Reckitt Benckiser Group plc

Greetings and welcome. I hope you and your families are safe and well in this very difficult time. Our hearts go out to the many communities around the world who are facing the challenges of COVID-19. As a company, we are trying our best to play a small part in helping these communities. Clearly, what we do as a company is much smaller than what is happening outside. I'm incredibly grateful to all our RB associates, customers, partners and suppliers who have gone beyond the ordinary to help us navigate an exceptionally difficult time. There are four key messages I would like you to take away from today's presentation. First, consisting with our messaging on our Q1 trading update, RB is off to a stronger than expected start for 2020. Importantly, in addition to the demand tailwinds for COVID-19 on several key brands, we are pleased that are underlying sales trends are also performing above our plan. Second, RB is making good progress regarding the strategy outlined in February, designed to rejuvenate sustainable growth. I believe we have made significant strides in improving our execution. We're also making good progress building an organization with the right capabilities and culture to realize the long-term opportunities for the company. Third, COVID-19 is having a profound impact on consumer behavior, not just for a few months or quarters. Our research suggests that the increased interest in hygiene and health is likely to be sustained over time, albeit at more moderated levels. And our portfolio is well positioned to benefit and navigate the additional macroeconomic challenges we expect. There is no question that our purpose and fight, which we announced at the end of February 2020, are even more relevant in these times. Fourth, we plan to leverage our strong outperformance in early 2020 by increasing the level and expanding the scope of our investment spending. Also, before moving on, let me address up front what I suspect is top of mind today For the analyst community and for our investors. Since February, when we laid out our long-term financial algorithm, we are reporting better than expected performance of our underlying business. We see structural shifts in consumer engagement in hygiene and health that favors several of our categories. And we are announcing an increased level and expanded scope of our investment spending designed to further accelerate growth. The obvious question then becomes, why aren't we increasing our long-term EPS growth expectations above the 79% level we committed to over the medium term, or moving forward the timing of performing against our mid-single-digit revenue growth target? The answer to this question has three parts. We unquestionably have greater confidence in achieving our median-term growth and margin goals. Second, while we feel more confident and perhaps even lean toward being more bullish, we recognize that we are operating in highly uncertain times, which very well could lead to significant public health and economic dislocations. Third, We are six months into the implementation of our strategic plan and transformation, are pleased with the early progress, but we do not want to get ahead of ourselves and we'll update you next February on our journey. Over the course of this presentation, I'll provide an overview of the first half with some reflections on what has changed as a result of COVID-19. Jeff will then take you through the first half results in more detail. Then we'll together provide a detailed strategic update, including our expanded plan and an outlook for the year. Before highlighting our first half results, let me spend a minute to remind you of the plans and long-term objectives that we set out in February. Our plan to rejuvenate sustainable growth at RB is based on investing in the business to create a platform that is capable of sustainably delivering mid-single-digit growth, mid-20s margins, and therefore 79% earnings growth in the medium term. Our plan calls for investing two billion pounds over three years in a series of investments in commercial muscle, innovation, and consumer value, coupled with a higher level of capital spending to support the anticipated growth acceleration. We expected a reset of margins in 2020, declining by 350 basis points from the 2019 levels, before returning to the mid-20s by 2025. Our expanded productivity program is expected to create savings to invest in capabilities and address any shortfalls along the way. As you hear, we made a good start in many respects, despite the operational headwinds caused by COVID-19 with strong executional proof points. We still have a lot more to do and we have new opportunities as well. As I mentioned earlier, Arby's A to 1 top and bottom line results were stronger than expected. In addition to the demand tailwinds from COVID-19 on several key brands, I am very pleased to report that are underlying sales trends are also performing above our plan. We delivered 11.9% life-for-life growth, reflecting the 3-4% estimated underlying growth and a significant COVID tailwind. Our growth has been broad-based. We delivered double-digit growth in China, the UK, Germany, Mexico, and Australia. North America was up over 25%. India was also up high single digits on a like-for-like basis, despite the severity of the early lockdown. And Brazil was up mid-single digits. Just under 1.7 billion of adjusted operating profit, up 15% on the prize year. Our margin was 24.5%, up 90 basis points. As a result, we delivered earnings per share of 166.5 pence, which was 14.5% up on the prior year. Our free cash flow at 1.9 billion pounds was exceptionally strong. Finally, we're