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Reckitt Benckiser Exceeds 2011 Financial Targets, Announces New Growth Strategy
Posted: February 9, 2012
Reckitt Benckiser (RB), owner of the Veet and Clearasil brands, released financial results for fourth quarter 2011 and full year 2011, noting that the company exceeded its full year 2011 targets. Highlights of the full year report included total net revenue growth of 13% to £9,485 million—ahead of the 12% target—and adjusted net income of 9% actual exchange, (11% constant) ahead of the10% target. Fourth quarter highlights included total net revenue growth of 8% to £2,416 million.
Commenting on the full year results, company CEO Rakesh Kapoor said, “Reckitt Benckiser delivered another strong year, exceeding both our net revenue target (+12%) and adjusted net income target (+10%) in an increasingly tough environment. Like-for-like growth of 4% was underpinned by a robust performance in the base business, especially in Q4.
“Growth was driven in particular by excellent growth in emerging markets, and growth in [several of] our power brands. In 2012 we are targeting total company net revenue growth, excluding RBP, of 200bps above our market growth rate. We expect the market to grow at 1–2%. 2012 will be a year of higher investment but, ex RBP, we are still targeting to maintain our operating margins.”
The company also is announcing a number of important changes to itself and its strategy to fuel another decade of market outperformance and attractive shareholder returns. The company announced plans to target its health and hygiene power brands, saying its successful power brand strategy will continue, but with increased focus and investment for higher growth and higher margins from health and hygiene, in addition to home. It will also target faster growing markets, prioritizing 16 “power markets,” which are mainly emerging markets, for disproportionate investment and growth. RB will also redeploy resources to emerging markets and will increase investment in brand building, targeting annual cost savings to fuel an additional investment of £100 million in brand equity building. Through the measures, RB has set to achieve three medium-term (five-year) key performance indicators: 200bps of net revenue (NR) growth above market growth on average each year; emerging market areas to be 50% of core business NR by 2016 (up from 42%); and health and hygiene to be 72% of core business NR by 2016 (up from 67%).