SHAREHOLDERS’ REVIEW AND SUMMARY FINANCIAL STATEMENT 2005
ENTERING NEW SEGMENTS, EXPANDING OUR BRANDS
INTO NEW GEOGRAPHIES, ACQUIRING NEW CATEGORIES
STRONG FINANCIAL RESULTS • DIVIDEND UP 15% • BHI ACQUISITION – NEW PLATFORM FOR GROWTH
CHIEF EXECUTIVE’S REVIEW
ENTERING NEW SEGMENTS,
EXTENDING INTO NEW
GEOGRAPHIES AND BUILDING
NEW GROWTH PLATFORMS
Over The Counter (OTC) Healthcare is a market with good
growth and inherently attractive margins. We expect this
growth to be sustained by the trends of increasing self
medication, ageing populations and national health systems’
growing need to pass the cost of minor ailments to
consumers. Margins are attractive as brand loyalty is
particularly strong in OTC Healthcare. Consequently, growing
our healthcare business has the potential to enhance Reckitt
Benckiser’s overall operating margins, albeit this will take time
due to the regulatory hurdles in expanding this business rapidly.
BHI owns three particularly powerful multi-national brands:
Nurofen, Europe’s No.2 analgesic, Strepsils, world No.1
(outside the US) in sore throat and Clearasil, world No.1 in
anti-acne. With Lemsip and Gaviscon we’ve already shown
we can grow strong brands like these in healthcare –
stimulating growth by choosing the right categories and
segments, developing innovative products that meet real
consumer needs, and expanding distribution into new
Combining our healthcare business with BHI’s will create
a platform for growth for RB’s Health & Personal Care both
organically as well as through further acquisition.
We paid a full price for BHI, reflecting its quality and
growth record. But we believe this price is justified by
the anticipated cost synergies of £75m and opportunities
to reduce working capital by £130m.
VISION AND STRATEGY
Our vision is continuously to deliver better products to
consumers that improve their lives at crucial moments.
Our strategy is equally simple. Let me remind you of
its key elements.
DELIVER ABOVE INDUSTRY AVERAGE GROWTH
IN NET REVENUES.
We do this in five ways.
Focus investment and innovation on ‘the right brands
in the right categories’. That means categories with
Reckitt Benckiser continued to expand its business with 2005 ACHIEVEMENTS strong growth potential like Automatic Dishwashing and
good results in 2005. We further strengthened our brand It is satisfying to deliver good financial results for shareholders Fabric Treatment, where we can drive growth behind world
and market positions behind successful new products, but one year of results is not the only measure of success. leading brands such as Finish and Vanish. Most of our
entered new segments and extended our portfolio into I’m equally excited about the progress we made in effort goes behind the 18 flagship powerbrands that will
new geographic markets. We also substantially strengthened strengthening our business for the long-term – building by the end of 2006 represent 60% of our net revenues.
our core business by agreeing to acquire Boots Healthcare our brands, market positions and geographic spread. Reinforce our brands with an exceptional rate of product
International, creating a new platform for profitable growth. innovation. Offering consumers ever-better solutions
New product launches
2005 RESULTS We launched a number of even better solutions for our stimulates them to purchase, helping to grow both the
I think the business performance, in the face of sharply consumers. Vanish Dual Power harnessed new technology category and our market share. Almost 40% of our net
higher prices for materials and energy, emphasises the with its dual chamber bottle to provide powerful, instant revenues come from products launched in the past three years.
resilience of our business: it was a major achievement stain removal. We upgraded Vanish Oxi Action Max to
Back our brands with consistent marketing
to sustain margin growth by relentlessly reducing costs. tackle even tough dried-on stains. Finish 4in1 brought still
investment. Our media spend rate, at around 12% of net
more convenience to Automatic Dishwashing, combining
revenues, is at the top of the industry. And we are now
Net revenues grew 8% (6% at constant exchange rates) to detergent, rinse aid, salt and glass protection in a single
complementing media investment with more direct
£4,179m. Operating profit increased 12% to £840m. Despite tablet. In North America we launched Electrasol 3in1 with
interaction with consumers through in-store demonstrations,
the significant increases in input costs, gross margins expanded Jet Dry Action. Air Wick Freshmatic allowed users to
sampling programmes and point-of-sale communication.
by 10 basis points to 54.9%. Thanks to tight control of fixed choose the frequency of air freshener spray. Finally, we took
costs, we achieved an 80 basis point increase in operating world leadership in multi-purpose cleaners by rolling-out Build our major brands by rolling them out into new
margins to 20.1%. Net income grew 16% to £669m, helped Bang globally. Launched in Europe as Cillit Bang and beyond geographies. Vanish (now in 48 countries) and, more
by higher interest received and non-recurring tax credits. Europe as Easy-Off Bang, it is now sold in 68 countries recently, Bang (now in 68) demonstrate the scope for
and makes a powerful new platform on which to build. doing this. Few of our major brands are yet present in all
We continue to strengthen our financial position. Dividends
territories, and we continue to roll them out as market
for the year increased 15% to 39p, and share buy backs BHI – an excellent add-on acquisition
totalled £300m. Even after returning over £550m of In October we announced agreement to acquire Boots
cash to shareholders in these ways, net funds increased Healthcare International (BHI) for £1,926m. We have been Finally, leverage our financial strength to enhance
by £255m to £887m. seeking suitable add-on acquisitions for our core business long-term growth by making add-on acquisitions that
and BHI fits our criteria exactly. strengthen our core business.
Reckitt Benckiser Shareholders’ Review 2005
CONVERT GROWTH INTO EVEN MORE ATTRACTIVE 2005 was another year of very good progress in challenging
PROFIT AND CASH FLOW THROUGH CONTINUING circumstances. The results again exceeded targets, allowing
MARGIN EXPANSION AND CASH CONVERSION. us to deliver strong returns to shareholders.
Most importantly, we expand margins through intensive STRATEGY
work on cost optimisation – in goods and services, and in The Company’s strategy, set out in the Chief Executive’s
fixed costs. We find exciting rewards in the most review, remains unchanged. During the year the Board
unglamorous places: using less packaging, standardising approved a successful offer for Boots Healthcare
product formulas, renegotiating supply contracts, simplifying International (BHI), advancing the strategy of becoming
processes. Margin expansion fuels the business, funding a major player in Health & Personal Care.
marketing investment and driving profit growth. In 2000,
RETURNING CASH TO SHAREHOLDERS
our operating margin was 14.4%. It is now over 20%,
The Company has continued to return cash to shareholders
achieving our target for 2006 a year early.
through progressive dividends and share buy backs. The
I like to tell my colleagues that I cannot invest profit, directors propose a total dividend for the year of 39p, an
I can only invest cash. That is why we focus relentlessly overall increase of 15%. In addition we met our commitment
on collecting cash – which allowed us to return over to buy back £300m of shares during the year. The Company
£550m to shareholders last year while making the £1,926m has consistently strengthened its balance sheet over recent
BHI bid on the strength of our own balance sheet. years. Following the BHI acquisition it will have proforma net
borrowings of over £1 billion but will still have the financial
These are the principles of our strategy. In the following
strength to continue share buy backs. We are targeting £300m
pages you will see examples of how we put it into practice
of buy backs in 2006, and dividend growth in line with earnings.
to deliver results for shareholders.
MANAGEMENT AND COMPENSATION
OUR PEOPLE AND CULTURE
The strength of the management team is evident from the
Our strategy will only work if we have the right people
Company’s sustained performance. There were no major
working together within the right corporate culture. Our
changes in the team over the year. The Board continues to
people consistently achieve remarkable things through their
review remuneration policy to ensure that it is appropriate
passion for the business and determination to succeed.
in a competitive international market and that it incentivises
I thank them for their tremendous contribution.
managers to generate quality returns for shareholders.
