REJUVENATING RECKITT CAGNY - 24 FEBRUARY 2022
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REJUVENATING RECKITT
CAGNY
24 FEBRUARY 2022
Cautionary note concerning forward-looking statements
This presentation contains statements with respect to the financial Group’s control. Among other risks and uncertainties, the material or
condition, results of operations and business of the Reckitt group of principal factors which could cause actual results to differ materially are:
companies (the “Group”) and certain of the plans and objectives of the the general economic, business, political and social conditions in the key
Group that are forward-looking statements. Words such as ‘‘intends’, markets in which the Group operates; the ability of the Group to manage
‘targets’, or the negative of these terms and other similar expressions of regulatory, tax and legal matters, including changes thereto; the reliability
future performance or results, and their negatives, are intended to identify of the Group’s technological infrastructure or that of third parties on which
such forward-looking statements. In particular, all statements that express the Group relies; interruptions in the Group’s supply chain and disruptions to
forecasts, expectations and projections with respect to future matters, its production facilities; the reputation of the Group’s global brands; and the
including targets for net revenue, operating margin and cost efficiency, are recruitment and retention of key management.
forward-looking statements. Such statements are not historical facts, nor These forward-looking statements speak only as of the date of this
are they guarantees of future performance. announcement. Except as required by any applicable law or regulation, the
By their nature, forward-looking statements involve risk and uncertainty Group expressly disclaims any obligation or undertaking to release publicly
because they relate to events and depend on circumstances that will occur any updates or revisions to any forward-looking statements contained
in the future. There are a number of factors that could cause actual results herein to reflect any change in the Group’s expectations with regard
and developments to differ materially from those expressed or implied by thereto or any change in events, conditions or circumstances on which any
these forward-looking statements, including many factors outside the such statement is based.
2
LAXMAN NARASIMHAN Chief Executive Officer
A 200 year strong heritage
4
Long standing, trusted and loved brands
LYSOL HARPIC DETTOL AIR WICK FINISH STREPSILS CLEARASIL NUROFEN MUCINEX ENFINITAS BOTANICA
launched launched launched launched launched launched launched launched launched launched launched
1889 1923 1932 1943 1953 1958 1959 1983 2002 2016 2020
1819
MORTEIN VEET DUREX NUTRAMIGEN WOOLITE CALGON ENFAMIL GAVISCON VANISH CILLIT BANG NEURIVA
launched launched launched launched launched launched launched launched launched launched launched
1880 1922 1929 1942 1951 1956 1959 1965 1983 2004 2019
5
At a glance
Heidelberg
Evansville Hull
Montvale Slough
Salt Headquarters
Lake City Bangpakong
60
countries with physical
4
Centres of
Amsterdam
Mira
Dongguan
operations Excellence
Gurgaon
40,000 200+
employees years heritage
3
Business units
20m+
products sold daily
>3,000 £13.2bn 18
scientists, engineers, net revenue in 2021 consecutive years as a
66%
absolute carbon
technologists and member of the reduction from
experts FTSE4Good index operations since 2015
6
Focused on four of the world’s largest problems
SIGNIFICANT UNREALISED MARKET OPPORTUNITY ASSOCIATED WITH ADDRESSING THESE PROBLEMS
How can hygiene be the How do we enable consumers How do we support intimate How do we provide enhanced
foundation for health? to self-care at a time when wellness and eradicate nutrition for infants and
health systems are under the menace of sexually for the increasing number
massive pressure? transmitted diseases? of seniors in society?
