Download Shareholders - Reckitt Benckiser

SHAREHOLDERS’ REVIEW AND SUMMARY FINANCIAL STATEMENT 2005 

EXPANDING 

HORIZONS 

ENTERING NEW SEGMENTS, EXPANDING OUR BRANDS 

INTO NEW GEOGRAPHIES, ACQUIRING NEW CATEGORIES 

STRONG FINANCIAL RESULTS • DIVIDEND UP 15% • BHI ACQUISITION – NEW PLATFORM FOR GROWTH

Reckitt Benckiser continued to expand its business with 

good results in 2005. We further strengthened our brand 

and market positions behind successful new products, 

entered new segments and extended our portfolio into 

new geographic markets. We also substantially strengthened 

our core business by agreeing to acquire Boots Healthcare 

International, creating a new platform for profitable growth. 

2005 RESULTS 

I think the business performance, in the face of sharply 

higher prices for materials and energy, emphasises the 

resilience of our business: it was a major achievement 

to sustain margin growth by relentlessly reducing costs. 

Net revenues grew 8% (6% at constant exchange rates) to 

£4,179m. Operating profit increased 12% to £840m. Despite 

the significant increases in input costs, gross margins expanded 

by 10 basis points to 54.9%. Thanks to tight control of fixed 

costs, we achieved an 80 basis point increase in operating 

margins to 20.1%. Net income grew 16% to £669m, helped 

by higher interest received and non-recurring tax credits. 

We continue to strengthen our financial position. Dividends 

for the year increased 15% to 39p, and share buy backs 

totalled £300m. Even after returning over £550m of 

cash to shareholders in these ways, net funds increased 

by £255m to £887m. 

2 

CHIEF EXECUTIVE’S REVIEW 

ENTERING NEW SEGMENTS, 

EXTENDING INTO NEW 

GEOGRAPHIES AND BUILDING 

NEW GROWTH PLATFORMS 

Reckitt Benckiser Shareholders’ Review 2005 

2005 ACHIEVEMENTS 

It is satisfying to deliver good financial results for shareholders 

but one year of results is not the only measure of success. 

I’m equally excited about the progress we made in 

strengthening our business for the long-term – building 

our brands, market positions and geographic spread. 

New product launches 

We launched a number of even better solutions for our 

consumers. Vanish Dual Power harnessed new technology 

with its dual chamber bottle to provide powerful, instant 

stain removal. We upgraded Vanish Oxi Action Max to 

tackle even tough dried-on stains. Finish 4in1 brought still 

more convenience to Automatic Dishwashing, combining 

detergent, rinse aid, salt and glass protection in a single 

tablet. In North America we launched Electrasol 3in1 with 

Jet Dry Action. Air Wick Freshmatic allowed users to 

choose the frequency of air freshener spray. Finally, we took 

world leadership in multi-purpose cleaners by rolling-out 

Bang globally. Launched in Europe as Cillit Bang and beyond 

Europe as Easy-Off Bang, it is now sold in 68 countries 

and makes a powerful new platform on which to build. 

BHI – an excellent add-on acquisition 

In October we announced agreement to acquire Boots 

Healthcare International (BHI) for £1,926m. We have been 

seeking suitable add-on acquisitions for our core business 

and BHI fits our criteria exactly. 

Over The Counter (OTC) Healthcare is a market with good 

growth and inherently attractive margins. We expect this 

growth to be sustained by the trends of increasing self 

medication, ageing populations and national health systems’ 

growing need to pass the cost of minor ailments to 

consumers. Margins are attractive as brand loyalty is 

particularly strong in OTC Healthcare. Consequently, growing 

our healthcare business has the potential to enhance Reckitt 

Benckiser’s overall operating margins, albeit this will take time 

due to the regulatory hurdles in expanding this business rapidly. 

BHI owns three particularly powerful multi-national brands: 

Nurofen, Europe’s No.2 analgesic, Strepsils, world No.1 

(outside the US) in sore throat and Clearasil, world No.1 in 

anti-acne. With Lemsip and Gaviscon we’ve already shown 

we can grow strong brands like these in healthcare – 

stimulating growth by choosing the right categories and 

segments, developing innovative products that meet real 

consumer needs, and expanding distribution into new 

geographical markets. 

Combining our healthcare business with BHI’s will create 

a platform for growth for RB’s Health & Personal Care both 

organically as well as through further acquisition. 

We paid a full price for BHI, reflecting its quality and 

growth record. But we believe this price is justified by 

the anticipated cost synergies of £75m and opportunities 

to reduce working capital by £130m. 

VISION AND STRATEGY 

Our vision is continuously to deliver better products to 

consumers that improve their lives at crucial moments. 

Our strategy is equally simple. Let me remind you of 

its key elements. 

DELIVER ABOVE INDUSTRY AVERAGE GROWTH 

IN NET REVENUES. 

We do this in five ways. 

Focus investment and innovation on ‘the right brands 

in the right categories’. That means categories with 

strong growth potential like Automatic Dishwashing and 

Fabric Treatment, where we can drive growth behind world 

leading brands such as Finish and Vanish. Most of our 

effort goes behind the 18 flagship powerbrands that will 

by the end of 2006 represent 60% of our net revenues. 

Reinforce our brands with an exceptional rate of product 

innovation. Offering consumers ever-better solutions 

stimulates them to purchase, helping to grow both the 

category and our market share. Almost 40% of our net 

revenues come from products launched in the past three years. 

Back our brands with consistent marketing 

investment. Our media spend rate, at around 12% of net 

revenues, is at the top of the industry. And we are now 

complementing media investment with more direct 

interaction with consumers through in-store demonstrations, 

sampling programmes and point-of-sale communication. 

Build our major brands by rolling them out into new 

geographies. Vanish (now in 48 countries) and, more 

recently, Bang (now in 68) demonstrate the scope for 

doing this. Few of our major brands are yet present in all 

territories, and we continue to roll them out as market 

opportunities develop. 

Finally, leverage our financial strength to enhance 

long-term growth by making add-on acquisitions that 

strengthen our core business.

CONVERT GROWTH INTO EVEN MORE ATTRACTIVE 

PROFIT AND CASH FLOW THROUGH CONTINUING 

MARGIN EXPANSION AND CASH CONVERSION. 

Most importantly, we expand margins through intensive 

work on cost optimisation – in goods and services, and in 

fixed costs. We find exciting rewards in the most 

unglamorous places: using less packaging, standardising 

product formulas, renegotiating supply contracts, simplifying 

processes. Margin expansion fuels the business, funding 

marketing investment and driving profit growth. In 2000, 

our operating margin was 14.4%. It is now over 20%, 

achieving our target for 2006 a year early. 

I like to tell my colleagues that I cannot invest profit, 

I can only invest cash. That is why we focus relentlessly 

on collecting cash – which allowed us to return over 

£550m to shareholders last year while making the £1,926m 

BHI bid on the strength of our own balance sheet. 

These are the principles of our strategy. In the following 

pages you will see examples of how we put it into practice 

to deliver results for shareholders. 

OUR PEOPLE AND CULTURE 

Our strategy will only work if we have the right people 

working together within the right corporate culture. Our 

people consistently achieve remarkable things through their 

passion for the business and determination to succeed. 

I thank them for their tremendous contribution. 

Our success does not depend on a few outstanding people, 

but on many good people working effectively together 

in a culture that shares a hunger for success, celebrates 

achievement, collaborates in powerful teams and takes 

intelligent risks together on behalf of the business. Internal 

politics waste time and dissipate effort. We aim to unite 

behind shared strategies to make a winning business. 

Our remuneration system is a key tool in driving culture, 

behaviour and performance. It is designed to reward 

success. We make no apology for paying well for excellent 

performance, nor for being unsympathetic to mediocrity. 

Reckitt Benckiser people like to work for a responsible company 

– one whose products are a force for good in society and 

which helps to improve lives through wealth creation and 

community involvement. Our sustainability commitment is to 

operate ever more effectively today with as little environmental, 

social and ethical cost to the future as possible. 

We are making good progress in addressing our environmental 

and social impacts. For example, our new Automatic Dishwashing 

initiative, detailed in this report, shows how we can play a major 

role in making a positive impact on climate change. I hope 

you will find time to read more in our Sustainability Report. 

