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RECKITT BENCKISER GROUP PLC: FY Results 2012

13 February 2013 
                        2012 TARGETS ACHIEVED 
                        STRATEGY WELL ON TRACK 
Results at a glance        Q4   % change % change   FY   % change % change
(unaudited)                £m    actual  constant   £m    actual  constant 
                            exchange exchange        exchange exchange
Net revenue              2,476     +2       +6    9,567     +1       +4
- Like-for-like growth*                     +7                       +5
Operating profit -                                2,435     +2       +5
reported
Operating profit -                                2,570     +3       +6
adjusted**
Net income - reported                             1,829     +5       +8
Net income - adjusted**                           1,938     +7      +10
EPS (diluted) - reported                          249.5p    +5
EPS (diluted) -                                   264.4p    +7
adjusted**
* Like-for-like ("LFL") growth excludes the impact of changes in
exchange rates, material acquisitions and disposals. 
** Adjusted results exclude exceptional items. 
Highlights: Full Year 
- LFL +5% ex RBP (+5% incl. RBP), well ahead of our market growth, driven by
Emerging Market Areas and Europe North America (ENA). 
- Health & Hygiene led growth; Durex, Gaviscon, Strepsils, Dettol, Lysol,
Harpic and Finish. 
- Increased brand equity investment (BEI) of £100m1, +70bps, (ex RBP). 
- Gross margin +50bps to 57.9%. "Project Fuel" targets fully achieved. 
- Adjusted operating margin** +70bps to 26.9% via gross margin expansion and
early ENA cost savings. 
- Adjusted net income** +7% (+10% constant): adjusted diluted EPS of 264.4p
(+7%). 
- Net working capital of minus £700m (2011: minus £701m). 
- Net debt after dividends, acquisitions and restructuring of £2,426m (2011:
£1,795m). 
- The Board recommends an +11% increase in the final dividend to 78p per share
bringing the total dividend for 2012 to 134p (+7% versus 2011). 
Highlights: Q4 
- Q4 LFL growth +6% ex RBP (+7% incl. RBP), reflecting steadily improving
in-year performance. 
- Further improvement in ENA +3% LFL, assisted by higher incidences
of cold and flu. 
Commenting on these results, Rakesh Kapoor, Chief Executive
Officer, said: 
"A year ago we set a new purpose driven strategy to deliver growth and
outperformance over the next decade. 
We are laying the foundations for RB to succeed in a world where health and
hygiene play an increasingly important role in terms of both economic and
social development. We enhanced our focus on our 16 Powermarkets, many of
which are in the emerging market areas that now represent 44% of our core net
revenue. I am very pleased that our 2012 achievements demonstrate the strength
of this strategy and its ability to create sustainable value for all of our
stakeholders. 
In environmental sustainability we have already reduced the carbon footprint
of our products by 20% and have now set an ambitious target to reduce that by
a further third, while also cutting the water use associated with our products
by the same amount. 
While much has yet to be done and markets remain challenging, we approach 2013
with the confidence that we have the right strategic focus, the right
organisation and culture, and with the right innovation platforms. We are
particularly excited by our entry into the vitamins, minerals and supplements
(VMS) market with the acquisition of Schiff. We are supporting our brands with
more and better quality brand equity investment to deliver further growth in
an increasingly competitive consumer environment. 
We remain committed to our goal of net revenue growth on average +200bps per
annum above our market growth, and moderate operating margin expansion (ex
RBP). For 2013, we are targeting net revenue growth of +5-6%2 including
acquisitions and disposals announced to date. Given the early achievement of
cost savings in 2012, we expect to maintain operating margins in 2013. These
targets exclude RBP. 
This will allow us to further accelerate the shape of our core business in
line with our strategy. We are now setting the target of Health & Hygiene
categories to become 72%, and our emerging market areas to become 50%, of our
core business net revenue by 2015. This is a year earlier than previously
targeted." 
1 at constant rates 
2 at constant rates including announced acquisitions and disposals /
withdrawal from Private Label and other minor items, ex RBP. Together they
will have a net impact of c.+100bps 
             Basis of Presentation and Exceptional Items 
Where appropriate, the term "like-for-like" (LFL) describes the
performance of the business on a comparable basis, excluding the impact of
major acquisitions, disposals and discontinued operations. It is measured on a
constant exchange basis. 
ENA is the Europe and North America area structure. RUMEA is the
Russia and CIS, Middle East and Africa area structure. LAPAC is the Latin
America, Asia and Asia Pacific area structure. 
Where appropriate, the term "core business" represents the ENA,
RUMEA and LAPAC geographic areas, and excludes RBP and Food. 
Where appropriate, the term "adjusted" excludes the impact of
exceptional items. There was an exceptional pre-tax charge of £135m in FY 2012
mainly relating to restructuring costs in respect of the new strategy
reorganisation, integration costs arising from the acquisition of SSL, and
costs associated with acquisitions. This exceptional pre-tax charge is
reflected in reported operating profit. Exceptional items in FY 2011 were £92m
in reported operating profit and £4m in net interest. The tax effect of
exceptional items in the period is £26m (2011: £23m). 
As communicated in RB's February 2012 "Strategy for Continued
Outperformance" announcement, the Group now uses a number of new, or refined,
measures to monitor progress. This includes a revised gross margin definition