Our success does not depend on a few outstanding people, We believe it is an important contributor to the continuing
but on many good people working effectively together success of the business. Some minor changes, disclosed
in a culture that shares a hunger for success, celebrates in the Remuneration Report, are being made to bring
achievement, collaborates in powerful teams and takes it into line with best practice, for which we are seeking
intelligent risks together on behalf of the business. Internal shareholder endorsement at the AGM.
politics waste time and dissipate effort. We aim to unite
ANNUAL GENERAL MEETING
behind shared strategies to make a winning business.
The Board strongly recommends that shareholders support
Our remuneration system is a key tool in driving culture, the resolutions at the AGM on 4 May 2006, endorsing the
behaviour and performance. It is designed to reward policies that have brought the Company continuing success.
success. We make no apology for paying well for excellent
performance, nor for being unsympathetic to mediocrity.
The Board reviewed various aspects of the business during
Reckitt Benckiser people like to work for a responsible company 2005 – in particular corporate governance, corporate
– one whose products are a force for good in society and responsibility and sustainability, and reputational risk
which helps to improve lives through wealth creation and especially in relation to product and manufacturing risks.
community involvement. Our sustainability commitment is to The Board regularly reviews business performance and
operate ever more effectively today with as little environmental, holds specific reviews with operational management
social and ethical cost to the future as possible. on area and functional performance.
We are making good progress in addressing our environmental In 2005 the Board was strengthened with the appointment
and social impacts. For example, our new Automatic Dishwashing of Graham Mackay, Chief Executive of SABMiller, and
initiative, detailed in this report, shows how we can play a major Gerard Murphy, Chief Executive of Kingfisher. Graham
role in making a positive impact on climate change. I hope Mackay joined the Remuneration Committee and Gerard
you will find time to read more in our Sustainability Report. Murphy joined the Audit Committee. Ken Hydon assumed
the role of senior Non-Executive Director. George Greener
will not be standing for re-election at the AGM. I thank
Our brands and market positions are stronger than they
him for his significant contribution throughout his ten
were last year. They benefit from a consistent stream of
years as a director, latterly as senior Non-Executive
investment and continuous consumer-relevant innovation.
Director and a member of the Remuneration Committee.
Our financial strength continues to grow and the BHI
Ana Maria Llopis and Hans van der Wielen retired at the
acquisition will provide a new platform for us to develop
2005 AGM; I thank them both for their contribution.
at inherently higher margins. Our people are even more
experienced and just as passionate. Reckitt Benckiser THANKS
is well placed to continue living its vision. I thank Bart Becht and his excellent team for another year
of strong results and good strategic progress. I would also
like to thank the Board for their important contribution.
Bart Becht Chief Executive Officer Adrian Bellamy Chairman
Reckitt Benckiser Shareholders’ Review 2005
AT A GLANCE WE ARE PASSIONATE ABOUT
DELIVERING BETTER SOLUTIONS IN
HOUSEHOLD CLEANING AND HEALTH &
OUR BRANDS, PERSONAL CARE TO CUSTOMERS AND
CONSUMERS, WHEREVER THEY MAY BE,
FOR THE ULTIMATE PURPOSE OF
OUR BUSINESS CREATING SHAREHOLDER VALUE.
EUROPE NORTH AMERICA AND AUSTRALIA DEVELOPING MARKETS
0000 0000 0000
REVENUE GROWTH* OPERATING PROFIT REVENUE GROWTH* OPERATING PROFIT REVENUE GROWTH* OPERATING PROFIT
4% £502m 5% £270m 12% £68m
Growth came from key recent product introductions. In Fabric Care, Spray ‘n Wash Dual Power Fabric There was strong growth in all categories. In Fabric
In Fabric Treatment, growth was due to the success of Treatment and Resolve Dual Power carpet cleaner grew Care, growth came following the roll-out of Vanish
Vanish with Vanish Oxi Action Max and Vanish Dual sales. In Surface Care increases came from growth for Oxi Action Fabric Treatment products. In Surface Care,
Power. In Surface Care, growth came from Cillit Bang. Lysol Disinfectant Spray, and the launch of Easy-Off increases came from the success of Easy-Off Bang. Pest
In Dishwashing, growth was due to Finish/Calgonit Bam. In Dishwashing increases came due to the Control grew strongly with the launch of Mortein Power
4in1. Home Care increased due to the successful success of Electrasol with Jet Dry Action. In Home Booster coils. Health & Personal Care grew due to the
launch of Air Wick Freshmatic. Health & Personal Care Care, Air Care grew following the launch of Air Wick continuing roll-out of Veet in new markets and strong
saw strong growth for the Health Care portfolio due Freshmatic, and in Health & Personal Care, Veet growth for the Dettol range of personal care products.
to the roll-out of Gaviscon in Europe. depilatories and prescription drug Suboxone were the
principal contributors to growth. Food increased net
OPERATING COUNTRIES Argentina, Bangladesh, Brazil, Chile, China, Colombia,
revenues due to the launch of Cattleman’s BBQ Sauce
Austria, Belgium, Bulgaria, Croatia, Czech Republic, Costa Rica, Egypt, Hong Kong, India, Indonesia, Japan,
in retail and to continued growth for French’s yellow
Denmark, France, Germany, Greece, Hungary, Ireland, Kenya, Korea, Malaysia, Mexico, Nigeria, Pakistan,
mustard and gains for Frank’s Red Hot Sauce.
Israel, Italy, Latvia, Netherlands, Poland, Portugal, Philippines, Singapore, South Africa, Sri Lanka, Taiwan,
Romania, Russia, Slovakia, Slovenia, Spain, OPERATING COUNTRIES Thailand, United Arab Emirates, Uruguay, Venezuela
Switzerland, Turkey, UK and Ukraine. Australia, Canada, New Zealand and USA. and Zambia.
*at constant exchange rate *at constant exchange rate *at constant exchange rate
COMPARISONS BY REGIONS GROUP FINANCIAL HIGHLIGHTS
2005 2004 change
£M £M %
Net revenues 4,179 3,871 8
Operating profit 840 749 12
Profit before tax 876 758 16
Profit after tax 669 577 16
Basic earnings per share 92.0p 80.7p 14
Diluted earnings per share 90.0p 77.1p 17
Declared dividend per share 39.0p 34.0p 15
Reckitt Benckiser Shareholders’ Review 2005
OUR GLOBAL BRANDS
HEALTH & PERSONAL CARE
16% 27% 21% 14% 15%
OF NET REVENUES OF NET REVENUES OF NET REVENUES OF NET REVENUES OF NET CARE
HEALTH & PERSONAL CARE FABRIC CARE SURFACE CARE DISHWASHING HOME CARE
Net revenue £662m Net revenue £1,113m Net revenue £871m Net revenue £579m Net revenue £628m
PROFILE OF CATEGORY PROFILE OF CATEGORY PROFILE OF CATEGORY PROFILE OF CATEGORY PROFILE OF CATEGORY
Products that relieve or solve This category consists of Five product groups. Products used in automatic Consists of three categories.
common personal or health five product groups used Disinfectant cleaners both dishwashing machines and Air Care products freshen
problems, protecting against for cleaning and treating clean and disinfect surfaces, for washing dishes by hand. or add fragrance to the
infection and improving all fabrics. It covers products killing 99.9% of germs. In automatic dishwashing air and also create an
wellbeing. Our personal care used before, during or after Lavatory cleaners offer the main product is detergent ambience. Various formats
products include Clearasil the main laundry wash cycle. specialised cleaning and for cleaning dishes in the include; aerosols, gels,
anti-acne cream and Veet Fabric Treatment products disinfecting for the toilet main wash cycle and sold liquids, electricals and
to remove unwanted body remove stains from clothes, bowl and cistern. All purpose in an increasing range of candles. Pest Control
hair. Denture Care cleans and carpets and upholstery. cleaners are ideal for formats: powder, liquid, products offer solutions
improves the performance Garment Care products many household surfaces, gels (standard and 2in1), to domestic infestation.
