Interim Report 2007 live it - Zonebourse.com Benckiser Interim Report 2007 3 Mortein growth came from a number of new initiatives such as Mortein Lantern and Mortein with Dettol, while

live itInterim Report 2007

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Health & Personal Care Net revenue £605m

Profile of categoryProducts that relieve or solvecommon personal or healthproblems, protecting againstinfection and improvingwellbeing. Our Personal Careproducts include Clearasil anti-acne cream and Veet toremove unwanted body hair.Denture Care cleans andimproves the performance ofdentures. Our range of over-the-counter health products includesanalgesics, gastro-intestinalproducts and cough, cold andsore throat products.

Market positionDettol is the world leader inantiseptics bought for use athome. Veet is the world leader in depilatories. Nurofen is theNo.2 Analgesic in Europe.Strepsils is the No.1 sore throatproduct outside the US. Clearasilis the No.2 anti-acne treatment.Gaviscon is the No.1 UGI (uppergastro-intestinal) brand in Europe.

We are passionate about delivering bettersolutions in household cleaning and health & personal care to customers, wherever theymay be, for the ultimate purpose of creatingshareholder value.

Fabric Care Net revenue £605m

Profile of categoryThis category consists of fiveproduct groups used for cleaningand treating all fabrics. It coversproducts used before, during orafter the main laundry washcycle. Fabric Treatment productsremove stains from clothes,carpets and upholstery. GarmentCare products are speciallyformulated for washing delicatefabrics. Water Softeners protectthe machine and laundry againstthe build-up of limescale andother deposits. Fabric Softenersare used for softening andfreshening fabrics and ironingaids help make ironing moreconvenient. Laundry Detergentsclean fabrics in washingmachines.

Market positionNo.1 worldwide in FabricTreatment and Water Softenercategories. No.2 worldwide inGarment Care.

Surface Care Net revenue £459m

Profile of categoryFive product groups. Disinfectantcleaners both clean and disinfectsurfaces, killing 99.9% of germs. Lavatory cleaners offerspecialised cleaning anddisinfecting for the toilet bowland cistern. All purpose cleanersare ideal for many householdsurfaces, particularly in thebathroom and kitchen. Specialtycleaners are designed for specifictasks – from cleaning ovens toremoving limescale. Finally,Polishes & Waxes clean and shinehard surfaces such as furnitureand floors.

Market positionNo.1 worldwide in Surface Care with leading positionsacross the five product groupsdescribed above.

Dishwashing Net revenue £305m

Profile of categoryProducts used in automaticdishwashing machines and forwashing dishes by hand. In Automatic Dishwashing themain product is detergent forcleaning dishes in the main washcycle and sold in an increasingrange of formats: powder, liquid,gels (standard and 2in1), gelcaps(standard and 2in1) and tabs(Double Action, PowerBall, 2in1,3in1, 4in1, 5in1 and Quantum).Other products include rinseagents, decalcifying salts,dishwasher cleaners, deodorisersand glass corrosion protectors.

Market positionNo.1 worldwide in Automatic Dishwashing.

Home Care Net revenue £364m

Profile of categoryConsists of three categories. Air Care products freshen or add fragrance to the air and also create an ambience. Various formats include: aerosols,gels, liquids, electricals andcandles. Pest Control productsoffer solutions to domesticinfestation. The category includesrodenticide and insecticideproducts – in formats such ascoils, mats, baits, traps,vapourisers and sprays – toprevent infestation and to killpests. Shoe Care cleans andprotects shoes.

Market positionNo.2 worldwide in Air Care,Shoe Care and Pest Control.

24%of net revenues

24%of net revenues

18%of net revenues

14%of net revenues

12%of net revenues

Reckitt Benckiser Interim Report 2007 1

• Net revenues grew 7% (12% constant) to £2,560m.The underlying business (excluding BHI) grew 5%(10% constant).

• BHI contributed net revenues of £273m.

• Operating profit as reported increased 39% to £510m.Adjusted operating profit (before 2006 restructuring charges) increased 20%.

• Net income as reported was 51% higher at £395m. Diluted earnings per share (reported) were 51% higher at 53.6 pence. Adjusted net income (before 2006 restructuring charges) increased 30%. Diluted earnings per share (adjusted) increased 30%.

• Cash generated from operations increased 3% to £634m.Net borrowings at the half year were £484m.

• The interim dividend will be increased 22% to 25.0 pence per share and the Company is committed to its £300mshare buyback program this year.

