Reckitt BenckiserReckitt BenckiserGlobal Business

PresentationGlobal Business

Presentation

June 2002June 2002

OutlineOutline

• The Company

• Organisational structure

• Vision and strategies

• Case studies

• The Company

• Organisational structure

• Vision and strategies

• Case studies

Reckitt Benckiser - The CompanyReckitt Benckiser - The Company

• Listed on London Stock Exchange

• Included in FTSE 100 index

• Current market capitalisation of £7.9b(share price @ £ 12.50)

• Profit & Loss statements reported in Pounds Sterling– Sales (net revenue) = £3.5b– Operating Profit = £525m – Net income = £340m

• Listed on London Stock Exchange

• Included in FTSE 100 index

• Current market capitalisation of £7.9b(share price @ £ 12.50)

• Profit & Loss statements reported in Pounds Sterling– Sales (net revenue) = £3.5b– Operating Profit = £525m – Net income = £340m

HistoryHistory

• Reckitt Benckiser has a diverse history

spanning about 200 years

• From humble beginnings it has expanded into

the world’s No.1 in household cleaning

• A short summary of the company history is

available here:

or from the official website:

www.reckittbenckiser.com

• Reckitt Benckiser has a diverse history

spanning about 200 years

• From humble beginnings it has expanded into

the world’s No.1 in household cleaning

• A short summary of the company history is

available here:

or from the official website:

www.reckittbenckiser.com

Global BusinessGlobal Business

• Approximately 23 000 employees globally

• Offices in about 60 countries

• 52 manufacturing centres in 35 countries

• Sells products into about 180 different

countries globally

• Consumers are familiar with our products &

brands but know little about our company

• Approximately 23 000 employees globally

• Offices in about 60 countries

• 52 manufacturing centres in 35 countries

• Sells products into about 180 different

countries globally

• Consumers are familiar with our products &

brands but know little about our company

Over 9 million of our products are sold everyday

Over 9 million of our products are sold everyday

Reckitt Benckiser Global Offices Reckitt Benckiser Global Offices

60 countries60 countries

52 manufacturing centres in 35 countries52 manufacturing centres in 35 countries

Reckitt Benckiser Countries with Local Factories

Reckitt Benckiser Countries with Local Factories

Organisational Structure- Major Functions

Organisational Structure- Major Functions

• Area Management– Sales– Finance– Human Resources– Information Services

• Area Management– Sales– Finance– Human Resources– Information Services

• Supply Organisation– Procurement– Production– Logistics– Distribution

• Supply Organisation– Procurement– Production– Logistics– Distribution

• Category Development– Marketing– Research & Development– Media– Market Research

• Category Development– Marketing– Research & Development– Media– Market Research

Area Management (Operating Regions)Area Management (Operating Regions)

• RB is classified into 3 global regions:

• Western Europe

• The Americas / Australia / New Zealand

• Rest of World

• RB is classified into 3 global regions:

• Western Europe

• The Americas / Australia / New Zealand

• Rest of World

Reckitt Benckiser - Global regionsReckitt Benckiser - Global regions

Western EuropeWestern Europe

The Americas/ANZThe Americas/ANZ

RoWRoW

Reckitt Benckiser - Major CompetitorsReckitt Benckiser - Major Competitors

– Procter & Gamble

(USA)

– Unilever (UK &

Netherlands)

– Colgate Palmolive

(USA)

– The Clorox Company

(USA)

– Procter & Gamble

(USA)

– Unilever (UK &

Netherlands)

– Colgate Palmolive

(USA)

– The Clorox Company

(USA)

– Henkel (Germany)

– Dial Corporation

(USA)

– SC Johnson & Sons

(USA)

– Bayer (Germany)

– Sara Lee (USA)

– Henkel (Germany)

– Dial Corporation

(USA)

– SC Johnson & Sons

(USA)

– Bayer (Germany)

– Sara Lee (USA)

0

1

2

3

4

ReckittBenckiser

Unilever P&G Colgate Clorox

Net Revenues $bn fromHousehold Cleaning Products *

Net Revenues $bn fromHousehold Cleaning Products *

* Excluding laundry detergentsSource: Company reports, industry and brokers reports, latest available data

World No.1 in Household CleaningWorld No.1 in Household Cleaning

Company VisionCompany Vision

“Reckitt Benckiser is about passionately delivering better solutions in household cleaning and health & personal care to customers and consumers, wherever they may be, for the ultimate purpose of creating shareholder value.”

