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Powering ahead
Annual Report and Financial Statements 2009
Contents
1 Chairman’s Statement
2 Chief Executive’s Statement
4 Business Review 2009
11 Board of Directors and Executive Committee
12 Report of the Directors
19 Directors’ Remuneration Report
25 Independent auditors’ report to the members
of Reckitt Benckiser Group plc
26 Group income statement
26 Group statement of comprehensive income
27 Group balance sheet
28 Group statement of changes in equity
29 Group cash flow statement
30 Notes to the accounts
60 Five year summary
61
Parent company – independent auditors’ report
to the members of Reckitt Benckiser Group plc
62 Parent company balance sheet
63 Notes to the parent company accounts
68 Shareholder information
2009 was a year to be especially proud of at RB.
In our tenth anniversary year as Reckitt Benckiser we faced
the decade’s toughest global economic conditions, but
still delivered excellent growth. This proved again that our
strategy of focusing on Powerbrands with consumer relevant
innovation and strong marketing investment is the right one.
The entrepreneurial spirit and deep commitment from RB
people to drive better and better solutions for consumers
continues to deliver outstanding* returns for shareholders.
We believe this strong entrepreneurial spirit and deep
commitment has and will continue to help us power the
business ahead.
Bart Becht Chief Executive
£7,753m
our net revenue
100.0p **
dividend per share
£1,891m
adjusted operating profit
* At 649% our ten year TSR ranks
number four in the FTSE 100
** Includes final 2009 dividend of 57p
recommended by the Board
Reckitt Benckiser 2009 1
Chairman’s Statement
In 2009 the Board conducted its regular
reviews of the performance and results of
the business. It holds specific reviews with
management on strategy, brands, geographic
area and functional performance together with
detailed reviews of its human resources and
corporate responsibility. In addition, the Board
completed its annual reviews of corporate
governance including Board performance,
corporate responsibility, and reputational and
business risk.
Annual General Meeting resolutions
The resolutions, which will be voted upon at
our AGM on 6 May 2010 are fully explained in
the Notice of Meeting. They will include some
amendments to the Articles of Association
following the full implementation of the
Companies Act (CA) 2006 on 1 October 2009.
Once again we encourage all our shareholders
to attend our AGM.
Thanks
On behalf of the Board I would like to thank
Bart Becht and his executive team for their
continued excellent leadership of the
business and thank employees globally
for their achievement in delivering such
an excellent performance in the tenth year
of Reckitt Benckiser.
It will be of interest to shareholders to
know that this year RB won The Economist
Magazine’s coveted Innovation Award 2009,
for an outstanding product innovation record.
In addition, our CEO was ranked by INSEAD
in research published in the Harvard Business
Review, as the world’s 16th best performing
CEO over the long term. Both of these awards
are great testament to the quality of the
Company. Details of both of these awards
and others the Company has been given
can be found on the Company’s website,
www.rb.com.
My thanks go also to my Board colleagues for
their continued support and guidance. The
Board never takes for granted the support of
our shareholders and we thank you for your
on-going confidence in our Company.
The strategy the Company continues to pursue
is, in your Board’s view, fundamentally sound
and the management team has our utmost
confidence in its ability to lead the Company to
continued success.
Adrian Bellamy Chairman
Strong performance
In one of the global economy’s most
challenging years, I am pleased to report
that your Company delivered an outstanding
performance. Continuing a record of strong
growth in such circumstances is a testament
to the quality of the Company’s strategy and
execution, its culture, its employees and their
leadership, headed up by our CEO Bart Becht.
The headlines for the year were sales growth of
8% (at constant exchange), net income growth
of 13% (at constant exchange) and cash flow
from operations of £1,803m. We also achieved
impressive market share growth with most of
our Powerbrands.
2009 was the tenth year since the merger that
created Reckitt Benckiser. It was a decade of
performance, the hallmark of which was the
delivery of exceptional shareholder value. The
ten year total shareholder return is one of the
highest in the FTSE, standing at 649%.
Cash
In 2009 the strong net revenue growth of the
business has been leveraged into even higher
increases in profit and cash flow. This has
allowed the Company to pay down virtually all
of the debt created by the Adams acquisition,
leaving the company in strong financial health.
It also enables your Board to propose a final
dividend of 57.0p per share. This brings the
dividend for the year to 100.0p per share, an
increase of 25% over 2008.
Board of Directors
Since the AGM in 2009 we appointed
Richard Cousins as a Non-Executive Director
and member of the Remuneration Committee,
effective 1 October 2009. He is group Chief
Executive of Compass Group PLC, the world’s
largest catering company. He was previously
Chief Executive Officer of BPB plc and is a
former Non-Executive Director of P&O plc and
HBOS plc. We also appointed Warren Tucker
as a Non-Executive Director and member of
the Audit Committee effective 24 February
2010. He is Chief Financial Officer of Cobham
plc, an international company engaged in the
development, delivery and support of advanced
aerospace and defence systems for land,
sea and air. Richard and Warren bring useful
perspective and experience to the Board and
we welcome them. There has been one Board
departure. David Tyler resigned effective
30 September 2009, in recognition of the
amount of time he would need to devote to his
new role as chairman of J Sainsbury plc. Our
thanks go to him for his significant contribution
to the Board during his tenure.
Reckitt Benckiser 20092
Chief Executive’s Statement
The examples of Finish in dishwashing and
Lysol and Dettol in germ protection, shown on
these pages, are just two of many. You can see
more at www.rb.com. I would encourage you
to take a look.
Finish Quantum
In dishwashing we have led the sector with
Finish, creating all-in-one tablets, driving lower
washing temperatures and ultimately creating
the Diamond standard in cleaning dishes with
our Quantum product, where superior shine
performance and no-wrapper technology have
made it a firm favourite with consumers.
And now we are launching QuantuMatic – an
automatic dispenser of dishwasher detergent
delivering Quantum shine performance while
also eliminating the need to put detergent into
the machine every wash.
Lysol and Dettol
Staying healthy starts with keeping hands
clean and germ free. The easier we make it to
wash hands, the more we help families to
keep healthy.
Our Lysol and Dettol brands are introducing
an entirely new way to do just that. No
more messy, dirty, germy soap bars or pump
dispensers. We’ve made it automatic, so that
hand washing can be too. The new Lysol
No-Touch Hand Soap System is motion
activated, dispensing automatically exactly the
right amount of moisturising, fragranced soap.
It kills 99.9% of bacteria to stop the spread of
germs between people. In a more convenience
driven world this innovation extends Lysol and
Dettol’s role in protecting people’s health.
Operating profit rose by 12% (at constant
exchange) to £1.9 billion and net income
increased by 13% to £1.4 billion.
We’ve proven that by keeping it simple and
never being distracted from our strategy, we
can deliver even when times are hard. We
remain confident that our culture, talented
people and our drive to make the world easier
for our millions of consumers, will continue to
serve us well as we begin a new decade for RB.
A decade of Reckitt Benckiser
We are not a company that spends much time
studying the past. We are too busy looking
to the future, searching for the trends and
the opportunities to build our future success.
However in our tenth year it is worth taking
stock of the notable successes since we were
created in 1999.
These achievements have allowed us to more
than double our revenues to over £7 billion
over the period and our operating profits
have almost quadrupled. Our ranking in the
FTSE 100 has risen from 88 in 1999 to 21 at
the end of 2009. Over the period, investors
have enjoyed an average total shareholder
return of 24% a year – the fourth highest in
the FTSE 100.
While these metrics are of crucial interest
to our investors, we place equal importance
on our impact on consumers. We will only
succeed as a company if we succeed in making
products that improve our consumers’ lives.
Over the past ten years we have done this by
rapidly responding to a changing consumer
environment and by pro-actively developing
better consumer solutions.
2009 was a year to be especially proud
of at RB. In our tenth anniversary year as
Reckitt Benckiser we faced the decade’s
toughest global economic conditions, but still
delivered excellent growth. This proved again
that our strategy of focusing on Powerbrands
with consumer relevant innovation and strong
marketing investment is the right one.
The entrepreneurial spirit and deep
commitment from RB people to drive better
and better solutions for consumers continues
to deliver outstanding returns for shareholders.
We believe this strong entrepreneurial spirit and
deep commitment has and will continue to help
us power the business ahead.
The year in review
It will come as no surprise to anyone witnessing
the events of the past year, that 2009 was
one of the more challenging years. As we
entered the tenth year of Reckitt Benckiser,
many western economies were plunged into
deep recession.
Yet we have continued to excel. By sticking
with our proven strategy last year became a
year to be proud of.
Despite slowing economic growth, we grew
net revenues by 8% (at constant exchange).
Our 17 Powerbrands drove this growth through
sustained product innovation and marketing
support, and increased 7% in net revenues. As
a result they now represent 70% of Company
net revenues, including brands in transition.
Our operating margins increased 100 basis
points to 24.4%.
A simple, powerful strategy
Our clear and consistent strategy is to drive
above industry growth and returns through:
• Adisproportionatefocusondrivingour
Powerbrands, global leaders in categories
with high growth potential, and completing
their international roll-out.
• Highlevelsofmediaandmarketing
investment, and continuous innovation.
• Transformingnetrevenuegrowthintoever
better profit and strong cash flow.
Reckitt Benckiser 2009 3
entrepreneurial spirit. We purposely keep our
structure flat and lean, so entrepreneurship
can flourish and people can make real
decisions, fast and without being second-
guessed. Alongside this we encourage
constructive conflict, as this enables the best
delivery, a central part of our culture which
unleashes performance time after time.
The next ten years
We are always mindful of the maxim, “Past
performance is not a reliable guide to future
performance.” That is why we refuse to rest
on our laurels; we know that consumers are
always looking for new products that fit their
needs and offer real value. It takes great focus
Bart Becht Chief Executive
Sustainability and responsibility
There are of course other ways to make a
difference. Through our work with Save the
Children we saved 120,000 children’s lives last
year, taking us close to a quarter of a million
lives saved since we started this partnership.
products, not just in their manufacture,
packaging and distribution, but also when used
in the home, and then disposed of; in other
words throughout the product’s lifecycle.
RB’s Our Home Our Planet programme
communicates to consumers what we are
doing and what they can do to reduce the
carbon impact of our products by 20% by
2020. Last year we reduced our product carbon
People, culture, strategy
The success that we have enjoyed stems from
our consistent focus on three things; our
people, our culture and our strategy.
Our people are not just strong professionals,
they are invariably also high performers
who thrive in a culture that fosters their
Group financial highlights
2009 2008 change
£m £m %
Net revenues 7,753 6,563 +18
Diluted earnings per share 194.7p 154.7p +26
Adjusted operating profit* 1,891 1,535 +23
Adjusted net income for the year* 1,418 1,143 +24
Adjusted diluted earnings per share* 194.7p 157.8p +23
Diluted earnings per share pence
200 150 100 50
0908070605
Adjusted net income
£m
*adjusted to exclude the impact of exceptional items
1500 1200 600900 300 0
Dividend per share pence
100 75 50 25
0908070605
0
*adjusted to exclude the impact of exceptional items
1,418*
1,143*
194.7*
157.8*
45.5
39.0
55.0
100.0
80.0
Reckitt Benckiser 20094
• LeadingpositionsinAnalgesicsandUpper
Gastro-Intestinal products in Europe and
Australia with Nurofen and Gaviscon.
• TheCompanyalsohaslocalleading
positions in Denture Care, Dry Skin Care
and Cold/Flu products.
Other
The Company also has two non-strategic
businesses; Food and Pharmaceuticals.
• Food. The Company owns a largely
North American Food business, the principal
brands of which are French’s Mustard
(the No.1 mustard) and Frank’s Red Hot
Sauce (the No.1 hot/Tabasco/wing sauce in
North America).
• Pharmaceuticals. (formerly known as BBG
or the Buprenorphine Business Group) is
responsible for the development of the
Company’s Subutex and Suboxone
prescription drug business. Both products are
based on buprenorphine for treatment of
opiate dependence. Suboxone is a more
advanced product compared to Subutex, as
it has substantially better protection against
abuse by the opioid-dependent population.
Suboxone is sold by Reckitt Benckiser directly
intheUS,asignicantproportionofthe
Pharmaceuticals business, and Australia.
IntheUS,Suboxonelosttheexclusivity
afforded by its Orphan Drug Status on
8 October 2009. Suboxone has received
marketing approval from the European
Commission for treatment in the 27 states of
theEuropeanUnion,NorwayandIceland,
with exclusivity until 2016. During 2009,
Subutex was principally marketed in Europe
by Merck & Co., Inc. (previously Schering
Plough Corporation, Kenilworth, New Jersey)
to whom it was licensed. As with all
prescription drugs, the protection of this
business has a finite term unless replaced
with new treatments or forms. While the
Group continues to search for ways to offset
theimpactofthelossofexclusivityintheUS,
up to 80% of the revenue and profit of that
business might be lost in the year following
the launch of generic competitors, with the
possibility of further erosion thereafter.