announcing an interim dividend of 73 pence per share, unchanged year on year, as we said in February. On to the underlying business. I'm incredibly proud of what our teams around the world have achieved in an extraordinarily challenging environment. We have worked tirelessly to keep our people safe, meet the needs of our consumers and customers, and all the while actively play a positive role in the communities in which we live and in which we work. We have invested to strengthen our supply chain performance both before and during the COVID-19 crisis. This is perhaps best illustrated by how the team responded to the exceptional growth in demand for Lysol's market leading disinfectant spray. This is our biggest selling SKU in the Lysol power brand family. Demand has exploded in the U.S. and we have worked across the supply chain and with partners to increase capacity by 150% in the first six months to meet demand. As a result, in the first half of this year, we sold two and a half times as much as we did last year. As a result, with Lysol growing over 70% as a whole, the spray now represents 30% of the Lysol family. This rate of growth has been seen across the Dettol and Lysol families, making RV the undoubted leader in disinfecting products worldwide. In addition, the sudden spike in consumer demand for key products like Dettol, Lysol, Finish, and Airborne caused customers to significantly increase order sizes, which in turn resulted in delivery performance tailing off post-March. The progress we had made before COVID-19 had already had a material positive impact on our customer relationships, particularly after a difficult Q3 in the U.S. and provided the goodwill necessary to help us work in partnership through these difficult and subsequent challenges. Without the work we commenced in September to enhance customer relationships and service, we would be in a very different place. At the same time, we've made a good start to our enhanced productivity program. We set a 2020 target of 340 million pounds, over 100 million pounds higher than our traditional run rate. In the first six months, we are ahead of plan, a testament to the focus, a can-do attitude of our people and the execution with agility of our teams. In many cases, they deliver the different projects from their living room tables, from their bedrooms, or from their home offices, as well as from the floors of our factories and distribution centers, all while ensuring safety. Let me now address a question that many of you are asking. What changes are we seeing in consumer behavior? We see five significant changes. First, our research suggests that COVID-19 is driving a meaningfully increased interest in hygiene and health, a behavior that is likely to be sustained over time. Experience tells us that a change in behavior for over 60 days causes consumers to permanently change what they do over time. Over 85% of people have already improved their hygiene habits as a result of COVID-19, leading to a large increase in household penetration and frequency of product use. Importantly, as we have discussed in the past, this is an underlying trend that anchors RB's strategic direction, and the COVID-19 pandemic has both brought it to the forefront and accelerated the adoption curve for many people. We do have headwinds in a few brands, but we expect these will moderate or even reverse over time. Second, the pandemic led to pantry loading, particularly for many of our OTC and nutrition products. As we pointed out in April, we expected much of that would unwind, either quickly or as we've seen with infant formula, or more slowly as we're seeing with OTC. Drawing out the unloading over the second, third, and possibly fourth quarters. Third, the partial or full lockdowns or stay-at-home guidance evident in over 100 countries at various times have also led to large populations of people nesting at home and engaging in less social interaction. Such consumers are cooking more and are looking for ways to make their homes cleaner and better. Fourth, We see massive shifts across the world in online spending, over 77% increase in spending year over year in May. Finally, we continue to see challenges on the horizon on the economy, with over 51% of American consumers worried that their finances will be impacted by COVID-19, a trend we need to be sensitive to as we plan for the future. Our portfolio is very well positioned against the changes we are seeing in consumer behavior. Greater awareness of hygiene and health will increase consumption for key brands like Dettol, Lysol, Sagartan, Napisan, and Airborne, which in 2019 represented around 20% of our portfolio and are national beneficiaries. We expect to see sustained uplift from consumers in-store and online, but also in the professional channel where consumer brands can now provide real hygiene quality and effectiveness assurance to their customers whether in accommodation, travel, or other service industries. Pantry loading and unloading has had a marked effect on our OTC and nutrition business where we expect the initial lifts from panic buying to balance out over the course of the year. Additionally, sustaining hygiene and physical distancing protocols can negatively impact the flu season. Nestle Get Home has definitely had a positive effect on brands like Finish in particular. This has more than offset the low demand for Durex, Vanish, and Shoal today. We expect these businesses to improve as more social interactions happen. Of note, our business in China provides some early indications. As China came out of the severest stages of lockdown, demand for structural well-being products are rebounding quickly. One