DELIVERING OUR STRATEGY
Rejuvenating sustainable growth
In February 2020, we shared our strategy for rejuvenating sustainable growth, and our medium-term financial targets. This set out how we would:
Drive growth, rebuild a strong earnings model and outperform with mid-single digit organic top-line, mid 20’s margins and 7-9% EPS growth
Enable improved growth by investing in key capabilities to strengthen product innovation and enhance customer service, with sustainability at the heart of everything we do
Fund investment through delivery of an enhanced productivity programme and short-term reduction in operating margin
Deliver progressive improvements to our top-line growth through better product penetration, market share gains, and expansion into new places and new spaces
Manage capital allocation to support a strong balance sheet while actively migrating our portfolio to higher growth opportunities
'A better house in a great neighbourhood'
In Laxman’s fireside chat at the Morgan Stanley Global Consumer & Retail Conference in December 2020 he connected with international investors to outline Reckitt’s business transformation strategy and review its performance at the end of an eventful year.
Financial highlightsNet Revenue £ 14.0 bn +11.8% LFL growth4 Reported growth +8.9%
SocietyNet Revenue from more sustainable products1, 2, 4 30.4 %
EnvironmentGreenhouse Gas emissions per unit of production1 53 % reduction since 2012
Hygiene Net Revenue2020
LFL Growth1+ 19.5 %
Actual Growth+ 15.6 %
Adjusted Operating Profit1£ 1,505 m
Adjusted Operating Margin125.9 %
Health Net Revenue2020
LFL Growth1+ 12.1 %
Actual Growth+ 9.6 %
Adjusted Operating Profit1£ 1,334 m
Adjusted Operating Margin127.3 %
The Nutrition business includes our leading infant and child nutrition, adult nutrition and our range of vitamins, minerals and supplements. Brands include Airborne, Mead Johnson, Move Free and Schiff. The strength of this business is its focus on science-led innovations which underpin products catering to consumers from infant through to the elderly.
Nutrition Net Revenue2020
Actual Growth- 2.0 %
Adjusted Operating Profit1£ 462 m
Adjusted Operating Margin114.1 %
meeting the needs of society and our stakeholders
Our business is responsive to the change that is happening around us. We’re working together to keep pace and meet people’s changing needs. As part of our business transformation, our strategy focuses on our purpose in the world, clearly articulating the reason we exist and the change we want to see that drives our growth.
Reckitt works with a wide variety of stakeholders: our consumers and customers; investors and shareholders; our suppliers and partners; governments in support of a wider public health agenda; and, of course our 43,500+ strong team whose engagement drives our business. The trends we describe in our business strategy create challenges and opportunities for ourselves and all of our stakeholders.
Urbanisation and global warming
Growing demand for self care
Sexual health crisis
Growing and ageing population
Digital and e-commerce
Our purpose drives our performance
Putting consumers first
Consumers buy brands they trust. They rightly expect safe, effective and sustainable products, delivered at a fair price. This is always our focus, but we are also meeting their growing expectation that products are responsibly sourced and won’t damage the environment. And that our social and environmental impacts tackle global issues for a sustainable future.
Fostering stronger customer relationships
Our customers’ expertise brings consumer insights to strengthen our innovation pipeline. We work with our customers to build and meet joint goals, design and develop even safer and more effective products and to enable greater social and environmental impact. Collaboration with our customers enables joint activity that supports both our own purpose and our collective ambitions.
Inspiring and supporting our people
Our highly skilled people enable our success. We want to attract, develop and retain the very best. Engaged, inclusive teams spur growth and performance. We want our teams to feel good about what they do and our contribution to the world as a whole. Our purposeful culture strengthens engagement and brings better brand offerings for consumers and more value for shareholders and investors.
Extending our impact with like-minded partners
We join forces to build shared success with suppliers, scientists, civil society and more, that deliver practical and sustainable solutions to create a cleaner, healthier world. Our partners share our purpose and values. Through them, we build lasting solutions with real social impact.
Investing in communities
We fight to make access to the highest quality hygiene, health and nutrition a right not a privilege. Improving that access, in communities with unmet needs, creates social impact and brings our brands to new consumers. Through our products, consumer education and skills, we empower people to make small changes in their lives for a cleaner, healthier world.
TALKING TO OUR BUSINESS LEADERS
In 2020, we all had to adapt to new realities.
At Reckitt, we stepped up to play our part in combatting the spread of the virus and we’ve also been hard at work to progress our business transformation plan. I wanted to take stock with the leadership team at the end of an eventful year.Laxman Narasimhan Chief Executive Officer