THE INDUSTRY, MARKET AND COMPETITIVE
ENVIRONMENT
The household cleaning and health & personal
care industry is characterised by steady growth
in demand, with little variation due to
macro-economic factors, particularly in
developed markets. Some developing markets
exhibit more volatile demand in reaction to
macro-economic factors. The principal drivers
of market growth in all markets are the rate of
household formation and growth in the level of
disposable income, combined with demand for
new products that offer improved performance
or greater convenience.
The industry is intensely competitive, with a
comparatively small number of major multi-
national competitors accounting for a large
proportion of total global demand. The
Company competes with numerous, well-
established, local, regional, national and
international companies, some of which are
very large and aggressively establish and defend
• No.1worldwideinGarmentCare(laundry
cleaning products for delicate garments)
with Woolite.
• No.1worldwideinWaterSofteners(products
to prevent destructive limescale build-up on
washing machines and laundry) with Calgon.
• TheCompanyalsohasanumberoflocal
market positions in Laundry Detergents and
Fabric Softeners (for example, in Spain, Italy,
certain East European markets and Korea).
The Company also has a small private label
business, the majority of which provides
Laundry Detergent to major multi-national
retailers in Europe.
Surface Care
• No.1worldwideintheoverallSurfaceCare
category due to leading positions across
disinfectant cleaners, non-disinfectant all
purpose cleaners, lavatory care, speciality
cleaners and polishes/waxes.
• No.1worldwideindisinfectantcleaners
(products which both clean and disinfect
surfaces, killing 99.9% of germs) with Lysol
in North America and the Surface Care
products in the Dettol range outside
North America.
• No.1worldwideinlavatorycarewithLysolin
North America and Harpic across Europe and
Developing Markets.
• TheCompanyhasanumberoflocal
leading brands in non-disinfectant all
purpose cleaners, speciality cleaners and
polishes/waxes.
Dishwashing
• No.1worldwideinAutomaticDishwashing
(products used in automatic dishwashers)
with Finish.
• TheCompanyalsohassomesmall,local
positions left in the declining manual
dishwashing market.
Home Care
Home Care consists of Air Care, Pest Control
and Shoe Care.
• No.2worldwideinAirCarewithAirWick.
• No.2worldwideinPestControlwith
Mortein, the Company’s international brand,
supported by local brand franchises like
d-Con in North America.
• No.2worldwideinShoeCarewithsuch
brands as Cherry Blossom and Nugget.
Health & Personal Care
The Health & Personal Care category consists of
products that relieve or solve common personal
and health problems.
• No.1worldwideintopicalAntisepticsand
Antiseptic Liquids with Dettol.
• No.1worldwideinDepilatoryproducts
with Veet.
• No.2worldwideinAcnetreatment
with Clearasil.
• No.1worldwideinMedicatedSoreThroat
products with Strepsils.
• No.2worldwideinCold/‘Flu(including
decongestants) with Mucinex.
Business review 2009
2009 business highlights.
Net revenue grew by 8% (constant) to
£7,753m. Adjusted operating profit up 12%
(constant) to £1,891m. Total dividends paid of
£648m, up 47% versus 2008.
Colin Day Chief Financial Officer
This review for the financial year ended
31 December 2009 conforms to the
Business Review required under the
Companies Act 2006. It should be read in
conjunction with the rest of this annual
report, the Company’s latest Sustainability
Report and the Company’s website
(www.rb.com).
NATURE, OBJECTIVES AND STRATEGIES OF
THE BUSINESS
Reckitt Benckiser is one of the world’s leading
manufacturers and marketers of branded
products in household cleaning and health &
personal care, selling a comprehensive range
through over 60 operating companies into
around 180 countries. In 2009, around
three-quarters of net revenue was generated by
brands that are either market leader or ranked
second in their markets. The Company’s
principal product categories are listed below.
Reckitt Benckiser’s vision is to deliver better
consumer solutions in household cleaning and
health & personal care for the ultimate purpose
of creating shareholder value.
The strategy of the business is described in
detail in the Chief Executive’s Review.
In summary:
• Haveadisproportionatefocusonour17
Powerbrands to realise our vision and drive
above industry average growth to strengthen
their global market positions.
• Transformtheaboveindustryaveragenet
revenue growth into attractive profits and
cash flow.
THE COMPANY’S BRAND PORTFOLIO AND
MARKET POSITION
The Company benefits from many very strong
market positions for its brand portfolio.
Excluding Laundry Detergent and Fabric
Softener, the Company is the world market
leader in household cleaning products and has
leading positions in selected health & personal
care categories. These positions derive from
the strength of the Company’s leading brands,
described as Powerbrands, which are the
flagship brands in the Company’s five major
categories and on which the Company focuses
the majority of its efforts and investment.
The Company also has other brands and
market positions that are less of a strategic
focus, but which play a role as scale builders
in local markets.
These leading positions include:
Fabric Care
• No.1worldwideinFabricTreatment
(products to remove stains from clothes,
carpets and upholstery) with Vanish around
theglobeandResolve/Spray‘nWashin
North America.
Reckitt Benckiser 2009 5
chosen Enterprise Resource Planning (ERP)
system and its associated programmes.
The Company has a comprehensive set of
policies and procedures designed to enforce
and protect its reputation and govern its
business methods and practices. These cover,
inter alia, a comprehensive Code of Business
Conduct, an Environmental Policy, a Global
Manufacturing Standard, Product Safety Policy
including compliance with all regulatory
requirements, and product quality. Internal
controls on environmental, social, governance
(ESG) matters and reputational risk are further
outlined in pages 15 and 16 of this report.
RESOURCES
The major resources required by the business
are an adequate supply of the raw and
packaging materials consumed by the
Company’s products and the necessary funds
for developing new products and reinvestment
in advertising and promoting those brands. The
other principal resource is management.
The Company considers that its primary raw
materials, such as bulk chemicals (including a
number of petrochemicals, plastics, pulp,
metal cans etc), are generally in adequate
supply globally. The cost of these items
fluctuates from time to time but not at levels
that seriously impinge on the ability of the
Company to supply its products or generate
profit. The Company is profitable and cash
generative, even after reinvesting in marketing,
specifically media, at levels well above the
industry average. The Company therefore
believes that its ability to reinvest in supporting
and building its brands is a significant
competitive advantage.
Supply constraints do exist in the Company’s
supply chain from time to time. These normally
arise due to unexpected demand for new
products or to the time delay involved in
stepping up production of new items to the
levels required to supply many millions of
units internationally.
The Company’s supply chain is deliberately
relatively well spread in terms of geography and
technology, such that the reliance on any one
facility is minimised. However, there are a
number of facilities that remain critical to the
Company’s supply chain where major
interruption to normal working could involve
disruption to supply. The Company’s suppliers
are similarly deliberately well spread in terms of
geography and supplied items, but there are
nonetheless some risks to continuity of supply
arising from some specialised suppliers both
of raw materials and of third party
manufactured items.
The supply of strong management for the
Company remains more than adequate. This is
attributable to the Company’s culture and its
highly performance-oriented remuneration
policy which is based on paying for excellent
performance. The Company believes that its
ability to attract and retain the excellent
management it needs to continue its success
depends critically on this system.
The Company trains and develops its
management pipeline through formal training
Zealand, (excluding Pharmaceuticals) with the
remainder coming mostly from semi-established
or developing economies. The Company is
expanding its operations in these semi-
established economies, which may bring
increased risks from greater economic volatility,
additional governmental burden and
regulation, political instability and local labour
conditions. However, this is not the case with
all developing markets, many of which offer
higher economic growth potential.
The Company structures its business through a
matrix of a centralised Category Development
organisation, Global Sales organisation, Supply
organisation and support functions (Finance,
Human Resources and Information Services),
combined with three Area organisations,
Europe, North America & Australia, and
Developing Markets, plus Reckitt Benckiser
Pharmaceuticals. The central Category
Development function, where appropriate
supported by Global Sales, is responsible for
Powerbrand strategies, brand equity
programmes and best practices and new
product development (including R&D and
consumer and market research), for
implementation by the Area organisation.
The three geographical Areas are
responsible for local execution of marketing
and sales programmes:
• Europe. The Area covers the regions of
NorthernEurope(UK,Ireland,Scandinavia,
Germany, Netherlands, Austria, Switzerland),
Southern Europe (France, Belgium, Italy,
Greece, Spain, Portugal and export business)
and Eastern Europe (Poland, Hungary,
Czech Republic/Slovakia, Romania, Adriatics,
Russia/CIS, Turkey).
• North America & Australia (NAA). The
Area covers the markets of North America
(USA,Canada),AustraliaandNewZealand.
• Developing Markets. The Area covers the
regions of Latin America (Brazil, Mexico,
Argentina and smaller markets), Africa
Middle East (South Africa, Middle East,
Pakistan, East Africa, West Africa), South
Asia (India, Bangladesh, Sri Lanka,
Indonesia) and East Asia (Korea, Hong Kong,
China, Taiwan, Singapore, Malaysia,
Thailand, Japan).
The Supply function is responsible for all
procurement (raw and packaging materials and
services), production and logistics globally, and
is directly responsible for the operation of the
Company’s 41 production facilities worldwide.
Approximately 90% of manufacturing and
supply is through these 41 sites around the
world, with facilities located in Europe (15
facilities), North America (5 facilities), Australia
and New Zealand (1 facility) and the remaining
facilities spread across Asia (12), Latin America
(4), and Africa Middle East (4). These include
a small number of facilities in higher risk
labour and social environments in Asia and
Latin America.
Information Services is responsible for the
Company’s global systems infrastructure and
global systems, including the Company’s
their products, market shares and brands.
Principal competitors include FMCG companies
like Procter & Gamble, Colgate-Palmolive,
Clorox,S.C.Johnson,HenkelandUnilever,
and such pharmaceutical companies as
GlaxoSmithKline, Johnson & Johnson, Novartis
and Bayer, plus a number of strong local
industry players.
The Company competes, particularly in strongly
branded segments, through its focus on its
leading position in higher growth categories
where it is typically the market leader or a close
follower, and through its ability to introduce
new products (whether improved or newly
developed) supported by a rising and
substantial level of marketing, particularly
media investment. Much industry competition
focuses on competing claims for product
performance rather than price or terms. For this
reason, failure to introduce new products and
gain acceptance thereof may significantly
impact the Company’s operating results. The
Company also encounters challenges to its
leadership positions in markets, the defence
against which requires significant marketing
expenditure and promotional activity.
The Company’s products also compete with
private label products sold by major retail
companies. The Company competes with
private label primarily by focusing on delivering
innovative new products with real consumer
benefits, on which private label typically does
not focus, and by consistent marketing
investment to communicate the benefits of its
brands direct to consumers, where private label
is not advertised.
Technological change and product
improvement can therefore be a key
determinant of the Company’s success. Reckitt
Benckiser’s success in introducing new and
improved products stems from its heavy focus
on developing a pipeline of product innovation.
The Company maintains a large category
development organisation, including market
and consumer research, R&D and marketing/
sales best practice, to fuel this pipeline and
share category success factors and learning.
The Company invested £126m in R&D in 2009.
While the Company believes R&D to be a key
contributor to innovative new products, it does
not believe it to be the dominant performance
indicator for innovation success. The Company’s
success is demonstrated by the fact that around
one third of its net revenue comes from
products launched over the last three years.
INTERNATIONAL OPERATIONS AND
REGULATORY POSITION
The household and health & personal care
industry is heavily regulated by, inter alia, the
EuropeanUnion,theUnitedStatesgovernment
and individual country governments elsewhere.
Ingredients, manufacturing standards, labour
standards, product safety, marketing and
advertising claims are all subject to detailed
and developing regulation.
Reckitt Benckiser has operating companies
in over 60 countries and has sales in around
180 countries worldwide. At present, over 70%
of the Company’s net revenue derives from
Europe, North America and Australia/New
Business review 2009 continued
Reckitt Benckiser 20096
materials and packaging may limit the
Group’s ability to expand margins.
• Amajorsupplierorcustomercould
experience financial difficulties, impinging on
the Group’s normal course of business.
• TheCompanymaynotbeabletoprotectits
intellectual property rights.
Environmental, social and governance
(ESG) matters and reputational risks
Another group of risks concern the reputation
of the Company and its brands, but are
reduced by the fact that the Company and its
brands are not necessarily connected in the
mind of consumers.