of the most pronounced changes over the last five months has been an acceleration of growth in e-commerce. We've been advantaged in this space as a result of the investments we've progressively made in recent years and accelerated since January. As a result, the growth has been very strong. Our second quarter e-commerce growth across the whole business was over 70%, and our first half growth was over 60%. and now represents around 12% of our group sales in the half. Our growth has been strong across all forms of e-commerce, including pure plays, marketplaces, bricks and clicks, as well as direct-to-consumer. We saw a near doubling of the business in the first half of the year. Looking forward, we expect there will be some turbulent times in different markets. as we all come to terms with the economic and social cost of this pandemic. As a result, we fully expect spending power will be impacted much as we saw a decade ago. Our portfolio is well positioned to navigate the additional macroeconomic challenges we expect, which will have an impact on consumer spending. We're taking steps to anticipate this, learning from our past, and are building on the actions we talked about in February to ensure Our products are well positioned with different consumer value propositions across our ranges. Remaining relevant for all shoppers is key to success and we are investing as planned in doing just that. Overall, we feel our portfolio is well positioned to endure in a potential economic recession where our purpose and fight could not be more relevant. In light of the better than expected start of the year, we have decided to step up our investment spending plans as we see opportunities to capture additional growth. Our current plans expand on the plans we announced in February to invest in price competitiveness where appropriate, build our commercial muscle, invest in research, development, and quality, as well as invest in further strengthening supply. We see three additional areas where we plan to invest further. First, we are going to reinvest incremental upside delivered today to grow our leading position in disinfectants with brands like Dettol, Lysol, and Sagrotron. Dettol and Lysol together are powerful brands with retail sales over 3.5 billion pounds and strong consumer preference. Our additional investments focus on expanding and investing in these brands behind growth opportunities in an expanded number of category market units, or CMUs. For instance, we launched Lysol in Brazil in April this year, several months ahead of plan, including with local manufacturing. We are seeing strong initial interest. Second, we will further accelerate our digital and e-commerce investments to ensure we're at the forefront of market developments, capturing growth in this fast-changing business across all channels and categories. We are moving with speed to build on our momentum and further strengthen the business. For instance, we're investing in further supply capabilities and hiring a significant amount of talent in this environment through targeted recruiting and moving some of our best people internally into functions supporting this growth. Third, we are capitalizing on our brand strength by moving into the professional category, white space, for the benefit of a wider consumer audience. The agreements of companies like Hilton, Avis Budget Group, JLL, and Delta are great examples of a larger set of opportunities. Additionally, in the near term, we will also increase the capital expenditure to address the increased demand for disinfectants. These include New lines of existing funds, automation, as well as molds and co-pack investments to meet the demand. Given the favorable shifts in the environment and our expanded plan, we have greater confidence in achieving our medium-term goals that we set out earlier this year. I will talk about this more after Jeff has given you a review of the first half financials. Let me hand over to Jeff.

Thank you, Laxman. COVID-19 started impacting our business as early as January this year. And we have monitored not just the COVID impact on our business, but also our underlying performance. And we estimate the underlying performance during Q1 and Q2, as Laxman mentioned, at 3% to 4% growth. Significantly improved compared to 2019. Our half year and Q2 growth has also been impacted by our decision to adjust our revenue recognition in line with IFRS best practice and recognize revenue when received by customers and not at the point of dispatch. Our previous treatment has not impacted period-on-period growth rates but has a negative one-time impact on Q2 of 2.9% and 1.4% for the four-halves. Our hygiene and health business units have performed exceptionally well in this half, with sales growth at 16.1 and 18.6% respectively. We'll go into more detail later, but Lysol and Detol deserve a call-out with growth around 70% and 60% respectively, as consumers look for trusted disinfecting solutions in this difficult period. It's also worth mentioning at this point our exceptional e-commerce performance. The benefits Our investments in this area have resulted in growth of over 60%, and e-commerce now represents 12% of the group's net revenue. IFCN was down 4.8% in the period, but this had a tough lap in mainland China, headwinds in Hong Kong, and a planned dryer upgrade in Latin America. Importantly, we see positive momentum as we move into the second half of the year. Adjusted operating profit of $1.7 billion is ahead of expectations with a margin of 24.5%, 90 basis points ahead of last year. Gross margins are up 70 basis points due to a favorable mix and strong productivity benefits. BEI has been