A STRONG, WELL-INVESTED BUSINESS – NOW ENHANCING RETURNS TO SHAREHOLDERS
Reckitt today announces a strategy update and commencement of a share buyback programme following the appointment of Kris Licht as CEO on 1 October.
Key highlights are as follows:
· Reckitt is today a strong, well-invested business with a culture and purpose fit for the future.
· We operate in attractive growth categories. Our portfolio of brands is excellent and positions us well to deliver sustainable mid-single digit like-for-like (LFL) net revenue growth over the medium term.
· We will continue to invest in product superiority and to sharpen and improve the consistency of our in-market execution, and our cost base.
· We see a clear runway for sustainable growth, with superior gross margins, and we will extend our productivity programme to focus on fixed costs to fuel both growth and earnings.
· We are well positioned to grow adjusted operating profit ahead of net revenue in the medium term.
· Our strong free cashflow generation and a healthy balance sheet enable us to announce the commencement of an enhanced shareholder returns programme:
o Sustainable dividend growth (no change)
o Commencing a share buyback programme. £1bn over the next 12 months, commencing imminently (new).
Outlining the strategy, Kris Licht, Chief Executive Officer, said:
“Reckitt today is a strong, competitive, resilient business with an inspiring purpose and a distinctive culture fit for the future. We have an excellent portfolio of market-leading, high margin brands in growth categories.
“The investments that we have made in innovation, R&D, and our supply chain have enabled us to deliver sector-leading growth over the past three and a half years. And looking forward, our pipeline of large innovation platforms gives me continuing confidence to deliver mid-single digit net revenue growth.
“We do, however, have room to sharpen and improve. We will continue to invest in the superiority of our products, work to improve the consistency of our in-market execution and optimise our cost base. At the same time, we will constantly sharpen our portfolio in line with our clear principles for portfolio value creation.
“I am pleased to have announced today our intention to commence a new £1bn share buy back programme, a clear indication of my confidence in Reckitt.
“With our strong growth and sector leading earnings model, a clear set of priorities to sharpen and improve our business, significant free cashflow generation, and a healthy balance sheet, we are now well positioned to deliver sustainable and leading total shareholder returns.”