Reckitt Benckiser Group plc

Good morning and welcome to Reckitt's Q3 Trading Update. Our CEO, Chris Licht, and our CFO, Shannon Eisenhardt, will take you through some prepared remarks, followed by Q&A. Before we start, I would like to draw your attention to the usual disclaimer in respect to forward-looking statements contained on page two of our R&S published this morning. I'll now hand over to Chris.

Thank you, Nick, and welcome to Reckitt. Good morning to everyone, and thank you for dialing into our Q3 2024 trading update. At a time when Rekit is going through exciting change as we sharpen our portfolio and simplify our organization, I'm pleased that our third quarter net revenue performance is consistent with our guidance at the half year in July, and we remain on track to deliver our four-year targets. Shannon will take you through the details of our Q3 trading and our full year outlook shortly. We're pleased to see sustained volume growth across many of our power brands, including Dettol and Lysol, Durex, and our VMS and non-seasonal OTC brands. This volume growth is driving a more normalized growth algorithm between volume, price, and mix, and is something that we expect to continue in Q4 and into 2025. our large innovation platforms continue to drive our growth. Lysol laundry sanitizer and Lysol air sanitizer have helped deliver high single-digit like-for-like growth in Lysol, both in the quarter and in the year today. Our recently launched Durex Invisible and other thin-field condoms, such as hyaluronic acid condoms in China, are driving growth in our intimate wellness business. And our premium thermal forming products, which now account for 75% of our tablet net revenue, have driven growth and finish this year. And as you know, we've delivered these results despite a number of factors during the year which have a bearing on our numbers. We lacked a very high seasonal OTC comparative in Q1. The industry had a slow end to the cold and flu season. We're coming to the end of the market share rebasing in U.S. nutrition. And of course, we were impacted by the tornado that hit our Mount Vernon nutrition facility in July. None of this is structural, and we have good visibility across all our business units for a strong Q4. In particular, I feel very good about the momentum in our health business, where we've seen continued improvement in competitiveness, with strong market share gains over the last three months. These share gains are broad-based and include our OTC brands, our Durex portfolio globally, and Dettol, where volume shares are improving following actions we took earlier this year. We're continuing to progress on our share buyback program. Earlier this month, we completed the first tranche of our current one billion pound program, which we announced in July and have since started on the second tranche. As of last Friday, we've bought back 321 million pounds worth of shares since this current program commenced on the 26th of July. The actions we shared with you in July around our strategic agenda are progressing at pace. We've mobilized our organization, and I'm very pleased with the progress that we're seeing. Our refreshed Global Executive Committee is now operational and all senior leadership positions have been appointed. Our new operating model and organization structure has been developed and is on track to be deployed in January 2025. And an essential home, a seasoned leadership team has been appointed and separation work is well underway. We remain on track to exit this business by the end of 2025. And as our results today demonstrate, I'm encouraged that our businesses are continuing to deliver while we undergo this change. Before I pass over to Shannon, let me walk you through where we are today on the next litigation facing Mee Johnson. The litigation is continuing and Mee Johnson is currently defending a joint state court trial alongside Abbott and the relevant hospital in Missouri. The company continues to vigorously defend these claims. We are appealing the adverse jury verdict in the Watson case from last March. There are currently no additional state court trials scheduled for Mead Johnson. The next scheduled milestone is in the federal MDL in March, 2025. These near-term events do not change our overall outlook. We remain confident in our position And we are not seeing any wider impact on the equity of our nutrition brands from this litigation. I'm pleased to see statements from so many key stakeholders on this matter, including the Next Society, the American Association of Pediatricians, and more recently, the consensus statement from the Food and Drug Administration, the Centers for Disease Control and Prevention, and the National Institutes of Health. who earlier this month stated that there is no conclusive evidence that preterm formula causes NEC and that where the supply of human milk is insufficient, preterm infant formulas are a critically important option and standard of care for premature infants. They end their statement by emphasizing that while there is a preference for human milk, all infants should be fed as soon as it's medically feasible through whatever appropriate nutritious food source is available. With that, let me hand over to Shannon to provide you with further detail on our year-to-date and Q3 trading performance, as well as our four-year outlook.