invested in absolute amounts in line with last year. But due to the strong top line growth and favorable rates, BEI was 160 basis points favorable compared to last year. Of course, we have adjusted our spend plans as necessary during this unprecedented period, and I'd expect an increase in BEI as we move into the second half of the year. SG&A costs were up 140 basis points versus last year, reflecting variable pay headwinds, as we flagged in February, Some one-time charges and capability investments in areas such as R&D, which will enable and accelerate our growth program in line with our rejuvenation plan set out in February. Now looking at the margin development through a slightly different lens, the big picture is that our productivity program is delivering in line with expectations, while our investments will now be more weighted into the second half of the year. and as we'll talk about later in our outlook statement, some investments will now be phased into 2021. The re-phasing of investments into the second half of the year is largely a consequence of COVID. During March, April and May, our team's key focus was serving our customers, protecting our people and establishing new ways of working. Consequently, some programs have been updated and re-phased. But we're getting used to this new norm. Our people have adapted with agility and pace and we have good visibility of the second half investment programs. In addition to the reinvestment of 190 basis points let me now break down the 310 basis points of COVID related costs and other headwinds. This includes the operating margin headwind largely variable pay which we flagged in February Additionally, we've incurred around 100 basis points of impact from COVID-related costs in this ARF and we do expect these to continue in the balance of the year. Lastly, we've also incurred around 100 basis points in one-off charges for certain items, including legal provisions for historic cases which are now judged more likely to result in a negative outcome. Now let me take a couple of moments to dive a bit deeper into our productivity program. This is due to deliver 1.3 billion pounds over three years, providing the fuel to our growth engine, and I'm delighted to report that we have a very active and successful program up and running. Importantly, while some areas are less advanced due to COVID, other areas such as direct procurement have stepped up and all in all, We have delivered $165 million in the first half of the year, ahead of our initial plans. Like all good productivity programs, this is not made from one or two big one-off items. Rather, we have thousands of individual efforts running, and I've included four case studies of this in the Appendix, which are typical of the program. RPE has a strong track record in this field. But like many large organizations, we see opportunities to continue to improve efficiency. And I'm confident we can deliver and even expand on our goals as we go forward. And now we're going to look at our two reporting segments, starting with hygiene. It's been an exceptional half for hygiene with net revenue of 16.1% and 19.4% in the second quarter. And due to the strong leverage Margin of 25.1% at 320 basis points ahead of last year. Volumes are up 15% and with negligible price movements, mix was favorable by 1%. North American net revenue was up 29%, largely driven by Lysol and Finis, which were up 67% and 31% respectively in the region. Across the total segment, Other key performances include double-digit growth as to the Bang, Galgon and Bajor and other brands including Mortin, Harpic and Airwick all grew while Vanish was down slightly in the half. Now moving on to health. Total net revenue was up 9.3% and margins of 24.2% were down 50 basis points due to higher investments in pricing and capability. Volume was up 7% and pricing was basically flat with a favourable mix in the period of 2%. Health is a more complicated picture in the period. For example, OTC grew 10.9% and a half with strong Mesonex sales and share gains. However, in Q2, OTC was down 12.7% reflecting pantry stocking and lower sales of strepsils and Neurofen. Misunek saw very strong sell-in in Q1 and was still positive in Q2. However, sell-out has slowed significantly, and with the likelihood of a weak cold and flu season, we expect OTC will have a challenging second half of the year. Other health grew 22.7% in the half and 28.2% in the second quarter, with the acceleration largely due to stronger demand from debtor with net revenue growth at 62% in the half, accelerating to 80% in the second quarter. IFCN revenues were down 8% in the second quarter and 4.8% in the half. And as we've mentioned, there were three specific headwinds. First, in Greater China, we were restocking the trade in the first half of 2019, and this created an unnatural comparative numbers The closure of the Hong Kong border has significantly impacted cross-border sales in the first half of this year. And finally, the driver overhaul in Mexico has resulted in some sales being impacted in the first half. Adjusted for these events, IFCM performed as expected, and we are encouraged, as I mentioned earlier, by positive momentum into the second half of the year. Adjusted EPS grew by 14.5% to £1.66.5 in the half. The growth largely driven by an increase in operating profits and finance expenses and adjusted tax were in line with expectations. So now moving on to cash. Free cash flow at £1.9 billion is unusually high. One billion pounds ahead of last year due to stronger operating profit and exceptional working capital improvement. Trade receivables decreased slightly despite the strong sales growth, and