Highlights: Q3 and at constant rates unless otherwise stated
· RB base business -1% LFL in Q3, affected by the impact of known issues and a continued challenging market environment. Total Q3 continuing growth +30% benefitting from positive FX impact and the acquisition of Mead Johnson Nutrition (MJN).
· MJN +1% pro-forma LFL in Q3 benefitted from strong market growth in China and some customer stocking in the US.
· RB base business YTD -1% LFL. We are targeting a flat LFL performance* for the RB base business. We are progressing well and continue to target “-2% to flat” for MJN on a pro-forma basis.
· Full integration of MJN and creation of a new operating structure from Q1 2018.
· Creation of two focused, P&L accountable, Business Units (BU's) – RB Health and RB Hygiene Home
Commenting on these results, Rakesh Kapoor, Chief Executive Officer, said:
“Q3 was a soft quarter as we experienced both the tail end of known issues, and the impact of a continuing challenging market environment. Our underlying performance was in line with current market growth of around 2%. MJN had a better quarter, in particular in Greater China. Given these moving parts, we are now targeting flat full year LFL net revenue for the RB base business. MJN is progressing well against our reiterated H2 target of “-2% to flat”.
We have made great progress over the last five years, as we have transformed our Group into one where consumer health now represents more than half of our business. The acquisition of MJN closed earlier than planned and good progress has been made in preliminary integration. Today we effectively have two management teams in a number of our markets – both MJN and the base business. MJN provides us with both critical mass in consumer health and a fantastic opportunity to look at RB not just today, but where we want it to be in ten years time. We are working to create two focused, agile and fully accountable Business Units – RB Health (incorporating MJN) and RB Hygiene Home, effective from Q1 2018. I will lead the new Health business directly and Rob De Groot, who is currently our head of ENA, will become President of the Hygiene Home business, reporting to me.
I am very excited about our medium and long-term prospects. We expect strong growth trends in the broader consumer health category in the medium term, and our new organisational structure will provide us with a platform for growth and outperformance. The two Business Units will together form one RB – a single company devoted to delivering on our mission of creating healthier lives and happier homes – as well as positioning RB to deliver superior shareholder returns for years to come.”