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DELIVERING
FOR A CLEANER,
HEALTHIER
WORLD
Annual Report
and Accounts 2023
01 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Contents
About this report
This report has been
producedtooptimise the
readingexperienceonline.
Our Strategy
Page 08
Financial Performance
Page 41
Sustainability Performance Review
Page 47
STRATEGIC REPORT
02 At a Glance
03 Chair’s Statement
05 Chief Executive Officer’s Statement
07 Market Context
08 Our Strategy
12 Our Business Model
13 Key Performance Indicators
14 Sustainability Performance Dashboard
15 Brand Highlights
19 Spotlight On: People and Culture
22 Spotlight On: Scientific Innovation
25 Spotlight On: Our Supply Chain
28 Market Opportunities: Hygiene
31 Market Opportunities: Health
34 Market Opportunities: Nutrition
37 Our Stakeholders
41 Financial Performance
47 Sustainability Performance Review,
including Non-Financial and Sustainability
Information Statement
55 Risk Management
61 Our Viability Statement
GOVERNANCE
62 Corporate Governance Report
65 Board Leadership and Company Purpose,
including Section 172 Statement
80 Division of Responsibilities
82 Composition, Succession and Evaluation
83 Nomination Committee Report
88 Audit Committee Report
96 Corporate Responsibility,
Sustainability,Ethics and
ComplianceCommittee Report
100 Directors’ Remuneration Report
FINANCIAL STATEMENTS
133 Report of the Directors
137 Statement of Directors’ Responsibilities
138 Independent Auditor’s Report
156 Group Financial Statements
202 Parent Company FinancialStatements,
including Subsidiary Undertakings
OTHER INFORMATION
218 Climate-Related Financial Disclosures
223 Alternative Performance Measures
228 Shareholder Information
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02 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
At a Glance
DELIVERING FOR A CLEANER,
HEALTHIER WORLD
At Reckitt, we protect, heal and
nurture. We do this through our
attractive brand portfolio, which
includes some of the best-known
and most trusted brands in hygiene,
health and nutrition.
Delivering for a cleaner, healthier world
requires strong brands with a global footprint.
Many of our brands have number one or two
market share positions globally or in their
markets. From Dettol, Lysol, Durex, Finish,
Harpic and Vanish to Enfamil, Mucinex, Nurofen,
Strepsils, Nutramigen and Air Wick, consumers
love and rely on our brands to care for their
families, as they have done for over 200 years.
Around 30 million Reckitt products are sold
each day throughout the world, giving us
valuable insight into evolving consumer
behaviours and category trends. We use
this deep understanding to identify unmet
needs and develop solutions to help people
improve their health and hygiene.
Our long-term growth opportunities are rooted
in global megatrends that challenge everyday
health and wellbeing worldwide. We combine
our leading consumer insight and scientific
capabilities to create innovative products that can
address these everyday issues. This helps us reach
into new spaces and geographies, expanding
our presence in high-growth categories.
Our culture is innovative, caring and
entrepreneurial. Our valuesensure we
workcollectively forourconsumers,
employeesandallourstakeholders.
By continuously striving to minimise the
environmental impact of our business
and work towards a fairer society, we
are addressing evolving consumer needs
whilst supporting the planet and the
communities in which we operate.
This is how we create shared success.
Like-for-like
net revenue growth
1
+3.5%
2022: 7.6%
Adjusted operating
margin
1
23.1%
2022: 23.8%
Adjusted total
EPS
1
diluted
323.4p
2022: 341.7p
Full-year
dividend
192.5p
2022: 183.3p
Net revenue
from more
sustainable
products
1
29.6%
2022: 24.4%
IFRS net
revenue growth
+1.1%
2022: 9.2%
IFRS operating
margin
17.3%
2022: 22.5%
IFRS total
EPS diluted
228.7p
2022: 324.7p
Free cash flow
generation
1
£2.3bn
2022: £2.0bn
Absolute reduction
ingreenhousegas
emissions from
operations since 2015
67%
2022: 66%
1. Adjusted and other non-GAAP measures, definitions and
terms are defined on page 223
03 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Chair’s Statement
2023 was another eventful year. There were
challenges, but also encouraging progress
and positive change for our Company.
Like many companies, we experienced continued
macroeconomic headwinds, further disruptions to
our supply chain and the effects of the continuing
war in Ukraine and conflict in the Middle East.
Wealso saw changes in Reckitt’s leadership team,
with appointees to the roles of Chief Executive
Officer (CEO) and Chief Financial Officer (CFO)
Designate, as well as a new Chair to succeed
me following our 2024 Annual General Meeting
(AGM) and the completion of my full Board term.
I’m proud to say that throughout 2023, our
Company has proven its resilience and many
capabilities. We grew our revenue and our gross
margin, which ranks amongst the industry’s
highest. In line with our capital allocation policy
to deliver sustainable dividend growth, we have
proposed a 5% increase in our annual dividend
for the second year in a row. In total, we returned
£1.5 billion to shareholders through dividend
growth and our share buyback programme.
Amongst our innovations, we launched Lysol
Air Sanitiser, creating an entirely new sub-
category in Air Care. Whilst internally, our
annual GLINT employee survey revealed high
levels of endorsement from our people for
the clarity and direction we have brought to
our Purpose and the values that unite us.
Continuity and change
Whilst our commitment to our market-leading
brands has remained constant, today’s Reckitt
isvery different to the company I assumed the
Chair of six years ago.
A YEAR OF
PROGRESS AND
POSITIVE CHANGE
Reckitt is a special enterprise,
withpowerful brands, enormously
talented and passionate colleagues
and a compelling vision for the future.“
Chris Sinclair
Chair
04 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Leadership and talent
Our evolution as a Company has been
accompanied by a transition in our leadership.
Nicandro Durante, who had been our
Senior Independent Director, led our senior
management team as CEO for most of 2023.
I would like to sincerely thank Nicandro
for his leadership over this period.
Nicandro helped us oversee the selection of a
permanent CEO and a new CFO. The appointments
of Kris Licht and Shannon Eisenhardt to these
respective roles bring two highly talented and
accomplished global leaders to the forefront
of our Company, and I am confident they will
shape an exciting next chapter for Reckitt.
Kris brings considerable experience from within
Reckitt to the role of CEO, which he assumed on
1 October. Shannon joined the business from Nike
in October and formally assumed the role of CFO in
March 2024. Jeff’s contributions and commitment
to our company have been considerable. He
departs with my sincere thanks and very best
wishes for his well-deserved retirement.
There are other changes to our Board as well. We
extend a warm welcome to Marybeth Hays, who
joined the Board as a Non-Executive Director on
1 February. A former Walmart senior executive,
Marybeth brings more than 25 years of experience
in retail, healthcare and consumer goods.
We will also welcome Fiona Dawson to the Board
as a Non-Executive Director and Chair Designate
to the Remuneration Committee effective
1 June 2024. We thank Alan Stewart, who plans
to retire from the Board following the AGM.
In addition, I am also preparing to step down
from my position, having spent nine years on the
Reckitt Board. During this time we have built a
highly talented and diverse Board, which will enjoy
strong leadership under Sir Jeremy Darroch when
he takes over as Chair in May 2024. Jeremy is an
outstanding leader with considerable expertise
and a proven track record of performance. I know
Reckitt will succeed under his stewardship.
Legacy and reflections
Looking back on my tenure over these past nine
years, we have learned, and continue to learn,
agreat deal, not least from the experiences that
influence us, and which make Reckitt a more
effective and successful company today.
These include solidifying the importance of always
doing the right thing and standing by our values,
which are now codified through Leadership
Behaviours that require each of us to Own,
Create, Deliver and Care in everything we do.
We have demonstrated the value of brand
reinvestment alongside the delivery of
product superiority. This has allowed us to
unleash the potential of our brands to extend,
to premiumise and ultimately, to lead global
categories with long runways for growth.
We have also extended the breadth and reach
of our portfolio, harnessing the ‘Science Inside’
Reckitt to innovate brands that define their
categories. We have embraced technology
to transform our operations and deepen our
relationships with customers and consumers.
We have made many improvements in the
stewardship of the business that strengthen
our governance foundations and reinforce our
commitment to product quality and safety.
Furthermore, we have realised the benefits
ofbringing excellence to the point of sale and
are now rewarded with deeper, more enduring
customer relationships, which we are better
able to serve through a transformed supply
chain that has demonstrated its resilience
and strength when it has mattered most.
Above all, we have recognised that our greatest
assets are our people and the culture that
defines us. Reckitt is a special enterprise,
with powerful brands, enormously talented
and passionate colleagues, and a compelling
vision for the future. I leave full of pride in
our Company’s many achievements and with
enormous optimism about the years ahead.
This period has seen us rethink our culture and our
Purpose. We have invested in our people and the
values we want to define them, creating a culture
that is purposeful, entrepreneurial and caring.
We have transformed our capabilities to innovate
great products and extend categories. We have
deepened our consumer value proposition and set
new standards in customer service excellence.
Still, our strategy has remained unchanged.
The achievements of the past year affirm
that we operate in the right categories with
the right products. The focus now and in the
future is to deliver on the investments we have
made and the greater productivity, better
in-market execution capabilities and higher
shareholder returns we have enabled.
Chair’s Statement continued
Leadership Conference 2023
05 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Chief Executive Officer’s Statement
It is an honour to become CEO of Reckitt and
tolead our Company at such an important time.
Much has happened since I joined Reckitt four
years ago. We have encountered volatility,
opportunities and challenges, both in our
markets and within our business. We have also
undertaken a transformation programme that
has seen us invest in the strength of our brands,
transform our execution capabilities and establish
customer partnerships of unprecedented depth.
Our goal throughout has been to build the best
Reckitt possible. The result is a business that is
not only stronger, but also around a third larger
on a like-for-like (LFL) net revenue basis than it
was in 2019. And we have delivered this growth
with superior, industry-leading gross margins,
demonstrating the strength of our earnings
modeland the enduring attraction of our brands.
Focused on shareholder value creation
Whilst there is more work to be done to realise
ourfull potential, we are continuing to deliver,
asour recent performance shows.
Amidst continued market volatility and inflationary
pressures, we delivered LFL net revenue growth of
3.5% ahead of ingoing expectations and adjusted
operating margin of 23.1%. On an IFRS basis, our
operating margin was 17.3% which included an
£810 million goodwill impairment relating to our
Nutrition business (see page45). We reduced
our leverage and grew free cash flow by 11% to
£2.3 billion, enabling us to return £1.5 billion to
shareholders through an increased dividend and
our newly announced share buyback programme.
The strength of our business positions us well
todeliver adjusted operating profit growth ahead
of net revenue growth in the medium term, and
toraise returns to shareholders further through
growing our dividend and buying back our shares.
AN ENDURING
FRAMEWORK
FOR SUSTAINED
VALUE CREATION
We are a strong business with a purpose
and culture fit for the future, an excellent
brand portfolio and a scaled global
footprint. These position us well to
deliverthe next chapter of our growth.”
Kris Licht
Chief Executive Officer
06 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
and lock in scale opportunities where they exist.
We are also right-sizing ongoing investment in
our capabilities whilst ensuring we preserve the
important operational muscle we have built.
Beyond these, we see significant scope to
improve efficiency through automation and
shared services, as well as in harnessing the
productivity benefits of generative Artificial
Intelligence (AI), where we now have a group
policy in place to encourage our people to
embrace the technology responsibly.
In-market execution is another priority. By
providing our sales teams with the latest
digital technologies to optimise revenue
growth, we are now well equipped to win in
our markets. The focus now is to ensure we
execute with excellence wherever we play.
Lastly, our brand portfolio is strong but we must
always strive to improve. Product superiority,
sustainability and value are benchmarks we use
to measure our success. Although we possess
these across many of our categories, we must
innovate assiduously to ensure we earn their
market leadership and consumer trust each day.
Enhancing returns to shareholders
Execution also means maximising the returns
we offer to our shareholders. Our ambition has
always been to ensure these are industry leading
whenever our financial circumstances allow, in
line with our total shareholder return algorithm.
Thanks to our financial strength, I was very
pleased to announce our new share buyback
programme in October and our goal of buying
back £1 billion of our shares over the following
12 months. We expect this programme to
continue in the coming years, consistent
with our capital allocation principles.
Delivering on our ambitions
We move into 2024 a stronger, better equipped
and more agile business. Our Purpose is clear,
compelling and unchanged, as is our strategy and
the strength it draws from our earnings model.
Our focus is now on delivery and execution
as we reap the benefits of the investments
we have made. We must continue to evolve
what we do, whilst ensuring we don’t
disrupt the achievements we have secured.
Success will support our financial ambitions
and ensure Reckitt is able to deliver an
attractive, compounding total shareholder
return and drive enduring value creation.
I would like to thank our Chair and the Board
for the trust they have placed in me to deliver
on our ambitions. I would also like to thank
Nicandro Durante for his leadership. It has been
an honour to work alongside him this past year.
We are stewards of some of the world’s leading
household brands. Our role is to enhance their
value as they journey to serve the needs of a
new generation of consumers. This truly is an
exciting time for Reckitt and our people, whose
sense of ownership, entrepreneurial spirit and
drive for performance whilst always doing the
right thing at our core, are an enduring source
of competitive advantage as we write this
next chapter of growth for our business.
Group LFL net revenue growth
+3.5%
2022: +7.6%
Group 4-year LFL net revenue CAGR
+7.0%
A strong long-term growth business
The Reckitt I am privileged to lead is a strong,
competitive and resilient business. We have
a clear Purpose and a unique, entrepreneurial
ownership culture that is fit for the future.
Ourbrand portfolio is excellent and serves
asthe foundation for enduring value creation.
Our scaled global footprint spans developed
and emerging markets in categories that enjoy
long-term runways for growth. More than 70%
of our brands occupy market leading positions
in their categories on a net revenue basis and
earn high levels of consumer trust. Their strong
brand equity enables us to drive growth through
premiumisation and brand extensions alongside
the entirely new product categories we create
through world-class science-backed innovation.
Investments in our supply chain and go-to-
market networks have strengthened our abilities
to forge strong customer partnerships and
grow the distribution of our brands. Guiding
these are advanced digital and machine-
learning capabilities, which now enable us to
connect data of unprecedented scale when
deciding where to play and how to win.
Sharpening our execution
With the investment phase in these capabilities
now substantially behind us, our focus is on
maximising their benefits through sharpening
andimproving our execution.
Our cost base is a key focus. Our industry-
leading margins demonstrate the advantages
our categories enjoy. Yet there remains room for
us to be more efficient. We are extending our
productivity programmes to simplify our processes
Chief Executive Officer’s Statement continued
07 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Context
Our growth opportunity is rooted
infour global megatrends that
challenge everyday health and
wellbeing worldwide. We innovate
todeliver sustainable solutions which
address these challenges through
brands dedicated to the pursuit
ofacleaner, healthier world.
TACKLING
FOUR GLOBAL
CHALLENGES
#1 Health impact of poor access to water,
sanitation and hygiene
As cities become more crowded and populations more mobile, good
hygiene is essential in curbing the spread of infection. In developing
economies, water stress can compromise hygiene. This has a direct
impact on health, both in cities and in rural communities.
Our response: We promote hygiene as the foundation for health.
Ourproducts enable the highest standards of hygiene in the home
andprotect against the spread of germs, viruses and bacteria. Lysol
andDettol, our disinfectant brands, help break the chain of infection
onsurfaces, from hands and other at-risk spaces. Finish, Harpic and
Vanish support cleanliness and hygiene in the home. Our pest brands
likeMortein and SBP protect against unwanted pests and insects.
TheReckitt Global Hygiene Institute and our Fight for Access Fund
extend scientific understanding and grow awareness of hygiene issues.
#3 Importance of intimate wellness
and sexual health to public health
In many parts of the world, limited awareness and understanding of
intimate wellness and sexual health can contribute to the spread of
sexually transmitted infections (STIs). In some traditionally conservative
societies, cultural taboos rather than health considerations guide policy
priorities. Elsewhere, reproductive health and sexual wellbeing have not
been public policy priorities in recent years, whilst lockdown and other
pandemic-related measures restricted youth access to sexual education
and development.
Our response: We safeguard consumers by promoting sexual wellbeing
and helping to limit the spread of STIs. Durex, our world-leading condom
brand, alongside KY, our leading lubricant brand, play a crucial role in
reducing the risk of STI transmission whilst encouraging safe sex practices.
#2 Growing pressures on formal healthcare systems
Across the world, ageing populations and stretched public finances
areputting pressure on healthcare systems. Meanwhile, individuals are
becoming better informed and active in managing their health. Self-care
solutions, such as over-the-counter (OTC) health and wellness products,
give people more control and lessen the need to access formal
healthcare services.
Our response: We are reducing demand for formal healthcare by
empowering consumers with effective and practical self-care solutions.
OTC treatments like Mucinex, Nurofen and Strepsils combined with health
literacy campaigns enable individuals to better care for themselves and
treat a range of everyday ailments at home. We partner with clinicians
and share science-backed information with consumers to prevent and
treat infection alongside solutions to support personalised nutrition,
wellness and access to digital health resources.
#4 Growth in specialised nutritional needs
Infants deserve the best possible start in life. The nutrition they receive
is a key foundation for future health, especially those with allergies
orother specialised nutritional needs. Longer life expectancy means
agrowing demand for nutritional products that support mental and
physical wellness as we age. All adults, especially seniors, can benefit
from high-quality speciality food supplements that support immunity,
digestion, cognitive and mental health.
Our response: Our specialised nutrition products help infants to flourish
and adults to live fuller lives. Our market-leading brands, such as the
Enfarange and Nutramigen, draw on deep science platforms to serve
important early life nutritional needs. Brands like Provital, Move Free,
Airborne and Neuriva provide adults with essential vitamins, minerals and
supplements (VMS). We innovate constantly to deliver novel solutions
that serve the growing range of nutritional needs of infants and adults.
for how our brands contribute to improving global hygiene.
See pages 28-30
for how Durex contributes toglobal sexual health.
See page 32
for how our brands offer self-care solutions.
See pages 31-33
for how our brands provide clinically-proven nutritional options for infants and adults.
See pages 34-36
08
Do the
right thing.
Always.
Own
Deliver
Care Create
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Strategy
A STRONG
BUSINESS
PURPOSE AND CULTURE FIT FOR THE FUTURE
Our Purpose and culture,
excellentportfolio ofbrands
andscaled footprint underpin
ourstrategy todeliver attractive,
compounding total shareholder
return and drive enduring
valuecreation.
Our Purpose is clear and compelling.
Our brands and products do good in the world and enable us to
Protect, Heal and Nurture in the pursuit of a cleaner and healthier world.
Our 2030 Sustainability Ambitions are an integral part of our strategy
with a focus on three pillars of activity: innovating Purpose-led Brands,
enabling a Healthier Planet and contributing to a Fairer Society.
Our unique culture is purpose-driven, entrepreneurial, fast-paced
and action-oriented. Our people have an ownership mindset, and are
inspired to outperform with passion and energy throughout our business.
PURPOSE AND
CULTURE FIT
FOR THE FUTURE
EXCELLENT BRAND
PORTFOLIO FOR
VALUE CREATION
SCALED GLOBAL
FOOTPRINT
ENHANCED
RETURNS TO
SHAREHOLDERS
for our spotlight on people and culture.
See pages 19-21
We exist to
PROTECT,
HEAL AND NURTURE
in the pursuit of a cleaner
and healthier world
Our Purpose Our Culture
09 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Strategy continued
We operate in long-term growth categories We have an excellent portfolio of market-leading brands
We operate in categories with significant and long-term runways for growth. Category creation,
household penetration and premiumisation can fuel our growth for decades to come. On average,
we expect the medium-term revenue growth of our categories to be in the region of 3% to 4%.
More than 70% of our brands, on a net revenue basis, occupy market-leading positions in their
respective categories, with a high level of consumer trust and affinity.
1
OTC
11%
LFL NR CAGR vs 2019
Intimate Wellness
1 in 2
consumers did not
use a condom the
first time they had sex
Auto Dishwash
13%
global dishwash
machine penetration
Fabric Additives
1 in 5
people use a stain
removal product
EXCELLENT BRAND PORTFOLIO FOR VALUE CREATION
OTC
2
#2 US #2 Europe #1 Globally #1 Globally
Intimate Wellness
#1 Globally #1 Globally
Surface & Disinfection
Auto Dishwash
#1 Globally
Germ Protection
#1 Globally #3 US
VMS
2
Air Care
#3 Globally
Fabric Additives
#1 Globally #1 Globally
Lavatory Care
Personal Care
2
#1 Globally
Infant & Child | Specialty
#1 Globally #1 Globally
1. Branded player claims based on aggregated data from Nielsen, in each case, for the relevant category and geographic focus,
for period MAT Dec 2023
2. See pages 28-36 for specific category details
Value creation principles
Our portfolio choices are underpinned by
threeclear principles of portfolio value creation
that govern our organic and inorganic capital
allocation priorities.
1.
LONG-TERM RUNWAY
FOR GROWTH
2.
ATTRACTIVE
EARNINGS MODEL
3.
ENDURING COMPETITIVE
ADVANTAGE
for more details.
See pages 28-36
10 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Strategy continued
We have a scaled global footprint across
developed andemerging markets.
We have seen strong, broad-based net revenue
growth across both developed and emerging
markets and enjoy significant scale benefits in major
strategic growth markets, such as the US, China and
India. These markets alone contribute around 40%
of our Group net revenue and around 50% of our
Group net revenue growth over the last four years.
This scale in our manufacturing and go-to-market
networks enables us to partner effectively
with our customers and continuously grow the
distribution of our brands. When coupled with
our excellent brand portfolio and strengthened
innovation pipeline, this creates the opportunity
to rapidly scale and execute consumer-
preferred propositions throughout the world.
SCALED GLOBAL FOOTPRINT
DEVELOPED MARKETS
(c.65% of business
1
)
EMERGING MARKETS
(c.35% of business
1
)
US
6
+8.3%
Australia
+7.2%
United Kingdom
+5.9%
4-year LFL NR CAGR for top 3 markets
1, 4
China
+13.6%
Mexico
+8.3%
India
+8.2%
4-year LFL NR CAGR for top 3 markets
1, 4
4-year LFL NR CAGR vs 2019
4, 7
+7.5%
4-year LFL NR CAGR vs 2019
4, 7
+6.6%
Larger business than 2019
5
£2.5bn
Larger business than 2019
5
£1.1bn
1. Based on FY23 net revenue
2. Based on Advantage Group 2023 survey of retailers. 260bps
increase in markets rated top tier, from 39.5% in 2022 to 42.1%
in 2023. Share of markets excludes US
3. Decline from 29.1% (Nov YTD 2022) to 28.7% (Nov YTD 2023),
reflecting effects of US Nutrition rebasing. Hygiene and Health
increased by 10bps over the same period. On a 2-year basis versus
Nov YTD 2021, we increased total distribution points by 120bps
4. LFL net revenue CAGR FY23 vs FY19
5. On a LFL net revenue basis FY23 vs FY19
6. Excludes the benefit from US Nutrition
7. FY23 LFL equivalent: Developed Markets +4.4% and
EmergingMarkets +1.9%
+260bps
2
Share of markets where
we are recognised as top
tier by retail partners
2022: +100bps
-40bps
3
Reckitt Share of Total
Distribution Points
2022: +70bps
11 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainable mid-single-digit net revenue growth
We have an excellent portfolio of market leading brands operating in categories with
along-term runway for growth. We target to deliver sustainable mid-single-digit net
revenuegrowth, ahead of the medium-term growth of our categories.
High gross margin business
Our Group delivers high gross margins which reflects the quality of both the categories
inwhich we operate and the premiumisation of our portfolio.
Brand investments
Investing behind innovation, consumer education and omni-channel marketing is key to
ensuring our brands resonate with both customers and consumers and drive outperformance.
Adjusted operating profit growth ahead of net revenue growth
Operating leverage from topline growth at structurally high gross margins coupled with
anoptimised cost base delivered through our productivity programme fuels sustained
profitgrowth ahead of net revenue growth.
Strong cash flow and healthy balance sheet
High cash flow generation, with leverage at around 2.0x EBITDA. This places Reckitt
inaposition to deliver enhanced returns to shareholders.
Capital Allocation Framework
Our top priority is to invest in organic growth. We will continue to prioritise strong free
cashconversion and we are committed to sustainable progressive dividend growth. We target
a single Acredit rating and will maintain financial ratios appropriate with that rating. We will
use our three principles for long-term portfolio value creation to strengthen and optimise our
portfolio. We will manage an efficient balance sheet and return surplus cash to shareholders.
Our Strategy continued
ENHANCED RETURNS TO SHAREHOLDERS
We have an enduring framework for sustained value creation
MID-SINGLE-DIGIT
NET REVENUE GROWTH
We target sustainable
mid-single-digit top-line growth
overthe medium term.
GROW AOP AHEAD
OF NET REVENUE
We target to grow adjusted operating
profit ahead of net revenue growth
inthe medium term.
SUSTAINABLE
DIVIDEND GROWTH
We have a progressive
dividend growth policy
(5% increase in 2023).
SHARE
BUYBACKS
New £1 billion initial
share buyback programme
announced October 2023.
Earnings model driven Strong cash flow generation and capital allocation priorities
12 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Business Model
OUR ENABLERS
Our people and culture
We are a diverse workforce of over40,000
people from 125 different nations, and
our Company’s Purpose inspires our
team to make a positive impact.
Our brands
Our global portfolio of brands occupy
market-leading positions in their respective
categories. Our brands have a high level
of consumer trust and affinity, providing
an enduring competitive advantage.
1. Engage two billion people
withpurpose-led partnerships,
programmes and campaigns to
promote awareness for a cleaner,
healthier world (cumulative since 2020)
Our stakeholders
Together with our customers, consumers,
suppliers, communities and other partners,
wehave built strong partnerships with a unified
ambition to extend our positive impact.
Our insight and expertise
We translate our deep multi-dimensional
consumer insight into targeted product science
which is a key source of competitive advantage.
Our infrastructure
We have invested in and strengthened our
supplychain, enhancing the capabilities of
ourmanufacturing sites and R&D laboratories,
aswellas our digital systems.
Our financial strength
Structurally superior gross margins enable an
earnings model which can fuel both growth and
enhanced, sustained total shareholder returns.
OUR VALUE CHAIN THE VALUE WE CREATE
Sourcing
We source product packaging and household product
chemicals, such as pharmaceutical ingredients and
agricultural commodities, from around 4,000 suppliers
in70countries. Around 36,000 suppliers provide services
that support our business.
Manufacturing
Around 90% of our products are manufactured in-house
byour 48production and warehouse facilities. Supporting
our production requirements, we work with 243 third-party
manufacturing sites (co-packers).
Supply/logistics
Our global distribution network consists of 131 distribution/
embellishment centres across 51 countries.
Sales and
marketing
Globally, our major trading channels span millions of retailers
(hypermarkets and supermarkets, club, pharmacies, drug
stores, pure-play, discounters, convenience stores, mom &
pop stores, traditional trade outlets and speciality retail).
Consumer use
We sell around 30 million products every single day.
Onthis scale, even small changes in consumer behaviour
canhave a big impact.
Our People
c.9,500
Learning Library Unique Users
2022: n/a
Read more on page 38
Our Customers
42%
Top Tier Advantage Score
2022: 39%
Read more on page 38
Our Investors
£1.5bn
cash returned to shareholders
2022: £1.2bn
Read more on page 39
Our Consumers
1.9bn
People Engaged
1
2022: 1.5bn
Read more on page 37
Communities
£31m
invested in our FightforAccess
Fund 2022: £32m
Read more on page 40
Our Suppliers
£240k
average spend with our suppliers
2022: £249k
Read more on page 39
Governments & Regulators
£922m
tax paid
2022: £831m
Read more on page 40
for more details on our engagement
with our key stakeholders.
See pages 37-40
We develop superior solutions grounded in science and
weuse our Sustainable Innovation Calculator to design
products that contribute to our sustainability targets.
Readmore on pages 22-24.
Product design
We aim to design for a circular economy to help reduce
plastic and packaging waste. Read more on page 49.
End of life
disposal
13
2
022
2
020
2
021
2
019
2
023
7.6%
11.8%
3.5%
0.8%
3.5%
2
022
2
020
2
021
2
019
2
023
13.2%
10.1%
10.1%
10.3%
12 .5%
2
022
2
020
2
021
2
019
2
023
24.4%
30.4%
24.9%
24.6%
29.6%†
2
022
2
020
2
021
2
023
-66%
-39%
-66%
-67%†
2
022
2
020
2
021
2
019
2
023
+9.2%
+0.7%
-2.6%
-1.9%
+0.9%
2
022
2
020
2
021
2
019
2
023
341.7p
327.0p
288.5p
349.0p
323.4p
2
022
2
020
2
021
2
019
2
023
83%
131%
61%
87%
97%
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Key Performance Indicators
Reckitt’s key performance
indicators (KPIs) include
measuresfor assessing financial
and non-financial performance.
Variable pay across the Group is aligned
to these KPIs. Central to our remuneration
philosophy are the principles of pay for
performance, as well as strategic alignment.
Combined with our Compass and Leadership
Behaviours, these principles define how
decisions are made, how people act and
how they are assessed and rewarded.
The KPIs shown here directly impact
theremuneration awarded to
ExecutiveDirectors.
Like-for-like net revenue growth
1
Return on capital employed (ROCE)
1
Net revenue from more
sustainableproducts
1, 3
Reduction in Greenhouse Gas (GHG)
emissions inouroperations
1. See details on our alternative performance
measures on page 223
2. Years after and including 2021 exclude
IFCNChina (disposed September 2021)
3. Figures prior to 2021 exclude our Nutrition
business unit
† Data was subject to independent limited
assurance by ERM CVS in accordance
withISAE 3000 (Revised) and ISAE 3410.
Please see ERM CVS’ full assurance report
at www.reckitt.com/reporting-hub for
more details
Adjusted operating profit growth
atconstant exchange rates
1, 2
Adjusted diluted earnings per share
1
Free cash flow conversion
1
Why we measure it: To ensure our strategy
is delivering organic revenue growth. The
mix and strength of products and brands
enables us to deliver mid-single-digit
growth over time.
Performance narrative: Group net revenue
of £14,607 million grew by 3.5% on a LFL
basisinthe year, reflecting price/mix
improvements of +7.8% and a volume
decline of -4.3%. Our Hygiene brands grew
(+5.1%), our Health brands grew (+5.0%) and
Nutrition declined (-4.0%) as the US lapped
the prior year competitor supply issue.
Why we measure it: To ensure disciplined
capital management.
Performance narrative: ROCE in 2023 was
12.5% (2022: 13.2%), a decrease of 70bps
from 2022, due to a lower Net Operating
Profit After Tax as a result of the higher
adjusted tax rate.
Why we measure it: To drive product
innovation that supports the delivery of
our sustainability ambitions and meets the
growing demand for more sustainable
products. We are targeting 50% of net
revenue from more sustainable products
by 2030, as measured by our Sustainable
Innovation Calculator.
Performance narrative: 2023 improvement
reflects more sustainable innovations
reaching the marketplace, and better use
of the Calculator on new and existing
product development across all GBUs.
Why we measure it: To support our net
zero ambition and reduce emissions from
our own operations. We are targeting
a65% absolute reduction in operational
(Scope 1 and 2) GHG emissions by 2030.
Performance narrative: Through our
ongoing focus on optimising high energy
manufacturing processes, we continued
tosurpass our science-based target
reduction of 65% by 2030.
Why we measure it: To ensure we are
converting revenue growth into profit.
Weanticipate growing operating profit
faster than revenue growth.
Performance narrative: Adjusted operating
profit grew less than net revenue in 2023,
as gross margin expansion was offset by
increased brand equity investments and
inflation led cost base increases.
Why we measure it: To monitor profitability
and to provide a comparable net profit per
share attributable to owners.
Performance narrative: Adjusted diluted
EPS was 323.4 pence (2022: 341.7 pence),
adecrease of 5.4%, as higher adjusted
operating profit at constant exchange
rates was more than offset by adverse
foreign exchange and a higher adjusted
effective tax rate in 2023.
Why we measure it: To maintain the
delivery of strong free cash flow
conversion over time.
Performance narrative: Free cash flow of
£2,258 million increased by £227 million or
11%. Free cash flow conversion improved by
14 percentage points to 97% as the benefit
from working capital was only partially
offset byhigher tax and interest paid.
MEASURING
PERFORMANCE
for details of our definitions and terms in our APMs.
See page 223
for more information in our Remuneration Report.
See page 100
14 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Dashboard
OUR SUSTAINABILITY AMBITIONS PROGRESS OVERVIEW
This dashboard summarises our performance across key metrics and targets. A full performance breakdown can be found in our
Sustainability Report and ESG Data Book, available online at www.reckitt.com/reporting-hub
† ERM CVS provides independent limited assurance over selected sustainability disclosures. The assurance report, along with the principles and methodologies we use in our reporting, can be found online at www.reckitt.com/reporting-hub
1. Environmental reduction targets for carbon, water and waste are from a 2015 baseline
2. Reduction target for plastic is from a 2020 baseline. All packaging data relates to 2022, which is driven by the Ellen MacArthur Foundation reporting timelines. 2023 data will be available in mid-2024
3. Data as of 31 December 2023 for active Reckitt employees (excluding contractors). ‘All management’ includes: Executive Committee Member, Group Leadership Team, Senior Management Team, Middle Manager, Manager. See breakdowns on page 51
INNOVATING
PURPOSE-LED BRANDS
ENABLING A
HEALTHIER PLANET
CONTRIBUTING TO
AFAIRER SOCIETY
Sustainability pillar Topic Ambition Baseline 2023 progress Target
More sustainable
products
50% absolute reduction in product carbon footprint by 2030
1
13. 5%†
50%
50% reduction in product water footprint by 2040
1
9.9%†
50%
Plastics and
packaging
50% reduction in amount of virgin plastic packaging by 2030
2
7%
2
50%
25% recycled content in our plastic packaging by 2025
5%
2
25%
100% of packaging recyclable or reusable by 2025
76%
2
100%
Climate
Net zero across our value chain by 2040
65% absolute reduction in operational (Scope 1 and 2) GHG emissions by 2030
1
67%†
65%
100% renewable electricity by 2030
94%†
100%
Water
Water positive in water-stressed locations where we operate by 2030
1
17 sites
30% reduction in water use (per tonne of production) by 2025
1
7%†
30%
Waste
100% zero waste to landfill from our factories
10 0%†
100%
Inclusion
An inclusive culture where everybody is treated fairly and equitably
Gender balance at all management levels by 2030³
M: 49%
F: 51%
50/50
Social impact
Engage two billion people with purpose-led partnerships, programmes and campaigns
to promote awareness fora cleaner, healthier world (cumulative since 2020)
1.9 billion†
2 billion
Social Impact Investment of £20 million per year
£31 million
£20 million
for our Environmental Performance Review.
See pages 48–50
for our Social Performance Review.
See pages 51–53
Key: Baseline Target
for more on our innovation programme.
See page 24 See page 47
FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT Reckitt Annual Report and Accounts 2023 15
BRAND HIGHLIGHTS
Finish is the world’s leading auto dishwash brand. 2023 saw the launch
ofFinish Ultimate Plus, with technology that releases the right ingredient
to act at the right time in the wash cycle, further enabling people to
‘Skipthe Rinse’. Whilst Finish’s footprint is concentrated in markets such
asEurope and the US, its runway for growth is through global penetration
opportunities and premiumisation given dishwasher ownership in many
parts of the world remains low and our premium thermoformed tablets
are gaining share.
With a range of fabric stain
removers, whiteners and carpet
cleaners, Vanish is the number
onefabric treatment brand in the
world. In 2023, Vanish launched
amajor formula change, which
promises stain removal and colour
protection even at 20°C, enabling
consumers to save energy and
helping clothes look new for longer.
finish.co.uk
vanish.co.uk
airwick.co.uk
As one of the first brands dedicated to
air care, Air Wick has uplifted homes for
80 years. Air Wick is the number three
branded air care player globally. The
brand continues to innovate, such as
with the 2023 launch of 24/7 Active
Fresh, our first aerosol-free and best
ever auto-spray.
FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT Reckitt Annual Report and Accounts 2023 16
With a range of toilet and
bathroom cleaners and
fresheners, Harpic is the
number one lavatory care
player globally. In 2023 we
launched the Harpic Hygienic
&Fresh Sticker, our first
self-sticking toilet block
with99% less plastic,
whichconsumers love
foritssimplicity.
harpic.co.uk
The number one branded multipurpose
cleaning and disinfectant player in the world,
Lysol has been breaking the chain of infection
and protecting families from illness-causing
germs for more than a century. In the US,
itskey market, Lysol represents the gold
standard in germ protection and continues to
leverage its equity to create new categories,
such as laundry sanitiser and air sanitiser,
which launched in 2023.
lysol.com
Dettol is present in over 130 countries across 10 categories from
surfacedisinfection and laundry sanitiser to hand wash and shower gel.
Itis the world’s number one brand in antiseptic personal care. Through
itsproducts and its hygiene education programs, Dettol has been helping
protect people against illness-causing germs for 90 years. Its biggest
markets include India, China and the UK.
dettol.co.uk
FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT Reckitt Annual Report and Accounts 2023 17
Durex is the global leader in condoms, with key markets that include China and Europe.
YetDurex is present in less than 1% of global sex occasions and so offers significant
headroom for growth. Recent launches, including polyurethane (PU) condoms and those
lubricated with hyaluronic acid for extra moisture, are continuing to premiumise the portfolio.
Culturally relevant partnerships in fashion and music, including the ‘Diesel x Durex’ capsule
collection presented at Milan Fashion Week, connect the brand to its target audiences.
durex.co.uk
Mucinex is the number two cold
and flu brand in the US, and the
brand most trusted by doctors
for cough and cold symptoms.
Mucinex has a powerful brand
equity, which it uses to expand
into adjacent categories such
as the recent successful launch
of its medicated sore throat
product, Mucinex InstaSoothe.
mucinex.com
The world’s first medicated
lozenge, Strepsils is the leading
brand in sore throat care across
global markets. With an extensive
range of lozenges and sprays,
thebrand helps consumers to
manage their sore throat and
cough symptoms at home,
withformulations that relieve
dryness and pain.
strepsils.co.uk
1 IN 2 WOMEN FEEL THEY
HAVE HAD THEIR PAIN
DISMISSED BECAUSE
OF THEIR GENDER
See our commitments to help
close the Gender Pain Gap at
Nurofen.co.uk/see-my-pain
FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT Reckitt Annual Report and Accounts 2023 18
Nurofen, the number two analgesic brand in Europe, provides effective pain
relief, leveraging over 30 years of research and development. The 2023
expansion of Nurofen Liquid Capsules into key markets and purpose-led
initiatives like ‘See My Pain’, which aims to narrow the Gender Pain Gap by
highlighting how women’s pain is often ignored or dismissed, continue to
support brand growth.
nurofen.co.uk
With its strong science-backed
reputation for supporting brain health,
the Enfamil family of brands offers
a range of routine and specialty
infant formulas, as well as toddler
nutritional drinks. It is the leading
premium infant nutrition brand
across markets and the number one
paediatrician recommended product
in core markets such as the US.
enfamil.com
Nutramigen, a formula product for
the dietary management of cows’
milk allergy, was the first and is the
most extensively studied formula
of its kind. 75 years after its launch,
it remains the global leader in its
category. The UK’s National Health
Service estimates that CMA affects
around 7% of babies younger than
one year old, underscoring the
brand’s growth opportunity.
nutramigen.co.uk
19 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
People and Culture
Today’s Reckitt is rooted in a culture that
ispurpose driven, entrepreneurial, fast paced
and action oriented. Doing the right thing,
always, is at the centre of our Compass,
whichguides our business alongside the
Leadership Behaviours that drive our success.
SPOTLIGHT ON:
PEOPLE AND CULTURE
We always maintain an unwavering
commitment to our people, whose
passion, energy and professionalism
arethe source of our enduring strength.”
Ranjay Radhakrishnan
Chief Human Resources Officer
A business our people believe in
A powerful combination of our brands, people
and Purpose is what makes Reckitt unique.
Our people believe in and are inspired by
our Purpose and brands. They take pride
in our business and our shared ambition to
achieve. This is evidenced by our annual
employee survey, which in 2023 saw scores
higher than our external benchmark for
pride, strategy and company direction.
This shared vision has been crucial to our
transformation over the last four years. During this
period, we established deep cultural foundations
that empower our people as the key value drivers
of our business and redefined our Leadership
Behaviours to place a greater emphasis on care
as we serve the needs of all our stakeholders.
Around 14,000 colleagues now participate
in one of Reckitt’s all employee share plans.
This nurtures a culture in which individuals are
owners, as well as colleagues and managers.
The result is a business equipped for future
growth and focused on sharing the benefits
of pursuing a cleaner, healthier world.
Fostering success
The investment we make in our future starts
with our people. We want to attract, retain and
develop the best talent. We recognise the desire
of our colleagues to develop their careers. Yet
we acknowledge that personal growth can
take many forms; from building functional skills
and exploring new markets or functions, to
developing management and leadership skills.
Building on feedback received from our
colleagues, we have rejuvenated our approach
to personal growth by adopting a holistic
programme for development in its widestsense.
20
Do the
right thing.
Always.
Put consumers
and people first
Build shared
success
Seek out new
opportunities
Strive for
excellence
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
People and Culture continued
As well as online resources, we now have 10
functional academies across Reckitt. These
academies curate development content
across specific business functions and enable
employees to attain functional skills based
on their professional development goals.
Each of these academies is augmented by
global programmes, such as an embedded
leadership curriculum and a thriving mentor
and coaching programme, which support
individual goals and the needs of particular
employee groups. These include our Accelerate
for Women and Future Leaders Programmes.
Embedding these skills across our business
is a continual process of development and
renewal. This is vital for an organisation like
ours which purposefully introduces new talent
from outside to complement the wealth of
experience and skills we nurture from within.
This fosters a culture of innovation and change
through fresh thinking, whilst anchoring our
energy in a shared belief in how we deliver
the best outcomes for our business.
Rewarding outcomes
Reckitt is a results-oriented business with astrong
belief in collective accountability. That is why
many of our people are enrolled in, incentivised
by and rewarded through our Annual Performance
Plan (APP). Running each calendar year, this
measures our collective performance against
annual targets linked to Reckitt’s strategic
priorities and tailored to individual markets.
Reckitt’s most senior management participate
in our Long-Term Incentive Plan (LTIP), which
incentivises and rewards long-term performance,
and aligns the interests of our leaders with those
of shareholders. This also delivers a strong focus
on ownership and accountability, toensure
that our Leadership Behaviours provide the
lens through which success is evaluated.
Building a culture of inclusion
Success at Reckitt means excelling as who you
are. Our goal is to provide a working environment
where uniqueness is embraced and inclusion is a
lived experience. We recognise that diversity of
thought is a key driver of performance. With over
40,000 people worldwide drawn from 125 different
nations, we want to represent the countries and
communities we serve through a workplace where
everyone feels able to be their authentic self.
Equally, our aim is for a global workforce profile
that is more aligned with the global consumers,
customers and markets we serve. Together,
our colleagues, our partners and our brands
will drive that change as we reflect the diverse
and inclusive world in which we operate.
Inclusion is given senior focus in Reckitt by
our Global Inclusion Board, which is chaired
by our Group CEO. Its mandate is to drive our
inclusivity agenda throughout our employee
communities, our brand identities and our supply
chain. The Group Board works in partnership
with our Local Inclusion Boards in individual
markets and the growing number of local
chapters of our global Employee Resource
Groups (ERGs), which continue to play a
critical role in driving our inclusion agenda.
ERGs are employee networks that provide
visibility, understanding and support to groups that
may be underrepresented or face barriers in the
workplace. There are four global ERGs, focusing
on LGBTQ+, Women@Reckitt, Race and Ethnicity,
and Disability. Local ERGs maintain a focus in
market, supporting localised inclusion plans.
Thisranges from equipping individuals with
specific skills relating to their function to
developing leadership, resilience and providing
in-role support, both professionally and
personally, through our Wellbeing and Employee
Assistance Programmes. Together, these enable
individuals to realise their full potential.
In April 2023, we introduced a new Learning
Library, which draws on LinkedIn Learning to
provide access to a variety of resources tailored
to different skill levels. Early adoption has been
strong, with over 9,500 unique users. In the last
quarter of the year, we also launched a new
learning experience platform, myDevelopment
Learning, which brings together personalised
learning for professional growth based on the role,
function and career aspirations of each individual.
OUR COMPASS OUR LEADERSHIP BEHAVIOURS
Own
– Live our Purpose, Fight andCompass
– Know our business cold
– Make decisions
Create
– Spot opportunities
– Innovate, iterate andscale
– Relentlessly build better
Deliver
– Focus on what matters
– Move boldly and at pace
– Join forces to win bigger
Care
– Actively listen, learn andinclude
– Speak direct with respect
– Act to unleash potential
21 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
People and Culture continued
2023 saw continued war in Ukraine, a devastating
earthquake hit Turkey and conflict in the Middle
East. Our teams provided financial and mental
health support for affected colleagues. We
were also able to commit over £400k of funds to
alleviate suffering on both sides of the conflict
in the Middle East through our disaster relief
emergency response partner The British Red
Cross, and further matched employee donations.
Whilst the safety of our people is paramount,
we also recognise the importance of employee
health and wellbeing to ensuring our people
can thrive, both at home and in the workplace.
Supporting these is the cornerstone of our
Global Wellbeing Policy, which recognises
mental health as the foundation of a healthy,
happy employee community and a cornerstone
of sustained business performance.
Our Global Wellbeing Hub enables access
toa variety of resources on topics which we
know, through employee surveys, are priorities
for achieving balance and wellbeing at work.
Augmenting this is a global programme of
webinars and events that draw attention to some
of the key issues that challenge wellbeing.