OUR FUTURE 

Our brands and market positions are stronger than they 

were last year. They benefit from a consistent stream of 

investment and continuous consumer-relevant innovation. 

Our financial strength continues to grow and the BHI 

acquisition will provide a new platform for us to develop 

at inherently higher margins. Our people are even more 

experienced and just as passionate. Reckitt Benckiser 

is well placed to continue living its vision. 

Bart Becht Chief Executive Officer 

CHAIRMAN’S STATEMENT 

2005 was another year of very good progress in challenging 

circumstances. The results again exceeded targets, allowing 

us to deliver strong returns to shareholders. 

STRATEGY 

The Company’s strategy, set out in the Chief Executive’s 

review, remains unchanged. During the year the Board 

approved a successful offer for Boots Healthcare 

International (BHI), advancing the strategy of becoming 

a major player in Health & Personal Care. 

RETURNING CASH TO SHAREHOLDERS 

The Company has continued to return cash to shareholders 

through progressive dividends and share buy backs. The 

directors propose a total dividend for the year of 39p, an 

overall increase of 15%. In addition we met our commitment 

to buy back £300m of shares during the year. The Company 

has consistently strengthened its balance sheet over recent 

years. Following the BHI acquisition it will have proforma net 

borrowings of over £1 billion but will still have the financial 

strength to continue share buy backs. We are targeting £300m 

of buy backs in 2006, and dividend growth in line with earnings. 

MANAGEMENT AND COMPENSATION 

The strength of the management team is evident from the 

Company’s sustained performance. There were no major 

changes in the team over the year. The Board continues to 

review remuneration policy to ensure that it is appropriate 

in a competitive international market and that it incentivises 

managers to generate quality returns for shareholders. 

We believe it is an important contributor to the continuing 

success of the business. Some minor changes, disclosed 

in the Remuneration Report, are being made to bring 

it into line with best practice, for which we are seeking 

shareholder endorsement at the AGM. 

ANNUAL GENERAL MEETING 

The Board strongly recommends that shareholders support 

the resolutions at the AGM on 4 May 2006, endorsing the 

policies that have brought the Company continuing success. 

BOARD 

The Board reviewed various aspects of the business during 

2005 – in particular corporate governance, corporate 

responsibility and sustainability, and reputational risk 

especially in relation to product and manufacturing risks. 

The Board regularly reviews business performance and 

holds specific reviews with operational management 

on area and functional performance. 

In 2005 the Board was strengthened with the appointment 

of Graham Mackay, Chief Executive of SABMiller, and 

Gerard Murphy, Chief Executive of Kingfisher. Graham 

Mackay joined the Remuneration Committee and Gerard 

Murphy joined the Audit Committee. Ken Hydon assumed 

the role of senior Non-Executive Director. George Greener 

will not be standing for re-election at the AGM. I thank 

him for his significant contribution throughout his ten 

years as a director, latterly as senior Non-Executive 

Director and a member of the Remuneration Committee. 

Ana Maria Llopis and Hans van der Wielen retired at the 

2005 AGM; I thank them both for their contribution. 

THANKS 

I thank Bart Becht and his excellent team for another year 

of strong results and good strategic progress. I would also 

like to thank the Board for their important contribution. 

Adrian Bellamy Chairman 

3 

Reckitt Benckiser Shareholders’ Review 2005

OUR BRANDS, 

OUR BUSINESS 

4 

AT A GLANCE 

REVENUE GROWTH* OPERATING PROFIT 

4% 

Growth came from key recent product introductions. 

In Fabric Treatment, growth was due to the success of 

Vanish with Vanish Oxi Action Max and Vanish Dual 

Power. In Surface Care, growth came from Cillit Bang. 

In Dishwashing, growth was due to Finish/Calgonit 

4in1. Home Care increased due to the successful 

launch of Air Wick Freshmatic. Health & Personal Care 

saw strong growth for the Health Care portfolio due 

to the roll-out of Gaviscon in Europe. 

OPERATING COUNTRIES 

Austria, Belgium, Bulgaria, Croatia, Czech Republic, 

Denmark, France, Germany, Greece, Hungary, Ireland, 

Israel, Italy, Latvia, Netherlands, Poland, Portugal, 

Romania, Russia, Slovakia, Slovenia, Spain, 

Switzerland, Turkey, UK and Ukraine. 

*at constant exchange rate 

COMPARISONS BY REGIONS 


0000 

0000 

In Fabric Care, Spray ‘n Wash Dual Power Fabric 

Treatment and Resolve Dual Power carpet cleaner grew 

sales. In Surface Care increases came from growth for 

Lysol Disinfectant Spray, and the launch of Easy-Off 

Bam. In Dishwashing increases came due to the 

success of Electrasol with Jet Dry Action. In Home 

Care, Air Care grew following the launch of Air Wick 

Freshmatic, and in Health & Personal Care, Veet 

depilatories and prescription drug Suboxone were the 

principal contributors to growth. Food increased net 

revenues due to the launch of Cattleman’s BBQ Sauce 

in retail and to continued growth for French’s yellow 

mustard and gains for Frank’s Red Hot Sauce. 


Australia, Canada, New Zealand and USA. 

WE ARE PASSIONATE ABOUT 

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. 

EUROPE NORTH AMERICA AND AUSTRALIA DEVELOPING MARKETS 

£502m 5% 



0000 

£270m 12% 

0000 


There was strong growth in all categories. In Fabric 

Care, growth came following the roll-out of Vanish 

Oxi Action Fabric Treatment products. In Surface Care, 

increases came from the success of Easy-Off Bang. Pest 

Control grew strongly with the launch of Mortein Power 

Booster coils. Health & Personal Care grew due to the 

continuing roll-out of Veet in new markets and strong 

growth for the Dettol range of personal care products. 


Argentina, Bangladesh, Brazil, Chile, China, Colombia, 

Costa Rica, Egypt, Hong Kong, India, Indonesia, Japan, 

Kenya, Korea, Malaysia, Mexico, Nigeria, Pakistan, 

Philippines, Singapore, South Africa, Sri Lanka, Taiwan, 

Thailand, United Arab Emirates, Uruguay, Venezuela 

and Zambia. 


GROUP FINANCIAL HIGHLIGHTS 

£68m 

2005 2004 change 

£M £M % 

Net revenues 4,179 3,871 8 

Operating profit 840 749 12 

Profit before tax 876 758 16 

Profit after tax 669 577 16 

Basic earnings per share 92.0p 80.7p 14 

Diluted earnings per share 90.0p 77.1p 17 

Declared dividend per share 39.0p 34.0p 15

OUR GLOBAL BRANDS 

16% 

HEALTH & PERSONAL CARE 

Net revenue £662m 

PROFILE OF CATEGORY 

Products that relieve or solve 

common personal or health 

problems, protecting against 

infection and improving 

wellbeing. Our personal care 

products include Clearasil 

anti-acne cream and Veet 

to remove unwanted body 

hair. Denture Care cleans and 

improves the performance 

of dentures. Our range of 

the over-the-counter health 

products includes analgesics, 

gastro-intestinal products 

and cough, cold and sore 

throat products. Suboxone 

(Buprenorphine) is the 

Company’s prescription drug 

against opiate dependence. 

KEY BRANDS 

Antiseptics Dettol Denture 

Care Kukident, Steradent 

Analgesics cold/flu Disprin, 

Lemsip, Nurofen*, Strepsils* 

Gastro-Intestinals Gaviscon, 

Senokot, Fybogel Personal 

Care Clearasil*, Veet 

MARKET POSITION 

Dettol is the world leader 

in antiseptics bought for use 

at home. Veet is the world 

leader in depilatories. 

Nurofen is the No.2 Analgesic 

in Europe. Strepsils is the No.1 

sore throat product outside 

the US. Clearasil is the No.1 

anti-acne treatment. 

*Acquired 31 January 2006 

27% 21% 14% 

15% 

OF NET REVENUES OF NET REVENUES 

FABRIC CARE 

Net revenue £1,113m 


This category consists of 

five product groups used 

for cleaning and treating 

all fabrics. It covers products 

used before, during or after 

the main laundry wash cycle. 

Fabric Treatment products 

remove stains from clothes, 

carpets and upholstery. 

Garment Care products 

are specially formulated 

for washing delicate fabrics. 