Risks from the perspective of Environmental,
Social and Governance (ESG) matter and
reputation are discussed in the Report of the
Directors on pages 12 to 18. These should be
read in conjunction with the Company’s annual
Sustainability Reports (available on the
Company’s website) which address a number of
potentially reputation-affecting ESG matters
such as employee health & safety at work and
how the Company is addressing such matters,
and which are independently assured.
In summary, the principal ESG risks identified by
the Company are:
• Industrysectorandproduct&consumer
safety/regulatory risks. The household
products and health & personal care sectors
have a number of product and ingredient
issues relating to ongoing developments in
ingredient regulation and concerns voiced
over the potential long-term effects of
household chemicals and OTC (over-the-
counter) drug ingredients on human health
and the environment.
• Supplychainrisks.Mostproductandraw
material supply chains present a number of
potential reputational risks relating to: labour
standards; raw material sourcing; and the
social, ethical and environmental
performance of third party manufacturers
and other suppliers.
• Productqualityrisks.Failuresinproduct
quality controls could potentially lead to
damage to the reputation of and trust in the
Company’s brands.
The Company has a full set of policies,
programmes and control arrangements,
building on its central Code of Business
Conduct, that address the full range of ESG
matters and reputational risks. The Code itself
was in 2009 the subject of a comprehensive
internal training and awareness programme,
and is covered by an annual review and
certification process carried out by Internal
Audit and the Legal Department. The Board
holds a formal review of ESG matters at
least annually.
Financial risks
The Company has a number of risk exposures
in relation to tax, treasury, financial controls
and reporting that are actively managed
through the Company’s financial manual of
policies and procedures, through regular review
and controls, and through regular auditing,
both internal and external.
The Company’s customer base is diverse, with
no single customer accounting for more than
10% of net revenue, and the top ten customers
only accounting for between one quarter and
one third of total net revenue. These customers
are becoming more concentrated and more
multi-national, increasing demands on the
Company’s service levels. In addition, many
retailers compete with the Company’s products
with their own private label offerings. The
Company maintains its relationship with its
principal retail customers through the efforts of
its dedicated sales force, including key account
directors, and its global sales organisation
specifically set up to manage its interface with
the growth of international retailers.
The Company has many suppliers. The suppliers
are predominantly international chemical and
packaging companies. The Company sources
most of its supplies through its global
purchasing function, which acts as its primary
interface with its suppliers.
The principal risk factors that may be
considered in relation to the Group are, in the
opinion of the Directors:
Market risks
• DemandfortheCompany’sproductsmay
be adversely affected by changes in
consumer preferences.
• Customers,mainlylargeretailers,maydecide
to de-list the Company’s brands, or not
participate in the active promotion of the
brands through in-store programmes.
• CompetitionmayreducetheCompany’s
market shares and margins.
• TheexpiryoftheCompany’sexclusivelicence
forSuboxoneintheUnitedStatesin2009,
with the possibility that the Company will
not develop new forms that offer new
intellectual property protection beyond 2009.
• Competitionfromprivatelabeland
unbranded products may intensify.
Operational risks
• TheCompany’snewproductpipelinemay
not generate consumer-relevant innovation
and improvement to fuel growth and build
market shares.
• Keymanagementmayleave,ormanagement
turnover may significantly increase.
• Informationtechnologysystemsmaybe
disrupted or may fail, despite the Company’s
disaster recovery processes, interfering with
the Company’s ability to conduct its business.
• Regulatorydecisionsandchangesinthelegal
and regulatory environment could increase
costs or liabilities or limit business activities.
• Operatingresultsmaybeaffectedby
increased costs or shortages of raw materials,
labour or by disruption to production
facilities or operating centres.
• Unfavourableeconomicorbusiness
conditions may adversely affect or disrupt
operations in countries in which the
Company operates.
• Signicantmovementintheexchangerates
in which the Group purchases its raw
programmes focusing on three areas:
leadership skills, functional skills and general
skills, and through a deliberate policy of
training on the job. The Company has
14 formal training modules for middle
management and Top 400 managers.
During 2009, the Company ran 64 courses
on these modules, training over 1,100 people.
Management is international, and is trained
through rotation in international postings both
in countries and in the Company’s central
functions. Succession planning is a critical
management discipline and is reviewed at
least annually at the full Board and the
Executive Committee.
The Company closely monitors and tracks its
Top 400 international managers (T400), the
core management team of the business. This is
a diverse group, consisting of 49 nationalities;
and over 60% of the T400 is working in a
country that is not their original domicile,
consistent with the Company’s policy to
develop a multi-national management team.
Turnover within this T400 group in 2009 was
15.7%, which the Company considers
satisfactory given the need to retain high-
quality management offset by the benefits of
refreshing the team with new talent. 2009
saw 95 promotions, 76 moves and 22 external
recruits. The Company ended the year with
an historically low level of vacancies within
the T400 of 11, or around 2.5% of the
measured group.
There is a comprehensive set of policies
governing employment and employees to
ensure that the Company remains an attractive
employer. The Company is committed to the
principle of equal opportunity in employment;
no applicant or employee receives less
favourable treatment on the grounds of
nationality, age, gender, religion or disability.
It is essential to the continued improvement in
efficiency and productivity that each employee
understands the Company’s strategies, policies
and procedures. Open and regular
communication with employees at all levels is
an essential part of the management process.
A continuing programme of training and
development reinforces the Company’s
commitment to employee involvement.
The Board encourages employees to
become shareholders and to participate
in the Company’s employee share
ownership schemes.
The Company relies on its brand names and
intellectual property. All of the Company’s
major brand names are protected by nationally
or internationally registered trademarks.
The Company also maintains patents or
other protection for its significant product
formulations, designs and processing
methods. The Company aggressively
monitors these protections and pursues any
apparent infringements.
RELATIONSHIPS AND PRINCIPAL RISKS
The Company’s critical external relationships are
with its major customers, typically the large
grocery, mass market, multiple retailers, and its
suppliers of raw and packaging materials and
finished goods.
Reckitt Benckiser 2009 7
constant). The adjusted operating margin
increased by +100bp to 24.4% due to gross
margin expansion and operating cost
efficiencies, partially offset by a re-organisation
charge taken in Q4.
Net finance income was £1m (2008: net
finance expense of £31m), reflecting strong
free cash flow generation and progress made
on net debt repayment during the year. The tax
rate was 25%.
Net income was £1,418m, an increase of
+27% (+15% constant) versus 2008: on an
adjusted basis, net income was up +24%
(+13% constant). Diluted earnings per share of
194.7 pence was ahead +26% on a reported
basis; on an adjusted diluted basis, the growth
was +23%.
OPERATING SEGMENT ANALYSIS AT
CONSTANT EXCHANGE
Europe – 45% of net revenue
2009 total net revenue increased +1% to
£3,511m, with growth largely in Dishwashing,
Home Care and Health & Personal Care.
In Dishwashing, the continued success of
Quantum contributed to growth, while Home
Care was supported by such initiatives as
Airwick Freshmatic, Freshmatic Mini and
<i>motion. In Health & Personal Care, Nurofen,
Strepsils and Gaviscon all performed strongly,
boosted by increased marketing investment.
For the full year, the adjusted operating margin
was -100bp below last year at 22.9%, owing
to a re-organisation charge taken in Q4; this
resulted in a -3% decline in adjusted operating
profit to £804m. Excluding the charge, the
operating margin increased +10bp to 24.0%.
North America & Australia – 28% of
net revenue
2009 total net revenue increased +7% to
£2,160m, with growth coming mainly in
Surface Care, Home Care and Health &
Personal Care. Increased consumption of Lysol
spray and disinfectant wipes boosted growth in
Surface Care, while Airwick Freshmatic and
<i>motion contributed to the result in Home
Care. In Health & Personal Care, growth was
driven by Mucinex.
Food performed well, with growth coming
particularly from the consumer brands of
French’s Yellow Mustard, French’s Fried Onions
and Frank’s Red Hot sauce.
For the full year, adjusted operating profit
increased +12% to £500m: the adjusted
operating margin was +60bp higher at 23.1%.
Developing Markets – 19% of net revenue
2009 net revenue was ahead +16% to
£1,494m, with strong growth across all regions
and driven particularly by Fabric Care, Surface
Care and Health & Personal Care. In Fabric
Care, increased marketing investment and
new initiatives helped generate a strong
performance for Vanish. In Surface Care,
Harpic, and Veja in Brazil, were the key growth
drivers. In Health & Personal Care, additional
marketing investment helped drive an
excellent result for the Dettol personal care
range, with Veet and Gaviscon also both
contributing strongly.
The Company has taken a leadership position
with regard to its products’ carbon footprint,
by seeking to understand, measure and reduce
the GHG emissions generated by all stages in
the product lifecycle for its global product
portfolio, and including amongst other things:
the raw and packaging materials provided
by its suppliers; the Company’s own direct
manufacturing and other operations;
transportation of both raw materials and
finished products; the retail sale of its products;
consumers use of its products; and, the
disposal / recycling of those products and
their packaging. The Company publicly
launched this initiative in November 2007,
comprising its Carbon20 programme and the
target to reduce its global products’ carbon
footprint across their complete lifecycle by 20%
per unit dose by 2020 versus a 2007 baseline
(www.Carbon20.info).
In 2008, the first year of the Company’s
Carbon20 programme, 1.5 million tonnes of
CO2 were avoided by a 5.75% reduction per
unit dose in the carbon impact of the
Company’s global products’ lifecycle; this is
similar to taking around 450,000 cars off the
road. This 5.75% reduction in carbon emissions
per unit dose means the Company achieved
25% of its Carbon20 target for 2020 in the
first year of the programme.
In January 2009, the Company launched Our
Home Our Planet, an international consumer
communication programme across many of its
major brands. Our Home Our Planet aims to
change consumer behaviour by informing
consumers how they can reduce their impact
on the environment when using the Company’s
products, for example by reducing domestic
energy and water use, whilst also saving money
on their household bills
(www.ourhome-ourplanet.com).
As noted above regarding ESG matters and
reputational risks: the Company has a full
set of policies, programmes and control
arrangements, building on its central Code
of Business Conduct, that address the full
range of ESG matters and reputational risks.
The Code itself was in 2009 the subject of a
comprehensive internal training and awareness
programme, and is covered by an annual
review and certification process carried out by
Internal Audit and the Legal Department.
The Board holds a formal review of ESG matters
at least annually.
PERFORMANCE OF THE BUSINESS IN 2009
Net revenue increased +18% to £7,753m, with
growth of +8% at constant exchange.
Gross margin improved by +90bp to 60.2%,
largely as a result of easing input costs and
benefits from cost optimisation programmes,
partially offset by a negative transaction impact
from foreign exchange. Total marketing
investment was higher, and pure media spend
rose +6% (-3% constant) to a level of 11.1%
of net revenue. There was significant growth in
Other Consumer Marketing, funded by savings
from more favourable media rates. Operating
profit as reported was £1,891m, +26% higher
than last year (+14% constant): on an adjusted
basis, operating profit was ahead +23% (+12%
Environmental matters, employees and
social & community issues
In line with the requirements of the Companies
Act 2006, a rationale has been developed
and a review undertaken to determine what
information to include in this Report as
necessary for an understanding of the
development, performance and position of the
business of the Company relating to
environmental matters (including the impact of
the Company’s business on the environment),
its employees, and social & community issues.
A summary of this information is provided here,
with further information provided in other
sections of the Business Review and in the
Report of the Directors on page 15.
Overall, Environmental, Social and Governance
matters and reputational risk are addressed in
the Report of the Directors on pages 12 to 18,
and with regard to Employees and Internal
Control on pages 12 and 14. These should be
read in conjunction with the Company’s latest
Sustainability Report (available on the
Company’s website at www.rb.com) which
addresses a number of potentially reputation-
affecting issues such as employee health &
safety at work and how the Company is
addressing those issues, and which is
independently assured.
In summary environmental, employee and
social & community issues identified by the
Company are: product / ingredient regulation
and specifically REACh (the European
framework for the Registration, Evaluation,
Authorisation and Restriction of Chemicals),
which is discussed in the Report of the Directors
on page 15; product quality / safety and
specifically the Company’s arrangements for
managing product quality such as to prevent
large scale sub-standard quality events and its
arrangements to ensure that its products are
both suitable and safe for their intended use,
which are discussed in the Report of the
Directors on pages 15 and 16; in terms of the
environment, the carbon footprint of its
products, which is described below; and, in
terms of the impact of the Company’s business
on the environment, the greenhouse gas (GHG)
emissions originating from its direct operations
and specifically energy use at its global
manufacturing operations. Due to the
Company’s industry sectors and product
categories the greenhouse gas emissions
originating from energy use at its direct
operations is of medium-to-low impact in
comparison to those of other similarly-sized
companies, as assessed for example in recent
reports of the independent Carbon Disclosure
Project (CDP, www.cdproject.net); specifically,
the GHG emissions from the Company’s global
manufacturing operations is circa. 300,000
tonnes CO2-equivalents per annum.
