Announcements

RB Press release - 15/07/2003
Strong Results in Q2 Continue Growth Trend

The following is the text for the Reckitt Benckiser conference call to be given today by Bart Becht, Chief Executive Officer, and Colin Day, Chief Financial Officer, at 1430 hrs London time. The purpose of the call is to update the market on progress of the business in the second quarter of 2003.

Commenting on the position, Bart Becht said

"Q2 will be a strong quarter for both net revenues and profits for Reckitt Benckiser. Net revenue growth at 7% was above the full year target and came from practically all categories and regions.

"The Company's net revenue growth in Western Europe was particularly good behind new product initiatives resulting in strong profit growth. Net revenues in North America were in line with last year as market growth slowed to zero and that, combined with higher marketing investment, resulted in lower profits for the quarter. However activities for the second half have already been adjusted with the aim of re-establishing profitable growth in North America. Reckitt Benckiser's recovery in the emerging markets of Asia and Rest of World accelerated.

"Net, after two strong quarters, Reckitt Benckiser is firmly on track to deliver on the Company's full year targets."

Update on Q2

For the total Company, net revenue growth at constant exchange in the second quarter is expected to be around 7% (2002 base £901m). The exchange rate impact on net revenues in Q2 was less than 1% resulting in net revenue growth also at close to 7% at actual exchange.

Profitability benefited from further improvement in gross margins, driven by product mix and by savings from cost optimization programs. Operating margin expansion reflected the heavy phasing of marketing investment behind new initiatives in Q2. Cash generation was strong. Consequently, the Company looks for the Q2 normalized net income growth rate to be in line with the full year target (2002 base of £103m).

Half Year

This will bring net revenue growth for the half year to over 6% at constant exchange. Exchange rates were adverse in the half year overall, reducing the over 6% constant exchange rate growth by 2% points at actual exchange to over 4% (2002 Base £1,756m). Profitability has improved, due to strong gross margin expansion somewhat offset by the substantial phasing of marketing investment into the first half of the year, resulting in operating margin expansion in line with the Company's long-term objectives. Net income growth for the half year is expected to be somewhat ahead of the target full year growth (2002 base of £173m).

Full Year Targets

The full year target growth rate for net revenues is 4% to 6% and for net income of low double digits, both at constant exchange.

The full results for Q2 and Half Year 2002 will be released on 26th August 2003.

For Further information
Tom Corran
SVP Investor Relations and Corporate Communications
Tel: +44(0) 1753 217800

Mark Wilson
Investor Relations Manager
Tel: +44(0) 1753 217800

Tim Spratt
Financial Dynamics
Tel: +44 (0) 207 831 3113


Notes.

Discontinued business

Discontinued business in 2002 relates to: -

1. The results of the Group's subsidiary in Zimbabwe which have been excluded from the consolidated Group results with effect from 1st July 2002. The effect of this is that net revenues of £7m in Q2 and £13m in the first half of 2002 will be shown as discontinued and de-consolidated. The resulting profit impact in H1 2002 was £1m.

2. An agency agreement under which the Group sold third party products in one category in one European market (Bayer pest control products in Italy) was terminated with effect from the end of 2002. This will be shown as discontinued in the half year and full year results. The impact will be to reclassify operating profit by £1m in H1 2002 and £2m in FY 2002 into discontinued business. No income was recorded in 2003. Net revenues for this agency business were not recognized.