2 Operating and Financial Review

5 Accounting Policies

6 Group Income Statement

6 Group Statement of Recognised Income and Expense

7 Group Balance Sheet

8 Group Cash Flow Statement

9 Statement of changes in Shareholders’ Equity

10 Segmental Analysis

11 Earnings per Ordinary Share and Dividends

12 Independent Review Reportto Reckitt Benckiser plc

IBC Shareholder Information

Results at a glance 2007 H1 2006 H1 change£m £m %

Net revenues 2,560 2,386 +7

Operating profit 510 367 +39

Net income 395 261 +51

Operating profit (adjusted)* 510 424 +20

Net income (adjusted)* 395 303 +30

*The term adjusted excludes the impact of the restructuring charge in 2006

Financial Highlights

2 Reckitt Benckiser Interim Report 2007

Basis of presentationWhere appropriate, the term ‘adjusted’excludes the impact of the restructuringcharge, the term ‘underlying’ representsthe results excluding the Boots HealthcareInternational business (BHI), acquired on 1February 2006, and the term ’like-for-like’includes proforma BHI financial data forJanuary 2006.

Note that the former BuprenorphineBusiness Group (BBG) has now beenrenamed Reckitt Benckiser Pharmaceuticals(Pharmaceuticals), and is disclosed as aseparate business segment, reflecting theCompany’s internal management structure.

Detailed operating reviewNet revenues grew by 7% (12% constant) to £2,560m. The underlying business grew by 5% (10% constant) to £2,287m. BHI contributed net revenues of £273m in the six months compared to £204m last year for the 5 months of ownership.

Adjusted operating profit increased 20%(26% constant) to £510m. Gross marginswere 190bps ahead of last year at 57.6% due to the benefit of price increases and cost optimisation. Marketing investment wassubstantially higher, with media investmentincreased by 17% constant to 13.0% of netrevenues, +50bps versus H1 2006. Adjustedoperating margins increased by 210bps to19.9% due to the BHI synergies and the grossmargin expansion somewhat offset by highermarketing investment.

Restructuring charges primarily relating to the BHI acquisition in H1 2006 were £57m.Cumulative synergies reached £68m at theend of June 2007, compared to £53m at theend of Q1, fully on track to reach the targetof £80m by the end of 2007.

Net interest charges were £16m (2006 £17m)with the interest cost of the BHI acquisitionoffset by the strong cash inflow over theperiod. The tax rate is 20%, benefiting from£20m of one-off tax releases.

Net income for the half year was 51% (60% constant) higher at £395m. Adjustednet income was 30% (37% constant) higher.

Excluding the £20m one-off tax release,adjusted net income would have been 24%(30% constant) higher.

Basic EPS was 55.1 pence per share. AdjustedEPS diluted increased by 30% to 53.6 penceper share.

Geographic analysis at constant exchange excluding restructuring

Europe55% of Net RevenuesNet revenues grew by 11% to £1,398m.Underlying growth was 7%. All five categoriescontributed to this growth. The main driver in Fabric Care was fabric treatment due to the success of Vanish Oxi Action Crystal Whiteand Vanish Oxi Action Multi, and to Calgonwater softener following increased investment.Surface Care growth benefited from thelaunch of Cillit Bang 2X Power and fromgrowth for Harpic Power Plus and Harpic MaxIn Toilet Bowl device (ITB) in Lavatory Care. In Automatic Dishwashing, the key driver was Finish Quantum and Finish All in One. In Home Care, Aircare growth was driven bycontinuing success for Airwick Freshmatic and the early results of the first launchmarkets of Airwick Freshmatic Mini. In Health & Personal Care, growth came from thehealthcare portfolio due to higher investment,particularly behind Nurofen and Strepsils, and togrowth for Veet depilatories following the initiallaunch of the new Veet 400ml Pump Pack.

Operating margins were 120bps ahead of lastyear at 22.7% due to higher gross marginsand BHI synergies, partially offset by highermarketing investment in new products. Thisresulted in a 18% increase in operating profitsto £318m.

North America & Australia27% of Net RevenuesNet revenues increased 11% to £690m.Underlying growth was 11%. Within this,NAA Household grew 7% underlying, NA Food grew 7% and Pharmaceuticals grew 83%.

H1 growth in Household came particularlyfrom Surface Care, Automatic Dishwashingand Home Care. Surface Care growth wasdriven by Lysol disinfecting spray and wipes in NA and by Harpic Max ITB Lavatory Care in ANZ. Automatic Dishwashing increased as a result of the continuing success of Electrasol3in1 monodose tablets. In Home Care, AirCare growth came across both AirwickFreshmatic and the launch of Airwick MiniFreshmatic, and from Airwick Electrical Oils. In Health & Personal Care, increased netrevenues came mainly from strong growth for Nurofen in ANZ behind higher investmentin the healthcare portfolio.

Pharmaceuticals (formerly BBG) grew sales of Suboxone very strongly in the USA wherethe sales organisation has been substantiallyincreased and helped by a regulatory changewhich allows qualified medical practices totake on up to 100 patients each for treatmentwith Suboxone, rather than the previous limitof 30 patients.