In 2023, these included a Mental Health
Month, a cancer pledge to encourage greater
understanding of working with cancer, and a Global
Steps Challenge, which united colleagues from
more than 30 countries in a physical challenge.
Alongside these global initiatives, our monthly
Wellbeing Boosters sessions provide access
to performance coaches for advice and
support. In 2023, there was a 61% increase
in people leader coaching versus 2022 and
attendance of over 19,000 at our wellbeing
events, a ten-fold increase year on year.
Each of these workplace initiatives is balanced
by individual Employee Assistance Programmes
that provide tailored care for specific
issues, including mental health support.
Fit for the future
Our journey over the past four years has seen
Reckitt realign important aspects of its culture
with its Purpose.
Our goal throughout has been to ensure
ourpeople share a strong sense of purpose
anchored in a deep-rooted culture that
emphasises ownership and accountability
ashallmarks of success.
We live in a changing world. We shall continue
to adapt as we grow. Our Purpose provides
us meaning, builds our resilience and serves
as a north star. We always maintain an
unwavering commitment to our people,
whose passion, energy and professionalism
are the source of our enduring strength.
for more details on developing our people.
See page 51
Through active engagement on workplace
issues, ERGs have been instrumental in driving
change across a range of policies and processes.
These include our shared parental leave, the
development of our Accelerate leadership
programme to support women throughout
their careers, and Reckitt’s conscious inclusion
programme, which highlights unconscious
bias, microaggressions and the steps
everyone can take to promote inclusivity.
Our ERGs have been critical in harnessing a
community-based sense of togetherness and
belonging across Reckitt. Yet we also recognise
that inclusivity is for everyone. We believe that
we are Stronger Together and our ambition is
that all colleagues are welcomed, able to fully
contribute to our business and supported to thrive.
This is a guiding principle behind the next stage
of our inclusivity journey. In 2023, we hosted
a global Stronger Together event to promote
allyship and foster an understanding of how to
be an active ally to each other. Through similar
events and workplace initiatives, we shall continue
to extend conversations beyond our ERGs to
make inclusivity an aspect of our culture that
everyone can relate to and take responsibility for.
Health, safety and wellbeing
Our commitment to caring for our people
goestothe heart of our Purpose to protect,
healand nurture. This means promoting and
safeguarding wellbeing, as well as ensuring
safetyin our workplace.
Our primary concern is that our people are safe at
work, irrespective of what they do or where they
live. With a global business spread throughout 68
countries, we ensure we have mature systems in
place that enable us to step in quickly to support
our people and their families in times of need.
22 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Scientific Innovation
We combine deep consumer insights
with cutting-edge science to create
differentiated, superior solutions that
bring delight to consumers everywhere.
SPOTLIGHT ON:
SCIENTIFIC INNOVATION
Our goal is to unleash the ‘Science Inside’
Reckitt through the very best and most
trusted brands.”
Angela Naef
Chief R&D Officer
Our innovation capabilities
Innovation is harnessed through the global
capabilities we possess across the Group, including
R&D, Marketing, Sales and Supply. These teams
work together with in-market experts to build a
deep understanding of the consumer, connecting
this with great science to develop products that
delight our consumers and meet their everyday
needs. Our Supply team then enable us to execute
with excellence by delivering these through their
best-in-class route-to-market capabilities.
Within our Global Business Units, our Category
Development Organisations create and grow
categories through consumer-focused innovation
that extends Reckitt’s brands into adjacent white
spaces. This team has developed industry-leading
ways of combining consumer insights with our
science capabilities that enable us to extend our
categories and identify new spaces for growth.
Through our leading R&D capabilities, we have
elevated the ‘Science Inside’ our business to
create enduring value through our brands.
We have built rigour, discipline and precision
across our R&D activities to ensure our science
can travel across our categories. This enables
greater degrees of freedom in designing new
products and provides us with a longer-term
lens through which to innovate, reinforcing the
sustainability and growth potential of our brands.
With targeted R&D investment, we have built
new capabilities in medical sciences that enable
us to generate superior evidence. Alongside
this, investment in our regulatory intelligence
capabilities helps us to identify and anticipate
changes in our regulatory landscape. This enables
us to drive advocacy that opens channels and
routes to market for our innovations so that we
can put new products in the hands of consumers.
23 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Scientific Innovation continued
ongoing interaction with our stakeholders and
amindset of regulatory foresight that anticipates
how future changes may impact them.
Our third priority is Driving Productivity. We pursue
this with our Supply colleagues and partners
to ensure innovation delivers on the Group’s
productivity goals. This involves optimising our
supply of raw materials by qualifying suppliers
to drive the best procurement choices, and
refining our processes to ensure we balance
capacity across our manufacturing.
Extending our growth runways
As well as supporting our current growth
ambitions, innovation equips us to anticipate
and plan for the future. This means being
able to look through a longer-term lens
and anticipate change though a multi-
generational approach to R&D planning.
Our investment in PU technology for Durex
condoms in China is an example. This captured
a shift in consumer preferences, but also
reshaped our manufacturing process and
resulted in the establishment of a new
Polymer Science and Technology platform.
Now one of nine foundational disciplines that
shape our science capabilities across the
Company, this platform brings together polymer
scientists to design methods of PU use across our
brands that meet consumer needs as they evolve.
Throughout, we made sure this science travels:
polymer science has since crossed categories
into Hygiene and the thermoform technology
we use in our Finish dishwasher tablets.
Innovation draws continually on our science
capabilities to develop and extend products that
improve the consumer experience of our brands.
Our Nutrition Innovation pipeline is closely linked
to our rich science heritage and capabilities,
allowing us to develop nutritional solutions that
give babies the best start in life, as well as to
provide the foundation for life-long health.
Our scientific commitment and cutting-edge
studies are advancing the field of paediatric
nutrition globally. This was showcased in one
ofour recent clinical publications, which gained
widespread recognition for its findings relating
to our Enfamil formula enriched with milk fat
globule membrane (MFGM). This showed lasting
brain benefits at the age of five-and-a-half
years in children who were fed this formulation
in their first year, exemplifying our longer-term
approach of extending clinical research on
our formulas beyond infancy (see page 35).
Similarly, in 2023 our Intimate Wellness team
also achieved a significant scientific milestone
This is a source of competitive advantage
through which we offer consumers a greater
choice of safe and effective solutions that
anticipate their present and future needs.
Our approach to R&D is driven by a strong
commercial focus and an innovation culture
thatfosters collaboration. We focus on strategic
choices that help us to build critical capabilities
that unlock value and drive step changes
ingrowth.
Framing our strategy
The megatrends behind Reckitt’s four global
challenges (see page 07) provide the strategic
frame that determines where we innovate and
channel our R&D. These guide our long-term
thinking and ensure the commercial opportunities
we pursue offer lasting social benefits.
We think about Innovation at Reckitt not as a
function, but as an outcome. Its impact is guided
by three priorities, which taken together define
the role of R&D in our growth ambitions.
The first we call Innovate Impactfully. This
captures the value we create by innovating to
drive sustainable top-line growth. By focusing
on value as an outcome, we introduce financial
rigour wherever we innovate, from formulation
through to product packaging, our science-based
claims and methods of delivery. We maximise
innovation’s impact through a ‘touch it once’
approach, which means that innovation in one
science platform travels across the organisation
to offer benefit to all brands and categories.
The second priority we refer to as Securing
the Company. This safeguards the lifecycle of
our products to ensure they remain relevant,
compliant and progressive as regulations and
consumer preferences evolve. It requires
The ‘Science Inside’ Reckitt:
supercharging science
todelightconsumers
The ‘Science Inside’ Reckitt is a global
community of over 3,000 scientists spanning
nine centres of excellence. It provides us
with the capability not only to create a
new and disruptive product like Lysol Air
Sanitiser, but also to partner with regulators
to develop standards for this new category.
We connect the expertise in Reckitt across nine
scientific platforms to our deep knowledge
of consumers. Within these, we innovate new
products that solve unmet consumer needs and
deliver our growth ambitions. The pursuit of
scientific excellence has transformed Reckitt’s
R&D. By connecting our science platforms, we
ensure our science travels across Reckitt so
that we can deliver for consumers everywhere.
In 2023, our Hull Science and Innovation
Centre hosted our first annual ‘Science Inside’
Symposium. Our community came together
to celebrate, recognise and connect.
Witha focus on peer-based scientific review,
900 authors from 21 countries submitted
over 300 abstracts for debate, from which
113 were selected for discussion.
By fostering a culture of collaborative
innovation, the Symposium epitomises how
the ‘Science Inside’ Reckitt harnesses our
science goals to our ambition to deliver
ever-greater value for our consumers.
CASE STUDY
24 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Scientific Innovation continued
Reckitt’s Sustainable Innovation Calculator helps
guide us to the right decisions throughout the
innovation process. It measures the impact of
anew product by rating its ingredients, plastics,
packaging, carbon and water performance,
as well as evaluating its extended producer
responsibility risk. By comparing these data
with existing product ratings, we are able
to identify alternatives that offer better
environmental outcomes (see page 47).
This approach helped shape our Finish Ultimate
Plus dishwasher product, which offers superior
wash performance alongside a 20% reduction
in chemicals use. This enables consumers to
‘Skip the Rinse’ and helps to save many millions
of litres of water every year across the world.
It also drove the development of Harpic Hygienic
and Fresh, the very first self-sticking toilet block.
This uses a biodegradable polyvinyl alcohol
wrap that sticks to the inside of the toilet bowl,
removing the need for a plastic cage to hold
the block in place. It also dissolves with use.
Theresultis a considerable reduction in plastic
anda product that consumers love for its simplicity.
Our Sustainable Innovation Calculator considers
key aspects of the product lifecycle to ensure
innovation contributes positively to our
sustainability targets. This has helped us identify
new opportunities to reduce our use of plastics,
carbon and water. It has also cultivated a mindset
of continuous improvement across our categories
backed by hard data to drive positive outcomes.
Harnessing the benefits
of Artificial Intelligence
Reckitt has been involved in complex dataset
processing for many years, which has driven
astep-change in our ability to understand
theneeds of consumers. We already leverage
machine learning and advanced analytics
across consumer research, into consumer
activation touchpoints, and to plan, measure
and steer our digital campaigns in real-time.
AI enables us to extend these capabilities to
additional datasets, including unstructured text
shared through sensory evaluations, consumer
trials, and ratings and reviews. These offer
insight on an unprecedented level that will
transform our relationship with consumers
as we innovate the products of the future.
We are constantly evaluating the wealth of
value that AI can offer as we deepen our
understanding of its capabilities, its risks and
the opportunities it unlocks. We have focused
our efforts on accelerating the adoption and
impact of AI across our business, from R&D
and manufacturing to sales, marketing and
logistics. We are identifying high-value use
cases, expediting AI project implementation
and reducing barriers to AI innovation. Our
objective throughout is to deliver AI-driven
results efficiently and responsibly.
For example, AI-driven simulation and
modelling are enabling us to achieve our
innovation and sustainability goals within
R&D and manufacturing. It is also boosting
productivity by shortening our product
development lifecycles. As these capabilities
scale, we will be able to conceive, design and
prototype a growing number of new products
in the digital-first world, trialling hundreds of
different potential variations that simply would
not be possible without the human–machine
partnership opportunities that AI offers.
At the same time, we are mindful that the
nature of this new technology and the speed
at which these tools are being developed
can, if unchecked, impact issues such as
data privacy, biases and content accuracy.
In 2023, we introduced an AI Tools Policy
to encourage our people to embrace the
responsible use of AI tools in the workplace
so that we may enjoy the productivity
benefits and creativity they can unlock.
in a clinical trial involving the reformulation of
our lubrication portfolio. Driven by our R&D
team, the resulting study
1
was acknowledged
by the International Society of Sexual
Medicine as the Best Paper of 2023 in Female
Sexual medicine. These demonstrations of
scientific leadership illustrate the depth of
clinical and medical expertise within our
categories, which serve our global community
of healthcare providers and consumers and
position our brands for future growth.
Driving sustainable outcomes
Sustainability is a governing principle for Reckitt.
Everything we do aims to create more enduring,
relevant products that captivate and delight
our consumers, whilst delivering on our Purpose
and progressing our sustainability goals. These
include our ambition for 50% of our net revenue
tocome from more sustainable products by 2030.
1. A randomised trial on the effectiveness and safety of five
water-based personal lubricants. The Journal of Sexual
Medicine, Volume 20, Issue 4, April 2023, pages 498-506
Generative AI will unlock significant new opportunities
for Reckitt. By maintaining a strong focus on data
foundations and quality, we can ensure that this
technology becomes a true competitive advantage.”
Filippo Catalano
Chief Information & Digitisation Officer
25 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Supply Chain
Our supply chain is the operational
backbone that enables us to deliver
on our Purpose.
SPOTLIGHT ON:
OUR SUPPLY CHAIN
Our priority is to ensure we have the depth,
agility and resilience to respond to an
increasingly complex global supply network.”
Sami Naffakh
Chief Supply Officer
Investing in our supply strategy
During 2023 our global supply chain was impacted
by macroeconomic issues such as inflation and
geopolitical instability, causing fluctuations
in supply and demand. The investments we
have made in the resilience and flexibility of
our supply chain enabled us to mitigate the
impact of these, whilst strengthening our
relationships with suppliers and customers.
Our investment priorities have been
underpinned by the four pillars of our supply
strategy. Each pillar is fundamental to our
Purpose, the success of our business and the
returns we generate for our shareholders.
The first pillar ensures we embed care and
responsibility in everything we do. This means
protecting our consumers through product quality
and value, keeping our people safe and managing
the impact of our activities on communities
and our planet. This commitment ensures we
provide our consumers with reliable products
that are safe and deliver on their brand promise.
Responsibility and care for our people involves
an immutable commitment to health and
safety. We continue to strengthen processes to
safeguard both, whilst recognising that health
and safety cannot flourish without a genuine
safety culture, a responsibility and commitment
we place at the heart of our business.
The second pillar drives operational excellence
across all supply. Our goal is to build a world-class
supply function that delivers outstanding customer
service and excellence in execution to meet the
needs of consumers and customers, both today and
in the future. Fundamental to achieving this is the
excellence programmes we have launched across
all our supply sub-functions. Through these, we
have made targeted investments in new technology
26 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Supply Chain continued
In manufacturing, our Reckitt Production System
(RPS) is now a key driver of our on-site productivity
capabilities. RPS is helping us pilot several
packaging optimisation projects that reduce
costs, whilst meeting the needs of our customers
and consumers around sustainable materials.
Our Reckitt Logistics Excellence programme
is providing new tools, capabilities and
standards to improve productivity and costs
inwarehousing and transport operations.
AndourCustomer Fulfilment Excellence
programme is improving the way we collaborate
and serve our customers, whilst optimising our
internal processes to support their needs.
to develop our productivity muscle near term
andboost our competitive advantage long term.
An example is procurement, where we have
developed a digital risk management platform
that enhances our operational resilience by
identifying and mitigating risks associated with
the supply of materials. We have also invested in
advanced market-based analytical capabilities
to provide our buyers with greater visibility
on how we can best direct our spending.
In end-to-end planning, we have redesigned
our activities from a process, operating model
and systems perspective in order to improve
service, optimise our inventory levels and the
utilisation of our assets and to reduce our costs.
The fourth pillar captures the importance of our
people to Reckitt’s success. This means investing
in skills, promoting diversity and fostering an
inclusive working environment that enables
our employees to realise their full potential
andour Company to deliver on our ambitions.
Each of our people initiatives have been
supported through a variety of training and
development resources, including our Future
Leaders programme, Personal Development
Plans and a Supply Academy, as well as a
strong community of experts we have nurtured
across the Company. These people foundations
remain important resources as we build on our
achievements and extend the reach of these
new capabilities across supply (see page 50).
Sustainable customer partnerships
Our customer relationships are vital to our
market presence and a source of competitive
advantage. Strengthening these during volatile
periods for supply and demand has been a
key priority for us. This involves continuous
improvements in forecasting, developing
tactical solutions to drive better, more reliable
service levels and strengthening communication
and engagement to fuel future growth.
In parallel, we have developed an entirely new
Customer Service Excellence Playbook, which
we are now rolling out as best practice across
all our markets and regions. This is a multi-year
roadmap for achieving best-in-class customer
service globally. It has aligned our focus and
driven sustained service improvement, better
customer engagement and a reduced cost
to serve, whilst supporting increased sales
growth and better employee engagement.
Throughout, we continue to use our scale
and reach to influence positive change and
impact across our value chain. This includes
promoting supplier diversity, embedding
measures to help secure sustainable livelihoods
for our suppliers and increasing the use of
recyclable and reusable packaging. Each
of these were key initiatives in 2023 as we
worked to boost responsible procurement
andreinforce the sustainability of our supply.
The third pillar is to deliver a supply chain for
the future. Here, we have strengthened the
resilience of our manufacturing by reducing
mono-sourcing, localising production and
digitising key components of our supply function
to ensure we have the network, assets and
capabilities that will enable our future growth.
Raw material sourcing is a case in point. Many
of our products, including Dettol soaps, Durex
condoms and our infant nutrition formulas,
are exposed to naturally-sourced agricultural
commodities. Their supply can be affected
by geopolitical events, weather and other
disruptions. Through greater agility and
flexibility in procurement and by adapting
our sourcing strategies, we are able to
mitigate these impacts more effectively.
We have also built greater redundancy into our
supply arrangements to mitigate risk around
single-source procurement. This includes infant
formula, where we have forged alternative
supply for the US market through our plants
in Mexico and Singapore. And by developing
our own supply capabilities, we have in some
instances moved ourselves up the value
chain. This includes our VMS category, where
we are now in-sourcing vitamin and mineral
blends in our Evansville facility in the US.
27 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Supply Chain continued
This structured approach places collaboration
and dialogue at the centre of our customer
relationships. It involves listening closely to
customer needs and serving these though a
partnership that integrates sales and supply
across our product platform. The benefits are
mutual: it improves our ability to deliver whilst
lowering our cost to serve through, for example,
encouraging more efficient order weights
and a greater reliance on no-touch orders.
Technology and digitisation
Technology is a key enabler of change across
oursupply chain. The improvements it has
broughtabout have in large part been enabled
through an accelerated digitisation of our
supplysub-functions.
Our Taicang plant in China is a great example.
Our newest and largest site in this high-growth
market, Taicang is equipped with some of the
most advanced automation technology available
to create a manufacturing facility that is fully
digitally native (see case study opposite).
Technology has also played a key role in lessening
the financial impact of market volatility, whilst
helping us to mitigate its risks. As a key element
of our Commodity Risk Management process,
technology is enabling greater market insight
through new real-time capabilities in feedstock
trend analysis, demand-supply evolution and
historical price data. These are enabling us to
make smarter decisions in hedging, fixed price
contracts and forward booking, which in turn help
us to reduce our exposure to market volatility.
Sharing this market insight deepens our supply
partnerships. Our capabilities ensure we
remain agile in responding to changing market
conditions and continue to be an attractive,
competitive buyer, whilst helping us to manage
risk. The objective throughout is to maximise
the benefits we can realise through the choices
we make across supply. This helps us achieve
sustainable, profitable growth and higher
returns through faster in-market execution.
As we progress our digitisation journey, technology
will be an ongoing enabler of productivity
and quality benefits through monitoring our
complex supply chains and identifying potential
issues and opportunities as they arise.
Continuity and maturity are themes for the
year ahead as we realise further benefits
from the investments we have made.
Building shared success:
our Taicang manufacturing plant
Taicang is our fifth, most recent and largest
manufacturing plant in China. It produces
Dettol for the people of China, with an annual
production capacity of 100,000 tonnes.
Committed as a greenfield site in 2019,
Taicang was built and operational within
three years; quite an achievement given this
period spanned the COVID-19 pandemic.
As a site, Taicang is fully digitally native, with
some of the most advanced automation and
systems available. Utilising Reckitt’s global
Production Management System, the factory
is equipped with a variety of digital systems
that empower management with data as an
asset to drive innovation and development.
These include Taicang’s Automated
Storage and Retrieval System warehousing
technology, which enables us to organise
the movement of pallets efficiently
and within a much tighter space than
traditional forklift racking systems allow.
By localising the production of Dettol
and providing us with options on further
expansion, Taicang is crucial to delivering
on our growth ambitions in China.
CASE STUDY
28
HOME
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Hygiene
HYGIENE
Market-leading brands with purpose
Our Hygiene portfolio extends over six core
categories. These include world-class brands that
lead their markets and enjoy high levels of consumer
trust. Each is supported by a clear and consistent
consumer-focused growth model based on driving
market penetration and brand extension. Our brands
earn industry-leading margins thanks to the strength
of their brand equity, our innovation capabilities
and our ongoing investment in productivity.
What unites our brands is a shared belief in
hygiene as the foundation of health. The COVID-19
pandemic underscored the vital importance
of this, particularly in our crowded cities and
shared spaces where good hygiene isan
effective barrier to the spread of infection.
Population growth and mobility, as well as
global warming, are placing unprecedented
strains on sanitation and water resources in
many parts of the world. These are essential
public health priorities that our brands help to
address. A growing middle class in these markets
is driving greater adoption of our brands as
consumers seek the benefits they provide.
Attractive growth opportunities
Our Hygiene brands have very strong and distinct
brand equity and benefit from high levels of
consumer awareness. Yet their global penetration
remains low, particularly in developing markets.
Dishwasher ownership is just 13% globally and
in the UK fewer than one in five households use
either a sanitiser or stain removal product in their
general laundry wash. This provides our category-
leading brands like Finish in dishwashing, Lysol in
laundry sanitisers and Vanish in stain removers
with significant headroom for growth as rising
household incomes and growing awareness of
their benefits drive adoption rates higher.
Our Hygiene business comprises category-
leading brands anchoredinour Purpose.
Each enjoys attractive growth opportunities
driven by global megatrends and rising
household adoption.
We keep raising the bar on
how we execute and build
ourbrands to improve our
consumers’ lives and grow
ourcustomers’ categories.”
Volker Kuhn
President Hygiene
Surface & Disinfection
Lavatory Care
#1 Globally
Auto Dishwash
Other
#1 Globally
Fabric Additives Air Care
#3 Globally #1 Globally
Our categories
Category Profile
1
1. Based on FY23 net revenue
Geographical Profile
1
Surface & Disinfection
Auto Dishwash
Air Care
Fabric Additives
Lavatory Care
Other
North America
Europe/ANZ
Developing Markets
29 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Hygiene continued
Similarly, two new brand extensions to AirWick
helped us to deliver further category growth
through premium products that attract higher
pricing per dose. Air Wick’s new Vibrant
range offers an improved scent experience
delivered via an anti-fade technology infused
with more essential oils than our regular
scented oils. Meanwhile, 24/7 Active Fresh is
our first aerosol-free spray, which is delighting
the market with a range of natural-smelling
fragrances our consumers tell us they enjoy.
Brand extensions like these demonstrate our
ability to galvanise consumer loyalty to drive
category growth through innovation that
extends product performance. Leveraging the
strength and depth of our science platforms is
fundamental to this process, providing us with
market-leading technology and chemistry that are
enduring sources of our competitive advantage.
Delivering sustainable outcomes
Sustainable business principles are at the heart
of our Purpose. They find expression throughout
our Hygiene categories, both in terms of the
health-based principles we support and the
environmental impacts we seek to mitigate.
Core to our strategy is developing products that
deliver superior performance at lower levels of
resource use, like the CycleSync technology we have
introduced in Finish Ultimate Plus (see case study).
Premiumisation and sustainability reinforce each
other as we deliver superior, more sustainable
solutions that provide us with a greater share of
the consumer wallet, whilst helping consumers
toreduce their overall spend on energy and water
during use. This shares the benefits of innovation
and secures inherently sustainable outcomes as
wedeepen our consumer value proposition through
brands with lighter environmental footprints.
Our Hygiene portfolio enjoys strong growth
characteristics. In 2023, our categories saw
between mid-single-digit and double-digit
year-on-year market growth. In Surface
andDisinfection, Lysol is the world’s largest
disinfection brand and its growth in the most
recent years has been driven by new household
penetration and expansion into adjacent
categories as we leverage Lysol’s brand
equitythrough innovation.
The depth of our brand equity in each category
is rooted in strong consumer trust and loyalty,
which reflect our commitment to premium
brands with a reputation for outperformance.
The result is a profitable portfolio with high rates
of return and attractive margins. We underpin
these with a constant focus on productivity and
the strength of our go-to-market capabilities.
Coupled with the significant Group-wide
investments we have made in our supply chain
capabilities, we are now closer to our customers
than ever and able to serve them better.
Innovation-led growth
Innovation is critical to our brand success in
the attractive categories in which we play. Our
DNA is to create and grow categories through
consumer-focused innovation that extends
brands into adjacent white spaces. We delight
consumers by developing new formulations and
superior products through a problem-solving,
solutions-based approach to their needs.
By applying our polymer science expertise
to the thermoform technology used in
our Finish dishwasher tablets, we have
secured significant growth and market
share gains for our premium Finish products,
which adopt this surface chemistry.
Finish Ultimate Plus: driving
growthand penetration
throughpremiumisation
Auto Dishwash is one of our biggest Hygiene
categories. It is also one in which our brand Finish
is the global market leader. Auto Dishwash has
delivered double-digit compound growth over
the past five years as we have driven market
share though innovation and premiumisation.
Five years ago, 95% of our revenue from
monodose detergents was generated by
hard-pressed tablets. Since then, we have
introduced different tiers of premium-
priced thermoformed tablets. Now, around
two-thirds of the revenue of monodose
detergent is coming from new technologies.
In 2023, we launched Finish Ultimate Plus,
ourbest-performing detergent yet, in Europe
and the US.
Finish Ultimate Plus uses our CycleSync
technology, which phases the release of
the tablet’s detergents to match the wash
cycle. Not only does this deliver better
results, but as with all thermoform portfolio,
enables consumers to ‘Skip the Rinse’
and helps to save many millions of litres
of water every year across the world.
Auto Dishwash has enormous upside in
category penetration. Global dishwasher
penetration remains at 13% globally and
is lower still in emerging markets like
India, China and Brazil where it is less than
3%. We are actively partnering with the
leading dishwashing machine brands to
encourage consumer adoption, both in
emerging markets and developed ones.
CASE STUDY
30 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Hygiene continued
Innovation also plays a key role in enabling us to
reduce the use of virgin plastic in our packaging
and maximise recyclability of components,
thereby contributing to progress against
our sustainability targets (see page 49).
Outlook and ambitions
Our Hygiene business enters 2024 with an
abundance of opportunity. Our brand leadership
and innovation capabilities position us well
toextend the value proposition we offer
ourconsumers in categories where global
penetration rates remain low.
We continue to reap the benefits of
investment in our execution capabilities
through our ability to leverage technologies,
data, our partnerships and our scale.
Low global penetration rates in many of
our categories provide us with long growth
runwaysfor penetration and brand extensions.
So, too, do opportunities to deepen consumer
engagement in categories like Air Care, where
we see in some markets, consumers who buy
two segments or more spending on average four
times more than those buying a single product.
Similarly, premiumisation will continue to
encourage consumers to trade-up to products
that offer a stronger value proposition at higher
price points. This includes the Fabric Additives
category, where an average Vanish user is
delivering three times the revenue per wash
compared with one using detergent alone.
A mindset of continuous improvement
unites our teams and ensures that growth
through innovation will remain our constant.
Premiumisation and growing penetration are
core to our strategy as we look for future
opportunities to create new categories through
market-leading brands that our consumers love.
Throughout, serving consumers and their
needs is fundamental to everything we do,
as is delivering the benefits of the cleaner,
healthier world our brands enable.
for details of our 2023 financial performance in Hygiene.
See page 42
Vanish Oxi-Action: reducing energy
use through cooler wash cycles
Vanish is the world’s leading stain remover
brand. It enjoys a number one position in more
than three-quarters of its markets. Yet with
less than 10% global household penetration,
premiumisation provides us with headroom
for considerable growth as we innovate and
extend Vanish’s considerable brand equity.
In 2023, we upgraded Vanish’s stain removal
capabilities through Vanish Oxi-Action,
anewformulation that gives better
performance at cooler 20°C wash cycles
thanwith a detergent alone at 40°C.
Anewpatented oxi-action catalyst makes
thispossible, enabling even the toughest stains
to be removed in extreme test conditions
without the help of high wash temperatures.
This helps make clothes last longer whilst
reducing energy use.
As well as helping to drive category
penetration through premiumisation,
VanishOxi-Action is a great example of
how we innovate products that deliver
a strong consumer value proposition
alongside better environmental outcomes.
CASE STUDY
Lysol Air Sanitiser: innovating for
unmet consumer needs
2023 the introduction of a product that
defines the future of Air Care: Lysol
Air Sanitiser, a spray that kills 99.9%
ofairborne viruses and bacteria whilst
eliminating bacterial odours in the air.
Lysol Air Sanitiser is a first-of-its-kind
in the Air Care category: an entirely
new product that combines a sanitiser
and bacterial odour eliminator in one.
It epitomises how our science-backed
innovation enables us to develop new
products on the shoulders of very strong
brand equity and consumer trust.
Launching in the US, the product
reached retail shelves in Q3 to a very
warm responsefrom customers and
consumers, with two of its product variants
reaching the top five Stock Keeping Units
(SKUs) by rotation in the Instant Action
category within the first three months.
CASE STUDY
31 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Health
Category Profile
1
Geographical Profile
1
HEALTH
A portfolio of market-leading brands
Our Health portfolio enables us to deliver
Reckitt’s Purpose to protect, heal and nurture
in the pursuit of a cleaner, healthier world.
Ours is a portfolio differentiated by the quality
of our brands and our geographic footprint. Our
exceptionally strong brands, including Mucinex,
Durex, Dettol, Strepsils and Nurofen, offer high
growth opportunities and an excellent margin
structure. Combined with our geographic
diversification, we are well positioned to serve
a wide range of health and wellness needs.
We are selective about where we play and are
focused on five key categories: OTC, Intimate
Wellness, Germ Protection, VMS and Personal Care.
Our brands possess considerable equity and
continue to earn high levels of consumer trust,
which allows them to extend into adjacent
white space opportunities, often crossing
consumer categories. This horizontal reach
brings with it an abundance of premiumisation
opportunities as we extend our relationship
with the consumer, evolving our brands to
match their changing needs and behaviours.
OTC
OTC is the biggest category in our Health
business and enjoys high growth and high
margins across our sub-categories, including pain,
gastrointestinal and upper respiratory. Since2019,
our OTC business has added over £1 billion in
net revenue. Innovation continues to extend
itsmarket reach and we continue to invest in both
short- and long-term innovation opportunities.
In the US, the extension of Mucinex into
the treatment of sore throats through the
introduction of Mucinex InstaSoothe drew
on scientific expertise from Strepsils.
Our Health business brings together
a portfolio of market-leading brands
that define their categories and are
synonymous with day-to-day health
and wellness needs.
Our brands possess considerable
equity and continue to earn
highlevels of consumer
trust,which allow
themtoextend
intoadjacentwhite
spaceopportunities.”
Germ Protection
OTC
#1 Globally
#1 Globally in
Upper GI
#2 US in
Cold & Flu
#2 Europe in
Analgesics
#1 Globally in
Sore Throat
VMS Personal Care
#3 US in Bone
& Joint Care
#2 US in Brain
Supplement
#1 Globally in
Depilatories
Intimate Wellness
#1 Globally
Our categories
Pat Sly
President Health
OTC
Intimate Wellness
Germ Protection
VMS
Personal Care
North America
Europe/ANZ
Developing Markets
1. Based on FY23 net revenue
32 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Health continued
Itsecured a meaningful share of the US sore
throat category within a year of launch.
Pain is an important sub-category within our
OTC portfolio. Nurofen continues to offer
opportunities to expand into white spaces.
In 2023, we made significant progress in
establishing Nurofen in some of the most
attractive adult pain markets in Europe through
Nurofen Liquid Capsules and are seeing early
success versus our initial launch targets.
Through our multi-year ‘See My Pain’ campaign
in the UK, Nurofen has highlighted the gender
pain gap, with over 50% of women sharing an
experience of pain being ignored or dismissed.
Now in its second year, the campaign has
recently launched ‘PAINPASS’, a tool to enable
women to have data-centred conversations
around their pain and its management with their
healthcare providers. This campaign was shaped
by extensive research and insights generated
by our Medical Affairs and Medical Marketing
teams and continues to build brand equity.
The 2021 acquisition of Biofreeze, a market leader
in topical pain relief in the US, provided us with
a brand extension opportunity through a night
formulation that meets an underserved consumer
need. During 2023, our launch of Biofreeze in
France enjoyed early success with consumers
and continues to build on the successful
international rollout of the Biofreeze brand.
Intimate Wellness
Durex maintains its position as the global
market leader in condoms and we continue to
see growth in our KY portfolio. We have built
asuccessful Intimate Wellness business, which
enjoys significant headroom for growth given
that our products are currently used in less than
1% of global sex occasions. We are continuing
to extend our Durex brand through a new range
of intimate devices, which launched in the
second half of 2023. Our innovation agenda has
allowed us to launch more premium offerings
in our condom and lubricants portfolio, which
have enabled us to cover a range of increasingly
premium pricing tiers in many markets.
By continuing to invest in our materials science
platform, we are bringing innovative new products
to market across our latex and PU condom
portfolios. We recently launched a new hyaluronic
acid-lubricated condom in China, Durex Fetherlite,
which delivers additional moisturising benefits.
Our Intimate Wellness portfolio in China was a
strong contributor to sales during 2023. Through
ongoing innovation and a revitalised China
strategy, we have seen positive competitive
momentum in the business and continued
growth of our PU condoms franchise.
Germ protection
As the number one antiseptic liquid brand globally,
Dettol is an expansive brand that can traverse
categories. This has enabled us to extend the
brand from antiseptic use for cuts and wounds
to personal care, laundry and the disinfection
of household surfaces and appliances. Yet with
around 20% penetration globally, Dettol enjoys
considerable headroom for further growth,
particularly in developing markets where
a growing middle class is devoting greater
spend to health, hygiene and personal care.
In India and China, we have been particularly
successful in leveraging Dettol’s brand equity
into a growing number of new product spaces,
stretching its reach across home hygiene and
personal care and enabling us to compete
in different market tiers. These range from
soaps and handwash to our premium range
of Dettol-based bath and shower products.
Strepsils investment in increased
capacity to meet sustained
highdemand
Through investment at Reckitt’s
manufacturing sites in Nottingham, UK and
Bangplee, Thailand, we’ve built increased
capacity to enable us to continue to meet
sustained high demand for Strepsils.
This brand has broad shoulders, offering
significant opportunities for expansion,
as we’ve seen recently with the launch of
Strepsils Cough in Australia, which meets
an additional consumer need through one
of our trusted, efficacious solutions. This
mirrors the similar, recent extension of our
Mucinex category in the US into sore throat
with the launch of Mucinex InstaSoothe.
CASE STUDY
Durex hyaluronic acid-
lubricatedcondom
Launched in China, Durex Fetherlite is a new,
premium product which offers a water-
based, hyaluronic acid-lubricated condom
which delivers an additional consumer
benefit through the moisturising properties
of hyaluronic acid. This product was the
result of an incredibly fast innovation cycle,
from ideation through to delivery in under
12 months, and achieved a leading share of
this segment within its first year in market.
CASE STUDY
33 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Health continued
We never lose sight of the fact that our customers
are the key point of interaction between
our brands and the consumer. Throughthe
strength of our customer relationships, we
help influence, shape and drive our ambition
to enable better care for consumers’ health.
We draw on our customer partnerships early
when developing consumer initiatives designed
to bring about critical changes in behaviour. That
was the approach we adopted with Tesco in the
UK to drive the adoption of refills for our Dettol
surface cleanser trigger bottle, which not only
reduced packaging but also provides consumers
with a more sustainable, better value alternative.
Shaping the digital journey
Digital channels play an important role in shaping
the customer relationship with our health brands.
We leverage a wide range of capabilities to
improve our understanding of consumer needs
and behaviour, complementing these with
avariety of fulfilment capabilities that enable
us to enhance online engagement and sales.
For Intimate Wellness, digital channels are already
fundamental to our success since they provide
a more discrete medium through which to
engage, educate and then fulfil. Nowhere is this
more so than in China, where this combination
enabled the market success we achieved with
Durex PU, and where we continue to invest
in our live-commerce capabilities to enable
effective direct-to-consumer operations.
In other categories, we are continuing to
scale our e-commerce and digital capabilities
to cement the brand leadership we enjoy.
These include Dettol, where we have doubled
the size of our e-commerce business over
the last four years to around 20% of sales,
but still have ample headroom to grow.
Here, as elsewhere, we are excited by
developments in machine learning and AI
inhelping to guide where our brands should
play. We are already using a wide range of
consumer datapoints across multiple machine
learning algorithms to direct our campaigns
and engagement activities. These are used
alongside a proprietary marketing return on
investment capability, offering us a material
uplift in returns on our marketing spend.
Technology is also improving our execution
across channels. As we continue to see the
rise of new ways of shopping, we are using our
rich data insights to fully leverage AI, including
its conversational and creative capabilities, to
develop entirely new experiences for consumers.
Outlook and priorities
Leveraging the leading positions and scale of our
brands in high-growth categories, we continue
to build on the momentum we enjoy through
trusted products that can provide new benefits
and define new usage occasions. Stretching our
considerable brand equities to close adjacent
white spaces with efficacious products will
remain our focus as we innovate to meet new
health and wellness needs in a sustainable way.
for details of our 2023 financial performance in Health.
See page 43
Together, these deepen Dettol’s brand equity
and enable us to strengthen our market
presence through brand extensions.
VMS and Personal Care
In our VMS category, which includes Neuriva,
Airborne and Move Free, we continue to focus
on establishing leading positions in key areas of
consumer need. The recent launch in the US for
Neuriva Ultra is designed to deliver mental alertness
from the first serving and supports seven indicators
of brain health: mental alertness, reasoning, memory,
focus, concentration, learning and accuracy.
Move Free continues to grow in China, where it
serves a growing number of older people for
whom pain and joint health are top personal
health concerns. We see significant, expandable
equity for the brand and the opportunity to
deliver increased joint health and additional
benefit products through further innovation.
In Personal Care, the launch of our Veet Total Pro
intimate hair removal kit has seen it become a best
seller on European online platforms. Wecontinue
to invest in improved formulations across the
Veet portfolio. Our Veet depilatory products
enjoy some of the highest consumer repeat
rates in their category, particularly in France.
Winning through the consumer experience
The consumer’s experience of our brands is
fundamental to our market success. Wefocus
on developing the most effective solutions
in the categories where we play, and on
designing products that help consumers
maximise their ‘health span’: the proportion
of their life they can live feeling healthy and
well. Throughout, we leverage a wealth of
consumer insight and deep science platforms
to formulate, test and deliver our products to
the very highest quality and safety standards.
Dettol laundry expansion
inGreaterChina
Through the expansion of our Dettol
4-in-1 laundry pods into offline channels
in Hong Kong, and the launch of Dettol
Washing Machine Cleaner in China, the
laundry category in the Greater China
region is now a significant contributor
to our growth. Dettol products are
scoring well ahead of rival brands in
in-store performance across the region
and Dettol Washing Machine Cleaner
isperforming ahead of expectations.
CASE STUDY
34
Lactum
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Nutrition
NUTRITION
A specialised, science-led portfolio
Our infant formula and toddler products
lead their categories and earn trust through
an immutable commitment to quality that is
deeply rooted in our Purpose. We bring that
Purpose to life through a strong innovation
and clinical research pipeline that delivers the
latest inscientific advances to our consumers.
Our Nutrition business comprises some of the
world’s leading brands in infant and toddler
formula alongside a growing brand presence in
adult nutrition. Our products are differentiated by
our clinical, science-based approach to innovation
and an expanding focus on specialised nutrition.
Our leading scientists and Key Opinion Leader
partnerships enable us to deliver solutions that are
trusted and respected by parents and healthcare
professionals (HCPs) alike. This is reflected in
Enfa’s position as the leading premium infant
nutrition brand across markets and the number
one paediatrician recommended product in
core markets such as the US and Malaysia, where
infants are able to benefit from the cognitive and
digestive benefits of our science-backed formula.
Similarly, Nutramigen is the number one global
brand for cow’s milk allergy and is the only
productwith 75 years of evidence and
over100published studies.
Our brands lead in premium product
categories globally. Together, they comprise
acomprehensive portfolio designed to meet
theincreasingly specialised needs of every child.
Our Nutrition business is dedicated to
providing the very best science-based
products throughout the stages of life.
Our products are differentiated
byour clinical, science-based
approach to innovation and
anexpanding focus on
specialised nutrition.”
Susan Sholtis
President Nutrition
Infant & Child
Specialty
#1 Globally
Our categories
Category Profile
1
Geographical Profile
1
Infant & Child
Specialty
Other
North America
Europe/ANZ
Developing Markets
1. Based on FY23 net revenue
35 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Nutrition continued
Our success is rooted in a team-based approach
to clinical excellence and delivery. For 120
years, our R&D, Medical Affairs and Commercial
Innovation teams have been pioneers in
advancing research and innovation to provide
superior nutrition that nourishes children in the
early stages of their life. Our credible science
has meant we have established high levels of
consumer trust and paediatric recommendation.
This is a position we never take for granted.
We recognise trust needs to be earned every
day and we work relentlessly to meet changing
nutritional needs through a no-compromise
commitment to product quality and food safety.
Our long-term growth opportunity
Our share of the core infant formula market
remains a focus. Yet set against a global trend
of declining birth rates, we see our long-term
growth opportunity in specialised nutrition,
where customisation and premiumisation
provide us with attractive opportunities
forinnovation and product development.
By extending our categories into these white
spaces via nutritional categories like digestion
andallergies, we are driving momentum
andlengthening our growth runways across
ourmarkets.
A science-driven innovator
Our science-as-solutions mindset is the inspiration
behind our formulations that incorporate MFGM,
a critical component in breast milk linked to
long-term brain development (see case study).
Doctors have told us that the science behind
the benefits of MFGM can change healthcare
practice by enabling more infants to receive
benefits from early life nutrition that support
long-term cognitive outcomes. It is differentiated
and important benefits like these that have
Enfamil: building brains,
easingtummies
When choosing an infant formula, promoting
brain health is cited as the number one benefit
looked for by parents. Digestion issues,
meanwhile, are a common problem for infants
and a key reason why parents switch products.
Tackling both challenges head on, we’ve
developed Enfamil formulations with key
nutrients such as MFGM, a naturally occurring
compound found in breast milk, to combine
brain and digestion benefits in a single formula.
Our vision is to establish MFGM as a powerful,
clinically proven ingredient that brings
our formulas closer to breast milk.
Like all of our infant nutrition products,
thedevelopment of our customised MFGM
formulation is science-driven and based
onstate-of-the-art clinical research. This
includes evidence from our most recent study
that showed lasting neurocognitive benefits in
children who had used formulations containing
MFGM during their first year that were still
measurable at five and a half years of age.
By adding MFGM to our superior Gentlease
product, a partially hydrolysed protein (PHP)
based formulation, Enfamil Gentlease Neuro
Pro was able to overcome common digestive
issues that affect an estimated eight out of 10
babies fed on formula in their early years, whilst
also supporting neurodevelopmental benefits.
Launched first in ASEAN and Latin America in
the second quarter of 2023, and introduced
in North America during the fourth quarter,
Enfamil Gentlease Neuro-Pro has met
with a positive consumer response that
has helped us to gain market share.
CASE STUDY
Enfa A+, CS-Biome: protecting
early-year health and wellness
Babies born through caesarean section
could be missing an important step in the
development of their immune system
compared to babies born through vaginal
birth. This is a particular challenge in
Asia where caesarean section births
account for up to 40% of births in nations
like the Philippines and Thailand.
Enfa A+ offers Brain-Immune-Gut (BIG)
health benefits for caesarean section babies
by supporting their microbiome with our
exclusive immune blend, CS-Biome. This
helps to promote optimal immune system
function and offer babies the best start in
life, irrespective of how they were born.
Working closely with HCPs, Enfa A+ has
received acknowledgment for its infant
health benefits, which we have leveraged
to a broader education campaign that
promotes awareness of the importance
of a baby’s microbiome development.
Launched initially in the Philippines in
July 2023, Enfa A+ uses a differentiated
formulation, which we’ve integrated into
our existing manufacturing platform.
CASE STUDY
36 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Market Opportunities: Nutrition continued
Shaping the consumer journey
Whilst prenatal interactions with HCPs play a vital
role in our category, the influence of consumer
research on formula choice is increasing, and
with it the importance of winning in search.
We are expanding the reach and quality of our
digital engagement to capture this opportunity
through content designed to foster consumer
interactions based on truth, accuracy and
trust. AI is set to play an increasingly important
role in this arena by extending our consumer
reach considerably through individualised,
authentic and credible content that helps
us to win in the information journey.
Our mission throughout is to reduce the
complexity of the communication between HCPs
and parents in order to strengthen dialogue.
By bringing both sides closer together through
engaging digital content, we can help to inform
decisions and build confidence in choice.
Achievements and priorities
During 2023 the market environment for infant
formula continued to be influenced by the
prior year infant formula supply shortages in
the US, which resulted from the temporary
closure of a major factory belonging to a
competitor. These past supply shortages have
influenced and resulted in an evolving regulatory
landscape, which we expect to increase both
ongoing compliance costs and our capital
requirement for the infant formula business.
Our US market share is now normalising, following
an extended period of elevated gains as we
increased production in order to help feed
as many infants and children as possible.
Stability in quality supply has been our
uppermost priority throughout. Our teams
worked tirelessly to ensure product availability
was met on retail shelves and in hospitals.
The episode made unprecedented demands on
our manufacturing platform. Our achievements
in helping to overcome a nationwide infant
formula shortage are a testament to the hard
work, ingenuity and dedication of our teams.
