Reckitt Benckiser Group (RKT) Q4 2025 earnings summary

Executive summary

• Core net revenue grew 5.2% year-over-year, exceeding guidance, with emerging markets up double digits in Q4 and FY 2025 net revenue at £14,205m, adjusted operating profit at £3,543m, both up over 5%.

• Adjusted operating profit rose 5.3%, supported by the Fuel for Growth program, margin expansion, and operational excellence.

• Portfolio sharpened by divesting Essential Home, focusing on 11 Powerbrands and innovation launches, with a 30% equity stake retained in the acquirer.

• Strong cash returns: GBP 2.3 billion to shareholders via dividends and buybacks, plus a GBP 1.6 billion special dividend.

• Supply chain investments and executional improvements drove operational resilience and efficiency.

Financial highlights

• Group like-for-like net revenue up 5%, with emerging markets leading at 14.6% growth.

• Core gross margin held at 62.2%; group gross margin above 60%, up 10 bps year-over-year.

• Adjusted operating profit margin for Core up 90 bps to 26.7%; group margin up 40 bps to 24.9%.

• Adjusted diluted EPS increased 1.1% to 352.8 pence, with a 7% headwind from tax and FX.

• Free cash flow was GBP 1.7 billion (71% conversion), impacted by transformation and restructuring costs; share buybacks totaled c.£900m.

Outlook and guidance

• 2026 Core net revenue growth expected at 4%-5%, led by emerging markets; Q1 to be softer due to seasonality.

• Non-core Mead Johnson Nutrition to see low single-digit growth in 2026, with Q1 decline as inventory normalizes.

• Group aims to offset stranded costs from Essential Home divestment via Fuel for Growth.

• EPS growth ambition remains, though 2026 faces dilution from divestment; effective tax rate guided to ~27%.

• Dividend proposed to increase 5%, maintaining progressive policy.