Food grew strongly due to the consumerbrands of French’s yellow mustard, Frank’s Red Hot sauce and French’s Fried Onions.

Operating margins were 350bps higher at19.4% mainly due to mix benefit from thehigh growth of Suboxone plus gross marginexpansion and BHI synergies resulting inprofits increasing 35% to £134m.

Developing Markets18% of Net RevenuesNet revenues grew 18% to £472m.Underlying growth was 17% with stronggrowth across all regions of Asia, LatinAmerica and Africa Middle East. The majorcontributors to growth were Fabric Care,Surface Care, Home Care and Health &Personal Care. In Fabric Care, the growthcame from Fabric Treatment, mainly driven by initiatives to drive the category penetrationacross the Area. In Surface Care, the maindriver was the continuing growth for HarpicPower Plus lavatory cleaner, supported byhigher investment. In Home Care, the increase was in both Pest Control and Air Care.

Operating and Financial Review

Reckitt Benckiser had a very good first half with like-for-like growth of 10%. Growth has come across all geographies and categories and was mostly driven by the success ofinitiatives like Air Wick Freshmatic, Finish Quantum and Vanish Oxi Action Crystal White.Profit growth was ahead of the full year target rate due to good gross margin expansionand BHI synergies coming ahead of schedule.


Mortein growth came from a number of new initiatives such as Mortein Lantern and Mortein with Dettol, while in Air Care,the key driver was Air Wick Freshmatic. InHealth & Personal Care, the Dettol personalcare range grew strongly benefiting fromrange extensions and additional investment,while in Healthcare both Strepsils, due to higher investment, and Gaviscon, due togeographical expansion, grew strongly.

Operating margins expanded 280bps to12.3% resulting in operating profits increasingby 57% to £58m.

Category review at constant exchange rates

Fabric Care Net revenues increased 6% to £605m. The major drivers were strongcontinuing growth for Vanish Oxi Action Multi and Vanish Oxi Action Crystal White.Calgon Water Softeners grew as a result of higher marketing investment. WooliteGarment Care benefited from the roll-out ofWoolite Color and from higher investment.Category growth was somewhat affected bylower private label sales of laundry detergent.

Surface Care Net revenues grew 8% to£459m principally due to the relaunch of the Cillit Bang range with 2X Power, the roll-out of Cillit/Easy Off Bang Stain and Drain outside Europe, and to strong growthfor Lysol disinfectant spray and wipes in North America. Harpic Lavatory Care netrevenues were also stronger due to thesuccess of Harpic Power Plus and HarpicMax ITB in Europe and ANZ and to strongunderlying growth in Developing Markets.

Dishwashing Net revenues increased 7% to£305m due to the success of Finish Quantum,launched last year, and the launch of Finish All in One. In North America, AutomaticDishwashing grew strongly, mainly due toElectrasol 3in1 monodose tablets.

Home Care Net revenues improved by 18%to £364m. Air Care grew strongly due to the continuing success of Airwick Freshmatic

in Europe and North America, and stronggrowth for Airwick Electrical Oils in NorthAmerica, plus early benefits from the firstlaunch markets of Airwick Mini Freshmatic.Pest Control growth came mainly as a resultof the launch of new products, MorteinLantern, Mortein with Dettol and MorteinProfessional Indoor Spray.

Health & Personal Care Net revenuesincreased 21% to £605m, with underlyinggrowth (excluding BHI) of 11%. Dettolantiseptic was significantly ahead inDeveloping Markets due to the expansion of the personal care range and significantlyincreased marketing investment. Veetdepilatories saw the initial launch of the new Veet 400ml Pump Pack in Europe.Healthcare, including the former business ofBHI, contributed strongly to the growth in thehalf year. BHI net revenues, led by Nurofen,Strepsils and Clearasil, were £273m in the halfyear compared to £204m in the five monthsof ownership in 2006. Adjusting for the extramonth, the like-for-like growth in the formerBHI business was 9%, mainly due tosubstantial growth for Strepsils and Nurofenas a result of higher investment.

Total Household and Health & PersonalCare Net revenues were ahead by 11% to £2,380m, +9% on an underlying basis.

Pharmaceuticals (formerly BBG) Netrevenues were £92m, 51% ahead of theequivalent period last year. This exceptionalgrowth was driven by the growth of Suboxonein the USA following a substantial increase in the sales organisation and helped by aregulatory change that allows medical practicesto take on 100 patients each for treatmentwith Suboxone, rather than the previous limitof 30 patients.

Profit for the half year was £50m, +72%.

Pharmaceuticals is now reported as a separatebusiness segment.

Food Net revenues grew 7% to £88m with good performance across the consumer

portfolio, in particular further growth forFrench’s yellow mustard and French’s FriedOnions and for Frank’s Red Hot sauce.Operating profits increased 25% to £15m,with operating margins improving 260bps to 17.0%.