Ensuring we maintain the highest levels
of quality and food safety will remain our
overriding priority as we work relentlessly
to sustain the trust we have earned and the
market leadership we are privileged to enjoy.
for details of our 2023 financial performance in Nutrition.
See page 44
led us to extend MFGM’s use to our Digestive
portfolio in brands such as Gentlease.
Elsewhere, we have extended the Enfamil brand
in Asia with the launch of Enfamil CS-Biome.
This supports the development needs that
can arise from childbirth given the greater
occurrence of caesarean section births in the
region, which can impact the development of
ababy’s microbiome and therefore the health of
its immune system (see case study on page 35).
A differentiated go-to-market model
Our infant formula products have a consumer
journey that differs to those in our Hygiene and
Health businesses. Within Nutrition, HCPs play an
integral role in educating parents on child nutrition
and recommending the solutions for their needs.
As channel mediators, HCPs are therefore critical
to our market success, which means building their
awareness and trust alongside that of consumers.
We review the latest clinical research continually to
help improve understanding of how our products
may be used to meet the specialised nutritional
needs of infants and toddlers. We provide a
variety of resources to HCPs, including medical
education, roundtables and the workshops
wefacilitate with world-renowned experts.
Our goal throughout is to foster a collaborative
support environment that is second to none.
The investment we have made in educating
HCPs on the scientific credibility of our products
has resulted in our status as the number one
trusted infant formula in the US; a testament
to the trust we have established throughout
this important stakeholder community.
Keeping children in schools by
increasing access to water in Mexico
Access to clean water and sanitation is one
of four global challenges our products seek
to address. This is a pressing problem in
Mexico, where it is estimated that four out
of 10 schools don’t have water available
every day. In areas with the highest water
stress and high population concentration,
access to water in schools can impact class
hours, student attendance, performance
and overall learning achievement.
We’re working with local communities and the
Agua Capital non-governmental organisation
(NGO) to increase water availability in the areas
surrounding Tlalpan, Atizapan and Chiapas,
the latter being home to cocoa farming
communities that support our Chocomilk brand.
We’re aiming to positively impact the lives of
2.4 million people in vulnerable communities
by generating 116,000 m
3
of clean water to
keep schools open. So far, we’ve installed
11rainwater harvesting systems at schools
inEstado de México. In 2024, we plan to expand
the reach of this programme to more schools
by partnering with Walmart on a campaign to
install additional rainwater harvesting systems.
Through infrastructure improvements and
education programmes in schools, we are
able to support children’s learning and the
broader community to build a better future.
for more details on our communityinvestments.
See page 53
CASE STUDY
37 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Stakeholders
for our Section 172 Statement.
See page 76
Understanding the needs and
expectations of our stakeholders
isfundamental to our Purpose.
Our business can only grow and prosper by acting
in the long-term interests of our consumers and
customers, our people, our suppliers, our investors
and shareholders, and the communities in which
weoperate.
Our commitment to ‘Do the right thing. Always’
guides us in acting responsibly and with
integrity, puttingpeople first, seeking out new
opportunities, striving for excellence and building
shared success with our stakeholders. For us,
high standards of corporate governance and
incorporating stakeholder voices into our decision-
making are central to maintaining that integrity and
trust, and strengthen our long-term relationships.
for our Section 172 Statement, which explains how the
Directors have discharged their responsibilities during
theyear under review.
See page 76
MAINTAINING THE TRUST
OF OUR STAKEHOLDERS
OUR CONSUMERS
Putting consumers and
people first is a guiding
principle for our business.
Our consumers want products
that are safe, effective and
provide value for money.
Increasingly, they also want
reassurance that the products
they trust are responsibly
sourced, with consideration and
care for the people who make
them and for natural resources
Consumer insight drives
our innovation programme,
helping us to provide trusted,
quality products that help
meet consumers’ hygiene,
health and nutritional needs.
By reaching more people in
more places, we grow our
business and increase our
impact. We do that by gaining
and retaining people’s trust.
How we engage
Group
– We sell around 30 million products every day
and we collect consumer insights through our
sales teams, supply chain partners, customer
and consumer teams. Most of our products are
sold through our retail customers who provide
us with feedback on consumer priorities
(seemore in Customers on the next page)
– Our sensory and consumer science labs
combine this insight and feedback with
behavioural analytics to develop superior
solutions grounded in science
– Through our brands, we work to forge emotional
connections with our consumers by delivering
products and solutions that meet their needs
and reflect their values
Board
– In October 2023, the Board visited the Montvale,
New Jersey R&D facility to learn more about the
consumer-focused approach adopted by the
R&D function
2023 outcomes of engagement
– We are ranked number 24 out of the top 100
consumer packaged goods companies in the
Kantar PowerRanking, which identifies retailers
and suppliers that set the standard of
performance (as rated by trade partners)
– Based on consumer insights, during the year
wedeveloped and launched Finish Ultimate Plus,
Air Wick Vibrant, Nurofen Liquid Capsules and
Lysol Air Sanitiser (read more on pages 28 to 30)
– We continued our multi-year Nurofen ‘See My
Pain’ campaign highlighting the Gender Pain Gap
and launching ‘PAINPASS’, a tool that enables
women to have data-centred conversations
with HCPs
– We simplified the communication between
HCPs and parents through the use of engaging
digital content tailored to the information needs
of each group
– Our Amazon Climate Pledge Friendly products
continued to deliver benefits and outperform
their benchmark by helping our consumers
discover more sustainable products in our
ranges and make choices that align with
theirvalues
38 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Stakeholders continued
How we engage
Group
– Regular global townhalls, hosted by the CEO
andGlobal Executive Committee (GEC),
including live-streamed Q&As plus supporting
market andfunction-specific townhalls
– Annual Global Employee Engagement Survey
– Employee Resource Groups (ERGs) provide
aspace for underrepresented groups of
colleagues to connect and support each
otherand share views with the business
– ‘Always-on’ communication provided through
our intranet, Rubi, supported by Workplace,
amore tailored communication platform for
employees to share updates, insights and news
Board
– Mary Harris, our Designated Non-Executive
Director for Engagement with Company’s
Workforce, maintains regular engagement
withvarious employee groups, including the
Group’s ERGs
– In October 2023, the Board undertook in-person
engagement sessions with US employees at our
Parsippany office
– The Board also receives briefings on the Group’s
annual employee ‘pulse’ survey
2023 outcomes of engagement
– We hosted nine global townhalls during 2023,
including three on strategy, performance and
results, five on wellbeing and allyship, plus our
annual Global Compass Awards. Around 11%
ofemployees attended and/or viewed our
strategy, performance and results updates,
withquestions raised on a range of topics,
including ongoing performance, our CEO’s
priorities and how we are supporting our
DE&Iand sustainability agendas
– A record 87% of employees took part in
ourannual GLINT employee survey, in which:
• 80% ‘believe in and are inspired by our
Purposeto protect, heal and nurture in
thepursuit of a cleaner, healthier world’;
• 82%indicated they are ‘proud to work
atReckitt’, and
• 78% would ‘recommend Reckitt as
anemployer’,3% higher than external
benchmarks and the highest positive
response recorded to this question since
webegan the survey in 2020
OUR PEOPLE
Our colleagues collectively
help fulfil our Purpose to
protect, heal and nurture
inthe pursuit of a cleaner,
healthier world.
We believe in nurturing
aworkplace that supports
and encourages all colleagues
to thrive. The talent, skills,
experience and values
our colleagues bring and
continuously develop
strengthen our organisation.
We engage to build strong
relationships with our people,
ensuring an understanding of
Reckitt’s strategic direction
and the role that every one
of us plays in contributing
to ourcollective success.
In turn, we strive to provide
an inclusive, fulfilling and
high-performing workplace
where everyone has the
freedom to succeed.
for our Section 172 Statement.
See page 76
OUR CUSTOMERS
Our partnerships with
ourretail customers and
distributors are the way
inwhich consumers access
our products.
Aside from the merchandising
opportunities they provide,
retailers also offer us vital
feedback on evolving
consumer priorities and
patterns of demand.
This informs our product
and service innovation
programmes and helps us to
better meet consumers’ needs.
We aim to build strong
and successful customer
relationships and partnerships
founded on common purpose
that ultimately helpus
to grow our business.
In turn, we aim to exceed
our customers’ expectations
through successful innovation,
efficient execution and high-
quality products and service
that help our customers to
grow their own businesses.
How we engage
Group
– We have a Chief Customer Officer for the Group
who is focused on customer engagement,
delivering profitable results and accelerating
sales growth through execution excellence
– Customer relationships are coordinated globally,
regionally or nationally through our customer
service and sales teams. Joint meetings and
workshops are used to define and build shared
objectives, both commercial and non-financial,
agree strategy and action plans, performance
and growth metrics
– We develop joint sustainability business plans
with many of our customers to help deliver
oncollective goals such as plastics and
packaging reduction and emissions avoidance.
Operationally, we provide ongoing support
through our category, shopper, sustainability,
channel and format, and regional specialists
– We seek to identify strategic synergies,
promote purpose-led innovation and invest
inpartnerships and networks that deliver
jointgrowth
Board
– The Board recognises the importance of
understanding our customers. The recent
appointments of Tamara Ingram and
MarybethHays strengthen the Board’s
capabilityin this area
2023 outcomes of engagement
– Our customers rated us top tier in 42% of our
markets in the Advantage Group Survey of
retailers (+260 bps improvement on 2022).
Specifically, Reckitt Hygiene was ranked
numberone for ‘Best E-commerce Supplier’
across all supermarket categories in Australia
– Reckitt won ‘Best Healthcare Partner’ at the
Watsons Singapore Health, Wellness and Beauty
Awards, and Dettol featured as a ‘Must Have’ in
the Boots Thailand Most Loved Beauty Awards
– Drawing upon our relationship with Tesco in the
UK, we worked on consumer behaviour change
initiatives to drive the adoption of refills for our
Dettol surface spray bottle
– Customer Service Excellence Playbook
developed, which drives sustained service
improvement, better customer engagement
and a reduced cost to serve
39 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Stakeholders continued
Board
– The Board receives briefings from the Supply
function on our key supplier relationships,
including in the context of progress against
ourwider supply strategy
2023 outcomes of engagement
– As a member of Manufacture 2030, we are
helping our co-packers to improve their
environmental performance, specifically
emissions reduction and water use
– In partnership with Oxfam Business Advisory
Service, we created a practical toolkit to help
suppliers develop and implement site-level
grievance mechanisms. The toolkit was piloted
with suppliers in India, Pakistan, China, Peru
andthe UK across the manufacturing and
agricultural sectors
– We updated our Supplier Balanced Scorecard
tofacilitate more granularity on sustainability
performance, allowing us to review
performance and action plans twice a year
– We incorporated sustainability metrics into
ourSupplier Vulnerability Tool, a framework
used to assess supply risk data (including
sustainability metrics)
– TheFinance Directors of Hygiene and Health
participated in investor conferences during
theyear
– Our Global Head of Sustainability participated
ina number of ESG investment panels as a
speaker on biodiversity, in addition to hosting
abiodiversity webinar in partnership with the
publisher Responsible Investor and supporting
the launch of the Taskforce on Nature-related
Financial Disclosures (TNFD) framework
– Our Chair hosted meetings with key investors to
discuss the appointment of Kris Licht as new CEO
2023 outcomes of engagement
– Following extensive outreach to investors by
ournew CEO Kris Licht, through one-on-one
meetings and attendance at leading bank
conferences, we updated the market with
ourStrategic Update alongside our Q3 results
– We reinforced our strategic message:
wearefocused on the continuity of our
strategy, delivering consistent execution
anddriving sustained value creation
How we engage
Group
– We host regional supplier capability-building
events in partnership with industry peers, where
local suppliers are invited to attend and share
best practice on salient topics
– We have centralised more supplier relationships
and procurement activity to monitor supplier
performance and enable best practice sharing
– We conduct regular supplier audits based
onpast performance and risk. Where needed,
we work with suppliers through our capability
building programme to help improve processes
and raise standards
– We engage with HCPs internationally to
exchange information, share best clinical
practice and sponsor research. We also
contribute our expertise to professional journals,
international symposiums and congresses
– We collaborate with independent, purpose-
driven entrepreneurs whose objectives
complement our own
How we engage
Group and Board
– We communicate our financial results through
webinars and management presentations
toanalysts and institutional investors
– We communicate our financial results at our
Annual General Meeting to retail investors
– Post results, the CEO and CFO attend
roadshows to meet with top shareholders
andprospective investors to discuss our latest
financial performance and address any relevant
associated topics
– Management and the Investor Relations team
attend investor conferences throughout the
year to communicate key messages from our
most recent financial results and reiterate our
company strategy
– We hold ad hoc meetings with investors and
sell-side analysts to address any strategy,
operational, Environmental, Social and
Governance (ESG) and modelling queries
– We host a number of additional investor
engagement events, including investor dinners,
sales desks and credit investor updates
OUR SUPPLIERS
AND PARTNERS
Maintaining long-term
relationships with suppliers
and partners helps us to
protect business continuity,
drive innovation and deliver
our Sustainability Ambitions.
OUR INVESTORS
Investors provide financial
capital in the form of equity
and debt, which underpins our
business and enables us to
execute our strategy. In return,
investors expect attractive
returns through capital
appreciation, dividends,
sharebuybacks or interest.
Ensuring our supplier
relationships are founded
on high standards helps us
to drive progress across the
value chain. From ensuring
the fair treatment of workers,
to reducing carbon emissions
and water use, and protecting
local ecosystems and nature,
our engagement is helping to
Our investment community
includes current shareholders
and prospective investors,
mainly institutional and
retail, as well as sell-side
research analysts, investment
and financing banks and
ratings agencies. Many of
our employees form part of
this shareholder community,
being shareholders also.
build resilience and maximise
opportunities for all.
Insights from across the value
chain help us to understand
long-term trends, build
action programmes, guide
innovation and develop
expertise and capabilities
to meet future challenges in
partnership with our suppliers.
Our Investor Relations
programme promotes an open,
consistent and transparent
dialogue, with the aim of
informing investors and
market participants of our
key attributes and strategy.
for our Section 172 Statement.
See page 76
40 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
How we engage
Group
– Together with our partners, we use our
expertise and global reach to drive measurable
and sustainable impact in communities aligned
with our commitment to a cleaner, healthier
world and our focus on achieving a fairer
society, while advancing the UN Sustainable
Development Goals
– We accelerate social entrepreneurship with
expert partners, including Yunus Social Business
and Health Innovation Exchange, by mentoring,
funding and scaling these businesses
– We leverage innovative finance and impact
investments like Water Equity’s Fund IV and
Watercredit micro-finance loans to help provide
lasting access to clean water and sanitation
– We drive behaviour change at scale through our
leading brands; for example, through Dettol’s
Hygiene Quest, a gamified school programme
that educates millions of students each year
– We work with suppliers and communities in
oursupply network through partners such as
Earthworm Foundation, to manage our supply
networks, promote sustainable livelihoods,
andprotect local ecosystems and habitats
Board
– Through the Corporate Responsibility,
Sustainability, Ethics and Compliance (CRSEC)
Committee, the Board is kept updated on and
monitors our Fight for Access Fund and other
social impact initiatives
2023 outcomes of engagement
– Enabling access to hygiene education is a key
focus for our Dettol, Lysol, Harpic and Napisan
brands. Our global hygiene campaigns have
brought high-quality hygiene education to
35million people in over 7 countries and
reduced absenteeism in schools
– We launched the ‘Empowering our Youth’
strategic partnership with the United Nations
Population Fund (UNFPA) to empower women and
young people on sexual and reproductive health
– In collaboration with local partners, through
commercial incentives and investment in
training and capacity building, rubber farmers in
our latex supply chain have reduced their costs,
built resilience and improved their incomes,
leading to wider community benefits
for our Social Performance Review.
See page 52
Board
– To coincide with the first ever Health Day at
COP28, the Board held a Listening Session on
the impacts of climate change on global health.
Experts from the London School of Hygiene
andTropical Medicine (LSHTM) provided
theBoard with a strategic overview of the
associated health issues. The session also
assessed the topic from the perspective of
thecommunities Reckitt serves; in particular,
the health challenges of water scarcity in Mexico
and thespread of vector-borne diseases in India
2023 outcomes of engagement
– With our partners, we emphasised the impact
ofclimate change on health and collectively
secured the first ever Health Day at COP28,
nowpart of the COP agenda
– Reckitt’s long-term collaboration with LSHTM
has advanced hygiene best practices
– Our ‘Oh Yes! Net Zero’ campaign, which aims to
make Hull net zero, now has 175 local companies
from the region, both large and small, signed up
as members
How we engage
Group
– We engage with governments and national
regulators, including the FDA in the US, through
formal policy consultation processes and
informally through bilateral engagement
atformal public-private forums, such as
theUnitedNations COP28 and Water Week
– With NGOs: through global partnership
programmes with Water.org and our WWF
partnership, and through local supply chain
partnerships such as with Earthworm Foundation
– With industry peers: through trade associations
including the International Association for Soaps,
Detergents and Maintenance products (AISE),
via the World Business Council for Sustainable
Development (WBCSD) and the Consumer
Goods Forum (CGF), and through partnerships
such as the Climate & Health Coalition,
facilitated by independent partners
– We work with the Nature-based Insetting team,
a spin-off from the University of Oxford, to help
us understand and measure our impact on
biodiversity in key supply chains, and the
University of York on PhDs to support green
chemistry and product resilience
Our Stakeholders continued
COMMUNITIES
From the markets we support
with our products to those
atthe heart of where we
operate and source our
ingredients, the communities
across our value chain, are
critical to our goal to make
apositive impact.
GOVERNMENTS,
NGOS, INDUSTRY
AND ACADEMIA
We engage with public
policymakers to protect
andstrengthen our reputation
andinfluence policy and
regulatory development.
Our community focus is linked
to our Purpose and areas
where we can make the
biggest impact: access to clean
water, hygiene and sanitation
for all; championing sexual
and reproductive healthcare
and rights; strengthening
maternal and child healthcare;
and improving access to
healthcare and self-care.
We also work with civil
society and NGOs on areas
of common interest to
identify opportunities where
collective action canmake
an impact at scale.
We work with universities
and industry groups to
support new innovation
andprocess development.
With engaged and empowered
communities, we benefit from
long-term market growth
and resilient supply chains,
while advancing access to
the highest-quality hygiene,
wellness and nourishment.
In turn, these forums provide
valuable research, insights and
feedback to further strengthen
our approach and help shape
wider industry action.
for our Section 172 Statement.
See page 76
41 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Financial Performance
Group net revenue of £14,607 million grew by
+3.5% on a LFL basis in the year, reflecting price /
mix improvements of +7.8% and a volume decline
of -4.3%. Our Hygiene brands delivered broad-
based growth (+5.1%) across our brand portfolio
with improving volume trends throughout the
year. Health growth (+5.0%) was led by our
OTC and Intimate Wellness portfolios, and
Nutrition declined (-4.0%) as the US lapped
the prior year competitor supply issue.
Total net revenue on an IFRS basis was up
+1.1%, reflecting net M&A impact of -0.3%
and foreign exchange headwinds of -2.1%.
44% of our Core Category Market Units (CMUs) held
or gained share, with 47% in Hygiene, 46% in Health
and 37% in Nutrition (weighted by net revenue).
E-commerce net revenue grew by +9% in 2023
and now accounts for 15% of Group net revenue.
Adjusted gross margin was 60.0% (2022: 57.8%),
an increase of +220bps, driven by pricing and
productivity efficiencies – predominantly
across revenue growth management and
procurement. These levers more than offset
inflation of mid-single digits in the year.
Brand equity investment (BEI) increased by +13.2%
(+£0.2 billion) on a constant FX basis as we invest
behind innovation launches and the long-term
strength of our brands. BEI percentage of net
revenue was up +130bps to 13.1% (2022: 11.8%).
A YEAR OF
PROGRESS WITH
MID-SINGLE-DIGIT
GROWTH FOR
HEALTH AND
HYGIENE
We grew net revenue,
increased free cash
flow and reduced
leverage, enabling
ustodeliver greater
returns toshareholders.”
Jeff Carr
Chief Financial Officer
Adjusted operating profit was £3,373 million
(2022: £3,439 million) at an adjusted operating
margin of 23.1% (2022: 23.8%), -70bps lower
than prior year, with gross margin expansion
offset by increased brand equity investments
and inflation-led cost base increases. When
excluding the one-off benefits of circa 80bps
in 2022 related to US Nutrition, adjusted
operating profit margin grew +10 bps.
IFRS operating profit was £2,531 million
(2022:£3,249 million) at an operating profit margin
of 17.3% (2022: 22.5%). This was impacted by the
IFCN goodwill impairment of £810 million (2022: £nil),
reflecting higher interest rates and changes in the
regulatory environment.
Total adjusted diluted EPS was 323.4p in 2023
(2022: 341.7p), -5.4% below 2022 as higher adjusted
operating profit at constant exchange rates was
more than offset by adverse foreign exchange
and a higher adjusted effective tax rate in 2023.
Total IFRS diluted EPS was 228.7p (2022: 324.7p).
Full year dividend increased by 5% to 192.5p
(2022:183.3p) per share, in line with our policy
todeliver sustainable dividend growth. Thefinal
proposed dividend is 115.9p (2022: 110.3p) per share.
Free cash flow was £2,258 million in 2023
(2022:£2,031 million) a +11% increase year on year
driven by an improvement in net working capital.
Net debt ended the year 1.9x adjusted EBITDA
(2022: 2.1x adjusted EBITDA).
Net Revenue
£14.6bn
£14.5bn as of 2022
Adjusted Operating Profit
£3.4bn
£3.4bn as of 2022
Free Cash Flow
£2.3bn
£2.0bn as of 2022
42 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Financial Performance continued
HYGIENE
Within Auto Dish, our market leading brand
Finish, grew low-double digits LFL net
revenue and grew market share driven by the
successful launch of our new super premium
tier, Finish Ultimate Plus All-in-One, delivering
more superior solutions to consumers and
driving premiumisation in the category.
Lysol returned to growth in the year driven by
strengthened brand equity and the broadening
of the brand’s shoulders with continued
strong growth in Laundry Sanitiser expanding
household penetration and the recent creation
of the Air Sanitisation category with the
launch of Lysol Air Sanitisers in the US, the
first and only antimicrobial product approved
by the EPA that kills 99.9% of airborne viruses
and bacteria while eliminating odours.
Adjusted operating profit for Hygiene at
£1,236million was up +4.7% on a constant FX basis
and +1.8% on an actual basis. Adjusted operating
profit margin was 20.1%, down -30bps. Strong
gross margin expansion was offset by increased
investment behind innovation launches and brand
building initiatives, and inflation-led fixed costs.
Hygiene net revenue grew +5.1% on a LFL basis
to £6,135 million for the full year. Innovation-led
pricing and favourable mix (price / mix +11.1%) were
the key drivers partially offset by volume decline
of 6%. Importantly, our volume trend substantially
improved quarter by quarter throughout the year.
Net revenue growth was broad-based across all
major brands delivering positive LFL net revenue
growth and total Hygiene market share momentum
improving in Q4 driven by continued momentum
in Auto Dish (Finish). We successfully launched
innovations in most categories that improved
consumer delight, delivered more premium
solutions for our consumers and grew penetration,
in line with our category growth strategy.
47% of Core Hygiene CMUs (weighted by net
revenue) gained or held share during the year.
Volume -6.0%
Price/Mix +11.1%
LFL
1
+5.1%
Net M&A –
FX -2.2%
Actual +2.9%
FY 2023 Net Revenue
£6,135m
Adjusted Operating Profit
1
£1,236m
Adjusted Operating Profit Margin
1
20.1%
Constant FX (CER)
1
+4.7%
Actual +1.8%
Actual -30bps
1. Adjusted measures are defined on page 223
42%
of Group net revenue
43 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Financial Performance continued
HEALTH
cold & flu season in Q4 2022. Mucinex added a
new medicated throat spray to its InstaSoothe
product range, further extending its presence
in the $1 billion US sore throat market.
Intimate Wellness delivered high single-digit
growth in the year. Growth was broad-based
across Europe, following the rebranding of
the product range during 2022. Our portfolio
in China benefited from the end of COVID-
related lockdowns and innovation, including
Durex Fetherlite, our new hyaluronic acid
condom with water-based lubricant providing
a natural moisturisation experience. Growth
was also strong across LATAM, and India
where we increased total distribution points
share during the year by around +400bps.
Dettol declined mid-single digits in the year, with
a mixed performance across markets. A number
of markets delivered growth and market share
gains, underpinned by innovations, including an
extension of Dettol Cool in India, Dettol Washing
Machine Cleaner and Dettol Laundry Pods in China.
However, growth was offset by declines in ASEAN
due to category weakness and specific in-market
challenges. The actions taken during the second
half of the year to address these challenges
have driven an improved performance in Q4.
Adjusted operating profit for Health at
£1,690million was up +6.3% on a constant FX
basis and +2.5% on an actual basis. Adjusted
operating margin was 27.9%, an increase of
+40bps, with gross margin expansion more than
offsetting increased investment behind our
brands and inflation-led fixed cost increases.
Health net revenue grew +5.0% on a LFL basis to
£6,062 million for the full year. This reflected price /
mix improvements of +5.3% and volume decline
of-0.3%.
46% of Core Health CMUs (weighted by net
revenue) gained or held share during the year.
Our OTC portfolio grew low-double digits on a LFL
net revenue basis behind a combination of both
volume and price / mix growth. Nurofen, Strepsils,
Gaviscon and Biofreeze all grew-double digits,
driven by innovation launches, premiumisation
and pricing actions, brand whitespace expansion
(Biofreeze Overnight Relief in the US and Nurofen
Liquid caps into a number of European markets),
as well as some retailer inventory rebuilding in
Europe in Q1. Mucinex delivered low-single-digit
growth which laps a very strong and earlier
FY 2023 Net Revenue
£6,062m
Adjusted Operating Profit
1
£1,690m
Adjusted Operating Profit Margin
1
27.9%
Volume -0.3%
Price/Mix +5.3%
LFL
1
+5.0%
Net M&A -0.6%
FX -3.2%
Actual +1.2%
Constant FX (CER)
1
+6.3%
Actual +2.5%
Actual +40bps
1. Adjusted measures are defined on page 223
42%
of Group net revenue
44 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Financial Performance continued
NUTRITION
value market share position in the non-WIC stage
1-3 segments where we operate. Our Enfamil
brand remain the number one recommended
infant formula by paediatricians in the US.
Our Developing Markets business declined
mid-single digits with category-led volume
declines partially offset by premiumisation and
growth in both the specialty and adult segments.
Areduction in our transitional service arrangement
(TSA) contract manufacturing volume relating
to our disposed China business, contributed
around 60bps to the year-on-year decline.
LATAM grew mid-single digits, offset by market
challenges across certain ASEAN markets.
Adjusted operating profit for Nutrition at
£447million was down -22.4% on a constant
FX basis and -22.5% on an actual basis.
Adjusted operating margin was 18.5%, down
-460bps, reflecting the year-on-year volume
deleverage as we lap the competitor supply
issue in the US, and negative mix as we lose the
benefit from WIC sales in states where Reckitt
does not hold the government contract.
Product liability claims have been filed against
the Group’s Nutrition business relating to
Necrotizing Enterocolitis (NEC). More details on
this matter are included in Note 20 on page 190.
Nutrition net revenue declined -4.0% on a LFL basis
to £2,410 million for the full year. Volume declined
-10.0% due to the lapping of peak market shares
in the US from the competitor supply shortage in
the prior year and category-led volume declines
in LATAM and ASEAN. Price / mix improvements
were +6.0% with pricing actions partially offset
by more normalised trade conditions in the US.
37% of Core Nutrition CMUs (weighted by net
revenue) gained or held share during the year.
IFCN US net revenue declined high-single digits
on a LFL basis in the year with non-WIC market
shares rebasing during the second half as we lap
the prior year competitor supply issue. Throughout
the year, we maintained our leading volume and
FY 2023 Net Revenue
£2,410m
Adjusted Operating Profit
1
£447m
Adjusted Operating Profit Margin
1
18.5%
Volume -10.0%
Price/Mix +6.0%
LFL
1
-4.0%
Net M&A -0.1%
FX +0.5%
Actual -3.6%
Constant FX (CER)
1
-22.4%
Actual -22.5%
Actual -460bps
1. Adjusted measures are defined on page 223
16%
of Group net revenue
45 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Financial Performance continued
Discontinued operations
The Group recognised a profit from discontinued operations of £9 million (2022: £7 million loss),
inrelationto the Group’s disposal of the RB Pharmaceuticals business (now Indivior plc).
Earnings per share (EPS)
Adjusted diluted EPS was 323.4 pence (2022: 341.7 pence), a decrease of 5.4% as higher adjusted
operating profit at constant exchange rates was more than offset by adverse foreign exchange
andahigher adjusted ETR in 2023.
IFRS diluted EPS was 228.7 pence (2022: 324.7 pence).
Balance sheet
At 31 December 2023, the Group had total equity of £8,469 million (31 December 2022: £9,483 million).
Current assets of £5,302 million (31 December 2022: £5,285 million) increased by £17 million as lower
inventories and lower corporation tax receivables were offset by higher cash and cash equivalents
andhigher assets held for sale.
Current liabilities of £8,338 million (31 December 2022: £8,341 million) decreased by £3 million. The decrease
principally relates to lower trade and other payables, together with lower current tax liabilities and current
provisions. These decreases were offset by the share repurchase liability in relation to committed
purchases under the share buy-back programme.
Non-current assets of £21,834 million (31 December 2022: £23,457 million) primarily comprise goodwill
and other intangible assets of £18,588 million (31 December 2022: £20,203 million) and property, plant
and equipment. The decrease in goodwill and other intangible assets of £1,615 million is predominantly
due to the strengthening of sterling reducing the value of foreign currency denominated assets and
theimpairment of IFCN goodwill.
Non-current liabilities of £10,329 million (31 December 2022: £10,918 million) decreased by
£589millionprincipally due to the strengthening of sterling reducing the value of foreign currency
denominated liabilities.
Net working capital
During the year, net working capital decreased by £56 million to negative £1,479 million. Net working
capital as a percentage of 12-month net revenue is -10% (31 December 2022: -11%) mainly due to lower
trade payables and lower inventories.
The following section should be read in conjunction with the full-year financial review from page 41
andthe alternative performance measures section from page 223.
Group operating profit
Adjusted operating profit was £3,373 million (2022: £3,439 million) at an adjusted operating margin of
23.1%, 70bps lower than the prior year (2022: 23.8%). Excluding the one off benefit of c.80bps in 2022
relating to US Nutrition, adjusted operating margin was 10bps higher than 2022. This increase was driven
by higher gross margins, 220bps higher than 2022 from productivity efficiencies and pricing. This gross
margin leverage was offset by higher BEI, 130bps higher than 2022 as we have invested behind our
innovation launches and the long-term strength of our brands, and higher fixed costs, 160bps higher than
2022 due to inflation led cost base increases. Adjusted operating profit in both 2023 and 2022 included
the favourable effect of adjustments to trade spend and operational accruals, certain of which were
subject to significant estimation uncertainty when initially recorded.
Late in the year end close process we identified, through our ongoing compliance procedures,
anunderstatement of trade spend in two Middle Eastern markets related to the fourth quarter and
priorquarters of 2023. As a result, full year net revenue was £55 million lower than previously expected
whichis fully reflected in the FY 2023 results (adjusted operating profit impact of £35 million).
IFRS operating profit was £2,531 million (2022: £3,249 million) at an IFRS operating margin of 17.3%
(2022:22.5%). IFRS operating profit in 2023 was impacted by a goodwill impairment charge of £810 million
relating to IFCN (2022: £Nil), reflecting higher interest rates and changes in the regulatory environment,
(see Note 9). IFRS operating profit in 2022 was impacted by a charge of £152 million from impairment
ofgoodwill relating to the acquisition of Biofreeze.
Net finance expense
Adjusted net finance expense was £247 million (2022: £256 million). Adjusted net finance expense
in2023 benefited from foreign exchange gains on certain financing liabilities (compared with losses
in2022), which offset the effect of higher interest rates in 2023 as compared to 2022.
IFRS net finance expense was £130 million (2022: £161 million). The lower net finance expense under
IFRSis principally due to £130 million of translational foreign exchange gains resulting from the liquidation
of a number of subsidiaries to simplify the Group’s legal entity structure (2022: £69 million).
Tax
The adjusted effective tax rate (ETR) was 25.2% (2022: 21.9%). The 2022 ETR benefited from a higher level
of reassessment of uncertain tax positions following progress on and conclusions of tax authority audits.
The IFRS tax rate was 31.4% (2022: 23.2%). The IFRS ETR in 2023 is higher than the adjusted ETR due to
thenon-deductible impairment of IFCN goodwill offset by the benefit from largely non-taxable gains on
liquidation of subsidiaries. The IFRS ETR in 2022 benefited from a higher level of reassessment of uncertain
tax positions following progress on and conclusions of tax authority audits, and largely non-taxable gains
on sale of E45 and foreign exchange gains on liquidation of subsidiaries.
46 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Financial Performance continued
At 31 December 2023, net debt was £7,290 million, a decrease of £694 million from 31 December 2022,
ascontinued strong free cash flow was used to pay down debt and enabled higher capital returns through
dividends (£1,339 million) and the new share buy-back program (£207 million). Net debt was 1.9x adjusted
EBITDA at 31 December 2023 (31 December 2022: 2.1x).
The Group regularly reviews its banking arrangements and currently has adequate facilities available to it.
The Group has committed borrowing facilities totalling £4,500 million (31 December 2022: £4,500 million),
£4,450 million of which expire after more than two years, which are undrawn at year end. The Group
remains compliant with its banking covenants. The committed borrowing facilities, together with cash
and cash equivalents, are considered sufficient to meet the Group’s projected cash requirements.
Dividends
The Board of Directors recommends a final 2023 dividend of 115.9 pence (2022: 110.3 pence). The
ex-dividend date will be 11 April 2024 and the dividend will be paid on 24 May 2024 to shareholders on
the register at the record date of 12 April 2024. The final 2023 dividend will be accrued once approved
byshareholders.
Return on Capital Employed (ROCE)
ROCE in 2023 was 12.5% (2022: 13.2%), a decrease of 70bps from 2022, due to a lower Net Operating
Profit after Tax (NOPAT) as a result of the higher adjusted tax rate.
Capital returns policy
Reckitt has consistently communicated its intention to use its strong cash flow for the benefit of
shareholders. Our priority remains to reinvest our financial resources back into the business, including
through value-adding acquisitions, in order to deliver sustainable growth in net revenue and improving
earnings per share over time.
In managing the balance sheet, we intend to maintain key financial ratios in line with those expected of
an A-grade credit-rated business. This will broadly define acceptable levels of leverage over time. As we
reduce leverage we will return surplus cash to shareholders as appropriate. In October 2023, our strong
free cash flow generation and healthy balance sheet enabled us to announce a £1 billion share buy-back
programme over the following twelve months.
Growing the dividend is a long-term goal of the business. The Board’s dividend policy aims to deliver
sustainable dividend growth in future years, subject to any significant internal or external factors.
Accordingly, the 2023 dividend was increased by 5% in line with this objective.
Cash flow
31 Dec 2023
£m
31 Dec 2022
£m
Adjusted operating profit 3,373 3,439
Depreciation, share-based payments and gain on disposal of fixed assets
(net of proceeds) 585 521
Capital expenditure (449) (443)
Movement in working capital and provisions (21) (408)
Cash flow in relation to adjusting items (45) (38)
Interest paid (263) (209)
Tax paid (922) (831)
Free cash flow 2,258 2,031
Free cash flow conversion 97% 83%
Free cash flow (FCF) is the amount of cash generated from continuing operating activities after net
capital expenditure on property, plant and equipment and intangible software assets. Free cash flow
reflects cash flows that could be used for payment of dividends, repayment of debt or to fund
acquisitions or other strategic objectives.
Free cash flow of £2,258 million increased by £227 million or 11%. Free cash flow conversion improved
by14 percentage points to 97% as the benefit from working capital was only partially offset by higher
taxand interest paid.
Net cash generated from operating activities has increased by £239 million to £2,636 million
(2022: £2,397 million).
Net debt
31 Dec 2023
£m
31 Dec 2022
£m
Opening net debt (7,984) (8,378)
Free cash flow 2,258 2,031
Share buyback (207) –
Purchase of ordinary shares by employee share ownership trust (2) –
Shares reissued 48 54
Acquisitions, disposals and purchase of investments (80) 220
Dividends paid to owners of the parent company (1,339) (1,249)
Dividends paid to non-controlling interests (8) (35)
New lease liabilities in the period (44) (134)
Exchange and other movements 76 (500)
Cash flow attributable to discontinued operations (8) 7
Closing net debt (7,290) (7,984)
47 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review
Our 2030 Sustainability Ambitions
arean integral part of our business
strategy and support long-term
resilience and growth. They act to
bring ourPurpose to life: to protect,
heal and nurture in the pursuit
ofacleaner, healthierworld.
Our sustainability activity is focused on three
pillars of activity: innovating Purpose-led brands,
enabling a Healthier Planet and contributing
to a Fairer Society. These focus our work on
delivering a cleaner, healthier world whilst
contributing to our business resilience and
growth. Our approach aims to create impact
for society and impact for our business.
Our business and brands help solve some of
the world’s biggest challenges. Our portfolio
is uniquely placed to support hygiene as a
foundation for health, to enable self-care, support
sexual health and wellbeing, and nutrition at all
stages of life. Each of our brands contribute to
the UN Sustainable Development Goals (SDGs)
and create impact through their innovation
programmes and consumer engagement
activities that support change in the home.
Collectively, the positive social and environmental
impacts we create help advance the broader aims
of the UN SDGs. Whilst we contribute to many of
the goals, we believe we can make the biggest
impact on five that are most closely connected
to our brands and our social impact partnerships:
Focusing on what’s material
During the year, we reviewed our approach to
double materiality against the requirements of the
EU Corporate Sustainability Reporting Directive
(CSRD) and the latest guidance from the European
Financial Reporting Advisory Group (EFRAG).
This, along with external research, benchmarking
and input from key stakeholders, has formed
the basis of our updated double materiality
assessment, the details of which we will disclose
in our 2024 Annual Report and Accounts.
DELIVERING OUR
SUSTAINABILITY AMBITIONS
PURPOSE-LED BRANDS
for our Sustainability Ambitions progress overview.
See page 14
We are increasingly aware of the connection
between planetary and public health,
socioeconomic resilience and shared
prosperity. Enabling andstrengthening
hygiene, health and nutrition, together with
safeguarding the planet, are critical toour
business resilience and long-term success.
More sustainable products
Our portfolio of brands help solve everyday
problems and do so at scale, with around 30million
products sold around the world every day.
We are committed to ensuring sustainability is front
and centre of our brands’ purpose and product
innovation whilst maintaining superior efficacy.
This is reflected in our ambition to achieve 50% net
revenue from more sustainable products by 2030.
Alongside this, we are also aiming to achieve:
– 50% reduction in our product carbon footprint
by 2030 versus 2015
– 50% reduction in product water footprint
by2040 versus 2015
– 50% reduction of virgin plastic in packaging
by2030 versus 2020
Our Sustainable Innovation Calculator,
astreamlined product lifecycle assessment
tool, evaluates the environmental impacts of
our products by measuring five metrics: Carbon,
Water, Plastics, Packaging, Ingredients and
Chemistry. The outputs from the calculator
areused to guide decision-making at a project
level, enabling our product developers to make
informed decisions on sustainability indicators,
aligned with delivering our commitments.
In 2023, we have seen a marked improvement
insales from more sustainable products, with
29.6% of net revenue generated from these as
measured by our Sustainable Innovation Calculator,
an uplift from 24.4% in 2022. Thisimprovement
reflects more sustainable innovations reaching
themarketplace, and better use of our Calculator
onnew and existing product development
acrossall GBUs.
for more about our brand innovations.
See pages 15-18
for more about our Scientific Innovation
programmeandoutcomes.
See pages 22-24
48 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
HEALTHIER PLANET
for our Sustainability Ambitions progress overview.
See page 14
Net zero across our value chain
We have a holistic set of science-based targets
tohelp tackle climate change and achieve
netzeroby 2040:
– Reduce our product carbon footprint by 50%
by2030 versus 2015
– Reduce our absolute Scope 1 and 2 GHG emissions
by 65% by 2030 versus 2015
– Achieve 100% renewable electricity by 2030
Emissions reduction and energy use
Our product carbon footprint includes emissions
across the whole value chain (Scopes 1, 2 and
selected Scope 3). During 2023, we improved the
stability of our model, enhancing the methodology
and strengthening the approach. This process
has resulted in our 2015 baseline being restated
at 10.6 million tCO₂e (previously 11.1 million tCO₂e).
Using the updated methodology, our 2023 product
carbon footprint was 9.1 million tCO₂e, a 13.5%
reduction on our 2015 baseline. Further information
on this is available in our Basis of Reporting
Criteria at www.reckitt.com/reporting-hub.
Our approach to reducing our Scope 3 emissions
is to focus on the largest emitting categories. Raw
materials and packaging account for over half of our
carbon footprint and 25 key raw materials comprise
80% of our ingredients footprint. We have begun
working with our suppliers to reduce the carbon
emissions associated with these categories. In some
cases, we will switch to low carbon alternatives
and our R&D team is evaluating options for this
while maintaining the safety and efficacy of our
products. Downstream logistics makes up another
significant proportion of our footprint and we are
evaluating low carbon road- and sea-freight options.
In our operations, we continue to meet and
exceed our target to reduce emissions from our
manufacturing and warehousing operations,
achieving a 67% reduction in Scope 1 and 2
emissions against our baseline. We have developed
plans and targets for carbon reduction across
our manufacturing sites which are reviewed
monthly by our Supply Chain Leadership
team. Specifically, we focus on optimising
high carbon manufacturing processes and
exploring options for asset replacement.
We source renewable electricity and are evaluating
alternative options and replacements for our
thermal energy needs. 94% of the electricity
purchased and consumed by our sites is renewable
through a combination of on-site generation and
renewable energy certificates. We are progressively
implementing power purchase agreements (PPA)
toreduce the use of renewable energy certificates.
In partnership with Manufacture 2030, we continued
to work with our contract manufacturers through
our Supplier Environmental Performance programme
to measure, track and help progressively reduce
their emissions. This included the launch of the
‘FMCG Vertical’ campaign in March 2023, where
we, along with other peer companies, promoted
shared data provision and action planning. This
simplifies environmental performance activity for
both the suppliers involved and their customers.
for more detailed emissions and energy data and the
methodologies used to calculate this information.
See our ESG data book
for our Climate-related Financial Disclosures and
TCFDstatement.
See pages 218-222
Emissions information¹
Metric Unit 2023
2022
(restated)* 2022
Scope 1 emissions tCO
2
e 115,705+ 121,467 121,275
Scope 2 emissions (market-based) tCO
2
e 8,902+ 9,450 9,448
Scope 2 emissions (location-based) tCO
2
e 241,600+ 241,968 237,471
Total Scope 1 and 2 emissions (market-based) tCO
2
e 124,606 130,917 130,723
Total Scope 1 and 2 emissions (location-based) tCO
2
e 357, 304 363,435 358,746
Scope 3 emissions (excluding indirect consumer use) million tCO
2
e 9.2 9.5 13.0
Scope 3 emissions (including indirect consumer use) million tCO
2
e 37.6 36.7 40.0
Total product carbon footprint
(excluding indirect consumer use)
2
million tCO
2
e 9.1+ 9.5 13.0
Total product carbon footprint
(including indirect consumer use)
2
million tCO
2
e 37.3+ 36.7 40.0
Scope 1 and 2 GHG emissions intensity (market-based)
– tCO
2
e per tonne of production
3
0.04 0.04 0.04
– tCO
2
e/£m revenue 0.008 0.009 0.009
Energy consumption resulting in
Scope 1 and 2 emissions MWh 1,220,968+ 1,278,934 1,278,643
Proportion of energy consumption from UK operations % 10 11 11
Proportion of Scope 1 and 2 emissions from
UKoperations % 12 11 11
+ Assured by ERM CVS as part of limited assurance engagement in accordance with International Standard on Assurance
Engagement ISAE 3000 (revised) and ISAE 3410 for Greenhouse Gas data issued by the International Auditing and Assurance
Standards Board. The assurance report, along with the principles and methodologies we use in our reporting, can be found
online at www.reckitt.com/reporting-hub
1. We report on emission sources required under the Companies Act 2006 (Strategic Report and Directors’ Reports)
Regulations2013 and the Streamlined Energy and Carbon Reporting (SECR) requirements covering the 2023 reporting year
(1 January–31 December). Emissions have been calculated in line with the World Resources Institute (WRI)/World Business
Council for Sustainable Development (WBCSD)Greenhouse Gas (GHG) Protocol – Corporate Accounting and Reporting
(revisededition). Our GHG emissions and energy data includes emissions and energy consumption from operations covered
bythe Group Financial Statements for which we have operational control
2. Our total product carbon footprint includes Scope 1, 2 and selected Scope 3 emissions.
3. The scope of our GHG emissions per tonne of production covers manufacturing and warehousing. Including R&D and offices
the GHG emissions intensity per unit of production in 2023 sites only was 0.04 tCO
2
e
* Restatements: prior year Scope 1 and 2 data has been restated as a result of site divestments, and updates to local energy
conversion factors and the International Energy Agency GHG emission factors. Prior year Scope 3 data has been restated
asaresult of methodology improvements
Full details on the calculation methodologies are available in our Basis of Reporting Criteria online at www. reckitt.com/reporting-hub.
49
1
Foundation
Industries emit
valuable CO
2
CO
2
is
captured
CO
2
is converted into key
intermediates used widely in
the chemical industry
Intermediates
converted into
surfactants
Surfactants are
formulated into cleaning
products and coatings.