of dentures. Our range of are specially formulated particularly in the bathroom gelcaps (standard and 2in1) The category includes
the over-the-counter health for washing delicate fabrics. and kitchen. Specialty and tabs (Double Action, rodenticide and insecticide
products includes analgesics, Water Softeners protect cleaners are designed PowerBall, 2in1, 3in1 and products – in formats such
gastro-intestinal products the machine and laundry for specific tasks – from 4in1). Other products include as coils, mats, baits, traps,
and cough, cold and sore against the build-up cleaning ovens to removing rinse agents, decalcifying salts, vapourisers and sprays –
throat products. Suboxone of limescale and other limescale. Finally, polishes dishwasher cleaners, to prevent infestation
(Buprenorphine) is the deposits. Fabric Softeners and waxes clean and shine deodorisers and glass and to kill pests. Shoe Care
Company’s prescription drug are used for softening hard surfaces such as corrosion protectors. cleans and protects shoes.
against opiate dependence. and freshening fabrics furniture and floors.
KEY BRANDS KEY BRANDS
and ironing aids help make
KEY BRANDS KEY BRANDS Finish, Calgonit, Electrasol, Air Care Air Wick Pest
ironing more convenient.
Antiseptics Dettol Denture Disinfectant Lysol, Dettol, Jet Dry Control d-Con, Mortein,
Laundry detergents clean
Care Kukident, Steradent Sagrotan, Pine-O-Cleen Shieldtox, Target, Rodasol,
fabrics in washing machines. MARKET POSITION
Analgesics cold/flu Disprin, Lavatory Harpic, Lysol Pif Paf, Tiga Roda Shoe Care
No.1 worldwide in
Lemsip, Nurofen*, Strepsils* KEY BRANDS All purpose Veja, St Marc, Nugget, Cherry Blossom
Gastro-Intestinals Gaviscon, Fabric Treatment Vanish, Cillit Bang, Easy-Off Bang
Senokot, Fybogel Personal Spray ‘n Wash, Resolve, Specialty Easy-Off Oven,
No.2 worldwide in Air Care,
Care Clearasil*, Veet Napisan Garment Care Mop & Glo, Brasso,
Shoe Care and Pest Control.
Woolite Water Softener Lime-A-Way, Destop, Rid-X
Calgon Fabric Softener Polishes & waxes Poliflor,
Dettol is the world leader
Quanto, Flor Laundry Old English, O’Cedar,
in antiseptics bought for use
Detergent Ava, Mr Sheen
at home. Veet is the world
Sole Colon, Dosia
leader in depilatories. MARKET POSITION
Nurofen is the No.2 Analgesic MARKET POSITION No.1 worldwide in
in Europe. Strepsils is the No.1 No.1 worldwide in Fabric Surface Care with leading
sore throat product outside Treatment and Water positions across the five
the US. Clearasil is the No.1 Softener categories. segments described above.
anti-acne treatment. No.2 worldwide in
*Acquired 31 January 2006 Reckitt Benckiser Shareholders’ Review 2005
OUR FORMULA IS SIMPLE: RIGHT
CATEGORY + CONSTANT INNOVATION
+ CLEAR COMMUNICATION…
Stain removal is an ideal category for us. There’s a real consumer
need: stains are a worry, you can’t be sure if they’ll come out in the
wash, and the wrong treatment can make matters worse. Consumers
know their laundry detergents alone won’t do the trick – and there’s
growing demand for specialised additives that can.
The right product has real value to consumers, if it rescues a garment.
And the market has plenty of room for further growth. In the past
few years we’ve covered the world in pink, making Vanish global
market leader. From nine countries in 1999, it’s now sold in 48.
We’ve built a worldwide brand into which we can launch a stream
of ever cleverer products.
Consumers trust Vanish because it works. And we reinforce their
trust through constant product innovation.
For us, innovation does two things. It grows sales, as we improve
our products or broaden the range of Vanish products for specific
challenges such as carpet stains. And it protects our premium pricing,
as consumers are willing to pay for better products.
In 2005 we found ways to improve Vanish Oxi Action Max so it
removes even tough dried-in stains in the wash. And we launched
Vanish Dual Power pre-treater, with two active solutions in an
eyecatching double-barrelled bottle: you squirt, they mix and you see
them fizz as they activate. As always, we backed the brand with clear
communication that demonstrates how Vanish makes stains disappear.
Result: further market share growth virtually everywhere, and even
stronger global brand leadership. Our formula works like magic.
Reckitt Benckiser Shareholders’ Review 2005
2IN1, 3IN1, 4IN1…
WE’RE NEVER SAT ISFIED!
WHILE DISHWASHER OWNERS
ARE ‘VERY SATISFIED’, WE KEEP
To keep expanding our share of this growing market, we need to
make dishwasher owners even happier – with even better solutions.
What can we do, when they’re so happy already?
Simple. Surprise them. Amaze them. Then delight them.
We began in 1995, with the first two-layer dishwasher tablet. It sold very
well and research said consumers were ‘very satisfied’ with it. So we
improved its performance by adding the pre-soaker Powerball in 1999.
Consumers loved this. So we made life simpler for them with Finish
3in1, which had rinse aid and salt built-in.
Research said they disliked the corrosion that makes glasses cloudy.
So we launched Protector, to help stop it happening.
Could life get much better? Consumers didn’t really think so. Until
in 2005 we launched Finish 4in1 with Protector action built-in.
Over the past year it’s been a real success, further strengthening
our global leadership. In Germany, where strong local competition
has been a challenge for several years, it’s returned our market
share to growth. Worldwide, it’s taken our share to record levels
– and brought private label share growth to a standstill.
Finish 4in1 brought consumers our best-ever cleaning and stain
removal, shine, limescale protection – plus glass and silver
protection. So are they satisfied with it? Very, says the research.
And are we going to improve on it? Absolutely.
IN ONE YEAR, ‘BANG!’ HAS TAKEN
68 COUNTRIES BY STORM.
Bang really has launched with a bang. In just a year we’ve rolled it
out into 68 countries – and taken world leadership in multi-purpose
cleaners. It takes a powerfully co-ordinated global marketing
strategy to win friends on that scale. But it also takes real sensitivity
to local conditions.
In South Africa, for example, we used the global media campaign
to reach the country’s three million more-affluent households.
But for the other seven million households we used an altogether
more down-home approach.
The townships are a big market – Soweto alone has a population of
six million. But TV commercials wouldn’t get us much visibility there.
And as well as reaching consumers, we also had to reach the small
independent stores where they shop. So we set up a roadshow
to tour community halls and shopping centres.
We brought music to draw the crowds, with big-name DJs to add
excitement and credibility. We gave live demonstrations to convince
people that Bang really works, and delivers great value. The theme
was “Haikona” or “I can’t believe my eyes!”. Some 12,000 people
came to see for themselves. And live tie-ups with radio stations
broadcasting in 11 languages enabled us to reach 3.4 million listeners
with just six events.
To encourage retailers to stock the product, we gave them display
cards of sample sachets. Within eight weeks we were in 2,500 stores,
including 96% of the top 500.
A year on, we’re still in all those stores – and they’re still selling out.