total payables increased by just under 800 million pounds, due mainly to high levels of manufacturing activity and volume-related trade accruals. It's important to emphasize that payable days outstanding remain in line with policy and in line with our historic levels. Capital expenditure was lower than expected due to the challenge from COVID-19, while short-term capacity increases were mainly the result of increasing throughput on existing assets and new co-pack facilities. In line with our strategy, we expect a significant increase in capital over the medium term as we step up our supply chain capabilities to meet consumer customer needs. I'm very pleased to see our net debt reduced 10.2 billion pounds as a result of a strong free cash flow and despite adverse exchange, foreign exchange movements of 0.6 million pounds due to the strengthening US dollar. The bond issuance in May significantly reduced our reliance on commercial paper and increased our average maturity to 5.4 years and 4.2 years at the end of 2019. Now let me wrap up, but before I hand back to Max, let me just reiterate our disciplined approach to capital allocation and our commitment to a single A credit rating. Our balance sheet is strong and we have declared an interim dividend of 73 pence per share in line with last year. Our capital allocation policy is built around strong free cash flow and I'll continue to ensure we remain focused on this while ensuring we invest in growth to deliver the full potential of our base. Thank you. And now let me hand back to Laxman.

Thank you, Jeff. Back in February, we set out a clear agenda for RB. We demonstrated that RB is a good house in a great neighborhood with the potential to be a great house again. We mapped out a clear strategy to rejuvenate growth, supported by investment plans, funded by productivity and a margin reset. And we set out how we would do this in a sustainable way, anchored with a purpose and fight. That provides a clear direction to the business. Together, these will provide the keys to lead and inspire the people of RB to succeed. Since then, we have already seen some material changes in our markets and environment, and these will influence our strategy. But the fundamentals don't change. In fact, they are even more relevant. The megatrends we highlighted in February are very clear, in many cases having strengthened by our experience with COVID-19. Hygiene has never been more clearly the foundation for health. COVID-19 is demonstrating the pressures on societies all over the world for higher standards of hygiene.

This has already led to material opportunities for our portfolio.

While COVID-19 has negatively impacted the shortened demands for sexual well-being products, the long-term trends are unchanged. We still have over 1 million sexually transmitted infections every day, with such infections being less taken care of in times like COVID-19. The pressures on the healthcare systems are making self-care even more relevant, and we continue to see the demand for nutrition and immunity perhaps at a heightened level in these times. Digital and e-commerce have materially increased since February, with step changes happening in how people access and buy our products. We also set out a clear business model that we felt could deliver strong, sustainable mid-single-digit growth by leveraging the individual and combined strengths of the business. Our growth drivers remain unchanged. Our growth model continues to focus on product penetration and usage, particularly for our leading range of surface disinfectants, including Dettol, Lysol, and Spagriton, a drive to ensure market share gains, as well as opening up new spaces and channels for us. And finally, new places and geographies where our products are available. Let's look at the evidence of these by business. In hygiene, we already see new opportunities that reconfirm medium-term strong growth expectations of 3% to 5%, consistent with being part of a mid-single digital growth company. For example, in the US, Lysol has developed as a mega brand, adding over 600 basis points of market share in the space of 12 months, driven in part by COVID-19 pandemic, but also by the initiatives Nesting is also held out of dishwashing as a category, growth penetration. We've also seen Finnish growth market share 600 basis points in the U.S. In terms of new spaces, the extension of our focus or power category market units or CMUs from 40 to 50 is putting more resources into the right growth opportunities. Value growth across the portfolio has been strong because of COVID, but for eight of the incremental investment areas, the transformation in five months has been outstanding, growing 10 times the rate they did prior to our changes. The additional CMUs are an area of expanded investment. From a standing start in February, we've also been able to develop the professional channel, with business opportunities arising every day. Since March, we've re-announced several major new relationships, agreements with Hilton Hotels, Delta Airlines, Avis Budget Group, and American Campus Communities, putting Lysol at the heart of Hy-Dee to WEMS for travelers and students alike. Our health business includes our Dettol portfolio, our OTC business, and our sexual wellness franchise. and our execution is improving. Our Dettol franchise continues to perform strongly across the world, further reinforced by the consumer trends during COVID-19. We have seen strong market share gains in many markets. For example, Dettol soap now has market share leadership in India, the United Arab Emirates, Saudi Arabia and Malaysia. Insuring supply has meant bold choices on how we respond