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
Energy efficiency measures
When we set our science-based targets for
emissions reduction in 2020, improving our
energy efficiency was an important step in
delivering a 65% carbon reduction. Since then,
changes to our business structure and product
mix alongside ensuring our purchased electricity
is from renewable sources, has reduced the
significance of energy efficiency on our carbon
emissions. We remain focused on energy efficiency
improvements for cost purposes, but the original
target is no longer as relevant for decarbonisation.
Instead, we are targeting gas efficiency and
alternative thermal energy to reduce emissions.
As a result, progress towards our energy efficiency
target has slowed and this year we reduced
energy use per tonne of production by 4% against
our baseline. We are still aiming to improve energy
efficiency, with its associated reduction in energy
costs, but with many projects having longer
pay-back periods, absolute carbon reduction will
remain the focus of our attention.
Plastics and packaging
By 2030, we plan to halve our use of virgin plastic.
Our ambition is for all our plastic packaging to
be recyclable or reusable by 2025, with at least
a quarter coming from recycled materials.
During the year, we reviewed our Post-Consumer
Recycled (PCR) plastic inclusion rates against
our targets and planned activity. Progress to
date is slower than anticipated at 5%. To help
accelerate the inclusion of more PCR in our
packaging, the GEC approved an additional
financial commitment. This will support our work
to increase PCR across many of our Hygiene and
Health brands, focused on key packaging formats
where the majority of plastic is used, and help
correct our trajectory towards our target of 25%
recycled content in plastic packaging by 2025.
In addition, we’re working with Recyclass and
other industry experts and associations to
ensure we have access to the latest recycling
guidelines, and in-country collection and
recycling information. This enables our teams
to design for recycling right from the start of
aproject. The guidance extends beyond plastic
to other materials, ensuring we’re equipped
with the knowledge to make the right choices
in product design and development.
We continue to make progress in reducing our use
of virgin plastic. For example, Dettol’s new surface
cleaner refill in the UK enables consumers to refill
their original bottle and trigger packaging and
results in 75% less plastic versus buying another
750ml Dettol trigger bottle. Looking ahead,
we’re investing in polymer science and research
to find the solutions for our products which will
help us deliver our reduction target by 2030.
for more on Plastics and Packaging.
See reckitt.com/reporting-hub
Reducing waste in our operations
During the year, we reduced waste in
manufacturing by 18% versus 2015, keeping
us on track to achieve our 2025 target of a
25% reduction against our baseline. All of our
manufacturing sites have now achieved zero
waste to landfill, with new waste management
and disposal systems in our US Nutrition sites
(previously the only remaining sites using landfill).
Flue2Chem: cross sector collaboration
to tackle net zero
Reckitt has joined forces with a number
of businesses, universities and NGOs
in the pioneering Flue2Chem project,
spearheaded by Unilever and the Society
of Chemical Industry. The project aims to
cut CO
2
emissions by converting industrial
waste gases into chemicals to create
more sustainable consumer products.
It focuses on the potential to capture
the carbon created as a byproduct of
industrial processes, such as steel or paper
manufacturing, and converting this into
an ingredient that can be used in cleaning
products for brands such as Dettol. This
not only helps to tackle greenhouse
gas emissions but also promotes a
circular economy, recognising the value
and potential of waste materials while
reducing our reliance on fossil fuels.
Flue2Chem represents an opportunity
to progress our journey towards a
cleaner, healthier world. If successful
and adopted at scale, Flue2Chem could
cut 15 to 20 million tonnes of carbon
dioxide emissions in the UK each year.
CASE STUDY
50 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
Water stewardship
Our ambition is to halve our total product
water footprint by 2040 versus 2015. Where
we operate in water-stressed areas (17 sites)
we aim to be water positive by 2030.
Our Sustainable Innovation Calculator encourages
the design of products that reduce water
consumption across the value chain. Volume and
product mix changes have led to our product
water footprint increasing by 9.9% versus our
baseline. However the expansion of our Calculator
across all parts of the innovation process has
resulted in an improvement versus 2022.
In the near term, our focus on driving water
reduction has centred around our operations and
the catchment areas we are part of, especially in
water-stressed locations. Our progress on water
reduction in our operations remained relatively
static versus last year, with small improvements
driven by production efficiencies, water treatment
recovery, cleaning optimisation and water recycling.
The return on investment from water saving
projects is low given the relative price of water
but within water-stressed locations it remains a
key part of our water strategy for resilience in the
long term. This extends to our catchment area
work. Our Hosur site in India became our first water
positive site in 2022 and we are advancing similar
projects in our other water catchments of focus,
near Mysore in India and in Mexico and Pakistan,
partnering with local NGOs and governments
to support communities and our sites there.
Biodiversity and nature-based solutions
We have committed to developing ecosystem
protection and regeneration programmes
with nature-based solutions in our key value
chains by 2030. Our focus is on the areas
where we can have the most impact, and our
priority commodities include rubber, palm
oil, natural fragrances, dairy and timber.
We have been a contributing member to and
early adopter of the TNFD, whose framework
helps companies identify nature-related
dependencies, risks and opportunities.
Duringthe year, we participated in a pilot of
the scenario modelling guidance focusing on
our latex supply chain (see case study).
To measure the biodiversity impacts of our
activities on local ecosystems we are taking a
science-based approach, developed over the
last two years in collaboration with the Nature-
based Insights (NbI) team, a spin-off from the
University of Oxford. This enables us to quantify
both positive and negative impacts, assess
potential interventions and understand which
will have greatest impact. The outcomes are
helping to shape new ways of working with
suppliers and farmers that support sustainable
development. Our partnerships with smallholder
rubber farmers in Thailand for example, facilitated
by our partner Earthworm Foundation, encourage
good agricultural practices, protecting the
ecosystem and strengthening productivity.
We work with a number of partners to help
regenerate ecosystems and deliver social
benefits, including the Earthworm Foundation’s
palm landscape programmes in Indonesia and
Malaysia. With WWF, our work on critical river
systems in the Amazon and Ganges basins has
helped strengthen the aquatic ecosystem by
preventing pollution and with demonstrable
impact on local wildlife. This supports the water
catchment area of our sites and the sourcing
regions we depend on for our ingredients.
online at reckitt.com/reporting-hub.
See our Sustainability Report
Applying the TNFD framework to our
latex supply chain in Thailand
Reckitt relies on a range of ecosystems
to supply ingredients, including rubber
for latex condoms, palm oil for soaps, and
natural fragrances. Our sustainable sourcing
programme is designed to help protect and
support these ecosystems with nature-
based solutions that can also help mitigate
risks such as climate change. This, in turn,
can have a positive social impact for local
communities. Our suppliers and farmers are key
stakeholders in protecting these ecosystems.
During the year, Reckitt’s Sustainable Sourcing
team, in partnership with NbI, piloted the TNFD
LEAP framework in our latex supply chain to
establish a baseline of our current impact and
identify the potential areas affected by latex
sourcing. The Surat Thani landscape in Thailand
was chosen for analysis due to its high levels
of biodiversity and its importance in supplying
rubber for our Durex brand. It is also the
location of our existing partnership programme
with Earthworm Foundation, which builds
the capacity of local farmers in the region.
NbI’s analytical approach has helped us to
identify areas under stress and focus our
resources where we can have the most impact.
Using the framework, NbI also conducted
a deep dive into deforestation and water-
related risks. In addition, Earthworm identified
the impact of high market prices for durian,
a tropical fruit to which some rubber farmers
were switching. Durian is generally produced
with higher levels of fertilisers and pesticides,
and unlike rubber requires irrigation to farm.
Further land use change of rubber landscapes
to durian therefore represents a risk to the
intensity of local water demands and could
reduce the long-term biodiversity and carbon
gains made by mature rubber plantations.
Reckitt and NbI’s work in Thailand is one of over
200 test cases to use the TNFD framework.
Together we are working with local farmers
and stakeholders to shape targets that are
economically viable and bring a positive
climate, biodiversity and social impact to the
region. We are building a network to evolve
themodel that we have used in Surat Thani and
we are aiming to extend this methodology to
other key commodities in Reckitt’s supply chain,
including palm oil in Indonesia and Malaysia.
on tnfd.global for more detail.
See the TNFD guidance
CASE STUDY
51
9 (60%) 6 (40%)
64 (71%) 26 (29%)
400 (66%) 202 (34%)
7,983 (49%) 8,294 (51%)
19,931 (55%) 16,120 (45%)
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
Developing our people
On-the-job learning and continuous development
take place throughout the year. All employees
have a formal annual performance review against
business objectives. This is also a chance to discuss
ongoing personal development plans, career
ambitions and potential to take on different roles.
We continue to invest in a range of learning
and development programmes and following
feedback from colleagues have rejuvenated
FAIRER SOCIETY
for our Sustainability Ambitions progress overview.
See page 14
We are committed to enabling a fair, diverse
andinclusive society as an employer and across
our value chain.
Our people
Leveraging diversity
Our cultural diversity is a key strategic
capability, harnessing diversity of thought
to drive our performance. With over 40,000
people from 125 different nationalities
operating across 68 countries spanning six
continents, we closely reflect and represent
the consumers and communities we serve.
Building a culture of inclusion
Our ambition is to build a business where
every one of our colleagues feels able to
be their authentic self as they contribute to
our collective performance, that our brands
reflect this value and support inclusion within
the markets we serve, and that we set clear
standards for the partners and businesses
we work with throughout our value chain.
for more on Our People.
See pages 19-21 See page 38
our approach to personal development. Reckitt
colleagues now have access to a new learning
platform which offers personalised development
options based on role, function and career
aspirations. Aligned to our 10 functional academies
and LinkedIn’s Learning library, colleagues
are able to drive their own development
using the format that works for them.
Since launch in April 2023, our LinkedIn Learning
library had 9,500 active Reckitt users at the year-
end with a total of 14,898 learning hours (2hr 20
minutes average training hours per person).
Of our 10 functional learning academies, the
Reckitt Marketing Academy was our champion in
2023. Targeted at Reckitt marketing professionals,
the Marketing Academy facilitates online and
face-to-face learning and integrates a learning
culture within the business operating model.
– The online platform achieved an impressive
89%participation rate, with 2,286 people
registered across 58 markets
– 70+ countries now have a marketing
upskillingplan
– 70 learning courses are available with an
average 4.3/5 satisfaction score and the
platform received Bronze for ‘best technology’
at the Learning Technologies Awards
In terms of our Group leadership development
programmes, we ran:
– 15 Accelerate/Advanced Accelerate inclusion
focused programmes for high-potential women;
the highest we have ever run in a year
– 7 Explore sessions for our purpose focused
leadership programme for senior leaders,
including two session in Amsterdam, two
intheUS, one in Malaysia and two in the UK
– 5 Global Commercial Future Leadership Potential
programmes to spot and develop high-potential
senior leaders of the future
In addition, our ‘Good to Great’ programme
forhigh-potential leaders aspiring to global
management positions or GEC/functional
leadership roles had 37 people this year;
arecordnumber and investment.
Supporting livelihoods
Reckitt has been an accredited Living Wage
Employer in the UK since 2020. A living wage
goes above and beyond the minimum wage
and reflects the real cost of living. Having
extended this commitment across our global
markets in 2023, we now pay all our employees
above the Fair Living Wage thresholds, as
defined by the Fair Wage Network. We are
also committed to paying a Fair Living Wage
for all our contractors, interns and trainees.
In 2023, we completed an assessment to identify
if any Fair Wage gaps existed and, where they
did, put plans in place to rectify through mid-year
adjustments and our annual pay review process.
for our Remuneration Report.
See pages 100-136
Our Sustainable Livelihood Framework goes
beyond wages to also capture broader work
on providing a safe working environment
that promotes health and wellbeing, equality,
employment rights, long-term financial
security, and skills development to support
ongoing career development for our people.
Gender diversity
We aim to achieve gender balance at all
management levels by 2030.
1. Diversity data is taken as of 31 December 2023 for
active Reckitt employees (excluding contractors)
2. ‘All management’ includes: Executive Committee
Member, Group Leadership team, Senior
Management team, Middle Manager, Manager
3. 79 persons with undisclosed gender
4. Further information on methodology for calculating
diversity performance is available in our Basis of
Reporting Criteria at www.reckitt.com/reporting-hub
Board Directors
GEC and Direct Reports
Senior manager roles
All management roles
All employees
Male Female
52 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
In 2023, our Framework was expanded to
include key Water, Sanitation and Hygiene
(WASH) metrics. The metrics were developed
to ensure that all of our facilities provide people
with access to sufficient, free, safe water that
meets required quality standards; access to
sufficient personal hygiene and hand washing
facilities; and adequate, improved, convenient
toilet facilities (as per the WHO definition of
adequate and improved). We are pleased to
report that all of our facilities met these criteria.
Enabling a fairer society across our value chain
Our global supply chain extends across 70
countries. We work with manufacturing partners,
distributors and various other organisations,
from rural farms to multinational raw material
and packaging material suppliers.
Our focus over the past 12 months has been:
– Expanding the scope of our sustainability
programmes to identify and tackle human
rights and environmental challenges by
engaging more categories of indirect suppliers
and distributors
– Deploying effective remediation where
weidentify cases of modern slavery and
transparently report our findings and actions
– Supporting suppliers to implement
effectivesite-level grievance mechanisms
using the toolkit developed with Oxfam
Business Advisory Service to enable grievances
to be raised and effectively addressed close
tosource
– Looking beyond audit to actively identify and
address potential human rights impacts before
they materialise
– Enhancing our sustainable sourcing activities
within our palm oil and latex supply chains to
enable a healthier planet and deliver sustainable
livelihoods and working conditions
– Ongoing collaboration and partnership through
industry associations and forums, such as
AIM-Progress, the Pharmaceutical Supply Chain
Initiative (PSCI) and the Consumer Goods Forum,
to promote human rights and build sustainable
solutions that make a tangible difference to
tackle systemic issues such as modern slavery
We are committed to protecting human rights
and use impact assessments and action plans
in our key value chains and top 10 priority
markets to monitor and drive improvement.
Having completed our first Human Rights
Impact Assessment of our Durex and Enfa
brand value chains in Thailand, this year we
completed an assessment of our Brazilian
operations (see case study right). Using a tool
developed with the Danish Institute for Human
Rights together with our own knowledge and
insights, we have identified a further eight
priority markets in which we plan to conduct
human rights impact assessments by 2030.
During the year, we also continued our
programmes of risk-based supplier audits,
helping to strengthen labour standards in our
supply chain. We complement these audits
with asupplier capability programme to raise
awareness, knowledge and skills of our suppliers
on labour standards and human rights issues. This
joint approach continues to improve standards
within our supplier network and we report on this
in more detail in our Modern Slavery Statement.
online at reckitt.com/reporting-hub.
See our Sustainability Report
Assessing human rights
impactsinBrazil
As part of our commitment to protecting
human rights across our value chains, we
carry out human rights impact assessments
to understand the actual and potential
impacts affecting a particular market or
geography. These assessments help us
to create locally relevant action plans to
drive improvement for our stakeholders.
In 2023, we completed an assessment
of our operations in Brazil, covering the
value chains of our Olla condoms, SBP’s
Aerosol Pesticides, and Veja’s Multipurpose
Cleaners. It took into account consumers,
our employees, tier 1 suppliers and workers
in the raw material supply chain.
The findings acknowledged the positive impact
we are having through our purpose-led brands.
It also identified several potential human rights
issues, related to systemic issues in Brazil.
These are areas of strength for Reckitt where
we have programmes and strategies in place.
We have identified threekey areas where
Reckitt can continue to drive improvements
inour operations, across our value chain and
forthe communities where weoperate:
– Continuing to take a leadership position
ondiversity, equity and inclusion matters
– Working with local suppliers to ensure
theresponsible sourcing of raw materials
– Increasing access to intimate wellness
products and information on sexual
healthindisadvantaged and lower
incomecommunities
at reckitt.com/reporting-hub for more detail
onourhuman rights programmes.
See our Sustainability Report
CASE STUDY
53 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
Our communities
We aim to reach half the world with our purpose-
led brands, engage two billion people through
our programmes, partnerships and campaigns,
and have a measurable, positive impact on 10
million people by 2030. We have already exceeded
this goal, impacting 18 million people to date.
We have set a target that at least 50% of
ourbeneficiaries should be women. In 2023,
we helped to progress this ambition through
our support for initiatives such as the Climate
Gender Equity Fund and Women in Innovation
Fund (WiNFUND), which both support the
scale-up of women-led grassroots innovation.
An example from the WiNFUND, which is
focused on healthcare, is CHIL AI Lab in Uganda,
which leverages AI to extend specialised and
affordable disease prevention and management
services to women in remote areas.
We see our role as a catalyst to driving lasting,
positive impact in communities. We drive
systems change by leaning into the positive
power of business and do what we do best:
– Driving behaviour change at scale via our
market-leading brands. Examples include Dettol
Hygiene Quest in partnership with Roblox that
has engaged over five million children in 2023
inthe metaverse
– Scaling the social economy by supporting
socialentrepreneurship via mentorship
andcapacity building
– Leveraging innovative finance to create lasting
impact in communities
1. Clean water, sanitation and hygiene: We strive
for universal access in communities around the
world. In 2023, we enabled access to improved
water and/or sanitation solutions for more than
331,000 people in India, Indonesia and Kenya
through our partnership with Water.org.
Since2018, this partnership has enabled lasting
access to WASH for more than two million
people. In 2023, to address critical capacity
challenges in scaling up this programme, Reckitt
invested $2.4 million into WaterEquity’s Global
Access Fund IV, which seeks to increase access
to a further 240,000 people by supporting
financial institutions in emerging markets to scale
their water and sanitation microloan portfolios.
2. Sexual health and rights: We empower women
and young people to know their sexual rights and
protect their sexual health. In 2023, Reckitt and
Durex launched the ‘Safeteen First’ programme
in partnership with UNFPA in Thailand and Mexico,
which aims to positively impact 700,000 people
by 2026 by reducing prevalence of STIs and
unwanted teenage pregnancies through
changing behaviours, breaking stigmas and
increasing condom use.
3. Maternal and child health: We support mothers
and infants to have the best start in life. In 2023,
forexample, our partnership with Wellbeing
Foundation Africa in Nigeria connected with
25,835 pregnant and lactating mothers to educate
on critical hygiene practice to prevent infection.
Our social impact investments are critical
to furthering our fairer society goal to
measurably impact 10 million people by 2030.
This work is funded via our Fight for Access
Fund, which totalled £31.4 million in 2023.
online at reckitt.com/reporting-hub.
See our Social Impact Report
Accelerating social entrepreneurship
We believe we can have the greatest
impact when we work as a catalyst for social
innovation, harnessing the positive power
of business, our brands and our people.
By accelerating the growth of health and
hygiene social businesses, we can leverage
the multiplier effect and address the access
gap whist also unlocking economic growth,
creating jobs and reducing poverty. And by
working with entrepreneurs that inherently
understand the needs of their communities,
we can reach people with solutions that work.
In partnership with Yunus Social Business,
we are providing innovative WASH social
enterprises with the support they need to
scale: capacity building, expert mentorship
from Reckitt people and seed funding.
We have done this so far in Brazil, South
Africa and more recently, Nigeria.
In South Africa and Brazil, six months from
the close of the acceleration period, the
12 enterprises reported the following:
– A 56% increase in the total number of
full-time employees
– A 12x increase in the number of people
positively impacted by their business
One of those enterprises is Kusini
Water, based in South Africa, which
utilises waste macadamianut shells and
nanotechnology to build water filtration
systems that remove99% of disease-
causing bacteria, parasites and debris.
Kusini Water was able to reach an
additional 8,000 people with clean water
within six months of the acceleration
period ending. It is also now working to
implement clean water systems in a further
13 schools across rural South Africa.
Kusini Water alongside its Reckitt mentor,
Deroosha Naidoo, was the subject of the
‘Climate and Us’ film produced for Reckitt
by BBC Storyworks Commercial Productions
and presented by the Global Climate
and Health Alliance at COP28 in UAE.
CASE STUDY
54 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Sustainability Performance Review continued
NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT
We are committed to the 10 principles of the UN Global Compact in the areas of human rights, labour, the environment and anti-corruption.
Relevant policies and risk management processes Additional information
Environmental
matters
Our Environmental Policy sets out our objectives for reducing our environmental impacts. It requires compliance with relevant legislation, consideration of environmental
issues in key decisions, and engagement with multiple stakeholders for better environmental performance which is monitored through our Group Environmental
Management System. Our Supply Chain Leadership team routinely monitors environmental performance, including progress on our climate ambitions through our
operational change carbon emissions programmes. These are also reviewed at Business Unit, Group and Board level on a quarterly basis. Our Sourcing for Sustainable
Growth Policy sets out Reckitt’s human rights, health and safety, environment and sourcing requirements for all business partners. The policy details six responsible sourcing
principles that drive us to conduct business with honesty and integrity, respect human rights, provide a safe and healthy working environment, use safe and sustainable
ingredients, source raw materials responsibly, protect the environment and reduce environmental impact. The policy applies to Reckitt employees and third parties.
Environmental
Performance
Review,
pages48-50
Employees Reckitt’s Code of Conduct governs standards of conduct in relation to our employees, as well as our stakeholders. All employees must complete code of conduct training
and are encouraged to refer to the code frequently to ensure the right decisions are made. In addition, Reckitt has policies committing to equal opportunities at work and to
providing a safe and healthy working environment. Health and safety performance is monitored through our Group Occupational Health and Safety Management system,
enabling us to investigate any incidents and take any necessary action. We have a Speak Up policy and process, allowing any employee or third party to confidentially report
a violation of the Code of Conduct, local law or regulation, or unethical behaviour.
Social Performance
Review, page 51
Our People,
pages19-20, and 38
Human rights
Respecting human rights is an absolute and universal requirement and through our Code of Conduct we set out our commitment to respecting the fundamental human
rightsdefined in the UN Universal Declaration of Human Rights. Our Labour and Human Rights Standard sets out the requirements and practices expected of our supply chain.
Our Sourcing for Sustainable Growth Policy (see above) also encompasses principles of the International Bill of Human Rights and the International Labour Organization’s (ILO)
Declaration on Fundamental Principles and Rights at Work. We also follow the UN Guiding Principles on Business and Human Rights and Organisation for Economic Co-operation
and Development (OECD) Guidelines for Multinational Enterprises. Our Supply Chain Leadership team monitors our human rights and labour standards assessment programme
on a monthly basis, while these are also reviewed at Business Unit, Group and Board level on a quarterly basis.
Social Performance
Review, page 52
Our Suppliers,
page39
Social and
community
matters, including
consumers
Reckitt’s Product Safety Policy describes our approach to safety assurance for products, covering product development; monitoring in-use safety and feedback from users;
and reacting promptly and effectively to mitigate potential harm. In addition, our Responsible Marketing Policy covers the full marketing lifecycle of our products and applies
to all marketing communications touchpoints and channels. It applies to everyone at Reckitt and external parties. We perform ongoing audits and adherence checks on policy
implementation. We also monitor consumer, customer and employee feedback on an ongoing basis, through our consumer care lines or our Speak Up Line.
Social Performance
Review, page 51-53
Our Stakeholders,
pages 37-40
Anti-bribery
andcorruption
Our policy is that all Reckitt companies, employees and contractors must comply with the anti-bribery, anti-corruption and competition laws of all countries in which they
operate. Directors and managers must ensure that the employees and contractors they supervise are aware of and comply with this policy. All employees and contractors
must certify annually that they have complied with our Code of Conduct, and the Audit Committee reviews internal audit findings in relation to this.
Emissions information Page 48
Climate-related financial disclosures Our climate-related financial disclosures can be found on pages 218-222 and are incorporated into the Strategic Report by reference
Diversity information Page 51
Policy embedding, due diligence and outcomes Risk Management, pages 55-56 | CRSEC Committee Report, pages 96-99
Principal risks and impact of business activity Pages 57-60
Description of business model Page 12
Non-financial key performance indicators Pages 13-14
55
Board
and
Committees
Enterprise level
risk management
Operational level risk management
Enterprise Risk Management Framework
GBUs
Roles and
responsibilities
Policy and
process
Tools and
training
Core
functions
Sites, regions
and programmes
GEC
Co ntinuous
process of risk
re view and
management
Communicate and escalate
Strategic objectives
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Risk Management
Risk governance
The Board provides oversight over our principal
risks and the Audit Committee monitors the
overall effectiveness of our risk management
and internal controls framework.
Board oversight is achieved through several
mechanisms which include reviews of strategic
programmes, Committee meetings and
focused reviews into selected risk areas.
The Group and GBU Risk, Sustainability &
Compliance Committees (RSCCs) support the GEC
in its oversight role. These are embedded within
the governance structure of the organisation,
with escalation between committees as needed.
They meet quarterly to review, challenge
and monitor risk management activities.
Ownership and accountability for the management
of principal risks resides with the GEC. There is
an accountable owner for each principal risk.
Our Risk Management Framework is aligned
with the Three Lines of Defence model, which
assigns roles and responsibilities for risk and
control across line management, oversight
functions and independent assurance providers.
Risk appetite
The Board interprets risk appetite as the level of
risk that the Company is willing to take to meet
its business objectives. The Board’s appetite for
risk is communicated to the organisation through
our strategic and business planning process and
control frameworks. The Board recognises that not
only does risk mitigation need to be proportionate
to the benefit gained, but also carefully balanced
with a degree of flexibility to support Reckitt’s
dynamic and entrepreneurial culture.
In assessing risk appetite, the Board reviews the
three-year business plan and associated strategic
risks. Risk appetite for specific financial risks such
as funding and liquidity, credit, counterparty,
foreign exchange, interest and commodity risk are
set out in the Board-approved Treasury policies.
Compliance with our safety standards and our
legal and regulatory requirements is mandatory.
Taking and managing risk is essential
to operating and growing our business
safely, effectively, and sustainably.
Our approach to risk management
Our Risk Management Framework provides
a consistent approach to risk management
across the organisation and facilitates the timely
communication of risks to ensure the right people
at the right level are managing the right risks.
Risk management process
We embed risk management at multiple levels
of the organisation. Our framework ensures
risks are identified, assessed, mitigated and
monitored in an effective and consistent
way and supports information flow and
open communication between the GEC,
GBUs, our functions, markets and sites.
Our Group Risk team facilitates the risk
management process throughout the year.
Thisensures that we are appropriately prioritising
our efforts and resources to manage our risks.
The Group’s risk profile along with key mitigations
and action plans are reported throughout the
year, providing the GBU Leadership, GEC and
Board with an enterprise-wide view of risk.
RISK MANAGEMENT
ATRECKITT
56
Speed
of impact
Financial
impact
Years
Minor impact
Weeks
Months
Days
S
t
r
a
t
e
g
i
c
O
p
e
r
a
t
i
o
n
a
l
C
o
m
p
l
i
a
n
c
e
Severe impact
Significant
impact
Major impact
1
4
10
8
5
3
2
9
7
6
Remote RemotePossi ble Possi ble Likely Likely LikelyHighly likely
Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Risk Management continued
Emerging risks
Emerging risks and horizon scanning are integrated
into our risk management process and provide
a forward-looking view of major trends that
have the potential to impact the business across
a longer time horizon (>three years). We are
currently monitoring a number of emerging risks.
The impact of industry on nature and biodiversity
is a growing area of interest and emerging
risk, both in terms of resilience of supply
chains and the impact of growing regulatory
frameworks. With this in mind, we have developed
programmes to prevent deforestation, support
water resources in areas of water stress and
act to prevent pollution from manufacturing
operations. We have also developed biodiversity
impact monitoring systems that steer activity
in key value chains. These help us introduce
activity to mitigate impact on biodiversity and
will support our emerging reporting against the
guidance from the TNFD, to which we have been
a contributing member for the past year. This
complements our activity on climate change
and reporting against the guidance of the TCFD,
given climate change is frequently a driver of
nature-related issues. For more information on
our response to TCFD, please refer to page 218.
The emergence of generative AI tools presents
new opportunity for how we work across all areas
of the Company. However, the nature of this
new technology and the speed at which these
tools are being developed has the potential to
impact data privacy, accuracy and reliability. Our
Information Technology & Digital (IT&D) and Legal
teams are working closely to ensure that any AI
tools utilised across the organisation are fully risk
assessed, with appropriate actions taken where
necessary, and that our policies (e.g. AI Tools
Policy) are adopted and regularly updated.
KeyManufacturing Sites, to provide greater
focus on these two key areas of our supplychain
– Sustainability has evolved to ESG Transition
inresponse to the changing regulatory
environment and the growing ESG reporting
agenda. This risk includes the work being done
to understand the impact of climate risk and
respond to our climate-related disclosures
– Product Quality and Product Safety have been
merged to create a Product Safety risk,
reflecting the close interdependencies
between these two areas
– South Korea Humidifier Sanitiser (HS), which has
been managed as its own principal risk for a
considerable period, has now been subsumed
within the Legal and Compliance principal risk
Developments in disruptive science and
technology may impact some of the categories
in which we operate, such as the traditional cold
and flu category. Our R&D and Science teams
actively engage with the scientific community
to stay abreast of leading developments
in science, medical and regulatory affairs,
and the impact of emerging technology.
Finally, we continue to see consolidation across the
sector, with increasing levels of competition for
acquisition targets. Our CorporateDevelopment
team, which is responsible for identifying,
evaluating and executing on Reckitt’s global
M&A opportunities, partners closely with each
GBU to actively manage our portfolio and
undertake competitive screening activities.
Our principal risks
The Group’s principal risks represent the
most significant risks facing the Group and
arise from one or a combination of internal
or external factors. The Group’s risk profile
is reviewed biannually, with risks assessed
across a timeline of up to three years.
During the year, we undertook a review of our
principal risks to make them more focused
and specific to our business. This included re-
evaluating their potential impact and likelihood.
The 10 listed are assessed as being the most
material risks to the Group. Four risks previously
reported fell below this threshold, and whilst
they will continue to be managed in the same
way, they have not been reported in detail here.
These risks are Employee Health and Safety,
Tax Disputes, Commercial, and People. Other
key changes to the principal risks include:
– Supply Disruption risk has been split into
twomore specific supply-related risks,
SupplierDisruption and Reliance on
Principal risk
1. Cyber Security
2. Changes to Product Regulations
3. Legal and Compliance
4. Supplier Disruption
5. Geopolitical Instability
Principal risk
6. ESG Transition
7. Product Safety
8. Innovation
9. Reliance on Key Manufacturing Sites
10. Economic Volatility
57 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Risk Management continued
OUR PRINCIPAL RISKS
The risks listed in this section and the activities being undertaken to manage them should be considered in context of the Group’s internal control framework described in the Corporate Governance statement on
page78. Each of our principal risks has been linked to Our Strategy. For more information refer to page 11.
Risk What is the risk? Examples of how we are managing the risk Mitigation progress this year
1 Cyber Security
Risk trend:
Increasing
Link to strategy:
Oversight Committee:
Main Board
A cyber security incident that could
compromise the confidentiality, integrity
and availability of critical IT systems,
and the data held on them, within our
own network or that of a third party.
Such an attack could impact our ability
to manufacture and/or move products,
resulting in a material impact on our
market value and reputation.
This risk is heightened as we become a
more digitally-enabled and data-driven
Company with greater connectivity
and mandatory internal and external
compliance obligations to protect
our customers, suppliers, consumers
and critical business processes.
– We operate a Group-wide cyber security control
framework,aligned with industry standards, including ISO
and National Institute of Standards and Technology (NIST).
This includes security controls and active monitoring across
our factory environments to ensure we identify and manage
any vulnerabilities
– We undertake regular horizon scanning and threat
detectionactivities, perform penetration testing
andworkclosely with our third parties and partners
tomanage cyber risk.
– Mandatory Cyber Awareness training is rolled out to all
employees across the Group as part of our compliance
training programme
– During the year, we have seen cyber threats continue
torise.In response, we have continued to strengthen
ourgovernance and controls through the Cyber Security
programme. This has included a campaign to raise
awareness of cyber security across the organisation
andensure business-critical systems are supported
bydisaster recovery plans
– We have launched a multi-year programme to strengthen
security and resilience across our factories, including
againstcyber threats
2 Changes to Product
Regulations
Risk trend:
Increasing
Link to strategy:
Oversight Committee:
CRSEC Committee
Failure to identify, assess and proactively
respond to new or changing regulations
or emerging detection methodologies
impacting our products could result in
increased regulatory scrutiny, costly
product reformulations or product
recalls, potential litigation and the license
to sell a product being removed.
– Our Regulatory Intelligence programme proactively
identifies new or changing regulations and trends
inenforcement practice
– Regulatory Affairs and Safety (RAS) works closely with
thebusiness to assess and respond to new regulations
impacting our existing portfolio of products
– Our Ingredient Steering Group monitors regulatory
developments, reviews classification changes and
completes impact assessments
– We work closely with external regulators, engaging
withthem to advocate on any new or pending product
regulations where it is feasible to do so
– We have consolidated our Regulatory Operating model
toreduce complexity
– We have completed nitrosamine assessments for all
products in line with regulatory requirements
– We have strengthened our REACH compliance programme
with enhancements to our systems, processes and data
– We continue to strengthen our claims substantiation and
have put in place long-term initiatives to establish corporate
data standards and oversight to improve our data quality
and availability
High gross
margin business
Brand
Investments
Adjusted operating profit growth
ahead of net revenue growth
Strong cash flow and
healthy balance sheet
Capital Allocation
Framework
Key
Sustainable mid-single-
digit growth
58 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Risk What is the risk? Examples of how we are managing the risk Mitigation progress this year
3 Legal and
Compliance
Risk trend:
Increasing
Link to strategy:
Oversight Committee:
CRSEC Committee
We operate in multiple jurisdictions which
creates a complex regulatory environment.
Aserious violation of competition,
anti-corruption, human rights or data
protection legislation or economic sanctions
within our operations or our supply chain
could result in significant fines, penalties
andreputational damage.
A number of products are manufactured and
sold in litigious jurisdictions, which increases
the risk for potential class action and mass tort
litigation that could result in significant legal or
settlement costs and reputational damage.
– A global Ethics and Compliance programme including
annualtraining, ‘Speak Up’ hotline, compliance policies
andprocedures, targeted risk and control assessments
andthird-party due diligence
– Embedded legal and compliance teams, supported by
externalexperts as needed, to help us identify, understand
andcomply with current and emerging regulatory obligations
– Group Privacy Office (GPO) and in-market privacy
programmes to support the business and provide oversight
ofdata protection policy compliance
– Disputes and litigation are supervised by senior members of
the Legal team, with General Counsel oversight of significant
Group matters
– Our Code of Conduct has been updated and is supported
with a refreshed code of conduct and ‘Speak Up’ training
– We continue to evolve our Ethics and Compliance programme,
including additional metrics to support the ongoing
monitoring of key compliance risks
– Our Legal and Compliance team has been working closely
with our Sustainability team to ensure that evolving
ESGregulations are fully understood and to support the
management of ESG Transition risk (see principal risk 6 below)
4 Supplier Disruption
Risk trend:
No change
Link to strategy:
Oversight Committee:
Main Board
Over-reliance on a limited number of
suppliers, geographic concentration, or an
excessive dependence on specific routes,
sub-suppliers or technologies could render
our supply chain vulnerable to disruption.
Our business is dependent on a significant
number of sole- and single-source suppliers
for critical raw and pack materials.
– We carefully monitor all our third-party suppliers
– Our Procurement team regularly risk assesses our suppliers
across multiple dimensions using our supplier vulnerability tool
– Action plans are put in place for any suppliers identified as
critical to our supply chain to ensure continuity of supply in the
event of a disruption. Where possible, these include business
continuity planning and the qualification of alternative suppliers
– Action plans are centrally tracked and monitored through our
quarterly Supplier Risk Committee
– We have continued to de-risk our sourcing of critical materials
through the qualification of alternative suppliers and have
reduced the total value of single-sourced spend across each
GBU. In 2023, we reduced monosourcing of critical materials
by 9.4%
– We have started mapping our suppliers further up the value
chain to identify any potential geographic concentration risk
– An SKU simplification programme has been initiated
toreduce complexity across our supplier base, and
ourprocurement teams are working more closely with
ourR&D teams to ensure supplier resilience is built into
theearly stages of new product development
5 Geopolitical
Instability
Risk trend:
Increasing
Link to strategy:
Oversight Committee:
Main Board
Geopolitical events, including threats of
conflict, trade wars, economic sanctions
andpolitical polarisation, could disrupt our
operations. Our presence in unstable regions
and countries further increases this risk.
– We maintain an extensive network of local regulatory and
external affairs teams, which together with external advisors
closely monitor the political and geopolitical environment
– Our Issues and Crisis Management team supports the
businesswith market-specific risk assessments and resources
to support with regional issue and crisis management
– Geopolitical risk is considered within our business continuity
planning for the resilience of our supply chain
– Our Corporate Security Function identifies potential threats
through the Corporate Security programme and supports
thebusiness with horizon scanning activities
– The GEC provides ongoing oversight over the management
of the Group’s geopolitical risk profile. We continue to
diversify our supply chain through regionalisation and
onshoring to mitigate any regional instability
– Ad hoc horizon scanning and scenario planning activities are
undertaken by the GEC and in-country management teams
Risk Management continued
High gross
margin business
Brand
Investments
Adjusted operating profit growth
ahead of net revenue growth
Strong cash flow and
healthy balance sheet
Capital Allocation
Framework
Key
Sustainable mid-single-
digit growth
59 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Risk What is the risk? Examples of how we are managing the risk Mitigation progress this year
6 ESG Transition
Risk trend:
No change
Link to strategy:
Oversight Committee:
CRSEC Committee
Changes in the regulatory environment
andshifting stakeholder expectations
emerging from the transition to a more
sustainable, net zero economy could
createsignificant uncertainty for Reckitt.
There isa risk that we fail to deliver our
ESGprogramme or deliver against our
sustainability ambitions.
– A Group ESG reporting function is in place and responsible
for identifying, assessing and implementing emerging
ESGregulation
– Tools have been developed to support delivery against
oursustainability ambitions, including the SIC. This has been
implemented across our innovation pipeline to quantify
sustainability improvements across carbon, water, plastics
and packaging, ingredients and overall Extended Producer
Responsibility (EPR) risk
– Performance against our Sustainability Ambitions is centrally
coordinated, monitored, and reported
– A DE&I Board is in place to provide oversight across diversity
and gender balance
– We have established cross-functional steering
committeesproviding governance and oversight across
keyESG transition risks and sustainable product activities
– A taskforce to respond to the Corporate Sustainability
Reporting Directive (CSRD) has been established,
whichisfocused on preparing the business to meet
itsincoming requirements
– We have started product carbon footprint modelling
toidentify and prioritise reductions in our product
carbonfootprint in partnership with our suppliers
andinnovation teams
7 Product Safety
Risk trend:
No change
Link to strategy:
Oversight Committee:
CRSEC Committee
Across our broad consumer-facing
portfolio, many of our products are
ingested, have direct skin contact,
areconsumed by a varied range of
demographics and vulnerable populations,
and can contain corrosive/flammable
chemicals. Failure to prevent, identify
orrespond to a product quality and/or
safety issue may result in potential
consumer harm or death, financial
settlements (product liability claims),
costlyrecalls and reputational damage.
– Our Consumer Safety and Vigilance team partners with
eachof our GBUs, embedding product safety into operations
and providing oversight and assurance services
– A robust quality management system is in place
underpinnedby clear policies and supporting systems,
andissubject to regular independent audits
– Our manufacturing facilities adhere to Quality Manufacturing
Systems and our adverse and critical events process and
ourdedicated Vigilance team allows us to monitor and
respond to any product quality or safety issues
– Role-based mandatory Product Safety training is in place, with
all employees required to complete Adverse Events training
– We continued our five-year Global Safety Transformation
programme to elevate our global safety approach across
safety culture, processes, systems and data
– We have deployed our global quality management system
(Quality One) to support better control of, and visibility into,
product quality and safety processes
– A cross-functional Quality, Regulatory and Safety (QRS)
Council has been created to enhance Reckitt’s
complianceprogrammes
Risk Management continued
High gross
margin business
Brand
Investments
Adjusted operating profit growth
ahead of net revenue growth
Strong cash flow and
healthy balance sheet
Capital Allocation
Framework
Key
Sustainable mid-single-
digit growth
60 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Risk What is the risk? Examples of how we are managing the risk Mitigation progress this year
8 Innovation
Risk trend:
No change
Link to strategy:
Oversight Committee:
Main Board
Our continued growth and success
depends on the relevance of our brands
toconsumers and our ability to innovate.
Failure to effectively innovate, launch
andmarket new products could lead to
adverse financial performance and loss
ofmarket share.
– Consumer trends, behaviour and needs are analysed through
our Demand Centered Growth process based on targeted
consumer segments
– Innovation projects follow a standardised operating model,
which includes defined stage gates and cross-functional
approvals, with oversight from our Category and R&D teams
– Enhanced reporting provides greater visibility over our
innovation pipeline
– To ensure we are identifying and responding to changing
consumer needs, we continued to make investments in
ourscience platforms to create superior, longer-term and
differentiated products, strengthen our claims and lead
withconsumer-relevant solutions
– We have enhanced our external partnership capability to
drive co-creation of innovation through greater external
orientation in key areas like sustainability
9 Reliance on Key
Manufacturing Sites
Risk trend:
No change
Link to strategy:
Oversight Committee:
Main Board
We are heavily reliant on a few key
manufacturing sites to produce our
products. An unexpected shutdown
atoneof these sites or a sustained
increaseindemand could lead to a
significant interruption to the production
ofa specific component or product.
– Each of our manufacturing sites is classified through
athree-tier system based on revenue dependency
orcriticality to market. This drives our site inspection
programme with Tier 1 sites being subject to more
regularinspections
– We operate a Global asset protection programme through
our insurers, which includes a rotational review of sites
– Our Global Health and Safety and Corporate Security teams
maintain a framework of standards and complete a global
audit compliance programme
– Short- and medium-term strategies are being implemented
to build redundancy into our manufacturing network.
Theseinclude investment in line capacity, refocusing
ofmanufacturing operations and dual sourcing for
criticalbrands
– We have deployed the Reckitt Production System
acrossallour manufacturing sites to drive sustainable
manufacturing performance
– We continue to closely monitor the external environment
and develop business continuity plans to minimise the
impact of any disruption
10 Economic Volatility
Risk trend:
No change
Link to strategy:
Oversight Committee:
Main Board
Adverse economic conditions, together
with high levels of volatility and
unpredictability in the macroeconomic
environment, could impact our ability to
deliver consistent and predictable growth.
– Price volatility is managed through our CRM process,
whichdetermines the optimal price management
strategiesfor energy and other key commodities
– Our Treasury function oversees the Group’s risks relating to
foreign exchange and interest rate risk management through
several controls, including policies, oversight of market and
GBU activities, monitoring and reporting
– We launched our Planning and Forecasting programme
aspart of our Finance for the Future Transformation
programme. The programme aims to mitigate against
unpredictability in the external environment and improve
the accuracy of planning and forecasting activities.
Theprogramme will continue into 2024
Risk Management continued
Sustainable mid-single-
digit growth
High gross
margin business
Brand
Investments
Adjusted operating profit growth
ahead of net revenue growth
Strong cash flow and
healthy balance sheet
Capital Allocation
Framework
Key
61 Reckitt Annual Report and Accounts 2023 STRATEGIC REPORT FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE
Our Viability Statement
Assessment of principal risks and viability
To further test the robustness of the base case
forecast, further analyses were prepared to
consider the viability of the business in the
event of adverse unexpected circumstances.
Such adverse circumstances were modelled
primarily upon the crystallisation of the Group’s
principal risks (see pages 57-60, including how
we are managing the risk). Principal risks have
the potential to create adverse circumstances
for the Group and can occur individually or in
combination with each other. The assessment
of viability considered the implications of
crystallisation of each principal risk and
estimating the impact on interest cover ratios
andheadroom over available borrowing facilities.
These principal risks were aggregated to create
two scenarios which model plausible downside
scenarios of increasing severity based on:
(i)crystallisation of principal risks deemed to
havethe most relevant potential impact on
viability; and (ii) crystallisation of all principal risks
and the impact of adverse movements in foreign
exchange and interest rates. The principal risks
that were evaluated also include the failure to
address existing and emerging environmental,
social and governance (ESG) and sustainability
risks and the changing societal and stakeholder
expectations of businesses in addressing these.
The Board has also considered the potential
impact of changes to environmental factors which
may affect the business model and performance in
the future, as set out in the Taskforce on Climate-
related Financial Disclosures (TCFD) statement on
page 218. The analysis indicated that even with
unexpected events occurring immediately and
in combination, Reckitt would still have sufficient
funds to trade, settle its liabilities as they fall due
and remain compliant with financial covenants.
The Board has further considered the occurrence
of a Black Swan event: an event of greater
adversity than those modelled above, with
sufficient potential impact to risk the future of
Reckitt as a strong and independent business
operating in its chosen markets. The occurrence
of a major issue could result in significant
reputational impact, a substantial share price
fall, significant loss of consumer confidence
and the inability to retain and recruit quality
people. Such an event could have an impact
on the viability of the business. On the basis
of a comprehensive set of mitigating controls
in place across the business, considering the
unknown nature of a Black Swan event and that
its occurrence is considered highly unlikely, ithas
not been included in the Viability Review.
Viability Statement
The Board believes that the Group is well-
positioned to manage its principal risks
successfully. The Board’s belief is based on
consideration of the historic resilience of
Reckitt and has taken account of its current
position and prospects, the actions taken to
manage the Group’s debt profile, risk appetite
and the principal risks facing the business
in unexpected and adverse circumstances.
Mitigating actions, should they be required,
are all within management’s control and
could include reduced capital expenditure or
temporary suspension of dividend payments.
Conclusion
As a result of the Viability Review, the Board
has a reasonable expectation that the Group
will be able to continue in operation and meet
its liabilities as they fall due over the five-year
period covered in the Viability Review.