Bang now has the top-selling trigger pack and two of the top-selling
powder packs on the multi-purpose cleaner market. And on the back
of Bang’s success, we’re now building distribution of other Reckitt
Benckiser brands in the townships. Looks like everyone’s cleaning up
Reckitt Benckiser Shareholders’ Review 2005
ACQUIRING BOOTS HEALTHCARE
INTERNATIONAL (BHI) IS THE
RIGHT PLATFORM TO EXPAND
It’s an ideal marriage. BHI brings complementary strengths to our
Health & Personal Care business, creating a platform for sustainable
growth in a very attractive category. As we’ve already shown with
Lemsip and Gaviscon, there’s major potential in over-the-counter
(OTC) medicines if you know how to develop products and brands
that meet real consumer needs.
What’s more, we expect the overall OTC market to show good growth
for many years to come. Why? Because ageing populations are more
prone to minor ailments which they could treat themselves with OTC
medicines. And because governments need to curb the rising cost
Following the acquisition we’ll have strong positions in four of
the key OTC medicine categories. In analgesics we’ll have Nurofen,
the European brand leader, and Disprin. In cough, cold and flu Lemsip
will be joined by Strepsils, the world’s leading sore throat brand.
In gastro-intestinal we already have Gaviscon and Senokot. And in
medicated skin care we’ll have Clearasil, the world’s leading anti-acne
brand, as well as strong local brands such as E45 and Lutsine.
Brand loyalty is strong in this sector, which is generally good for
margins. And by exploiting synergies and reducing costs, we expect
to build margins even further. As the business grows, we expect
it to give the Group’s overall margins a healthy lift.
Combining the brands and the infrastructure of BHI with our existing
business in Health & Personal Care creates a strong platform across
Europe and selected other markets in OTC. Our strength in grocery
and mass market distribution will be complemented by BHI’s
capability in medical detailing and pharmacy channels. This makes
a powerful base for organic development or for further acquisitions
to expand our portfolio and geographical reach.
Reckitt Benckiser Shareholders’ Review 2005
OUR COST REDUCTION PROGRAMME
ROUTINELY TAKES £30M OUT OF OUR
COSTS EACH YEAR. BUT IN 2005 WE
FACED A SWARM OF RAW MATERIAL
It wasn’t just the soaring oil price. High-priced oil drove up the cost of
plastics and chemical feedstocks. And booming demand from growth
economies such as China and India raised the price of materials like
steel and tinplate.
That was a serious challenge for our strategy of squeezing costs to
drive up profits and cash flow even faster than sales. Just to stand
still, we needed major savings – on top of our existing £30m cost
Undaunted, a SWAT team representing all spending departments
looked at hundreds of cost-saving ideas. They filtered-out any
that might affect product performance or consumer perceptions,
and still found enough to offset all our input cost increases and
keep margins growing. Mission accomplished.
And we’re well placed to do it again this year, despite continuing
How’s it done? Relentlessly reviewing everything we do, to get more
cost out or more value in. In the US we switched from printing on
cans to glossy plastic labels that look better and cost less – on millions
and millions of cans a year. Europe follows suit in 2006. In Europe
we optimised our distribution logistics and saved £1m.
In India, sales of Mortein mosquito coils are growing very rapidly. We
moved production to economically deprived areas in Northern India
where the government provides fiscal incentives. And negotiated
to introduce a more advanced active ingredient at lower cost.
Rising costs won’t go away. So we’re focused on long-term, sustainable
savings. We’re moving up the supply chain – helping suppliers cut
their own costs, so they can curb their prices to us. That way,
everyone wins: our suppliers, shareholders and consumers.
Reckitt Benckiser Shareholders’ Review 2005
TAKING A LEAD IN ACTION FOR SUSTAINABILITY…
TO AN ENERGY
AND YOU’LL SAVE
OVER AND ABOVE THE CLEAR BENEFITS
OF OUR PRODUCTS IN IMPROVING
HYGIENE AND HEALTH, WE’RE INTENT
ON DELIVERING THEM IN A SUSTAINABLE
AND RESPONSIBLE WAY.
We focus on sustainability issues both as distinct targets and as an but now we are sponsoring a number of projects to improve the amount
everyday part of how we manage our business. How can we make our of plastic packaging that is recycled, including three public recycling
direct business performance more sustainable, and how can we influence schemes in the US, France and South Africa – with more to come in 2006.
others to do so too?
SOCIAL & ETHICAL SUSTAINABILITY
ENVIRONMENTAL SUSTAINABILITY We judge our social and ethical sustainability in terms of making our
Our target is to achieve a 20% reduction in the ‘direct’ greenhouse gas company and supply chain a better place in which to work; and in terms
emissions from our global manufacturing energy use by 31st December of how we share some of our wealth creation with those parts of society
2010; in 2004 we beat our initial 10% reduction target, having achieved most in need of support, who cannot generally afford to benefit from
an 11% reduction since 2000; this is measured per unit of production. our products.
We seek a similar reduction in the ‘indirect’ greenhouse gas emissions
In terms of improving social issues at work, we focus particularly on
that arise when consumers use our products in their home.
improving employee health & safety. In 2005 we cut our lost time
So what progress have we made in 2005 to improve our environmental, accident rate by around 30%, bringing the total reduction since 2001
social and ethical performance? to about 80%. We also work continuously on a more sustainable supply
chain. In 2005 we audited more than 40% of our third-party product
Take the new industry initiative to cut climate change emissions and water
suppliers against our Global Manufacturing Standard, which requires
use across Europe. The idea is simple: many people use higher temperature
compliance with local and international labour, health & safety and
wash programmes on their dishwashers needlessly, because our
environmental standards. This was well ahead of our 20% target.
dishwashing products work just as well on energy saving / Eco programmes.
We are also working actively on the sustainable sourcing of
If we could persuade just half the EU households using higher temperature
a number of our raw materials, including woods and palm oil.
dishwashing programmes to switch to energy saving programmes, they’d
save up to 388,000 tonnes of greenhouse gas emissions from their annual Our community programmes are designed to assist the most deprived
energy use; more than the total greenhouse gas emissions from energy parts of society with help on basic health and hygiene. In 2005 we gave
use at all Reckitt Benckiser factories around the world. They’d also save more than £1.6m in cash and products to community projects worldwide
up to 7,000 million litres of water a year – enough for over 200 million (2004 £1m). We continued with our support for Médecins Sans Frontières
showers. Overall, a simple way to help the environment, save money programmes tackling HIV / AIDS in Thailand and Ethiopia. And in year
and reduce climate change. Since March 2006 we’ve started to put two of our partnership with Save the Children we supported health and
“Save Energy and Water” advice on our automatic dishwashing hygiene programmes in Bangladesh, China and India.
products across Europe.
We also responded to major natural catastrophes. The Company and its
We also introduced a major programme to improve plastic packaging employees donated almost $500,000 in cash and products to help US
recycling in 2005. Our plastic packaging does an important job, but too victims of Hurricane Katrina. After the earthquake in Pakistan we gave
much of it ends up in landfill, a very visible waste of resources. We’ve over £75,000 in cash and products to help with immediate health and
already done much to make our packaging thinner and lighter, sanitation needs.
For a full report on our policies, targets and progress on sustainability, please see
our full Sustainability Report available at www.reckittbenckiser.com
NB: our internal controls around Social, Environmental and Ethical (SEE) matters and
reputational risk are outlined in our Annual Report and Financial Statements 2005 (p4).
*All brands that carry this mark are from companies which are committed to the
Industry programme “Charter for Sustainable Cleaning”.
Reckitt Benckiser Shareholders’ Review 2005
FINANCIAL OVERVIEW FOR THE DETAILED FINANCIAL
REVIEW, SEE OUR FULL ANNUAL
REPORT – AVAILABLE ONLINE AT
2005 WAS ANOTHER YEAR OF WWW.RECKITTBENCKISER.COM
SOLID PROGRESS EXCEEDING
2005 was another year of solid progress exceeding our revenue growth due to a shift in marketing mix towards
earlier targets. Growth came across all regions and was other forms of consumer marketing. Operating margins
strongly driven by new products like Cillit / Easy-Off Bang, increased by 80bps to 20.1% due to gross margin
Finish 4in1, Air Wick Freshmatic and Vanish Oxi Action expansion and particularly to tight control of fixed costs
Max. Benefiting from strong cost containment, operating more than offsetting higher marketing investment.
margin reached our 20% target.
