of exceptional items

* Reflects the acquisitions of Schiff and other minor announced acquisitions,withdrawal from Propack (Private Label) and disposal / discontinuance of anumber of minor businesses. There is no impact in Q1 from the BMS collaborationagreement as the regulatory approvals are only expected in Q2.

** Scholl footwear is now included within ENA. It was previously includedwithin RUMEA. Net revenue values and growth rates have been restated /calculated based on this reclassification.

ENA 56% of core net revenue

Q1 net revenue increased to £1,260m with LFL growth of +3% and total growth of+4% (constant exchange).

Growth was driven by a strong performance in the US, led by Health brands - inparticular Mucinex Fast Max (liquids and capsules) and Sinus-Max innovations.Other Health powerbrands also performed well in the quarter - Strepsils,Nurofen and Durex, with early encouraging results from our recent innovations.In Hygiene Lysol / Dettol and Finish performed well, and in Home, Air Wick grewstrongly.

These were supported by increased TV and digital Brand Equity Investment (BEI)initiatives, and stronger in market executions as we leveraged increased coldand flu search volumes, created by the higher incidences of cold and flu in theUS.

We have undertaken a number of specific actions to streamline our SchollFootwear business in Europe. There is a short term impact of this in both ENAand portfolio brands.

The Schiff integration in the US is progressing well and is in line withexpectations. LFL revenue growth is strong and is well in excess of VMS marketgrowth. MegaRed in particular is achieving excellent growth due to acombination of new product roll out and increased BEI investment to drivepenetration.

LAPAC 28% of core net revenue

Q1 2013 net revenue increased to £626m with LFL growth of +11% and total growthof +12% (constant). Growth was driven by a combination of powerbrand rollouts,innovation, distribution and penetration expansion, particularly in the keygrowth markets of India, Brazil and China. In Health, Durex and Gavisconperformed well and Vanish and Air Wick drove the growth in Home. The strongperformance in Hygiene was driven by Dettol. Mortein also performed well in ourlarger "pest" markets of India and Australia.

RUMEA 16% of core net revenue

Q1 2013 net revenue increased to £354m, with LFL growth of +7% and total growthof +6% (constant). On a category basis, Health was driven by strongperformances in Durex and Strepsils. Hygiene performed particularly well behindFinish, Dettol, and Veet.

As signaled with our full year 2012 numbers, RUMEA growth is somewhat impactedby the up scheduling of certain Nurofen products in Russia and some operationaland socio-political challenges in certain markets. However, we are pleased withour business performance in the Area, particularly the continued strong resultsfrom Russia.

Food

Food returned to growth with constant and LFL growth of +3%. This was driven byinnovations in the USA, and continued growth in international markets.

Pharmaceuticals

Q1 2013 net revenue was £201m, an increase of +19% (constant). The underlyingvolume growth in prescriptions in the US continues to be strong and in linewith recent market trends. As signaled with our 2012 full year numbers, the Q12013 reported growth was increased by the sell-in to drug wholesalers of new4mg and 12mg film dosages, and the tail of the high Medicaid accruals in Q12012. We saw further strong conversion from tablets to film as we voluntarilydiscontinued the sale of tablets in the US from 18 March. In Europe, we wereimpacted by government imposed price reductions in a number of markets.

Generic tablets were launched into the US market late in the quarter followingthe approval of two generics manufacturers by the FDA in February. Since theirlaunch, generic Suboxone tablets have gained a 10% mg volume market share* ofthe buprenorphine market, taken mainly from our tablet business as we expected.We continue to believe that increased price pressure will lead to some filmloss over time.

*source: Healthcare Analytics Retail Phast Weekly Data as at 5 April 2013

* Reflects the acquisitions of Schiff and other minor announced acquisitions,withdrawal from Propack (Private Label) and disposal / discontinuance of anumber of minor businesses. There is no impact in Q1 from the BMS collaborationagreement as the regulatory approvals are only expected in Q2.

Category review is at constant exchange rates.