The Strategic Report, as set out on pages2
to 61, has been approved by the Board.
Catheryn O’Rourke
Company Secretary
Reckitt Benckiser Group plc
21 March 2024
The Board’s Viability Review is based
on the Group’s strategy, its long-term
financial plan and its principal risks.
A financial forecast covering a five-year period
was prepared (the base case). This period was
selected as it is the period covered in the Group’s
long-term forecasting process, based on the
budget and projections for the following years and
covers the introduction to market of the current
new product pipeline. The period also covers the
majority of Reckitt’s debt repayment profile.
The financial forecast is based on a number of
key assumptions aligned to the Group’s growth
strategy, planned capital spending and capital
allocation policy. The assessment of viability takes
into account the Group’s cash flow, its currently
available banking facilities and interest cover
ratios in relevant financial covenants, and does
not assume the raising of additional new debt
or equity finance. If Reckitt performs in line with
the base case forecasts, it will have sufficient
funds to trade, settle its liabilities as they fall
due, remain compliant with financial covenants
and remain viable. Moreover, the Group has
access to external debt markets on account of
its credit rating together with a well-diversified
supplier network, customer base and product
range, and geographical activities with a strong
innovation pipeline and dividend cover.
THE ASSESSMENT PROCESS
AND KEY ASSUMPTIONS
62
60%
40%
6
1
1
1
1
1
3
1
5
4
6
Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Corporate Governance Report
AT A GLANCE
DIVERSE LEADERSHIP
UK Corporate Governance Code: 2018 Statement of Compliance
For the year ended 31 December 2023, the Company complied
withall the provisions of the Code and the Disclosure Guidance
andTransparency Rules requirements to provide a corporate
governance statement.
How we comply with the Code
1. Board leadership and company purpose Page
Our Board of Directors
65-68
Group Executive Committee
69-70
Reckitt’s approach to governance
71-73
Board activities during 2023
74-75
Market Context, Our Strategy and
Our Business Model
07-12
CRSEC Committee Report
96-99
2. Division of responsibilities
How we are governed
80-81
3. Composition, succession and evaluation
Board performance review and effectiveness
82
Nomination Committee Report
83-87
4. Audit, risk and internal control
Audit Committee Report
88-95
5. Remuneration
Remuneration Committee Report
100-132
1. As at close of business on 31 December 2023
2. Board skills as at 15 March 2024
3. Board members who have served over nine years as
at the date of this Report will retire at the 2024 AGM,
with the exception of Mary Harris, who will remain
onthe Board for a fixed term until the 2025 AGM to
support a smooth Remuneration Committee Chair
succession (see page 64)
Board members skills overview
2
Core skill
Gender
1
Tenure
1,3
Nationality
1
Male
Female
Under 3 years
3-6 years
6-9 years
9+ years
British
American
French
British/Dutch
American/British
Danish
Italian/British
Italian/Brazilian
Financial Expertise
Consumer Goods & Retail Healthcare & Pharmaceuticals
Strategy & Transformation
Leadership Digital & Marketing
for details of Board members who served during the year
and as at the date of this Report.
See pages 65-68
63 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Corporate Governance Report continued
Dear shareholder,
On behalf of the Board, I am pleased to present
Reckitt’s Corporate Governance Report for
the financial year ended 31 December 2023.
The Board is responsible for the effective
leadership of the Group and for promoting
its long-term sustainable success.
The Board provides leadership by setting
theCompany’s Purpose, strategy and values,
overseeing implementation of the strategy by
management and monitoring culture to ensure
itsalignment with our Purpose and values.
TheBoard ensures there are appropriate
processes in place to manage risk and monitors
the Company’s financial and operational
performance against objectives.
Evolution of the Board and Executive Team
Since I have now completed nine years on the
Board, a process was undertaken during the year
to identify my successor as Chair. This exercise
was undertaken by the Nomination Committee
(excluding me) and led by Andrew Bonfield.
Further information on the process is described
onpage 86. It was successful, and I am delighted
to be succeeded by Sir Jeremy Darroch who will
take over as Chair of the Board with effect from
the conclusion of the AGM.
Sir Jeremy joined the Board as Senior Independent
Director in November 2022. He is an outstanding
leader with considerable expertise, a proven track
record of performance and a unique insight into
what motivates consumers as well as a passion
for responsible and sustainable business.
Our evolution as a Company has also been
accompanied by a transition in our executive
leadership team. On behalf of the Board, I’d like to
thank Nicandro Durante for the exceptional job he
has done as CEO, helping to oversee the selection
of a permanent CEO and a new CFO, andfor
working with Kris Licht to ensure a seamless
transition for all our stakeholders. The Board came
into this process knowing we had a strong bench
of leadership talent and Kris Licht was identified
as the outstanding candidate to be CEO. Kris has
been instrumental in Reckitt’s transformation
through his role as Chief Transformation Officer
and his strong operational leadership of our Health
GBU. He has a deep understanding of Reckitt’s
business, customers, brands and culture.
During the year, Jeff Carr, our Chief Financial
Officer (CFO) notified the Board of his
intention to retire in March 2024. Following
a thorough search, Shannon Eisenhardt was
appointed as CFO Designate on 17 October
and will succeed Jeff as CFO in March 2024.
Shannon brings extensive experience across
the consumer goods and retail sectors, having
worked with some of the most globally
recognised brands. Shannon is a proven
strategic and operational leader with a track
record of building highly successful teams and
delivering strong and consistent performance.
CHAIR’S
INTRODUCTION
TO GOVERNANCE
Our Board is committed to
upholding the highest standards
of governance in the long term
interests of our shareholders
andstakeholders.
Chris Sinclair
Chair
64 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Corporate Governance Report continued
Following Kris’s appointment as CEO Designate
in May, there were also changes to our Group
Executive Committee (GEC) membership.
Pat Sly was appointed as President Health
having previously led Reckitt’s Global Nutrition
business since 2021. Pat was succeeded as
President Nutrition by Susan Sholtis, who
rejoined Reckitt on 1 July 2023. Susan has
adeep knowledge of the Nutrition business,
having previously worked for more than 11 years
at both Mead Johnson and Reckitt in general
management and global marketing roles.
On 12 January 2024, we announced the
appointment of Marybeth Hays as a Non-Executive
Director, with effect from 1 February 2024.
Marybeth has over 25 years of experience in the
retail, healthcare and consumer goods sectors
and we are delighted Marybeth has agreed
to join the Board. More details on Marybeth’s
appointment can be found on page 84.
In February 2024, we were also delighted to
confirm the appointment of Fiona Dawson
as a Non-Executive Director and as Chair
Designate of the Remuneration Committee
from 1 June. Fiona brings extensive consumer
goods experience and is passionate about
sustainability, health and wellbeing – particularly
women’s entrepreneurship and human rights.
On the same day, we announced that Alan
Stewart, currently Non-Executive Director and
Chair of the Remuneration Committee, had
notified the Board of his intention to retire
from the Board following the AGM in May.
To ensure continuity in relation to the
Remuneration Committee, Mary Harris, former
Chair of the Remuneration Committee and the
current Designated Non-Executive Director for
Engagement with the Company’s Workforce,
willbe reappointed as Chair of the Remuneration
Committee upon conclusion of this year’s AGM,
for a fixed term until our next AGM in May 2025.
Although Mary has now served nine years as
a Non-Executive Director of the Company,
the Board unanimously agreed that Mary is
uniquely positioned to undertake the role of
Remuneration Committee Chair during this
interim period due to her extensive knowledge
of the business, her in-depth understanding of
investor and other stakeholder expectations
and previous Remuneration Committee Chair
experience. Mary is considered to continue to
retain an independence of mind and to be an
effective and valued contributor to the Board.
Elane Stock will take on the role of Designated
Non-Executive Director for Engagement with
the Company’s Workforce from Mary Harris, with
effect from the conclusion of this year’s AGM.
At the conclusion of the 2025 AGM, Fiona will take
on the role of Remuneration Committee Chair.
Board performance review
The Board undertakes an annual review of its
own and its Committees’ performance and
effectiveness. The Board performance review
was facilitated by Lintstock Ltd (Lintstock),
as part of its ongoing Board Development
Programme. Details of this year’s Board
performance review, together with our progress
against the outcomes from our 2022 Board
performance, can be found on page 82.
Our people and culture
Our culture and values define the way that Reckitt
does business and this starts with our employees.
We aim to create the space and opportunities
to help our employees make a difference and
do the right thing, always. It is our collective
responsibility to build inclusion into everything
we do, whilst ensuring we represent the people
we are and the global community we serve.
Our Code of Conduct reinforces our principles
of business conduct and is communicated to all
employees each year with mandatory training.
Our values underpin our Code of Conduct and
are enhanced by our Purpose and Compass.
We are evolving a vibrant, inclusive and
collaborative culture to deliver on our Purpose.
Inembedding inclusivity, all colleagues should
feel free to participate fully, bring their authentic
self towork and realise their full potential.
Internally, we are strengthening our inclusive
culture by focusing on leadership, people
and policy. Externally, our inclusive approach
to procurement, brands and partnerships
aligns what we do with who we are.
Further details on our people, culture and inclusion
can be found on pages 19 to 21 and page 51.
Engaging with our stakeholders
Effective engagement with our shareholders,
our employees and wider stakeholders is key to
Reckitt’s sustainable success. We, as directors,
must act in a way that we consider, in good faith,
would be likely to promote the success of the
Company for the benefit of its shareholders
as a whole. In our decision-making, the Board
also considers wider stakeholder interests.
Our key stakeholders include our employees,
shareholders, customers, consumers, partners,
and the communities in which we operate and
the environment. Our Section 172 Statement,
which explains how the Directors have discharged
their responsibilities during the year under
review, can be found on pages 76 to 77.
For further information on our Sustainability
Ambitions, please see pages 14 and 47-54.
Our Climate-related Financial Disclosures
can be found on pages 218 to 222.
I am extremely proud of the Board and all
our Reckitt employees for their continued
commitment to our Purpose, Compass
and the stewardship of our business,
on behalf of all our stakeholders.
Chris Sinclair
Chair
Reckitt Benckiser Group plc
21 March 2024
65 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose
OUR BOARD
The Board of Reckitt: experienced,
diverse andbalanced
Biographical details of the Directors
asat31 December 2023.
Nationality American
Appointment
Appointed as a Non-Executive Director in February
2015 and as Chair of the Board and Nomination
Committee in May 2018. Chris will retire as Chair
andfrom the Board following the Company’s
AnnualGeneral Meeting in May 2024.
Skills and competencies
Chris brings strong leadership skills and
valuable strategic insight to the Board,
through his experience as CEO and Chair of
other large companies. He also has a strong
understanding of international consumer-
focused businesses. He is the former Chair and
CEO of Mattel, Inc. and previously served as
CEO for various companies including Caribiner
International, Quality Food Centers, Pepsi-Cola
Co. and PepsiCo Foods and Beverages.
Current external appointments
None
Nationality Danish
Appointment
Appointed as Chief Executive Officer (CEO)
Designate on 1 May 2023, an Executive Director on
1 June 2023 and became CEO on 1 October 2023.
Skills and competencies
Kris has strong leadership and transformation
experience with a proven track record in delivering
growth and driving performance. He has in-depth
knowledge of the consumer goods sector.
Krisjoined Reckitt in November 2019 as Chief
Transformation Officer and in July 2020 became
President Health & Chief Customer Officer.
PriortoReckitt, he has held a number of senior
strategic and operational positions at PepsiCo
andwas a Partner at McKinsey & Company working
in the consumer, health and retail practices.
Current external appointments
Board member of the Consumer Brands Association
Committee Key
Chair
Nomination
Remuneration
Audit
Corporate Responsibility,
Sustainability, Ethics and Compliance
N
R
A
C
Chris Sinclair (73)
Chair of the Board
Kris Licht (47)
Chief Executive Officer
N R C C
can be found at reckitt.com/our-company/our-leadership/.
Detailed Board members biographies
Nationality British
Appointment
Appointed as Senior Independent Director and
amember of the Remuneration and Nomination
Committees in November 2022. Sir Jeremy
willbecome Chair of the Board following the
Company’s Annual General Meeting in May 2024.
Skills and competencies
Jeremy is an outstanding leader with considerable
expertise in the consumer retail environment.
He has a proven track record of driving business
performance and a unique insight into what
motivates consumers. He is the former Executive
Chairman and Group CEO of Sky and prior to that
was Group Finance Director of DSG International
plc. He has also held board positions with Burberry
Group plc and Marks and Spencer Group plc.
Current external appointments
Director of The Walt Disney Company
Chair, National Oceanography Centre
WWF Ambassador
Non-Executive Director of Ahren Acquisition Corp
Sir Jeremy Darroch (61)
Senior Independent Director
N R
66 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
Nationality American
Appointment
Appointed as CFO Designate on 17 October 2023
and will become CFO in March2024.
Skills and competencies
Shannon brings extensive experience across the
consumer and retail sectors, having worked with
some of the most globally recognised brands.
Shannon held multiple senior management roles
atNIKE, Inc., including as CFO of the NIKE Consumer,
Marketplace and Brand segment. Prior to that,
Shannon had spent almost two decades at Procter
& Gamble in a range of finance roles. Shannon
isaproven strategic and operational leader with
a track record of building highly successful teams
and delivering strong and consistent performance.
Current external appointments
None
Shannon Eisenhardt (49)
Chief Financial Officer Designate
A N
Nationality British
Appointment
Appointed as a Non-Executive Director in February
2015 and as Chair of the CRSEC Committee in
July2016. Pam will retire from the Board following
the Company’s Annual General Meeting in May 2024.
Skills and competencies
Pam brings to the Board extensive knowledge of
the healthcare sector and a wealth of international
business and pharmaceutical experience.
These skills are highly valuable toher role as
Chair of the CRSEC Committee. She has served
as Chair of SCYNEXIS, Inc., CEO of Quintiles
Transnational Corporation and held senior
positions in the international healthcare industry
at AstraZeneca plc and Hoffman-LaRoche.
Current external appointments
Non-Executive Director of Bunzl plc
Member of the Supervisory Board of AkzoNobel N.V.
Pam Kirby (70)
Non-Executive Director
Nationality British
Appointment
Appointed as a Non-Executive Director in July 2018
and as Chair of the Audit Committee in January
2019. Andrew will become Senior Independent
Director following the Company’s Annual General
Meeting in May 2024.
Skills and competencies
Andrew brings more than three decades of
financial expertise to the Board. He is a strong
leader, with experience gained in large, complex
organisations and has a history of driving strong
financial performance in the UK and globally.
These skills are valuable to the Board and to his
role as Chair of the Audit Committee. He is CFO
of Caterpillar Inc., was Group CFO of National
Grid plc, CFO of Cadbury plc and Executive
VicePresident and CFO at Bristol Myers Squibb.
Current external appointments
Chief Financial Officer of Caterpillar Inc.
Andrew Bonfield (61)
Non-Executive Director
C N A
Nationality British
Appointment
Appointed as Chief Financial Officer (CFO)
inApril2020. Jeff will step down as CFO in
March2024 and will retire as an Executive Director
on31 March2024.
Skills and competencies
Jeff brings extensive experience across
consumer and retail companies. He has a record
of transformational, strategic and operational
leadership, consistent performance delivery
and strong capital allocation discipline. Prior
to Reckitt, he was the CFO and Management
Board member at Ahold Delhaize, CFO of First
Group plc and easyJet plc and held senior
finance roles at Associated British Foods plc.
Current external appointments
Chair of the Audit Committee and Non-Executive
Director of Kingfisher plc
Jeff Carr (62)
Chief Financial Officer
67 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
Nationality Italian/British
Appointment
Appointed as a Non-Executive Director in July 2020.
Skills and competencies
Margherita has extensive experience of financial
markets and digital technologies. She is an
experienced leader in business in both developed
and developing markets. Margherita is Chief
Executive Officer of Vodafone Group plc and
prior to that held numerous senior finance roles
within the business including as Chief Financial
Officer. These skills, together with her strong
leadership background, are valuable to the Board
and her membership of the Audit Committee.
Current external appointments
Chief Executive Officer of Vodafone Group Plc
Nationality British/Dutch
Appointment
Appointed as a Non-Executive Director in
February2015. Mary was Chair of the Remuneration
Committee from November 2017 to May 2022, and
will resume that role following the Company’s AGM
in May 2024. Mary has been the Designated NED for
Engagement with the Company’s Workforce since
July 2019.
Skills and competencies
Mary has substantial experience in consumer
and retail businesses across China, Southeast
Asia and Europe. She brings to the Board a top-
level strategic outlook, with an international and
consumer focus. Her previous experience in other
Non-Executive Director roles, and as Chair of
other Remuneration Committees, is invaluable
tothe Board and the Remuneration Committee.
Current external appointments
Non-Executive Director of Coca-Cola Europacific
Partners plc
Supervisory Director of HAL Holding N.V.
Margherita Della Valle (58)
Non-Executive Director
Mary Harris (57)
Designated Non-Executive Director for
Engagement with Company’s Workforce
A
Nationality British
Appointment
Appointed as a Non-Executive Director in February
2022 and as Chair of the Remuneration Committee
in May 2022. Alan will retire from the Board following
the Company’s AGM in May 2024.
Skills and competencies
Alan brings to the Board significant corporate
finance and accounting experience from a variety
of industries, including retail, banking and travel,
as well as executive leadership experience
within a listed company environment. He was
CFO of Tesco PLC where he played a key role in
the turnaround of Tesco. Prior to this he was also
CFO of Marks and Spencer Group plc, CFO of
AWAS, Group Finance Director of WH Smith PLC
and CEO and CFO of Thomas Cook Holdings.
Current external appointments
Non-Executive Director of Diageo plc
Non-Executive Director of Burberry Group plc
Alan Stewart (63)
Non-Executive Director
R C
Nationality French
Appointment
Appointed as a Non-Executive Director
inJanuary2021.
Skills and competencies
Olivier is a successful leader, with many years’
experience as CEO of a large, global company.
Olivier has a wealth of experience in healthcare
products and markets and brings great insight
to the Board. He was the CEO of Smith &
Nephew plc and of healthcare, cosmetology
and pharmaceutical company Laboratoires
Pierre Fabre, and Corporate Executive Vice
President of Abbott Laboratories and President
of their pharmaceutical products division.
Current external appointments
Chairman of Majorelle
External Director of Takeda Pharmaceutical
Company Limited
Co-Founder and Board member
ofAlgoTherapeutixSAS
Olivier Bohuon (65)
Non-Executive Director
R R N
68 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
Nationality American
Appointment
Appointed as a Non-Executive Director
inSeptember 2018.
Skills and competencies
Elane has held various senior leadership positions
including Chief Executive Officer of ServiceMaster
Brands, Group President at Kimberly-Clark
International and Kimberly-Clark Professional and
as a director and member of the Audit Committee
of Yum Brands! and Equifax. Elane brings great
sector-relevant experience and insight of consumer
goods products to the Board, particularly in
personal care and wellness. She also brings key
knowledge of emerging markets and the changing
channels of trade and consumer preferences.
Current external appointments
None
Nationality American
Appointment
Appointed as a Non-Executive Director
inFebruary2024.
Skills and competencies
Marybeth has over 25 years of experience in the
retail, healthcare and consumer goods sectors. She
has held various senior roles at Walmart, including
as Executive Vice President of Consumables and
Health & Wellness for Walmart U.S. and as Chief
Merchandising, Marketing and Supply Chain Officer
for Walmart China. Marybeth was previously Vice
President of Marketing at HanesBrands, Inc.
Current external appointments
Director and member of Audit Committee of
JOANN Stores, Inc.
Board member of Decowraps
Fiona Dawson CBE will join the Board as a
Non-Executive Director and as Chair Designate
tothe Remuneration Committee effective
1 June2024. Fiona’s full biography will be available
on our website upon her appointment.
Elane Stock (59)
Non-Executive Director
Marybeth Hays (55)
Non-Executive Director
A
Nationality British
Appointment
Appointed as a Non-Executive Director
inFebruary2023.
Skills and competencies
Tamara has had an extensive career in advertising,
marketing and digital communications and has a
deep understanding of consumer brands and digital
strategy. She was Global Chair of Wunderman
Thompson and also held various leadership roles
at WPP plc. She also served as CEO of McCann
Worldgroup and Saatchi & Saatchi in London.
Current external appointments
Non-Executive Director of Marks and Spencer
Group plc
Non-Executive Director of Intertek Groupplc
Non-Executive Director of Marsh & McLennan
Companies, Inc.
Tamara Ingram, OBE (61)
Non-Executive Director
C
Nationality American/British
Appointment
Appointed as a Non-Executive Director in July 2018.
Skills and competencies
Mehmood is a highly skilled medical practitioner
and researcher. Mehmood has been Chief
Executive Officer of Hevolution Foundation since
October 2020. He was previously CEO of Life
Biosciences Inc., and before that served as Vice
Chairman and Chief Scientific Officer, Global
Research and Development at PepsiCo Inc. He
has extensive experience in both developing
and developed markets, adding value to the
CRSEC Committee through his knowledge
of creating sustainable initiatives and past
experiences of leading research and development
efforts to create breakthrough innovations.
Current external appointments
Chief Executive Officer of Hevolution Foundation
Executive Chairman of Life Biosciences Inc.
Chairman of VCAT, US National Institute
ofStandards and Technology
Mehmood Khan (65)
Non-Executive Director
A
Other Directors who served during the year
Nicandro Durante, Non-Executive Director from
December 2013, was appointed as Chief Executive
Officer from October 2022 until October 2023 and
stayed on as Executive Director until his departure
in December 2023.
69 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
GROUP EXECUTIVE
COMMITTEE
2 1
2 1
2 3
2 2
2 4
2 4
2 7
2 10
2 2
2 5
2 8
2 3
2 6
2 9
2 11 2 12
Nationality Danish
Key skills and experience
Kris has strong leadership and transformation
experience with a proven track record in delivering
growth and driving performance. He has in-depth
knowledge of the consumer goods sector.
Kris joined Reckitt in November 2019 as Chief
Transformation Officer, and in July 2020 became
President Health & Chief Customer Officer.
Prior to Reckitt, he has held a number of senior
strategic and operational positions at PepsiCo,
andwas a Partner at McKinsey & Company working
in the consumer, health and retail practices.
Nationality American
Key skills and experience
Shannon joined Reckitt as CFO Designate in
October 2023 and will become CFO in March 2024.
Shannon brings extensive experience across the
consumer and retail sectors, having worked with
some of the most globally recognised brands.
Shannon held multiple senior management roles at
NIKE, Inc., including as CFO of the NIKE Consumer,
Marketplace and Brand segment. Prior to that,
Shannon had spent almost two decades at Procter
& Gamble in a range of finance roles. Shannon is
a proven strategic and operational leader with a
track record of building highly successful teams
and delivering strong and consistent performance.
Nationality British
Key skills and experience
Jeff joined Reckitt as Chief Financial Officer in April
2020. Prior to that, he was CFO and Management
Board member at Ahold Delhaize, and held
the role of CFO at First Group plc and easyJet
plc. Jeff brings extensive experience across
consumer and retail companies. He has a record
of transformational strategic and operational
leadership, consistent performance delivery
and strong capital allocation discipline. Jeff will
step down as CFO in March 2024 and will retire
as an Executive Director on 31 March 2024.
Nationality German/Swiss
Key skills and experience
Volker joined Reckitt in August 2020 as Chief
Transformation Officer, and in May 2021 became
President Hygiene. As well as leading the Hygiene
BU’s global team, he has additional responsibility
for New Growth Platforms, a cross-BU initiative.
Prior to joining Reckitt, Volker spent 26 years with
Procter & Gamble in a range of international finance,
marketing, and senior general management roles.
Kris Licht (47)
Chief Executive Officer
Shannon Eisenhardt (49)
Chief Financial Officer Designate
Jeff Carr (62)
Chief Financial Officer
Volker Kuhn (56)
President Hygiene
can be found at reckitt.com/our-company/our-leadership/.
Detailed Executive Committee members biographies
70 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
2 5 2 7
2 9 2 11 2 12
2 6 2 8
2 10
Nationality American
Key skills and experience
Pat joined Reckitt in 2017 as part of the Mead
Johnson Nutrition acquisition. He was appointed
as Chief Operating Officer, Nutrition in July
2021, as President Nutrition in February 2022
and as President Health in July 2023. Pat has
more than 20 years of experience in senior
leadership roles in general management,
marketing and sales across North America,
Europe, Asia Pacific and Latin America.
Nationality British
Key skills and experience
Ranjay joined Reckitt as Chief Human Resources
Officer in March 2020. Ranjay has over 30 years’
experience in the human resources function
across different geographies and industries.
Prior to joining Reckitt, Ranjay was the Chief
Human Resources Officer at InterContinental
Hotels Group plc and spent over two decades
at Unilever in senior leadership roles.
Nationality French
Key skills and experience
Sami joined Reckitt as Chief Supply Officer
in July2020. He is responsible for global
supply chain operations, including planning,
procurement, manufacturing and logistics.
Sami will be leaving Reckitt in July, to be
succeeded by Harald Emberger, previously
Chief Supply Chain Officer at Beiersdorf AG.
Nationality Italian
Key skills and experience
Filippo joined Reckitt as Chief Information
& Digitisation Officer in April 2021. Filippo is
responsible for building and maintaining Reckitt’s
IT, Data and Digital capabilities. Filippo brings
to Reckitt extensive leadership experience in
defining and shaping IT, digital portfolios and
technology-enabled new business models
across leading consumer goods organisations.
Nationality American
Key skills and experience
Catheryn joined Reckitt in February 2022 and
isresponsible for legal and compliance matters
across the Group. She brings to Reckitt more
than 20 years of professional expertise in
running global legal and compliance teams,
managing litigation and corporate transactions,
advising on financial reporting and disclosure
as well as supporting Board governance.
Nationality American
Key skills and experience
Susan joined Reckitt as President Nutrition in July
2023. Susan brings to Reckitt a deep knowledge
of the Nutrition business, having previously
worked for over 11 years at Mead Johnson
Nutrition and Reckitt in a number of senior
leadership roles in the US and Europe, including
general management, marketing and sales.
Nationality French
Key skills and experience
Fabrice joined Reckitt in 1999 and the GEC in April
2022. Since joining the Company he has worked
internationally in senior leadership roles across
marketing and general management. He oversees
the Marketing Centres of Excellence and the
Sustainability and Corporate Affairs functions.
Heis responsible, amongst others, for reimagining
and scaling Reckitt’s playbook for digitally led,
sustainable and profitable growth. Fabrice is
agraduate of EM Lyon Business School, France.
Nationality American
Key skills and experience
Angela joined Reckitt as Chief R&D Officer in
September 2020 and is responsible for elevating
Reckitt’s science capability and platforms aswell
as for driving external partnerships. Sheisfocused
on enabling the R&D organisation to deliver
meaningful solutions addressing the mega
trends and sustainability to deliver growth.
Pat Sly (47)
President Health
Ranjay Radhakrishnan (53)
Chief Human Resources Officer
Sami Naffakh (53)
Chief Supply Officer
Filippo Catalano (51)
Chief Information & Digitisation Officer
Catheryn O’Rourke (51)
General Counsel & Company Secretary
Susan Sholtis (57)
President Nutrition
Fabrice Beaulieu (50)
Chief Marketing, Sustainability and
Corporate Affairs Officer
Angela Naef, PhD (48)
Chief R&D Officer
Other Group Executive Committee members who served in the year
Nicandro Durante, Non-Executive Director from December 2013, was appointed as Chief Executive
Officer from October 2022 until October 2023 and stayed on as Executive Director until his departure
inDecember 2023.
71 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
The Board is responsible for the effective
leadership of the Group and for promoting
itslong-term sustainable success, generating
value for shareholders and contributing to wider
society, whilst focusing on governance with the
highest regard to the principles of the Code.
The Board provides leadership by setting our
Purpose, strategy and values, monitoring our
culture and ensuring alignment with our Purpose
and Compass, and overseeing implementation by
management. All Directors must act with integrity,
lead by example and promote the Company’s
culture and values. The Board also ensures there
are appropriate processes in place to manage
risk, including the Company’s risk appetite and
monitors financial and operational performance
against objectives. The Board consists of a
balance of Executive and Non-Executive Directors
who together have collective accountability to
Reckitt’s shareholders as well as responsibility
for the overriding strategic, financial and
operational objectives and direction of Reckitt.
The Board manages the overall leadership of the
Group with reference to its formal Schedule of
Matters Reserved for the Board. This schedule is
reviewed annually, with the last review undertaken
in November 2023, and broadly covers:
– Matters which are legally required to be
considered or decided by the Board, such
asapproval of Reckitt’s Annual Report and
Financial Statements, declaration of dividends
and appointment of new Directors
– Matters recommended by the Code to be
considered by the Board, such as terms of
reference for the Board and its Committees,
review of internal controls and risk management
– Compliance with regulations governing
UKpublicly listed companies, such as the UK
Listing Rules, the Disclosure Guidance and
Transparency Rules and the Prospectus
Regulation Rules
– Matters relating to developments in, or changes
to, the Group’s strategic direction, or material
corporate or financial transactions
is available on the Reckitt website at
reckitt.com/investors/corporate-governance.
The full Schedule of Matters Reserved for the Board
RECKITT’S APPROACH
TOGOVERNANCE
72 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Nomination Committee
Chaired by Chris Sinclair
Responsible for making
recommendations to the Board on
suitable candidates for appointment
to the Board, its Committees and
senior management and to regularly
review and refresh their composition
to ensure that they comprise a
diverse group of individuals with
the necessary skills, knowledge and
experience to effectively discharge
their responsibilities, whilst keeping
in mind the importance of diversity.
Audit Committee
Chaired by Andrew Bonfield
Responsible for monitoring the
integrity of Reckitt’s Financial
Statements and for ensuring
effective functioning of internal
audit, internal controls and risk
management. It is also responsible
for managing the Company’s
relationship with its External Auditor.
Remuneration Committee
Chaired by Alan Stewart
Responsible for assisting the Board
in fulfilling its oversight responsibility
by ensuring that the Remuneration
Policy and practices reward fairly and
responsibly, are linked to corporate
and individual performance and take
account of the generally accepted
principles of good governance.
The Committee is responsible for
determining the remuneration for
theChair, Executive Directors and
senior management.
CRSEC Committee
Chaired by Pam Kirby
Responsible for supporting the
Board in reviewing, monitoring and
assessing the Company’s approach
to responsible, sustainable, ethical
and compliant corporate conduct
and to assist the Board in upholding
its Compass.
Board Leadership and Company Purpose continued
Governance structure
The Company has a clear and effective
governance structure, which allows the Board,
its Committees and the Executive team to make
decisions effectively. The Board has established
four Committees to assist in the execution of its
responsibilities. Each Committee operates under
terms of reference approved by the Board. The
terms of reference are reviewed regularly, with
the last review taking place in November 2023.
There are also three supporting Management
Committees: the Disclosure Committee, the
Group Executive Committee (GEC), and the Risk,
Sustainability & Compliance Committee (RSCC).
Disclosure Committee
Chaired by CFO
Responsible for
ensuring accuracy and
timeliness of disclosure
of financialand other
publicannouncements.
Group Executive Committee
Chaired by CEO
Responsible for overseeing Reckitt’s management and ensuring
collaboration between GBUs, functions and in-market operations.
It recommends and implements the strategy and related budget
as approved by the Board. The GEC drives business and cultural
transformation, reviews business performance and approves business
development plans and major investments. It plays a critical role in
talent management and development and oversees the integration
ofsustainability within business operations.
Risk, Sustainability &
Compliance Committee
Chaired by CEO
Provides oversight of risk across the organisation and
makes recommendations to the CRSEC Committee
for actions to be taken in respect of the Group’s legal
compliance and ethics, sustainability, external affairs,
employee health and safety, quality, consumer safety
and regulatory matters, including compliance strategies,
policies, programmes and key activities.
for more details in the
Nomination Committee Report.
See pages 83-87
for more details in the
Audit Committee Report.
See pages 88-95
for more details in the
Remuneration Committee Report.
See pages 100-132
for more details in the
CRSEC Committee Report.
See pages 96-99
Our Board
The Board is collectively responsible for the overall leadership of the Group and for promoting its long-term sustainable success whilst focusing on its strategic
direction, Purpose, values and governance with the highest regard to the principles of the Code. There is a clear division of responsibilities between the Board,
itsCommittees and Management Committees.
Shareholders
Our shareholders are the ultimate owners of the Company and play an important role in the governance structure. Further information on our engagement with
shareholders can be found on page 39.
73 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
How we manage conflicts of interest
Directors have a duty to avoid interests, director
indirect, which might conflict with the interests
of the Group. Under the terms of our Articles,
such conflicts can be authorised by the Board.
Procedures are in place to manage and, where
appropriate, approve such conflicts. Any
authorisations granted by the Board are recorded
by the General Counsel & Company Secretary
in a Register of Conflicts, together with the
date on which the conflict was authorised. Any
conflicts authorised during the year are reviewed
annually by the Nomination Committee and the
Board. In addition, each Director certifies on
an annual basis that the information contained
in the Register of Conflicts is correct.
The Company indemnifies the Directors and
Officers of the Company and any Group subsidiary
to the extent permitted by law in respect of the
legal defence costs for claims against them and
third-party liabilities. The indemnity would not
provide cover for a Director or Officer if that
individual was found to have acted fraudulently
or dishonestly. Additionally, Directors’ and
Officers’ liability insurance cover was maintained
throughout the year at the Company’s expense.
How Board meetings are structured
Board meetings are conducted in an open
atmosphere conducive to challenge and debate.
Agendas are tailored to the requirements
of the business and agreed in advance by
the Chair and CEO with the support of the
General Counsel & Company Secretary.
The Board receives operating and financial reports
from the CEO and CFO on strategic and business
developments, as well as financial performance
and forecasts at each meeting. Specific
presentations are also made by non-Board
members on material matters to the Group.
Inaddition, the Chairs of the Audit, Remuneration,
CRSEC and Nomination Committees update the
Board on the proceedings of those meetings,
including key topics and areas of concern.
At the conclusion of every scheduled Board
meeting, the Chair holds a session with the
other Non-Executive Directors, without
the Executive Directors present, providing
further opportunity for the Non-Executive
Directors to assess the performance of
management and individual Executive Directors
and help drive future agenda items.
The Board uses its meetings as a way of
discharging its responsibilities, including
as set out in section 172 of CA 2006 to
promote the success of the Company for
the benefit of its members as a whole.
Board and Committee meeting attendance
In 2023, there were five scheduled Board
meetings. The October Board meeting was a
strategy session held in person in New Jersey,
USA to allow the Board to immerse itself in
the Group’s operations, to visit local sites and
meet the local workforce. During the three-day
meeting, the Board received presentations on
the Company’s strategy, including deep dives
into each GBU, innovation, supply and IT &
Digital strategy. The Board also met informally
with senior leadership from the US team and
hosted employee engagement sessions.
The table opposite sets out the attendance by
Directors at scheduled Board and Committee
meetings that each Director was eligible to
attend. Directors who were not members
of individual Board Committees were also
invited to attend one or more meetings
of those Committees during the year.
Where a Director is unavoidably absent from a Board or Committee meeting, they still receive and
reviewthe papers for the meeting and may provide verbal or written input ahead of the meeting,
usuallythrough the Chair of the Board or the Chair of the relevant Committee, so that their views
areconsidered at the meeting.
Board
Audit
Committee
Remuneration
Committee
CRSEC
Committee
Nomination
Committee
5
meetings
4
meetings
3
meetings
4
meetings
2
meetings
Andrew Bonfield 5 of 5 4 of 4 2 of 2
Olivier Bohuon 4 of 5 2 of 3 3 of 4
Jeff Carr 5 of 5
Jeremy Darroch 5 of 5 4 of 4 3 of 3 2 of 2
Margherita Della Valle 4 of 5 3 of 4
Nicandro Durante
1
4 of 5
Shannon Eisenhardt
2
1 of 1
Mary Harris 5 of 5 3 of 3
Tamara Ingram 5 of 5 4 of 4
Kris Licht
3
3 of 3
Mehmood Khan 5 of 5 4 of 4
Pam Kirby 5 of 5 4 of 4 4 of 4
Chris Sinclair 5 of 5 3 of 3 4 of 4 2 of 2
Alan Stewart 5 of 5 3 of 3 2 of 2
Elane Stock 5 of 5 4 of 4
1. Nicandro Durante resigned from the Board on 31 December 2023
2. Shannon Eisenhardt was appointed to the Board on 17 October 2023
3. Kris Licht was appointed to the Board on 1 June 2023
74 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Stakeholders
Customers People Partners Communities
Government and
industry associations
Consumers Shareholders
Our activities during the year
FEBRUARY MEETING
– Approval and publication of Full Year Results
– Approval and publication of Annual
Report2022
– Consideration of Full year dividend proposal
JULY MEETING
– Approval and publication
ofHalfYearResults
– Consideration of Interim
dividendproposal
AGM
– In person engagements
withshareholders and Q&A
– AGM resolutions proposed
toshareholders
MAY MEETING
– Review of Sustainability Strategy
– Approval of Modern Slavery
ActStatement
Strategy
Group plans and budgets
– Reviewed the Group’s financial plan
for2024and individually for the GBUs
– Reviewed forecasts and business
performance
Strategy
– Board members met in person for a
three-day meeting in October 2023 to
discuss strategy and the innovation pipeline
– Reviewed strategy for each GBU, supply
chain and IT & Digital function
– Received updates on competitive
environment and broader
marketdevelopments
Mergers and acquisitions
– Oversight of potential merger and
acquisitions (M&A) activities and
portfoliostrategy
Business updates
– Review of GBU business performance
– Deep dives on functions such as Finance,
HR,Supply, IT & Digital and Cyber
Board Leadership and Company Purpose continued
2023 BOARD ACTIVITIES
Governance and Oversight
Board and Committee performance review
– Conducted the annual Board performance
review and had oversight of Committee
performance reviews. Identified areas for
improvement and recommended actions
– Considered and proactively addressed
actions from the 2022 Board
performancereview
Talent, succession and board composition
– Oversight of Group talent planning and
succession, including senior management
succession and retention
– Considered and approved Board changes,
including the appointment of Chair, CEO,
CFO, SID and new Non-Executive Directors
as detailed on pages 83 to 87
Shareholders and stakeholders
– Held the 2023 AGM as a physical meeting.
Shareholders had the opportunity to
pre-submit questions as well as ask them
during the meeting
– Held Board and employee engagement
meetings, to understand employee views,
aspart of October strategy meetings
Compliance
– Reviewed and approved governance
matters, such as the Schedule of Matters
Reserved for the Board, Committee terms of
reference, Directors’ conflicts of interest and
compliance with the Code and best practice
– Kept abreast of upcoming changes in the
UKcorporate governance and regulatory
framework
– Approved Reckitt’s 2022 Modern Slavery
andHuman Trafficking Statement, as
recommended by the CRSEC Committee
75 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Our activities during the year
SITE VISIT
– Board visit to R&D facility and review of
R&D functional strategy
ESG Financial
– Reviewed the Group’s sustainability strategy
and approach, including progress against
thedelivery of our Sustainability Ambitions
Reporting
– Reviewed and approved Reckitt’s Annual
Report and Financial Statements including
compliance with reporting requirements
– Reviewed and approved Reckitt’s full-year,
half-year and quarterly results
– Provided results presentations to investors
and employees during the year
Going concern
– Reviewed long term going concern and
liquidity considerations
– Considered and approved the 2023
AnnualReport Viability Statement upon
recommendation of the Audit Committee
– Received updates on sustainability activities
and initiatives
Financial resources
– Reviewed the Company’s financial
position,Group debt and funding
arrangements and capital allocation
– Approved bond issuance
– Approved initiation of share
buybackprogramme
– Interim and final dividend payments
– Approved the final 2022 and
interim2023dividend payments
Treasury policies
– Reviewed and approved the Group’s
Treasury policies
Board Leadership and Company Purpose continued
Risk Management and Internal Controls
Principal and Emerging Risks
– Conducted an annual review of Reckitt’s
principal and emerging risks and
consideration of risk management approach
– Reviewing the appropriateness and
effectiveness of the system of internal
control and risk management
Stakeholders
OCTOBER MEETING
– Board three-day strategy sessions
– Board and employee engagement sessions
NOVEMBER MEETING
– 2024 Plan agreed
– Board performance review
LISTENING SESSIONS
– Conducted listening session on the
intersectionality of Health and Climate
Customers People Partners Communities
Government and
industry associations
Consumers Shareholders
76
Governments,
NGOs, Industry
&Academia
Communities
Suppliers &
partners
People
Consumers
Customers
Investors
Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
CEO appointment
In appointing Kris Licht as CEO, following
anextensive search which considered both
internal and external candidates, the Board
took account of the need to build on the strong
momentum in the business over the past three
years, Kris’ strong strategic and operational
leadership experience, as well as his in-depth
knowledge of Reckitt’s business, culture,
customers and other stakeholders, as well
asof the consumer goods sector generally.
CASE STUDY
CASE STUDY
This statement shows how our
Directors have acted in a way
thatthey consider, in good faith,
would be most likely to promote
thesuccess of the Company for
thebenefit of its members as a
whole during 2023, having regard
tostakeholders, including matters
under Section 172(1)(a)-(f) of the
Companies Act 2006.
Understanding the needs and expectations
of our stakeholders is fundamental to our
Purpose: to protect, heal and nurture in the
relentless pursuit of a cleaner and healthier
world. In making decisions, the Directors
consider what is most likely to promote the
success of the Company for its shareholders
in the long term, as well as the interests
of the Group’s other stakeholders.
We recognise that our business can only
grow and prosper by acting in the long-term
interests of our key stakeholders, namely
our people, our consumers and customers,
our shareholders, investors and partners, the
communities in which we operate and the
environment. Further information on our key
stakeholders can be found on pages 37 to 40.
The Board considers our key stakeholders and
the matters set out under Section 172 of the
CA2006 in its discussions and decision-making.
The following table sets out examples of how
the Board has considered matters under section
172 during the year in performing its duties.
Our stakeholders
Board Leadership and Company Purpose continued
SECTION 172
STATEMENT
How the Board engaged
withstakeholders: Page
Consumers
37
Customers
38
People
38
Suppliers & partners
39
Investors
39
Communities
40
Governments, NGOs,
Industry&Academia
40
Shareholder returns
The Board recognises the importance of
shareholder returns and, during the year,
increased both the 2022 final dividend
and the 2023 interim dividend by 5%.
InOctober, the Board also announced
a£1 billion share buyback programme.
Inannouncing this enhanced shareholder
returns programme, the Board tookaccount
of the Group’s strong free cash flow
generation, the views of shareholders,
and that capacity existed to return excess
capital to shareholders without impacting
the successful delivery of the business plan
or the Group’s capital allocation priorities.
77 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
(a) Considering long-term consequences
The Board strives to act in the long-term
interests of its key stakeholders, and this
frames its oversight of corporate strategy,
which is founded on creating long-term
shareholder value. Our Sustainability
Ambitions frame decision-making, and
provide important interim milestones
to 2030. These parameters, set by the
Board, are reflected within strategy
work and objectives, which extends
to: capital investment; Group budgets;
dividend plans; and future resourcing
requirements. Reckitt’s risk management
framework, including the Group’s Principal
Risks, further underpin the Board’s
long-term approach. The Board and its
Committees are responsible for risk
governance, and oversight is achieved
through several mechanisms including
strategy reviews, Committee meetings
and deep dives into selected risk areas.
(b, c) Fostering stakeholder relationships
Constructive two-way dialogue with
Reckitt’s key stakeholders, including
employees, customers and consumers,
investors, suppliers and partners,
governments and regulators, tracks
priorities and helps identify issues as
they arise. Strategic engagement with
stakeholders reflects the structure of
our business as one Group with three
autonomous business units with decision-
making authority. The Board creates the
right conditions for this approach by
setting Reckitt’s long-term direction,
overarching decision-making framework
and culture. This is in-line with the Board’s
own experience and understanding of
stakeholder needs, Reckitt’s Sustainability
Ambitions and engagement on the future
of the retail and consumer goods industry.
(d) Protecting communities and
theenvironment
We understand as a business the effects
our operations have on the environment and
the need to embed sustainability to create
positive impacts both for communities and
the wider society in which we operate, as
well as for our business. Our Sustainability
Ambitions to 2030 focus on our impact
through our purpose-led brands and
innovative products; sustaining a healthier
planet through our work on climate change,
natural resources and biodiversity; and
enabling a fairer society through our activity
in our own business and across our value
chain. The Board oversees and reviews
performance against Reckitt’s Sustainability
Ambitions and delegates regular oversight
of sustainability to the CRSEC Committee.
(e, f) Setting culture and conduct
The Board is responsible for monitoring
Reckitt’s culture and values, and the delivery
of our strategy can only be achieved with
the highest standards of business conduct.
All Directors must act with integrity, lead
by example, and promote the Company’s
culture and values. We aim to create
the space and opportunities to help our
employees make a difference and do the
right thing, always. The CRSEC Committee
reports to the Board after each of its
meetings, to provide an update on Reckitt’s
ethics and compliance priorities, including
the Group’s Speak Up programme.
Relevant s172(a) disclosures
Our Strategy
8-11
Board activities
andgovernance
71-75
Focus on risk management
78
Relevant s172(b, c) disclosures
Reckitt’s decision-making
framework
72
Stakeholder engagement
andactions
37-40
Relevant s172(d) disclosures
Sustainability Ambitions
Progress Overview and
Performance Review
14
47-54
Audit Committee report
88-95
CRSEC Committee report
96-99
Climate-related
FinancialDisclosures
218-222
Relevant s172(e, f) disclosures
Board oversight/focus on
culture and ethical conduct
96-99
Reckitt’s approach to DE&I,
health, safety and wellbeing
19-21
112-114
Board Leadership and Company Purpose continued
78 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
Risk Appetite
The Board is responsible for compliance with
the Code and the Financial Reporting Council’s
(FRC) Guidance on Risk Management, Internal
Control and Related Financial and Business
Reporting. The sectors and environment within
which Reckitt operates are dynamic and fast-
moving, and in some areas, highly regulated, and
so controls are kept under review. The system
is designed to assess and manage, rather than
eliminate, risks to our business objectives. The
Board relies on these controls insofar as they are
able to provide reasonable, but not absolute,
assurance against material misstatement or loss.