(discussed in note 3 to the Half Year Condensed Financial Statements), as well
as a new definition of net working capital (inventories, trade and other
receivables and trade and other payables) and a new measure of total brand
equity building investment (BEI). 
                Detailed Operating Review: Total Group 
Full Year 2012 
Total FY net revenue was £9,567m, an increase of +5% LFL. Growth
was driven by a strong performance in our emerging market (LAPAC and RUMEA)
areas, with an improving result from ENA despite challenging market
conditions. Health and Hygiene led performance with strong results from Health
Powerbrands Durex and Gaviscon, and from Hygiene Powerbrands Dettol, Lysol,
Finish and Harpic. 
Gross margin increased by +50bps to 57.9%. The significant
improvement in margins during the second half, as expected, was driven by a
number of factors - a more benign input cost environment, pricing, improved
mix and savings from our ongoing cost optimisation programme (Project Fuel),
where we delivered savings of £50m, as targeted. These improvements were
partially offset by adverse foreign exchange. 
Our newly defined BEI metric increased by £100m (constant) +70 bps
to 12.7% of net revenue (ex RBP). Within this, media increased by +50bps to
11.7% of net revenue (ex RBP). 
Operating profit was £2,435m, +5% constant versus FY 2011 (+2%
actual). There was an exceptional pre-tax charge of £135m (FY 2011: £92m). On
an adjusted basis, operating profit was ahead +6% (constant) to £2,570m.
Adjusted operating margin increased by +70bps to 26.9% (ex RBP +70bps to
23.3%). This margin increase was in part due to early achievement of some of
the £30m costs savings from the new ENA structure targeted for 2013. 
Net finance expense was £15m (FY 2011: £19m). The tax rate was 24%,
(FY 2011: 26%). This reduction was primarily due to the benefit in 2012 of the
2% reduction in the UK corporate tax rate (both the reduction in the current
year tax liability, and the reduction to deferred tax liability in respect of
tax payable in future years), and the favourable settlement of certain tax
cases. 
Reported net income was £1,829m, an increase of +8% constant (+5%
actual). On an adjusted basis net income rose +10% constant (+7% actual).
Diluted earnings per share of 249.5 pence was +5% higher on a reported basis
and on an adjusted basis, the growth was +7% to 264.4 pence. 
Fourth quarter 2012 
Total Q4 net revenue was £2,476m, a +7% LFL increase. Growth trends
in Emerging Markets were similar to those in Q3, whilst ENA continued to
improve its performance with +3% LFL growth. Health category performance was
driven by Strepsils and Mucinex following a higher incidence of flu, but also
from our non-seasonal brands with Durex having a particularly strong quarter.
In Hygiene, growth was driven by strong performances from Dettol / Lysol and
Finish, and in Home, Air Wick had a strong quarter. 
                        Portfolio Development 
We have made progress in strengthening and reshaping the core
business in line with our new strategy. Our private label business did not fit
with our future strategic focus and we withdrew from it during 2012. We also
sold our non-core Paras Personal Care business and a number of other minor
businesses. 
We continue to strengthen our global health care franchise by
entering the VMS market with the acquisition of Schiff, and building local
health care platforms in China and Latin America via a number of small
acquisitions, including the recently announced collaboration with
Bristol-Myers Squibb. 
                 Sustainability & Social Contribution 
We increased our global partnership with Save the Children in order to support
health and hygiene programmes in more than 40 countries, taking funds
contributed to £3.5m, up +60% from £2.2m in 2011. In 2012 we helped to reach
approximately 325,000 children and families and since our relationship began
in 2006 it has reached nearly 900,000 vulnerable children and families. 2013
will see this partnership continuing and expanding further still. 
In sustainability, we achieved our targeted 20% carbon reduction
per dose of product since 2007 ahead of schedule and by year end had reduced
it by 21%. In 2012 specifically our carbon reduction was the equivalent of
taking 2.4 million cars off the road. We maintained our effectively carbon
neutral global manufacturing status, which started in 2006, with an additional
370,000 trees planted, taking it to 5.8 million trees planted in total. We
have set further ambitious sustainability goals for 2020. These are to further
reduce our per dose carbon footprint by 1/3, reduce our water impact by 1/3
and innovate such that 1/3 of our net revenue comes from more sustainable
products. 
                       FY 2012 Business Review 
Summary: % net revenue growth 
FY 2012       Like-for-like Acquisitions &  Exchange    Reported 
                          Disposals*
ENA                +1%           -1%           -3%         -3%
LAPAC             +11%            0%           -6%         +5%
RUMEA              +8%           -1%           -4%         +3%
Food               +2%            0%           +1%         +3%
Group ex-RBP       +5%           -1%           -4%          0%
RBP               +10%            0%            0%        +10%
TOTAL              +5%           -1%           -3%         +1%
* Reflects the acquisition of Paras (Q1), Schiff and other minor
acquisitions (Q4), withdrawal from Private Label (Propack), disposal of Paras
Personal Care and a number of minor businesses. 
Analyses by operating segment of net revenue and adjusted operating
profit, and of net revenue by product group are set out below. The Executive
Committee of the Group assesses the performance of the operating segments
based on net revenue and adjusted operating profit. This measurement basis
excludes the effect of exceptional items. 
Review by Operating Segment 