Net income for the year increased 16% (14% constant) to 20
The Group has adopted IFRS for its financial reporting £669m. Net interest received of £36m (2004 £9m) was due
for the year ended 31 December 2005. Financial reporting to the strong cash inflow over the past year increasing the 19
for 2004 has been restated, but for 2001, 2002 and 2003 level of net funds after higher dividend payments and share
it has not been restated. buy back, and the conversion of the Convertible Capital
Bond. The underlying tax rate for the period is 26% before 17
Net revenues grew by 8% (6% constant) to £4,179m.
non-recurring tax credits of £16m arising from favourable
Operating profit increased 12% (10% constant) to £840m. tax settlements. 16
Gross margin increased 10bps to 54.9% as a result of
EPS diluted increased 17% to 90.0 pence. 15
higher margin new products, and savings from ongoing
cost optimisation programmes offsetting significantly 14
higher input costs. Media investment increased 3% and
represented 11.9% of net revenues (2004 12.4%). Other 13
01 02 03 04 05
marketing investment increased ahead of the rate of net Colin Day Chief Financial Officer
HEALTH & PERSONAL CARE FABRIC CARE SURFACE CARE DISHWASHING HOME CARE
NET REVENUES GREW 9% NET REVENUES GREW 2% NET REVENUES GREW 9% NET REVENUES GREW 6% NET REVENUES GREW 8%
TO £662M TO £1,113M TO £871M TO £579M TO £628M
Net revenues grew 9% to £662m Net revenues grew 2% to £1,113m The major growth driver was the Net revenues grew 6% to £579m Net revenues grew 8% to £628m
with growth across all segments. Veet largely due to the success of Vanish roll-out of Bang under the Cillit due to strong growth in Automatic with strong growth for both Air
depilatories continue to benefit from Oxi Action, the Company’s Fabric brand in Europe, and the Easy-Off Dishwashing. Growth came from Care and Pest Control. Air Care
the continuing roll-out in Developing Treatment franchise, and Calgon brand in North America and the success of Finish/Calgonit grew behind the launch of Air Wick
Markets and growth in North America. water softener, offset to some Developing Markets. The Dettol 4in1 in Europe, initial sales of Freshmatic in Europe, North
Dettol antiseptics grew behind the extent by softness in laundry and Lysol disinfecting range, Finish/Calgonit Quantum in America and certain Developing
personal care range in Developing detergent and fabric softeners. particularly disinfectant spray, early launch markets and from Markets. Pest Control growth was
Markets. Healthcare products Key drivers of growth included the grew in Europe, North America Electrasol with Jet Dry Action driven by Mortein Power Booster
benefited from the continuing roll-out roll-out of Vanish Oxi Action Max, and Developing Markets. in North America. coils and a strong pest season
of Gaviscon in Europe. Suboxone Vanish Dual Power and continued in the Southern Hemisphere.
continues to grow strongly as growth for Vanish carpet cleaners.
distribution builds in North America.
Reckitt Benckiser Shareholders’ Review 2005
GEOGRAPHICAL ANALYSIS FIGURES AT A GLANCE
GEOGRAPHICAL ANALYSIS AT CONSTANT SUMMARY GROUP PROFIT AND LOSS ACCOUNT
EXCHANGE (SEE CHARTS ON PAGE 4) FOR THE YEAR ENDED 31 DECEMBER 2005
51% OF NET REVENUES
Net revenues 4,179 3,871
EUROPE Operating profit 840 749
NET REVENUES GREW BY 4% TO £2,135M
Growth came from key recent product introductions. Net finance income 36 9
In Fabric Treatment, growth was due to the success of (including coupon on convertible capital bonds)
Vanish with Vanish Oxi Action Max and Vanish Dual
Power. In Surface Care, growth came from Cillit Bang. Profit on ordinary activities before taxation 876 758
In Dishwashing, growth was due to Finish/Calgonit Tax on profit on ordinary activities (207) (181)
4in1. Home Care increased due to the successful
launch of Air Wick Freshmatic. Health & Personal Care Profit for the year 669 577
saw strong growth for the health care portfolio due to Attributable to equity minority interests – –
the roll-out of Gaviscon in Europe. Operating margins
were 60bps ahead of last year at 23.5% due to tight Profit for the year (attributable to ordinary equity holders of the parent) 669 577
control of costs offsetting higher marketing investment, Dividends (262) (216)
resulting in operating profits increased by 6% to £502m.
Profit for the year after dividends 407 361
31% OF NET REVENUES
Earnings per ordinary share
On profit for the year, basic 92.0p 80.7p
NORTH AMERICA & AUSTRALIA
On profit for the year, diluted 90.0p 77.1p
NET REVENUES INCREASED 5% TO £1,281M
In Fabric Care, Spray ‘n Wash Dual Power Fabric Treatment
and Resolve Dual Power carpet cleaner grew sales.
In Surface Care increases came from growth for Lysol Dividend paid on ordinary shares for the year is 36p per share (2004 30p) consisting of 2004 final 18p per share (2004 14p)
disinfectant spray, and the launch of Easy-Off Bam. and 2005 interim 18p per share (2004 16p). The Directors are proposing a final dividend in respect of the financial year
In Dishwashing increases came due to the success of ended 31 December 2005 of 21p per share to be paid, if approved at the AGM, on 25 May 2006.
Electrasol with Jet Dry Action. In Home Care, Air Care
grew following the launch of Air Wick Freshmatic, and in
Health & Personal Care, Veet depilatories and prescription SUMMARY GROUP BALANCE SHEET
drug Suboxone were the principal contributors to growth. AS AT 31 DECEMBER 2005
Food increased net revenues due to the launch of 2005 2004
Cattleman’s BBQ sauce in retail and to continued growth £M £M
for French’s yellow mustard and gains for Frank’s Red Hot
Non-current assets 2,343 2,212
sauce. Operating margins were 90bps higher at 21.1%,
due to substantially higher input costs reducing gross Current assets 1,870 1,640
margins offset by tight control of fixed costs. As a result
operating profits increased 9% to £270m. Total assets 4,213 3,852
Current liabilities (1,523) (1,404)
18% OF NET REVENUES Non-current liabilities (834) (868)
DEVELOPING MARKETS Total liabilities (2,357) (2,272)
NET REVENUES GREW 12% TO £763M
Net Assets 1,856 1,580
There was strong growth in all categories. In Fabric Care,
growth came following the roll-out of Vanish Oxi Action Equity minority interests (1) (3)
Fabric Treatment products. In Surface Care, increases came
from the success of Easy-Off Bang. Pest Control grew Total shareholders’ funds 1,855 1,577
strongly with the launch of Mortein Power Booster coils.
Health & Personal Care grew due to the continuing roll-
out of Veet in new markets and strong growth for the Approved by the Board on 20 March 2006
Dettol range of personal care products. Operating margins
expanded 250bps to 8.9%, resulting in operating profits Adrian Bellamy Bart Becht
increasing by 55% to £68m. Director Director
SUMMARY GROUP CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2005
CASH FLOW 2005 2004
Cash generated from operations 946 914
Net interest received 34 8
Tax paid (157) (189)
Net cash generated from operating activities 823 733
Capital expenditure (78) (83)
Other investing activities 13 8
Maturity of short-term investments 493 38
Proceeds for issuance of ordinary shares 36 30
Share purchases (300) (283)
Repayments of borrowings (66) (87)
Cash generated from operations increased to £946m Dividends paid to the Company’s shareholders (262) (216)
due to higher operating profit. Net working capital
improvements were lower than in 2004 as many Net increase in cash and cash equivalents in year 659 140
of the Group’s businesses reached optimal levels.