This vision defines both our purpose and our values as a company.

“Reckitt Benckiser is about passionately delivering better solutions in household cleaning and health & personal care to customers and consumers, wherever they may be, for the ultimate purpose of creating shareholder value.”

This vision defines both our purpose and our values as a company.

Reckitt Benckiser - Core StrategiesReckitt Benckiser - Core Strategies

• Reckitt Benckiser’s objective is to generate above industry average profitable growth, by:

– Focusing on the 5 growing core categories

– Building on our brand positions through continuous innovations and investment

– Geographic portfolio expansion

– Selective add-on acquisitions

– Margin enhancement and cash flow improvement to fund reinvestment in core brands and profit growth

• Reckitt Benckiser’s objective is to generate above industry average profitable growth, by:

– Focusing on the 5 growing core categories

– Building on our brand positions through continuous innovations and investment

– Geographic portfolio expansion

– Selective add-on acquisitions

– Margin enhancement and cash flow improvement to fund reinvestment in core brands and profit growth

Competitive advantageCompetitive advantage

• “Globally local” approach

• Combines swift day to day decision making

with action

• Clear responsibility of area / local management

• Clear framework set by global categories and

functions

• “Globally local” approach

• Combines swift day to day decision making

with action

• Clear responsibility of area / local management

• Clear framework set by global categories and

functions

Competitive edgeCompetitive edge

• Aim to have products at # 1 or # 2 in markets in

which we operate

• Strong global brand heritage and brand loyalty

• Innovation / 1st to market / speed to market /

quality of delivery

• Constant stream of New Product Development

and Existing Product enhancements

• Aim to have products at # 1 or # 2 in markets in

which we operate

• Strong global brand heritage and brand loyalty

• Innovation / 1st to market / speed to market /

quality of delivery

• Constant stream of New Product Development

and Existing Product enhancements

Competitive edge (cont)Competitive edge (cont)

• Understanding of consumer attitudes to gain

consumer insights into their needs

• Good R&D investment to provide technical

support, new technologies, sharing know-how

across the business

• Intellectual property protection

• Good management with strategic planning on

direction

• Understanding of consumer attitudes to gain

consumer insights into their needs

• Good R&D investment to provide technical

support, new technologies, sharing know-how

across the business

• Intellectual property protection

• Good management with strategic planning on

direction

Competitive edge (cont)Competitive edge (cont)

• Efficient use of available resources -

prioritisation

• Operational efficiencies

• Emphasis on cost control

• Strong economies of scale and purchasing

power

• Efficient use of available resources -

prioritisation

• Operational efficiencies

• Emphasis on cost control

• Strong economies of scale and purchasing

power

Recent Global AcquisitionsRecent Global Acquisitions

• Company has strong history of

acquisitions

• Current company resulted from merger of

Reckitt & Colman with Benckiser in 1999

• Recently:• Tiga Roda (Indonesia) acquisition in 2001• Oxy Chemicals (Korea) acquisition in 2001

• Company has strong history of

acquisitions

• Current company resulted from merger of

Reckitt & Colman with Benckiser in 1999

• Recently:• Tiga Roda (Indonesia) acquisition in 2001• Oxy Chemicals (Korea) acquisition in 2001

Management Responsibility in a Global Environment

Management Responsibility in a Global Environment

• Strictly observe all laws & regulations

applicable in the conduct of business – taxes– social security– operations– employment conditions– occupational health & safety– fair trade practices– intellectual property

• Ensure ethical business practices

• Strictly observe all laws & regulations

applicable in the conduct of business – taxes– social security– operations– employment conditions– occupational health & safety– fair trade practices– intellectual property

• Ensure ethical business practices

Management Responsibility in a Global Environment

Management Responsibility in a Global Environment

• Community involvement - India, South America, South Africa, USA, Australia (“Community News”)

• Community & Ethical Responsibility Policies

include: Code of Business Conduct Environmental policy Animal Testing Product Safety Health & Safety Crisis Management Community Involvement