to market demand. A big emphasis has been and will continue to be on the simplification of the business, including through skew rationalization, where we have adopted radically simpler portfolios to boost throughput. Our health business Includes our debtor portfolio, our OTC business, and our sexual well-being franchise. And our execution is improving. Our debtor franchise continues to perform strongly across the world, further reinforced by the consumer trends during COVID-19. We have seen strong market share gains in many markets. For example, debtor soap now has market share leadership in India, the United Arab Emirates, Saudi Arabia and Malaysia. Ensuring supply has meant bold choices in how we respond to market demand. A big emphasis has been and will continue to be on the simplification of the business including through skew rationalization where we have adopted radically simpler portfolios to boost throughput. Our sexual well-being business did have headwinds through The lockdown period. However, e-commerce performance is strong, reflecting the privacy and convenience needs of our consumers. Our partnership with companies such as Glovo has enhanced the availability of our products with short lead times in several European metropolitan centers. Our professional business has also developed quickly, particularly for Dethol. Announcing partnerships with Hilton in China Uber in Australia, the ride-sharing app Grab across several markets, as well as airlines such as Salvia. Our OTC business has performed well, first with pantry loading early in the pandemic and the subsequent destocking, which we expect to play itself out over the course of the rest of the year. We've seen strong performance in brands like Mucinex and Neurofem, purely impacted by the pantry loading. and steady growth in brands like Gaviscon with market share increase until the end of May, particularly with Mucinex. We have made strong operational and commercial improvements and continue to focus on getting ready for the next season. We are therefore making good progress towards a 46% medium-term growth target with a business that is strengthening. Our innovation pipeline continues strongly on the debt hall. and we are sequencing our innovations in the other parts of the portfolio for maximum impact in the marketplace. Despite the headline numbers, the first part of 2020 for our infant formula business was reassuring as we made progress against our growth objectives and managed effectively our planned projects. For example, the dry overhaul The most significant unknown was always going to be the extent of unrest and COVID-19 impacts in Hong Kong as borders were closed and local demand fell sharply as a result. Hong Kong remains a concern as we look forward. And while we start lapping the unrest soon in the back half of 2019, the situation remains uncertain. Pleasingly, The underlying progress in mainland China has been good, reflecting the benefit of the recovery actions taken over the last few quarters. The recent investments in competitiveness and the new product introductions, both local and imported, add to our super premium positions. Furthermore, we have seen stronger marketplace execution in both online and offline channels, where market share increases as a result. In some emerging markets, We know we have a lot of work to do to consistently deliver positive growth. For instance, while some of our ASEAN markets are already doing well, we continue to have turnaround opportunities in a few of our hotspot markets that are highly competitive. Looking ahead, the impact of slowing birth rates and possible weaker GDP growth in the near term also make it very important that we judge our investments and innovations well to maintain leadership positions. Even in the market like the U.S., while underlying birth rates have traditionally been positive, COVID-19 has had and will have a negative effect. The pressure for local welfare support, particularly in communities with a higher level of unemployment, will also make future quick participation higher. Notwithstanding these external challenges, the growth opportunities for the broader nutrition business unit remain strong, and execution is strengthening. We continue to see strong performance in the US as our NeuroPro brand continues to grow market share. Our e-commerce performance across the board is strengthening, particularly in ASEAN. We continue to be positive about the growth, price premiumization and market share performance of the Infinitas brand in China. In the broader nutrition space, particularly in a COVID environment where immunity is a strong need, Our airborne business is showing strong penetration and market share increases. In summary, we are making good progress in several of these markets, but a couple are still work in progress. Our market share performance in Latin America was encouraging ahead of the drier overhaul. The business is now ramping up supply in the markets, and we expect to see continued improvements. While ASEAN is doing well in several markets and with a hotspot in a few others. Mainland China is getting stronger in a highly competitive environment. The North American business is performing better. As the business pivots to broader nutrition, we see strong performance in a few brands like Nereva and Airborne. While there is a lot to be done over the next few years, we are laying stronger foundations as we build towards our medium-term goal of 3% to 5% revenue growth per annum. Now, on to ERB. As a result of our early successes in e-commerce, CRM and digital, we've streamlined these businesses and functions into a unified unit under one umbrella called