           Quarter ended                                                        
          Full Year ended
            31 December                                                         
            31 December
    2012     2011     % change                                                  
    2012      2011     % change
      £m       £m    exch. rates                                              
        £m        £m    exch. rates
                    actual   const.                                             
                     actual   const.


                                Total Net revenue 
1,236    1,245       -1       +2 ENA                                          
4,678     4,837       -3        0 
 591      568       +4       +9 LAPAC                                        
2,327     2,210       +5      +11 
 327      316       +3       +6 RUMEA                                        
1,404     1,364       +3       +7 
  93       94       -1        0 Food                                         
 321       312       +3       +2 
2,247    2,223       +1       +5 Total - ex RBP                               
8,730     8,723        0       +4 
 229      193      +19      +22 RBP                                          
 837       762      +10      +10 
2,476    2,416       +2       +6 Total                                        
9,567     9,485       +1       +4 
                                Operating profit - adjusted* 
                                ENA                                         
  1,156     1,157        0      +3 


                                    LAPAC                                       
    464       417      +11     +17
                                    RUMEA                                       
    290       293       -1      +3
                                    Food                                        
     92        92        0      -1
                                    Corporate**                                 
     32        10      n/a     n/a


                                Total - ex RBP                              
  2,034     1,969       +3      +7 


                                    RBP                                         
    536       518       +3      +3


                                Subtotal before exceptional items           
  2,570     2,487       +3      +6 
                                Exceptional items                           
  (135)      (92) 
                                Total                                       
  2,435     2,395       +2      +5 


                                    Operating margin - adjusted*                
     %         %


                                ENA                                         
  24.7      23.9 
                                LAPAC                                       
  19.9      18.9 
                                RUMEA                                       
  20.7      21.5 
                                Food                                        
  28.7      29.5 
                                Corporate **                                 
n/a       n/a 
                                Total - ex RBP                              
  23.3      22.6 
                                RBP                                         
  64.0      68.0 
                                Total                                       
  26.9      26.2 
* Adjusted to exclude the impact of exceptional items. 
**Items of income and expense which are not part of the results and
financial position of the reported segments, and therefore reported to the
Chief Operating Decision Maker outside of the individual segment financial
information, are shown in the Corporate segment. For the 12 months ended 31
December 2012, these items include profits on disposals of intangibles and the
Paras Personal Care business, expenses for legal matters and movements in
corporate provisions. 
The Business Review below is given at constant exchange rates. 
ENA 56% of core net revenue 
FY 2012 total net revenue was £4,678m, with LFL growth of +1%. We
continue to witness difficult market conditions in many parts of Europe.
Despite this the new organisation delivered a consistently improving
performance through the year across ENA, supported with higher levels of BEI.
Additionally, the 2nd half witnessed a higher incidence of flu than in the
comparable period. 
Growth in our Health platform was driven by Durex, Gaviscon,
Mucinex, and Strepsils. Hygiene brands of Dettol, Lysol and Finish performed
strongly, particularly in Europe behind Dettol No-Touch, and in the US behind
Finish Quantum and All-in-1 gel packs and tablets. In the Home category, Air
Wick achieved good growth in H2 driven by a strong performance from the newly
launched Filter & Fresh and Black Edition candles. 
FY adjusted operating profit was £1,156m, an increase of +3% at
constant. The adjusted operating margin increased +80bps, with increased BEI
more than offset by a combination of gross margin expansion, and fixed cost
savings. These savings came from the early achievement of cost savings from
the new structure in H2. This has effectively brought forward some of the
planned cost savings originally targeted for 2013. 
Q4 LFL growth was +3%. 
LAPAC 27% of core net revenue 
FY 2012 total net revenue increased to £2,327m, with LFL growth of
+11%. Growth came from Latin America, North Asia and South East Asia, driven
by distribution expansion, innovation and increasing penetration. In Health,
all Powerbrands grew, with exceptionally strong performances from Durex in
China, Scholl in Japan, Paras brands in India, and Gaviscon rollouts in a
number of markets. In Hygiene, Dettol, Lysol, Harpic and Veet delivered strong
growth from initiatives such as Dettol Daily Care and Re-energize, and
PowerPlus in Harpic. Vanish and Air Wick performed well in the Home category. 
FY adjusted operating profit increased +17% to £464m. Adjusted
operating margin was +100bps higher at 19.9%. Increased investment behind BEI
was more than offset by good gross margin, volume leverage and fixed cost
containment. 
Q4 LFL growth was +11%. 
RUMEA 17% of core net revenue 
FY 2012 net revenue of £1,404m was ahead +8% on LFL basis (+7%
total), driven by strong growth in Russia & CIS. In Health, growth was driven
by Durex, Gaviscon, and Strepsils. Hygiene Powerbrands Dettol, Finish, Harpic
and Veet performed particularly well supported by initiatives such as Dettol
Daily Care and Re-energize. Air Wick performed well in the Home category with
growth driven by Freshmatic and Aqua Mist. 
The 2nd half saw the upscheduling of certain Nurofen products in
Russia, an increased promotional environment and some operational and
socio-political challenges in certain markets. These headwinds will continue
through the year but we remain confident about the underlying strength of the
business. 
FY adjusted operating profit increased by +3% to £290m. This
resulted in a -80bps decline in the adjusted operating margin to 20.7%. This
was due to adverse FX impacting gross margin and increased investment in both
BEI and the new area structure, to support the business and drive future
growth. 
Q4 LFL growth was +7%. 
Food 
FY 2012 net revenue increased +2% to £321m underpinned by continued
growth in French's Mustard and Frank's Red Hot Sauce. The 2nd half was flat
due to weaker US market conditions and increased private label activity,
particularly around French Fried Onions. Our core French's Mustard and Frank's
Red Hot franchises remain strong. 
Operating margins fell by -80bps to 28.7% due to adverse mix and
input costs. 
Q4 LFL growth was 0%. 
Pharmaceuticals ("RBP") 
FY 2012 net revenue increased +10% to £837m. Growth came from
continued strong volume growth in the US. This was offset by dilution from the
increased Film penetration, which is a lower priced product, and government
price reductions in a number of European markets. Conversion from tablets to
Film in the US continues to increase with market volume share now 64%, up from
48% at the end of 2011, creating a significantly more sustainable business. 
Q4 net revenue growth of +22% was helped by the lapping of the adjustments
made on Medicaid accruals in Q4 2011. The underlying growth trends in the
quarter were similar to those experienced throughout 2012. 
FY operating profit increased +3% to £536m. The operating margin was down
-400bps to 64.0%, due to the factors, as communicated during the Q3 IMS
conference call. These factors included lower margins of the film variant,
downward pricing pressure in Europe, and 2nd half increase in BEI for
advertising and marketing programmes to increase patient awareness about the
Film and treatment. We also increased investment in the clinical pipeline. We
expect this gradual increase in investment to continue into 2013 and beyond as
we build a strong, sustainable growth business. 
RBP recently announced its voluntary discontinuation of Suboxone
tablets in the USA due to increasing concerns with pediatric exposure. Further
details can be found on our website - www.rb.com 
At this time the Group does not know the timing of potential
generic competition to Suboxone in the US. For further information surrounding
Suboxone products, please refer to page 11 of the 2011 Annual Report and
Financial Statements. 