Exchange gains/(losses) 9 (2)
Net cash flow from operations (defined in the
Cash and cash equivalents at beginning of year 301 163
Annual Report and Financial Statements 2005;
Group Cash Flow p22) increased to £758m. Net cash and cash equivalents at end of year 969 301
Net interest received was £34m (2004 £8m)
while tax payments decreased by £32m.
Reckitt Benckiser Shareholders’ Review 2005
SUMMARY DIRECTORS’, AUDITORS’ AND REMUNERATION REPORT
THIS IS A SUMMARY OF INFORMATION FROM THE consistency of the Summary Financial Statement within Pensions
ANNUAL REPORT AND FINANCIAL STATEMENTS 2005 the Shareholders’ Review with the full Annual Report and In line with the Committee’s emphasis on the importance
Financial Statements, the Report of the Directors and the of only rewarding the Executive Directors for creating
This Summary Financial Statement is a summary of
Directors’ Remuneration Report and its compliance with the shareholder value, Reckitt Benckiser operates a defined
information in the Report of the Directors and the Group’s
relevant requirements of s.251 of the Companies Act 1985 contribution pension plan, the Reckitt Benckiser Executive
accounts. The Summary Financial Statement does not contain
and the regulations made thereunder. We also read the Pension Plan. Mr Becht and Mr Day are both members
sufficient information to allow for a full understanding of
other information contained in the Shareholders’ Review and of this Plan.
the results of the Group and of the state of affairs of the
consider the implications for our report if we become aware
Company or of the Group. For further information, the Bart Becht’s standard Company pension contribution was
of any apparent misstatements or material inconsistencies
Report of the Directors, the Directors’ Remuneration Report, 30% of pensionable pay during 2005. A further annual
with the Summary Financial Statement.
the Annual Report and Financial Statements and the contribution of 20% of pensionable pay was also paid
auditors’ report on those accounts should be consulted. This statement, including the opinion, has been prepared in 2005 to take account of the uncompetitive level of his
for and only for the Company’s members as a body in pension contributions since his appointment as Chief Executive
Shareholders have the right to receive, free of charge, Officer. This additional contribution has now ceased.
accordance with s.251 of the Companies Act 1985 and for
a copy of the Group’s Annual Report and Financial Statements.
no other purpose. We do not, in giving this opinion, accept Colin Day’s standard Company pension contribution was
If shareholders wish to receive a copy of the Group’s Annual or assume responsibility for any other purpose or to any 25% of pensionable pay in 2005.
Report and Financial Statements for this and all future years, other person to whom this statement is shown or into
whose hands it may come save where expressly agreed In 2006, only Bart Becht is immediately affected by the
please write to the Registrar whose address appears on
by our prior consent in writing. new lifetime limit brought about by the proposed UK tax
the back cover.
changes effective from April 2006. The Committee has
SUMMARY REPORT OF THE DIRECTORS Basis of opinion decided that the most cost-effective approach is to maintain
Review of the activities and the development We conducted our work in accordance with Bulletin his current pension commitment, and to make a funded
of the Group’s business 1999/6, ‘The auditors’ statement on the Summary Financial and unapproved pension arrangement.
The Financial Review set out on pages 7 to 9 of the Annual Statement’ issued by the Auditing Practices Board for use
Report and Financial Statements includes a review of the in the United Kingdom. Service agreements
operations for the year. The Directors endorse the content For newly-appointed Executive Directors, termination
Opinion payments, including compensation paid during any notice
of that Review.
In our opinion, the Summary Financial Statement is period, will not exceed 12 months’ pay. Service contracts
In the view of the Directors, the Group’s likely future consistent with the full Annual Report and Financial will be rolling and terminable on six months’ notice.
development will continue to centre on the main product Statements, the Report of the Directors and the Directors’ Contracts will also provide liquidated damages of six
categories in which it now operates. Remuneration Report of Reckitt Benckiser plc for the year months’ base salary plus an amount equal to one times
ended 31 December 2005, and complies with the the average bonus paid (if any) in the two years up to
Directors applicable requirements of s.251 of the Companies Act termination. Any bonus earned will be included in the
Information regarding the Directors of the Company who 1985, and the regulations made thereunder. termination payment on the basis that a high proportion
were serving on 31 December 2005 is set out on page 15.
PricewaterhouseCoopers LLP of pay is related to performance and that in the event of
During the year there were the following changes to the Chartered Accountants and Registered Auditors, termination for poor performance it is unlikely that any
Board of Directors. Ana Maria Llopis and Hans van der London 20 March 2006 bonus will have been paid.
Wielen resigned at the conclusion of the AGM held on
SUMMARY OF POLICY ON REMUNERATION Non-Executive Directors do not have service agreements,
5 May 2005. Graham Mackay and Gerard Murphy joined
The full Directors’ Remuneration Report can be found but are subject to re-election by shareholders every
the Board as Non-Executive Directors on 25 February 2005
on pages 10 to 15 of the 2005 Annual Report and three years.
and 20 June 2005 respectively. As Gerard Murphy’s
appointment was made subsequent to the date Financial Statements. The remuneration for Non-Executive Directors consists of
of the 2005 AGM, he will offer himself for election fees for their services in connection with Board and Board
The Remuneration Committee of the Board (the ‘Committee’)
at this year’s AGM. committee meetings.
is responsible for determining and reviewing the terms of
Bart Becht and Peter Harf retire by rotation and, being eligible, employment and remuneration of the Executive Directors Historical TSR performance
offer themselves for re-election at the forthcoming AGM. and senior executives. The Committee comprises three Growth in the value of a hypothetical £100 holding over
Non-Executive Directors under the Chairmanship of five years.
George Greener has served on the Board for more than nine Judith Sprieser. The Committee’s overriding objective
years and, under the Combined Code, is therefore obliged is to ensure that Reckitt Benckiser’s remuneration policy
to offer himself for re-election on an annual basis. George encourages, reinforces and rewards the delivery of
Greener has advised that he will not be offering himself for outstanding shareholder value. The graph opposite
re-election at the AGM in 2006 and will accordingly step shows that the Company has, over the last five years,
down from the Board at the conclusion of the AGM. outperformed the UK FTSE 100 in terms of Total
Shareholder Return (TSR). The core principles on which
the remuneration policy is based are described below.
The Company recognises the importance of high standards
of Corporate Governance. It understands, supports and First, in order to attract and retain the best available people,
has applied throughout 2005 the principles set out in the the Committee has – and will continue to adopt
Combined Code and has complied with the great majority – a policy of executive remuneration based on competitive
of the detailed provisions contained in the Code. The ways practice. Reckitt Benckiser competes for management skills
in which the Company applies these principles, and the few and talent in the same international market place as its
provisions with which the Company does not consider that main competitors, the vast majority of which are based
it is appropriate to comply, are set out in the appropriate in the US. In accordance with this policy principle, total
sections of the Annual Report and Financial Statements. remuneration for Executive Directors and other senior
The application of the principles to matters related to executives will be benchmarked against the upper quartile
the Board and its committees, to internal control and of a peer group comprising Reckitt Benckiser’s main
to relations with shareholders is included in the Report competitors, together with a range of comparable
of the Directors and to Directors’ remuneration in the companies in the US consumer goods industry.
Directors’ Remuneration Report.