Water Softeners protect 

the machine and laundry 

against the build-up 

of limescale and other 

deposits. Fabric Softeners 

are used for softening 

and freshening fabrics 

and ironing aids help make 

ironing more convenient. 

Laundry detergents clean 

fabrics in washing machines. 

KEY BRANDS 

Fabric Treatment Vanish, 

Spray ‘n Wash, Resolve, 

Napisan Garment Care 

Woolite Water Softener 

Calgon Fabric Softener 

Quanto, Flor Laundry 

Detergent Ava, 

Sole Colon, Dosia 


No.1 worldwide in Fabric 

Treatment and Water 

Softener categories. 

No.2 worldwide in 

Garment Care. 

SURFACE CARE 



Five product groups. 

Disinfectant cleaners both 

clean and disinfect surfaces, 

killing 99.9% of germs. 

Lavatory cleaners offer 

specialised cleaning and 

disinfecting for the toilet 

bowl and cistern. All purpose 

cleaners are ideal for 

many household surfaces, 

particularly in the bathroom 

and kitchen. Specialty 

cleaners are designed 

for specific tasks – from 

cleaning ovens to removing 

limescale. Finally, polishes 

and waxes clean and shine 

hard surfaces such as 

furniture and floors. 

KEY BRANDS 

Disinfectant Lysol, Dettol, 

Sagrotan, Pine-O-Cleen 

Lavatory Harpic, Lysol 

All purpose Veja, St Marc, 

Cillit Bang, Easy-Off Bang 

Specialty Easy-Off Oven, 

Mop & Glo, Brasso, 

Lime-A-Way, Destop, Rid-X 

Polishes & waxes Poliflor, 

Old English, O’Cedar, 

Mr Sheen 



Surface Care with leading 

positions across the five 

segments described above. 

DISHWASHING 



Products used in automatic 

dishwashing machines and 

for washing dishes by hand. 

In automatic dishwashing 

the main product is detergent 

for cleaning dishes in the 

main wash cycle and sold 

in an increasing range of 

formats: powder, liquid, 

gels (standard and 2in1), 

gelcaps (standard and 2in1) 

and tabs (Double Action, 

PowerBall, 2in1, 3in1 and 

4in1). Other products include 

rinse agents, decalcifying salts, 

dishwasher cleaners, 

deodorisers and glass 

corrosion protectors. 

KEY BRANDS 

Finish, Calgonit, Electrasol, 

Jet Dry 



Automatic Dishwashing. 


FABRIC CARE 

SURFACE CARE 

DISHWASHING 

HOME CARE 

HOME CARE 

OF NET REVENUES OF NET REVENUES OF NET REVENUES 

HOME CARE 



Consists 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 and 

candles. Pest Control 

products offer solutions 

to domestic infestation. 

The category includes 

rodenticide and insecticide 

products – in formats such 

as coils, mats, baits, traps, 

vapourisers and sprays – 

to prevent infestation 

and to kill pests. Shoe Care 

cleans and protects shoes. 

KEY BRANDS 

Air Care Air Wick Pest 

Control d-Con, Mortein, 

Shieldtox, Target, Rodasol, 

Pif Paf, Tiga Roda Shoe Care 

Nugget, Cherry Blossom 


No.2 worldwide in Air Care, 

Shoe Care and Pest Control. 


5

OUR FORMULA IS SIMPLE: RIGHT 

CATEGORY + CONSTANT INNOVATION 

+ CLEAR COMMUNICATION… 

Stain removal is an ideal category for us. There’s a real consumer 

need: stains are a worry, you can’t be sure if they’ll come out in the 

wash, and the wrong treatment can make matters worse. Consumers 

know their laundry detergents alone won’t do the trick – and there’s 

growing demand for specialised additives that can. 

The right product has real value to consumers, if it rescues a garment. 

And the market has plenty of room for further growth. In the past 

few years we’ve covered the world in pink, making Vanish global 

market leader. From nine countries in 1999, it’s now sold in 48. 

We’ve built a worldwide brand into which we can launch a stream 

of ever cleverer products. 

Consumers trust Vanish because it works. And we reinforce their 

trust through constant product innovation. 

For us, innovation does two things. It grows sales, as we improve 

our products or broaden the range of Vanish products for specific 

challenges such as carpet stains. And it protects our premium pricing, 

as consumers are willing to pay for better products. 

In 2005 we found ways to improve Vanish Oxi Action Max so it 

removes even tough dried-in stains in the wash. And we launched 

Vanish Dual Power pre-treater, with two active solutions in an 

eyecatching double-barrelled bottle: you squirt, they mix and you see 

them fizz as they activate. As always, we backed the brand with clear 

communication that demonstrates how Vanish makes stains disappear. 

Result: further market share growth virtually everywhere, and even 

stronger global brand leadership. Our formula works like magic. 

Like Vanish. 


TURNING 

STAINS 

INTO 

GAINS...

WHILE DISHWASHER OWNERS 

ARE ‘VERY SATISFIED’, WE KEEP 

SURPRISING THEM... 

2IN1, 3IN1, 4IN1… 

WE’RE NEVER SATISFIED! 

To keep expanding our share of this growing market, we need to 

make dishwasher owners even happier – with even better solutions. 

What can we do, when they’re so happy already? 

Simple. Surprise them. Amaze them. Then delight them. 

We began in 1995, with the first two-layer dishwasher tablet. It sold very 

well and research said consumers were ‘very satisfied’ with it. So we 

improved its performance by adding the pre-soaker Powerball in 1999. 

Consumers loved this. So we made life simpler for them with Finish 

3in1, which had rinse aid and salt built-in. 

Research said they disliked the corrosion that makes glasses cloudy. 

So we launched Protector, to help stop it happening. 

Could life get much better? Consumers didn’t really think so. Until 

in 2005 we launched Finish 4in1 with Protector action built-in. 

Over the past year it’s been a real success, further strengthening 

our global leadership. In Germany, where strong local competition 

has been a challenge for several years, it’s returned our market 

share to growth. Worldwide, it’s taken our share to record levels 

– and brought private label share growth to a standstill. 

Finish 4in1 brought consumers our best-ever cleaning and stain 

removal, shine, limescale protection – plus glass and silver 

protection. So are they satisfied with it? Very, says the research. 

And are we going to improve on it? Absolutely.

IN ONE YEAR, ‘BANG!’ HAS TAKEN 

68 COUNTRIES BY STORM. 

Bang really has launched with a bang. In just a year we’ve rolled it 

out into 68 countries – and taken world leadership in multi-purpose 

cleaners. It takes a powerfully co-ordinated global marketing 

strategy to win friends on that scale. But it also takes real sensitivity 

to local conditions. 

In South Africa, for example, we used the global media campaign 

to reach the country’s three million more-affluent households. 

But for the other seven million households we used an altogether 

more down-home approach. 

The townships are a big market – Soweto alone has a population of 

six million. But TV commercials wouldn’t get us much visibility there. 

And as well as reaching consumers, we also had to reach the small 

independent stores where they shop. So we set up a roadshow 

to tour community halls and shopping centres. 

We brought music to draw the crowds, with big-name DJs to add 

excitement and credibility. We gave live demonstrations to convince 

people that Bang really works, and delivers great value. The theme 

was “Haikona” or “I can’t believe my eyes!”. Some 12,000 people 

came to see for themselves. And live tie-ups with radio stations 

broadcasting in 11 languages enabled us to reach 3.4 million listeners 

with just six events. 

To encourage retailers to stock the product, we gave them display 

cards of sample sachets. Within eight weeks we were in 2,500 stores, 

including 96% of the top 500. 

A year on, we’re still in all those stores – and they’re still selling out. 

Bang now has the top-selling trigger pack and two of the top-selling 

powder packs on the multi-purpose cleaner market. And on the back 

of Bang’s success, we’re now building distribution of other Reckitt 

Benckiser brands in the townships. Looks like everyone’s cleaning up 

with Bang… 


AND 

IT’S 

GONE 

GLOBAL...

BHI 

HITS 

THE 

SPOT... 

ACQUIRING BOOTS HEALTHCARE 

INTERNATIONAL (BHI) IS THE 

RIGHT PLATFORM TO EXPAND 

INTO HEALTHCARE. 

It’s an ideal marriage. BHI brings complementary strengths to our 

Health & Personal Care business, creating a platform for sustainable 

growth in a very attractive category. As we’ve already shown with 

Lemsip and Gaviscon, there’s major potential in over-the-counter 

(OTC) medicines if you know how to develop products and brands 

that meet real consumer needs. 