ERB. This unit is a key growth and capability driver, and our expanded plan for ERB builds on the strong first-half performance that I shared earlier. Without doubt, there will be pronounced shifts in behavior for consumers as they access more of their products online. We've been well-placed because of the investments we've made today. The strategy I shared in February outlined two tailored business models, Be Big and Be Fast. The first about efficiency, and the second focused on D2C, CRM, and cross-border. To that, we've added a third, Be Bold and Open, a platform for our rocket brands and incubator partnerships. A great example of Be Fast is the pace at which we're developing our B2C business using partners around the world. Since COVID started, we've added the capability to deliver 14 RB brands in seven EU countries within 60 minutes to consumers in urgent need. This new unit will focus on accelerating our investments and capability to build on progress today, particularly through working proactively with platforms and partners. Building the strength and depth of our engagement across our portfolio and expanding across more borders with our strongest brands, we are constantly innovating here with new capabilities of cross-border delivery, ultra-fast fulfillment, just to name a few. Our aspiration to have over 20% of our revenues generated through e-commerce by 2025 is unchanged. These opportunities increase our confidence that we will deliver this while strengthening our brands and channels and strong margins as well. A key enabler of our growth opportunities is the work we're doing on our supply chain. Since our Q3 results last year, as you know, this has been a key area of focus for the team and for me. We've made some strong progress in execution, particularly in the months before COVID, with material improvements to our customer service and delivery performance. A key enabler of our growth opportunities is the work we are doing on our supply chain. Since our Q3 results last year, as you know, this has been a key area of focus for the team and for me. We've made some progress in execution, particularly in the months before COVID, with material improvements to our customer service and delivery performance. As COVID has unfolded, our team has rapidly scaled the supply chain to meet demand. Their execution in a challenging environment has been remarkable. For example, we've sold 340% more Dettol hand sanitizer, moving it from our 11th best SKU to the number three today, and over 75 million pounds of extra wipes across Dettol and Lysol combined. Thank you for joining us today. as well as the FDU reductions. In the long term, we can optimize these growth opportunities by investing in new capacity and facilities and driving further productivity, particularly for Dettol and Lysol. But we need to do this carefully, balancing flexibility with commitment. As the pandemic evolves around the world, we are focused on the safety of our people, increasing flexibility and resilience in our core operations, particularly for products like Mucinex, where our long lead times in the past have resulted in poor customer service. These remain priorities for the business, but the program of investment will now be rephased over a longer timeframe into 2021 and 2022. Let me now pass you to Jeff, who will take you through the financial implications of these changes and how they impact our financial algorithm. Jeff.

Thank you, Laxman. Our response to COVID-19 is to stay agile and where needed modify and expand our plan and on this chart I'd like to be clear with reference to the key financial metrics of our rejuvenating sustainable growth plan. Our plan is more important than ever but as you see elements of our plan have been re-phased due to COVID and importantly we've increased our total investment from 2 billion pounds to 2.2 billion pounds to ensure our expanded plan delivers the full potential of our world-leading disinfectant brands. We said we'd make 150 basis points or 200 million pounds of P&L investments. These are investments in price, commercial competitiveness, and the capabilities needed to build the infrastructure to deliver sustainable outperformance. We will continue with these investments. However, they'll be more heavily weighted to the second half of 2020 and the first half of 2021. We will still invest £250 million in transformation costs in 2020, 21 and 22. However, the investment in 2020 will be slightly lower than the 100 basis points we previously planned. Our productivity program, as discussed, is on track and as we investigate more options, we will look to expand this program in the future. Now new to our plan, We will be investing an incremental 100 million pounds to fund the expanded plan. This will be funded through expected outperformance as we go forward. And likewise, while our capital expenditure was lower in the first half, we now expect to invest an incremental 400 million pounds over 2020, 21, 22, as we build the capacity and supply chain to support our expanded plan up from 300 million pounds previously disclosed. X-Men has already outlined the key features of our expanded plan, but let me just reiterate, these include accelerating e-commerce and digital, delivering the full Lysol and Dettol potential, accelerating our expansion into new CMUs, white spaces, and plan adjacencies, building our professional capabilities, and supporting our supply chain to meet these demands. This next page highlights our medium-term guidance, which is unchanged. However, let me just state these are unprecedented times with an uncertain COVID health crisis and a significant economic challenge ahead of all of us.