CAPITALISING ON THE BROAD AND RISING IMPACT OF DIGITAL AND SUSTAINABILITY
7
Fundamentally attractive categories with strong market leading brands
PROTECT HEAL NUTURE
HYGIENE
#1 GLOBALLY #2 GLOBALLY #2 GLOBALLY #1 BRAZIL #1 GLOBALLY #1 GLOBALLY #3 GLOBALLY
Surface & Pest control Multi purpose Fabric treatment Auto dishwash Air care
Lavatory care
disinfection cleaners
HEALTH
#1 GLOBALLY #1 GLOBALLY #2 US #1 EU #1 EU #1 GLOBALLY #1 GLOBALLY #2 GLOBALLY
Antiseptic Condoms Upper Medicated sore Analgesics Gastrointestinal Depilatories Lubes
personal care & lubes respiratory throat
NUTRITION #2 US #2 US #2 US #2 GLOBALLY #1 GLOBALLY
Joint Immunity Brain Allergy Infant
supplement supplement nutrition1 nutrition1
Claims based on information aggregated and reported in part from data supplied by Nielsen through its Retail Measurement Services and in part from data inputs from other suppliers, in each case, for the relevant category, geographic
focus and latest available MAT | 1 – Excluding China
8
Right categories for long term growth: Hygiene
HYGIENE
Category growth drivers:
• Growing demand for protection against germs
inside and outside the home Surface and
disinfection Auto-dish Laundry additives
• Increasing urbanisation and global warming c. 4-6% c. 3-5% c. 2-4%
making hygiene an even more important need
• Rising middle class in developing and emerging
markets
Sanitisation
• Step change in digital / eCommerce and bathroom Air Pest
c. 3-6% c. 3-5% c. 2-4%
c. 4-5% PA MEDIUM–TERM NET REVENUE GROWTH
9
Right categories for long term growth: Health
HEALTH
Category growth drivers:
• Health systems under pressure driving
self-care need
Germ protection Intimate Wellness
• Growing demand for intimate wellness solutions c. 4-6% c. 7-9%
• Rising middle class in developing and
emerging markets
• Step change in digital / eCommerce /
personalisation OTC Personal Care
c. 2-4% c. 2-3%
c. 4-6% PA MEDIUM–TERM NET REVENUE GROWTH
10Accelerating growth: Intimate Wellness
FROM BRAND CENTRIC FROM SINGLE BRAND PLAY
TO CATEGORY CENTRIC VIEW TO THE PORTFOLIO OF GLOBAL LIFESTYLE BRANDS
We are in a business larger than “act of sex’’
Core
50K
Respondents
17
Countries
66
Needs
Condoms
sex
act £5bn and Lubes
£5bn
NEW BRAND
Female Intimate Wellness
Toys
Intimate
wellness
£40bn+
NEW BRAND
Broader Protection Solutions
NEW BRAND
Performance Enhancers NEW BRAND
Data source: BCG Market Scoping.
11Right categories for long term growth: Nutrition
NUTRITION
Category growth drivers:
• Demographics (birth rate, women in
workforce, ageing)
Core Enfa Speciality Infant
• Premiumisation, quality infant nutrition solutions c. 0-2% c. 7-10%
• Increasing need for specialty
(e.g. allergy, immunity)
• Need for enhanced senior nutrition
VMS Adult
• Step change in digital / eCommerce /
personalisation
c. 4-6% +100bps contribution
c. 3-5% PA MEDIUM–TERM NET REVENUE GROWTH
12A strong earnings model
MEDIUM-TERM TARGETS
Innovation High Gross
Margin Business
Productivity
MID-SINGLE MID-20s 7 – 9%
Growth High BEI
DIGIT
Organic revenue AOP margin EPS growth
(at constant FX)
Out- execute growth by the mid-20s
BEI = Brand equity investment
13Significant investments in capabilities to support growth
£0.2bn
Investment in competitiveness
£0.4bn
Investment in growth enablers
Examples: Examples:
• Health Germ Protection • R&D
• Hygiene competitive battles • Supply chain and capacity
• Quality, Regulatory and Sustainability
£0.3bn
• Digital and IT
• Centres of excellence
• Productivity teams
Investment in growth drivers P&L Investment
to date
Examples:
• Dettol and Lysol expansion
• Global Business Services
• CMU expansion
• eCommerce
14Productivity embedded into the business and on track to deliver £2bn
£0.7bn
Design to Value
e.g. analysis of >1,000
products to optimise cost
and value, and reduce
Network / Cost environmental footprint Direct
Optimisation Procurement
Savings delivered in 2021 e.g. organisational optimisation e.g. Improved relationships
and reversal of RB2.0 with suppliers to drive
mutual efficiencies
£1.1bn
Savings delivered to date1
Revenue Growth
Management
Improved analytics to drive
Fully
embedded
effectiveness of trade spend in operation and
culture of the
c.14,000
company
Supply Chain Marketing and
Lean manufacturing Indirect Procurement
Individual initiatives practices and continuous
improvement,; elimination Improved supplier negotiations,
of transportation costs e.g. consolidation of regional
media-buying
1 – Programme began in 2020, savings tracked at 2020 average exchange rates
15Sustainability embedded into everything we do
PURPOSE-LED BRANDS HEALTHIER PLANET FAIRER SOCIETY
29.3%
of 2021 net revenue from
66%
absolute carbon reduction
£38m
Fight for Access Fund
more sustainable products1 from operations since 2015
Meeting our 2030 science-based
target ahead of schedule
AA
(upgraded in April 2021)
22.9
(as of January 2022)
1 – Net revenue (excluding Nutrition)
16Stepped up execution for our customers
IN-STORE IN SERVICE RECOGNITION AWARDS FROM