The Group’s principal and emerging risks and
mitigating actions are detailed on pages 55 to 60.
As part of our risk management process,
weregularly evaluate risks to achieving objectives,
and the likelihood of such risks materialising and
impacting the ability of the Group to cope with
the circumstances should they occur. In doing so,
we are inherently considering our risk appetite
through the actions taken, controls implemented
and processes followed to reduce the likelihood
of risk events taking place, mitigating the
potential impact and ensuring that the cost
ofdoing so is proportionate to the benefit gain.
Principal risks
Reckitt is committed to maintaining strong
internal controls and further enhancing
these. Further information on internal control
activities during the year can be found on
page 94 of the Audit Committee Report.
Functional and operational management meet
todiscuss performance measured against
strategic aims and goals, with risks and risk
controls incorporated into the discussions.
During the year, the Directors undertook a robust
assessment of the principal and emerging risks
facing the Group, including those that could
threaten our business model, future performance,
solvency and liquidity. Each principal and emerging
risk is overseen by the Board, or a designated
Committee of the Board, and is subject to formal
deep-dive reviews as appropriate at Board, GEC
and GBU meetings. More details on the Group’s
principal strategic risks and uncertainties can be
found in the Strategic Report on pages 55 to 60.
Risk management and internal controls
The Audit Committee, on behalf of the Board,
oversees the Group’s overall Risk Management
Framework, the effectiveness of internal controls
and monitors Reckitt’s compliance with the
requirements of the Code in respect of risk
management and internal controls. The Audit
Committee monitored the key elements of the
Group’s internal controls framework throughout
the year and conducted an annual review of
the effectiveness of Reckitt’s system of risk
management and internal control in respect of
2023, which covered all material controls, including
financial, operational and compliance controls. The
Audit Committee’s annual review was supported by
a report prepared by the Internal Audit function on
the Group’s risk management and internal controls.
On an ongoing basis, the Board reviews the
effectiveness of the Group’s risk management
and internal control system, including through
monitoring reports from management on their
assessment of risks and internal control systems,
assurance received from management regarding
compliance with relevant policies, and assurance
received on the effectiveness of the Company’s
internal control environment. In addition, the Board
reviews reports from the Audit Committee, the
Internal Audit function and the External Auditor,
the Company’s response to incidents and threats,
including those relating to cybersecurity and
safety. The Board reviewed information gathered
from the Company’s formal Speak Up programme
including the results of an investigation conducted
in two Middle Eastern markets (see page 93). It
also considers the External Auditor’s observations
on the financial control environment.
In particular, the Audit Committee monitored
progress against Reckitt’s ongoing controls
transformation programme to strengthen internal
control over financial reporting. The Group’s
financial controls transformation programme is
intended to increase the overall level of control
environment maturity and improve consistency
across the Group. During 2023, it reviewed the
results of testing performed by the internal
controls and Internal Audit teams to confirm
the effective operation of key financial controls
across the Group, in particularly following the
launch of the Group’s revised financial control
framework during the year. More details on the
financial control framework can be found in the
Audit Committee Report on page 94. The Audit
Committee also continues to monitor progress
in relation to IT General Controls and technology
security and control initiatives, with regular
updates from the Chief Information and Digitisation
Officer and on the related assurance programmes.
Where areas for improvement are identified, the
Audit Committee is updated regularly with respect
to progress on those remediation activities as
well as reviewing ongoing control improvements
identified. It is recognised that improvements
will be ongoing through 2024 and the Audit
Committee will continue to support management
and review the remediation activities to monitor
that management have the appropriate resources
and an appropriate remediation timeline is in place.
Climate-related risk and environmental,
socialand governance (ESG) matters
The Board oversees, considers and reviews
the Group’s ESG strategy and has oversight
of climate-related risks and opportunities.
As part of the Board’s annual review of our
principal and emerging risks, sustainability was
considered. The Board’s focus included, both ESG
performance and reporting. More information
on our Sustainability Ambitions can be found on
pages 47 to 54. Our Climate Related Financial
Disclosures can be found on pages 218–222.
The CRSEC Committee supports the Board in
reviewing, monitoring, and assessing our approach
to sustainability, which includes climate change.
The CRSEC Committee reports to the Board
regularly at Board meetings, providing an update
on sustainability objectives and progress against
our targets. Further details on the activities of the
CRSEC Committee can be found on pages 96 to 99.
FOCUS ON RISK
MANAGEMENT
79 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Board Leadership and Company Purpose continued
Reckitt is rooted in a culture that is purpose driven,
innovative and entrepreneurial. Our leadership
behaviours unite us through a shared ambition
to Own, to Create, to Deliver and, above all,
toCare about the outcomes we deliver. Doing
the right thing, always, is at the centre of our
Compass, which guides our business and the
leadership behaviours that drive our success.
Our people are what makes Reckitt unique.
They believe in and are inspired by our Purpose.
During the last four years, we have established
deep cultural foundations that empower our
people as the key value drivers of our business.
We redefined our leadership behaviours to place
a greater emphasis on care as we serve the
needs of all our stakeholders. We elevated the
importance of teamwork in delivering outcomes
and protecting against the pursuit of results at
any cost. More information on our culture can be
found on pages 19 to 21 of the Strategic Report.
How the Board monitors culture
A key focus of the Board is to monitor culture
and ensure alignment between our Purpose,
values, and behaviours. Our culture and
values at Reckitt are defined by the Board
and the GEC. Regular interactions with
employees help the Board monitor culture
and are detailed in the table opposite.
How we monitor culture Board interactions and engagement to monitor culture throughout the year
Connecting directly
withemployees
Board members meet with employees regularly. As part of this year’s October Board meeting schedule, Board members met
informally with senior leadership from the US and hosted employee engagement sessions. The Board reviewed feedback
from the round-table discussions. In her role as Designated NED for Engagement with the Company’s Workforce, Mary Harris
attended meetings where employees were able to speak directly with Mary. The Board received feedback from Mary on
these discussions. Further information on Mary’s role as Designed NED for Engagement with the Company’s Workforce can
befound on pages 38 and 80.
Monitoring employee
perceptions
Regular global all-employee surveys include questions to gauge employees’ perceptions and understanding of leadership,
inclusion and wellbeing at Reckitt, and identify areas which require greater attention. This year’s survey highlighted that
employees would recommend Reckitt as a place to work; believe in and are inspired by our Purpose to protect, heal and
nurture in the relentless pursuit of a cleaner, healthier world; are proud to work for Reckitt; and agreed that we are achievers.
Similar to last year, responses from the survey also identified areas that need further improvement, such as: removing barriers
that slow down work; transparency on equal opportunities and career progression; and investing in and developing people.
The Board will continue to monitor progress against these areas.
Creating a forum for
employees to be heard
Employee Resource Groups (ERGs) are employee networks that aim to raise the visibility of underrepresented communities.
They provide a space for colleagues to connect and support each other and are also represented on the Global Inclusion
Board. In addition, throughout the year, Mary Harris, the Designated NED for Engagement with the Company’s Workforce,
hasmaintained regular engagement with various employee groups, including the ERGs.
Ensuring employees
areinformed
Quarterly all-employee global live-streaming results broadcasts were held by the CEO, CFO and GBU leaders to present
ourresults and employees are invited to ask questions and interact directly with presenters.
Staying informed of legal
and compliance matters
At each Board meeting, the CRSEC Committee reports to the Board on legal compliance and ethics matters, including the
Group’s Speak Up programme, which provides safe communication channels for employees wishing to raise concerns on
potential violations of regulations, internal policies or any misconduct observed at Reckitt.
Maintaining open
communications
Following the Q3 2023 results announcement, a CEO chat was broadcast to update Reckitt employees on the continued
strategic direction beyond Q3 and provided employees with an opportunity to ask questions.
FOCUS ON
CULTURE
80 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Division of Responsibilities
Board roles and responsibilities
To ensure the Board performs effectively, there is
a clear division of responsibilities, set out in writing
and agreed by the Board, between the leadership
of the Board and the executive leadership of the
business. The key roles are defined in greater
detail on the following pages.
A full description of the roles and responsibilities
of the Chair, CEO and Senior Independent Director
can be found on our website: www.reckitt.com.
Managing time commitment and ‘overboarding’
On appointment, Non-Executive Directors are
made aware of the need to, and are required to
confirm that they will, allocate sufficient time
to their role to discharge their responsibilities
effectively. They are also required to seek
agreement from the Chair before taking on
additional commitments, and to declare any actual
or potential conflicts of interest. Non-Executive
Directors are engaged under the terms of a letter
of appointment. Initial terms of appointment are
for three years with three months’ notice, with all
Directors standing for election or re-election at
every AGM. The Board has reviewed the length of
service of each Director and considers that each
Non-Executive Director standing for re-election
or election at this year’s AGM is independent.
Inparticular, in relation to the reappointment
of Mary Harris as Chair of the Remuneration
Committee for a fixed term between the
HOW WE ARE
GOVERNED
Non-Executive
The Chair
– Leading the Board and taking responsibility
forthe Board’s overall effectiveness
indirecting the Company
– Upholding the highest standards of integrity
and ethical leadership, leading by example
andpromoting a culture of openness and
debate, based on mutual respect, both in
andoutside the boardroom and in line with
ourPurpose, values, strategy and culture
– Chairing Board, Nomination Committee
andshareholder meetings and setting
Boardagendas
– Encouraging constructive challenge and
facilitating effective communication between
the Board, management, shareholders and
wider stakeholders, while promoting a culture
of openness and constructive debate
– Ensuring an appropriate balance is maintained
between the interests of shareholders and
other stakeholders
– Leading the annual performance review
process for the Board and its Committees
andaddressing any subsequent actions
– Promoting the highest standards
ofcorporategovernance
– Building a well-balanced, diverse
andhighlyeffective Board
– Ensuring Directors receive accurate,
timelyandclear information
– Ensuring there are appropriate induction
anddevelopment programmes for all
Boardmembers
– Ensuring the long-term sustainability
oftheCompany
The Senior Independent Director
– Acting as a sounding board for the Chair
onBoard-related matters
– Acting as an intermediary for other Directors
as necessary
– Evaluating the Chair’s performance
onanannual basis
– Chairing Board and Nomination Committee
meetings in the absence of the Chair
– Being available to shareholders and
stakeholders to address any concerns that
they have been unable to resolve through
normal channels
– Leading the search and appointment process
for a new Chair, when necessary
Designated Non-Executive Director for Engagement with the Company’s Workforce
– Overseeing the Board’s engagement with
theCompany’s workforce together with
management, to understand more about
engagement and the culture of the Company
– Developing and implementing employee
engagement initiatives
– Providing an employee voice in the boardroom
and reporting on matters relating to Company
culture, purpose and improvements
Non-Executive Directors
– Providing independent input into Board decisions
through constructive challenge anddebate,
strategic guidance and specialist advice
– Setting and approving the Company’s long-term
strategic, financial and operational goals
– Examining the day-to-day management of the
business against the performance targets and
objectives set, ensuring that management
isheldto account
– Reviewing financial information and ensuring
itiscomplete, accurate and transparent
– Ensuring there are effective systems of internal
control and risk management and that these are
continually monitored and reviewed
– Setting appropriate levels of remuneration
forExecutive Directors and ensuring
performance targets are closely aligned
withshareholder interests
– Development of succession planning and the
appointment and removal of senior management
– Taking into account and responding
toshareholders’ views
81 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Division of Responsibilities continued
Company’s 2024 and 2025 AGMs, see page 64.
The Board considers all Non-Executive Directors
who served during the year to be independent.
Whilst both Chris Sinclair and Pam Kirby will have
served nine years in February 2024, the 2024 AGM
represents a natural point for them to stand down,
and enables smooth succession of their roles. The
period from February to the AGM is considered
sufficiently short not to impair their independence.
The Board and Directors are confident that each
Director individually has the expertise and relevant
experience required to perform the role of a
Director of a listed company and to contribute
effectively to the Board and Committees to which
they are appointed. The Company recognises
the developmental advantages of an external
non-executive role on a non-competitor board
and Executive Directors are permitted to seek
such a role, provided that they do not take on
more than one non-executive directorship in,
nor become the Chair of, a FTSE 100 company.
Nicandro Durante, who was an Executive
Director until the end of the year, was Chair
of TIM Participações S.A. and Jeff Carr is
currently a Non-Executive Director of Kingfisher
plc and Chair of its Audit Committee.
Board support
The General Counsel & Company Secretary
isresponsible for organising Board meetings,
as well as collating any papers for the Board
to review and consider. Board and Committee
papers are accessible to all Directors through
a secure and confidential electronic document
storage facility. This facility is maintained by
Reckitt’s Secretariat function and additionally
holds other information which the Chair, the CEO
or the General Counsel & Company Secretary
may deem useful to the Directors, such as press
releases and pertinent company information.
All Directors have individual access to advice
from the General Counsel & Company Secretary
and a procedure exists for Directors to take
independent professional advice at the Company’s
expense in furtherance of their duties.
Executive
The Chief Executive Officer
– Principally responsible for the day-to-day
management of Reckitt, in line with the
strategic, financial and operational objectives
set by the Board
– Chair of the GEC, consisting of the CEO,
theCFO and senior management executives,
who together are responsible for execution
ofthe Company’s strategy and achieving
itscommercial aims
– Effective development and implementation of
strategy and commercial objectives as agreed
by the Board
– Maintaining relationships with investors and
advising the Board accordingly
– Managing Reckitt’s risk profile and establishing
effective internal controls
– Ensuring there are effective communication
flows to the Board and the Chair, and that they
are regularly updated on key matters, including
progress on delivering strategic objectives
– Regularly reviewing the organisation structure,
developing a Group Executive team and
planning for succession
– Providing clear leadership to promote the
desired culture, values and behaviours to
inspire and support the Company’s workforce
– Ensuring the long-term sustainability of
thebusiness
The Company Secretary
– Providing advice and support to the Chair
andall Directors
– Advising and keeping the Board up to date
onall relevant legal and governance
requirements and ensuring the Company
iscompliant
– Ensuring the Board receives high quality,
timelyinformation in advance of Board
meetings to ensure effective discussion
– Facilitating an induction programme for
allBoard members
– Ensuring there are policies and processes
inplace to help the Board function efficiently
and effectively
– Keeping abreast of shareholders’ views
The Chief Financial Officer
– Supporting the CEO in developing and
implementing the Company’s strategy
– Leading the global finance function,
anddeveloping key talent and planning
forsuccession
– Responsible for establishing and maintaining
adequate internal controls over financial
reporting and for the preparation and integrity
of financial reporting
– Ensuring the Board receives accurate, timely
and clear information in respect of the Group’s
financial performance and position
– Developing and recommending the long-term
strategic and financial plan
82 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Composition, Succession and Evaluation
Board Performance review process 2023
The Board undertakes an annual review of
its own and its Committees’ performance
and effectiveness, with a formal externally
facilitated performance review of the Board
conducted at least every three years. In 2020,
we engaged Lintstock to facilitate a three-year
Board Development Programme, which was
extended for an extra year in 2023. In this final
year, the review consisted of both an online
questionnaire and interviews with the Directors.
The 2023 Board performance review considered
the effectiveness of the Board, as well as that
of each Board Committee and the individual
Directors. The areas of focus included Board
composition and succession planning, quality of
information received, Board dynamics and support,
management and focus of meetings, Board
Committees, strategic oversight, risk management
and mitigation, internal control, advancement of
diversity and inclusion, oversight of sustainability
disclosures and board relations. A report, with
action points and recommendations for the
Board to consider, was distributed to Directors
and the results of the review were subsequently
discussed by the Board at its November meeting.
Key themes identified through the performance
review included the need to focus in 2024
on Board succession, risk management and
providing the Board with more opportunities
to engage with the business (for example,
byholding meetings in proximity to key sites).
In addition, the Chair’s performance was
considered by the Senior Independent Director
with input from his fellow Non-Executive
Directors and discussed following the November
Board meeting without the Chair present. The
discussion concluded that the Chair continued
to devote sufficient time to his role and
continued to lead the Board constructively,
demonstrating objective judgement and
encouraging a culture of openness and debate.
Lintstock is independent of and has no other
links with the Company or its Directors in
connection with the performance review.
Actions taken to address the findings of the 2022
review are also outlined in the table opposite.
2022 recommendations Action taken during 2023
Board succession
Whilst Board composition was rated highly,
it was noted that ensuring appropriate
geographical representation, gender diversity
and recruiting Non-Executive Directors
with IT & Digital and marketing experience
would be beneficial to the Board.
Through the Nomination Committee, the Board
maintained a strong focus on Board renewal
during 2023. The appointment of Tamara Ingram
in February 2023, Marybeth Hays in February
2024 and Fiona Dawson in June 2024, brings
material leadership and marketing, retail and
omni-channel experience to the Board.
Talent and succession planning
Chair and CEO succession were
identified as key priorities for 2023.
As detailed in the Nomination Committee Report,
successful exercises have been undertaken
during 2023 resulting in the appointment
of Sir Jeremy Darroch as Chair, Kris Licht
asCEO and Shannon Eisenhardt as CFO.
Execution and delivery
To ensure appropriate oversight of execution
and delivery, risk management, investment
in the capabilities and systems to deliver
the strategy, with a particular focus on
Supply, IT & Digital and Cyber Security.
The Board has during the year maintained
a specific focus on these areas, receiving
detailed briefing on Supply, IT & Digital and
Cyber Security as part of its Board, Audit
Committee and CRSEC Committee agendas.
BOARD PERFORMANCE REVIEW
AND EFFECTIVENESS
83 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Committee priorities in 2023
– The selection and appointment of our new
ChiefExecutive Officer (CEO), Kris Licht,
whowas appointed as CEO Designate in
Mayand formally became CEO on 1 October
– The selection and appointment of our new
ChiefFinancial Officer (CFO) Shannon
Eisenhardt, who was appointed as CFO
Designate on 17 October, and will succeed
JeffCarr in March 2024
– Chair succession planning. In November,
weannounced that Sir Jeremy Darroch,
currently the Senior Independent Director
(SID),would succeed Chris Sinclair as Chair
oftheBoard, from the conclusion of the 2024
Annual General Meeting (AGM), and that
AndrewBonfield will take on the role of
SIDfrom the conclusion of the 2024 AGM
Key objectives for 2024
– Support a smooth Chair transition for
SirJeremyDarroch
– Support the smooth transition of the Executive
Directors, onboarding of the new Non-Executive
Directors and transition of Remuneration
Committee Chair
– Continue succession planning for the Board
andsenior management roles and to keep
Committee memberships under review
Committee membership
Members of the Committee are appointed by
the Board. Membership currently comprises the
Chair, the SID and the Chairs of each of the Board’s
Committees. In accordance with the principles
ofthe Code, the Committee is made up of a
majority of independent Non-Executive Directors.
The General Counsel & Company Secretary acted
as Secretary to the Committee during the year.
The membership of the Committee is reviewed
annually by the Chair as part of the annual
performance review of the Committee.
AllDirectors are required to seek election or
re-election each year at the AGM. Biographical
details of the Directors, including their skills and
experience, can be found on pages 65 to 68.
Role and responsibilities
The role of the Committee, as set out in
the Committee’s terms of reference, is to
ensure that there is a formal, rigorous and
transparent procedure for the appointment
of new Directors to the Board and to lead
the process for Board appointments.
The Nomination Committee has principal
responsibility for making recommendations
tothe Board on new appointments and on the
composition of the Board and its Committees.
The Committee also assists the Board in
succession planning for senior management.
The role of the Committee includes, but is
not limited to, the following matters:
– Reviewing the composition (including skills,
experience, independence, knowledge
anddiversity) of the Board and making
recommendations to the Board with regards
toany changes deemed necessary, taking
intoaccount the length of service of the
Boardas a whole and the need to regularly
refresh membership
– Reviewing the composition of each of the Board
Committees and evaluating the performance
and effectiveness of each Director
– Keeping under review the leadership
capabilities of the Company, covering
bothexecutive, non-executive and senior
management positions, ensuring plans are
inplace for orderly succession, with a view
NOMINATION
COMMITTEE
REPORT
Member
Scheduled
meetings attended
Chris Sinclair (Chair)
Chair and member for the whole year
5 2/2
Andrew Bonfield
Member for the whole year
5 2/2
Alan Stewart
Member for the whole year
5 2/2
Pam Kirby
Member for the whole year
5 2/2
Sir Jeremy Darroch
Member for the whole year
5 2/2
This year the Committee’s focus was
onsuccession planning, ensuring that
the right people arein place to enable
Reckitt toexecute its strategic aims.
Chris Sinclair
Chair of the Nomination Committee
84 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Nomination Committee Report continued
toensuring the continued ability of the
Company to compete effectively in the markets
in which it operates. Management succession
planning is considered to be so important that
itis also reviewed by the full Board
– Ensuring that all newly appointed Directors
undertake an appropriate induction programme
to ensure that they are fully informed about the
strategic and commercial issues affecting the
Company and the markets in which it operates,
as well as their duties and responsibilities as a
Director of the Board and member of one or
more Board Committees
– Keeping under annual review and monitoring
potential conflicts of interest, and, if appropriate,
authorising situational conflicts of interest,
whilstensuring the risk of unacceptable
influence resulting from any conflict of interest
isminimised
Further details on the Committee’s role and
responsibilities can be found in its terms of
reference, available at www.reckitt.com.
Board composition
The Committee regularly reviews the
composition of the Board and its Committees,
considering the balance of skills and experience,
diversity and how effectively Directors work
together to achieve Reckitt’s objectives.
Non-Executive Directors are initially appointed
for a three-year term and generally continue to
serve one or more further terms. All Directors are
nominated for appointment by the Committee,
which is subsequently approved by the Board.
In January 2024, we announced the appointment
of Marybeth Hays as a new Non-Executive Director,
effective from 1 February 2024. Marybethbrings
over 25 years of experience in retail, healthcare
and consumer goods and we are delighted
she has joined the Board. Biographical details
for Marybeth can be found on page 68.
In February 2024, we announced the appointment
of Fiona Dawson CBE as a Non-Executive Director
and as Chair Designate of the Remuneration
Committee. Fiona will join the Board on 1 June.
In accordance with the Code, all existing
Directors will stand for election or re-election
at the AGM, with the exception of Chris Sinclair,
Pam Kirby and Alan Stewart who have each
already notified their intention not to stand for
re-election at the AGM, Chris and Pam having
reached the end of their nine-year term.
The Committee recommends that all existing
Board members have their appointments renewed.
Resolutions to this effect will be proposed to
shareholders for approval at the forthcoming AGM.
Details of the specific contributions each Director
makes to Reckitt’s long-term success are set out in
the Notice of AGM, available at www.reckitt.com/
investors/annual-general-meetings.
Key activities during 2023
Meetings of the Committee are held as needed but are required to take place at least once a year.
In2023, the Committee held two scheduled meetings and three additional meetings. Meetings
takeplace ahead of Board meetings and the Chair of the Committee reports formally to the Board
onitsproceedings.
FEBRUARY
Succession planning
CEO succession and senior management succession planning
APRIL
Succession planning
The Committee met to review the CEO succession and then approved
its recommendation to the Board to appoint Kris Licht as CEO
AUGUST
Succession planning
CFO succession planning and recommendation of appointment of CFO
JULY
Succession planning
The Committee considered senior management succession planning,
including for the role of CFO. The Committee also conducted areview
of thecurrent composition of the Board Committees and succession
planning for Committee Chair roles
NOVEMBER
Succession planning
Update on succession planning generally
Recommendation of appointment of Chair and Senior Independent
Director positions
Governance matters
Annual review of Committee terms of reference
Annual review of potential conflicts of interest
Committee performance review
85 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Nomination Committee Report continued
Succession planning
The Committee regularly reviews and monitors the
Board’s structure, size and composition, including
the balance of skills, experience, independence,
knowledge and diversity required and makes
recommendations to the Board of any changes
deemed necessary. Consideration is given to the
length of service of the Board as a whole and
Directors individually. In addition, the Committee
keeps the leadership needs of the Company under
review, including senior management positions,
ensuring plans are in place for orderly succession
and so that the Company can continue to compete
effectively in the markets in which it operates.
The Committee considers Board renewal on
anongoing basis, and makes recommendations
tothe Board regarding proposed appointments.
The Committee is also responsible for making
recommendations from the Non-Executive
Directors for the role of SID and proposes
themembership and the role of Chair for
eachofthe Board Committees.
Induction programmes
New Directors receive a tailored induction
programme on appointment to the Board. The
induction programme generally includes meetings
with the other Directors, the General Counsel &
Company Secretary and GEC members on a 1:1
basis, relevant Committee Chairs (depending
on proposed Committee memberships), the
Presidents of the GBUs and senior representatives
from our advisors such as our lawyers and
External Auditor. The meetings are usually
held in person, virtually or a mix of both.
New Directors may also carry out market
visits and attend key Reckitt sites.
Chief Executive Officer search, selection and induction process
In September 2022, we announced that Nicandro Durante, who was at the time the SID, would undertake
the role of CEO while the Committee identified the best long-term candidate to take Reckitt on the next
phase of its journey.
Following an extensive search, which considered both internal and external candidates, we were pleased
to announce in April that Kris Licht had been selected to become Reckitt’s new CEO.
Further details on the stakeholder considerations the Board had in mind whilst selecting the new CEO
can be found in our Section 172 Statement, on page 76.
STEP 1
The Committee considered and identified
the skills, experience and expertise required
for the role of CEO, taking into account the
long-term strategic priorities of the business.
STEP 2
The Committee outlined a role specification
and engaged Egon Zehnder, an independent
search agency, to conduct a search for
potential candidates, while also considering
potential internal candidates with relevant
skills, experience and expertise. Egon
Zehnder’s search focused on ‘best in class’
CEOs with consumer goods experience.
Following conclusion of their search, Egon
Zehnder drew up a long list of candidates
for the Committee to review. Potential
internal candidates were also reviewed.
STEP 3
The Committee evaluated the potential
candidates and identified a shortlist of
candidates who were invited for meetings
andinterviews.
STEP 4
Following the conclusion of the interviews,
the Committee met to review and provide
feedback on both potential external and
internal candidates. This resulted in the
Committee’s recommendation to the Board
to appoint Kris Licht as Reckitt’s new CEO.
STEP 5
After the Board approved the Committee’s
recommendation, the appointment
wasannounced and a formal induction
processcommenced, including a handover
fromNicandro Durante.
86 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Nomination Committee Report continued
Chief Financial Officer search,
selection andinduction
During the year, a search commenced for a
successor for the Chief Financial Officer (CFO)
position. MWM Consulting Limited (MWM), an
external search firm, were instructed to conduct
a search for external candidates who met the
required criteria. From the individuals identified,
interviews were held with the CEO and CEO
Designate, Chair and the SID. Feedback was
provided to the Committee at its meeting in July.
Following conclusion of the interview process,
the Committee made a recommendation to
the Board to appoint Shannon Eisenhardt.
Chair succession
During the year a process was undertaken to
identify my successor as Chair. This exercise
was undertaken by the Nomination Committee
(excluding me and Jeremy Darroch) and led by
Andrew Bonfield. Based on discussions with
Board members and a thorough market review,
Jeremy Darroch was identified as the best
successor to me as Chair, and his appointment
was recommended by the Nomination
Committee and approved by the Board.
Board Directors ongoing training and development
The Chair has overall responsibility for ensuring
that all the Directors receive suitable training to
enable them to carry out their duties. As part of
their role, Directors are also expected to personally
identify any additional training requirements
they feel would benefit them in performing their
duties. We arrange ongoing training including
on legal and financial regulatory developments
relevant to the Company and the Directors.
Training is also provided by way of briefing
papers or presentations at scheduled Board
meetings, as well as meetings with senior
executives or external sources. The Directors may,
at the Company’s expense, take independent
professional advice and are encouraged to
continually update their professional skills and
knowledge of the business and wider industry.
During the year, training materials have been made
available for Board members to view, on ongoing
UK corporate governance reforms. We also aim
to have one Board strategy meeting held at an
off-site business location each year. This gives
new Directors an opportunity to engage directly
with employees and key personnel in other
jurisdictions and be immersed in our business.
Group Executive Committee (GEC) changes
The GEC changes during the year reflect the
Committee’s focus on succession planning and the
alignment of our functional leaders with Reckitt’s
strategic priorities and growth opportunities.
In July, Susan Sholtis joined the GEC on her
appointment as President of the Nutrition GBU.
Shannon Eisenhardt became a GEC member on
her appointment as CFO Designate in October.
Nicandro Durante, who was CEO up until October
and then remained an Executive Director, resigned
from the Board and as a GEC member at the end
of 2023.
Biographical details of GEC members can be found
on pages 69 to 70.
Committee performance review
A performance review of the Committee
was conducted as part of the broader Board
performance review (see page 82). All areas
received positive ratings overall, with succession
planning for the Chair scoring the highest.
As part of the Board’s annual performance
review, the Committee reviews the Board’s
composition, diversity and how effectively
members work together to achieve objectives.
Directors are evaluated both collectively and
individually, to demonstrate whether each
Director continues to contribute effectively.
Following conclusion of the performance review,
the Committee reports to the Board on the
outcomes of the review that have or will influence
its composition and whether each Director is
committing sufficient time to fulfil their duties.
The Board, having had sight of the results of the
Committee’s performance review, considers the
Committee to continue to operate effectively.
Diversity and inclusion
The Board and Committee fully recognise the
importance of diversity, including gender and
ethnicity, at Board and senior management levels
in compliance with the Code. Inclusioniscore
to Reckitt’s Purpose to ‘protect, heal and
nurture in the relentless pursuit of a cleaner
and healthier world’. We recognise that it
is critical for us to have a diverse employee
population and a Board and senior management
team that is reflective of the markets we
operate in and the consumers we serve.
We are committed to equality of opportunity in
all areas of employment and business, regardless
of personal characteristics. We always recruit
the best and most suitable candidates for
any role, and we strive for a well-balanced
representation of backgrounds, nationalities,
cultures, skills and experiences at all levels
across the Group. Ultimate responsibility for
and sponsorship of this policy rests with the
GEC. Senior management is accountable and all
Reckitt employees are responsible for ensuring
that our diversity policies and programmes
are actively implemented and followed.
87 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Nomination Committee Report continued
Although we do not have a written Board diversity policy, the Committee and the Board are committed
to recruit members of the Board on the strict criteria of merit, skill, experience and cultural fit of any
potential candidates, and to seek diversity of gender, social and ethnic backgrounds, cognitive and
personal strengths. This commitment is demonstrated through our Board composition which comprises
eight nationalities and seven women as at the date of this Report. Our Board consists of one member
from an ethnic minority, in line with the Parker Review recommendation and the Financial Conduct
Authority (FCA) Policy on Diversity and Inclusion on Company Boards and Executive Management.
Our GEC, comprising the most senior management level in the business, represents seven different
nationalities from across the globe, embodying our truly multinational focus. The Company’s wider global
leadership community holds over 49 nationalities between them, representing a broad background of
collective skills, cultures and experience. This widens our understanding of our consumers, who themselves
come from the broadest possible backgrounds allowing us to be best placed in serving their needs.
Number of
board members
Percentage
of the board
Number of
senior positions
on the board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
White British or other
White (including
minority-white groups) 12 80% 100% 9 76%
Mixed/Multiple Ethnic
Groups – – – 1 8%
Asian/Asian British 1 7% – 1 8%
Black/African/
Caribbean/Black British – – – – –
Other ethnic group,
including Arab – – – 1 8%
Not specified/
prefer not to say 2 13% – – –
Representation of women at Board and senior management levels
As at 31 December 2023, 40% of our Board members are women and we have achieved the 40% target
as outlined in the FTSE Women Leaders Review (formerly the Hampton-Alexander Review). In addition,
we will comply with the FCA’s Policy on Diversity and Inclusion on Company Boards and Executive
Management, which requires that at least one of the senior Board roles should be held by a woman,
withthe appointment of Shannon Eisenhardt as CFO in March 2024.
As at 31 December 2023, representation of women within the GEC was 33%, and within the GEC and
theirdirect reports was 29%. We are cognisant of the gap in performance towards the 40% for women
inleadership within the GEC as detailed in the FTSE Women Leaders Review (and in Provision 23 of
theCode).
We recognise that representation of women at our most senior levels needs improvement, and the
Committee continues to make a commitment to increase women’s representation at this level.
As at 31 December 2023, women employees accounted for 45% of our global workforce and make up
51% of our manager population.
Number of
board members
Percentage
of the board
Number of
senior positions
on the board
(CEO, CFO, SID
and Chair)
Number in
executive
management
Percentage of
executive
management
Men 9 60% 100% 8 67%
Women 6 40% –
1
4 33%
Not specified/
prefer not to say – – – – –
1. Shannon Eisenhardt was appointed as CFO Designate on 17 October 2023 and will take on the role of CFO in March 2024
We continue to put diversity and inclusion at the centre of everything we do. Further details can be
found at pages 19 to 21 and in our Fairer Society section on page 51.
88 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
On behalf of the Board, I am pleased to present the Audit Committee Report for the financial year ended
31 December 2023.
This report details how the Committee has discharged its role, duties and performance during the year
under review in relation to internal control, financial and other reporting, risk management, the internal
audit function and our relationship and interaction with the External Auditor.
Committee priorities in 2024
– Maintaining oversight and providing assurance to the Board on Reckitt’s risk management and internal
control procedures, including monitoring key areas in the context of risk and control
– Sustaining a strong culture of risk management and embedding and strengthening internal controls
across the Group
– Monitoring potential legislative and regulatory changes which may affect the work of the Committee
– Reviewing cyber security risks and controls
Committee membership and experience
Name Recent and relevant financialexperience
Sectoral experience relevant
toReckitt’s operations
Andrew Bonfield (Chair) – Financial expert
– Chartered Accountant
– Currently CFO of a global US Fortune
100company
– Multiple CFO roles at other large companies,
including in the consumer goods sector
– Consumer goods
– Pharmaceuticals/healthcare
Pam Kirby – Sits on another FTSE 100 company’s
AuditCommittee
– Pharmaceuticals/healthcare
– Technology
Margherita Della Valle – Financial expert
– Holds a Master’s degree in Economics
– Previously held Group CFO and senior
finance roles
– Consumer goods
– Technology
Elane Stock – Holds Master’s degrees in Finance
– Previously member of the audit committee
of two US listed entities
– Consumer goods
– Emerging markets
Tamara Ingram – Member of the Audit Committee of
aUS-listed company
– Consumer goods
– Digital strategy
AUDIT
COMMITTEE
REPORT
The focus this year remained on
oversight of Reckitt’s internal controls
and risk management framework in
the context of the upcoming revisions
to the Corporate Governance Code.
Andrew Bonfield
Chair of the Audit Committee
Member
Meetings
attended
Andrew Bonfield (Chair)
Chair and member for the whole year
5 4/4
Pam Kirby
Member for the whole year
5 4/4
Margherita Della Valle
Member for the whole year
5 3/4
Elane Stock
Member for the whole year
5 4/4
Tamara Ingram
Member from February 2023
5 4/4
89 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
All Committee members are independent
Non-Executive Directors who have financial,
economics and/or business management
expertise in large companies.
As Chair of the CRSEC Committee, Pam Kirby’s
membership of the Audit Committee ensures that
relevant issues, such as risk, whistle-blowing and
compliance, are shared and coordinated between
the two Committees.
Committee members are expected in particular
tohave an understanding of:
• The Group’s operations, policies and internal
control environment
• The principles of, and recent developments
in, financial reporting
• Relevant legislation, regulatory requirements
and ethical codes of practice
• The role of internal and external audit and
riskmanagement
The Board is satisfied that, in compliance with
theCode, Committee members as a whole have
competence relevant to the Company’s sector
(consumer goods).
Committee appointments are generally
madeforathree-year period. Members of the
Committee are appointed by the Board on the
recommendation of the Nomination Committee.
On joining the Committee and during their tenure,
members receive additional training tailored
totheir individual requirements. Committee
members also meet with management covering
internal audit, risk management, legal, tax, treasury
and financial matters, as well as meetings with the
External Auditor.
During the year, members of the Committee
received regular briefings from management
onmatters covering governance and legislative
developments, accounting policies and practices,
and tax and treasury.
During the year, the Head of Secretariat acted
asSecretary to the Committee.
Meetings
During 2023, the Committee held four scheduled
meetings at times aligned to the Company’s
reporting cycle. In addition, one non-scheduled
meeting was held via videoconference, as
permitted by the Company’s articles of association
and the Committee’s terms of reference.
Committee meetings usually take place ahead of
Board meetings and the Committee Chair provides
an update to the Board on the key issues discussed
at each meeting. Committee papers are provided
to all Directors in advance of each meeting,
including a copy of the Committee minutes.
Meetings are attended by senior representatives
of the External Auditor and by the Group Head
ofAudit, CFO, CFO Designate and SVP Corporate
Controller. TheChair of the Board and the CEO are
also invited to attend. Other management attend
whendeemed appropriate by the Committee.
Time is allocated at the end of each meeting
forprivate discussion with internal audit and
theExternal Auditors, without other invitees
beingpresent, as well as a private session
oftheCommittee members.
Committee members’ meeting attendance
duringthe year is set out on the first page
ofthisAudit Committee Report.
Committee performance review
A performance review of the Committee
wasconducted as part of the Board’s external
performance review, conducted by Lintstock.
The performance review of the Committee
utilised a bespoke questionnaire sent
to Committee members followed by an
interview. Matters evaluated by Committee
members included meeting management and
composition, Committee support, Committee
relationships, quality of information and the
work of the Committee and its review of
controls and reporting. All areas received
positive ratings overall, with management
ofCommittee meetings scoring the highest.
The Board, having had sight of the results of
theCommittee’s performance review, considers
the Committee to be operating effectively.
90 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
Fair, balanced and understandable
The Committee reviewed the 2023 Annual
Report and Financial Statements to confirm
that it is fair, balanced and understandable
and provides sufficient information to
shareholders to assess the Group’s position,
performance, business model and strategy.
The Committee relies upon the following
assurance framework in making its assessment
of fair, balanced and understandable:
– All sections of the 2023 Annual Report and
Financial Statements were prepared in
accordance with the Standard Operating
Procedures (SOPs) as approved by the
Disclosure Committee
– A detailed review of the 2023 Annual Report
and Financial Statements was undertaken
bysenior management and the Disclosure
Committee to ensure consistency in
messaging and appropriate balance
– A comprehensive review by the Directors
and the senior management team of
theform, content and consistency of
narrative, the disclosures contained in the
Financial Statements and the underlying
processes and controls supporting the
preparation ofthe 2023 Annual Report
andFinancial Statements
– The comprehensive verification process,
supporting any facts, figures and statements
included in the 2023 Annual Report and
Financial Statements
Role and responsibilities
The Committee is part of the Group’s
governance framework and supports the
Board in fulfilling its oversight responsibilities
in ensuring the integrity of the Group’s
financial reporting, internal controls and overall
risk management process, and relationship
with the Company’s External Auditor.
Financial reporting
– Monitor the integrity of the financial
statements of the Company including
interimand annual financial statements
– Review the appropriateness of significant
accounting policies and practices
– Review significant financial judgements and
estimates, taking into account the External
Auditor’s view on the financial judgements
and estimates
– Advise the Board on whether, taken as a
whole, the Annual Report is fair, balanced
and understandable and provides the
information necessary for shareholders
toassess the Company’s performance,
business model and strategy
Risk management systems and internal controls
– Review and monitor the effectiveness of
themanagement of risk and overall system
of Internal Control
– Review the framework and analysis to
support both the Going Concern and
thelong-term Viability Statement
Whistle-blowing, fraud and compliance
– In conjunction with the CRSEC Committee,
review the Company’s arrangements for its
workforce to raise concerns about possible
The Committee and the Board received
confirmation from management that the
Annual Report and Financial Statements
had been prepared in accordance with the
assurance framework and that appropriate
verification had been undertaken.
In addition, the Committee also reviewed
KPMG’s audit findings report, draft audit opinion
and draft management representation letter.
Following the Committee’s review, the
Committee was satisfied that the 2023
Annual Report and Financial Statements,
taken as a whole, met its objectives and
accordingly recommended to the Board
that the 2023 Annual Report and Financial
Statements be approved and that the
Board make its statement on page 137.
wrongdoings in financial reporting and other
matters; review the Company’s procedures
for detecting fraud; and its systems and
controls for ethical behaviours and the
prevention of bribery
External audit
– Make recommendations to the Board on the
appointment, removal, remuneration and
terms of engagement of the External Auditor
– Review and assess the External Auditor’s
independence and objectivity taking into
account relevant UK law, professional and
regulatory requirements
– Develop, recommend and implement the
Group’s policy in relation to the provision
ofnon-audit services
– Review and approve the annual audit
planand assess the effectiveness of
theaudit process
Internal audit
– Review and approve the annual internal
auditplan and monitor and review
itseffectiveness
– Review and monitor the effectiveness of
theinternal audit function, ensuring the
necessary resources are in place for it
toperform effectively
There were no significant changes to the
Committee’s role and responsibilities during
the year.
The Committee’s role and responsibilities
are set out in its terms of reference,
whichare available at www.reckitt.com.
91 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
Key activities during the year
FEBRUARY MAY JULY NOVEMBER
– Review of the 2022 preliminary results
announcement, including the Financial
Statements and recommend for
approval by the Board
– Review of the 2022 Annual Report
andFinancial Statements, the going
concern basis of preparation and
Viability Statement, including whether
the Committee could recommend that
the Board approve the 2022 Annual
Report and Financial Statements
– KPMG’s 2022 audit findings report,
observations on Reckitt’s internal
controls for the 2022 financial year,
management representation letter
and report on the 2022 Annual Report
and Financial Statements
– KPMG’s final non-audit fees for 2022
– Annual review of risk management
and internal controls including
reviewof risks across Group
functionsand of the integrated
riskmanagement framework
– Approval of KPMG’s 2023 audit fees
and terms of engagement
– Conduct assessment of External
Auditor independence and ethics
– KPMG’s strategy for the 2023 audit
– Conclude on audit quality delivery and
assess External Auditor effectiveness
– Work undertaken in respect of the
2023 internal audit plan and monitoring
the 2023 internal audit plan
– Review of whistle-blowing procedures
– Consider legal matters, including
provisioning and compliance risk
andcompliance controls
– Consider tax and treasury matters,
including provisioning for uncertain
taxpositions and compliance with
statutory reporting obligations
– Review of risk management and
business continuity
– Review of the Company’s IT controls,
with a focus on cyber risk
– Review of the 2023 half-year results
announcement, including the going
concern basis of preparation and
recommendation for approval
bytheBoard
– KPMG’s half-year review report
findings to 30 June 2023 and
management representation letter
– KPMG’s assessment of its objectivity
and independence
– Review internal audit findings and
responsiveness of management
– Review of the Committee’s
2024standing agenda and terms
ofreference
– Results of the performance review
ofthe Committee
– Monitor legislative and governance
changes regarding proposed audit
reform and changes to the Code
– Review of the Company’s IT controls
with a focus on cyber risk
– KPMG’s interim IT control findings
relating to the 2023 audit cycle
– Annual review and approval of
GroupTreasury policies
– Review KPMG’s non-audit fees for
2023 and review of independence
– Review of internal controls
andtheCompany’s controls
transformation programme
92 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
Significant and key financial reporting matters
The key matters reviewed and evaluated by the
Committee during the year were as follows.
The Committee is responsible for reviewing
andapproving the appropriateness of the interim
and annual Financial Statements and related
announcements, including:
– Recommending that, in the Committee’s view,
the Financial Statements are fair, balanced
andunderstandable. In addition to the
detailedpreparation and verification
proceduresin place for the 2023 Annual
Reportand Financial Statements, management
continued its focus on narrative reporting
withclear written and visual messaging
tocommunicate the Group’s strategy
– Reviewing the appropriateness of the
accounting policies, judgements and estimates
used as set out from pages 160 to 200 and
concluding that the judgements and
assumptions used are reasonable
– Reviewing the Group’s policy relating to,
anddisclosure of, alternative performance
measures (APMs)
Areas of significant financial judgement
The areas of significant financial judgement in
relation to the 2023 Group Financial Statements
considered by the Committee, together with a
summary of the actions taken, were as follows.
Recoverability of goodwill
andotherintangibleassets
Under International Financial Reporting Standards
(IFRS), goodwill and indefinite-life assets must be
tested for impairment on at least an annual basis.
Impairment testing is inherently judgemental and
requires management to make multiple estimates,
on future performance, for example around future
price and volume growth, future margins, terminal
growth rates and discount rates. The Group’s
impairment testing utilised cash flow projections
included within one-year budgets and five-year
strategic plans. Cash flows beyond the five-year
period were projected using terminal growth rates.
As a result of impairment testing performed
in 2023, management determined that an
impairment charge of £810 million relating to its
IFCN cash-generating unit (CGU) was required
at 31 December 2023 (2022: impairment charge
of £152 million relating to the Biofreeze CGU
and £15 million relating to other CGUs).
In November 2023, the Committee reviewed
the detailed results of the impairment testing
for the Group’s CGUs, with a particular focus
on the Biofreeze CGU, as no headroom existed
between the Biofreeze recoverable amount and
carrying value following impairment in 2022. The
Committee challenged the key assumptions
which underpinned the Biofreeze recoverable
amount, including anticipated category growth,
market share improvement, the commercial
success of new product launches and international
market expansion. The Committee confirmed
the key judgements and estimates made by
management including market expansion and
discount rate, and reviewed the sensitivity of
the Biofreeze impairment model to changes in
key assumptions. Subsequent to the impairment
review the Committee reviewed the transfer of
Biofreeze goodwill (£160 million) to the Health
CGU, the transfer occurring due to the completion
of the integration of Biofreeze into Health in
2023, and considered it to be appropriate.
