Announcements

RB Press release - 26/04/2007
Very Strong Start, Full Year Targets Raised

Results at a Glance	Q1	% change	% change	% change
	£m	Actual exchange Adjusted Basis*	Constant exchange Adjusted Basis*	Actual exchange As reported
Net Revenues	£1,258m	+8%	+15%	+8%
Operating Profit	£244m	+24%	+33%	+58%
Net Income	£179m	+27%	+36%	+63%
EPS (fully diluted)	24.3p	+27%	-	+63%

*% change numbers (adjusted basis) exclude the impact of the £42m 2006 restructuring charge on comparatives.

Net revenues increased 8% (15% at constant exchange) to £1,258m.  The underlying business (excluding BHI) grew 3% (10% constant) to £1,119m. BHI contributed net revenues of £139m in the quarter compared to £77m for the two months of ownership in 2006.

On a reported basis, operating profit increased 58% to £244m and net income increased 63% to £179m against last year's reported comparatives including £42m of one-off restructuring charges.

On an adjusted basis, excluding restructuring, operating profit of £244m increased 24% (33% constant).  Operating profit benefited from £13m of synergies in the quarter and from the profit on the extra month of BHI this year.  Gross margins increased 250bps to 56.9%.  Operating margins before restructuring increased 250bps to 19.4% after media investment increased 17%.

Cumulative synergies reached £53m annualized, an increase of £14m in Q1 and on track to reach the full target of £80m this year, a year ahead of plan.  

Net income of £179m increased 27% (36% constant) on an adjusted basis.

Net borrowings were £468m, £192m below the end of last year due to strong cash inflow.  1.6m shares were repurchased in the quarter at a cost of £43m.  Net working capital improved a further £48m, mainly from BHI, to minus £776m.

"Reckitt Benckiser had an excellent first quarter with very good growth on both the base business (10% like-for-like) and the BHI business acquired in early 2006.  Growth has come across all geographies and all categories mainly from the success of initiatives like Air Wick Freshmatic and Electricals, Finish & Calgonit Quantum and 5in1, Vanish Oxi Action Crystal White and Multi, supported by further increases in marketing investment.

ôBased on these strong results and momentum, we are raising our target for net revenue growth from at least 6% to between 7% and 8% at constant exchange (base £4,922m).  We are also raising our target for net income growth at constant exchange from low double digits to mid teens percentage (base £786m)."

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