Results at a glance Q2* % change % change HY % change % change
actual constant £m actual constant
exchange exchange exchange exchange
Net revenue 2,312 -1 +3 4,669 +1 +4
- Like-for-like growth +4 +4
Operating profit - reported 1,072 +2 +4
Operating profit - adjusted 1,120 +2 +4
Net income - reported 779 +3 +5
Net income - adjusted 818 +2 +4
EPS (diluted) - reported 105.8p +3
EPS (diluted) - adjusted 111.1p +2
Highlights: Half Year (HY)
- LFL growth +4% (+4% ex-RBP) driven by strong Emerging Market (EM) growth.
- Q2 LFL growth +4% (+4% ex RBP). Similar trends to Q1.
- Gross margin -60bps to 56.3%: adjusted operating margin +10bps to 24.0%.
- Increased brand equity investment (BEI), ex RBP, of £40m* (+60bps) and within this media +40bps.
- Adjusted net income +2% (+4% constant): adjusted diluted EPS of 111.1p (+2%).
- Net working capital of minus £752m, reflecting a £51m improvement versus year end 2011.
- Net debt of £1,846m (31 December 2011: £1,795m), with strong free cash flow generation offset by final 2011 dividend payment and share repurchases.
- The Board declares a +2% increase in the interim dividend to 56p per share.
* at constant rates
Commenting on these results, Rakesh Kapoor, Chief Executive Officer, said:
"Six months into our Purpose driven strategy, Reckitt Benckiser has delivered revenue growth well ahead of our market. On a LFL basis (ex RBP), Net revenue growth of 4% was driven by continued excellent performance from Emerging Market Areas and Hygiene Brands such as Dettol, Lysol and Finish. While the consumer and competitive environment in Europe and North America remains challenging, we are doing the right things for the long term by increasing our Brand Equity Investment.
Our H1 margins are in line with expectations with higher input costs and increased investment being partially offset by cost savings programmes. The new organisation structure is fully in place and we are seeing early benefits of increased operational focus: speed, scale and consistency of our execution.
RBP continues to make very good progress with the Suboxone sublingual film now at 56% market volume share.
These results and our exciting innovations for H2, backed by further increased Brand Equity Investment underpins our confidence in our FY 2012 target of 200bps above our market growth rate of 1-2%."