In February 2024, following management’s
considerations of the external auditor’s
observations, the Committee reviewed the detailed
results of the impairment testing in relation to the
IFCN CGU and challenged the key assumptions
which underpinned the IFCN recoverable amount
at 31 December 2023. This included the effect
of changes to the regulatory environment, the
level at which US market share stabilises, net
revenue growth rates, the commercial success
of new product launches and the expansion
of speciality nutrition. The evolving regulatory
environment has increased the judgemental
nature of estimating the future cash flows, thereby
resulting in increased scrutiny and focus by the
Committee and challenge to management.
This challenge resulted in refinement of the
assumptions underpinning management’s estimate
of the recoverable amount of the IFCN CGU.
The Committee also reviewed the discount rate
used by management to calculate the value in use
of IFCN, in particular the increase in the discount
rate in 2023 due to a higher risk free-rate.
The Committee confirmed the key judgements
and estimates made by management and
reviewed the sensitivities of the impairment
model to reasonable changes in key assumptions.
The Committee reviewed management’s
disclosures in relation to goodwill, other intangible
assets and related impairment reviews included
within Note 9 and considered them appropriate.
Forward purchase of shares held
bynon-controlling interests
On 25 May the Group entered into an agreement
pursuant to which it will proceed to acquire
the remaining interests associated with the
Company’s majority owned activities in mainland
China and Hong Kong (RB Manon) from its
existing minority shareholders. The transaction
will be implemented through the purchase,
in multiple stages, of the non-controlling
shareholdings held by the minority shareholders.
Amounts payable under the agreement are
dependent on the revenue and profits of RB
Manon in future periods. Management’s estimate
of the present value of amounts payable at the
date of the agreement is £298 million. The key
assumptions underpinning this estimate relate
to future revenue and profit growth of Reckitt’s
business in China, and the discount rate used to
determine the present value of future cash flows.
The Committee reviewed these assumptions
and considered them to be reasonable.
As the agreement to acquire the non-controlling
interest has multiple elements, judgement is
required to allocate the total amount payable
under the agreement to each element.
Management determined that the main elements
in the agreement related to (1) a forward contract
for the purchase of a non-controlling interest
in RB Manon, with £167 million allocated to this
element charged to shareholders equity, and
(2)services provided by the minority shareholders
in relation to the transition of leadership and
shares in RB Manon, with the residual amount
of £131 million allocated to this element, which
will be charged to the income statement over
the performance period for these services.
The Committee reviewed the identification and
allocation of consideration to each element in
the agreement, and the disclosures included
in Note 30, and considers them appropriate.
Tax provisioning
From time to time, the Group may be involved in
disputes in relation to ongoing tax matters in a
number of jurisdictions around the world where
the approach of the local authorities is particularly
93 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
difficult to predict. The amount of uncertain tax
position liabilities recorded in relation to these
investigations is an area where management and
tax judgement are important. The Committee
reviewed the key judgements made with
management, including relevant professional
advice that may have been received in each
case, and considered the level of recognised
uncertain tax position liabilities to be appropriate.
As required under IFRS, management has included
disclosure in the Financial Statements outlining
the amount of uncertain tax position liabilities, the
methodology by which they have been recognised
and the sources of estimation uncertainty in
relation to these uncertain tax position liabilities
or the rationale for why sensitivity disclosure is
not meaningful and has not been provided in
the Financial Statements. The Committee has
reviewed these disclosures, included within
Notes1 and 22, and considers them appropriate.
Legal liability provisioning
At 31 December 2023 a provision of £137 million
(2022: £221 million) was held on the Group’s
Balance Sheet in relation to regulatory,
civilandcriminal investigations as well
aslitigationproceedings.
The Committee has reviewed the status of
potential legal and constructive liabilities
during the year, and at the year end, including
the South Korea Humidifier Sanitiser (HS) issue,
Necrotizing Enterocolitis (NEC), Phenylephrine (PE)
and other significant matters. The Committee
challenged management on the judgements
made in determining the level of provisions
recognised and was satisfied with the level of
provisioning and associated disclosure for the
HS issue, NEC, PE and other significant matters
(see note 20). The Committee was also briefed
on the implications of the recent NEC state
court jury award in Belleville, Illinois (see note 33)
and challenged management on their exercise
of judgements described in the disclosure.
Other key financial reporting matters
Other key matters reviewed and evaluated in
relation to the 2023 Group Financial Statements
considered by the Committee, together with a
summary of the actions taken, are set out below.
Investigation in the Middle East
As part of the Group’s ongoing compliance
procedures, an investigation was conducted in
two Middle Eastern markets in late 2023 and early
2024. The investigation was led by the Group’s
Ethics and Compliance function, supported
by external legal counsel, internal audit and
corporate controllership. The Committee was
kept updated as the investigation progressed
and discussed the findings of the investigation
ahead of the release of the 2023 preliminary
results announcement and finalisation of the
2023 Annual Report. An understatement of
trade spend, which related to the fourth quarter
and prior quarters of 2023, was identified and
incorporated into the 2023 financial statements.
The Committee reviewed the investigation
reports and related accounting adjustments.
The Committee will continue to monitor the
actions and internal control enhancements taken
by management in response through 2024.
Going concern and Viability Statement
A Viability Review was undertaken by
management, encompassing its going concern
review. The Committee reviewed and challenged
the key assumptions used by management in its
Viability Review and going concern assessment, as
well as the scenarios applied and risks considered.
Based on its review, the Committee considers
that the application of the going concern basis
for the preparation of the Financial Statements
was appropriate and confirmed the suitability
of the Viability Statement covering a five-year
period, as set out on page 61. The use of a
five-year period for the Viability Review is the
period of the Group’s long-term forecasting
process and covers the various business cycles.
Internal audit
Role of internal auditor
The Committee is responsible for reviewing and
monitoring the effectiveness of the internal audit
function. The Group Head of Audit is accountable
to the Chair of the Committee, although for
administrative matters reports to the CFO. The
function operates independently of the business,
with no responsibility for operational management.
The independence of the Group Head of Audit
and the internal audit function is considered as
part of the annual internal audit effectiveness
review. Further details can be found on page 94.
The function is responsible for providing
independent and objective assurance on the
adequacy and effectiveness of Reckitt’s risk
management and internal control systems.
Itsmandate is set out in a written charter, approved
by the Committee, and it uses a formal internal audit
methodology consistent with the Institute of Internal
Auditors internationally recognised standards.
Prior to the start of each financial year the
Committee reviews and approves the annual audit
plan and assesses the adequacy of the function’s
budget and resources. The function brings in
specialist skills from external service providers,
as necessary. The strengthening of the finance
second line will allow the function in future periods
to transition away from an agreed rotation and
scope policy to a more risk-based approach.
The risk-based audit plan focuses on areas
deemed critical to achieving our business
objectives and covers Reckitt’s commercial
businesses, manufacturing facilities, information
systems, programmes and higher risk areas
and processes. Following each audit, control
weaknesses are reported to senior management,
together with recommendations and updates.
Resulting management actions are tracked
until they are satisfactorily closed. Audits that
identified significant weaknesses in the control
environment normally receive a follow-up
audit within 12 to 18 months as appropriate.
At each Committee meeting the Group Head
of Audit presents an update which includes an
assessment of the control environment together
with any material issues, the performance
of the internal audit function, and any other
topics as required. A private session with the
Committee is also held at every meeting.
Risk management
The Committee supports the Board in fulfilling its
oversight responsibilities in ensuring the integrity
of the Group’s financial reporting (including
the Annual Report and Financial Statements),
system of risk management and internal control,
and the relationship with the External Auditor.
The Committee makes recommendations
to the Board in relation to approval of the
Annual Report and Financial Statements.
The Committee regularly monitors our system
of risk management and internal control
(including internal financial controls). The finance
function, headed by the CFO, has implemented
policies, processes, and controls to enable the
Company to review and comply with changes
in accounting standards and relevant financial
regulations. These policies, processes and
controls are kept under review on an ongoing
94 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
basis to ensure both internal and external
developments are reviewed and acted upon.
In monitoring the integrity of financial reporting
and any other risks falling within its remit,
theCommittee receives regular reports from the
SVP Corporate Controller, Group Chief Ethics &
Compliance Officer, Group Head of Tax and Group
Head of Treasury on material developments in
the legislative, regulatory, and fiscal landscape in
which the Group operates. It also receives reports
on IT and cybersecurity risks and controls, and
on the Group’s whistle-blowing arrangements.
The Committee reported to the Board in February
2024 that it considers the internal control
framework to be functioning appropriately,
to enable the Board to meet its obligations
under section 4 of the Code, to maintain
sound risk management and internal control
systems, and to report to shareholders on
these in the Annual Report (see page 137).
Reckitt’s ongoing controls transformation
programme in preparation for internal
controlschanges arising from the revisions
totheCodehasidentified certain control
improvement opportunities that management
iscurrentlyundertaking.
The basis for the preparation of the Group
Financial Statements is set out on page 160
underAccounting Policies.
The External Auditor’s report, setting out its
work and reporting responsibilities, can be
found on pages 138 to 155. The terms, areas of
responsibility and scope of the External Auditor’s
work are agreed by the Committee and set out
in the External Auditor’s engagement letter.
More information on the Group’s principal and
emerging risks and strategy for growth and
achieving targeted goals is detailed in the Strategic
Report, which can be found on pages 55 to 60.
The Viability Statement can be found on page61.
The Statement of Directors’ Responsibilities on
page 137 details the Directors’ responsibility
for the Financial Statements, for disclosing
relevant audit information to the External
Auditor and for ensuring that the Annual
Report is fair, balanced and understandable.
Internal controls framework
Internal control processes are implemented through
clearly defined roles and responsibilities, supported
by clear policies and procedures, delegated to the
GEC and senior management. Reckitt operates
a ‘three lines of defence’ model in monitoring
internal control systems and managing risk.
1. Management in the first line ensures that
controls, policies and procedures are followed
indealing with risks in day-to-day activities.
Such risks are mitigated at source with controls
embedded into relevant systems and
processes. Supervisory controls, either at
management level or through delegation,
ensure appropriate checks and verifications
take place, with any failures dealt with promptly.
Throughout Reckitt, a key responsibility for any
line manager is to ensure the achievement of
business objectives with appropriate risk
management and internal control systems.
2. Each function and GBU has its own
managementwhich acts as a second line
ofoversight. This second line sets the local
levelpolicies and procedures, specific to its
ownbusiness environment, subject to Group
policy and authorisation. The second line
furtheracts in an oversight capacity over
theimplementation of controls in the first line.
The financial performance of each function
andGBU is monitored against pre-approved
budgets and forecasts ultimately overseen
bythe executive management and the Board.
As part of the second line, the corporate control
team identifies financial risks and mitigates
these with appropriate internal controls,
setoutthrough minimum expected financial
control requirements. The effectiveness
oftheglobal financial control framework
isreviewed annually. Further, the Group’s
compliance controls includethe operation
ofanindependent and anonymous ‘Speak Up’
whistle-blowing hotline, annual management
reviews and the provision of training specific
toindividual needs within the business.
3. The third line of defence is provided by
theinternal audit function which provides
independent and objective assurance
tomanagement and the Committee on
theadequacy and effectiveness of risk
management systems and internal controls
operated by the first and second lines
ofdefence. Internal audit also facilitates
theriskmanagement process.
Reckitt’s internal control framework provides
assurance that business objectives are
achieved, that business is conducted in an
orderly manner and in compliance with local
laws, that records are accurate, reliable
and free from material misstatement, and
that risks are understood and managed.
The corporate control team is accountable
formanaging global financial control policies and
frameworks and for monitoring the effectiveness
of the Group’s internal financial control
environment. Corporate control is responsible for
reporting and monitoring controls at local, GBU
and global levels, working with markets to improve
risk and controls capability and to support the
development of remediation plans and corrective
actions for financial control weaknesses.
To improve the maturity of the control
environment and meet upcoming changes
to the Code, the Company has established a
multi-year controls transformation programme.
In 2023, the controls transformation programme
launched an updated, standardised and risk-
focused controls framework for financial and
IT general controls, including new evidence
standards to enable consistent documentation
of the operating effectiveness of financial
and IT general controls. Following launch, the
second line of defence team, supported by
external advisors, conducted a comprehensive
fit-gap assessment to determine the required
uplift to comply with the new framework and
evidence standards. As anticipated, gaps
versus the framework and standard have
been identified in relation to the retention of
evidence and the formality and consistency of
control operation. Where required, plans have
been developed and remediation activity is
underway in markets, IT and group. In 2023, the
effectiveness of the global financial control
framework has been assessed through analysis
of the results from the fit-gap assessment and
subsequent remediation, alongside consideration
of findings on the internal control environment
from internal audits conducted in 2023.
At each meeting, the Committee reviews
a report outlining the status of the controls
transformation programme, the results of the
fit-gap assessment and remediation progress,
and other notable controls activity since the
previous meeting. In 2024, assurance over
95 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Audit Committee Report continued
the operating effectiveness of controls in the
revised framework will be provided by testing
conducted by the second line of defence team.
Internal auditor effectiveness review
The Committee monitors the effectiveness of
the internal audit function throughout the year
through the Group Head of Audit’s attendance at
Committee meetings, review of work presented
throughout the course of the year and the
annual internal audit effectiveness review.
The annual review involves the solicitation of
feedback through a survey circulated to internal
stakeholders including Committee members, GEC,
GBU, functional and operational leadership teams.
The survey assessed the skills and experience,
audit quality, audit scope, audit cost, audit
communication, independence, and change catalyst
of the internal audit function. The survey reported
strong, positive feedback with management
viewing the function as comprised of high quality
and skilled individuals who demonstrate a high
level ofintegrity, independence, and objectivity.
The Committee has considered the conclusions of
the effectiveness review and the work performed
by the function during the year and remains
satisfied that the resourcing, quality, experience
and expertise of the function is appropriate
for the Company and that the function was
objective and performed its role effectively.
External Auditor
The Committee is responsible for maintaining the
relationship with the External Auditor on behalf
of the Board. The Company’s External Auditor is
KPMG LLP (KPMG). Following a competitive tender
undertaken in 2017, KPMG was formally appointed
as the Group’s External Auditor by shareholders
in 2018. The Company will be required to conduct
its next external audit tender no later than 2027.
For the year ended 31 December 2023, the
Company has complied with the Competition
and Markets Authority Order: The Statutory
Services for Large Companies Market Investigation
(Mandatory use of Competitive Tender Processes
and Audit Committee Responsibilities) Order 2014.
The Committee considers and makes a
recommendation to the Board in relation to the
appointment, reappointment and removal of the
External Auditor, taking into account independence,
effectiveness, lead audit partner rotation and
any other relevant factors, and oversees the
tendering of the external audit contract.
The Committee approves the External Auditor’s
terms of engagement and remuneration and
reviews the strategy and scope of the audit
andthe work plan.
The Committee also monitors the rotation
of the lead audit partner every five years in
accordance with the FRC’s Ethical Standard. The
current lead audit partner, Andrew Bradshaw, has
completed his second year as lead audit partner.
External auditor effectiveness review
The annual evaluation of the External Auditor
was carried out in early 2023 and the results
reported to the Committee in May. The
assessment of the External Auditor was
conducted using a survey circulated to the
Board, GEC, GBU, finance and other functional
leadership and local finance management.
The survey covered the four competency
areas in the FRC’s Guidance on Audit Quality:
practice aid for Audit Committees (published
inDecember 2019): Judgement; Quality Control;
Skills and Knowledge; and Mindset and Culture.
Besides the annual evaluation of the External
Auditor, the Committee continually reviews the
External Auditor’s effectiveness through means
such as the monitoring of its progress against
the agreed audit plan and scope. KPMGreports
to the Committee annually with an audit
quality scorecard, providing a holistic view of,
and their investment in, audit quality and how
they measure their audit quality progress.
External Audit fees and non-audit services
The Committee reviews the nature and level
of non-audit services undertaken by the
External Auditor during the year to satisfy itself
that there is no impact on its independence.
The Committee is required to approve all
non-audit services. TheBoard recognises
that in certain circumstances the nature of
the service required may make it timelier and
more cost-effective to appoint an auditor that
already has a good understanding of Reckitt.
The total fees paid to KPMG for the year ended
31 December 2023 were £20.7 million, of which
£1.3million related to non-audit and audit-related
work (to which KPMG was appointed principally for
the above reasons). The Group’s internal policy on
non-audit fees (effective 1 January 2017) states
that, on an annual basis, non-audit fees should not
exceed 50% of the Group’s external audit and audit-
related fees for the year. The Board confirms that,
for the year ended 31 December 2023, non-audit
and audit-related fees were 6.7% of the audit fees.
Details of services provided by the External
Auditor are set out in Note 4 on page 169.
Independence and reappointment
Reckitt has a formal policy in place to safeguard
the External Auditor’s independence. In addition,
as part of its audit strategy presentation to the
Committee in May, KPMG identified its own
safeguards in place to protect its independence
and confirmed its independence in February
totheCommittee.
The Group has a policy that restricts the
recruitment or secondment of individuals
employed by the External Auditor into positions
that provide financial reporting oversight where
they could exercise influence over the financial
or regulatory statements of the Group or the
level of audit and non-audit fees. Other than the
provision of advisory services to a Director in
their personal capacity, KPMG had no connection
with the Directors during the financial year.
The External Auditor is a key stakeholder in
helping the Committee fulfil its oversight role
for the Board. The Committee remains satisfied
with the External Auditor’s independence
and effectiveness and believes KPMG is best
placed to conduct the Company’s audit for
the 2024 financial year. KPMG has expressed
awillingness to continue as External Auditor
ofthe Company. Following a recommendation
by the Committee, the Board concluded, on the
Committee’s recommendation, that it was in the
best interests of shareholders to appoint KPMG
asthe Company’s External Auditor for the financial
year ending 31 December 2024. The Committee
and Board’s recommendation was free from third
party influence and there was no contractual
term of the kind mentioned under Regulation
(EU) No 537/2014 imposed on the Company.
In accordance with Section 489 of CA 2006,
resolutions to propose the reappointment of KPMG
as the Company’s External Auditor and to authorise
the Committee to fix its remuneration will be
put to shareholders at the AGM on 2 May 2024.
Andrew Bonfield
Chair of the Audit Committee
Reckitt Benckiser Group plc
21 March 2024
Committee
areas of focus
96 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Area of focus Further detail Pages
Legal compliance and ethics Risk Management
55-60
Section 172 Statement
76-77
Audit Committee Report
88 -95
Sustainability Sustainability Performance Dashboard
14
Sustainability Performance Review
47-54
Product safety and quality Our Supply Chain
25-27
Our Stakeholders
37-40
Sustainability Performance Review
47-54
R&D and regulatory compliance Scientific Innovation
22-24
Nutrition – Market Opportunities
34-36
External affairs Our Stakeholders
37-40
Section 172 Statement
76-77
CORPORATE RESPONSIBILITY,
SUSTAINABILITY, ETHICS
ANDCOMPLIANCE
COMMITTEEREPORT
Member
Meetings
attended
Pam Kirby (Chair)
Chair and member for the whole year
5 4/4
Mehmood Khan
Member for the whole year
5 4/4
Chris Sinclair
Member for the whole year
5 4/4
Olivier Bohuon
Member for the whole year
5 3/4
Kris Licht
Member from 1 June 2023
5 2/2
The Committee receives regular briefings
from key functional teams to enable it
todischarge its oversight responsibilities
and works with the Audit Committee
onareas of crossover, as needed.
Pam Kirby
Chair of the Corporate Responsibility, Sustainability,
Ethicsand Compliance Committee
CRSEC
Legal
compliance
and ethics
Sustainability
Product
safety and
quality
R&D and
regulatory
compliance
External
affairs
97 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Corporate Responsibility, Sustainability, Ethics and Compliance Committee Report continued
On behalf of the Board, I am pleased to present
the Corporate Responsibility, Sustainability, Ethics
and Compliance (CRSEC) Committee Report for
the financial year ended 31 December 2023.
This report details how the Committee has
discharged its role and responsibilities during
the year in relation to monitoring and assessing
our approach to responsible, sustainable,
ethical and compliant corporate conduct in
accordance with our Purpose and Compass,
and our broader societal responsibility.
Committee membership
Members of the Committee are appointed by the
Board on the recommendation of the Nomination
Committee, which reviews membership in terms
of skills, knowledge, diversity and experience.
On joining the Committee and during their tenure,
members receive additional briefings and training
tailored to their individual requirements. This
includes meetings with internal management
covering CRSEC matters. All members of the
Committee receive regular briefings from senior
executives on matters covering governance,
regulatory and legislative developments,
product safety and corporate responsibility,
sustainability and ethics-related matters, and
Reckitt’s practices and policies in these areas.
During the year, the Deputy Company Secretary
acted as Secretary to the Committee.
Meetings
In 2023, the Committee held four meetings.
Meetings usually take place ahead of Board meetings
and the Chair of the Committee reports formally
to the Board on the Committee’s proceedings. The
CEO, CFO, Chief R&D Officer, Group Head of Audit,
General Counsel & Company Secretary, Chief Supply
Officer, Group Chief Ethics and Compliance Officer,
Chief Marketing, Sustainability and Corporate Affairs
Officer, Global Head of External Communications
& Affairs, Group Head of Sustainability, Chief
Safety Officer, SVP Head of Global Quality and
the Global Director of Health & Safety, Quality and
Compliance and Corporate Security regularly attend
meetings. Other Directors are invited to attend
all meetings. Other senior management attend
when deemed appropriate by the Committee.
Time is allocated at each meeting for private
discussion with the Chief R&D Officer, Group
Chief Ethics and Compliance Officer, Chief
Supply Officer, Chief Marketing, Sustainability
and Corporate Affairs Officer, Global Head of
External Communications & Affairs, Group Head
of Sustainability and Group Head of Audit without
other invitees being present, as necessary,
aswell as a private meeting of the Committee
members. All Board members are provided
withcopies of Committee papers and minutes.
In addition to reviewing matters at Committee
meetings, the Committee Chair held regular
meetings with our CEO, Chief R&D Officer, Chief
Supply Officer, Chief Marketing, Sustainability
and Corporate Affairs Officer, Global Head of
External Communications & Affairs, Group Head
of Sustainability and Group Chief Ethics and
Compliance Officer, to review progress against
the strategy and to represent the Board in
supporting the efforts in these critical areas.
Committee performance review
This year, a performance review of the
Committee was conducted as part of
the Board’s external performance review
(seepage82). All areas received positive
ratingsoverall, with Committee oversight of
legal compliance and ethics scoring the highest.
TheBoard, having had sight of the results of
theCommittee’s performance review, considers
the Committee to be operating effectively.
Role and responsibilities of the Committee
The Committee is part of the Group’s
governance framework and supports the
Board in fulfilling its oversight responsibilities
in ensuring the integrity of the Group’s
corporate responsibility and sustainability,
ethics and compliance policies, programmes
and activities. Its role and responsibilities are
set out in its terms of reference, which can
be found at www.reckitt.com. We review our
terms of reference annually. During the year,
the Committee’s terms of reference were
reviewed and considered to be appropriate.
The Audit Committee has a monitoring function
inrespect of risk management and internal
controlsystems, which also includes the assurance
framework established by management to
identify and monitor risks identified by the
CRSECCommittee. The Committee liaises with
the Audit Committee and the Chair of the CRSEC
Committee is a member of the Audit Committee.
Standing agenda items reviewed by
theCommittee throughout the year
The Committee has several standing agenda items
which it considers in-line with its terms of reference
and in the context of the Group’s Principal Risks:
– Assessment and recommendations on policies,
processes and procedures for corporate
responsibility, sustainability, compliance
andethical conduct
– Overseeing the Group’s conduct with regard
toits corporate and societal obligations as
aresponsible global citizen on behalf of all
itsstakeholders
– Reviewing and monitoring implementation and
compliance with our Speak Up Policy and review
of insights and trends from reports
– In conjunction with the Audit Committee,
reviewing the Company’s whistle-blowing,
fraudand compliance arrangements, including
the adequacy and security for the workforce to
raise concerns, and the systems and controls for
the prevention of bribery and modern slavery
– Monitoring and reviewing processes for risk
assessment for corporate responsibility,
sustainability, and compliance and
ethicalconduct
– Monitoring targets for corporate responsibility,
sustainability and compliance and ethical
conduct. Reviewing internal and external
reports on progress towards those targets
andKPIs
– Receiving reports from management
committees in respect of corporate
responsibility, sustainability, ethics, and
compliance and investigating and taking
actionin relation to issues raised or reported
98 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Corporate Responsibility, Sustainability, Ethics and Compliance Committee Report continued
Key activities during 2023
FEBRUARY MAY JULY NOVEMBER
Legal compliance & ethics
– Report on data privacy controls
andmaturity assessment
ESG Transition
– Monitoring sustainability targets
– Deep dive on post-consumer recycled
plastics (PCR)
Quality
– Monitoring quality performance
andongoing activities
Changes to Product Regulations
– Product Lifecycle Management (PLM)
– Report on developments
inregulatoryenvironment
Product Safety & Supply
– Product safety performance
Employee Health & Safety
– Performance monitoring
External affairs
– Humanitarian responses
– Social impact and gender
paygapreporting
– Partnerships and thought leadership,
including WiNFund
Legal compliance & ethics
– Third party due diligence
ESG Transition
– Sustainability matters and
targettracking
– Modern Slavery and Human
TraffickingStatement
Quality
– Monitoring quality performance
andongoing activities
Changes to Product Regulations
– REACH regulations
– Review of ongoing regulatory matters
Product Safety & Supply
– Ingredient Steering Group
Employee Health & Safety
– Deep dive on corporate security
External affairs
– Humanitarian responses
– UN Water Conference
– IFCN and marketing practices
Legal compliance & ethics
– Third party due diligence reviews
– Annual compliance training and Code
of Conduct
ESG Transition
– Sustainability matters and
targettracking
Quality
– Monitoring quality performance
andongoing activities
– Deep dive on consumer safety
evolution and maturity
Changes to Product Regulations
– PLM
– Report on developments
inregulatoryenvironment
Product Safety & Supply
– Market access and maintenance
ofproducts, including raw
materialsourcing
Employee Health & Safety
– Performance monitoring
External Affairs
– External affairs activity, including
publicpolicy and advocacy
– COP28
Legal compliance & ethics
– Deep dive on legal and compliance
programme and risks
ESG Transition
– Review of performance against
sustainability targets
Quality
– Monitoring quality performance
andongoing activities
Changes to Product Regulations
– Report on developments
inregulatoryenvironment
Product Safety & Supply
– PLM
Employee Health & Safety
– Employee health and safety
performance and risks
External Affairs
– COP28
– Board Listening Session and
intersectionality between Climate
andHealth
Governance
– Review of Committee terms
ofreference
– Committee performance review
99 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Corporate Responsibility, Sustainability, Ethics and Compliance Committee Report continued
Committee priorities for 2024
– Review the remit and activities of the
Committee within the broader Reckitt
governance framework
– Monitor and prepare for future developments
incorporate governance and non-financial
reporting requirements and review internal
processes, policies and procedures,
toensurecompliance
– Continually review and update the
BoardonReckitt’s quality, safety and
regulatoryresponsibilities
– Assist the Board to review our sustainability
objectives and chart progress against our
targets, including overseeing the Group’s
conduct with regard to its corporate and
societal obligations as a responsible global
citizen on behalf of all stakeholders
– Monitor and review the processes for risk
assessment of key Principal Risks including
inrelation to ESG Transition, Quality, Legal
andCompliance, and Product Regulation
– Maintain responsiveness to global events
impacting consumers, where Reckitt can
provide support and assistance
– Keep abreast of market access conditions and
maintenance of products, given the current
UKpolitical and wider economic landscapes
Pam Kirby
Chair of the Corporate Responsibility, Sustainability,
Ethics and Compliance Committee
Reckitt Benckiser Group plc
21 March 2024
Spotlight on: Legal Compliance &
Ethicsfunction – Risks and Mitigations
In November, the Committee
received an update on the Legal
Compliance & Ethics function’s
ongoing programme and activities.
An annual Ethics & Compliance plan is
developed around key themes, including
enabling responsible business, sustaining
ethical and compliant business as usual
processes, monitoring and training
programmes, data protection governance
and the updating and rollout of policies.
A number of activities were detailed
and their status discussed, including
updates to various global policies and
processes, a revised Code of Conduct,
updates to the annual compliance training
programmes and the launch of a new
Speak Up whistleblowing campaign.
Recent work in collaborating with IT &
Digital on the creation of an Artificial
Intelligence Tools Policy and on
enhancing Reckitt’s responsible data
programme were also considered.
100 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
LETTER FROM THE CHAIR
On behalf of the Board, I am pleased to present
the Directors’ Remuneration Report for the
financial year ended 31 December 2023.
I would like to thank shareholders for their support
of our 2022 Annual Report on Remuneration at our
AGM on 3 May 2023, whichreceived a strong vote
in favour of 93%.
Changes to the Board
During 2023, we announced several changes
tothe Board.
Kris Licht was appointed CEO to succeed Nicandro
Durante. Kris was appointed CEO Designate
on 1 May 2023 and to the Board as Executive
Director effective 1 June 2023, before assuming
the role of CEO on 1 October 2023. Nicandro
Durante remained an employee of the Company
and on the Board until 31 December 2023 to
ensure a smooth transition. Kris was appointed
CEO Designate on a salary of £900,000, which
increased to £1,100,000 upon taking the role of
CEO, in line with the salary paid to Nicandro.
Central to our remuneration
philosophy are the principles of pay
for performance and shareholder,
aswell as strategic, alignment.
Alan Stewart
Chair of the Remuneration Committee
Member
Meetings
attended
Alan Stewart (Chair)
Chair and member for the whole year
5 5/5
Olivier Bohuon
Member for the whole year
5 4/5
Jeremy Darroch
Member for the whole year
5 5/5
Mary Harris
Member for the whole year
5 5/5
Chris Sinclair
Member for the whole year
5 5/5
DIRECTORS’
REMUNERATION REPORT
Contents of Directors’ Remuneration Report
100 Letter from the Chair
102 Reckitt’s remuneration at a glance
106 Remuneration Committee governance
108 Annual Report on Remuneration
126 Additional remuneration disclosures
Shannon Eisenhardt was appointed CFO
Designate on 17 October 2023 and will succeed
Jeff Carr as CFO by 31 March 2024. Shannon was
appointed to the Board as Executive Director
upon joining the Company. Shannon previously
served as CFO of Nike Consumer, Brand and
Marketplace. Shannon was appointed on a salary
of £760,000 in line with the salary paid to Jeff.
Ongoing incentive opportunities and LTIP award
levels for Kris and Shannon are in line with the
outgoing individuals. Both Kris and Shannon did
not receive a salary increase on 1 January 2024.
In addition, Sir Jeremy Darroch, currently Senior
Independent Director, will succeed Chris Sinclair
as Chair of the Group Board of Directors in
May following the 2024 AGM. Chris will retire
as Chair and step down from the Board at the
same time. Sir Jeremy will be appointed on the
same terms and fees as Chris. Andrew Bonfield
will succeed Sir Jeremy as Senior Independent
Director upon Sir Jeremy’s appointment as
Chair with effect from the 2024 AGM. I would
like to extend the Board’s and my thanks to
Chris for his membership of the Remuneration
Committee and his time as Board Chair.
As previously announced, I will retire from the
Board at the 2024 AGM. Fiona Dawson CBE will
be appointed to the Board as Non-Executive
Director and Chair Designate to the Remuneration
Committee effective 1 June 2024. In order to
ensure continuity and effective succession,
Mary Harris, former Chair of the Company’s
Remuneration Committee, will be reappointed as
Chair of the Remuneration Committee from the
conclusion of the 2024 AGM until the conclusion
of the Company’s 2025 AGM, upon which Fiona
Dawson will take over. On behalf of the Committee,
I would like to thank Mary and welcome Fiona.
101 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
The remuneration arrangements for both the
outgoing and incoming Directors are in line
with the Remuneration Policy approved by
shareholders with details for Kris and Shannon also
published on announcement. Further details are
set out in the Annual Report on Remuneration.
Performance for the year under review
2023 was a challenging year for many companies
including Reckitt, with continued economic
shocks and geopolitical uncertainties across the
world. Despite these, Reckitt continued to make
progress in 2023, with like-for-like net revenue
(LFL NR) growth of +3.5%, led by growth across
the Hygiene and Health businesses, while Nutrition
began rebasing and held market leadership in the
US. We delivered growth through premiumisation,
household penetration and category creation.
Gross margins returned to historic strength
with adjusted operating profit margin at 23.1%
and adjusted EPS at 323.4p. We also increased
investment in brands and innovation, and launched
a fixed cost optimisation programme. In 2023 we
generated strong free cash flow and significantly
increased cash returns to shareholders, enhanced
by our new, sustainable share buyback programme
announced in October 2023. We have also
proposed a5%increase in our annual dividend,
for the second year in a row, in line with our
policy to deliver sustainable dividend growth.
During the year, we have built strong winning
teams and strengthened our culture, to
harness the things that are special about
Reckitt: our entrepreneurial spirit, passion for
performance, and action orientation. Wehave
gained real credibility on sustainability and
become a significantly more inclusive and
diverse company, which sets us up well as we
continue to drive these through the business.
Performance outcomes for 2023
The Committee carried out a thorough evaluation
of the performance of both the Group and the
Executive Directors in the round, having regard
to broader circumstances to assess whether
the formulaic incentive outturns are appropriate
and justified. Based on the assessment, the
Committee determined that the level of annual
bonus payout and the total vesting level of the
LTIP set out below are appropriate and justified
in this context and that no discretion would be
applied. The framework and the assessment
against performance which the Committee
used are set out in detail on page 110.
Annual bonus
Reckitt operates an annual bonus plan that is
strongly aligned to performance, measured
against targets of NR and adjusted profit before
income tax, with a downward modifier based
onnet working capital (NWC) added from 2023.
NR growth of 3.5% exceeded the initial guidance
and market expectations at the beginning of 2023.
The Health and Hygiene GBUs both delivered LFL
NR growth at the upper end of the medium-term
goal of mid-single-digit growth. The Nutrition GBU
declined in the year as our US business lapped
high and unsustainable comparatives due to a
competitor supply issue from the prior year, but still
performed above initial expectations. This Group
performance resulted ina multiplier towards the
upper end of the NR growth target range. Profit
has exceeded the target range, driven by our NR
performance and strong gross margin expansion.
However, NWC at -7.7% in the year whilst being
industry leading was below targets set and resulted
in a downward modifier of 0.89x being applied to
the outcome. This resulted in an overall payout of
82% of the maximum. This is in line with all other
employees on the same Group-wide measures.
The bonus for Kris and Shannon in respect of
Executive Director services is pro-rated for
the period as an Executive Director. One-third
of bonus payments to Executive Directors
are deferred into Reckitt shares for three
years in line with the Policy. More details are
set out on page 115 of the Annual Report.
2021–2023 LTIP
The Reckitt LTIP is designed to align participants
with shareholders through making awards
with stretching performance conditions
denominated in both performance share options
and performance share awards. Vesting of
awards under the 2021 LTIP was dependent on
LFL NR growth, EPS and ROCE targets. Asset
out in the 2021 Directors’ Remuneration Report,
targets were adjusted for the disposal of
IFCNChina, given the size of that transaction,
to ensure that the new targets were no harder
oreasier to achieve than the original targets.
As a result of good performance over the three
years, NR growth was at 4.8% p.a.. This was close
to maximum of the target range and resulted in a
vesting of 98% of this element. EPS performance
based on both actual and constant FX was
between threshold and maximum, resulting in
vesting of 59% and 46% of maximum for each
element respectively. ROCE performance was
also between threshold and maximum, resulting
in a vesting of 62% of maximum. As set out on
page 116, the overall resultant outcome is that
78% of the total award vests. This outturn follows
two years of zero vesting in 2020 and 2021, 21.5%
vesting in 2022 and 100% vesting in 2023.
In line with our Policy, there is a further
two-year holding period attached to Kris’
andJeff’s LTIP awards. Nicandro and Shannon
did not participate in the 2021 LTIP.
2024 remuneration
Salaries for 2024 for the CEO and CFO are
unchanged from 2023 at £1,100,000 and
£760,000, respectively. The 2024 salary increase
budget for the wider UK employee population
was 5.5% to 6% depending on location.
There are no changes to the bonus opportunity
for the CEO and CFO, remaining at 120%
and 100% of salary at target, respectively.
Performance measures and weightings for
the 2024 annual bonus will be the same as for
2023, being NR and adjusted profit before tax,
with a downward modifier based on NWC.
In line with prior years, the Committee has set the
performance targets at a stretching level having
considered the internal business plan and external
expectations. As in prior years, the Committee will
carry out a thorough assessment of performance
in the round taking into account a wide range
of factors before determining bonus payouts.
There are no changes to the 2024 LTIP awards
including performance measures and weightings.
Performance will continue to be assessed based
on NR growth, ROCE, relative TSR, and ESG
measures, which have been reviewed in light
ofshare price performance, Group performance
and individual performance. Kris’ 2024 LTIP
award will consist of 150,000 performance share
options and 75,000 performance shares and
Shannon’s award will be 80,000 performance
share options and 40,000 performance shares.
These awards will be made in early March 2024
following the full-year results announcement.
Jeff will not receive a 2024 LTIP award.
102 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Remuneration Policy review
In line with the normal three-year cycle, our
Remuneration Policy is due for renewal at the
2025 AGM. Over the course of 2024 we will
undertake a full review of the Policy and its
implementation, with a view to ensuring that
our remuneration arrangements continue
to appropriately incentivise the delivery of
the strategy and the creation of long-term,
sustainable shareholder value. This will include
review of our incentive structures throughout
the organisation. We will consult with our
shareholders as part of this process.
Conclusion
On behalf of the Committee, I would like
to thank shareholders for their continued
support and engagement during the year.
Wewelcome any comments you may have
onthis report and I look forward to your
support at the upcoming AGM on 2 May 2024.
Finally, I would also like to thank my fellow
Committee members during my tenure as Chair
for their insight and commitment and shareholders
for their invaluable feedback and support.
Alan Stewart
Chair of the Remuneration Committee
Reckitt Benckiser Group plc
21 March 2024
During the year, the Chair and Non-Executive
Director (NED) fees have been reviewed with
regard to increases given to the wider workforce
and market practice. Taking into account the
increased time commitment and responsibilities
of the roles over the last few years, and the
knowledge and skills required to undertake
the roles, the fee for the Chair will increase to
£680,000 and the basic NED fee will increase
to £110,000, with effect from 1 January 2024.
The additional fee for the Senior Independent
Director (SID) will also increase to £35,000.
Thereare no changes to fees for Committee Chair,
Committee member or Designated Non-Executive
Director for Engagement with Company’s
Workforce. 25% of the Chair fee and basic
NED fee continues to be paid in shares. Wewill
continue to review NED fees to ensure they are
appropriate and competitive against the market.
Context for remuneration of the wider workforce
Reckitt is committed to fair and consistent
reward policies for its employees, aligned with
our Compass, remuneration philosophy and our
culture. The Remuneration Committee reviews
various aspects of workforce remuneration
and related policies regularly. In 2023, Reckitt
has made significant developments and
demonstrated further commitment to support
sustainable livelihoods, ensure pay equity
and gender pay gaps are addressed, build
an inclusive culture and facilitate employee
development. The annual employee survey
shows high levels of satisfaction and pride among
Reckitt’s employees and we are recognised
as Top Employers in several markets. For more
information, please refer to pages 120-122.
RECKITT’S REMUNERATION ATA GLANCE
Reckitt strives for leading global performance.
Our management team is multinational and
we compete for talent globally. Central to our
remuneration philosophy are the principles
of pay for performance and shareholder, as
well as strategic, alignment. Combined with
our Compass and business model, these
principles define how decisions are made,
how people act and how we reward them.
To reinforce our philosophy, the majority
of the Executive Directors’ remuneration
packages are made up of variable at-risk pay,
linked to stretching targets that align with
our strategy and shareholder value creation,
and are largely delivered in Reckitt shares.
Inaddition, we have market-leading shareholding
requirements for Executives. This approach is
cascaded throughout our senior leadership.
Context for remuneration at Reckitt
Reckitt’s Compass
Do the
right thing.
Always.
Put consumers
and people first
Build shared
success
Seek out new
opportunities
Strive for
excellence
Reckitt’s strategy
– Purpose and culture fit for the future
– Excellent brand portfolio for value creation
– Scaled global footprint
– Enhanced returns to shareholders
Reckitt’s remuneration philosophy
Pay for
performance
Strategic
alignment
Shareholder
alignment
for more details of our Company strategy.
See pages 8-11
103
Fixed
pay
8%
Variable
pay
92%
APP
(shares)
10%
APP
(cash)
19%
Salary 7%
Pension 1%
LTIP
64%
Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
The tables below illustrate the remuneration principles at Reckitt, which are driven by our Compass,
strategy and the remuneration philosophy
High proportion of variable pay
Maximum CEO pay under the Remuneration Policy
Attract and retain the
best global talent
Note: Value of the CEO’s maximum 2024 package. This
illustrates fixed remuneration plus full payout of the annual
bonus (APP) and full vesting of the LTIP awards including
50%share price growth
1. Based on the average closing share price in Q4 2023
of£55.56
2. Reflecting 50% of the in-employment shareholding
requirement
– Alignment of performance metrics with strategy
– Alignment across the business of metrics
andownership
– Engage highly performance-driven individuals
– Reflect global competitive practice across our
industry peer group
In-employment shareholding requirement
Number
of shares
Value
of shares (£)
1
% of 2023
annual salary
CEO 200,000 11,112,000 1,010%
CFO 100,000 5,556,000 731%
Post-employment shareholding requirement
2
Number
of shares
Value
of shares (£)
1
% of 2023
annual salary
CEO 100,000 5,556,000 505%
CFO 50,000 2,778,000 366%
Market-leading share ownership policy
Ensure alignment with strategy
acrossthe business
1
3
2
4
Summary of our Remuneration Policy
The table below summarises the current Directors’ Remuneration Policy which can be found on pages
160-167 of the 2021 Annual Report and is also available on our website in the Corporate Governance
section. The Committee is of the view that the current remuneration framework remains fit for purpose
and therefore no changes to the Policy were proposed for 2024.
Year 1 Year 2 Year 3 Year 4 Year 5 Up to Year 10
Fixed pay
Salary,
benefits
and
pension
Annual bonus
(APP)
One-year
performance
period
Two-thirds paid incash; one-third in
Reckitt shares deferred for three years
No further performance conditions
LTIP
Performance shares and
performance share options
Three-year performance period
Two-year holding period
No further performance
conditions
Ten-year life for options from grant
Shareholding
requirements
Period of eight years from appointment to achieve requirements
Two-year shareholding requirement post-departure
104 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Element Key features of operation of policy How will we implement for 2024 Link to strategy
Salary, benefits and pension – Salary increases and pension contribution set in
context of wider workforce
– Salaries and benefits set competitively against peers
– Zero salary increase for CEO and CFO
– CEO and CFO pension contribution of 10% of salary
inline with the wider workforce in the UK
– To enable the total package to support
recruitment and retention
Annual bonus (APP) – Target bonus of 120% of salary for CEO and 100%
forCFO
– One-third deferred into awards over Reckitt shares
for three years
– Malus and clawback provisions apply (incircumstances
including material misstatement of financial results,
gross misconduct and corporate failure)
– Targets set for NR and adjusted profit before
incometax
– NWC target to act as a downward modifier
– Threshold performance results in zero payout,
withmaximum of 3.57x target for truly exceptional
performance on all three metrics
– Remuneration Committee assessment of
performance in the round
– To drive strong performance, with
significant reward for overachievement
ofannual targets linked to Reckitt’s
strategic priorities
– Use of deferral for longer-term
shareholderalignment
LTIP
Performance shares and
performance share options
– Three-year performance period and two-year
holding period
– Malus and clawback provisions apply (in circumstances
including material misstatement of financial results,
gross misconduct, and corporate failure) until two
years after vesting
– Options have approximately seven years to exercise
post vesting
– Targets set for LFL NR growth (40% weighting);
ROCE(25% weighting); relative TSR (25%weighting);
and ESG (10% weighting, split equally between
twometrics)
– Performance conditions are applied to both
performance share options and performance shares
– Remuneration Committee assessment of
performance in the round
– To incentivise and reward long-term
performance and align the interests
ofExecutive Directors with those
ofshareholders
– Two-year holding period for longer-term
shareholder alignment
Shareholding requirements – CEO: 200,000 shares
– CFO: 100,000 shares
– Period of eight years from appointment to
achieverequirements
– Two-year shareholding requirement post-departure
– Promotes long-term alignment
withshareholders
– Promotes focus on management
ofcorporate risks
Directors’ Remuneration Report continued
Purpose and culture
fit for the future
Excellent brand portfolio
for value creation
Scaled global
footprint
Enhanced returns
to shareholders
105 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Summary of performance and payout
Annual performance plan
The performance outcome for the annual bonus was 82% of maximum. A third of the bonus is deferred,
by way of an award over Reckitt shares.