Proposals for new corporate structure The Company intends to propose a change to its corporate structure to enable it toincrease the Group’s distributable reserves.

The proposed change, which is subject toCourt and Shareholder approval, involves a scheme of arrangement to introduce a new parent company above Reckitt Benckiserplc, followed by a reduction of the nominalvalue of the share capital of the new parent company. The reserves created will be available for the declaration of futuredividends and for general corporate purposes,including the re-purchase of shares.

At the same time, the Company intends to seek the repayment of its listed 5%cumulative preference shares of £1 each at par value (plus accrued dividend) in order to simplify the capital structure andreduce the associated administrative costs.

The proposals will not affect or alter theCompany’s existing dividend or buybackpolicies and will result in Reckitt Benckiser’sshareholders owning the same number ofshares but in the new parent company.Furthermore, the reduction in nominal valueof the new shares will not, in itself, have anyimpact on the market value of the shares.

Shareholder approval of these proposals will be sought at an Extraordinary GeneralMeeting, further details of which will be sent out to shareholders in due course. It isenvisaged that this process will be completedbefore the announcement of the Group’s third quarter results.


In order to increase clarity on the impact of this business on the Company’s growthrate and profitability, the Company is makingadditional disclosures, including reportingPharmaceuticals as a separate businesssegment (see table above). This is designed to clarify for investors the contribution of this business, and the potential impact of the ending of the exclusive license status ofSuboxone in the USA in late 2009 and thenewly granted license for Suboxone in Europeto 2016.

Financial ReviewNet interest Net interest payable was £16m(2006 £17m). This resulted from the debttaken on following the acquisition of BHI for a full six months, offset by strong cash inflowduring the period.

Tax The tax rate is 20% (2006 25%)benefiting from a £20m one-off tax release.The tax charge is split between UnitedKingdom tax of £14m (2006 £17m) andoverseas tax of £85m (2006 £72m).

Cash flow Cash generated from operationsincreased 3% to £634m due to increasedoperating profits and net working capitalreleases. Net cash flow from operations was£464m (2006 £496m), with significantlyhigher net capital expenditure of £62m (2006£21m) due to manufacturing re-engineeringfollowing the integration of BHI.

Net working capital (inventories, short termreceivables and short term liabilities excludingborrowings and provisions) decreased by£114m in the period to minus £842m, mostlydue to further significant reductions in the BHInet working capital, effectively achieving the£130m targeted reduction one year early.

Net borrowings at the half year were £484m(2006 year end £660m), a reduction in theperiod of £176m. This reflected net cash flowfrom operations of £464m somewhat offsetby payment of the final dividend (£179m) andshare buybacks (£143m).

Financing At the half year, the Group hadshareholders’ funds of £1,993m (2006 yearend £1,866m), an increase of 7%.

Net debt was £484m (2006 year end £660m).Total capital employed in the businessdecreased from £2,526m to £2,477m, a reduction of 2%.

Dividends The Board of Directors announcesan interim dividend of 25 pence per share(2006 20.5 pence per share), an increase of22% in line with the Company's policy toincrease the dividend in line with underlyingearnings. The ex dividend date will be 8August and the dividend will be paid on 27September to shareholders on the register atthe record date of 10 August. The last datefor election for the share alternative to thedividend is 6 September.

Share buyback Between February and June2007, the Group purchased 5.3m shares at a cost of £143m as part of its ongoing sharebuyback program. In Q2, the Companypurchased 3.7m shares at a cost of £100m.The Company is committed to completing its £300m programme for the full year 2007.

Post balance sheet event – Sale of HermalThe Company announced on 16 July that it had agreed to dispose of the Hermalprescription skincare business to LaboratoriosAlmirall S.A. for a consideration of £255m incash. The disposal is expected to completeduring Q3 2007. 2006 Full Year net revenueswere £58m, all in Europe, and operatingprofit was £14m.

Management discussion of financial targetsfor the full year excludes any non-operatingitems that may arise on the disposal of Hermal.

ProspectsGiven the strength of the momentum in the first half, the Company will likelyexceed its full year targets of net revenuegrowth of between 7% and 8% atconstant exchange (base £4,922m) andnet income growth in the mid teenspercentage (base £786m) at constantexchange. The Company will update themarket on the full year targets with itsQ3 results in October.

Bart BechtChief Executive Officer

Additional Disclosures – PharmaceuticalsThe following is the historical financial record of Pharmaceuticals:

Year 2002 2003 2004 2005 2006 H1 2007£m £m £m £m £m £m

Net Revenue 49 68 89 121 156 92Operating Profit 34 43 56 73 84 50Operating margin 69% 63% 63% 60% 54% 54%

Operating and Financial Review continued


The principal accounting policies adopted in the preparation of this financial informationare as per the Reckitt Benckiser plc AnnualReport and Accounts for the year ended 31December 2006. Unless otherwise stated theyhave been consistently applied to all theperiods presented.

