1 Reckitt Benckiser A Business Case Study Carlingford High School

2 Reckitt Benckiser - Business Case Study Carlingford High School Annual Report Comparison Ratios and Competitors Finance Team in RB ANZ A bit about us

3 Reckitt Benckiser - Business Case Study Carlingford High School Annual Report Comparison Ratios and Competitors Finance Team in RB ANZ A bit about us

4 +9% +8% +16% Our Business Reckitt Benckiser is the world leader in Household Cleaning (excl laundry) Our passion is to improve peoples lives when they use our products RB sells its products in some 180 countries and has operations in 60 countries. About Reckitt Benckiser Net Revenue - £ million

5 Our Categories - % Share of 2004 Net Revenue No. 1 Worldwide in disinfectants & lavatory care No. 1 Worldwide in Fabric Treatment & Water softeners No. 1 Worldwide in Auto Dishwashing detergent No. 2 Worldwide in Air Care, Shoe Care & Pest Control Veet is worldwide leader in Depilatories % Share

6 Annual Report Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements

7 Chairman's Statement Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements

8 CEO Review Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements

9 Corporate Business Review Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements To date we’ve launched Rasera in all Veet’s developed markets - and we’re now using it to spearhead the brand’s entry into new ones.

10 Corporate Business Review Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements Year after year, our Squeeze programme finds ways to save upwards of £30m annually - with over 600 Squeeze projects on the go at any time.

11 Corporate Business Review Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements Thanks to Vanish, now in some 50 countries worldwide, we’re the global leader in stain removal Marketed in Australia under Napisan/Preen Brand

12 Board Of Directors Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements

13 Report of the Directors Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements

14 Annual Report Chairman’s Statement Chief Executive’s Review Corporate Business Review Board of Directors Report of the Directors Financial Statements Profit & Loss Balance Sheet

15 Profit & Loss Statement Financial Statements Profit & Loss Balance Sheet

16 Profit and Loss Statement £’million’s Raw Materials Packaging Labour Depreciation R&D Marketing Other Overheads Also known as Gross Margin Gross Sales minus Trade Spend

17 Balance Sheet Financial Statements Profit & Loss Balance Sheet

18 Balance Sheet £’million’s Creditors Borrowings Conv Capital Bonds Creditors Borrowings Intangible Assets Tangible Assets Stocks Debtors Investments Cash Share Capital Retained Earnings

19 Reckitt Benckiser - Business Case Study Carlingford High School Annual Report Comparison Ratios and Competitors Finance Team in RB ANZ A bit about us

20 Comparison Ratios Why use ratios? Understand business trends over time Used as ‘key performance indicator’ to measure business performance Understand where problems exist - and how to fix them Drive accountability Benchmark against competitors

21 Comparison Ratios Profit & Loss Ratios –Net Revenue Growth –Gross Profit % of Net Revenue –Operating Profit Growth –Operating % of Net Revenue Balance Sheet Ratios –Debt to Equity –Current Asset to Current Liabilities

22 Profit and Loss Ratios £’million’s Gross Profit % of Net Revenue: 2004 = 55% 2003 = 53% Net Revenue Growth: Growth of 4% on 2003 Operating Profit % of Net Revenue: 2004 = 20% 2003 = 18% Operating Profit Growth: Growth of 12% on 2003

23 Balance Sheet ratios £’million’s Creditors Borrowings £82 Conv Capital Bonds £40 Creditors Borrowings £118 Current Asset / Current Liabilities 2004 = 1709 / 1519 = = 1.08 Total Debt = = 240 Debt to Equity 2004 = 240 / 1676 = 14% 2003 = 33%

24 Comparison Ratios Profit & Loss Ratios –Net Revenue Growth –Gross Profit % of Net Revenue –Operating Profit Growth –Operating % of Net Revenue Balance Sheet Ratios –Debt to Equity –Current Asset to Current Liabilities We can analyse our competitors using Ratio Analysis Our competitors include: SC Johnson Unilever Sara Lee Clorox Proctor & Gamble Colgate

25 Treasury Global Treasury manages three main risks: Translation Risk –Financial statements reported in £’s but business conducted in other currencies –Managed through currency swaps Transaction Risk –Purchases of Goods & Services and receipts from customers in other currencies –Managed through derivatives Interest Rate Risk –65% of financial liabilities at fixed interest rates

26 Reckitt Benckiser - Business Case Study Carlingford High School Annual Report Comparison Ratios and Competitors Finance Team in RB ANZ A bit about us

27 Finance Charter “The purpose of finance is to be a business partner that adds value to the organisation”

28 Organisation Chart Preparation of Monthly Results to HO General Ledger Maintenance Fixed Assets Taxation Insurance Bank Accounts & Treasury Liaison Preparation of Factory Budgets & Forecasts Monthly Factory Reporting COGS Information for NPD Standard Cost Maintenance Inventory Management Sales & Pricing Analysis Marketing Commercial Analysis Monthly Overheads Reports New Product Development analysis Planning & forecasting

29 Reckitt Benckiser - Business Case Study Carlingford High School Annual Report Comparison Ratios and Competitors Finance Team in RB ANZ A bit about us

30 Any Questions ?