Additionally, the Company has been proactive
in managing the energy use of its direct
operations so as to continually reduce its
associated GHG emissions since 2000;
specifically, the Company reduced the GHG
emissions from its global manufacturing
facilities energy use between 2000 and 2008
by 35% per unit of production and by 20% in
absolute terms.
Business review 2009 continued
Reckitt Benckiser 20098
improvement of £1,316m. This reflected net
cash flow from operations of £1,803m, offset
by the payment of two dividends totaling
£648m. The Group regularly reviews its banking
arrangements and currently has adequate
facilities available to it, only £25m of which
expires within one year.
Balance sheet. At the end of 2009, the Group
had shareholders’ funds of £4,014m (2008:
£3,294m), an increase of +22%. Net cash was
£220m (2008: net debt of £1,096m) and total
capital employed in the business was £3,794m
(2008: £4,390m).
This finances non-current assets of £6,891m
(2008: £7,228m), of which £639m (2008:
£637m) is property, plant & equipment, the
remainder being goodwill, other intangible
assets, deferred tax, available for sale financial
assets and other receivables. The Group has net
working capital of minus £1,257m (2008:
minus £1,097m), current provisions of £88m
(2008: £73m) and long-term liabilities other
than borrowings of £1,752m (2008: £1,668m).
The Group’s financial ratios remain strong.
Return on shareholders’ funds (net income
divided by total shareholders’ funds) was
35.3% on both a reported and an adjusted
basis (2008: reported basis 34.0%, adjusted
basis 34.7%).
Dividends. The Board of Directors
recommends a final dividend of 57.0 pence
(2008: 48.0 pence), an increase of +19%, to
give a full year dividend of 100.0 pence (2008:
80.0 pence), an overall increase of +25%. The
dividend, if approved by shareholders at the
AGM on 6 May 2010, will be paid on 27 May
to shareholders on the register at the record
date of 26 February. The ex-dividend date is
24 February and the last date for election for
the share alternative to the dividend is 6 May.
The final dividend will be accrued once
approved by shareholders.
Contingent liabilities. The Group is involved
in a number of investigations by competition
authorities in Europe. It is too early to
determine the likely outcome of these matters
and the Directors have made no provisions for
such potential liabilities.
The Group has recently received a Statement
of Objections from the Office of Fair Trading
intheUnitedKingdomregardingalleged
anti-competitive activity involving the Gaviscon
brand. In the event that the Office of Fair
Trading finds against the Group it may impose
a fine of up to the statutory maximum of ten
percent of Group worldwide turnover. The
Board considers it appropriate to disclose a
contingent liability in this regard. The Statement
of Objections is under review and the Group
will present an appropriate response to the
Office of Fair Trading in due course. The
Directors at this stage believe that there are
substantive questions of law brought forward
by the Statement of Objections, questions that
have not been settled in prior competition law
Nurofen, Strepsils, Gaviscon and Mucinex all
contributed to a strong performance, while the
Dettol personal wash range continued to
deliver excellent growth.
Total Household and Health & Personal
Care. Net revenue was ahead by +6%
to £6,890m.
Pharmaceuticals. 2009 net revenue for the
Group’s Subutex and Suboxone prescription
drug business grew +50% to £588m,
predominantly driven by a continued increase in
penetrationofSuboxoneintheUS.Adjusted
operating profit was ahead +63% to £371m,
equating to a +650bp improvement in the
operating margin to 63.1%.
Food. Net revenue grew +5% to £275m with
good performance across the consumer
portfolio, in particular further growth for
French’s Yellow Mustard, French’s Fried Onions
and Frank’s Red Hot Sauce. Adjusted operating
profit increased +3% to £73m.
FINANCIAL REVIEW
Basis of preparation. The financial
information is prepared in accordance with
IFRSsasadoptedbytheEuropeanUnionand
IFRSs as issued by the International Accounting
Standards Board, and with the accounting
policies set out in note 1 on pages 30 to 33.
Constant exchange. Movements in exchange
rates relative to sterling affect actual results as
reported. The constant exchange rate basis
adjusts the comparative amount to exclude
such movements, to show the underlying
growth of the Group.
Net finance income. Net finance income was
£1m, a £32m improvement compared to 2008
(net finance expense of £31m), reflecting
strong free cash flow generation.
Tax. The underlying tax rate was 25%
(2008: 24%).
Net working capital (inventories, short-term
receivables and short-term liabilities excluding
borrowings and provisions) improved by £160m
to minus £1,257m, mostly due to further
improvement in payables.
Cash flow. Cash generated from operating
activities was £2,323m (2008: £1,640m) and
net cash flow from operations was £1,803m
(2008: £1,177m). Net interest paid was £4m
(2008: £27m) and tax payments increased by
£91m to £371m (2008: £280m). Capital
expenditure was lower than the prior year at
£158m (2008: £216m).
Net cash at the end of the year was £220m
(December 2008: net debt of £1,096m), an
For the full year, adjusted operating profit
increased by +21% to £216m. This resulted
in a +80bp improvement in the adjusted
operating margin to 14.5%.
Pharmaceuticals – 8% of net revenue
2009 net revenue for the Group’s Subutex and
Suboxone prescription drug business grew
+50% to £588m. These buprenorphine-based
products are used to treat opiate dependence.
This very strong growth was predominantly
driven by a continued increase in penetration
ofSuboxoneintheUS.
For the full year, the adjusted operating margin
improved by +650bp to 63.1%. Adjusted
operating profit was £371m, an increase
of +63%.
Suboxone has data exclusivity in Europe until
2016:intheUS,Suboxonelosttheexclusivity
afforded by its Orphan Drug Status on
8 October 2009. Within the Pharmaceuticals
division,theUSSuboxonebusinessgenerated
net revenue of £502m and adjusted operating
profit of £345m. While the Group continues to
search for ways to offset the impact of the loss
ofexclusivityintheUS,upto80%ofthe
revenue and profit of that business might be
lost in the year following the launch of generic
competitors, with the possibility of further
erosion thereafter.
CATEGORY REVIEW AT CONSTANT
EXCHANGE RATES
Fabric Care. Net revenue was unchanged
versus the prior year, at £1,578m. Vanish
increased, driven by a strong performance in
Developing Markets; Woolite also contributed,
supported by such initiatives as Triple
Protection. However, growth in the
Powerbrands was offset by weakness in
Laundry Detergents and Fabric Conditioners.
Surface Care. Net revenue increased +5% to
£1,290m, driven by strong growth for the
Dettol and Lysol ranges, and Veja in Brazil.
Harpic Lavatory Care also performed well,
supported by such new initiatives as Harpic
liquid with Max Coverage.
Dishwashing. Net revenue increased +2% to
£843m. The performance was led by the
continued success of Finish Quantum behind
increased investment, partially offset by
weakness in Dishwashing Additives.
Home Care. Net revenue increased +4% to
£1,036m. This growth was largely driven by Air
Care, with Air Wick Freshmatic, Freshmatic Mini
and <i>motion contributing.
Health & Personal Care. Net revenue
increased +14% to £2,078m. In Healthcare,
2009 results excluding RB Pharmaceuticals
In light of the increasing significance of the RB Pharmaceuticals business, the Company provides
the following information relating to the performance of the business in 2009 excluding
RB Pharmaceuticals (on an adjusted basis):
Reckitt Benckiser 2009 9
COMPANY PROSPECTS
The Company believes it is well-positioned to
continue to deliver on its strategic objective of
profitable growth.
For the medium-term outlook, the Company
targets to deliver above industry average
growth in net revenue, converted into attractive
growth in earnings, with increasing capital
efficiency. The Company has confidence in its
ability to continue to generate strong cash
flow and to return substantial cash to
shareholders annually.
The unknown factor is the ability of the
Company to enhance its prospects through
mergers and acquisitions. The industries in
which it competes are already characterised by
high levels of concentration, resulting in very
infrequent opportunities to buy worthwhile
assets or businesses. The Company is of the
belief that add-on acquisitions, geographically
and by product category, could enhance the
business, but is not in a position to forecast if
and when such acquisitions might occur.
The Company retains substantial resources to
fund such acquisitions and believes it has the
management capability to absorb, integrate
and manage such acquisitions within its
existing structure.
Based on the current market outlook, the
Group is confident of achieving good growth in
2010. Due to the uncertain timing of generic
competitiontoSuboxoneintheUS,itisnot
considered appropriate to communicate targets
for the total Group. For the business excluding
Pharmaceuticals, the targets in 2010 are for net
revenue growth of 5% (continuing operations,
base: £7,144m) and for operating profit growth
of 10% (continuing operations, base:
£1,512m), both at constant exchange.
Cautionary note concerning forward
looking statements
This document contains forward looking statements,
including statements with respect to the financial
condition, results of operations and business of Reckitt
Benckiser and certain of the plans and objectives of
the Company with respect to these items. These
forward looking statements are made pursuant to the
‘SafeHarbor’provisionsoftheUnitedStatesPrivate
Securities Litigation Reform Act of 1995. In particular,
all statements that express forecasts, expectations and
projections with respect to future matters, including
trends in results of operations, margins, growth rates,
overall market trends, the impact of interest or
exchange rates, the availability of financing to the
Company, anticipated cost savings or synergies and
the completion of strategic transactions are forward
looking statements. These forward looking statements
are not guarantees of future performance: by their
nature, forward looking statements involve known
and unknown risk and uncertainty and other factors
because they relate to events and depend on
circumstances that will occur in the future. There are a
number of factors, discussed in this report that could
cause actual results and developments to differ
materially from those expressed or implied by these
forward looking statements, including many factors
outside Reckitt Benckiser’s control. Past performance
cannot be relied upon as a guide to future
performance. Each forward looking statement speaks
as of the date of the particular statement.
term contracts with certain key suppliers and is
not therefore viewed as being a material risk.
Interest rate risk
The Group has both interest-bearing and non
interest-bearing assets and liabilities. The Group
managed its interest expense rate exposure
using a mixture of fixed rate and floating rate
debt. The Group managed its interest rate
exposure on its gross financial assets by using
fixed rate term deposits.
Credit risk
The Group has no significant concentrations of
credit risk. Financial institution counterparties
are subject to approval under the Group’s
counterparty risk policy and such approval is
limited to financial institutions with a BBB
rating or above. The amount of exposure to any
individual counterparty is subject to a limit
defined within the counterparty risk policy,
which is reassessed annually by the Board.
Liquidity risk
The Group has bilateral credit facilities with
high-quality international banks. All of these
facilities have similar or equivalent terms and
conditions, and have a financial covenant,
which is not expected to restrict the Group’s
future operations. The committed borrowing
facilities, together with available uncommitted
facilities and central cash and investments, are
considered sufficient to meet the Group’s
projected cash requirements. Only £25m of
the Group’s borrowing facilities expires within
one year.
Funds over and above those required for
short-term working capital purposes by the
overseas businesses are generally remitted to
the GTC. The Group uses the remittances to
settle obligations, repay borrowings, or, in the
event of a surplus, invest in short-term
instruments issued by institutions with a BBB
rating or above.
Capital management
The Company’s objectives for managing capital
are to safeguard the Group’s ability to continue
as a going concern, in order to provide returns
for shareholders and benefits for other
stakeholders and to maintain an efficient
capital structure to optimise the cost of capital.
In maintaining an appropriate capital structure
and providing returns for shareholders, in 2009
the Company adopted a programme of
returning cash to shareholders in the form of
dividends, current details of which are included
in the Financial Review for the year, above.
The Group monitors net debt (total borrowings
less cash and cash equivalents and financing
derivative financial instruments) and at year end
the Company had net cash of £220m (2008:
net debt of £1,096m). Due to the low level of
net debt in its recent history, the Company does
not actively monitor a gearing ratio, but seeks
to pay down net debt using cash generated by
the business to maintain an appropriate level of
financial flexibility.
Details of numerical disclosures relating to the
Group’s financial risk management are included
in note 24 to the Accounts on pages 54 to 58.
Financial risk management
The Group’s multi-national operations expose it
to a variety of financial risks that include the
effects of changes in foreign currency exchange
rates (foreign exchange risk), market prices,
interest rates, credit risks and liquidity. The
Group has in place a risk management
programme that uses foreign currency financial
instruments, including debt, and other
instruments, to limit the impact of these risks
on the financial performance of the Group.