What’s more, we expect the overall OTC market to show good growth 

for many years to come. Why? Because ageing populations are more 

prone to minor ailments which they could treat themselves with OTC 

medicines. And because governments need to curb the rising cost 

of healthcare. 

Following the acquisition we’ll have strong positions in four of 

the key OTC medicine categories. In analgesics we’ll have Nurofen, 

the European brand leader, and Disprin. In cough, cold and flu Lemsip 

will be joined by Strepsils, the world’s leading sore throat brand. 

In gastro-intestinal we already have Gaviscon and Senokot. And in 

medicated skin care we’ll have Clearasil, the world’s leading anti-acne 

brand, as well as strong local brands such as E45 and Lutsine. 

Brand loyalty is strong in this sector, which is generally good for 

margins. And by exploiting synergies and reducing costs, we expect 

to build margins even further. As the business grows, we expect 

it to give the Group’s overall margins a healthy lift. 

Combining the brands and the infrastructure of BHI with our existing 

business in Health & Personal Care creates a strong platform across 

Europe and selected other markets in OTC. Our strength in grocery 

and mass market distribution will be complemented by BHI’s 

capability in medical detailing and pharmacy channels. This makes 

a powerful base for organic development or for further acquisitions 

to expand our portfolio and geographical reach. 


RISING 

COSTS 

REALLY 

BUG US! 

OUR COST REDUCTION PROGRAMME 

ROUTINELY TAKES £30M OUT OF OUR 

COSTS EACH YEAR. BUT IN 2005 WE 

FACED A SWARM OF RAW MATERIAL 

PRICE HIKES. 

It wasn’t just the soaring oil price. High-priced oil drove up the cost of 

plastics and chemical feedstocks. And booming demand from growth 

economies such as China and India raised the price of materials like 

steel and tinplate. 

That was a serious challenge for our strategy of squeezing costs to 

drive up profits and cash flow even faster than sales. Just to stand 

still, we needed major savings – on top of our existing £30m cost 

reduction target. 

Undaunted, a SWAT team representing all spending departments 

looked at hundreds of cost-saving ideas. They filtered-out any 

that might affect product performance or consumer perceptions, 

and still found enough to offset all our input cost increases and 

keep margins growing. Mission accomplished. 

And we’re well placed to do it again this year, despite continuing 

cost pressures. 

How’s it done? Relentlessly reviewing everything we do, to get more 

cost out or more value in. In the US we switched from printing on 

cans to glossy plastic labels that look better and cost less – on millions 

and millions of cans a year. Europe follows suit in 2006. In Europe 

we optimised our distribution logistics and saved £1m. 

In India, sales of Mortein mosquito coils are growing very rapidly. We 

moved production to economically deprived areas in Northern India 

where the government provides fiscal incentives. And negotiated 

to introduce a more advanced active ingredient at lower cost. 

Rising costs won’t go away. So we’re focused on long-term, sustainable 

savings. We’re moving up the supply chain – helping suppliers cut 

their own costs, so they can curb their prices to us. That way, 

everyone wins: our suppliers, shareholders and consumers. 


TAKING A LEAD IN ACTION FOR SUSTAINABILITY… 

CLICK YOUR 

DISHWASHER 

TO AN ENERGY 

SAVING PROGRAMME 

AND YOU’LL SAVE 

MORE THAN 

YOU THINK... 

OVER AND ABOVE THE CLEAR BENEFITS 

OF OUR PRODUCTS IN IMPROVING 

HYGIENE AND HEALTH, WE’RE INTENT 

ON DELIVERING THEM IN A SUSTAINABLE 

AND RESPONSIBLE WAY. 

We focus on sustainability issues both as distinct targets and as an 

everyday part of how we manage our business. How can we make our 

direct business performance more sustainable, and how can we influence 

others to do so too? 

ENVIRONMENTAL SUSTAINABILITY 

Our target is to achieve a 20% reduction in the ‘direct’ greenhouse gas 

emissions from our global manufacturing energy use by 31st December 

2010; in 2004 we beat our initial 10% reduction target, having achieved 

an 11% reduction since 2000; this is measured per unit of production. 

We seek a similar reduction in the ‘indirect’ greenhouse gas emissions 

that arise when consumers use our products in their home. 

So what progress have we made in 2005 to improve our environmental, 

social and ethical performance? 

Take the new industry initiative to cut climate change emissions and water 

use across Europe. The idea is simple: many people use higher temperature 

wash programmes on their dishwashers needlessly, because our 

dishwashing products work just as well on energy saving / Eco programmes. 

If we could persuade just half the EU households using higher temperature 

dishwashing programmes to switch to energy saving programmes, they’d 

save up to 388,000 tonnes of greenhouse gas emissions from their annual 

energy use; more than the total greenhouse gas emissions from energy 

use at all Reckitt Benckiser factories around the world. They’d also save 

up to 7,000 million litres of water a year – enough for over 200 million 

showers. Overall, a simple way to help the environment, save money 

and reduce climate change. Since March 2006 we’ve started to put 

“Save Energy and Water” advice on our automatic dishwashing 

products across Europe. 

We also introduced a major programme to improve plastic packaging 

recycling in 2005. Our plastic packaging does an important job, but too 

much of it ends up in landfill, a very visible waste of resources. We’ve 

already done much to make our packaging thinner and lighter, 

* 

but now we are sponsoring a number of projects to improve the amount 

of plastic packaging that is recycled, including three public recycling 

schemes in the US, France and South Africa – with more to come in 2006. 

SOCIAL & ETHICAL SUSTAINABILITY 

We judge our social and ethical sustainability in terms of making our 

company and supply chain a better place in which to work; and in terms 

of how we share some of our wealth creation with those parts of society 

most in need of support, who cannot generally afford to benefit from 

our products. 

In terms of improving social issues at work, we focus particularly on 

improving employee health & safety. In 2005 we cut our lost time 

accident rate by around 30%, bringing the total reduction since 2001 

to about 80%. We also work continuously on a more sustainable supply 

chain. In 2005 we audited more than 40% of our third-party product 

suppliers against our Global Manufacturing Standard, which requires 

compliance with local and international labour, health & safety and 

environmental standards. This was well ahead of our 20% target. 

We are also working actively on the sustainable sourcing of 

a number of our raw materials, including woods and palm oil. 

Our community programmes are designed to assist the most deprived 

parts of society with help on basic health and hygiene. In 2005 we gave 

more than £1.6m in cash and products to community projects worldwide 

(2004 £1m). We continued with our support for Médecins Sans Frontières 

programmes tackling HIV / AIDS in Thailand and Ethiopia. And in year 

two of our partnership with Save the Children we supported health and 

hygiene programmes in Bangladesh, China and India. 

We also responded to major natural catastrophes. The Company and its 

employees donated almost $500,000 in cash and products to help US 

victims of Hurricane Katrina. After the earthquake in Pakistan we gave 

over £75,000 in cash and products to help with immediate health and 

sanitation needs. 

For a full report on our policies, targets and progress on sustainability, please see 

our full Sustainability Report available at www.reckittbenckiser.com 

NB: our internal controls around Social, Environmental and Ethical (SEE) matters and 

reputational risk are outlined in our Annual Report and Financial Statements 2005 (p4). 

*All brands that carry this mark are from companies which are committed to the 

Industry programme “Charter for Sustainable Cleaning”. 

11 


2005 WAS ANOTHER YEAR OF 

SOLID PROGRESS EXCEEDING 

EARLIER TARGETS 

2005 was another year of solid progress exceeding our 

earlier targets. Growth came across all regions and was 

strongly driven by new products like Cillit / Easy-Off Bang, 

Finish 4in1, Air Wick Freshmatic and Vanish Oxi Action 

Max. Benefiting from strong cost containment, operating 

margin reached our 20% target. 

The Group has adopted IFRS for its financial reporting 

for the year ended 31 December 2005. Financial reporting 

for 2004 has been restated, but for 2001, 2002 and 2003 

it has not been restated. 

Net revenues grew by 8% (6% constant) to £4,179m. 

Operating profit increased 12% (10% constant) to £840m. 