                           FY 2012 Category Review
           Quarter ended                                                        
          Full Year ended
            31 December                                                         
            31 December
    2012     2011     % change                                                  
    2012      2011     % change
      £m       £m    exch. rates                                              
        £m        £m    exch. rates
                    actual   const.                                             
                     actual   const.
                                    Net revenue by category


 606      546      +11      +13 Health                                       
2,068     2,000       +3       +6 
 897      902       -1       +4 Hygiene                                      
3,682     3,643       +1       +5 
 501      506       -1       +3 Home                                         
1,966     2,009       -2       +2 


     150      175      -14      -11 Portfolio Brands                            
     693       759       -9       -4
      93       94       -1        0 Food                                        


 321       312       +3       +2 
2,247    2,223       +1       +5 Total - ex RBP                               
8,730     8,723        0       +4 
 229      193      +19      +22 RBP                                          
 837       762      +10      +10 
2,476    2,416       +2       +6 Total                                        
9,567     9,485       +1       +4 
                                Operating profit - adjusted 
                                Health, Hygiene, Home & Portfolio            
1,910     1,867       +2       +6 


                                    Food                                        
      92        92        0       -1
                                    Corporate                                   
      32        10      n/a      n/a


                                Total - ex RBP                               
2,034     1,969       +3       +7 


                                    RBP                                         
     536       518       +3       +3


                                Total                                        
2,570     2,487       +3       +6 
                                Exceptional items                            
(135)      (92) 
                                Total                                        
2,435     2,395       +2       +5 


                                    Operating margin - adjusted                 
       %         %
                                    Health, Hygiene, Home & Portfolio           
    22.7      22.2
                                    Food                                        
    28.7      29.5
                                    Corporate                                   
     n/a       n/a
                                    Total - ex RBP                              
    23.3      22.6
                                    RBP                                         
    64.0      68.0
                                    Total                                       
    26.9      26.2

The Category Review below is given at constant exchange rates.

Health 25% of core net revenue

Net revenue increased to £2,068m, with LFL growth of +6%. Higher
incidences of cold and flu in Q4 in ENA drove improved performances of our
seasonal brands Mucinex and Strepsils. The non-seasonal Powerbrands performed
well particularly Durex, Paras brands and Gaviscon. Growth in Nurofen was
impacted by upscheduling of certain products in Russia. New initiatives such
as Performax Intense condoms, plus increased distribution in China drove Durex
growth, and the roll out of Double Action in a number of emerging markets
strengthened performance from Gaviscon.

Q4 LFL growth was +10%.

Hygiene 44% of core net revenue

Net revenue increased to £3,682m with LFL growth of +6%, driven by
strong growth in the Dettol / Lysol franchise across all three of our areas.
New initiatives such as Dettol Daily Care and Re-energize in emerging markets
and the recently launched Lysol No-Touch Kitchen System in ENA underpinned
this strong performance. Finish continues to perform well in a number of
markets globally, and particularly in the US where Quantum and All-In-1
tablets and gel packs have gained market share. Veet delivered good growth
behind initiatives such as the Veet Easy Wax Electrical Roll-On. Harpic
enjoyed very strong growth in LAPAC and RUMEA by driving category penetration
via consumer education and increased distribution, backed by the continued
success of Harpic Powerplus, and Harpic Hygienic blocks in all geographies.

Q4 LFL growth was +6%.

Home 23% of core net revenue

Net revenue increased to £1,966m, with LFL growth of +2%. Growth
came from Vanish where there has been excellent growth in a number of emerging
market countries, combined with more stable market shares in ENA where we have
lapped competitive entries. Growth was also driven by Air Wick which produced
a good performance behind Freshmatic, candles and "Flip & Fresh".

Q4 LFL growth was +3%.

Portfolio 8% of core net revenue

Net revenue was £693m, with LFL growth of +1%. The total
performance of -4% was primarily due to the discontinuation of the Private
Label business where all contracts are now terminated.

Q4 LFL growth was -2%.
                       New Product Initiatives: H1 2013

RB announces a number of new product initiatives for the first half
of 2013:

Health:

- Launch of Mucinex Sinus-Max range. A Triple Action formula that
relieves sinus pressure, breaks down mucus and helps get rid of headaches with
maximum strength medicines.

- Launch of Nurofen next generation heat patch. A flexible patch
that starts to heat up in just five minutes from application.

- Launch of Nurofen Meltlets for youth, even on-the-go.

- Strepsils Children 6+ Lozenges. The product acts directly at the
site of pain, providing fast and long lasting relief for `little ones' sore
throats.

- Launch of Durex Feel Real. Polyisoprene condom using a softer
more flexible material to provide a more natural feeling during sex.

- Launch of Gaviscon Instant Granules. Dissolves in seconds and
soothes in minutes.

- Launch of Scholl Hard Skin and Callus Express treatment. It
delivers soft feeling skin in one application without using a blade.

Hygiene:

- Launch of Finish Quantum with Power Gel. New formula of Finish
Quantum that now comes with a revolutionary gel chamber that delivers
amazingly clean and shiny dishes.

- Launch of Dettol Kitchen Gels - India and South Korea. A unique
dish wash gel that gives you healthy dishes and kitchen surfaces. It makes
your dishes, sink and counter top sparkling clean and kills 100 times more
germs than an ordinary dish wash.