Basis of PreparationThe unaudited financial information isprepared in accordance with the Listing Rulesof the Financial Services Authority and on thebasis of the IFRS accounting policies that theDirectors intend to use in the 2007 annualreport. This basis is subject to amendment bythe International Accounting Standards Board(IASB). The Directors have chosen not to earlyadopt International Accounting Standard 34:Interim Financial Reporting (IAS 34).Consequently the financial information in thisinterim Report is not presented in accordancewith IAS 34.

This consolidated financial information hasbeen prepared under the historical costconvention, as modified by the revaluation of financial assets and liabilities at fair valuethrough the Group income statement subjectto the Group’s hedge accounting policies.

The results and net assets of the Group’ssubsidiary in Zimbabwe have been excludedfrom the consolidated Group results. This is on the basis that the Group does notconsider the Zimbabwean business to be a subsidiary due to the loss of power togovern the financial and operating policies ofthe Zimbabwean business and to therestrictions on remitting funds out of thecountry. Results for 2006 (half and full year)and 2007 half year, and the balance sheets as at 30 June 2006, 31 December 2006 and30 June 2007, were insignificant.

Foreign Currency TranslationThe currencies that most influence theGroup’s financial results and position are:

2007 2006 2006Half Year Half Year Full Year

Average rates:£/Euro 1.4818 1.4556 1.4672£/US Dollar 1.9696 1.7904 1.8436Closing rates:£/Euro 1.4848 1.445 1.4841£/US Dollar 1.9997 1.8484 1.9589

Accounting Estimates and JudgementsThe Directors make a number of estimatesand assumptions regarding the future, and make some significant judgements inapplying the Group’s accounting policies.These include:

• Estimates of future business performanceand cash generation supporting the net book value of intangible assets at the balance sheet date;

• The determination of the carrying value ofproperty, plant and equipment and relateddepreciation, and the estimation of usefuleconomic life of these assets;

• The continuing enduring nature of theGroup’s indefinite life brands supporting the assumed indefinite useful lives of these assets;

• Long-term rates of return, inflation ratesand discount rates have been assumed in calculating the pension and other employee post-retirement benefits. If the real rates are significantly different over time to those assumed, the amountsrecognised in the income statement and in the balance sheet will be impacted;

• Assumptions are made as to therecoverability of tax assets especially as to whether there will be sufficient futuretaxable profits in the same jurisdictions to fully utilise losses in future years;

• Assumptions are made in relation to shareawards, both in the Black-Scholes modelused to calculate the charge and in terms ofthe recoverability of the deferred tax assetrelated to the share award reserve; and

• The actual tax paid on profits is determinedbased on tax laws and regulations that differacross the numerous jurisdictions in whichthe Group operates. Assumptions are madein applying these laws to the taxable profitsin any given period in order to calculate the tax charge for that period. Where theeventual tax paid or reclaimed is different to the amounts originally estimated, thedifference will be charged or credited to the income statement in the period in which it is determined.

for the half year ended 30 June 2007: unaudited

Accounting Policies


1st half 1st half Full-year2007 2006 2006

£m £m £m

Net revenues 2,560 2,386 4,922Cost of sales (1,085) (1,058) (2,133)

Gross profit 1,475 1,328 2,789Net operating expenses (965) (961) (1,879)

Total operating profit 510 367 910

Operating profit before restructuring 510 424 1,059Restructuring charge – (57) (149)

Total operating profit 510 367 910

Finance income 10 10 18Finance expense (26) (27) (54)

Net finance (expense)/income (16) (17) 36

Profit on ordinary activities before taxation 494 350 874

Tax on profit on ordinary activities - UK (14) (17) (6)Tax on profit on ordinary activities - overseas (85) (72) (194)

Total tax on profit on ordinary activities (99) (89) (200)

Profit for the period 395 261 674

Attributable to equity minority interests – – –Attributable to equity shareholders 395 261 674

Profit for the period 395 261 674

Earnings per ordinary share:On profit for the period 55.1p 36.2p 93.5pOn profit for the period, diluted 53.6p 35.5p 91.8p

Dividend per ordinary share (paid in period) 25.0p 21.0p 41.5p

Total dividends paid in the period 179 152 300


Group Income Statement


£m £m £m

Profit for the period 395 261 674Net exchange adjustments on foreign currency translation 1 (71) (194)Net actuarial gains/losses – – 43Movement of deferred tax on pension liability – – (15)Net hedged gains and losses taken to reserves (5) 2 –

Net gains/(losses) not recognised in income statement (4) (69) (166)