The Group’s financing and financial risk
management activities are centralised into the
Group Treasury Centre (GTC) to achieve
benefits of scale and control. The GTC manages
financial exposures of the Group centrally in a
manner consistent with underlying business
risks. The GTC manages only those risks and
flows generated by the underlying commercial
operations and speculative transactions are
not undertaken.
The Board of Directors reviews and agrees
policies, guidelines and authority levels for all
areas of treasury activity and individually
approves significant activities. The GTC
operates under the close control of the Chief
Financial Officer and is subject to periodic
independent review and audits, both internal
and external.
Foreign exchange risk
(a) Translation risk
The Group publishes its financial statements in
sterling but conducts business in many foreign
currencies. As a result, it is subject to foreign
currency exchange risk due to the effects that
exchange rate movements have on the
translation of the results and the underlying net
assets of its foreign subsidiaries.
The Group’s policy is to align interest costs and
operating profit of its major currencies in order
to provide some protection against the
translation exposure on foreign currency profits
after tax. The Group may undertake borrowings
and other hedging methods in the currencies
of the countries where most of its assets
are located.
(b) Transaction risk
It is the Group’s policy to monitor and, only
where appropriate, hedge its foreign currency
transaction exposure. These transaction
exposures arise mainly from foreign currency
receipts and payments for goods and services,
and from the remittance of foreign currency
dividends and loans. The local business units
enter into forward foreign exchange contracts
with the GTC to manage these exposures
where practical and allowed by local
regulations. The GTC matches the Group
exposures, and hedges the net position where
possible, using spot and forward foreign
currency exchange contracts.
Market price risk
The Group is not exposed to equity securities
price risk. Due to the nature of its business the
Group is exposed to commodity price risk
related to the production or packaging of
finished goods such as oil-related and a diverse
range of other raw materials. This risk is,
however, managed primarily through medium-
Business review 2009 continued
Reckitt Benckiser 200910
KEY PERFORMANCE INDICATORS
The Board and the Executive Committee have identified a number of Key Performance Indicators (KPIs) that are most relevant to the Company and are
used to measure performance.
KPI 2009 2008 Comments
at constant exchange
Powerbrands 70% 70% Measures the growth and importance of the
% of net revenue from top 17 brands Company’s flagship brands
Gross margin % 60.2% 59.3% Measures the resources available for reinvestment
Gross profit as % of net revenue or profit growth
Media investment 11.1% 12.4% Measures the rate of reinvestment in the
Media investment as % of net revenue Company’s brands
Operating margin %* 24.4% 23.4% Measures the profitability of the Company
Operating profit as % of net revenue
EPS (fully diluted)* 194.7p 157.8p Measures the increase in profit per share of the Company
% change in EPS (fully diluted)* +23% +28%
Net cash flow £m £1,803 £1,177 Measures how the Company converts its profits into cash
See page 29 +53% +37%
Net working capital ratio -£1,257 -£1,097 Measures the ability of the Company to finance
(defined as inventories, short-term receivables and -16.2% -16.7% its expansion and release cash from working capital
short-term liabilities excluding borrowings and provisions)
As % of net revenue
* Adjusted to exclude the impact of exceptional items
Reckitt Benckiser 2009 11
Board of Directors and Executive Committee
warehousing and logistics. Also responsible
for management of Squeeze and X-trim gross
margin enhancement programmes. Amedeo
previously worked for Pirelli Tyres in multiple
Supply assignments.
Rob de Groot (43, Dutch)
Executive Vice President, North America &
Australia. Joined in 1988. After international
roles in marketing and sales became General
Manager The Netherlands, then SVP, Regional
Director, Eastern Europe and appointed Global
Category Officer, Surface and Dish in 2005.
Appointed EVP North America & Australia
in 2008.
Gareth Hill (43, South African)
Senior Vice President, Information
Services. Joined in October 2006. Previously
Information Systems Director at Arcadia Group
Ltd.PriortoArcadia,GarethwasatIBMUKLtd,
Rex Trueform Clothing Ltd in South Africa
and Arthur Andersen. He is a qualified
chartered accountant.
Rakesh Kapoor (51, Indian)
Executive Vice President, Category
Development. Joined in 1987 serving in
various regional and central marketing roles. In
2001 became SVP, Regional Director, Northern
Europe and was appointed EVP Category
Development in 2006. Rakesh is responsible
for global category management, R&D, media,
market research and strategic alliances.
Simon Nash (48, British)
Senior Vice President, Human Resources.
Simon Nash joined RB in July 2009 from
Novartis Consumer Health, where he was
Global Head of Human Resources, based in
Switzerland. He was with Novartis for nearly
ten years and initially led organisation and
leadership development for the group before
taking on the HR leadership role for the
consumer health division. Simon started his
international career with P&G in Detergent
Manufacturing, before moving into HR with
Mars Confectionery in Slough. He moved
to New York in 1993 with Kraft Foods
International and then on to Chicago as
HR Head of the office products subsidiary
of Fortune Brands Inc.
* Member of the Audit Committee
‡ Member of the Remuneration Committee
# Member of the Nomination Committee
André Lacroix (50, French) *
Was appointed a Non-Executive Director in
October 2008. He is Group Chief Executive
of Inchcape plc and Chairman of Good
Restaurants AG. He was previously Chairman
and Chief Executive Officer of Euro Disney, and
has also held positions at Burger King (Diageo),
Colgate, PepsiCo and Ernst & Young LLP.
Judith Sprieser (56, American) ‡#
Was appointed a Non-Executive Director
in August 2003 and has been Chair of the
Remuneration Committee since June 2004.
She was previously Chief Executive Officer
of Transora, Inc., an e-commerce software
and service company and Executive Vice
President (formerly Chief Financial Officer)
of Sara Lee Corporation. She is a Director of
AllstateInsuranceCompany,USGCorporation,
InterContinental Exchange, Inc., Royal Ahold NV
and Adecco SA.
Warren Tucker (47, British) *
Was appointed a Non-Executive Director in
February 2010. He has been Chief Financial
Officer of Cobham plc since he joined in 2003.
He is a chartered accountant and previously
held senior finance positions at Cable and
Wireless plc and British Airways plc.
EXECUTIVE COMMITTEE
Bart Becht (53, Dutch)
Chief Executive Officer. Joined in 1988
andwasGeneralManagerinCanada,UK,
France and Italy before becoming Chief
Executive of Benckiser Detergents, then
Benckiser N.V. Appointed Chief Executive
Officer of Reckitt Benckiser in 1999. Bart is
Chairman of the Executive Committee.
Freddy Caspers (48, German)
Executive Vice President, Developing
Markets. Joined in September 1997 as EVP
for Eastern Europe. Previously in PepsiCo and
Johnson & Johnson in various roles in Europe,
US,EasternEuropeandTurkey.Freddyis
responsible for Asia Pacific, Latin America and
Africa Middle East.
Colin Day (54, British)
Chief Financial Officer. Joined in September
2000 from Aegis Group plc where he was
Group Finance Director. Previously with
Kodak, British Gas, De La Rue Group plc and
ABB Group. Colin is responsible for financial
controls and reporting, treasury, tax, corporate
development, legal affairs and internal audit.
Amedeo Fasano (48, Italian)
Executive Vice President, Supply.
Amedeo Fasano joined the Company in 1997
as Supply Director Italy. After the merger
with Reckitt & Colman he was appointed
Manufacturing Director for Central, South
Western and Southern Europe Regions. In
2002 he became Regional Supply Director
North America and in 2003 SVP Supply NA
and ANZ (Australia and New Zealand). In 2007
Amedeo took over the role as SVP Supply,
Developing Markets. In March 2009 Amedeo
was appointed as EVP Supply. Amedeo has
responsibility for the global supply chain
including procurement, manufacturing,
THE BOARD OF DIRECTORS
Bart Becht (53, Dutch) #
Joined the Board in 1999 on his appointment
as Chief Executive Officer of the Company.
He was appointed Chief Executive of
Benckiser Detergents, subsequently Benckiser
N.V., in 1995 and Chairman of Benckiser’s
Management Board from May 1999. He holds
no external directorships.
Adrian Bellamy (68, British) ‡ #
Was appointed a Non-Executive Director of the
Company in 1999 and became Non-Executive
Chairman in May 2003. He is a Director of The
Gap Inc and Williams-Sonoma, Inc. He was
an Executive Chairman and a director of The
Body Shop International plc until March 2008
and was formerly chairman and a director of
Gucci Group NV and a director of The Robert
Mondavi Corporation.
Richard Cousins (50, British) ‡
Was appointed a Non-Executive Director of
the Company in October 2009. He is Chief
Executive Officer of Compass Group PLC, the
world’s largest catering company. He was until
2006 Chief Executive Officer of BPB plc, having
held a number of positions with that company
since 1990. He is a former non-executive
director of P&O plc and HBOS plc.
Colin Day (54, British)
Joined Reckitt Benckiser in September 2000
from Aegis Group plc where he was Group
Finance Director from 1995. He was formerly
a Non-Executive Director of Vero plc, the Bell
Group plc, easyJet plc and Imperial Tobacco plc.
He is a Non-Executive Director of WPP Group plc
and Cadbury plc.
Dr Peter Harf (63, German) #
Joined the Board as a Non-Executive Director in
1999 and is the Deputy Chairman. He served
as Chairman of the Remuneration Committee
until June 2004. He is Chairman of Coty Inc.
and Anheuser Busch Inbev and was until May
2007 a Director of the Brunswick Corporation.
He is Chief Executive Officer of Joh. A.
Benckiser SE.
Kenneth Hydon (65, British)* #
Was appointed a Non-Executive Director in
December 2003 and Chairman of the Audit
Committee in November 2006. He is a Fellow
of the Chartered Institute of Management
Accountants, the Association of Chartered
Certified Accountants and the Association
of Corporate Treasurers. He was the Senior
Independent Non-Executive Director between
February 2005 and November 2006. He retired
as Financial Director of Vodafone Group plc
in July 2005 and is currently a Non-Executive
Director of Tesco plc, Pearson plc and the
Royal Berkshire NHS Foundation Trust.
Graham Mackay (60, British/South African) ‡
Was appointed a Non-Executive Director in
February 2005 and the Senior Non-Executive
Director in November 2006. He is the current
Chief Executive of SABMiller plc. He joined the
then South African Breweries Limited in 1978
and has held a number of senior positions
within that group. He joined the Board of
Philip Morris International Inc in October 2008.
Reckitt Benckiser 200912
Repo of the Directors
or the transfer of securities in the Company
except, in the case of transfers of securities:
• Thatcertainrestrictionsmayfromtimeto
time be imposed by laws and regulations (for
example, insider trading laws); and
• PursuanttotheListingRulesofthe
Financial Services Authority whereby certain
employees of the Company require the
approval of the Company to deal in the
Company’s ordinary shares.
No person holds securities in the Company
carrying special voting rights with regard to
control of the Company. The Company is not
aware of any agreements between holders of
securities that may result in restrictions on the
transfer of securities or on voting rights.
The Directors were granted authority at the
last Annual General Meeting (AGM) held in
2009 to allot shares up to a nominal amount
of £23,662,000. That authority will apply
until the conclusion of this year’s AGM. At
this year’s AGM, on 6 May 2010, shareholders
will be asked to grant an authority to make
such allotments up to a nominal amount
representing approximately one third of the
Company’s issued share capital as at the latest
practicable date prior to the publication of
the Notice of AGM. In line with guidance
issued by the Association of British Insurers,
shareholders will also be asked to grant an
authority to allot shares in connection with
a rights issue in favour of shareholders up to
an aggregate nominal amount representing
approximately two-thirds of the issued ordinary
share capital (excluding treasury shares) of
the Company as at the latest practicable date
prior to publication of the Notice of AGM. The
authorities sought would, if granted, expire at
the earlier of 30 June 2011 or at the conclusion
of the AGM of the Company held in 2011.
A special resolution will also be proposed to
renew the Directors’ power to make non-pre-
emptive issues for cash up to a nominal amount
representing less than 5% of the Company’s
issued share capital as at the latest practicable
date prior to the publication of the Notice
of AGM.
In accordance with the Company’s decision
made in 2009, a buy back programme was
not pursued during the year. The buy back
programme continues to be subject to regular
review and accordingly a resolution seeking to
renew the authority to make market purchases
will be put to shareholders at this year’s AGM
so that the Directors retain the flexibility to
reinstate the share buy back programme should
they so decide. This authority will be limited to
a maximum of 72,000,000 ordinary shares and
sets the minimum and maximum prices which
may be paid.
Directors
Information regarding the Directors of the
Company who were serving on 31 December
2009, and those serving at the date of
this report is set out on page 11. Further
biographical details of all Directors are available
from the Company’s website.
During the year there were the following
changes to the Board of Directors. David Tyler
Acquisitions and disposals
There have been no material acquisitions or
disposals during the year.