The second principle is to align the interests of Executive
Report of the auditors Directors and senior executives’ with those of shareholders
The report of the auditors on the annual accounts of through a variable, performance based compensation policy
the Group for the year ended 31 December 2005 is and the Company’s share ownership policy.
unqualified and does not contain a statement under either FTSE 100
In this context, variable pay is, and will continue to be,
s.237 (2) or s.237 (3) of the Companies Act 1985. Reckitt Benckiser
the major element of our current Executive Directors’ and
Annual General Meeting senior Executives’ total compensation package. Accordingly,
The notice convening the 53rd Annual General Meeting the Executive Directors’ compensation package comprises,
of the Company to be held on Thursday, 4 May 2006 in addition to base salary, an annual cash bonus and share-
The graph above shows the performance of Reckitt Benckiser
at The London Heathrow Marriott Hotel, Bath Road, based incentives. Highly leveraged annual cash bonuses,
in terms of TSR performances against the UK FTSE 100
Hayes, Middlesex, UB3 5AN is contained in a separate linked to the achievement of key business measures within
Index over a five-year period and conforms to the Directors’
document for shareholders which accompanies this the year, are designed to stimulate the achievement of
Remuneration Report Regulations 2002. The Index was
Shareholders’ Review. outstanding annual results.
selected on the basis of companies of a comparable size in
INDEPENDENT AUDITORS’ STATEMENT TO THE To balance the management’s orientation between the the absence of an appropriate industry peer group in the UK.
MEMBERS OF RECKITT BENCKISER PLC achievement of short and long-term business measures,
We have examined the Summary Financial Statement the Committee believes that longer-term share-based
The aggregate amount of Directors’ emoluments during the
of Reckitt Benckiser plc. incentives are also appropriate.
year was £5.3m (2004 £5.4m). The aggregate gains made by
Respective responsibilities of Directors and auditors Shareholders will be asked at the 2006 AGM to approve the Directors on the exercise of options and the vesting of
The Directors are responsible for preparing the Summary a consolidation and simplification of the current plans restricted shares were £12.3m (2004 £5.0m). The aggregate
Financial Statement in accordance with applicable law. rules under which grants for Executive Directors and amount of contributions made to money purchase pension
Our responsibility is to report to you our opinion on the other employees can be made. schemes in respect of the Directors was £0.5m (2004 £0.5m).
Reckitt Benckiser Shareholders’ Review 2005
COMBINING TALENTED PEOPLE
FROM DIFFERENT PROFESSIONAL
AND CULTURAL BACKGROUNDS IN
MEET THE TEAM ACTION-ORIENTATED TEAMS GIVES
US A COMPETITIVE EDGE.
EXECUTIVE COMMITTEE THE BOARD
ADRIAN BELLAMY (64, BRITISH) ‡ #
1 4 7 Was appointed a Non-Executive Director of the
Company in 1999 and became Non-Executive
Chairman in May 2003. He is Executive Chairman of
The Body Shop International Plc and a director
of The Gap and Williams-Sonoma, Inc. He was
formerly a director of Gucci Group NV and The
Robert Mondavi Corporation.
BART BECHT (49, DUTCH) #
Joined the Board in 1999 on his appointment
as Chief Executive Officer of the Company. He
was Chief Executive of Benckiser Detergents,
subsequently Benckiser N.V. since 1995 and Chairman
of Benckiser’s Management Board from May
1999. He holds no current external directorships.
COLIN DAY (50, BRITISH)
Joined Reckitt Benckiser in September 2000
2 5 8 from Aegis Group plc where he was Group
Finance Director from 1995. He was formerly
a Non-Executive Director of easyJet plc (resigned
September 2005) and the Bell Group plc
(resigned June 2004). During 2005 he was
appointed a Non-Executive Director of Imperial
Tobacco plc and WPP Group plc.
DR GEORGE GREENER, CBE (60, BRITISH)
Was appointed a Non-Executive Director in
1996 and was the Senior Non-Executive Director
from May 2003 to February 2005. He was formerly
Chairman of British Waterways and The Big
Food Group Plc. He was appointed Chairman
of Kellen Investments Limited in January 2006.
He is also a Non-Executive Director of JP Morgan
Fleming American Investment Trust plc.
DR PETER HARF (59, GERMAN) #
3 6 9
Joined the Board as a Non-Executive Director
in 1999 and is the Deputy Chairman. He served
as Chairman of the Remuneration Committee
until June 2004. He is Chairman of Coty Inc.
and a director of InBev and the Brunswick
Corporation. He is Chief Executive Officer
of Joh. A. Benckiser GmbH.
KENNETH HYDON (61, BRITISH) *
Was appointed a Non-Executive Director in
December 2003 and the Senior Independent
Non-Executive Director in February 2005.
He retired as Financial Director of Vodafone
Group plc in July 2005. He is a Non-Executive
Director of Tesco plc, the Royal Berkshire & Battle
Hospitals NHS Trust and Pearson plc.
1 ALAIN LE GOFF (53, FRENCH) 4 ERHARD SCHOEWEL (57, GERMAN) 7 JAVED AHMED (46, PAKISTANI) GRAHAM MACKAY
Executive Vice President, Supply. Was Executive Vice President, Europe. Joined Executive Vice President, North America (56, BRITISH/SOUTH AFRICAN) ‡
appointed EVP for Operations at Benckiser Benckiser in January 1979 and served and Australia and Regional Director Was appointed a Non-Executive Director in
in October 1996. He joined the as General Manager of Germany and North American Household. Joined February 2005. He is the current Chief Executive
Company in 1986, serving as Industrial of Propack Europe (private label). Benckiser in 1992 as General Manager, of SABMiller plc, one of the world’s largest
Director in France, Monaco, Germany He was General Manager of Italy Canada and in 1995 became General brewers with a brewing presence in over 40
and as Logistics Director for the Group. 1995–1996. From 1996 to 1999, Manager, UK. Appointed SVP North countries across four continents. He joined the
He was previously with Lesieur. he was EVP, Central Europe. He was American Household in 2001 and EVP, then South African Breweries Limited in 1978
previously with PWA Waldhof. North America and Australia in and has held a number of senior positions
Alain is responsible for the global
Erhard is responsible for all European September 2003. Prior to joining within that group.
supply chain including procurement,
markets, Western and Eastern. Benckiser, he previously worked with
manufacturing, warehousing and logistics. DR GERARD MURPHY (50, IRISH) *
Procter & Gamble and Bain & Company.
Also responsible for management of 5 COLIN DAY (50, BRITISH) Was appointed a Non-Executive Director in June
Squeeze and X-trim gross margin Chief Financial Officer. Joined Reckitt Javed is responsible for North America 2005. He is the current Chief Executive Officer
enhancement programmes. Benckiser in September 2000 from Aegis and Australia/New Zealand. of Kingfisher plc. He was previously Chief
Group plc where he was Group Finance 8 BART BECHT (49, DUTCH) Executive Officer of Carlton Communications plc,
2 TONY GALLAGHER (50, BRITISH) Exel plc and Greencore Group plc. Earlier
Senior Vice President, Information Director from 1995. Prior to that he was Chief Executive Officer. Joined Benckiser
at Kodak, British Gas, De La Rue Group in 1988 and served as General Manager in his career, he held various senior positions
Services. Joined Benckiser in September within food and drink group Grand Metropolitan
1997. He was previously CEO of InfoSol, plc and ABB Group. in Canada, the UK, France and Italy
before being appointed Chief Executive (now Diageo plc) in Ireland, UK and USA.
a systems integration and consulting Colin is responsible for financial
company in the Middle East. Prior to controls and reporting, treasury, tax, of Benckiser Detergents, subsequently JUDITH SPRIESER (52, AMERICAN) ‡ #
that, he was at Integraph and Mitel. corporate development, legal affairs Benckiser N.V., in 1995. He was appointed Chairman of the Remuneration Committee.
and internal audit. Chief Executive Officer of Reckitt Benckiser Was appointed a Non-Executive Director in
Tony is responsible for global following the merger in December 1999. August 2003. She was previously Chief Executive
information systems and services 6 ELIO LEONI SCETI (40, ITALIAN) He was previously with Procter & Gamble Officer of Transora Inc., an e-commerce
and telecommunications. Executive Vice President, Category both in the USA and Germany. software and service company and Executive
Tony will retire from the Company in April 2006. Development. Joined Benckiser in 1992 Vice President (formerly Chief Financial Officer)
serving in various marketing roles and as Bart is Chairman of the Executive Committee.
of Sara Lee Corporation. She is a Director of
3 FRANK RUETHER (53, GERMAN) General Manager of Germany and Italy. 9 FREDDY CASPERS (45, GERMAN) CBS Corporation, Allstate Insurance Company,
Senior Vice President, Human Resources. Following the merger in 1999, Elio was Executive Vice President, Developing Markets. USG Corporation and InterContinental Exchange.
