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RB Press release - 13/02/2013

2012 TARGETS ACHIEVED STRATEGY WELL ON TRACK

Results at a glance
(unaudited)		 Q4 % change actual exchange % change constant exchange FY % change actual exchange % change constant exchange
Net revenue 2,476 +2 +6 9,567 +1 +4
- Like-for-like growth* +7 +5
Operating profit – reported 2,435 +2 +5
Operating profit – adjusted** 2,570 +3 +6
Net income – reported 1,829 +5 +8
Net income – adjusted** 1,938 +7 +10
EPS (diluted) – reported 249.5p +5
264.4p +7
* Like-for-like (“LFL”) growth excludes the impact of changes in exchange rates, material acquisitions and disposals.
** Adjusted results exclude exceptional items.

Highlights: Full Year

  • LFL +5% ex RBP (+5% incl. RBP), well ahead of our market growth, driven by Emerging Market Areas and Europe North America (ENA).
  • Health & Hygiene led growth; Durex, Gaviscon, Strepsils, Dettol, Lysol, Harpic and Finish.
  • Increased brand equity investment (BEI) of £100m1, +70bps, (ex RBP).
  • Gross margin +50bps to 57.9%. “Project Fuel” targets fully achieved.
  • Adjusted operating margin** +70bps to 26.9% via gross margin expansion and early ENA cost savings.
  • Adjusted net income** +7% (+10% constant): adjusted diluted EPS of 264.4p (+7%).
  • Net working capital of minus £700m (2011: minus £701m).
  • Net debt after dividends, acquisitions and restructuring of £2,426m (2011: £1,795m).
  • The Board recommends an +11% increase in the final dividend to 78p per share bringing the total dividend for 2012 to 134p (+7% versus 2011).

  
Highlights: Q4

  • Q4 LFL growth +6% ex RBP (+7% incl. RBP), reflecting steadily improving in-year performance.
  • Further improvement in ENA +3% LFL, assisted by higher incidences of cold and flu.

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

"A year ago we set a new purpose driven strategy to deliver growth and outperformance over the next decade.

We are laying the foundations for RB to succeed in a world where health and hygiene play an increasingly important role in terms of both economic and social development. We enhanced our focus on our 16 Powermarkets, many of which are in the emerging market areas that now represent 44% of our core net revenue. I am very pleased that our 2012 achievements demonstrate the strength of this strategy and its ability to create sustainable value for all of our stakeholders.

In environmental sustainability we have already reduced the carbon footprint of our products by 20% and have now set an ambitious target to reduce that by a further third, while also cutting the water use associated with our products by the same amount.

While much has yet to be done and markets remain challenging, we approach 2013 with the confidence that we have the right strategic focus, the right organisation and culture, and with the right innovation platforms.  We are particularly excited by our entry into the vitamins, minerals and supplements (VMS) market with the acquisition of Schiff. We are supporting our brands with more and better quality brand equity investment to deliver further growth in an increasingly competitive consumer environment. 

We remain committed to our goal of net revenue growth on average +200bps per annum above our market growth, and moderate operating margin expansion (ex RBP). For 2013, we are targeting net revenue growth of +5-6%2 including acquisitions and disposals announced to date. Given the early achievement of cost savings in 2012, we expect to maintain operating margins in 2013.  These targets exclude RBP. 

This will allow us to further accelerate the shape of our core business in line with our strategy.  We are now setting the target of Health & Hygiene categories to become 72%, and our emerging market areas to become 50%, of our core business net revenue by 2015.  This is a year earlier than previously targeted.”

1 at constant rates

2 at constant rates including announced acquisitions and disposals / withdrawal from Private Label and other minor items, ex RBP. Together they will have a net impact of c.+100bps

To view the full press release, please click on the link below.