Total recognised income for the period 391 192 508

Attributable to equity minority interests – – –Attributable to equity shareholders 391 192 508

Total recognised income for the period 391 192 508


Group Statement of Recognised Income and Expense


Group Balance Sheet

as at 30 June 2007: unaudited


£m £m £m

ASSETSNon-current assets:Goodwill and intangible assets 3,827 3,981 3,842Property, plant and equipment 448 459 425Deferred tax assets 150 145 144Other receivables 16 11 10

4,441 4,596 4,421

Current assets:Inventories 365 325 322Trade and other receivables 689 680 670Available for sale financial assets 22 15 19Cash and cash equivalents 334 295 305

1,410 1,315 1,316

Total assets 5,851 5,911 5,737

LIABILITIESCurrent liabilities:Borrowings (830) (1,030) (973)Provisions (18) (17) (47)Tax liabilities (277) (242) (239)Other liabilities (1,619) (1,490) (1,481)

(2,744) (2,779) (2,740)

Non-current liabilities:Borrowings (10) (75) (11)Deferred tax liabilities (773) (791) (766)Retirement benefit obligations (213) (282) (216)Provisions (16) (14) (15)Tax liabilities (80) (85) (100)Other non-current liabilities (22) (41) (23)

(1,114) (1,288) (1,131)

Total Liabilities (3,858) (4,067) (3,871)

Net assets 1,993 1,844 1,866

EQUITYCapital and reservesShare capital 76 76 76Share premium account 533 497 527Capital redemption reserve 5 5 5Merger reserve 142 142 142Hedging reserve (6) 1 (1)Foreign currency translation reserve (151) (29) (152)Retained earnings 1,392 1,149 1,266

1,991 1,841 1,863

Equity minority interest 2 3 3

Total equity 1,993 1,844 1,866

Approved by the Board on 15 August 2007.

Adrian Bellamy Bart Becht Director Director


Group Cash Flow Statement

for the half year ended 30 June 2007 (unaudited)


£m £m £m

CASH FLOWS FROM OPERATING ACTIVITIESCash generated from operations:Operating profit 510 367 910Depreciation 40 45 88Amortisation and impairment 11 9 46Fair value (gains)/losses (1) – (2)Increase in inventories (47) (20) (28)Increase in trade and other receivables (7) (15) (23)Increase in payables and provisions 104 209 195Share award expense 25 21 42Other non-cash movements (1) – –

Cash generated from operations 634 616 1,228Interest paid (25) (25) (50)Interest received 10 12 20Tax paid (93) (86) (181)

Net cash generated from operating activities 526 517 1,017

CASH FLOWS FROM INVESTING ACTIVITIESPurchase of property, plant and equipment and intangible assets (67) (37) (88)Disposal of property, plant and equipment 5 12 19Acquisition of businesses – (1,941) (1,893)Reduction in / (purchase of) short-term investments (2) – –Maturity of short term investments – 62 57

Net cash used by investing activities (64) (1,904) (1,905)

CASH FLOWS FROM FINANCING ACTIVITIESProceeds from issuance of ordinary shares 30 19 56Share purchases (143) (93) (300)Proceeds from borrowings – 1,250 1,250Repayments of borrowings (143) (305) (473)Dividends paid to the Company’s shareholders (179) (152) (300)

Net cash (used) / generated in financing activities (435) 719 233

Net increase / (decrease) in cash and cash equivalents 27 (668) (655)Cash and cash equivalents at beginning of period 298 969 969Exchange gains / (losses) 3 (11) (16)

Cash and cash equivalents at end of period 328 290 298

Cash and cash equivalents compriseCash and cash equivalents 334 295 305Overdraft (6) (5) (7)

328 290 298

RECONCILIATION OF NET CASH FLOW FROM OPERATIONSNet cash generated from operating activities 526 517 1,017Net purchase of property, plant and equipment (62) (21) (64)

Net cash flow from operations 464 496 953

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


Statement of changes in Shareholders’ Equity


Capital CumulativeShare Share Merger Hedging redemption translation Retained Minority

capital premium reserve reserve reserve adjustments earnings interest Total£m £m £m £m £m £m £m £m £m

Balance at 1 January 2006 76 479 142 (1) 4 42 1,113 1 1,856

Shares allotted under share schemes 1 18 19Unvested share awards 22 22Deferred tax on share awards (2) (2)Profit for the half year 261 261Dividends (152) (152)Own shares repurchased (1) (92) (93)Transfer to capital redemption reserve 1 (1) 0Increase in minority interest on acquisition 2 2Net exchange adjustments on foreign currency translation (71) (71)Net hedged gains and losses taken to reserves 2 2

