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London UK, 24 July 2024: Reckitt Benckiser Group Plc (\u2018Reckitt plc\u2019) announces actions to reshape the company as a world-class consumer health and hygiene organisation, with one of the strongest growth and margin profiles among its peer group. This involves significant sharpening of its brand portfolio and a move to a simpler, more effective organisation1 to maximise long-term value for shareholders.<\/p>\n
Reckitt plc will focus on a portfolio of market-leading Powerbrands, in line with the criteria set out in the October 2023 strategy update. These high-growth, high-margin Powerbrands are beloved by consumers and hold leading market shares in categories with significant headroom for long-term growth.\u00a0 These actions are the result of a thorough review conducted over the last nine months. This sharpened portfolio creates the opportunity to move to a simpler, faster and more efficient organisation.<\/p>\n
Reckitt plc will seek to exit its portfolio of leading home care brands that are no longer core (\u2018Essential Home\u2019) including Air Wick, Mortein, Calgon and Cillit Bang, with FY2023 net revenue of \u00a31.9bn, by the end of 2025 and will consider all options to maximise shareholder value.\u00a0<\/p>\n
The Mead Johnson Nutrition business, with its market-leading brands of Enfamil and Nutramigen, is now non-core and Reckitt will consider all strategic options to maximise shareholder value.<\/p>\n
Reckitt plc\u2019s allocation framework remains constant, and these actions allow the company to focus capital against brands that offer the best long-term opportunity for growth. Reckitt plc will continue to pay a progressive dividend and return surplus cash to shareholders, including excess proceeds from future transactions.<\/p>\n
All proposals are subject to relevant employee representative and\/or works council information and consultation, where applicable.<\/p>\n
A sharper, simpler Reckitt<\/p>\n
The core Reckitt portfolio will be a uniquely attractive consumer health and hygiene business, with premium, high-growth and high-margin Powerbrands, including Muciniex, Strepsils, Gaviscon, Nurofen, Lysol, Dettol, Harpic, Finish, Vanish, Durex and Veet. Over the last five years this portfolio has delivered strong growth and high margins, generating a 7% net revenue CAGR between FY2018 and FY2023, and a gross margin of 61% in FY2023. The portfolio will also include likely future Powerbrands including Move Free and Biofreeze, and important local hero brands such as Lemsip, Airborne, KY, Veja, Jik, Tempra and Jontex.<\/p>\n
Reckitt will1 move to a simpler and more effective organisation with fewer management layers and reduced duplication, to accelerate speed of decision making and improve efficiency. This means a move to a unified category structure operated through three geographies, namely North America, Europe and Emerging Markets, removing the Global Business Unit structure. The global category organisation will deliver consumer insight, category expertise and innovation with the geographic areas focusing on execution excellence for our consumers and customers.<\/p>\n
Fuel for Growth<\/p>\n
Reckitt plc will1 expand and accelerate its existing fixed cost optimisation initiative to drive improved effectiveness and efficiency of the organisation. \u00a0This program will deliver a step change in organisational effectiveness with fewer management layers and greater proximity to the consumer. \u00a0These changes will unlock cost efficiencies delivering at least a 300bps reduction in fixed costs as it exits 20272 to achieve an end-state fixed-cost base of c.19%, from c.22% today.\u00a0 We expect to incur estimated one-off cash restructuring and transformation costs during this period of c.\u00a31.0bn3.<\/p>\n
Savings will come from organisation simplification, greater use of shared services, right-sizing investments, automation, and digital and generative AI opportunities1.<\/p>\n
Operations from January 2025<\/p>\n
Reckitt plc\u2019s new organisation and revised leadership will1 be in place on 1 January 2025.\u00a0 Also announced today are the designate geography and category leaders each of whom will be joining the Group Executive Committee.<\/p>\n
From 1 January 2025 Reckitt plc will report its financials in three segments \u2013 Reckitt, Essential Home, and Mead Johnson Nutrition.<\/p>\n
Maximising the value of Essential Home<\/p>\n
Reckitt plc will explore opportunities to maximise the full potential of its portfolio of attractive, iconic Essential Home brands. Essential Home is a stable and resilient international portfolio in the large home care category with attractive margins and high-cash generation. \u00a0Essential Home is focused on North America, Europe and Latin America. Essential Home will be run by a separate, dedicated team of experienced Reckitt leaders.<\/p>\n
Consider all strategic options for Mead Johnson Nutrition<\/p>\n
Reckitt plc will consider all strategic options for the Mead Johnson Nutrition Business to maximise shareholder value over time. The business will continue to be led by the same world-class management team.<\/p>\n
\u00a0<\/p>\n
Kris Licht, Chief Executive Officer, said:<\/p>\n
\u201cToday we announce an important step forward to firmly establish Reckitt as a world-class consumer health and hygiene company, with one of the strongest growth and margin profiles in the industry.<\/p>\n
Our core portfolio of market-leading Powerbrands, and simpler, more effective organisation positions us to better serve our consumers and customers. \u00a0This will deliver attractive long-term value creation for Reckitt\u2019s shareholders through our earnings model and cash returns.<\/p>\n