• Community involvement - India, South America, South Africa, USA, Australia (“Community News”)

• Community & Ethical Responsibility Policies

include: Code of Business Conduct Environmental policy Animal Testing Product Safety Health & Safety Crisis Management Community Involvement

Reckitt Benckiser - Product CategoriesReckitt Benckiser - Product Categories

• 5 core categories

– Fabric Care– Surface Care– Dishwashing– Health & Personal Care– Home Care

• account for 86% of total company net revenue

• 5 core categories

– Fabric Care– Surface Care– Dishwashing– Health & Personal Care– Home Care

• account for 86% of total company net revenue

Reckitt Benckiser Global Category R&D Laboratories

Reckitt Benckiser Global Category R&D Laboratories

Surface Care

Pharmaceuticals & Home Care

Fabric Care

Pest Control

Auto - Dishwash

Core Category BreakdownCore Category Breakdown

Fabric Care

fabric treatment, fabric & water softeners, detergents

Napisan, Calgon, Woolite, Spray’n Wash, Vanish, Dosia, Resolve,

Oxyclean

Home Care

air care, pest control, shoe care

Haze, Airwick, Wizard, Mortein, Aerogard, Pif Paf, Shieldtox, d-Con,

Nugget

Surface Care

disinfectants, lavatory, general purpose, specialty, polishes & waxes

Pine O Cleen, Harpic, Lysol, Easy Off, Brasso, Mr Sheen, Resolve,

Veja, Sagrotan, Old English, O’CedarDishwashing

Finish, Calgonit, Electrosol, Jet Dry

Health & Personal Care

antiseptics, depilatories, analgesics, cold/flu, gastrointestinal

Dettol, Disprin, Veet, Lemsip, Steradent, Gaviscon, Fybogel,

Senokot, Bonjela

Reckitt Benckiser - Leading brandsSurface Care - 24 % of net revenues

Fabric Care - 26 % of net revenuesFabric Care - 26 % of net revenues

Dishwashing - 13% of net revenuesDishwashing - 13% of net revenues

#2 worldwide

Lavatory Care

#1 worldwide

Automatic Dishwashing

#1 worldwide

Water Softeners

#1 worldwide

Disinfectant

#1 worldwide

Fabric Treatment

Note: positions calculated for the measured worldwide markets

#1 worldwide

Fine Fabric

Reckitt Benckiser - Leading brands (cont)

Reckitt Benckiser - Leading brands (cont)

Note: positions calculated for the measured worldwide marketsNote: positions calculated for the measured worldwide markets