Balance at 30 June 2006 76 497 142 1 5 (29) 1,149 3 1,844

Shares allotted under share schemes 30 30Unvested share awards 20 20Deferred tax on share awards 6 6Profit for second half year 413 413Dividends (148) (148)Actuarial gains / losses 43 43Movement of deferred tax on pension liability (15) (15)Purchase of minority interest (2) (2)Own shares repurchased (110) (110)Shares repurchased and held in Treasury (97) (97)Treasury shares reissued 7 7Net exchange adjustments on foreign currency translation (123) (123)Net hedged gains and losses taken to reserves (2) (2)

Balance at 31 December 2006 76 527 142 (1) 5 (152) 1,266 3 1,866

Shares allotted under share schemes 6 6Unvested share awards 25 25Deferred tax on share awards 4 4Profit for the half year 395 395Dividends (179) (179)Shares repurchased and held in Treasury (143) (143)Treasury shares reissued 24 24Net exchange adjustmentson foreign currency translation 1 1Net hedged gains and losses taken to reserves (5) (5)Minority interest reduction (1) (1)

Balance at 30 June 2007 76 533 142 (6) 5 (151) 1,392 2 1,993


Segmental Analysis


SECONDARY SEGMENT1st half 1st half

2007 2006Net revenues by product group £m £m

Continuing OperationsFabric Care 605 592Surface Care 459 451Dishwashing 305 295Home Care 364 325Health & Personal Care 605 517

Core Business 2,338 2,180Other Household 42 52

Household and Health & Personal Care 2,380 2,232Pharmaceuticals 92 64Food 88 90

2,560 2,386

DevelopingEurope NAA Markets Elimination Total

2007 £m £m £m £m £m

Total gross segment net revenues 1,435 690 475 (40) 2,560Inter-segment revenues (37) 0 (3) 40 –

Net revenues 1,398 690 472 2,560

Operating profit 318 134 58 – 510

DevelopingEurope NAA Markets Elimination Total

2006 £m £m £m £m £m

Total gross segment net revenues 1,303 671 437 (25) 2,386Inter-segment revenues (20) – (5) 25 –

Net revenues 1,283 671 432 – 2,386

Operating profit (adjusted) 276 107 41 – 424Restructuring charge (29) (19) (9) – (57)

Operating profit 247 88 32 – 367

The profits arising on inter-segment sales are insignificant.

There are no reconciling items between net revenues and operating profit shown above and those shown in the income statement.Operating profit (adjusted) excludes the impact of the restructuring charge in 2006.

Segmental information is presented in respect of the Group’s geographical and product group segments. The primary segment, geographical areas,is based on the Group’s management and internal reporting structure. The individual operations based in the countries within each geographicalsegment are considered to have similar operational risk and return for the Group.

Inter-segment revenues are charged according to internally agreed pricing terms that are designed to be equivalent to an arm’s length basis.

Primary Segment by Geographical AreasFor management purposes the Group is currently organised into three operating areas: Europe; North America, Australia and New Zealand (NAA);and Developing Markets and geographical segmental information is presented on this basis. Segment revenue is based on the geographical locationof the Group’s customers.


Earnings per Ordinary Share and Dividends


BasicBasic earnings per share is calculated by dividing the profit attributable to equity holders of the Company (2007 £395m (2006 £261m)) by the weightedaverage number of ordinary shares (2007 716,622,035 (2006 721,948,180)) in issue during the period.

DilutedDiluted earnings per share is calculated by adjusting the weighted average number of ordinary shares outstanding to assume conversion of all potentiallydilutive ordinary shares. The Company has two categories of potentially dilutive ordinary shares: Executive options and Employee sharesave schemes. The options only dilute earnings when they result in the issue of shares at a value below the average market price of the share and when all performancecriteria (if applicable) have been met. As at 30 June 2007 there were no (H1 2006 12.8m) executive share options not included within the dilution, because the contingent performance targets had not been met.

The Directors believe that a diluted earnings per ordinary share, adjusted for the distorting effects of the restructuring charge after the appropriate tax amount, provides the most meaningful measure of earnings per ordinary share in comparing the performance of the business over time.

The reconciliation between reported profit for the period and the weighted average number of shares used in the calculation of the diluted earnings per share is set out below.

2007 2006

Profit for the Average Earnings Profit for the Average Earningshalf year Number of per share half year number of per share

£m Shares pence £m shares pence

Profit attributable to shareholders 395 716,622,035 55.1 261 721,948,180 36.2Dilution for Executive options outstandingand Executive Restricted Share Plan 18,425,134 12,189,273Dilution for Employee Sharesave Schemeoptions outstanding 1,257,984 1,081,690

On a diluted basis 395 736,305,153 53.6 261 735,219,143 35.5

The reconciliation between adjusted profit* for the period and the weighted average number of shares used in the calculation of the diluted earnings pershare is set out below.