Employees
During 2009, the Group employed an average
of 24,900 (2008: 24,300) people worldwide,
of whom 2,500 (2008: 2,400) were employed
intheUK.TheGroupiscommittedtothe
principle of equal opportunity in employment;
no applicant or employee receives less
favourable treatment on the grounds of
nationality, age, gender, religion or disability.
The Group recognises its responsibilities to
disabled persons and endeavours to assist
them to make their full contribution at work.
Where employees become disabled, every
practical effort is made to allow them to
continue in their jobs or to provide retraining
in suitable alternative work.
It is essential to the continued improvement
in efficiency and productivity throughout the
Group that each employee understands the
Company’s strategies, policies and procedures.
Open and regular communication with
employees at all levels is an essential part of the
management process. A continuing programme
of training and development reinforces the
Group’s commitment to employee involvement.
Regular departmental meetings are held
where opinions of employees are sought
on a variety of issues. The Group operates
multi-dimensional internal communications
programmes which include the provision of a
Group Intranet and the publication of regular
Company newsletters.
Company incentive schemes reinforce
financial and economic factors affecting the
performance of the business. All employees
have 3-5 performance objectives which are
directly linked to their job and its role in the
overall performance of the Group. In addition,
presentations are given to employees around
the Group on publication of the Group’s
financial results.
The Board encourages employees to become
shareholders and to participate in the Group’s
employee share ownership schemes, should
they so wish. Sharesave schemes across the
world give employees the opportunity to
acquire shares in the Company by means of
regular savings.
Share capital
As at 31 December 2009, the Company’s
issued share capital consisted of 719,926,670
Ordinary shares of 10p and 2,441,842 Ordinary
shares held in treasury. Details of changes
to the ordinary shares issued, shares held in
Treasury, and of options and awards granted
during the year are set out in note 21 to
the accounts.
The rights and obligations attaching to the
Company’s ordinary shares are set out in the
Company’s Articles of Association, copies of
which can be obtained from Companies House in
theUKorbywritingtotheCompanySecretary.
There are no restrictions on the voting rights
attaching to the Company’s ordinary shares
The Directors submit their third Annual
Report to the members of the Company,
with the audited financial statements for
the year ended 31 December 2009.
Review of the activities and development
of the Group’s business
The principal activities continue to be the
manufacture and sale of household and health
care products.
Audited results for the period are set out
on pages 26 and 27. The performance of
the business is described in the Chairman’s
Statement on page 1, the Chief Executive’s
Statement on pages 2 to 3 and the Business
Review on pages 4 to 10. Within the
Business Review, which appears on pages 4
to 10, principal risk factors are given under
‘RelationshipsandPrincipalRisks’onpages
6 and 7, details of the key performance
indicators (“KPIs”) are given on page 10 and
information on the likely future developments
oftheCompanyunder‘CompanyProspects’on
page 9. Information regarding environmental
matters, the Company’s employees and
social and community issues are given on
page 7. Information about persons with
whom the Company has contractual or other
arrangements which are essential to the
business of the Company are given on page 6.
The Company’s financial risk management
objectives and policies are set out on pages 6 to
7 of the Business Review and note 24 on pages
54 to 58.
The information referred to above fulfils the
requirements of the business review provisions
ofs.417oftheCompaniesAct2006(‘theAct’)
and is incorporated by reference into, and
shall be deemed to form part of, this report
together with the other information referred to
in this report. This Report of the Directors has
been drawn up and presented in accordance
with, and in reliance upon, applicable English
company law and the liabilities of the Directors
in connection with this report shall be subject
to the limitations and restrictions provided by
such law.
In July 2009, the Directors resolved to pay
an interim dividend of 43p per ordinary
share (2008: 32p). The dividend was paid
on 28 September 2009. The Directors are
recommending a final dividend for the year
of 57p per share (2008: 48p), which, together
with the interim dividend, makes a total for
the year of 100p per share (2008: 80p).
The final dividend, if approved by the
shareholders, will be paid on 27 May 2010 to
ordinary shareholders on the register at the
close of business on 26 February 2010.
In the view of the Directors, the Group’s likely
future development will continue to centre
on the main product categories in which it
now operates.
Research and development
The Group continues to carry out research
and development in the search for new and
improved products in all its categories and for
increased manufacturing efficiencies. Direct
expenditure on R&D in 2009 amounted to
£126m (2008: £109m).
Reckitt Benckiser 2009 13
Non-Executive Directors devote sufficient time
to the Company.
The Board carried out a structured debate to
evaluate its own performance in 2009.
Graham Mackay, as the Senior Independent
Non-Executive Director, conducted an
evaluation of the Chairman’s performance in
conjunction with his Non-Executive Director
colleagues with input from both Executive
Directors. The Nomination Committee has
primary responsibility for reviewing the
performance of individual Directors and in
addition to this review process, the Chairman
carried out an evaluation of the performance
of individual Directors by face-to-face,
one-on-one interviews. The Board is of the
view that it is best placed to carry out such
evaluations, without the need to employ
the services of an outside consultancy, and
that this is an appropriate and cost-effective
procedure. The performance of the CEO, and
of other members of the Executive Committee,
is regularly reviewed by the Remuneration
Committee of the Board.
The Executive Committee presents an annual
strategic review and the Annual Plan to the Board
for its approval. Actual performance against
the Plan is presented to the Board at each of its
regular meetings and any changes to forecasts as
a result of current performance are reviewed.
All members of the Board receive timely reports
on items arising at meetings of the Board to
enable them to give due consideration to such
items in advance of the meetings.
Non-Executive Directors receive appropriate
briefings on the Company and its operations
around the world when they are appointed
to the Board. They are encouraged to visit the
Company’s offices and factories, whenever the
opportunity presents itself, where they can be
briefed on the local business operations. The
Board endeavours to hold one meeting each
year at one of the operating units.
Full, formal and tailored induction processes
are put in place on appointment to the Board
which retain flexibility to allow the new Director
to have input to the induction process so that
areas of particular interest to that Director can
be accommodated.
All the Directors have access to the Company
Secretary, who is responsible for ensuring that
Board procedures are followed and that the
Company complies with all applicable rules,
regulations and obligations governing the
Company’s operations. A procedure exists for
the Directors to take independent professional
advice, if necessary, in furtherance of their
duties at the Company’s expense.
The members of the Executive Committee are
appointed to the Committee by the CEO, who
leads the Committee.
The Executive Committee manages the day-
to-day operations of the Company. Individual
Executive Committee members hold global
responsibility for specific operating functions
including category development, supply,
finance, human resources and information
services. The three Area Executive Vice
The Board comprises eight Non-Executive
Directors including Adrian Bellamy, the
Chairman, who has the responsibility for
managing the Board, and two Executive
Directors, Bart Becht, the Chief Executive
Officer (CEO), and Colin Day, the Chief
Financial Officer (CFO). The Company has
adopted a Board structure which is similar
to that of its key international competitor
companies, the majority of which are based
intheUSA.TheBoardapprovesstrategy,
carries out an advisory and supervisory role
and accepts ultimate responsibility for the
conduct of the Company’s business. The
CEO, together with the other members of his
Executive Committee, provides the day-to-day
management of the Company.
The Board has identified Graham Mackay as the
Senior Independent Non-Executive Director in
accordance with provision A.3.3 of the Code.
The majority of Non-Executive Directors are
independent, as recommended by the Code.
Two of the Non-Executive Directors are not
considered to be independent for all purposes:
Adrian Bellamy, as Chairman of the Board,
and because he has served as a Director for
more than nine years, and Peter Harf, Deputy
Chairman, because of the shareholding he
represents, and because he has served as a
Director for more than nine years.
Mr Day is a Non-Executive Director of WPP
Group plc and Cadbury plc. This is non-
compliant with Code Provision A.4.5 which
requires that no full time Executive Director
should hold more than one non-executive
directorship in a FTSE 100 company. Both
WPP Group plc and Cadbury plc are FTSE 100
companies. This exception was made, subject
to certain specific conditions, when Mr Day
accepted the appointment to the board of
Cadbury plc in 2009, and continues to apply
because the Board believes that experience
as the Chairman of the Cadbury plc audit
committee is useful in Mr Day’s role as CFO of
Reckitt Benckiser.
The Articles of Association require that every
Director will seek re-election to the Board at
least every three years, in line with provision
A.7.1 of the Code.
The Board meets a minimum of five times
a year and will meet further as necessary to
consider specific matters which it has reserved
to itself for decision, such as significant
acquisition or disposal proposals or major
financing propositions. In 2009, there were five
regular meetings. A statement of the Directors’
attendance at these Board meetings, and at
meetings of Board Committees on which they
served during the year, is shown in Table 2
at the end of this report. In compliance with
Code provision A.1.3. the Chairman holds a
session with other Non-Executive Directors at
the conclusion of each formal Board meeting
without the Executive Directors present.
During the year the Board has carried out a
formal evaluation of its performance and that
of its Committees and individual Directors in
accordance with Code provision A.6.1. The
performance review of the Board undertaken in
2009 concluded that the Chairman and other
resigned on 30 September. Richard Cousins and
Warren Tucker were appointed as independent
Non-Executive Directors on 1 October 2009 and
24 February 2010 respectively. As these were
appointments made subsequent to the date of
the 2009 AGM, they will offer themselves for
election at this year’s AGM.
Adrian Bellamy and Peter Harf have served on
the Board for more than nine years and under
the June 2008 Combined Code on Corporate
Governance (the “Code”), are therefore
obliged to offer themselves for re-election
on an annual basis. In addition, Directors
required to offer themselves for re-election in
accordance with the Articles of Association at
this year’s AGM are Colin Day, Kenneth Hydon
and Judith Sprieser, who being eligible, offer
themselves for re-election.
A statement of Directors’ interests in the share
capital of the Company is shown in Table 1 at
the end of this report.
Details of Directors’ options to subscribe for
shares in the Company are included in Table 2
on page 23 in the audited part of the Directors’
Remuneration Report.
Details of the Directors’ service agreements are
given on page 24.
Directors’ Insurance and Indemnities
On 28 July 2009 the Company executed a
deed poll of indemnity for the benefit of each
individual who is at any time on, or after
28 July 2009, an officer of the Company
and/or any company within the Reckitt
Benckiser Group of companies in respect of
costs of defending claims against them and
third party liabilities.
In addition, the Directors have the benefit
of the indemnity provision contained in the
Company’s existing Articles and such provision
will also be included in the Company’s new
Articles(the‘newArticles’).Directors’and
Officers’ liability insurance cover has been
maintained throughout the year at the expense
of the Company.
Corporate governance statement
The Company recognises the importance of
high standards of corporate governance.
The governance principles applying to
UKcompanieslistedontheLondonStock
Exchange are contained in the Code, as
adopted by the Financial Reporting Council
most recently revised in June 2008.
Copies of the Code may be obtained from
www.frc.org.uk/corporate. The Company
understands and supports the main principles
set out in the Code. The ways in which the
Company applies these principles, as contained
in section 1 of the Code and the few provisions
with which the Company does not consider
that it is appropriate to comply, are set out
in the following sections: Committees of
the Board, Audit Committee, Remuneration
Committee, Nomination Committee, Internal
Control, Group policy in respect of non-
audit services provided by external auditors,
Environmental Social and Governance (ESG)
matters and reputational risk and relations
with shareholders.
Reckitt Benckiser 200914
Repo of the Directors continued
authority given by shareholders at the AGM
in May 2008 to the Directors to authorise
conflicts of interest, the Nomination Committee
has under its Terms of Reference the primary
responsibility for considering Directors’ conflicts
of interest. The Committee will consider
Directors’ other directorships and appointments
at least annually as part of the overall corporate
governance evaluation process and, more
frequently as circumstances may require. The
Committee will recommend to the full Board
whether a conflict or potential conflict should
be approved. Approval is required to be given
by the full Board and may not be delegated to
aBoardcommittee.Unders.175,allDirectors
are under a duty to consider their positions fully
at all times. They must advise the Chairman
immediately if they believe a potential conflict
may arise so that the Nomination Committee
may consider the position and the appropriate
course of action. This may require a Director
to absent himself from Board discussions or
be precluded from receiving Board papers and
may, in extreme circumstances, require his
resignation from the Board.
Internal control
The Board acknowledges that it has overall
responsibility for the Group’s system of internal
control and for reviewing its effectiveness, and
has established a control structure designed to
manage the achievement of business objectives.
The system complies with the Turnbull guidance
on internal control and provides reasonable,
but not absolute, assurance against material
misstatement or loss.