Health & Personal Care - 12% of net revenuesAntiseptics

#1 worldwide #1 worldwide

Depilatories

Pest Control

#3 worldwide#2 worldwide

Air CareHomecare - 12% of net revenues

Competitive Strategies

Competitive Strategies

• Innovation

• Product rollouts

• Brand harmonisation

• Innovation

• Product rollouts

• Brand harmonisation

InnovationInnovation

• Substantial increase in

new product initiatives in

2001

• 20% of net revenues from new products launched since January 2000

• Working towards 40% of net revenues from new products by 2005

• Substantial increase in

new product initiatives in

2001

• 20% of net revenues from new products launched since January 2000

• Working towards 40% of net revenues from new products by 2005

NewNew

• ActionBall provides enzymatic pre-soaker for better stain treatment

• Launch in UK, France, Spain, Portugal in Q1

• ActionBall provides enzymatic pre-soaker for better stain treatment

• Launch in UK, France, Spain, Portugal in Q1

Vanish ActionBall Tabs Vanish ActionBall Tabs

Further Innovation in WipesFurther Innovation in Wipes

• Lysol Floor Wipes

• Lysol Heavy Duty cleaning wipes

• Harpic Flushable Wipes for toilet cleaning

• Lysol Floor Wipes

• Lysol Heavy Duty cleaning wipes

• Harpic Flushable Wipes for toilet cleaning

NewNew

Dishwashing Dishwashing NewNew

• Combines convenience of 3 in 1 with cleaning power of Powerball

• Launch across Western Europe

• Combines convenience of 3 in 1 with cleaning power of Powerball

• Launch across Western Europe

Air Care Air Care Rollouts

Rollouts

Rollouts

RolloutsNewNew

• Crystal Air for Cars Launched in Western Europe

• Click Spray success - rolled out all across Europe

• Crystal Air for Cars Launched in Western Europe

• Click Spray success - rolled out all across Europe

Pest ControlPest Control

• Mortein Ultra Fast Killing Spray for flying insects

• Outdoor Barrier Spray

• Mortein Ultra Fast Killing Spray for flying insects

• Outdoor Barrier Spray

NewNew

Rollouts

Rollouts

Rollouts

Rollouts

Brand Management

One global visual identity

Brand Management

One global visual identity

Brand ManagementGlobal brand harmonisation

Brand ManagementGlobal brand harmonisation

Intellectual PropertyIntellectual Property

We have to protect all our knowledge & innovation

We use patent attorneys locally and internationally to provide legal support for:

Patents Design registration Trademarks, logos and brands Checks of existing intellectual property and

possible infringements

This is one of our competitive strategies

We have to protect all our knowledge & innovation

We use patent attorneys locally and internationally to provide legal support for:

Patents Design registration Trademarks, logos and brands Checks of existing intellectual property and

possible infringements

This is one of our competitive strategies

Internet-based informationInternet-based information

• Information about Reckitt Benckiser, its

operations, products, annual reports,

announcements, etc are available on the

official company web site:

www.reckittbenckiser.com

• Information about Reckitt Benckiser, its

operations, products, annual reports,

announcements, etc are available on the

official company web site:

www.reckittbenckiser.com

Case StudiesCase Studies

Case Study 1:Globalisation of the Mortein Brand

Case Study 1:Globalisation of the Mortein Brand

• Pack Graphics progression to laser beam graphics

• Insect Seeking Flyspray example of Product

Harmonisation

• Globalisation of Louie the Fly in marketing strategy

from Australia (local) to global markets (ie Latam

Middle East etc)

• Pack Graphics progression to laser beam graphics

• Insect Seeking Flyspray example of Product

Harmonisation

• Globalisation of Louie the Fly in marketing strategy

from Australia (local) to global markets (ie Latam

Middle East etc)

Globalisation of Laser Beam GraphicsGlobalisation of Laser Beam Graphics

The Mortein Brand GloballyThe Mortein Brand Globally

Australia Bangladesh Singapore Malaysia Eastern Europe Hungary South Africa

Louie the Fly - Early advertisement ~ 1960s

Globalisation of Louie the FlyGlobalisation of Louie the Fly

Louie the Fly - mid to late 1980’s

Louie the Fly - Globalisation into Middle East

Case Study 2Case Study 2

Insect Seeking FlysprayInsect Seeking Flyspray

ConceptConcept Development BriefDevelopment Brief

Development and TestingFormulation Packaging

Patenting

Development and TestingFormulation Packaging

Patenting

ProductLaunchProductLaunch

Roll-outRoll-out

Insect Seeking FlysprayThe Product Development Process

Insect Seeking FlysprayThe Product Development Process

Insect Seeking Flyspray: ConceptInsect Seeking Flyspray: Concept

• Market research • Consumer need identified• Suitable available technology -

electrostatics ie. Sprayed product targets just insects based on its static charge

• Brainstorming / idea generation• Winning Product Concept:

• Market research • Consumer need identified• Suitable available technology -

electrostatics ie. Sprayed product targets just insects based on its static charge

• Brainstorming / idea generation• Winning Product Concept:

“Mortein Fly and Insect Killer with Insect Seeking technology - safer for people, but

deadly for flying insects.”

“Mortein Fly and Insect Killer with Insect Seeking technology - safer for people, but

deadly for flying insects.”