- Launch of Dettol Radiance Soap and Body Wash. Contains a unique
blend of Vitamins B3 & C that helps rejuvenate and purify the skin for it to
regain its radiance.

- Launch of Veet Naturals Hair Removal Cream. Combines Veet's hair
removal expertise with nature's skin care ingredients.

Home:

- Launch of Vanish Gel Treat and Go: Treat the stains directly,
soak or add to the washing machine - for amazing stain removal first time.

- Launch of Air Wick Filter & Fresh Car. Physically captures odours
as well as adding great fragrance, thanks to its Activated Carbon Filter. A
truly clean, fresh fragrance experience!

- Launch of Air Wick EverFresh Gels. Slow release gel for
bathrooms.
                               Financial Review

Basis of preparation. The unaudited financial information is
prepared in accordance with IFRSs as adopted by the European Union and IFRSs
as issued by the International Accounting Standards Board, and with the
accounting policies set out in the Group's 2011 Annual Report and Financial
Statements, and as updated by the 2012 Interim Statement.

Constant exchange. Movements in exchange rates relative to Sterling
affect actual results as reported. The constant exchange rate basis adjusts
the comparative to exclude such movements, to show the underlying growth of
the Group.

Net finance expense. Net finance expense was £15m (2011: net
finance expense of £19m), reflecting the acquisition of SSL and Paras. The
2011 net finance expense includes a £4m exceptional charge in respect of
financial costs associated with the acquisition of SSL.

Tax. The tax rate was 24%, a reduction from the 2011 rate of 26%.
This was primarily due to a 2% reduction in the UK corporate tax, associated
deferred tax benefits and the favourable settlement of certain tax cases.

Net working capital (inventories, short-term receivables and
short-term liabilities excluding borrowings and provisions) of minus £700m,
which is in line with the 31 December 2011 level, despite the acquisition of
Schiff.

Cash flow. Cash generated from operating activities was £2,423m
(2011: £2,430m) and net cash flow from operations was £1,735m (2011: 
£1,581m).
Net interest paid was £7m (2011: net interest paid of £13m) and tax payments
were £528m (2011: £677m). Capital expenditure was lower than the prior year 
at
£177m (2011: £205m). Acquisition of businesses of £877m related to the
acquisition of Schiff, and other minor acquisitions.

Net debt at the end of the year was £2,426m (December 2011: net
debt of £1,795m). This reflected strong free cash flow generation, offset by
the payment of two dividends totaling £916m and the acquisition of businesses
(principally Schiff) for £877m. The Group regularly reviews its banking
arrangements and currently has adequate facilities available to it.

Restructuring charge. A total pre-tax exceptional charge of £135m
has been incurred during the year in respect of the following:

- The remaining restructuring costs in respect of the acquisition
of SSL;

- Costs associated with the new strategy and Private Label business
closure costs and

- Acquisition costs associated with the acquisition of Schiff and
other acquisitions

In FY 2011, an exceptional pre-tax charge of £96m was incurred, of
which £92m is reflected in reported operating profit and £4m is included in
net interest.

Acquisition of Schiff. On 14 December 2012, the Group acquired Schiff which
was funded by existing facilities. The following provisional items were
recognised on the Group's balance sheet as at 31 December 2012: Intangible
assets (£807m), Goodwill (£371m), net working capital assets (£26m), 
deferred
tax liabilities (£267m), provisions (£45m) and other net assets (£27m). 
These
provisional values will be finalised during 2013.

Balance sheet. At the end of 2012, the Group had total equity of
£5,922m (2011: £5,781m), an increase of +2%. Net debt was £2,426m (2011: net
debt of £1,795m) and total capital employed in the business was £8,348m 
(2011:
£7,576m).

This finances non-current assets of £12,023m (2011: £11,188m), of
which £737m (2011: £732m) is property, plant and equipment, the remainder
being goodwill, other intangible assets, deferred tax, available for sale
financial assets, retirement benefit surplus and other receivables. The Group
has net working capital of minus £700m (2011: minus £701m), current 
provisions
of £128m (2011: £60m) and long-term liabilities other than borrowings of
£2,668m (2011: £2,642m).

The Group's financial ratios remain strong. Return on shareholders'
funds (net income divided by total shareholders' funds) was 31.0% on a
reported basis and 32.8% on an adjusted basis (2011: 30.3% on a reported basis
and 31.6% on an adjusted basis).

Dividends. The Board of Directors recommends a final dividend of 78
pence (2011: 70 pence), an increase of +11%, to give a full year dividend of
134 pence (2011: 125 pence), an overall increase of +7%. The dividend, if
approved by shareholders at the AGM on 2 May 2013, will be paid on 30 May to
shareholders on the register at the record date of 22 February. The
ex-dividend date is 20 February and the last date for election for the share
alternative to the dividend is 8 May. The final dividend will be accrued once
approved by shareholders.

Contingent liabilities. The Group is involved in a number of
investigations by government authorities and has made provisions for such
investigations, where appropriate. Where it is too early to determine the
likely outcome of these matters, the Directors have made no provision for such
potential liabilities.

The Group has received a civil claim for damages from the
Department of Health and others in the United Kingdom, regarding alleged
anti-competitive activity involving the Gaviscon brand. The claim is under
review and at this time the Directors do not believe that any potential impact
would be material to the Group financial statements.

The Group from time to time is involved in discussions in relation
to ongoing tax matters in a number of jurisdictions around the world. Where
appropriate, the Directors make provisions based on their assessment of each
case.

Post balance sheet event. On 8 January 2013 the Group obtained control of
Oriental Medicine Company Limited, a manufacturer of traditional Chinese sore
throat products, by acquiring 100% of the share capital.

