Reckitt Benckiser Group (RKT) H1 2024 earnings summary

Executive summary

• H1 2024 performance was broadly in line with expectations, with like-for-like net revenue growth of 0.8% and strong free cash flow generation, supporting increased shareholder returns and an increased dividend.

• Strategic actions include sharpening the brand portfolio, exiting Essential Home and seeking options for Mead Johnson Nutrition by end of 2025, and simplifying the organisation to three geographies.

• A new, simpler organisational structure will be implemented, removing the global business unit model and expanding fixed cost optimisation.

Financial highlights

• Group net revenue was £7,167m, down 3.7% year-over-year on an IFRS basis, with like-for-like growth of 0.8%.

• Adjusted operating margin for H1 was 23.5%, with gross margin at 60.6% (+120bps); free cash flow grew 8% year-over-year.

• Adjusted diluted EPS was 161.3p, down 6.8% year-over-year, mainly due to FX; interim dividend increased by 5%.

• £0.8bn share buyback completed in H1, with a new £1bn programme to start.

Outlook and guidance

• 2024 like-for-like net revenue growth outlook revised to 1%-3% (from 2%-4%) due to tornado impact on U.S. Nutrition warehouse.

• Nutrition segment expected to see a low double-digit decline, with most impact in Q3; Health and Hygiene to deliver mid-single-digit growth at the low end.

• Adjusted operating profit expected to grow ahead of net revenue; adjusted net finance expense £300m–£320m; capex at 3%–3.5% of net revenue; tax rate 25%–26%.