Insect Seeking Flyspray: BriefInsect Seeking Flyspray: BriefInput of information from business functions

• Marketing strategy • Countries of launch• Financial analysis• Trade strategy• Supply / Purchasing chain• R & D info

– Required resources– Regulatory / Safety requirements– Specify claims– Price– Type of Packaging– Formula

Input of information from business functions

• Marketing strategy • Countries of launch• Financial analysis• Trade strategy• Supply / Purchasing chain• R & D info

– Required resources– Regulatory / Safety requirements– Specify claims– Price– Type of Packaging– Formula

Development Brief

Insect Seeking Flyspray: DevelopmentInsect Seeking Flyspray: Development

• Electrostatics optimisation• Product Performance - knockdown and kill• Benchmarking against competitors• Stability of formula for 2 or 3 years min

– study the product for many years– degradation

• Compatibility of formula with aerosol cans– corrosion, dissolving, leaking

• Product safety testing• Regulatory / legal requirements - registration

• Electrostatics optimisation• Product Performance - knockdown and kill• Benchmarking against competitors• Stability of formula for 2 or 3 years min

– study the product for many years– degradation

• Compatibility of formula with aerosol cans– corrosion, dissolving, leaking

• Product safety testing• Regulatory / legal requirements - registration

Insect Seeking Flyspray: Development (cont)

Insect Seeking Flyspray: Development (cont)

• Packaging materials are important for the

product

• Artwork & brand name

• Transport & warehouse tested

• Applied for international Patent protection of our

intellectual property (our strategy to be No 1)

• Packaging materials are important for the

product

• Artwork & brand name

• Transport & warehouse tested

• Applied for international Patent protection of our

intellectual property (our strategy to be No 1)

Insect Seeking Flyspray: LaunchInsect Seeking Flyspray: Launch

• Manufacturing - build up stock in warehouses

• Final trade briefing about a new product• Final advertising plan

• Launched in Australia 1999• Ongoing advertising, marketing and selling• Tracking of sales, market share and

consumer feedback

• Manufacturing - build up stock in warehouses

• Final trade briefing about a new product• Final advertising plan

• Launched in Australia 1999• Ongoing advertising, marketing and selling• Tracking of sales, market share and

consumer feedback

Launch Brief

Insect Seeking Flyspray: Roll-OutInsect Seeking Flyspray: Roll-Out• Harmonised graphics, cans, brand names (Mortein,

Shieldtox, Doom, Neocid, Pif Paf)• Marketed in more than 40 countries:

– ANZ (Australia, New Zealand, Fiji, PNG) – Africa Middle East (S.Africa, Kenya, Middle East- UAE, Kuwait, Jordan, Tunisia,

Libya, Jordan, Pakistan)

– E.Europe (Russia, Lithuania, Estonia, Latvia, Czech Republic, Slovak Republic, Hungary, Croatia, Bulgaria, Yugoslavia, Ukraine)

– W.Europe (Spain, Switzerland, France)

– Latin America (Argentina, Brazil, Chile, Mexico, Colombia, Venezuela)

– East Asia (China, Philippines, Indonesia,Malaysia, Singapore, Hong Kong, S. Korea, Thailand)

– South Asia (Sri Lanka, Bangladesh)

• Harmonised graphics, cans, brand names (Mortein, Shieldtox, Doom, Neocid, Pif Paf)

• Marketed in more than 40 countries:– ANZ (Australia, New Zealand, Fiji, PNG) – Africa Middle East (S.Africa, Kenya, Middle East- UAE, Kuwait, Jordan, Tunisia,

Libya, Jordan, Pakistan)

– E.Europe (Russia, Lithuania, Estonia, Latvia, Czech Republic, Slovak Republic, Hungary, Croatia, Bulgaria, Yugoslavia, Ukraine)

– W.Europe (Spain, Switzerland, France)

– Latin America (Argentina, Brazil, Chile, Mexico, Colombia, Venezuela)

– East Asia (China, Philippines, Indonesia,Malaysia, Singapore, Hong Kong, S. Korea, Thailand)

– South Asia (Sri Lanka, Bangladesh)

Insect Seeking - More informationInsect Seeking - More information

• More information regarding Insect Seeking Technology can be found at:

www.mortein.com.au/insect_seeking.html

• Further information regarding Louie the Fly, Mortein products and their uses can be found at:

www.mortein.com.au

• More information regarding Insect Seeking Technology can be found at:

www.mortein.com.au/insect_seeking.html

• Further information regarding Louie the Fly, Mortein products and their uses can be found at:

www.mortein.com.au

Louie the Fly - Insect seeking technology 2001