Gross margin increased 10bps to 54.9% as a result of 

higher margin new products, and savings from ongoing 

cost optimisation programmes offsetting significantly 

higher input costs. Media investment increased 3% and 

represented 11.9% of net revenues (2004 12.4%). Other 

marketing investment increased ahead of the rate of net 

12 

FINANCIAL OVERVIEW 

CATEGORY GROWTH 


NET REVENUES GREW 9% 

TO £662M 

FABRIC CARE 


TO £1,113M 

Net revenues grew 9% to £662m Net revenues grew 2% to £1,113m 

with growth across all segments. Veet largely due to the success of Vanish 

depilatories continue to benefit from Oxi Action, the Company’s Fabric 

the continuing roll-out in Developing Treatment franchise, and Calgon 

Markets and growth in North America. water softener, offset to some 

Dettol antiseptics grew behind the extent by softness in laundry 

personal care range in Developing detergent and fabric softeners. 

Markets. Healthcare products Key drivers of growth included the 

benefited from the continuing roll-out roll-out of Vanish Oxi Action Max, 

of Gaviscon in Europe. Suboxone Vanish Dual Power and continued 

continues to grow strongly as 

distribution builds in North America. 

growth for Vanish carpet cleaners. 


revenue growth due to a shift in marketing mix towards 

other forms of consumer marketing. Operating margins 

increased by 80bps to 20.1% due to gross margin 

expansion and particularly to tight control of fixed costs 

more than offsetting higher marketing investment. 

Net income for the year increased 16% (14% constant) to 

£669m. Net interest received of £36m (2004 £9m) was due 

to the strong cash inflow over the past year increasing the 

level of net funds after higher dividend payments and share 

buy back, and the conversion of the Convertible Capital 

Bond. The underlying tax rate for the period is 26% before 

non-recurring tax credits of £16m arising from favourable 

tax settlements. 

EPS diluted increased 17% to 90.0 pence. 

Colin Day Chief Financial Officer 

SURFACE CARE 


TO £871M 

The major growth driver was the 

roll-out of Bang under the Cillit 

brand in Europe, and the Easy-Off 

brand in North America and 

Developing Markets. The Dettol 

and Lysol disinfecting range, 

particularly disinfectant spray, 

grew in Europe, North America 

and Developing Markets. 

FOR THE DETAILED FINANCIAL 

REVIEW, SEE OUR FULL ANNUAL 

REPORT – AVAILABLE ONLINE AT 

WWW.RECKITTBENCKISER.COM 

20 

19 

18 

17 

16 

15 

14 

13 

DISHWASHING 


TO £579M 

Net revenues grew 6% to £579m 

due to strong growth in Automatic 

Dishwashing. Growth came from 

the success of Finish/Calgonit 

4in1 in Europe, initial sales of 

Finish/Calgonit Quantum in 

early launch markets and from 

Electrasol with Jet Dry Action 

in North America. 

01 02 03 04 05 

HOME CARE 


TO £628M 

Net revenues grew 8% to £628m 

with strong growth for both Air 

Care and Pest Control. Air Care 

grew behind the launch of Air Wick 

Freshmatic in Europe, North 

America and certain Developing 

Markets. Pest Control growth was 

driven by Mortein Power Booster 

coils and a strong pest season 

in the Southern Hemisphere.

GEOGRAPHICAL ANALYSIS FIGURES AT A GLANCE 

GEOGRAPHICAL ANALYSIS AT CONSTANT 

EXCHANGE (SEE CHARTS ON PAGE 4) 

51% 

EUROPE 

NET REVENUES GREW BY 4% TO £2,135M 

Growth came from key recent product introductions. 

In Fabric Treatment, growth was due to the success of 

Vanish with Vanish Oxi Action Max and Vanish Dual 

Power. In Surface Care, growth came from Cillit Bang. 

In Dishwashing, growth was due to Finish/Calgonit 

4in1. Home Care increased due to the successful 

launch of Air Wick Freshmatic. Health & Personal Care 

saw strong growth for the health care portfolio due to 

the roll-out of Gaviscon in Europe. Operating margins 

were 60bps ahead of last year at 23.5% due to tight 

control of costs offsetting higher marketing investment, 

resulting in operating profits increased by 6% to £502m. 

31% 

NORTH AMERICA & AUSTRALIA 

NET REVENUES INCREASED 5% TO £1,281M 

In Fabric Care, Spray ‘n Wash Dual Power Fabric Treatment 

and Resolve Dual Power carpet cleaner grew sales. 

In Surface Care increases came from growth for Lysol 

disinfectant spray, and the launch of Easy-Off Bam. 

In Dishwashing increases came due to the success of 

Electrasol with Jet Dry Action. In Home Care, Air Care 

grew following the launch of Air Wick Freshmatic, and in 

Health & Personal Care, Veet depilatories and prescription 

drug Suboxone were the principal contributors to growth. 

Food increased net revenues due to the launch of 

Cattleman’s BBQ sauce in retail and to continued growth 

for French’s yellow mustard and gains for Frank’s Red Hot 

sauce. Operating margins were 90bps higher at 21.1%, 

due to substantially higher input costs reducing gross 

margins offset by tight control of fixed costs. As a result 

operating profits increased 9% to £270m. 

18% 

DEVELOPING MARKETS 

NET REVENUES GREW 12% TO £763M 

There was strong growth in all categories. In Fabric Care, 

growth came following the roll-out of Vanish Oxi Action 

Fabric Treatment products. In Surface Care, increases came 

from the success of Easy-Off Bang. Pest Control grew 

strongly with the launch of Mortein Power Booster coils. 

Health & Personal Care grew due to the continuing rollout 

of Veet in new markets and strong growth for the 

Dettol range of personal care products. Operating margins 

expanded 250bps to 8.9%, resulting in operating profits 

increasing by 55% to £68m. 

CASH FLOW 

OF NET REVENUES 



Cash generated from operations increased to £946m 

due to higher operating profit. Net working capital 

improvements were lower than in 2004 as many 

of the Group’s businesses reached optimal levels. 

Net cash flow from operations (defined in the 

Annual Report and Financial Statements 2005; 

Group Cash Flow p22) increased to £758m. 

Net interest received was £34m (2004 £8m) 

while tax payments decreased by £32m. 

SUMMARY GROUP PROFIT AND LOSS ACCOUNT 

FOR THE YEAR ENDED 31 DECEMBER 2005 

2005 2004 

£M £M 

Net revenues 4,179 3,871 

Operating profit 840 749 

Net finance income 36 9 

(including coupon on convertible capital bonds) 

Profit on ordinary activities before taxation 876 758 

Tax on profit on ordinary activities (207) (181) 

Profit for the year 669 577 

Attributable to equity minority interests – – 

Profit for the year (attributable to ordinary equity holders of the parent) 669 577 

Dividends (262) (216) 

Profit for the year after dividends 407 361 

Earnings per ordinary share 

On profit for the year, basic 92.0p 80.7p 

On profit for the year, diluted 90.0p 77.1p 

Dividend paid on ordinary shares for the year is 36p per share (2004 30p) consisting of 2004 final 18p per share (2004 14p) 

and 2005 interim 18p per share (2004 16p). The Directors are proposing a final dividend in respect of the financial year 

ended 31 December 2005 of 21p per share to be paid, if approved at the AGM, on 25 May 2006. 

SUMMARY GROUP BALANCE SHEET 

AS AT 31 DECEMBER 2005 

2005 2004 

£M £M 

Non-current assets 2,343 2,212 

Current assets 1,870 1,640 

Total assets 4,213 3,852 

Current liabilities (1,523) (1,404) 

Non-current liabilities (834) (868) 

Total liabilities (2,357) (2,272) 

Net Assets 1,856 1,580 

Equity minority interests (1) (3) 

Total shareholders’ funds 1,855 1,577 

Approved by the Board on 20 March 2006 

Adrian Bellamy Bart Becht 

Director Director 

SUMMARY GROUP CASH FLOW STATEMENT 

FOR THE YEAR ENDED 31 DECEMBER 2005 

2005 2004 

£M £M 

Cash generated from operations 946 914 

Net interest received 34 8 

Tax paid (157) (189) 

Net cash generated from operating activities 823 733 

Capital expenditure (78) (83) 

Other investing activities 13 8 

Maturity of short-term investments 493 38 

1,251 696 

Proceeds for issuance of ordinary shares 36 30 

Share purchases (300) (283) 

Repayments of borrowings (66) (87) 

Dividends paid to the Company’s shareholders (262) (216) 

Net increase in cash and cash equivalents in year 659 140 

Exchange gains/(losses) 9 (2) 

Cash and cash equivalents at beginning of year 301 163 

Net cash and cash equivalents at end of year 969 301 

13 


SUMMARY DIRECTORS’, AUDITORS’ AND REMUNERATION REPORT 

THIS IS A SUMMARY OF INFORMATION FROM THE 

ANNUAL REPORT AND FINANCIAL STATEMENTS 2005 

This Summary Financial Statement is a summary of 

information in the Report of the Directors and the Group’s 

accounts. The Summary Financial Statement does not contain 

sufficient information to allow for a full understanding of 

the results of the Group and of the state of affairs of the 

Company or of the Group. For further information, the 

Report of the Directors, the Directors’ Remuneration Report, 

the Annual Report and Financial Statements and the 

auditors’ report on those accounts should be consulted. 