Joined Benckiser in July 1996 as Personnel promoted to Senior Vice President, Joined Benckiser in September 1997 as
Director and was appointed SVP Human North American Household and was EVP for Eastern Europe. He previously PETER WHITE (64, BRITISH) * #
Resources in March 1997. He was previously appointed EVP, Category Development served in PepsiCo and Johnson & Johnson Chairman of the Audit Committee, was
with Mars, 1986–1996, as Director of in July 2001. Elio was previously with in a variety of international assignments appointed a Non-Executive Director in
Compensation & Benefits (Europe). Procter & Gamble in Italy and France. in Europe, US, Eastern Europe and Turkey. December 1997. He was previously Group Chief
Executive of Alliance & Leicester Plc.
Frank is responsible for human resources Elio is responsible for global category Freddy is responsible for all companies
* Member of the Audit Committee
management, remuneration and benefits, development, research & development, in Asia Pacific, Latin America and Africa ‡ Member of the Remuneration Committee
and organisational development. media and market research. Middle East. # Member of the Nomination Committee 15
Reckitt Benckiser Shareholders’ Review 2005
DURING THE FOR SHAREHOLDERS
NEXT YEAR ANNUAL GENERAL MEETING
To be held on Thursday, 4 May 2006 at The London Heathrow
The following sharedealing services are available through
Marriott Hotel, Bath Road, Hayes Middlesex, UB3 5AN. our Registrars, Computershare Investor Services PLC:
WE WILL... Every ordinary shareholder is entitled to attend and vote
at the meeting. The notice convening the meeting is
Please note that, at present, this service is only available
contained in a separate document for shareholders.
ANNOUNCE QUARTER 1 RESULTS ON to shareholders in certain European jurisdictions. Please
FINAL DIVIDEND FOR THE YEAR ENDED refer to the website www.computershare.com for an up-
27 APRIL 2006
31 DECEMBER 2005 to-date list of these countries. This service provides shareholders
To be paid (if approved) on 25 May 2006 to with an easy way to buy or sell Reckitt Benckiser plc ordinary
HOLD THE ANNUAL GENERAL shareholders on the register on 3 March 2006. shares on the London Stock Exchange. The commission
MEETING ON 4 MAY 2006 COMPANY SECRETARY
is just 0.5%, subject to a minimum charge of £15. In
addition stamp duty, currently 0.5%, is payable on purchases.
Elizabeth Richardson There is no need to open an account in order to deal.
PAY FINAL ORDINARY DIVIDEND IF
REGISTERED OFFICE Real time dealing is available during UK market hours
APPROVED ON 25 MAY 2006 103-105 Bath Road, 8.00am to 4.30pm. In addition there is a convenient facility
Slough, to place your order outside of market hours. Up to 90-day
PAY HALF-YEARLY PREFERENCE Berkshire SL1 3UH limit orders are available for sales. To access the service-
DIVIDEND ON 1 JULY 2006 Telephone: 01753 217800 log on to www.computershare.com/dealing/uk. Shareholders
Facsimile: 01753 217899 should have their SRN available. The SRN appears on share
certificates. A bank debit card will be required for purchases.
ANNOUNCE INTERIM RESULTS ON REGISTERED IN ENGLAND
No. 527217 Telephone ShareDealing
24 JULY 2006 Please note this service is, at present, only available
AUDITORS to shareholders resident in the UK and Ireland. The
PAY INTERIM ORDINARY DIVIDEND PricewaterhouseCoopers LLP commission is 1%, subject to a minimum charge of
IN SEPTEMBER 2006 SOLICITORS £15. In addition stamp duty, currently 0.5%,is payable
Slaughter and May on purchases. The service is available from 8.00am to
4.30pm Monday to Friday, excluding bank holidays, on
ANNOUNCE QUARTER 3 RESULTS ON REGISTRAR AND TRANSFER OFFICE telephone number 0870 703 0084. Shareholders should
24 OCTOBER 2006 If you have any queries about your shareholding, have their SRN ready when making the call. The SRN
please write to, or telephone, the Company’s Registrar appears on share certificates. A bank debit card will be
at the following address: required for purchases. Detailed terms and conditions
PAY HALF-YEARLY PREFERENCE
Computershare Investor Services PLC, are available on request by telephoning 0870 702 0000.
DIVIDEND ON 1 JANUARY 2007
PO Box 82, These services are offered on an execution-only basis.
The Pavilions, This is not a recommendation to buy, sell or hold shares
ANNOUNCE PRELIMINARY 2006 Bridgwater Road, in Reckitt Benckiser plc. Shareholders who are unsure of
RESULTS IN FEBRUARY 2007 Bristol BS99 7NH what action to take should obtain independent financial
Dedicated Reckitt Benckiser shareholder helpline 0870 703 0118 advice. Share values may go down as well as up, which
PUBLISH 2006 ANNUAL REPORT AND website: www.computershare.com may result in a shareholder receiving less than he/she
FINANCIAL STATEMENTS IN APRIL 2007 VIEWING YOUR SHAREHOLDING
To the extent that this statement is a financial promotion
If you have internet access, you may view your
HOLD THE ANNUAL GENERAL for the sharedealing service provided by Computershare
shareholding by accessing the Computershare website,
Investor Services PLC, it has been approved by Computershare
MEETING IN MAY 2007 www.computershare.com. You will need your Shareholder
Investor Services PLC for the purpose of Section 21 (2) (b)
Reference Number (SRN) which appears on your
of the Financial Services and Markets Act 2000 only.
Computershare Investor Services PLC is authorised and
DIVIDENDS regulated by the Financial Services Authority. Where
If you wish to receive your dividends directly to your this has been received in a country where the provision
bank account, or by way of additional shares, please of such a service would be contrary to local laws or
contact the Registrars and ask for the relevant forms. regulations, this should be treated as information only.
FIND OUT MORE ABOUT OUR TOTAL PERFORMANCE...
This review is part of an integrated approach to reporting
our total performance. Our family of reports also includes
the Annual Report and Financial Statements, the
Sustainability Report on our social and environmental
responsibilities, and regularly updated corporate
responsibility information at
Reckitt Benckiser plc
103-105 Bath Road
Berkshire SL1 3UH
Annual Report and Sustainability Report Corporate responsibility web pages
Financial Statements 2005
Designed and produced by The Workroom www.workroom.co.uk Illustrations by Kevin Hopgood. Photography by Tim Barker and Duncan Smith.
Printed by the colourhouse / Westerham Press. The paper used throughout this report is produced from a combination of both TCF (Totally Chlorine Free) and ECF (Elemental
Chlorine Free) pulp. It is totally recyclable and manufactured within a BS EN ISO 14001 accredited mill, also conforming to EMAS (Eco-management and Audit Scheme).
The recyclable outer wrapping used is manufactured using totally degradable polythene.
Reckitt Benckiser Shareholders’ Review 2005