On 10 February 2013, the Group entered into a 3 year collaboration agreement
with Bristol-Myers Squibb, for a number of market-leading over-the-counter
consumer health care brands in Brazil, Mexico and certain other parts of Latin
America. The Group will make an upfront cash payment of $482m (£300m) to enter
into the arrangement which also includes personnel, supply contracts and an
option to acquire legal title to the related intellectual property at the end
of the collaboration period for a multiple of earnings. The transaction will
be accounted for as a business combination and the Directors are in the
process of revaluing the assets and liabilities acquired to fair value,
including the value of any acquired intangible assets.

Further disclosure will be provided in the 2013 Half Year Announcement.
                               Medium term KPIs

We continue to target net revenue growth on average +200bps per annum above
our market growth, and moderate operating margin expansion (ex RBP).

However, given the initial progress against our new strategy and our recent
acquisitions we are accelerating two of our medium term KPIs from 2016 to
2015. We are now targeting:

- Health & Hygiene revenues to be 72% of core net revenues by the end of 2015

- LAPAC and RUMEA revenues to be 50% of core net revenues by the
end of 2015

Both these KPIs are one year ahead of our ingoing expectations.
                                 2013 Targets

In 2012 we discontinued our Private Label business, and sold a number of small
non-core brands. 2013 will benefit from a number of acquisitions. Together
they will have a net impact of c.+100bps. Taking these into account, we are
targeting:

- net revenue growth of +5-6%**;

- further increased investment in our brands (BEI); and

- maintain operating margins*

These targets exclude RBP.

* adjusted to exclude the impact of exceptional items.

** at constant rates including acquisitions and disposals / withdrawal from
Private Label and other minor items, excluding RBP.

For further information, please contact:

Reckitt Benckiser                                +44 (0)1753 217800
 
Richard Joyce
 
Director, Investor Relations
 
Andraea Dawson-Shepherd
 
SVP, Global Corporate Communication and Affairs
Brunswick (Financial PR)                        +44 (0)20 7404 5959
 
David Litterick / Max McGahan
 
Notice to shareholders

Cautionary note concerning forward-looking statements

This document contains statements with respect to the financial
condition, results of operations and business of Reckitt Benckiser and certain
of the plans and objectives of the Group with respect to these items. These
forward-looking statements are made pursuant to the "Safe Harbor" provisions
of the United States Private Securities Litigation Reform Act of 1995. In
particular, all statements that express forecasts, expectations and
projections with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the impact of
interest or exchange rates, the availability of financing to the Company,
anticipated cost savings or synergies and the completion of strategic
transactions are forward-looking statements. By their nature, forward-looking
statements involve risk and uncertainty because they relate to events and
depend on circumstances that will occur in the future. There are a number of
factors discussed in this report, that could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements, including many factors outside Reckitt Benckiser's
control. Past performance cannot be relied upon as a guide to future
performance.

The Group at a Glance (Unaudited)

Quarter ended 31 December                                   Full year ended 31
                                                                 December
    2012         2011                                       2012          2011


 £m           £m                                         £m            
£m 


     2,476         2,416     Net revenue - total              9,567         9,485
    +7%           +3%      Net revenue growth -              +5%           +4%
                           like-for-like
    +6%           +8%      Net revenue growth -              +4%          +13%
                           constant
    +2%           +6%      Net revenue growth - total        +1%          +12%
                           Gross margin                     57.9%         57.4%
                           EBITDA - adjusted*               2,717         2,642
                           EBITDA margin - adjusted*        28.4%         27.9%
                           EBIT                             2,435         2,395
                           EBIT - adjusted*                 2,570         2,487
                           EBIT margin                      25.5%         25.3%
                           EBIT margin - adjusted*          26.9%         26.2%
                           Profit before tax                2,420         2,376
                           Net income                       1,829         1,745
                           Net income - adjusted*           1,938         1,818
                           EPS, basic, as reported         252.5p        239.8p
                           EPS, adjusted and diluted*      264.4p        247.1p

* Adjusted to exclude the impact of exceptional items.

Group balance sheet data                  31 December 31 December
                                             2012        2011


                                          £m          £m 
Net working capital *                        (700)       (701)
Net debt                                    (2,426)     (1,795) 
* Net working capital is defined as inventories, trade and other receivables
and trade and other payables. 
Shares in issue 
                                             Millions
31 December 2011                                   728.6
Issued                                              5.6
31 December 2012                                   734.2 
Group Income Statement 
For the 12 months ended 31 December 2012 (unaudited) 


                                                     Unaudited       Audited
                                                    Year ended    Year ended
                                                   31 December   31 December
                                                          2012          2011
                                                               (restated)(a)


                                                        £m            £m
Net revenue                                              9,567         9,485
Cost of sales                                          (4,030)       (4,036)
Gross profit                                             5,537         5,449
Net operating expenses                                 (3,102)       (3,054)
Operating profit                                         2,435         2,395
Operating profit before exceptional                      2,570         2,487
items
Exceptional items                                        (135)          (92)
Operating profit                                         2,435         2,395
Finance income                                              26            23
Finance expense(b)                                        (41)          (42)
Net finance expense                                       (15)          (19)
Profit on ordinary activities before                     2,420         2,376
taxation
Tax on profit on ordinary activities                     (587)         (622)
Net income for the period                                1,833         1,754 
Attributable to non-controlling                              4             9
interests
Attributable to owners of the parent                     1,829         1,745
Net income for the period                                1,833         1,754 
Earnings per ordinary share:
Basic earnings per share                                252.5p        239.8p
Diluted earnings per share                              249.5p        237.1p 
(a) The income statement for the year ended 31 December 2011 has been restated
to reflect a change in the Group's accounting policy for certain consumer
promotional costs. The Group now treats certain consumer promotional costs as
cost of sales where previously these were classified as marketing in net
operating expenses. The Directors believe that this change provides more
relevant information about the performance of the Group and aligns the Group's
accounting policies with common industry practice. 
(b) Finance expense for the year ended 31 December 2011 includes an
exceptional charge of £4m, relating to financial costs associated with the
acquisition of SSL. 
Group Statement of Comprehensive Income 
For the 12 months ended 31 December 2012 (unaudited) 