Throughout the year the Group has had in
place an ongoing process for evaluating the
system of internal control and identifying and
managing risk, including in relation to the
financial reporting process and the preparation
of consolidated accounts. The basis for the
preparation of consolidated accounts is as set
out on page 30 under Accounting Policies.
The Group’s control environment is supported
by a Code of Business Conduct, which
employees receive training on annually, and
a range of policies on corporate responsibility.
Other key elements within the internal control
structure are summarised as follows:
• TheBoardandmanagement–the
Board continues to approve strategy and
performs an advisory and supervisory
role with the day-to-day management of
the Company being undertaken by the
Executive Committee. The CEO and other
Executive Committee members have clearly
communicated the Group vision, strategy,
operating constitutions, values and business
objectives across the Group.
• Organisationalstructure–theGroup
operates four Area management
organisations; Europe, North America/
Australia, Developing Markets and
Pharmaceuticals, and centralised functions
covering category management, supply,
sales, finance and legal, information services
and human resources. Throughout the
organisation, the achievement of business
objectives and the establishment of
appropriate risk management and internal
financial reporting and governance matters. In
addition to its routine agenda, the Committee
received additional presentations from senior
management covering Information Services,
Internal Audit, Group Tax and Group Treasury
functions. The Committee took advantage of a
Board meeting held overseas to meet with, and
receive presentations from, the local financial
management to better understand how Group
policies are embedded in operations. The
CFO and other senior management attend
Audit Committee meetings by invitation. The
Group’s external auditors and the Group’s Vice
President, Internal Audit attend meetings, have
regular private meetings with the Committee
and have direct access to the Committee.
Remuneration Committee
The Remuneration Committee, chaired by
Judith Sprieser, meets regularly to review
remuneration policy for Directors and
senior executives. The Committee also has
responsibility for making decisions on the
Chairman’s remuneration. The Committee
comprises four members, of whom three,
Judith Sprieser, Graham Mackay and Richard
Cousins, are considered independent as
defined by the standards of the Code. Adrian
Bellamy is not considered independent as he
has served on the Board for more than nine
years. The Board considers that Mr Bellamy
should remain a member of the Remuneration
Committee in light of his considerable
experience and much valued contribution to
theworkingoftheCommittee.Underthe
Code, it is acceptable for the Chairman to sit
on the Remuneration Committee.
Nomination Committee
The Nomination Committee is responsible
for nominating candidates for the approval
of the Board to fill vacancies on the Board
of Directors.
As and when vacancies arise on the Board, the
services of an external search consultancy are
employed to seek candidates for appointment.
The Nomination Committee reviews each
candidate as presented by the consultancy
and all members of the Committee are
involved in the interview process before
making their recommendations to the full
Board. All members of the Board are given
the opportunity to meet the recommended
candidates prior to their appointment.
The Committee comprises the Chairman,
who also chairs the Committee, the CEO, the
Deputy Chairman and the Chairs of both the
Audit and Remuneration Committees. The
Board believes this membership is appropriate
to the Group despite this not being in
compliance with Code provision A.4.1, which
requires a majority of the members to be
independent. Adrian Bellamy is not considered
independent as he has served on the Board
for more than nine years, Peter Harf is not
considered independent because of the
shareholding he represents and because he has
served on the Board for more than nine years,
and Bart Becht is not considered independent
because he is the CEO.
Following the implementation of s.175 of
the Act on 1 October 2008 and, further to
Presidents covering Europe, North America/
Australia and Developing Markets are also
members of the Committee. At present,
the CEO is fulfilling the role of Area EVP for
Europe. There is no EVP for Pharmaceuticals
as management reports directly to the CEO
and CFO.
The Company has procedures in place to deal
with conflicts of interest as disclosed within
the section on the role of the Nomination
Committee below and these procedures have
operated effectively.
Committees of the Board
The Company has established three
Committees of the Board, (Audit,
Remuneration, Nomination) the terms of
reference of which are available on the
Company’s website and upon request.
Audit Committee
The Audit Committee comprises three
Independent Non-Executive Directors: Kenneth
Hydon, Chairman since 16 November 2006,
André Lacroix and Warren Tucker. Kenneth
Hydon, FCMA, FCCA, FCT, was Financial
Director of Vodafone Group plc until July 2005
and Warren Tucker is Chief Financial Officer of
Cobham plc. They both therefore have recent
and relevant financial experience.
The Committee monitors the adequacy
and effectiveness of the internal controls,
compliance procedures and the Group’s
overall risk framework (including the Group’s
whistleblowing arrangements). It considers
reports on Internal Audit’s activities, significant
legal claims and regulatory issues. It reviews
the interim and full year financial statements
before submission to the full Board and makes
recommendations to the Board regarding
the auditors and their terms of appointment.
It reviews and monitors the external auditors’
independence and services supplied and
the objectivity and the effectiveness of the
audit process. PricewaterhouseCoopers LLP
(and their predecessor firms) has been the
Group’s auditors since the merger of Reckitt
& Colman plc and Benckiser NV in 1999, and
the Company’s auditors since its formation in
2007. In the opinion of the Audit Committee,
the relationship with the auditors works well
and the Committee remains satisfied with
their independence and effectiveness. It has,
accordingly, not considered it necessary to
require the firm to tender for the audit work to
date. It is a requirement that the audit partner
responsible for the Group and subsidiary audits
is rotated every five years and the current lead
audit partner has been in place since 2008.
There are no contractual obligations restricting
the Company’s choice of external auditor.
The Committee met three times in 2009.
For a period following the resignation of
David Tyler in September, the constitution
of the Committee was non-compliant with
provision C.3.1 of the Code as it had only
two independent Non-Executive Directors as
members. It became compliant again upon the
appointment of Warren Tucker as a Committee
member in February 2010. The Committee
received regular technical updates from the
external auditors to keep abreast of changes in
Reckitt Benckiser 2009 15
Key areas of ESG internal control and
performance, including ESG disclosures, are
independently reviewed and verified by both
internal and external organisations, including
Internal Audit, and their findings regularly
reported to senior management, the CEO, the
Audit Committee and the Board.
The Board has identified and assessed the
range of ESG and associated reputational risks
and concluded that there are limited material
risks to the Company’s long- and short-term
value arising from ESG matters, other than
potential risks common to similarly sized
businesses operating in its industrial sectors and
with similarly well-known brands.
The issues of potential material ESG and
reputational risk identified by the Board include:
• Industrysectorandproductsafety/
regulatory risks: The household products
and health & personal care sectors have a
number of potential product and ingredient
risks, relating to ongoing developments in
ingredient regulation and concerns voiced
over the potential long-term effects of
household chemicals and OTC (over-the-
counter) drug ingredients on human health
and the environment. The Company has
comprehensive management processes
in place – at Group, Area, Regional and
National level – to ensure that its products
are both suitable and safe for their intended
use, in addition to meeting applicable
regulatory requirements. Additionally,
regulatory compliance and product safety
issues are proactively addressed by both
national and regional industry associations
of which the Company is an active member,
including those in Europe and North
America/Australia. For example, the HERA
(Human and Environmental Risk Assessment)
project, established in 1999, is a voluntary
industry programme of publicly available risk
assessments on ingredients of household
cleaning products (www.heraproject.com).
As part of the Company’s commitment
to make continual improvements in the
environmental sustainability of its products
and processes, it continues to progress
ingredient removal programmes, above
and beyond regulatory requirements, to
systematically remove specific ingredients
from Company product formulae and
packaging/device component specifications
globally. For example, recent programmes
include: removal of nitro and polycyclic
(artificial) musks, and Geranyl Nitrile,
from fragrances; removal of PDCB
(paradichlorobenzene) from toilet blocks;
removal of NPEs (Nonyl Phenol Ethoxylates),
APEs (Alkyl Phenol Ethoxylates) and
monoethylene series glycol ethers from
use in household cleaning products;
removal of brominated flame retardants
from devices; and, the replacement of
formaldehyde preservative.
REACh (Registration, Evaluation,
Authorisation and Restriction of Chemicals)
is the framework for regulation and
management of chemicals in Europe which
wasformallyadoptedbytheEuropeanUnion
Committee and the CFO keep under review the
independence and objectivity of the external
auditors. The Committee reviews the nature
and level of non-audit services undertaken by
the external auditors each year to satisfy itself
that there is no effect on their independence.
The Board recognises that in certain
circumstances the nature of the advice required
may make it more timely and cost-effective
to appoint the external auditors who already
have a good understanding of the Group. Any
significant information technology consultancy
projects are put out to tender and the external
auditors are excluded from this tender process.
The external auditors report to the Audit
Committee on the actions they take to comply
with professional and regulatory requirements
and with best practice designed to ensure
their independence from the Group, including
periodic rotation of the lead audit engagement
partner. Details of non-audit services are set out
in note 4 on page 37.
Environmental, social and governance
(ESG) matters and reputational risk
In line with the requirements of the Act,
a rationale has been developed and a review
undertaken to determine what information
to include in this Report as necessary for
an understanding of the development,
performance and position of the business
of the Company relating to environmental
matters (including the impact of the Company’s
business on the environment), its employees,
and social & community issues. Much of the
information required is provided here, and with
regard to Employees and Internal Control on
pages 12 and 14 of the Report of the Directors,
with an overall summary and other information
provided in the Business Review on pages 6
and 7.
The Board regularly considers and takes
account of the significance of ESG matters
and their potential risks to the business of
the Company, including risks relating to
environmental impacts, employees, society and
communities, as well as reputational risks and
the opportunities to enhance value that may
arise from an appropriate response.
The Board undertakes a formal review of
ESG matters at least annually, which includes
providing oversight to ensure that the Company
has in place effective policies, systems and
procedures for managing ESG matters and
mitigating significant ESG risks. Additionally,
as part of its risk assessment procedures,
the Board’s Audit Committee undertakes
regular reviews of the arrangements for, and
effectiveness of, risk management and internal
audit, including the full range of risks facing the
Company, which include risks relating to ESG
matters, reputational risks and risks relating
to employees.
The CEO is the Board member with specific
responsibility for ESG matters. As part of
established management processes, which
include performance management systems and
appropriate remuneration incentives, senior
management reports directly to the CEO on
ESG matters on a regular basis.
control are embedded in the responsibilities
of line executives.
• Budgeting–thereisanannualplanning
process whereby detailed operating budgets
for the following financial year are prepared
and are reviewed by the Board. Long-term
business plans are also prepared and are
reviewed by the Board on an annual basis.
• Managementreporting–thereisa
comprehensive system of management
reporting. The financial performance of
operating units and the Group as a whole
is monitored against budget on a monthly
basis and is updated by periodic forecasts.
Area and functional executives also
perform regular business reviews with their
management teams, which incorporate an
assessment of key risks and opportunities.
• Riskmanagement–aspartoftheongoing
risk and control process, operating units
review and evaluate risks to the achievement
of business objectives and the Board
reviews those significant risks which might
impact on the achievement of corporate
objectives. Mitigating controls, together
with any necessary actions, are identified
and implemented. A summary of the most
significant risks faced by the Group is
included in the Business Review on pages
6 to 7.
• Operatingunitcontrols–eachoperating
unit maintains internal controls, which are
appropriate to its own business environment.
Such controls must be in accordance with
Group policies and include management
authorisation processes, to ensure that all
commitments on behalf of the Group are
entered into after appropriate approval. In
particular, there is a structured process for
the appraisal and authorisation of all material
capital projects.
• Monitoring–theeffectivenessofinternal
controls is monitored regularly through
a combination of management review,
self-assessment and internal and external
audit. The results of external and internal
audit reviews are reported to and considered
by the Audit Committee, and actions are
taken to address significant control matters
identified. The Audit Committee also
approves annual internal audit plans and
is responsible for performing the ongoing
review of internal control on behalf of
the Board.
The Board confirms that reviews of the
appropriateness and effectiveness of the system
of internal control throughout the financial year
and up to the date of approval of the Annual
Report and Accounts have been satisfactorily
completed in compliance with provision C.2.1
of the Code. In particular major risks have been
identified and ongoing monitoring procedures
are in place. The Company is compliant with
DTR 7.2.6 and the information is included on
pages 12 and 17.
Group policy in respect of non-audit
services provided by external auditors
The Group has a formal policy in place to
safeguard auditor independence. The Audit
Reckitt Benckiser 200916
Repo of the Directors continued
the International Accounting Standards Board
(IASB).UndercompanylawtheDirectorsmust
not approve the financial statements unless
they are satisfied that they give a true and
fair view of the state of affairs of the Group
and the Company and of the profit or loss
of the Group for that period. In preparing
these financial statements, the Directors are
required to:
• Selectsuitableaccountingpoliciesandthen
apply them consistently;
• Makejudgementsandaccountingestimates
that are reasonable and prudent;
• StatewhetherIFRSsasadoptedbythe
EuropeanUnionandIFRSsissuedbyIASB
andapplicableUKAccountingStandards
have been followed, subject to any material
departures disclosed and explained in
the Group and parent company financial
statements respectively;
• Preparethenancialstatementsonthe
going concern basis unless it is inappropriate
to presume that the Company will continue
in business.
