Reckitt Benckiser’s First Quarter Net Income up 17%

Reckitt Benckiser PLC, London, said its pretax profit for the three months to March 31 was GBP111 million, compared with a year-earlier GBP96 million. Net revenues grew 2% (6% constant) to GBP874 million. Net revenues from continuing operations grew 3% (6% constant).

Gross margin increased 260 bps to 53.4% due to favorable long-term contracts, higher margin new products and savings from ongoing cost optimization programs, Squeeze and Xtrim. Net income was GBP82 million, an increase of 17% (15% constant).

Bart Becht, chief executive officer, said, “Reckitt Benckiser made a strong start to 2003. All regions contributed, with continuing growth in the established markets of Western Europe and North America and improvement in emerging markets. Profit growth was well ahead of this rate, with profitability benefiting from strong improvement in gross margins, partially offset by an increase in media and marketing support for new initiatives. This performance, backed by the strength of our innovation program, supports our confidence in achieving our targets for the full year of 4%-6% growth in net revenues and low double digit growth in net income, both at constant exchange.”

Fabric Care net revenues grew 6% to GBP232 million. Fabric Treatment contributed strongly due to the initial success of Vanish Oxi Action in a number of launch markets in Western Europe and Australia New Zealand. Calgon AquaPro created growth in water softeners in Western Europe. Woolite garment care grew strongly in North America and Eastern Europe reflecting investment in the base business and the success of Woolite Black.

Surface Care net revenues grew 4% to GBP189 million with good growth for Lysol Disinfectant cleaners in North America, behind the launch of Lysol NeutraAir, and for Dettol surface cleaners in Western Europe. Lavatory cleaners saw strong growth for Harpic 2-in-1 in Western Europe and Australia, and for the base Harpic business in Asia and Rest of World. Multi-Purpose Cleaners have grown steadily.

Dishwashing net revenues grew 15% to GBP140 million. Calgonit/Finish automatic dishwashing grew strongly in Western Europe behind the continuing success of 3- in-1 Total, and the successful launch of Protector in certain markets. Sales in North America were encouraging with the increasing success of Electrasol Gels and Gelpacs leading to further share gains. Automatic Dishwashing net revenues are also growing strongly in Eastern Europe and Australia New Zealand.

Home Care net revenues grew 2% to GBP128 million. Air Care grew albeit at somewhat slower rates than in recent years in Western Europe behind Air Wick Click Spray, and the initial success of Decosphere. In North America, category growth was down, following the enormous growth of recent years. Pest Control growth has not yet resumed, predominantly affected by Latin America.

Health & Personal Care net revenues grew 17% to GBP117 million. Veet Depilatories grew strongly across all regions behind the success of Veet Mousse and Veet Aquasystem. Dettol antiseptic grew strongly in Asia Pacific and Africa Middle East, responding to media and marketing investment on the base business. U.K. Health Care grew steadily with good results for recent Lemsip innovations and continuing growth for Gaviscon.