Shareholders have the right to receive, free of charge, 

a copy of the Group’s Annual Report and Financial Statements. 

If shareholders wish to receive a copy of the Group’s Annual 

Report and Financial Statements for this and all future years, 

please write to the Registrar whose address appears on 

the back cover. 

SUMMARY REPORT OF THE DIRECTORS 

Review of the activities and the development 

of the Group’s business 

The Financial Review set out on pages 7 to 9 of the Annual 

Report and Financial Statements includes a review of the 

operations for the year. The Directors endorse the content 

of that Review. 

In the view of the Directors, the Group’s likely future 

development will continue to centre on the main product 

categories in which it now operates. 

Directors 

Information regarding the Directors of the Company who 

were serving on 31 December 2005 is set out on page 15. 

During the year there were the following changes to the 

Board of Directors. Ana Maria Llopis and Hans van der 

Wielen resigned at the conclusion of the AGM held on 

5 May 2005. Graham Mackay and Gerard Murphy joined 

the Board as Non-Executive Directors on 25 February 2005 

and 20 June 2005 respectively. As Gerard Murphy’s 

appointment was made subsequent to the date 

of the 2005 AGM, he will offer himself for election 

at this year’s AGM. 

Bart Becht and Peter Harf retire by rotation and, being eligible, 

offer themselves for re-election at the forthcoming AGM. 

George Greener has served on the Board for more than nine 

years and, under the Combined Code, is therefore obliged 

to offer himself for re-election on an annual basis. George 

Greener has advised that he will not be offering himself for 

re-election at the AGM in 2006 and will accordingly step 

down from the Board at the conclusion of the AGM. 

Corporate Governance 

The Company recognises the importance of high standards 

of Corporate Governance. It understands, supports and 

has applied throughout 2005 the principles set out in the 

Combined Code and has complied with the great majority 

of the detailed provisions contained in the Code. The ways 

in which the Company applies these principles, and the few 

provisions with which the Company does not consider that 

it is appropriate to comply, are set out in the appropriate 

sections of the Annual Report and Financial Statements. 

The application of the principles to matters related to 

the Board and its committees, to internal control and 

to relations with shareholders is included in the Report 

of the Directors and to Directors’ remuneration in the 

Directors’ Remuneration Report. 

Report of the auditors 

The report of the auditors on the annual accounts of 

the Group for the year ended 31 December 2005 is 

unqualified and does not contain a statement under either 

s.237 (2) or s.237 (3) of the Companies Act 1985. 

Annual General Meeting 

The notice convening the 53rd Annual General Meeting 

of the Company to be held on Thursday, 4 May 2006 

at The London Heathrow Marriott Hotel, Bath Road, 

Hayes, Middlesex, UB3 5AN is contained in a separate 

document for shareholders which accompanies this 

Shareholders’ Review. 

INDEPENDENT AUDITORS’ STATEMENT TO THE 

MEMBERS OF RECKITT BENCKISER PLC 

We have examined the Summary Financial Statement 

of Reckitt Benckiser plc. 

Respective responsibilities of Directors and auditors 

The Directors are responsible for preparing the Summary 

Financial Statement in accordance with applicable law. 

Our responsibility is to report to you our opinion on the 

14 


consistency of the Summary Financial Statement within 

the Shareholders’ Review with the full Annual Report and 

Financial Statements, the Report of the Directors and the 

Directors’ Remuneration Report and its compliance with the 

relevant requirements of s.251 of the Companies Act 1985 

and the regulations made thereunder. We also read the 

other information contained in the Shareholders’ Review and 

consider the implications for our report if we become aware 

of any apparent misstatements or material inconsistencies 

with the Summary Financial Statement. 

This statement, including the opinion, has been prepared 

for and only for the Company’s members as a body in 

accordance with s.251 of the Companies Act 1985 and for 

no other purpose. We do not, in giving this opinion, accept 

or assume responsibility for any other purpose or to any 

other person to whom this statement is shown or into 

whose hands it may come save where expressly agreed 

by our prior consent in writing. 

Basis of opinion 

We conducted our work in accordance with Bulletin 

1999/6, ‘The auditors’ statement on the Summary Financial 

Statement’ issued by the Auditing Practices Board for use 

in the United Kingdom. 

Opinion 

In our opinion, the Summary Financial Statement is 

consistent with the full Annual Report and Financial 

Statements, the Report of the Directors and the Directors’ 

Remuneration Report of Reckitt Benckiser plc for the year 

ended 31 December 2005, and complies with the 

applicable requirements of s.251 of the Companies Act 

1985, and the regulations made thereunder. 

PricewaterhouseCoopers LLP 

Chartered Accountants and Registered Auditors, 

London 20 March 2006 

SUMMARY OF POLICY ON REMUNERATION 

The full Directors’ Remuneration Report can be found 

on pages 10 to 15 of the 2005 Annual Report and 

Financial Statements. 

The Remuneration Committee of the Board (the ‘Committee’) 

is responsible for determining and reviewing the terms of 

employment and remuneration of the Executive Directors 

and senior executives. The Committee comprises three 

Non-Executive Directors under the Chairmanship of 

Judith Sprieser. The Committee’s overriding objective 

is to ensure that Reckitt Benckiser’s remuneration policy 

encourages, reinforces and rewards the delivery of 

outstanding shareholder value. The graph opposite 

shows that the Company has, over the last five years, 

outperformed the UK FTSE 100 in terms of Total 

Shareholder Return (TSR). The core principles on which 

the remuneration policy is based are described below. 

First, in order to attract and retain the best available people, 

the Committee has – and will continue to adopt 

– a policy of executive remuneration based on competitive 

practice. Reckitt Benckiser competes for management skills 

and talent in the same international market place as its 

main competitors, the vast majority of which are based 

in the US. In accordance with this policy principle, total 

remuneration for Executive Directors and other senior 

executives will be benchmarked against the upper quartile 

of a peer group comprising Reckitt Benckiser’s main 

competitors, together with a range of comparable 

companies in the US consumer goods industry. 

The second principle is to align the interests of Executive 

Directors and senior executives’ with those of shareholders 

through a variable, performance based compensation policy 

and the Company’s share ownership policy. 

In this context, variable pay is, and will continue to be, 

the major element of our current Executive Directors’ and 

senior Executives’ total compensation package. Accordingly, 

the Executive Directors’ compensation package comprises, 

in addition to base salary, an annual cash bonus and sharebased 

incentives. Highly leveraged annual cash bonuses, 

linked to the achievement of key business measures within 

the year, are designed to stimulate the achievement of 

outstanding annual results. 

To balance the management’s orientation between the 

achievement of short and long-term business measures, 

the Committee believes that longer-term share-based 

incentives are also appropriate. 

Shareholders will be asked at the 2006 AGM to approve 

a consolidation and simplification of the current plans 

rules under which grants for Executive Directors and 

other employees can be made. 

Pensions 

In line with the Committee’s emphasis on the importance 

of only rewarding the Executive Directors for creating 

shareholder value, Reckitt Benckiser operates a defined 

contribution pension plan, the Reckitt Benckiser Executive 

Pension Plan. Mr Becht and Mr Day are both members 

of this Plan. 

Bart Becht’s standard Company pension contribution was 

30% of pensionable pay during 2005. A further annual 

contribution of 20% of pensionable pay was also paid 

in 2005 to take account of the uncompetitive level of his 

pension contributions since his appointment as Chief Executive 

Officer. This additional contribution has now ceased. 