That said, our expanded plan increases our confidence of delivering against our medium-term goals.

Specifically, in 2020, we expect net revenue growth for the full year of high single digits with 3% to 4% underlying growth. For 2020, we expect full-year operating margins to be in line with current consensus. This reflects the re-phasing of our investments, resulting in a significant increase in investment levels in the second half of the year, and some investments now falling into 2021. A margin reset will deliver sustainable mid-single-digit growth, and while margins will be less impacted in 2020 than originally anticipated, We expect to reflect the full 350 basis points versus 2019 over 2020 and 2021. Thank you. Now, back to Blacksman.

Thank you, Jeff. As I mentioned in my opening, our expectations for the medium term remain unchanged on both growth and margins. However, we are pleased to be off to a strong start and feeling more confident about a long-term We're making strong progress on embedding our purpose, fight, and compass in our culture. Our purpose and fight guide everything we do. Our purpose is clear. We exist to protect, heal, and nurture in the relentless pursuit of a cleaner, healthier world. We are in a fight, a fight to make access to the highest quality hygiene, wellness, and nourishment, a right, not a privilege. and our compass guides our decisions and actions on a daily basis in five areas. We do the right thing always. Second, we put consumers and people first. Next, we seek out new opportunities. We strive for excellence. And finally, we build shared success. Consumers, customers, partners and communities. I have been very proud of how as an organization we have come together to play our part in combating the impact of COVID-19. Our fight for access fund launched in February 2020 has already been mobilized to help deliver real on the ground benefits under resourced communities around the world. Since then, we have donated the equivalent of 1% of our annual operating profits to fund 20 initiatives across 41 countries with organizations like the CDC Foundation, the NHS in the UK, the UNAIDS effort, the International Rescue Committee, and product donations in several countries around the world. Some of our savings from areas like travel have been donated by our teams to local organizations consistent with our vision. Additionally, we have expressed our strong support for racial equality and Institute 100 four-year scholarships for STEM and public health through the United Negro College Fund, as well as directed our Lysol Schools Program to support 58,000 US Title I schools impacting over 15 million children with the greatest needs. We also continue to develop our scientific credentials. This month, We launched the Record Global Hygiene Institute with key partners drawn from outstanding institutions worldwide in medical science, health and education. The aim of the institute is to generate high quality scientific evidence to inform public health recommendations and promote behaviors that improve global hygiene. Additionally, we have formally signed a pledge to a 1.5 degree reduction in temperature and confirmed our commitments to get us to the targets in 2040, 10 years ahead of the Paris Accord. Since February, we have migrated to our proposed pre-GBU structure on July 1st as planned. Harold Fandenbroek, Chris Licht, and Adi Segal are in their new GBU roles. We've also formalized our group executive committee, including two new appointments. Sami Nafak joined us earlier this month as our new Chief Supply Chain Officer and is also part of our Group Executive Committee. Holger Kuhn will join us at the end of the week as our new Chief Transformation Officer, taking on a leading role in developing the business and some of our new growth opportunities as well, including professional. Together, our senior leadership team is well positioned to meet our need to deliver on our growth aspirations. It brings together the best of RB experience with external thinking and innovative ways of working to create a truly global high performing organization. As I close, let me reiterate the four key messages from this session. First, RB is off to a stronger than expected start for 2020. While COVID has had an impact, we are pleased that are underlying sales trends are also performing above our plan. Second, RB is making good progress regarding the strategy outlined in February, designed to rejuvenate sustainable growth. I believe we have made significant strides in improving our execution. We're also making good progress building an organization with the right capabilities and culture to realize the long-term opportunities for the company. Third, COVID-19 is having a profound impact on consumer behavior Not just for a few months or quarters, there is no question that our purpose and fight which we announced at the end of February 2020 are even more relevant in these times. Fourth, we plan to leverage our strong outperformance and reinvest. We believe our expanded plan gives us greater confidence in achieving our medium-term growth and margin goals. Thank you for your time. We look forward to addressing your questions.