                                                      Unaudited     Audited
                                                     Year ended  Year ended
                                                    31 December 31 December
                                                           2012        2011


                                                         £m          £m
Net income for the period                                 1,833       1,754
Other comprehensive income
Net exchange losses on foreign currency
translation, net of tax                                   (255)       (226)
Actuarial losses, net of tax                               (49)        (49)
Gains on cash flow hedges, net of tax                         3           3
Reclassification of foreign currency                          9           -
translation reserves on disposal of
subsidiary, net of tax
Other comprehensive income for the period,
net of tax                                                (292)       (272)
Total comprehensive income for the period                 1,541       1,482
Attributable to non-controlling interests                   (1)           4
Attributable to owners of the parent                      1,542       1,478 
                                                      1,541       1,482
Group Balance Sheet 
As at 31 December 2012 (unaudited) 


                                                Unaudited     Audited
                                              31 December 31 December
                                                     2012        2011


                                                     £m          £m
ASSETS
Non-current assets:
Goodwill and other intangible assets               11,175      10,258
Property, plant and equipment                         737         732
Deferred tax assets                                    49         150
Available for sale financial assets                     2          10
Retirement benefit surplus                             27          32
Other receivables                                      33           6 
                                               12,023      11,188
Current assets:
Inventories                                           735         758
Trade and other receivables                         1,407       1,442
Derivative financial instruments                        4          67
Current tax receivables                                20          21
Available for sale financial assets                     4          11
Cash and cash equivalents                             887         639 
                                                3,057       2,938
Total assets                                       15,080      14,126 
LIABILITIES
Current liabilities:
Borrowings                                        (3,271)     (2,505)
Provisions for liabilities and charges              (128)        (60)
Trade and other payables                          (2,842)     (2,901)
Derivative financial instruments                     (43)         (7)
Current tax liabilities                             (203)       (227) 
                                              (6,487)     (5,700)
Non-current liabilities:
Borrowings                                            (3)         (3)
Deferred tax liabilities                          (1,814)     (1,772)
Retirement benefit obligations                      (426)       (502)
Provisions for liabilities and charges              (100)       (118)
Non-current tax liabilities                         (311)       (211)
Other non-current liabilities                        (17)        (39) 
                                              (2,671)     (2,645)
Total liabilities                                 (9,158)     (8,345)
Net assets                                          5,922       5,781 
EQUITY
Capital and reserves:
Share capital                                          73          73
Share premium                                         184          86
Merger reserve                                   (14,229)    (14,229)
Hedging reserve                                         2         (1)
Foreign currency translation reserve                (131)         110
Retained earnings                                  20,022      19,672 
                                                5,921       5,711
Non-controlling interests                               1          70
Total equity                                        5,922       5,781 
Group Statement of Changes in Equity 
For the 12 months ended 31 December 2012 (unaudited) 


                                                                      Foreign   
              Total
                                                                     currency   
       attributable        Non-