The Directors are responsible for keeping
adequate accounting records that are
sufficient to show and explain the Company’s
transactions and disclose with reasonable
accuracy at any time the financial position
of the Company and the Group and enable
them to ensure that the financial statements
and the Directors’ Remuneration Report
comply with the Act and, as regards the
Group financial statements, Article 4 of the
IAS Regulation. They are also responsible for
safeguarding the assets of the Company and
the Group and hence for taking reasonable
steps for the prevention and detection of
fraud and other irregularities.
The Directors are responsible for the
maintenance and integrity of the Company’s
website.LegislationintheUnitedKingdom
governing the preparation and dissemination
of financial statements may differ from
legislation in other jurisdictions.
Each of the Directors, whose names and
functions are listed on page 11 confirm that,
to the best of their knowledge:
• TheGroupnancialstatements,whichhave
been prepared in accordance with IFRSs as
adoptedbytheEU,giveatrueandfairview
of the assets, liabilities, financial position and
profit of the Group; and
• TheDirectors’reportincludesafairreview
of the development and performance of
the business and the position of the Group,
together with a description of the principal
risks and uncertainties that it faces.
Going concern
The Group’s business activities, together
with the factors likely to affect its future
development, performance and position are
set out in the Business Review on pages 4 to
10. The financial position of the Group and
Company, its cash flows, liquidity position and
borrowing facilities, as well as the Group’s
objectives, policies and processes for managing
its capital; its financial risk management
Sustainability and corporate responsibility
Information on the Company’s management
of sustainability and corporate responsibility
issues is provided above; in other sections
of this Report of the Directors (for examples
regarding Employees and Internal Control);
in the Business Review on page 7 and, in the
Company’s annual Sustainability Reports,
which provide information on its policies,
programmes, targets and progress in this area.
Relations with shareholders
The Board is committed to effective
communication between the Company and
its shareholders. The Executive Directors, with
the Director, Investor Relations, meet regularly
with institutional shareholders and financial
analysts, in Europe and North America, to
discuss matters relating to the Company’s
business strategy and current performance
issues. The Board receives regular monthly
reports from the CEO which include updates on
the share price development, major buyers and
sellers of shares and investor views, including
analyst reports on the industry and specifically
on the Company. Feedback on presentations
and roadshow meetings with institutional
investors is presented to the Executive Directors
following twice-yearly roadshows in Europe and
North America.
The Chairman is available to discuss governance
and strategy with major shareholders should
such a dialogue be requested. During the year
the Chairman has met with shareholders in
satisfaction of Code Provision D.1.1 and has
reported upon these meetings to the Directors.
The Company believes that it is important
that it makes key executives available, along
with the Senior Independent Non-Executive
Director, if required, to discuss matters of
concern with its shareholders. The Company’s
Annual General Meeting is used as the main
opportunity for the Directors to communicate
with private investors.
Policy on the payment of creditors
It is the Company’s policy to follow the CBI
Prompt Payers’ Code. This policy requires the
Company to agree the terms of payments with
its suppliers, to ensure that those suppliers are
aware of those terms and to abide by those
terms. Copies of the Prompt Payers’ Code are
available from CBI, Centre Point, 103 New
OxfordStreet,LondonWC1A1DU.
Statement of Directors’ responsibilities
The Directors are responsible for preparing
the Annual Report, the Directors’ Remuneration
Report and the financial statements in
accordance with applicable law and regulations.
Company law requires the Directors to prepare
financial statements for each financial year.
UnderthatlawtheDirectorshaveelected
to prepare the Group financial statements
in accordance with International Financial
Reporting Standards (IFRSs) as adopted by
theEuropeanUnion,andtheparentcompany
nancialstatementsinaccordancewithUnited
Kingdom Generally Accepted Accounting
Practice(UnitedKingdomAccounting
Standards and applicable law). In preparing the
Group financial statements, the directors have
also elected to comply with IFRSs, issued by
in December 2006 and entered into force
in 2007.
UnderREACh,aspartofaphased
programme over several years, industry is
required to register most substances that are
manufactured, imported or used in Europe.
The first of these phases, pre-registration,
started on 1 June 2008. For the majority
of substances (i.e. ingredients) used in the
Company’s products the responsibility for
registration will lie with its suppliers, who
manufacture or import the ingredients
used. Reckitt Benckiser is fully compliant
with the provisions of REACh that needed
to be implemented to date and as the first
substance registration deadline of December
2010 approaches the Company continues
to work closely with its suppliers to ensure
that the ingredients used in its products are
registered and that its full compliance with
REACh is maintained. The Company has in
place an internal REACh Task Force to ensure
that all of its products and their ingredients
remain compliant with REACh as it is
implemented over the next several years.
• Supplychainrisks:Mostproduct,component
and raw material supply chains present
a number of potential reputational risks
relating to: labour standards; health,
safety and environmental standards; raw
material sourcing; and the social, ethical and
environmental performance of third party
manufacturers and other suppliers. The
Company’s Global Manufacturing Standard
(GMS) mandates minimum requirements
regarding employment arrangements,
labour standards and health, safety and
environmental management, in line with
international guidelines, for both the
Company and its suppliers. Management
processes and controls in place include
Group, Area and Regional monitoring and
auditing of compliance with the GMS (and
other) requirements, including the external
audit of third party product manufacturers.
• Productqualityrisks:Failuresinproduct
quality controls could potentially lead to
damage to the reputation of, and trust
in, the Company’s brands. The Company
has comprehensive quality management
processes and procedures in place, including
Group, Area, Regional and site-level quality
functions that oversee and monitor product
quality globally.
The Company’s annual Sustainability
Report (available at www.rb.com) provides
further information on its policies, systems
and procedures for managing ESG matters
and any material risks that may arise from
them, including: the extent to which it
complies with those policies, systems and
procedures; Key Performance Indicators (KPIs);
and its sustainability programmes, targets
and progress.
The Board believes that it receives adequate
information and training on ESG matters
and their potential risks and opportunities
to the business of the Company, including
reputational risks.
Reckitt Benckiser 2009 17
objectives; details of its financial instruments
and hedging activities; and its exposure to
credit risk and liquidity risk are described in
the Business Review on pages 4 to 10 and in
note 24.
The Group has considerable financial resources
together with a diverse customer and supplier
base across different geographical areas and
categories. As a consequence, the Directors
believe that the Group and Company are
well placed to manage their business risks
successfully despite the current uncertain
economic outlook.
The Directors have a reasonable expectation
that the Group and Company have adequate
resources to continue in operational existence
for the foreseeable future. Thus they continue
to adopt the going concern basis of accounting
in preparing the annual financial statements.
Audit
The Directors, having made appropriate
enquiries, state that:
a) so far as each Director is aware, there is
no relevant audit information of which the
Company’s auditors are unaware; and
b) each Director has taken all the steps that
he/she ought to have taken as a Director
to make him/herself aware of any relevant
audit information and to establish that
the Company’s auditors are aware of
that information.
Charitable and political donations
Donations to charitable organisations in the
UKamountedto£568,000(2008:£704,000)
of which £472,000 (2008: £439,000) was
donated to Save the Children, the Company’s
nominated global charity. No political donations
were made (2008: £nil).
AGM
The Notice convening the third AGM of the
Company to be held on Thursday, 6 May 2010
at 11.15 am at The London Heathrow Marriott
Hotel,BathRoad,Hayes,MiddlesexUB35AN
is contained in a separate document
for shareholders.
In accordance with the Shareholder Rights’
Directive(the‘Directive’)whichcameinto
force in August 2009, the Company obtained
shareholder approval at the 2009 AGM to the
calling of meetings, other than Annual General
Meetings,on14days’notice.Untilthecoming
into force of the Directive, the Company was
able to call meetings other than an AGM on
14 clear days’ notice without obtaining such
shareholder approval. In order to preserve this
ability, we will be asking shareholders to renew
their approval by considering Resolution 16 at
the AGM.
Adoption of new Articles of Association
In order to reflect changes to company
lawintheUnitedKingdommadebythe
implementation of the remaining parts of the
Act, which came into force on 1 October 2009,
the Company will be seeking approval from
shareholders to adopt new Articles of
Association(the‘NewArticles’)oftheCompany.
The principal changes introduced in the New
Articles are summarised in the Appendix
on page 6 to the Notice of AGM, Other
amendments, which are of a minor, technical or
clarifying nature (including those which merely
reflect changes made by the Act or conform
the language of the New Articles with that
used in the model articles for public companies
set out in the Companies (Model Articles)
Regulations 2008) have not been noted in
the Appendix to the Notice of AGM. Special
Resolution No 17 to adopt the New Articles will
be proposed at the AGM.
Takeovers Directive
Pursuant to s.992 of the Act, which
implementedtheEUTakeoversDirective,
the Company is required to disclose certain
additional information. The following gives
those disclosures which are not covered
elsewhere in this Annual Report.
The Company’s existing Articles of Association
(the‘Articles’)givetheBoardpowertoappoint
Directors, but also require Directors to submit
themselves for election at the first Annual
General Meeting following their appointment.
UndertheCode,andtheArticles,allDirectors
are required to offer themselves for re-election
every three years.
The Board of Directors is responsible for the
management of the business of the Company
and may exercise all the powers of the Company
subject to the provisions of the Company’s
Articles. The Articles contain specific provisions
and restrictions regarding the Company’s
power to borrow money. Powers relating to the
alteration of share capital are also included in
the Articles and shareholders are asked to renew
such authorities each year at the AGM. A copy
of the existing Articles is available on request
from the Company Secretary.
Unlessexpresslyspeciedtothecontrary
in the Articles, the Company’s Articles may
be amended by a special resolution of the
Company’s shareholders.
The requirements and provisions as specified
above in the Company’s existing Articles will
be reflected in the Company’s new Articles
of Association.
There are a number of agreements that take
effect, alter or terminate upon a change
of control of the Company following a
takeover, such as commercial contracts, bank
agreements, property lease arrangements
and employees’ share plans. None of these
are deemed to be significant in terms of their
potential impact on the business of the Group
as a whole.
There are no significant agreements between
the Company and its Directors or employees
providing for compensation for loss of office
or employment that occurs because of a
takeover bid.
Auditors
The auditors, PricewaterhouseCoopers LLP, have
indicated their willingness to continue in office
and a resolution that they be reappointed will
be proposed at the AGM.
Substantial shareholdings
As at 6 March 2010, the Company had received the following notices of substantial interests
(3% or more) in the total voting rights of the Company:
No of
By order of the Board
Elizabeth Richardson
Company Secretary
Reckitt Benckiser Group plc
103-105 Bath Road
Slough,BerksSL13UH
Company registration number: 6270876
15 March 2010
Reckitt Benckiser 200918
Repo of the Directors continued
Table 1 – Interests in the share capital of the Company
The Directors in office at the end of the year had the following beneficial interests (unless stated otherwise) in the ordinary shares of the Company:
6 March 2010 31 December 2009 31 December 2008
Adrian Bellamy 18,780 18,780 17,385
Bart Becht 3,110,422 3,610,422 1,774,669
Bart Becht – non-beneficial 1,843,821 1,343,821 1,263,821
Richard Cousins 84 84 –
Colin Day 424,682 424,129 364,624
Peter Harf 742,770 742,770 742,341
Notes
1 No person who was a Director (or a member of a Director’s family) on 31 December 2009 had any notifiable share interests in any subsidiary.
2 The Company’s Register of Directors’ Interests (which is open to inspection) contains full details of Directors’ shareholdings and options to subscribe.
Table 2 – Attendance at meetings
In 2009, there were five regular Board meetings. There were three Audit Committee meetings, five Remuneration Committee meetings (including two
dealt with by written resolution) and two Nomination Committee meetings. Written resolutions are required to be signed by all Directors on the Board
or Members on the Committee. Attendance by individual Directors at Board meetings and at meetings of Committees on which they sit is given in the
table below.
Number of meetings attended
Note Board Audit Remuneration Nomination
Adrian Bellamy 5 5 2
Bart Becht 5 2
Richard Cousins (a) 1 2
Graham Mackay 4 5
Judith Sprieser 5 5 2
David Tyler (b) 4 2
Notes
(a) Richard Cousins attended the one Board and two Remuneration Committee meetings held in 2009 following his appointment on 1 October 2009.
(b) David Tyler attended all Board and Audit Committee meetings held prior to his resignation on 30 September 2009.