2007 2006

Profit for the Average Earnings Profit for the Average Earningshalf year Number of per share half year number of per share

£m Shares pence £m shares pence

Profit attributable to shareholders (adjusted) 395 716,622,035 55.1 303 721,948,180 42.0Dilution for Executive options outstandingand Executive Restricted Share Plan 18,425,134 12,189,273Dilution for Employee Sharesave Schemeoptions outstanding 1,257,984 1,081,690

On a diluted basis (adjusted) 395 736,305,153 53.6 303 735,219,143 41.2

*Adjusted profit excludes the after tax impact of the restructuring charge in 2006.

Dividends2007 2006

£m £m

Dividends on equity ordinary shares2006 Final paid 25.0p (2005 Final 21.0p) 179 152

Total dividends for the period 179 152

In addition, the Directors are proposing an interim dividend in respect of the financial year ending 31 December 2007 of 25.0p per share which will absorb an estimated £179m of shareholders’ funds. It will be paid on 27 September 2007 to shareholders who are on the register on 10 August 2007.


Independent Review Report to Reckitt Benckiser plc

IntroductionWe have been instructed by the company to review the financial information for the six months ended 30 June 2007 whichcomprises the group balance sheet as at 30June 2007 and the related group interimstatements of income, recognised income andexpense, and cash flows for the six monthsthen ended, and the related notes. We haveread the other information contained in the interim report and considered whether it contains any apparent misstatements ormaterial inconsistencies with the financialinformation.

Directors’ responsibilitiesThe interim report, including the financialinformation contained therein, is theresponsibility of, and has been approved by the Directors. The Listing Rules of theFinancial Services Authority require that theaccounting policies and presentation appliedto the interim figures should be consistentwith those applied in preparing the precedingannual accounts except where any changes,and the reasons for them, are disclosed.

This interim report has been prepared inaccordance with the basis set out in theAccounting Policies.

Review work performedWe conducted our review in accordance withguidance contained in Bulletin 1999/4 issuedby the Auditing Practices Board for use in theUnited Kingdom. A review consists principallyof making enquiries of group managementand applying analytical procedures to thefinancial information and underlying financialdata and, based thereon, assessing whetherthe disclosed accounting policies have beenapplied. A review excludes audit proceduressuch as tests of controls and verification ofassets, liabilities and transactions. It issubstantially less in scope than an audit andtherefore provides a lower level of assurance.Accordingly we do not express an auditopinion on the financial information. Thisreport, including the conclusion, has beenprepared for and only for the company for the purpose of the Listing Rules of theFinancial Services Authority and for no other purpose.

We do not, in producing this report, accept or assume responsibility for any other purposeor to any other person to whom this report isshown or into whose hands it may come savewhere expressly agreed by our prior consentin writing.

Review conclusionOn the basis of our review we are not aware ofany material modifications that should be madeto the financial information as presented for thesix months ended 30 June 2007.

PricewaterhouseCoopers LLPChartered AccountantsLondon15 August 2007

Notesa) The maintenance and integrity of the Reckitt

Benckiser plc web site is the responsibility of the directors; the work carried out by the auditors does not involve consideration of these matters and, accordingly, the auditors accept no responsibility for any changes that may have occurred to the interim report since it was initially presented on the web site.

b) Legislation in the United Kingdom governing the preparation and dissemination of financial informationmay differ from legislation in other jurisdictions.

Designed and produced by The WorkroomTel +44 (0)20 7608 0840

Email [email protected]

The paper used throughout this report is manufacturedfrom ECF (Elemental Chlorine Free) pulps sourced from

sustainable, managed forests.

Interim dividend for the year ending 31 December 2007

Dividend per ordinary share 25.0p

Notice to ShareholdersThe financial information for the year ended31 December 2006 included in this InterimReport is based upon the Company’sconsolidated financial statements for thatyear. Those financial statements have beenreported on by the Company’s auditors andhave been delivered to the Registrar ofCompanies. The report of the auditors wasunqualified and did not contain a statementunder the following sections of the CompaniesAct 1985: Section 237(2) (inadequateaccounting records or returns, or accounts not agreeing with records and returns) or237(3) (failure to obtain necessary informationand explanations).

Registrar and Transfer OfficeIf you have any queries about yourshareholding, please write or telephone theRegistrar at the following address:

Computershare Investor Services plc PO Box 82 The Pavilions Bridgwater RoadBristol BS99 7NH

Dedicated Reckitt Benckiser shareholder helplineTelephone: 0870 703 0118

Website: www.computershare.com

Key dates

Shares quoted ex-dividend8 August 2007

Record date for interim dividend10 August 2007

Interim dividend payment date27 September 2007

Shareholder Information

Documents

Interim Report 2007 live it - Zonebourse.com Benckiser Interim Report 2007 3 Mortein growth came from a number of new initiatives such as Mortein Lantern and Mortein with Dettol, while