                               Share   Share   Merger Hedging translation 
Retained to owners of controlling   Total
Unaudited                        capital Premium  reserve reserve     reserve 
earnings   the parent   interests  equity 
                                  £m      £m       £m      £m          
£m       £m           £m          £m      £m
Balance at 1                          73      59 (14,229)     (4)         331   
18,828        5,058          72   5,130
January 2011
Net income                                                                      
 1,745        1,745           9   1,754
Other comprehensive
income
Actuarial losses, net of tax                                                    
  (49)         (49)                (49)
Gains on cash flow                                              3                
              3                   3
hedges, net of tax
Net exchange adjustments
on foreign currency
translation, net of tax                                                 (221)    
          (221)         (5)   (226)
Total other comprehensive              -       -        -       3       (221)   
  (49)        (267)         (5)   (272)
income
Total comprehensive                    -       -        -       3       (221)   
 1,696        1,478           4   1,482
income
Transactions with owners
Proceeds from share issue                     27                                 
             27                  27
Share based payments                                                             
61           61                  61
Deferred tax on share awards                                                    
  (13)         (13)                (13)
Current tax on share awards                                                      
 2            2                   2
Dividends                                                                       
 (873)        (873)         (7)   (880)
Non-controlling interest                                                         
                          1       1
arising on business
combination
Put option issued to non-                                                       
  (29)         (29)                (29)
controlling interest
Total transactions                     -      27        -       -           -   
 (852)        (825)         (6)   (831)
with owners
Balance at                            73      86 (14,229)     (1)         110   
19,672        5,711          70   5,781
31 December 2011
Net income                                                                      
 1,829        1,829           4   1,833
Other comprehensive
income
Actuarial losses, net of tax                                                    
  (49)         (49)                (49)
Gains on cash flow hedges,                                      3                
              3                   3
net of tax
Net exchange adjustments                                                (250)    
          (250)         (5)   (255)
on foreign currency translation,
net of tax
Reclassification of foreign                                                 9    
              9                   9
currency reserves on disposal
of subsidiary, net of tax
Total other comprehensive              -       -        -       3       (241)   
  (49)        (287)         (5)   (292)
income
Total comprehensive income             -       -        -       3       (241)   
 1,780        1,542         (1)   1,541
Transactions with owners
Proceeds from share issue                     98                                 
             98                  98
Share based payments                                                             
49           49                  49
Current tax on share awards                                                      
23           23                  23
Shares repurchased                                                              
 (535)        (535)               (535)
and held in
Treasury
Dividends                                                                       
 (916)        (916)         (4)   (920)
Acquisition of non-controlling                                                  
  (51)         (51)        (55)   (106)
Interest
Deconsolidation of                                                               
                        (9)     (9)
non-controlling
interest following loss of
control
Total transactions                     -      98        -       -           -  
(1,430)      (1,332)        (68) (1,400)
with owners
Balance at                            73     184 (14,229)       2       (131)   
20,022        5,921           1   5,922
31 December 2012 
Group Cash Flow Statement 
For the year ended ended 31 December 2012 (unaudited) 
                                                              Unaudited     
Audited 
                                                             Year ended  
Year ended 
                                                            31 December 31 
December 
                                                                   2012      
2011 
                                                                     £m     
  £m
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations:
Operating profit                                                      2,435     
  2,395
Depreciation of property, plant & equipment,                            148      
157
and amortisation & impairment of intangible
assets
Fair value (gains) / losses                                             (7)      
  1
Gain on sale of property, plant & equipment and                        (13)      
(9)
intangible assets
Gain on sale of businesses                                             (32)      
  -
Decrease / (Increase) in inventories                                     19     
  (131)
Increase in trade and other receivables                                (16)     
  (113)
(Decrease) / Increase in payables and                                 (160)      
 69
provisions
Share based payments                                                     49      
 61
Cash generated from operations:                                       2,423     
  2,430
Interest paid                                                          (34)      
(35)
Interest received                                                        27      
 22
Tax paid                                                              (528)     
  (677)
Net cash generated from operating activities                          1,888     
  1,740 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant and equipment                             (166)     
  (164)
Purchase of intangible assets                                          (11)      
(41)
Disposal of property, plant and equipment                                13      
  5
Disposal of intangible assets                                             9      
 12
Acquisition of businesses, net of cash                                (877)     
  (460)
acquired
Disposal of businesses, net of cash disposed                             81      
  -
Maturity / (Purchase) of short-term                                       7      
(2)
investments
Maturity of long-term investments                                        14      
  2
Net cash outflow on deconsolidation of a                                (6)      
  -
subsidiary
Net cash generated used in investing                                  (936)     
  (648)
activities 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares                                   98      
 27
Shares purchased and held as Treasury shares                          (535)      
  -
Proceeds from borrowings                                                887      
249
Repayments of borrowings                                              (112)     
  (400)
Dividends paid to owners of the parent                                (916)     
  (873)
Dividends paid to non-controlling interests                             (4)      
(7)
Acquisition of non-controlling interest                               (106)      
  -
Net cash used in financing activities                                 (688)     
(1,004) 
Net increase in cash and cash equivalents                               264      
 88
Cash and cash equivalents at beginning of                               634      
568
period
Exchange losses                                                        (16)      
(22)
Cash and cash equivalents at end of period                              882      
634 
Cash and cash equivalents comprise
Cash and cash equivalents                                               887      
639
Overdrafts                                                              (5)      


    (5)
                                                                        882     
    634

RECONCILIATION OF NET CASH FLOW FROM OPERATIONS

Net cash generated from operating activities                          1,888     
  1,740
Net purchases of property, plant and equipment                        (153)     
  (159)
Net cash flow from operations                                         1,735     
  1,581

Management uses net cash flow from operations as a performance measure.

Earnings per Ordinary Share
For the year ended 31 December 2012 (unaudited)
                                                           2012     2011
                                                          pence    pence

Basic earnings per share                                  252.5    239.8

Diluted earnings per share                                249.5    237.1

Adjusted basic earnings per share                         267.6    249.9

Adjusted diluted earnings per share                       264.4    247.1

Basic

Basic earnings per share is calculated by dividing the net income attributable
to owners of the parent (2012: £1,829m (2011: £1,745m)) by the weighted
average number of ordinary shares in issue during the year (2012: 724,238,235
(2011: 727,628,580)).

Diluted

Diluted earnings per share is calculated by adjusting the weighted average
number of shares outstanding to assume conversion of all potentially dilutive
ordinary shares. The Company has two categories of potentially dilutive
ordinary shares: those resulting from exercises under the Executive Share
Option and Employee Sharesave schemes. The options only dilute earnings when
they result in the issue of shares at a value below the market price of the
share and when all performance criteria (if applicable) have been met. As at
31 December 2012, there were 4m (2011: 4m) of Executive Share Options not
included within the dilution because the exercise price for the options was
greater than the average share price for the year.

The Directors believe that diluted earnings per ordinary share, adjusted for
the impact of exceptional items after the appropriate tax amount, provides
additional useful information on underlying trends to shareholders in respect
of earnings per ordinary share.

Details of the adjusted net income attributable to owners of the parent are as
follows:
                                                             2012    2011
                                                               £m      £m

Net income attributable to owners of the parent             1,829   1,745

Exceptional items                                             135      92

Exceptional charge included in finance expense                  -       4

Tax effect of exceptional items                              (26)    (23)

Adjusted net income attributable to owners of the parent    1,938   1,818

The reconciliation between the weighted average number of shares used in the
calculation of the earnings per share is set out below:
                                                   2012         2011
                                                Average      Average
                                              number of    number of
                                                 shares       shares

On a basic basis                            724,238,235  727,628,580

Dilution for Executive Options outstanding
and Executive Restricted Share Plan           8,098,123    7,423,757

Dilution for Employee Sharesave scheme 
options outstanding                             659,327      780,818

On a diluted basis                          732,995,685  735,833,155

The Directors believe that diluted earnings per ordinary share, adjusted for
the impact of the exceptional charge (net of tax) in the current year,
provides the most meaningful measure of earnings per ordinary share.
    END

-0- Feb/13/2013 07:00 GMT


 
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