I am pleased to announce the appointment of a number of talented, long-term Reckitt leaders to the Group Executive Committee to deliver this growth and value creation opportunity.\u201d<\/p>\n
\u00a0<\/p>\n
Reckitt<\/p>\n
A business with significant headroom for long-term growth with strong cash generation capabilities and compelling prospects for growth through greater focus, increased innovation, category expansion and inorganic growth opportunities.FY2023 net revenue of \u00a310.3bn and a 5-year LFL net revenue CAGR of 7% between FY2018 and FY2023, and a gross margin of 61% in FY2023.A portfolio of Powerbrands4 with clear category leadership , including:Mucinex \u2013 the #1 global cough & decongestant brandStrepsils \u2013 the #1 global medicated sore throat brandGaviscon \u2013 the #1 global upper gastrointestinal brandNurofen \u2013 the #1 European Sytemic Analgesics (Pain Relief) brandLysol \u2013 the #1 global disinfection brand, with the #1 market position in USDettol \u2013 the #1 global antiseptic liquid brandHarpic \u2013 the #1 global lavatory care brandFinish \u2013 the #1 global auto dishwash brandVanish \u2013 the #1 global fabric additives brandDurex \u2013 the #1 global condoms brand, with the #1 market position in ChinaVeet \u2013 the #1 global depilatory brandA balanced and attractive geographic profile with Europe 35%, North America 27% and Emerging Markets 38% of FY2023 net revenue.A unified category structure operated through three geographies \u2013 effective 1 January 2025.Category \u2013 will be led by Ryan Dullea, currently SVP Selfcare Global Category and has been at Reckitt since August 2019Europe \u2013 will be led by Eric Gilliot, currently EVP North America and has been at Reckitt since June 1998North America \u2013 will be led by Jerome Lemaire, currently EVP Category Development Hygiene and has been at Reckitt since April 1998Emerging Markets \u2013 will be led by Nitish Kapoor, currently EVP Fuel For Growth and has been at Reckitt since June 1993Ryan, Eric Jerome and Nitish will be appointed to Reckitt’s Group Executive Committee and will collectively be responsible with the other Executive Committee members for ensuring the successful delivery of this overall programmeAn efficient, agile organisation \u2013 significant cost savings targeted by expanding and accelerating the existing fixed cost optimisation initiative.A virtuous earnings model \u2013 high margins, brand equity investment and innovation. Sustainable revenue growth and high operating leverage.<\/p>\n
Essential Home<\/p>\n
A highly attractive portfolio, focussed on North America, Europe and Latin America, with FY2023 net revenue of \u00a31.9bn containing iconic brands with market-leading positions4, consumer recognition and loyalty, including:Air Wick \u2013 the #1 air care brand in Europe, #2 market position in Latin America and # 3 market position in USSBP \u2013 the #1 pest control brand in BrazilCalgon \u2013 the #1 European brand in water softenersCillit Bang \u2013 the #4 brand in surface cleaning in EuropeA stable and resilient business with strong cash-generation capabilities.One of the few scaled, international branded players in the large and attractive home care category.Essential Home will be led by Paolo D\u2019Orso, currently EVP Europe Hygiene and has been at Reckitt since July 2011.<\/p>\n
Mead Johnson Nutrition<\/p>\n
A leading nutrition business with a portfolio of strong global and local brands4 including:Enfamil \u2013 the #1 global infant formula brand and the #1 infant formula brand recommended by paediatricians in the USNutramigen \u2013 the #1 allergy brand in the USThis business will continue to be led by the same world-class management team.<\/p>\n
This announcement contains inside information for the purposes of Article 7 of the Market Abuse Regulation (EU) 596\/2014 as it forms part of United Kingdom domestic law by virtue of the European Union (Withdrawal) Act 2018.\u00a0 This announcement is made by Catheryn O’Rourke, Company Secretary, for Reckitt Benckiser Group plc.<\/p>\n
\u00a0<\/p>\n
1. All proposals are subject to relevant employee informing and consulting processes, where applicable.
2. The Fuel for Growth savings are net of dis-synergies from any portfolio actions
3. Does not include contingent M&A related expenses, including tax and deal costs \u00a0
4. Branded player claims based on aggregated data from Nielsen \/ Nicholas Hall, in each case, or the relevant category and geographic focus.<\/p>\n","protected":false},"excerpt":{"rendered":"London UK, 24 July 2024: Reckitt Benckiser Group Plc (\u2018Reckitt plc\u2019) announces actions to reshape the company as…\n","protected":false},"author":2,"featured_media":50300,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[21355],"tags":[4060,21376,25219],"class_list":["post-50299","post","type-post","status-publish","format-standard","has-post-thumbnail","category-reckitt-benckiser","tag-press","tag-reckitt-benckiser","tag-release"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@UnitedKingdom\/116648442873817933","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/50299","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/comments?post=50299"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/posts\/50299\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media\/50300"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/media?parent=50299"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/categories?post=50299"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/britain\/wp-json\/wp\/v2\/tags?post=50299"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}