Colin Day’s standard Company pension contribution was 

25% of pensionable pay in 2005. 

In 2006, only Bart Becht is immediately affected by the 

new lifetime limit brought about by the proposed UK tax 

changes effective from April 2006. The Committee has 

decided that the most cost-effective approach is to maintain 

his current pension commitment, and to make a funded 

and unapproved pension arrangement. 

Service agreements 

For newly-appointed Executive Directors, termination 

payments, including compensation paid during any notice 

period, will not exceed 12 months’ pay. Service contracts 

will be rolling and terminable on six months’ notice. 

Contracts will also provide liquidated damages of six 

months’ base salary plus an amount equal to one times 

the average bonus paid (if any) in the two years up to 

termination. Any bonus earned will be included in the 

termination payment on the basis that a high proportion 

of pay is related to performance and that in the event of 

termination for poor performance it is unlikely that any 

bonus will have been paid. 

Non-Executive Directors do not have service agreements, 

but are subject to re-election by shareholders every 

three years. 

The remuneration for Non-Executive Directors consists of 

fees for their services in connection with Board and Board 

committee meetings. 

Historical TSR performance 

Growth in the value of a hypothetical £100 holding over 

five years. 

FTSE 100 

Reckitt Benckiser 

Notes 

The graph above shows the performance of Reckitt Benckiser 

in terms of TSR performances against the UK FTSE 100 

Index over a five-year period and conforms to the Directors’ 

Remuneration Report Regulations 2002. The Index was 

selected on the basis of companies of a comparable size in 

the absence of an appropriate industry peer group in the UK. 

Directors’ remuneration 

The aggregate amount of Directors’ emoluments during the 

year was £5.3m (2004 £5.4m). The aggregate gains made by 

the Directors on the exercise of options and the vesting of 

restricted shares were £12.3m (2004 £5.0m). The aggregate 

amount of contributions made to money purchase pension 

schemes in respect of the Directors was £0.5m (2004 £0.5m).

MEET THE TEAM 

EXECUTIVE COMMITTEE THE BOARD 

1 4 7 

2 5 8 

3 6 

9 

1 ALAIN LE GOFF (53, FRENCH) 

Executive Vice President, Supply. Was 

appointed EVP for Operations at Benckiser 

in October 1996. He joined the 

Company in 1986, serving as Industrial 

Director in France, Monaco, Germany 

and as Logistics Director for the Group. 

He was previously with Lesieur. 

Alain is responsible for the global 

supply chain including procurement, 

manufacturing, warehousing and logistics. 

Also responsible for management of 

Squeeze and X-trim gross margin 

enhancement programmes. 

2 TONY GALLAGHER (50, BRITISH) 

Senior Vice President, Information 

Services. Joined Benckiser in September 

1997. He was previously CEO of InfoSol, 

a systems integration and consulting 

company in the Middle East. Prior to 

that, he was at Integraph and Mitel. 

Tony is responsible for global 

information systems and services 

and telecommunications. 

Tony will retire from the Company in April 2006. 

3 FRANK RUETHER (53, GERMAN) 

Senior Vice President, Human Resources. 

Joined Benckiser in July 1996 as Personnel 

Director and was appointed SVP Human 

Resources in March 1997. He was previously 

with Mars, 1986–1996, as Director of 

Compensation & Benefits (Europe). 

Frank is responsible for human resources 

management, remuneration and benefits, 

and organisational development. 

4 ERHARD SCHOEWEL (57, GERMAN) 

Executive Vice President, Europe. Joined 

Benckiser in January 1979 and served 

as General Manager of Germany and 

of Propack Europe (private label). 

He was General Manager of Italy 

1995–1996. From 1996 to 1999, 

he was EVP, Central Europe. He was 

previously with PWA Waldhof. 

Erhard is responsible for all European 

markets, Western and Eastern. 

5 COLIN DAY (50, BRITISH) 

Chief Financial Officer. Joined Reckitt 

Benckiser in September 2000 from Aegis 

Group plc where he was Group Finance 

Director from 1995. Prior to that he was 

at Kodak, British Gas, De La Rue Group 

plc and ABB Group. 

Colin is responsible for financial 

controls and reporting, treasury, tax, 

corporate development, legal affairs 

and internal audit. 

6 ELIO LEONI SCETI (40, ITALIAN) 

Executive Vice President, Category 

Development. Joined Benckiser in 1992 

serving in various marketing roles and as 

General Manager of Germany and Italy. 

Following the merger in 1999, Elio was 

promoted to Senior Vice President, 

North American Household and was 

appointed EVP, Category Development 

in July 2001. Elio was previously with 

Procter & Gamble in Italy and France. 

Elio is responsible for global category 

development, research & development, 

media and market research. 

COMBINING TALENTED PEOPLE 

FROM DIFFERENT PROFESSIONAL 

AND CULTURAL BACKGROUNDS IN 

ACTION-ORIENTATED TEAMS GIVES 

US A COMPETITIVE EDGE. 

7 JAVED AHMED (46, PAKISTANI) 

Executive Vice President, North America 

and Australia and Regional Director 

North American Household. Joined 

Benckiser in 1992 as General Manager, 

Canada and in 1995 became General 

Manager, UK. Appointed SVP North 

American Household in 2001 and EVP, 

North America and Australia in 

September 2003. Prior to joining 

Benckiser, he previously worked with 

Procter & Gamble and Bain & Company. 

Javed is responsible for North America 

and Australia/New Zealand. 

8 BART BECHT (49, DUTCH) 

Chief Executive Officer. Joined Benckiser 

in 1988 and served as General Manager 

in Canada, the UK, France and Italy 

before being appointed Chief Executive 

of Benckiser Detergents, subsequently 

Benckiser N.V., in 1995. He was appointed 

Chief Executive Officer of Reckitt Benckiser 

following the merger in December 1999. 

He was previously with Procter & Gamble 

both in the USA and Germany. 

Bart is Chairman of the Executive Committee. 

9 FREDDY CASPERS (45, GERMAN) 

Executive Vice President, Developing Markets. 

Joined Benckiser in September 1997 as 

EVP for Eastern Europe. He previously 

served in PepsiCo and Johnson & Johnson 

in a variety of international assignments 

in Europe, US, Eastern Europe and Turkey. 

Freddy is responsible for all companies 

in Asia Pacific, Latin America and Africa 

Middle East. 

ADRIAN BELLAMY (64, BRITISH) ‡ # 

Was appointed a Non-Executive Director of the 

Company in 1999 and became Non-Executive 

Chairman in May 2003. He is Executive Chairman of 

The Body Shop International Plc and a director 

of The Gap and Williams-Sonoma, Inc. He was 

formerly a director of Gucci Group NV and The 

Robert Mondavi Corporation. 

BART BECHT (49, DUTCH) # 

Joined the Board in 1999 on his appointment 

as Chief Executive Officer of the Company. He 

was Chief Executive of Benckiser Detergents, 

subsequently Benckiser N.V. since 1995 and Chairman 

of Benckiser’s Management Board from May 

1999. He holds no current external directorships. 

COLIN DAY (50, BRITISH) 

Joined Reckitt Benckiser in September 2000 

from Aegis Group plc where he was Group 

Finance Director from 1995. He was formerly 

a Non-Executive Director of easyJet plc (resigned 

September 2005) and the Bell Group plc 

(resigned June 2004). During 2005 he was 

appointed a Non-Executive Director of Imperial 

Tobacco plc and WPP Group plc. 

DR GEORGE GREENER, CBE (60, BRITISH) 

Was appointed a Non-Executive Director in 

1996 and was the Senior Non-Executive Director 

from May 2003 to February 2005. He was formerly 

Chairman of British Waterways and The Big 

Food Group Plc. He was appointed Chairman 

of Kellen Investments Limited in January 2006. 

He is also a Non-Executive Director of JP Morgan 

Fleming American Investment Trust plc. 

DR PETER HARF (59, GERMAN) # 

Joined the Board as a Non-Executive Director 

in 1999 and is the Deputy Chairman. He served 

as Chairman of the Remuneration Committee 

until June 2004. He is Chairman of Coty Inc. 

and a director of InBev and the Brunswick 

Corporation. He is Chief Executive Officer 

of Joh. A. Benckiser GmbH. 