Thank you, Chris, and good morning. As Chris mentioned, our third quarter net revenue performance is consistent with our guidance at the half year in July. For the quarter, we delivered 0.5% like-for-like net revenue declines, driven by our nutrition business, which declined by 17.4% as a result of the Mount Vernon tornado. Our combined health and hygiene businesses grew 2.6% in the quarter with a balanced contribution from price, mix, and volume. Our hygiene business grew 3.7% on a like-for-like net revenue basis year-to-date and 2.1% in Q3. Year-to-date volume growth was 0.9% with continuing volume growth in Q3 at 0.7%. This was led by Lysol. Lysol has been a standout performer this year with high single digit growth on a year to date basis. All key Lysol segments are in growth and it's great to see strong contributions from our innovation platforms in both laundry and air sanitizers. Hygiene's performance is not just about Lysol. Growth is broad-based with our core power brands, Finish, Vanish, and Harpic, all contributing to growth this year. Finish did have a tougher comp in Q3 as we lapped the U.S. launch of Finish Ultimate Plus all-in-one, and we continue to see a more promotional environment in Europe and the U.S. We remain disciplined in showing up competitively for our consumers. turning to health, which delivered 1.9% like-for-like net revenue growth on a year-to-date basis and up 3.2% growth in the quarter. Volume growth has turned positive, with year-to-date growth of 0.2% and growth in the quarter of 1.2%. This was driven by Durex, Dettol, VMS, and Gaviscon. As expected, our seasonal OTC brands, including Mucinex and Strepsils, saw volume declines as they lapped tough comparatives. Consistent with our guidance, we delivered modest sequential net revenue improvement in the quarter. I'm pleased to see total OTC return to growth and continued broad-based growth in directs. This includes China, which saw strong growth helped by the continued success of our innovation platforms, such as our hyaluronic acid condoms. As Chris mentioned, we're seeing broad-based momentum in our health business and we're pleased to see strong market share gains over the last three months. In nutrition, we delivered like-for-like net revenue decline of 11.6% on a year-to-date basis and down 17.4% in the quarter. Most of the net revenue decline in 2024 was a result of the supply constraints we faced in the quarter due to the impact of the Mount Vernon tornado and our market shares rebasing from unsustainable highs. The impact from the tornado was around 100 million pounds in the quarter, lower than our original expectations. Our quality and safety teams acted swiftly to minimize the impact to US consumers, and our supply team did an excellent job accelerating shipments of product from our factory in Singapore. I'm pleased to say there has been no major supply disruption of infant formula in the United States. We have been out of stock on certain SKUs, which has impacted our market shares in some of our more specialized formulations. The equity of our brands in the U.S. remains strong, with Infamil and Nutramigen continuing to be the number one recommended brands by pediatricians. Our developing markets business delivered a stable performance in the quarter with like-for-like growth in the low single digits. Moving to our outlook for 2024, we are on track to deliver our full year group net revenue growth target of between 1% to 3%. We expect acceleration in the fourth quarter across all our businesses, reflecting the underlying strength of our brands and categories as well as the easier comparatives we have highlighted. We continue to expect health and hygiene to deliver combined growth at the lower end of the mid single digit range. And we slightly improve our nutrition outlook to a high single digit decline, given the lower than expected impact of the Mount Vernon tornado. We also remain on track to deliver adjusted operating profit growth ahead of net revenue growth for the full year. Within this, we still expect the recognition of insurance proceeds in relation to Mount Vernon will occur within 2024. At our full year results in March, we will also report with our new reporting segments and provide historical pro forma financial information for comparison purposes. Chris, back to you.