Health 27% of core net revenue

Net revenue increased to £597m, with LFL growth of +13% and total growth of+29%. Growth was broad based across all powerbrands with particularly strongperformances from the flu related brands of Mucinex, Strepsils and certainproducts of Nurofen. This was due to higher incidences of cold and flu in theUS supported by increased TV and digital BEI initiatives as we leveragedincreased cold & flu search volumes. Additionally we have seen encouragingearly successes of recently launched innovations like Mucinex Sinus-Max,Strepsils Children 6+ lozenges, and Nurofen next generation heat patches. Otherpowerbrands also performed well, with Durex in particular benefitting fromfurther penetration in China, and the roll out of our Real Feel polyisoprenecondoms in a number of markets.

Hygiene 46% of core net revenue

Net revenue increased to £1,025m with LFL growth of +9% and total growth of+7%. This was largely driven by strong growth in Dettol / Lysol across bothemerging markets and ENA, underpinned by continued success of our basedisinfectants and also category extensions into kitchen gels, and soap and bodywashes in certain markets. Growth in Finish came from Quantum and All-in-1,which performed well, particularly in the US, Germany and Australia. Morteindelivered good growth in India and Australia aided by a good season.

Home 22% of core net revenue

Net revenue increased to £488m with LFL growth of +2% and total growth of +1%.Air Wick produced a strong performance behind electricals and candles. Vanishsaw good growth in a number of our emerging market countries, particularlyBrazil, whilst Europe continued to see share stabilization, albeit in adifficult consumer environment.

Portfolio Brands 5% of core net revenue

Net revenue decreased to £130m with LFL growth of -22% and total growth of-38%. The significant decline in LFL growth is due in large part to plannedactions in the predominantly Southern European Footwear business notedearlier. We expect to see some further restructuring within Footwear goingforward, but expect the impact to be more modest than it has been in Q1. Wealso saw further weakness in Laundry Detergents and Fabric Softeners, inSouthern Europe, driven primarily by more competitive market conditions. On atotal basis we saw the impact of our withdrawal from our Private Labelbusiness.

There has been no material change to the financial position of the companysince the published 2012 Annual Report and Accounts.

The Q1 2013 results position the Group well to achieve its FY 2013 financialtargets despite continued challenging market conditions.

For the Group excluding RBP, the target is for total net revenue growth of+5-6% at constant rates. We also expect to maintain operating margins* (ex RBP) as weinvest behind brand equity building initiatives.

*Adjusted to exclude the impact of exceptional items

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Cautionary note concerning forward-looking statements

This document contains statements with respect to the financial condition,results of operations and business of Reckitt Benckiser and certain of theplans and objectives of the Group with respect to these items. Theseforward-looking statements are made pursuant to the "Safe Harbor" provisions ofthe United States Private Securities Litigation Reform Act of 1995. Inparticular, all statements that express forecasts, expectations and projectionswith respect to future matters, including trends in results of operations,margins, growth rates, overall market trends, the impact of interest orexchange rates, the availability of financing to the Company, anticipated costsavings or synergies and the completion of strategic transactions areforward-looking statements. By their nature, forward-looking statements involverisk and uncertainty because they relate to events and depend on circumstancesthat will occur in the future. There are a number of factors discussed in thisreport, that could cause actual results and developments to differ materiallyfrom those expressed or implied by these forward-looking statements, includingmany factors outside Reckitt Benckiser's control. Past performance cannot berelied upon as a guide to future performance.

Basis of Presentation and Exceptional Items

Where appropriate, the term "like-for-like" (LFL) describes the performance ofthe business on a comparable basis, excluding the impact of acquisitions,disposals, discontinued operations and foreign exchange.

Where appropriate, the term "core business" represents the ENA (Europe andNorth America), RUMEA (Russia / CIS, Africa, North Africa, Middle East andTurkey) and LAPAC (Latin America, North Asia, South Asia and ANZ) geographicareas, and excludes RBP and Food.