KENNETH HYDON (61, BRITISH) * 


December 2003 and the Senior Independent 

Non-Executive Director in February 2005. 

He retired as Financial Director of Vodafone 

Group plc in July 2005. He is a Non-Executive 

Director of Tesco plc, the Royal Berkshire & Battle 

Hospitals NHS Trust and Pearson plc. 

GRAHAM MACKAY 

(56, BRITISH/SOUTH AFRICAN) ‡ 


February 2005. He is the current Chief Executive 

of SABMiller plc, one of the world’s largest 

brewers with a brewing presence in over 40 

countries across four continents. He joined the 

then South African Breweries Limited in 1978 

and has held a number of senior positions 

within that group. 

DR GERARD MURPHY (50, IRISH) * 

Was appointed a Non-Executive Director in June 

2005. He is the current Chief Executive Officer 

of Kingfisher plc. He was previously Chief 

Executive Officer of Carlton Communications plc, 

Exel plc and Greencore Group plc. Earlier 

in his career, he held various senior positions 

within food and drink group Grand Metropolitan 

(now Diageo plc) in Ireland, UK and USA. 

JUDITH SPRIESER (52, AMERICAN) ‡ # 

Chairman of the Remuneration Committee. 


August 2003. She was previously Chief Executive 

Officer of Transora Inc., an e-commerce 

software and service company and Executive 

Vice President (formerly Chief Financial Officer) 

of Sara Lee Corporation. She is a Director of 

CBS Corporation, Allstate Insurance Company, 

USG Corporation and InterContinental Exchange. 

PETER WHITE (64, BRITISH) * # 

Chairman of the Audit Committee, was 

appointed a Non-Executive Director in 

December 1997. He was previously Group Chief 

Executive of Alliance & Leicester Plc. 

* Member of the Audit Committee 

‡ Member of the Remuneration Committee 

# Member of the Nomination Committee 15 


Annual Report and 

Financial Statements 2005 

Sustainability Report Corporate responsibility web pages 

Designed and produced by The Workroom www.workroom.co.uk Illustrations by Kevin Hopgood. Photography by Tim Barker and Duncan Smith. 

Printed by the colourhouse / Westerham Press. The paper used throughout this report is produced from a combination of both TCF (Totally Chlorine Free) and ECF (Elemental 

Chlorine Free) pulp. It is totally recyclable and manufactured within a BS EN ISO 14001 accredited mill, also conforming to EMAS (Eco-management and Audit Scheme). 

The recyclable outer wrapping used is manufactured using totally degradable polythene. 

16 

LOOKING AHEAD 

DURING THE 

NEXT YEAR 

WE WILL... 

ANNOUNCE QUARTER 1 RESULTS ON 

27 APRIL 2006 

HOLD THE ANNUAL GENERAL 

MEETING ON 4 MAY 2006 

PAY FINAL ORDINARY DIVIDEND IF 

APPROVED ON 25 MAY 2006 

PAY HALF-YEARLY PREFERENCE 

DIVIDEND ON 1 JULY 2006 

ANNOUNCE INTERIM RESULTS ON 

24 JULY 2006 

PAY INTERIM ORDINARY DIVIDEND 

IN SEPTEMBER 2006 

ANNOUNCE QUARTER 3 RESULTS ON 

24 OCTOBER 2006 

PAY HALF-YEARLY PREFERENCE 

DIVIDEND ON 1 JANUARY 2007 

ANNOUNCE PRELIMINARY 2006 

RESULTS IN FEBRUARY 2007 

PUBLISH 2006 ANNUAL REPORT AND 

FINANCIAL STATEMENTS IN APRIL 2007 

HOLD THE ANNUAL GENERAL 

MEETING IN MAY 2007 

FIND OUT MORE ABOUT OUR TOTAL PERFORMANCE... 


USEFUL INFORMATION 

FOR SHAREHOLDERS 

ANNUAL GENERAL MEETING 

To be held on Thursday, 4 May 2006 at The London Heathrow 

Marriott Hotel, Bath Road, Hayes Middlesex, UB3 5AN. 

Every ordinary shareholder is entitled to attend and vote 

at the meeting. The notice convening the meeting is 

contained in a separate document for shareholders. 

FINAL DIVIDEND FOR THE YEAR ENDED 

31 DECEMBER 2005 

To be paid (if approved) on 25 May 2006 to 

shareholders on the register on 3 March 2006. 

COMPANY SECRETARY 

Elizabeth Richardson 

REGISTERED OFFICE 

103-105 Bath Road, 

Slough, 

Berkshire SL1 3UH 

Telephone: 01753 217800 

Facsimile: 01753 217899 

REGISTERED IN ENGLAND 

No. 527217 

AUDITORS 

PricewaterhouseCoopers LLP 

SOLICITORS 

Slaughter and May 

REGISTRAR AND TRANSFER OFFICE 

If you have any queries about your shareholding, 

please write to, or telephone, the Company’s Registrar 

at the following address: 

Computershare Investor Services PLC, 

PO Box 82, 

The Pavilions, 

Bridgwater Road, 

Bristol BS99 7NH 

Dedicated Reckitt Benckiser shareholder helpline 0870 703 0118 

website: www.computershare.com 

VIEWING YOUR SHAREHOLDING 

If you have internet access, you may view your 

shareholding by accessing the Computershare website, 

www.computershare.com. You will need your Shareholder 

Reference Number (SRN) which appears on your 

share certificate. 

DIVIDENDS 

If you wish to receive your dividends directly to your 

bank account, or by way of additional shares, please 

contact the Registrars and ask for the relevant forms. 

SHAREDEALING SERVICE 

The following sharedealing services are available through 

our Registrars, Computershare Investor Services PLC: 

Internet ShareDealing 

Please note that, at present, this service is only available 

to shareholders in certain European jurisdictions. Please 

refer to the website www.computershare.com for an upto-date 

list of these countries. This service provides shareholders 

with an easy way to buy or sell Reckitt Benckiser plc ordinary 

shares on the London Stock Exchange. The commission 

is just 0.5%, subject to a minimum charge of £15. In 

addition stamp duty, currently 0.5%, is payable on purchases. 

There is no need to open an account in order to deal. 

Real time dealing is available during UK market hours 

8.00am to 4.30pm. In addition there is a convenient facility 

to place your order outside of market hours. Up to 90-day 

limit orders are available for sales. To access the servicelog 

on to www.computershare.com/dealing/uk. Shareholders 

should have their SRN available. The SRN appears on share 

certificates. A bank debit card will be required for purchases. 

Telephone ShareDealing 

Please note this service is, at present, only available 

to shareholders resident in the UK and Ireland. The 

commission is 1%, subject to a minimum charge of 

£15. In addition stamp duty, currently 0.5%,is payable 

on purchases. The service is available from 8.00am to 

4.30pm Monday to Friday, excluding bank holidays, on 

telephone number 0870 703 0084. Shareholders should 

have their SRN ready when making the call. The SRN 

appears on share certificates. A bank debit card will be 

required for purchases. Detailed terms and conditions 

are available on request by telephoning 0870 702 0000. 

These services are offered on an execution-only basis. 

This is not a recommendation to buy, sell or hold shares 

in Reckitt Benckiser plc. Shareholders who are unsure of 

what action to take should obtain independent financial 

advice. Share values may go down as well as up, which 

may result in a shareholder receiving less than he/she 

originally invested. 

To the extent that this statement is a financial promotion 

for the sharedealing service provided by Computershare 

Investor Services PLC, it has been approved by Computershare 

Investor Services PLC for the purpose of Section 21 (2) (b) 

of the Financial Services and Markets Act 2000 only. 

Computershare Investor Services PLC is authorised and 

regulated by the Financial Services Authority. Where 

this has been received in a country where the provision 

of such a service would be contrary to local laws or 

regulations, this should be treated as information only. 

This review is part of an integrated approach to reporting 

our total performance. Our family of reports also includes 

the Annual Report and Financial Statements, the 

Sustainability Report on our social and environmental 

responsibilities, and regularly updated corporate 

responsibility information at 

www.reckittbenckiser.com/about/corporate.cfm 

Reckitt Benckiser plc 

103-105 Bath Road 

Slough 

Berkshire SL1 3UH 

United Kingdom 

www.reckittbenckiser.com

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