OUR RETAIL PARTNERS
Growth in omnichannel Improvement in customer
relationship score2
+20% pts Supplier of
the Year1
Walmart US
Supplier of
the Year 2021
Dollar General US
IN PARTNERSHIP
People rated top tier3
+50% Supplier of
the Year 2021
Superdrug UK
#1 Advantage
Survey
Tesco UK
1 – Walmart Supplier of the Year (Consumables) in 2021 | 2 – Based on Advantage Group 2021 survey of retailers. 20% pts increase in markets rated top-tier from 26% in 2020 to 46% in 2021 | 3 – 2021 Advantage survey performance
17Delivering on our consumer promise
AVAILABILITY QUALITY
DUREX SURPRISE MIX VANISH MULTI-ACTION TABS
+110bps PACKAGING FORMULA AND
PACKAGING
total Reckitt share of
total distribution points
Fit for eCommerce
channel and sustainable
38 AIRWICK BOTANICA KY JELLY AND LIQUID
total number of D2C
PACKAGING FORMULA
websites
More sustainable
18Delivering on our consumer promise
INNOVATION
Laundry Finish Mucinex Durex PU Neuropro Digestive
Sanitiser Platinum condoms Advantage
c.£100M
R&D investment
+50%
Group innovation OTC innovation
2X +30%
Patent filings
increase1 pipeline value2 pipeline value3 across the Group4
1 – R&D investment increase 2021 vs 2019 | 2 – Innovation pipeline increase 2022 vs 2021 | 3 – Pipeline value represents the increased revenue opportunity from innovation in 2022 compared to 2021 | 4 – 2021 vs 2020
19Portfolio migrating into higher growth spaces
9% portfolio turnover through targeted acquisitions and divestitures
DIVESTING ACQUIRING
Slower growth or Higher growth or strategically
less scalable brands important brands
3-year CAGR2
+10%
IFCN China & EnfaBebe
Personal Care brands:
3-year CAGR1
-14% Important strategic entry into the
world’s largest analgesics market
1 – 2019 to 2021 CAGR. For IFCN China, Scholl and E45 2021 growth is calculated to end of last full month of ownership by Reckitt | 2 – 2019 – 2021 CAGR. Reckitt ownership since 12 July 2021.
20Reckitt’s difference: a strong and evolving culture
Our Compass Our Leadership behaviours
Put consumers Own Deliver
and people first
• Live our purpose, fight • Focus on what matters
and compass
• Move boldly and at pace
• Know our business cold
• Join forces to win bigger
• Make decisions
Do the
Build shared right thing. Seek out new
success Always. opportunities Create Care
• Spot opportunities • Actively listen, learn
and include
• Innovate, iterate and
scale • Speak direct with respect
Strive for • Relentlessly build better • Act to unleash potential
excellence
21Led by an experienced and diverse management team
Chief Executive Officer Chief Financial Officer Chief Information and President Hygiene President Health and
Digitisation Officer Chief Customer Officer
Chief R&D Officer Chief Supply Officer General Counsel and Chief Human Resources Chief Operating Officer Head of Corporate Affairs
Company Secretary Officer Nutrition and Chief Sustainability Officer
HIGHEST OWNERSHIP REQUIREMENT IN FTSE 100
22Strong performance across growth drivers
62% of core CMUs holding / gaining share
PENETRATION MARKET SHARE GAINS NEW PLACES NEW SPACES
Lysol ‘Back to School’ Lysol laundry sanitiser
11m
programme
Surface care Disinfectant spray
+630bps +160bps
households reached1
52.8%
2021 brand penetration1
market share gains1 market share gains1
+45BPS Expanding internationally
Global Business Solutions
+61%
household penetration3
(cross-border)
68%
of sales from
distribution increase
vs 2019 +60%
NR CAGR 16-21
new customers3
+200bps
(to c.$100m)
market share gains2
1. – Kantar Footprint 2021 penetration points increase
23Restoring performance track record: despite challenging environment
2021 LAST 2 YEARS
Brands less sensitive to COVID
Growing consistently at mid-single-digits
17.4%
2-year stacked LFL net
revenue growth
3.5%
vs 1.3%
LFL CAGR 2017 - 2019
LFL group
net revenue
growth Average 2021 growth: >5%
8 out of top 10
brands grew DD in Q4
on a 2-year stacked LFL
net revenue basis
2021 Q1 2021 Q2 2021 Q3 2021 Q4
Refer to adjusted measures presented within the FY 2021 Results announcement
242022 outlook – breakdown of LFL growth
Brands less Brands more impacted by COVID
sensitive to
COVID
Approx.
weighting c.70% c.25% c.5% 1 - 4%
LFL revenue
growth
2022 Mid single- Double-digit Low single- Double digit
illustration digit growth decline digit growth growth
AOP MARGIN - GROWTH VS 2021 (FROM BASE OF 22.9%)
Refer to adjusted measures presented within the FY 2021 Results announcement
25A stronger Reckitt focused on sustainable growth and value creation
Right Trusted and Strong Relentless Sustainability Strong and
categories: loved brands earnings focus on increasingly evolving
large address- that innovate model execution embedded culture:
able market, and grow in how the run by owners
attractive across large company runs
growth and demand spaces
margins
TRANSFORMATION FIRMLY ON TRACK RECOGNISABLE PROGRESS TO MEDIUM TERM TARGETS SIGNIFICANT RERATING POTENTIAL
26Q&A
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