Performance
measure
Maximum
(3.57x target)
Like-for-like
Net Revenue
£14.07bn
£14.93bn
Actual £14.86bn 1.74x
Adjusted profit
before income tax
at constant rates
£2.85bn 1.89x
Average NWC
0.89x
Threshold
(zero bonus) MultiplierActual/Achieved
Total
2.93x
Achieved
£3.19bn
Actual £3.23bn
-7.4%
-9.6%
Actual -7.7%
2023 base
salary
(£)
Target bonus
opportunity
(% of salary)
Multiplier
achieved
Bonus payout
(% of salary)
Value
delivered
in cash
(£)
Value
deferred
into shares
(£)
Kris Licht 575,000
1
100%/120%
2
2.93x 293%/352%
2
1,230,600 615,300
Shannon Eisenhardt 158,333
1
100% 2.93x 293% 309,278 154,639
Jeff Carr 760,000 100% 2.93x 293% 1,484,533 742,267
Nicandro Durante 1,100,000 120% 2.93x 352% 2,578,400 1,289,200
1. The 2023 base salary for Kris Licht and Shannon Eisenhardt are pro-rated for the period served as Executive Directors
2. Kris’ target bonus opportunity as CEO Designate was 100% of salary, which increased to 120% of salary on his appointment as CEO
LTIP
The 2021 LTIP vested at 78% of maximum, against the performance conditions over the three-year period.
Performance
measure
Maximum
(100% vesting)
LFL NR growth
(3-year CAGR)
(50% weighting)
0.9% p.a.
4.9% p.a.
Actual 4.8% p.a.
98%
EPS (final year) on an actual
foreign exchange basis
(12.5% weighting)
289p
360p
Actual 323.4p
59%
EPS (final year) on
a constant FX basis
(12.5% weighting)
308p
382p
Actual 332.4p
46%
ROCE (final year)
(25% weighting)
13.7%
15.4%
Actual 14.6%
62%
Threshold
(20% vesting)
Vesting
(% of total award)
Achieved
Total vesting
78%
Achieved
Performance
share
options
granted
Performance
shares
granted
Total
vesting
%
Performance
share
options
vesting
Performance
shares
vesting
Total value
of award
vesting
(£)
3
Kris Licht
2
50,000 25,000 78% 39,000 19,500 1,083,420
Jeff Carr 80,000 40,000 78% 62,400 31,200 1,733,472
1. Nicandro and Shannon did not participate in the 2021 LTIP
2. Kris’ LTIP award was granted in relation to his previous role which did not sit on the Board, however, the full value of the award
has been shown for transparency
3. Based on the average closing share price in Q4 2023 of £55.56
106 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
2023 single figure
Kris Licht
£3.62m
Sharon Eisenhardt
£1.24m
Jeff Carr
Nicandro Durante
£4.81m
£5.26m
0
£m
1 2 43 5 6
Fixed remuneration Annual bonus (shares)
Annual bonus (cash) LTI P Buyout
Executive Director shareholding
Reckitt operates a market-leading shareholding requirement with an eight-year timeframe for
achievement and a two-year post-employment holding period. The chart below illustrates the progress
towards this for the Executive Directors.
Kris Licht
Shareholding
requirement
Current
shareholding
£3.18m
1
Jeff Carr
Shareholding
requirement
Current
shareholding
£5.24m
1
Shannon
Eisenhardt
Shareholding
requirement
Current
shareholding
£0.25m
1
200,0000 25,000 50,000 75,000 100,000 125,000 150,000 175,000
Shares held
2
Shares deferred from 2023 APP
3
2024 vesting
4
1. Current shareholding value based on the average closing share price in Q4 2023 of £55.56
2. Includes shares owned outright and shares subject to post-vesting holding restrictions
3. This is the estimated number of shares awarded, after tax under the Deferred Bonus Plan, including those to be deferred from
the 2023 APP
4. For Kris and Jeff this is the number of shares vesting in May 2024 under the 2021 LTIP, after tax. For Shannon this also includes
the restricted shares from buyout awards vesting in December 2024
Remuneration Committee governance
Committee membership and meeting attendance
The Remuneration Committee is made up entirely of NEDs who are appointed by the Board on the
recommendation of the Nomination Committee. Membership and meeting attendance of the
Remuneration Committee during the year were as follows:
Member Member since Meetings attended
Alan Stewart, Committee Chair February 2022 5/5
Olivier Bohuon January 2021 4/5
Jeremy Darroch November 2022 5/5
Mary Harris May 2017 5/5
Chris Sinclair March 2016 5/5
The Chief Human Resources Officer was Secretary to the Committee throughout the year. Meetings
were also attended by the CEO, CFO and SVP Reward by invitation. Deloitte was the appointed advisor
to the Committee throughout the year. Members of the Remuneration Committee and any person
attending its meetings do not participate in any discussion or decision on their own remuneration.
107 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Reckitt’s Remuneration Policy and the Corporate Governance Code
Reckitt’s Remuneration Policy and practices reflect the philosophy of pay for performance, shareholder
alignment and strategic alignment over the short, medium and long term. When determining the current
Policy and its implementations, Provision 40 of the UK Corporate Governance Code was taken into
account as follows:
Clarity Arrangements are transparent and reflect shareholder alignment and Reckitt’s
strategic priorities, thereby effectively engaging with the wider workforce and
shareholders. The Committee consulted with shareholders as part of the design
phase of the Policy and communicated to the wider workforce details of how
Executive pay is set, its alignment with the Company’s approach to the wider
paypolicy and how decisions are made by the Committee. It also gave employees
the opportunity to ask any questions on these topics.
Simplicity The Policy is simple and clear, comprising fixed pay, such as salary and benefits,
pension schemes that are offered to most of the workforce, plus variable pay
which incorporates the annual bonus, LTIP (performance share options and
performance share awards) and a clear Share Ownership Policy for senior members
of the business. Variable pay is set against financial targets to incentivise short-
and long-term financial performance and alignment with shareholders.
Risk The malus and clawback provisions which apply to annual bonus and LTIP awards
act as a safeguard to the Company and are one mechanism used to help encourage
the right behaviours, which lead to long-term shareholder alignment and sustained
value creation. The Committee has discretion to adjust the formulaic bonus and
LTIP outcomes both upwards and downwards.
Predictability The total of fixed pay and variable pay (target and maximum) illustrated in the
scenarios of total remuneration in our Policy provide an estimate of the potential
future remuneration of the Executive Directors, including the total remuneration
ifa50% share price growth is achieved.
Proportionality There is a clear link between pay for performance and business strategy, with
stretching financial targets applied to annual bonus payouts and LTIP vesting.
Alignment
toculture
Financial targets apply to the annual bonus and LTIP awards across the wider
workforce to drive business performance. These targets are reviewed on an annual
basis. Malus and clawback provisions apply to annual bonus and LTIP, and together
with deferred annual bonus, holding periods and share ownership for the Executive
Directors (and any other relevant senior employees), drive the right behaviours
expected within Reckitt. The remuneration arrangements of the wider workforce
reinforce employee engagement.
Directors’ Remuneration Report continued
The Committee’s role and key activities during the year
The Committee’s purpose is to assist the Board of Directors in fulfilling its oversight responsibility
byensuring that the Remuneration Policy and practices reward fairly and responsibly, are designed
tosupport the strategy and long-term success of the Company and take account of the generally
accepted principles of good governance.
The key activities and decisions made by the Committee during the year are set out below:
Changes to the Board and GEC
Approved the leaving arrangements for Nicandro Durante and JeffCarrand the remuneration
arrangements for Kris Licht and ShannonEisenhardt.
Approved remuneration arrangements for appointments to the GEC.
Wider workforce
Reviewed wider workforce remuneration and related policies.
Reviewed changes to the all-employee share plan launchdates.
Reviewed current shareholdings for senior employees with share ownership requirements.
Internal and external governance
Reviewed 2023 AGM voting, wider market trends, shareholder guidelines and corporate
governance updates.
Reviewed Remuneration Committee terms of reference.
Reviewed Remuneration Committee effectiveness.
Performance outcomes and target setting
Reviewed and approved performance outcomes to 2022 annual bonus and 2020–2022 LTIP, taking
into account wider performance of the Company and Executive Directors.
Approved 2024 annual bonus measures and targets and 2024 LTIP award and performance
measures. Approved 2023 LTIP performance targets.
Determined 2024 remuneration packages for the Executive Directors and GEC members.
Regularly reviewed performance for inflight bonus and LTIP awards.
108 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
ANNUAL REPORT ON REMUNERATION
The rest of this report sets out how we have implemented our Remuneration Policy in 2023, and how
weintend to implement the Policy in 2024.
Remuneration arrangements for the new CEO and CFO
CEO
Kris was appointed as CEO Designate on 1 May 2023 and to the Board as Executive Director effective
1 June 2023 before assuming the role of CEO on 1 October 2023. His remuneration was fully disclosed
upon the announcement of his appointment on 26 April 2023 and in line with the approved Policy.
As CEO Designate Kris received a salary of £900,000 per annum, which increased to £1,100,000 after
taking up the role of CEO, in line with his predecessor. He did not have a salary increase on 1 January
2024. Kris receives a pension allowance of 10% of salary in line with the wider Reckitt workforce in the UK
and other benefits including relocation in line with Reckitt’s benefits and international mobility policies.
As CEO Designate, Kris had a target APP of 100% of salary, which increased to 120% of salary as CEO,
witha maximum multiplier of 3.57x. In line with the Policy, one-third of any bonus will be deferred into
Reckitt shares for a period of three years. Kris will be eligible for an LTIP grant to be made in 2024 of
75,000 performance shares and 150,000 performance share options for the three-year performance
period 2024 to 2026, followed by a two-year holding period. Share awards granted to Kris prior to
hisappointment as CEO Designate in respect of his previous role will continue on their original terms.
These LTIP awards are subject to the same performance measures and targets as the LTIP awards
granted to Executive Directors, full details of which will be provided in the relevant Directors’
Remuneration Report when they vest.
The share ownership requirement as CEO is 200,000 shares and he will be subject to the post-
employment shareholding requirement. There are no buyout awards associated with his appointment.
CFO
Shannon was appointed as CFO Designate on 17 October 2023, joining the Board as an Executive Director
on the same day, and received a salary of £760,000 per annum, in line with her predecessor. Shannon
receives a pension allowance of 10% of salary in line with the wider Reckitt workforce in the UK and
otherbenefits including relocation in line with Reckitt’s benefits and international mobility policies.
Shannon has a target APP opportunity of 100% of salary with a maximum of 3.57 times, with one-third
ofany bonus awarded deferred into Reckitt shares for a period of three years. Her 2023 annual bonus
hasbeen pro-rated based on the portion of the year employed. Shannon received an initial 2023-2025
LTIP grant of 29,453 performance shares and 58,905 performance share options, for the three-year
performance period 2023 to 2025. This has been calculated as a pro-rata award of the CFO’s annual
LTIPaward of 40,000 performance shares and 80,000 performance share options, based on the period
employed during the performance period. All LTIP awards will be subject to a two-year holding period.
The share ownership requirement for Shannon will be 100,000 shares and she will be subject to the
post-employment shareholding requirement.
Shannon has also been granted replacement awards to compensate for remuneration arrangements
forfeited on leaving her previous employer. The terms of the buyout awards substantively replicated
therules of the Company’s LTIP approved by shareholders at the 2015 AGM and are in line with the
current Policy approved at the 2022 AGM. The structure takes into account shareholder guidance and
market practice and they remain subject to performance conditions where appropriate and mirror the
time horizons of forfeited awards. As Shannon is participating in the 2023 Reckitt LTIP, she will not be
compensated for any 2023 LTIP awards made by her previous employer. Details of these awards were
disclosed at the time of the grant and are detailed below. Dividend equivalents will accrue on the awards
and vest at the same time as the relevant award, delivered in shares.
Performance share awards
Performance share awards lapsing due to Shannon’s leaving her previous employer have been replaced
by awards of Reckitt performance shares of equivalent value as follows:
– An award of 3,526 performance shares granted in relation to the long-term incentive award over
Nikeshares granted to Shannon in August 2021 and vesting based on Nike’s performance over the
three-year period to 31 May 2024 as to be disclosed in Nike’s 2024 Proxy Statement. Any shares which
vest following assessment of performance will be released in August 2024 to mirror the time horizons
of forfeited awards
– An award of 5,248 performance shares granted in relation to the long-term incentive award over Nike
shares granted to Shannon in August 2022. Since Shannon had served less than half of the three-year
Nike performance period, to further align her with Reckitt’s performance this award will be subject to
the same performance conditions and targets as the Reckitt 2022 LTIP award. Any shares which vest
following assessment of performance will be released in August 2025 to mirror the time horizons of
forfeited awards
The vesting of these awards will be disclosed in the Annual Report on Remuneration for the relevant year
and included in the single figure table for that year.
Directors’ Remuneration Report continued
109 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Restricted share awards
An award of 5,564 restricted shares were also granted to replace the Nike restricted shares granted in
December 2021, which lapsed upon Shannon’s leaving. The first tranche of 2,782 restricted shares vested
on 10 December 2023 and the second tranche will vest in December 2024. The value of these awards
isincluded in the 2023 single figure table on page 117.
Bonus replacement award
The Nike FY24 bonus for the period from 1 June 2023 to 16 October 2023, being the date before Shannon
joined Reckitt, has also been bought out. The value of this will be based on the average annual bonus
outturn (in % of maximum terms) for the Named Executive Officers excluding the CEO in the Nike 2024
Proxy Statement, pro-rated for time and delivered in cash in line with the original terms of the award.
Thevalue of the FY24 Nike annual bonus will be determined and paid as soon as practicable following
thepublication of the Nike 2024 Proxy Statement. An estimated bonus replacement award value based
on the FY24 Nike target performance is included in the single figure table on page 117.
Shannon also forfeited market value option awards upon leaving her previous employer. These have not
been bought out and replaced at Reckitt as they were underwater when she joined.
Remuneration arrangements for the departing CEO and CFO
CEO
Nicandro Durante stepped down as CEO in October 2023 and remained on the Board as an Executive
Director until 31 December 2023 to ensure a smooth transition, at which time he left the Group.
Nicandrowas paid salary and benefits until his departure date. There is no payment in lieu of notice.
Nicandro is considered a ‘good leaver’ and his incentives have been treated accordingly. Nicandro was
paid an annual bonus in respect of 2023, with two-thirds delivered in cash and one-third is awarded as
Reckitt shares deferred for three years. Any outstanding deferred bonus awards will vest in line with
normal timescales.
Nicandro’s 2022 and 2023 LTIP awards remain subject to performance against the original performance
conditions over the respective three-year performance periods. Both of these awards will be reduced on
a pro-rata basis to reflect the proportion of the performance period employed as an Executive Director.
These will also be subject to a two-year holding period following the end of the respective performance
periods. Nicandro remains subject to the post-employment shareholding requirement.
CFO
Jeff Carr will remain on the Board as an Executive Director until 31 March 2024 to ensure a smooth
transition, at which time he will leave the Group. He will be paid salary, benefits and pension
contributionswhich are unchanged from 2023, until his departure date. There is no payment in lieu
ofnotice. Jeff will receive a capped contribution of £8,000 plus VAT towards legal fees incurred
inconnection with his departure.
Jeff is considered a ‘good leaver’ and his incentives have been treated accordingly. Jeff was paid
anannual bonus in respect of 2023, with two-thirds delivered in cash and one-third in Reckitt shares
deferred for three years. He remains eligible for an annual bonus in respect of 2024 which will be based
on the same performance measures and targets as for the other Executive Directors and pro-rated
based on the portion of the performance year employed. Any bonus awarded will be delivered at
theoriginal dates, with two-thirds in cash and one-third deferred into Reckitt shares for three years.
Anyoutstanding deferred bonus awards will vest in line with normal timescales.
Jeff’s 2021 LTIP award will vest in May 2024 and be subject to a two-year holding period and is not
subject to time pro-rating as he was employed for the full performance period. The 2022 and 2023 LTIP
awards will be pro-rated based on the proportion of the relevant performance period employed and
remain subject to the original performance and time horizons. He will not receive a 2024 LTIP award.
Jeff remains subject to the post-employment shareholding requirement.
2023 performance and remuneration outcomes
In reviewing Executive Director remuneration, the Remuneration Committee took into account
remuneration decisions for the wider workforce and individual performance of the Directors. The
Committee also reviewed market practice, primarily against the FTSE 30 (excluding financial services
companies) and considered an international remuneration peer group which Reckitt competes with for
talent and is subject to similar market forces. Operationally, the international peer group is representative
of the three Reckitt product categories of Hygiene, Health and Nutrition. This comprises 22 companies
asfollows: Abbott Laboratories, Bayer, Campbell Soup, Church and Dwight, Clorox, Coca-Cola, Colgate,
Danone, GSK, Haleon, Henkel, Johnson & Johnson, Kellogg, Kimberly-Clark, Kraft Heinz, Nestlé, Novartis,
PepsiCo, Pfizer, Procter & Gamble, Sanofi and Unilever. This peer group is also used to benchmark
remuneration for the GEC.
Directors’ Remuneration Report continued
110 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Annual bonus in respect of 2023 performance
Executive Director 2023 bonus opportunity
In line with the Remuneration Policy, the CEO and the CFO target bonus opportunities are 120%
ofsalaryand 100% of salary, respectively. Kris Licht’s target bonus opportunity as CEO Designate
was100%of salary. The bonus outcome and payout are calculated as follows:
– For each performance measure a target range is set
– A performance multiplier is calculated for each measure, calculated by the extent to which the
performance for that measure is achieved. These multipliers can be up to 1.89x for outperformance
ofthe stretching range set by the Committee. Net working capital is a downward modifier only and
the multiplier is capped at 1.00x target
– Three individual multipliers are then multiplied together
Net revenue
multiplier
(upto 1.89x)
X
Adjusted profit
before tax
multiplier
(up to 1.89x)
X
NWC modifier
(up to 1.00x)
=
Performance
multiplier
(Threshold = 0x;
target = 1.0x;
max = 3.57x)
– The total performance multiplier can range from zero for performance at threshold or below, to 3.57
for truly exceptional performance. The 3.57 multiplier will only be awarded if maximum performance
isachieved on all metrics (i.e. 1.89 x 1.89 x 1.00)
– This total performance multiplier is then applied to the target bonus opportunity to calculate the
overall formulaic bonus outcome. This is different to usual UK market practice whereby performance
measures are assessed independently and payment under one metric may result in payout regardless
of performance in other metrics. In Reckitt, the three measures combine to give the resultant payout
Cash Shares
Base salary X Target bonus =
Final bonus
outcome
2/3 + 1/3
– The effect of the multiplicative approach means that a high-performance multiplier can only
beachieved for outperformance on both top-line and bottom-line performance, with excellent
management of working capital
– Similarly, underperformance in one of the performance metrics will reduce the overall bonus payout,
even in the case of outperformance of the rest
– For example, if we grow NR above the stretching requirement for maximum performance and
maintainan excellent level of NWC, but fail to meet the profit threshold, the bonus payout will
bezero(i.e. 1.89 x 0 x 1.00)
– One-third of any APP is deferred into an award over Reckitt shares, to strengthen alignment
withshareholders
Directors’ Remuneration Report continued
Assessment of incentive outcomes
The Committee thoroughly evaluates the performance of both the Company and the Executive Directors
in the round to assess whether the formulaic level of annual bonus payout and long-term incentive
vesting are appropriate and justified. The Committee has formalised its approach to this assessment
andthe framework which is applied is illustrated below.
Consider the quality of earnings
Committee to review the results to ensure they reflect the underlying
performance and also consider any exceptional items.
Compare outcome against the shareholder experience
Committee to consider absolute and relative shareholder return over the relevant periods, the
dividend payment(s) and the likely shareholder response to results based on broker feedback.
Compare outcome with overall Company performance
For example, market share, competitor benchmarking, sustainability, people and culture, strategic
progress, wider stakeholder experience and analyst feedback.
Consider any events and other input
For example, reputation/risk related, any change of accounting standards etc.
Draw on input from CRSEC Committee, Audit Committee and management functions
and consider the impact of any external head or tailwinds.
Compare with historical use of discretion
In addition, consider whether bonus and LTIP outcomes are consistent.
What is the formulaic outcome?
Committee to consider year-on-year change, whether this reflects
performance trend and impact on the single figure outcome.
Final APP and LTIP outcomes
Committee to agree whether adjustments are required to formulaic results
and determine the final outcomes for APP payouts and LTIP vesting.
111 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
2023 performance targets
The Remuneration Committee set targets for the Executive Directors prior to the 2023 financial year.
These were based on NR and adjusted profit before income tax, both measured in GBP at a constant FX.
NWC is also used as a downward modifier on both measures. All targets were based on the business
planat the time, with reference also being made to external expectations of performance and market
practice of companies in a similar stage of the business cycle to Reckitt.
At the time the Committee finalised the targets, consensus expectation was 2.6% for LFL NR growth.
Insetting the targets, the Committee also had regard to competitor performance.
2023 financial performance against APP targets
As stated earlier in the annual report, 2023 marked a year of continued progress, with strong mid-single-
digit growth for our Health & Hygiene GBUs and the expected rebasing of our US Nutrition business as
itmaintains market leadership and delivered strong performance, but laps the prior year competitor
supply issue.
LFL NR growth was 3.5% resulting in the bonus metric of £14.86 billion (on a constant FX basis),
significantly exceeding the market expectations when the targets were set.
For 2023, operating margin was 23.1%, in line with guidance, resulting in the bonus metric of adjusted
profit before income tax (on a constant FX basis) of £3.23 billion which outperformed target range
setbythe Committee at the start of the year.
During 2023, NWC was -7.7%. The NWC metric for APP purposes is an Operating NWC andiscalculated as
a 12-month average.
The chart below illustrates performance compared to the targets:
Performance
measure
Maximum
(3.57x target)
Like-for-like
Net Revenue
£14.07bn
£14.93bn
Actual £14.86bn
1.74x
Adjusted profit
before income tax
at constant rates
£2.85bn
1.89x
Average NWC
0.89x
Threshold
(zero bonus) MultiplierActual/Achieved
Total
2.93x
Achieved
£3.19bn
Actual £3.23bn
-7.4%
-9.6%
Actual -7.7%
As illustrated above, 2023 NR was at the upper end of the performance range, and adjusted profit before
income tax exceeded the maximum of the performance range set for the 2023 annual bonus. With a
0.89x modifier on NWC, the overall formulaic bonus multiplier was 2.93x of target (82% of maximum).
These results reflect continued progress in 2023, delivering a four year growth CAGR at the topend of
our peer group during a period of significant market volatility and supply challenges. Total adjusted
diluted EPS was 323.4p in 2023, with FCF increased by 11% to £2.3 billion. Reckitt is well positioned today
to continue to deliver mid-single-digit growth in the medium term. We have an excellent portfolio of
market-leading, high margin brands in growth categories. With the proposed 5% increase in our annual
dividend, we continue to deliver returns to shareholder in line with our capital allocation policy.
Directors’ Remuneration Report continued
112 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Overall Group performance taken into consideration
As it does every year, the Committee thoroughly evaluated the performance of both the Group and the Executive Directors in the round to assess whether the level of annual bonus payout is both appropriate and
justified. The framework that the Committee applies is set out on page 110 and more details including progress on delivery of the strategy, wider people, culture and sustainability is provided below:
Directors’ Remuneration Report continued
Strategic delivery
Purpose and culture fit for the future
– Invested in our people and the values we
want to define them, creating a culture that
ispurposeful, entrepreneurial and caring
– Transformed our capabilities to innovate
great products and extend categories.
Wehave deepened our consumer value
proposition and set new standards in
customer service excellence
– High levels of endorsement from our people
as revealed by the annual employee survey
Excellent brand portfolio for value creation
– Over The Counter products grew by 11%
onaLFL NR CAGR basis compared to 2019
– More than 70% of the brands occupy
market-leading positions in their categories
ona NR basis
– Launched breakthrough products such as
Lysol Air Sanitiser and extended categories
through excellence in innovation
Scaled global footprint
– Scaled global footprint spans in developed
and emerging markets in long-term
growthcategories
– 7.5% 4-year LFL NR CAGR versus 2019 for
developed markets and 6.6% 4-year LFL
NRCAGR versus 2019 for emerging markets
– 260bps increase in share of markets
recognised as top tier by retail partners
Enhanced returns to shareholders
– Delivered LFL NR growth of 3.5% ahead
ofingoing expectations
– Superior industry-leading gross margins
withadjusted operating margin at 23.1%
– Reduced leverage and grew FCF by 11%
to£2.3billion
– Launched new share buyback programme in
October with a goal of buying back £1 billion
of our shares over the following 12 months
– Proposed 5% increase in annual dividend,
forthe second year in a row, with a total
return of £1.5 billion to shareholders
Sustainability
Purpose-led brands
– 29.6% NR from more sustainable products,
improved from 24.4% in 2022, driven by
innovation programme
– 5% PCR plastic inclusion rate with additional
financial commitment to increase this further
– Continued progress in reducing the use
ofvirgin plastic
Healthier planet
– 67% reduction in Scope 1 and Scope 2
emissions compared to our 2015 baseline
– 100% renewable electricity purchased for
manufacturing. Overall 94% of electricity
usedacross all sites is renewable
– 7% reduction in water use and 4% reduction
inenergy use
– Revisions in the water stress mapping
confirmed 17 sites in 2023. Our Hosur site
inIndia became our first water positive site
in2022 and we’re advancing similar projects
near Mysore and in Mexico and Pakistan
– 18% in waste reduction from manufacturing
versus 2015; all manufacturing sites have now
achieved zero waste to landfill
Fairer society
– 23% Group Leadership team, 34% Senior
Management team and 51% managers
arewomen
– £31.4 million Fight for Access social
impactinvestment
113 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Wider stakeholder experience
Suppliers and external partners
– Partnered with the Fair Rubber Association
and Earthworm Foundation to improve the
livelihoods of smallholder latex farmers
inThailand and protect the ecosystem
– Continued to engage palm oil suppliers
through our partnership with Earthworm
Foundation and Action for Sustainable
Derivatives; funded two landscape
programmes in Malaysia and Indonesia as
ameans of addressing risks and investing
inamore sustainable palm supply chain
fromfarm level onwards
– Engaged our third-party manufacturers
through Manufacture 2030 to help them
reduce their environmental footprint through
innovative projects and behavioural changes.
This included the launch of the ‘FMCG
Vertical’ campaign with peer companies
which promoted shared data provision
andaction planning
– Continued to partner with Oxford University’s
NbI team to develop the analytic framework
for assessing carbon, biodiversity and social
impacts in our priority supply chains of latex,
palm oil and fragrances
– Continued to run programmes focusing on
diversity and Human Rights with our suppliers
and external manufacturers
– Continued our programmes of risk-based
supplier audits, helping to strengthen labour
standards in our supply chain
Customers and communities
– Drove customer collaboration with our top
Global customers to deliver Supply Chain
value, improving cost to serve and deliver
improved instock and reliability of service,
which were recognised by top customers
with awards
– Partnered with customers on sustainable
logistics projects; focused on reducing
carbon footprint and increasing productivity
and efficiency
– Continued sales partnerships to improve
efficiency, customer service and logistics
andmeet customer demands
– Supported women entrepreneurs and
innovation via projects such as the WIN Fund
and Climate Gender Equity Fund
Directors’ Remuneration Report continued
People and culture
Pay, recognition and benefits
Our January 2023 global pay review budget
was 70% higher than that of the previous
year. In January 2024, our budget remained
at a broadly similar level to 2023 in line
with our goal to ensure all our colleagues
are paid competitively and fairly, albeit
slightly lower given falling inflation.
We continue to be an accredited Living Wage
Employer and paying at least the Living Wage
to all our UK employees and contractors.
In line with our 2030 Sustainability Ambitions,
our Sustainable Livelihood Framework has
been developed to promote a working
environment supporting health and
wellbeing, equality, employment rights,
financial security and skills development.
In 2022, we formed a partnership with the Fair
Wage Network and conducted analysis across
c.70% of our workforce in our top 10 markets.
In 2023, we extended this to cover all of our
workforce. We are proud to confirm that all our
employees are paid at least the living wage in
their location. We are also embedding this in
our new hire and annual pay review processes.
In 2023, extensive work has been underway to
prepare for the future of pay equity reporting
in Europe with the intention to expand scope
in future years. We already analyse pay equity
data on a mandatory basis in countries including
Australia, Canada, the US and South Africa.
People development
Continued focus on embedding and
cascading the Leadership Behaviours
of Own, Create, Deliver and Care and
celebrated role models in excellence of living
our Leadership Behaviours and Compass
through the Global Compass Awards.
We have transformed our offering in this area,
with the introduction of several initiatives:
– LinkedIn Learning Library: Introduced in April
2023, we have c.9,500 unique users with
c.15,000 hours of combined learning time
across Reckitt
– Functional learning academies: 10 academies
across Reckitt offering technical and
professional qualifications
– myDevelopment – Learning: A new platform
offering personalised development options
– Mentor and coaching programmes: Thriving
programmes, including initiatives for specific
groups such as Accelerate for women and
Global Commercial Future Leadership
Potential programmes to spot and develop
high-potential senior leaders
114 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Diversity and Inclusion
In 2023, we sharpened our Inclusion strategy
tofocus on three key areas – people, brands
andprocurement.
We undertook and achieved the Global Equality
Standard (GES), a global D&I certification.
The GES uses an assessment framework
developed in partnership with the UK
Government and public and private sector
organisations. We have subsequently achieved
local GES accreditation in Brazil and India.
Our Global ERGs continue to be critical in policy
changes and development programmes,
advocating conscious inclusion and shaping
our innovation process. The ERGs together
have over 50 market chapters enabling us to
respond to local needs and issues that matter.
Over 10,000 people have taken part in our
Conscious Inclusion programme that promotes
the role we all play in creating a more inclusive
workplace. Events on allyship and neurodiversity
and the introduction of new ERGs, including
an LGBTQ+ group in India, underline our
commitment to conscious inclusion.
In 2023, our final score for the Human Rights
Campaign Corporate Equality Index (HRC CEI)
is100 (out of 100). HRC’s CEI rates companies’
levels of LGBTQ+ inclusion.
We are now recognised as a top Global
employer and top 100 employer in the UK for
LGBTQ+ Inclusion by Stonewall. Durex won
Brand Ally of the Year at the Pink News Awards
in 2023 and we achieved a Disability Confident
Level 1 ranking in the UK
for more information on inclusion at Reckitt.
See Our People Report
Employee engagement and wellbeing
We continued with our annual employee
surveyin August 2023 with an overall 87%
response rate.
Some key highlights from this were:
– 80% of our colleagues stated they ‘believe
inand are inspired by our Purpose to protect,
heal and nurture in the relentless pursuit
ofacleaner, healthier world’;
– 82% of us are ‘proud to work at Reckitt’; and
– 82% also agreed ‘we are achievers’.
With high engagement from employees, we
have seen reduced overall voluntary attrition
rate especially for high potential employees
compared to last year. We are proud to be
named a Top Employer in 15 countries –
Bahrain, Canada, China, Germany, Hungary,
Italy, Netherlands, Portugal, Romania, Saudi
Arabia, South Africa, Spain, UAE, UK and USA,
by the Top Employers Institute which has been
reinforced by our annual employee survey
feedback in which 78% of our colleagues
would ‘recommend Reckitt as an employer’
(3% higher than external benchmarks).
Wehave also been named one of The Best
Workplaces for Women 2023 in Australia and
New Zealand, through the trust index survey,
ensuring women feel safe, heard, challenged
and valued. Reckitt was also named a LinkedIn
Top Company in 2023 in the UK and Netherlands.
Our Global Wellbeing Policy recognises mental
health, supported by Employee Assistance
Programmes, webinars and events such
asourGlobal Steps challenge and Mental
Healthmonth.
We continue to host monthly Better Life
webinars to help our people maintain a healthy
lifestyle and work-life balance. A people leader
coaching programme, Coach-On-Demand,
in partnership with HINTSA is now accessible
for everyone, everywhere. Monitoring the
gender pay gap remains a priority and Reckitt
voluntarily discloses the gender pay gap for
our 10 largest markets, covering approximately
70% of our global permanent workforce.
115 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Decision on 2023 bonus outcomes
Reckitt’s performance showed progress in 2023 despite complex external market conditions. We
exceeded our ingoing NR guidance and worked hard to strengthen our earnings model. We brought our
gross margin back to its historical strength, which in turn enabled us to increase BEI investment (+13%)
behind our brands and support our innovation launches. We generated strong free cash flows and
significantly increased returns to shareholders through our dividend and the start of ournew and
ongoing share buyback programme. Given this performance and wider assessment as described above
and in the Remuneration Chair’s letter, the Committee concluded that the formulaic APP payout based
on performance against targets is justified and no discretion will be applied.
Under the Remuneration Policy, one-third of the annual bonus will be delivered by way of an award over
Reckitt shares and deferred for a three-year period. Kris’ and Shannon’s 2023 APP awards were pro-rated
for the period they served as Executive Directors.
Base salary
(£) X
Target
bonus X
Performance
multiplier =
Total bonus
(£) =
Cash
(£)
Deferred
into shares
(£)
Kris Licht 575,000
1
100%/120%
2
2.93x 1,845,900 1,230,600 615,300
Shannon Eisenhardt 158,333
1
100% 2.93x 463,917 309,278 154,639
Jeff Carr 760,000 100% 2.93x 2,226,800 1,484,533 742,267
Nicandro Durante 1,100,000 120% 2.93x 3,867,600 2,578,400 1,289,200
1. The 2023 base salary for Kris Licht and Shannon Eisenhardt are pro-rated for the period served as Executive Directors
2. Kris’ target bonus opportunity as CEO Designate was 100% of salary, which increased to 120% of salary on his appointment as CEO
Vesting of the 2021 LTIP
The Reckitt LTIP is designed to align participants with shareholders through making awards with
stretching performance conditions denominated in both performance share options and performance
share awards. Kris Licht’s award under his previous role and Jeff Carr’s award were granted under the
previous Remuneration Policy on 28 May 2021. Neither Nicandro nor Shannon participated in the 2021 LTIP
as both they were not employees of the Company at the time of grant.
2021 performance targets
Vesting of awards under the 2021 LTIP was dependent on the performance conditions set out in the table
below. The targets were adjusted for the disposal of IFCN China during 2022 and were disclosed in detail
in the 2021 Directors’ Remuneration Report.
Assessment of performance versus targets
The chart below illustrates performance compared to the targets. As set out below, performance against
performance measures over the three-year performance period results in an overall78% vesting of the
2021 LTIP award. In 2023 an impairment was made in respect of IFCN goodwill, reflecting higher interest
rates and changes in the regulatory environment. For measuring ROCE for LTIPpurpose, capital employed
was not adjusted in order to ensure Management will not benefit from the impairment.
Performance
measure
Maximum
(100% vesting)
LFL NR growth
(3-year CAGR)
(50% weighting)
0.9% p.a.
4.9% p.a.
Actual 4.8% p.a.
98%
EPS (final year) on an actual
foreign exchange basis
(12.5% weighting)
289p
360p
Actual 323.4p
59%
EPS (final year) on
a constant FX basis
(12.5% weighting)
308p
382p
Actual 332.4p
46%
ROCE (final year)
(25% weighting)
13.7%
15.4%
Actual 14.6%
62%
Threshold
(20% vesting)
Vesting
(% of total award)
Achieved
Total vesting
78%
Achieved
116 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Overall Group performance taken into consideration
As it does every year, the Committee thoroughly evaluated the performance of both the Group and the
Executive Directors in the round to assess whether the level of vesting under the LTIP is both appropriate
and justified. The framework that the Committee applies is set out on page 110. The Committee took into
account the progress on delivery of the strategy and wider people, culture and sustainability in 2023 as
disclosed on pages 112-114 of this report and over the performance period of the 2021 LTIP, as disclosed in
previous Annual Reports, as well as the shareholder experience over this period.
Decision on 2021 LTIP vesting outcome
The Committee is satisfied that this outcome is aligned with the shareholder experience and the wider
assessment of performance over the last three years and concluded that the overall vesting level is
justified and appropriate in this context and that no discretion will be applied.
Vesting of the LTIP for the Executive Directors over the last five years is shown below:
2017–2019 2018–2020 2019–2021 2020–2022 2021–2023
0% 0% 21.5% 100% 78%
Based on the performance assessment above, the 2021 LTIP award to Kris and Jeff will vest as detailed
below. Kris’ LTIP award was granted in relation to his previous role which did not sit on the Board.
However, the full value of the award has been included for transparency. As mentioned previously,
neither Shannon nor Nicandro participated in the 2021 LTIP award.
Interests
held
Exercise
price Vesting %
Interests
vesting
Share price
(£)
1
Estimated
value
(£)
Kris Licht
Performance shares 25,000 n/a 78% 19,500 55.56 1,083,420
Performance share options 50,000 £64.67 78% 39,000 55.56 0
Jeff Carr
Performance shares 40,000 n/a 78% 31,200 55.56 1,733,472
Performance share options 80,000 £64.67 78% 62,400 55.56 0
1. As the share price on the date of vesting is unknown at the time of reporting, the value is estimated using the average market
value over Q4 2023 of £55.56. The actual value at vesting will be disclosed in the 2024 Annual Report
There is a further two-year holding period attached to the 2021 LTIP award for Kris and Jeff, which means
that vested performance shares (net of tax withholding) will not be released until 1 January 2026, and the
resultant shares (net of any tax withholding and the exercise cost as appropriate) from the exercise of
any vested performance share options will not be released until 1 January 2026.
117 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Single total figure of remuneration for Executive Directors (audited)
The table below sets out a single figure for the total remuneration received by each Executive Director for the year ended 31 December 2023, based on the information set out in the previous sections.
Thisiscompared to the prior year figure:
Current Executive Directors Former Executive Director
Kris Licht
1
Shannon Eisenhardt
2
Jeff Carr Nicandro Durante
3
2023
£
2022
£
2023
£
2022
£
2023
£
2022
£
2023
£
2022
£
Base salary 575,000 – 158,333 – 760,000 721,000 1,100,000 363,044
Taxable benefits
4
57,553 – 192,775 – 16,884 16,817 292,130 199,346
Pension benefit
5
57,500 – 15,833 – 76,000 72,100 – –
Annual bonus
6
1,845,900 – 463,917 – 2,226,800 2,573,970 3,867,600 1,555,279
LTIP
7,8
1,083,420 – – – 1,733,472 2,516,000 – –
Buyout awards
9
– – 411,971 – – – – –
Fixed remuneration 690,053 – 366,942 – 852,884 809,917 1,392,130 562,390
Variable remuneration 2,929,320 – 875,888 – 3,960,272 5,089,970 3,867,600 1,555,279
Total 3,619,373 – 1,242,830 – 4,813,156 5,899,887 5,259,730 2,117,669
1. Kris Licht received an annual salary of £900,000 as CEO Designate on the Board between 1 June 2023 and 30 September 2023. This increased to £1,100,000 upon taking the role of CEO from 1 October 2023. His salary was pro-rated for the period served
asanExecutive Director. Kris Licht’s salary in respect of his employment as President Health and Chief Customer Officer, a role which did not sit on the Board, is not included
2. Shannon Eisenhardt received an annual salary of £760,000 for the period from 17 October 2023 (when she joined Reckitt and the Board) to the end of the year (2.5 months of the year). Her salary was pro-rated for the period since joining the Company
3. Nicandro Durante stepped down as CEO in October 2023 and from the Board on 31 December 2023. Nicandro’s remuneration shown for 2022 relates to services as an Executive Director only
4. Benefits for Kris Licht in 2023 primarily consist of one-off relocation costs, the use of a car, healthcare and tax support. For Shannon Eisenhardt, the benefits include one-off relocation costs including temporary accommodation, the use of a car, home leave
flights, healthcare and tax support. For Jeff Carr, the benefits include a car allowance and healthcare. For Nicandro Durante, this includes mainly one-off relocation costs, the use of a car, healthcare and tax support. Where relevant the costs above include
agross-up for tax
5. The Company paid all current Executive Directors a cash allowance in respect of pension provision to the value shown in the table above. These payments reflect the full pension provision outlined in the Policy Table. Directors are only entitled to pension
onadefined contribution (or cash allowance) basis, with no defined benefit accrual. Nicandro Durante did not receive a pension allowance
6. Annual bonus reflects financial performance at 82% of the maximum level of the performance range set for the 2023 bonus; the Committee’s assessment of performance of both the Company and the Executive Directors in the round, and the Committee’s
determination of the level of annual bonus payout at 82% of the maximum level in line with the formulaic outcome is appropriate as set out on pages 110-115. One-third of this is deferred into share awards for three years and will vest subject to continued
employment. Kris Licht’s annual bonus has been pro-rated for time served as both CEO Designate (annual bonus target of 100% of salary) and CEO (annual bonus target of 120% of salary). Kris Licht’s annual bonus in respect of his employment as President Health
and Chief Customer Officer, a role which did not sit on the Board, is not included. Shannon Eisenhardt’s annual bonus has been pro-rated for time served as CFO Designate
7. Reflects the estimated value of LTIP performance share options and performance shares granted to Kris Licht and Jeff Carr in May 2021, which are due to vest in May 2024 at 78% of maximum. Valued using an average share price over Q4 2023 of £55.56.
Seetherelevant section on page 116 for more details. None of this value is attributable to share price growth over the vesting period. The Committee did not apply discretion in determining the remuneration resulting from the 2021 LTIP vesting. Kris Licht’s LTIP
award was granted in relation to his previous role which did not sit on the Board, however, the full value of the award has been included for transparency. Neither Shannon Eisenhardt nor Nicandro Durante participated in the 2021 LTIP awards
8. The value of the 2022 LTIP vesting for Jeff Carr has been restated from last year, which used an average share price of £58.22 over Q4 2022 to estimate the value of the vesting. The actual value shown above is based on the share price on the date of vesting
of£62.90 on 30 May 2023. As the share price at the date of vesting was lower than the share price at the date of the award, none of the value is attributable to share price growth
9. As part of Shannon Eisenhardt’s recruitment package, she received buyout awards in respect of awards forfeited on leaving her former employer. The value shown in the table relates to both an award of restricted shares (£305,352) and the FY24 Nike annual
bonus award (£106,619). The restricted share awards vest in equal tranches. The first tranche that vested in December 2023 has been valued based on the closing share price of £53.82 at the date of vesting, and the second tranche vesting in December 2024
hasbeen estimated based on the share price at the date of grant, being £55.94. The payment in respect of the FY24 Nike annual bonus is based on Shannon’s target bonus opportunity, pro-rated for the period 1 June to 16 October 2023, for the portion of Nike’s
performance year elapsed until Shannon joined Reckitt, assuming a target payout. As part of this calculation, Shannon’s Nike salary has been converted into pounds sterling using an average Q4 2023 USD:GBP FX of 1:0.806. Shannon was also granted performance
shares awards as part of her buyout – the value of these will be included in the single figure table for the financial period in which the relevant performance period ends
Directors’ Remuneration Report continued
118 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Shareholding of Executive Directors compared to requirements
The bar chart below illustrates the Executive Directors’ shareholding compared to the Company’s
shareholding requirements. Executives have a period of eight years from appointment to achieve the
requirements of 200,000 shares for the CEO and 100,000 for the CFO. All current Executive Directors are
showing expected progress towards meeting these requirements as reflected below:
Kris Licht
Shareholding
requirement
Current
shareholding
£3.18m
1
Jeff Carr
Shareholding
requirement
Current
shareholding
£5.24m
1
Shannon
Eisenhardt
Shareholding
requirement
Current
shareholding
£0.25m
1
200,0000 25,000 50,000 75,000 100,000 125,000 150,000 175,000
Shares held
2
Shares deferred from 2023 APP
3
2024 vesting
4
1. Current shareholding value based on the average closing share price in Q4 2023 of £55.56
2. Includes shares owned outright and shares subject to post-vesting holding restrictions
3. This is the estimated number of shares under the Deferred Bonus Plan, after tax, including those to be deferred from the 2023 APP
4. For Kris Licht and Jeff Carr, this is an estimate of the number of shares vesting in May 2024 under the 2021 LTIP, after tax.
ForShannon, this also includes the restricted shares from buyout awards vesting in December 2024
Executive Directors’ shareholding requirements (audited)
Executive Directors are expected to acquire significant numbers of shares over eight years and retain
these until retirement from the Board, with a portion required to be retained post-employment as
described below.
These shareholding requirements (200,000 shares for the current CEO and 100,000 shares for the current
CFO) are the most demanding in the market and are equivalent to c.1,010% and c.731% of salary for the CEO
and CFO, respectively, based on a share price of £55.56. These requirements are also more than double the
current annual LTIP award using a Black-Scholes valuation of 10% for the performance share options.
We also have post-employment shareholding requirements for a further two years. The post-
employment shareholding requirement is enforced through a restriction on Executive Directors’ vested
shares, held by our external share plan administrator, which requires Company permission before these
shares can be sold. This restriction excludes shares purchased by the Executive Directors.
The two-year post-employment shareholding requirement is 50% of the shareholding requirement or
actual shareholding on leaving if lower. This represents more than c.505% of salary for the CEO and
c.366% for the CFO and is more stretching than the majority of other UK companies’ in-employment
shareholding requirements; it is also greater than the current annual LTIP award.
The table below shows the current shareholding of each Executive Director against their respective
shareholding requirements as of 31 December 2023:
Directors’ Remuneration Report continued
Shareholding
requirement
(number of shares)
Total beneficial
interests
(number of shares)
1
Shares awarded
under the Deferred
Bonus Plan
2
Shares subject to
time vesting only
3
Performance shares Options held
To vest in 2024
4
Unvested, subject
to performance
5
Vested but not
exercised To vest in 2024
Unvested, subject
to performance
Kris Licht 200,000 25,995 20,856 10,000 10,335 80,000 50,000 39,000 160,000
Shannon Eisenhardt 100,000 1,471 1,474 1,474 – 38,227 – 58,905
Jeff Carr 100,000 51,069 26,697 – 16,536 80,000 80,000 62,400 160,000
Nicandro Durante
6
200,000 1,105 17,011 – – 58,333 – – 116,666
1. ‘Total beneficial interests’ includes shares owned outright and shares subject to post-vesting holding restrictions
2. ‘Shares awarded under the Deferred Bonus Plan’ shows the estimated number of shares awarded under the Deferred Bonus Plan, after tax, including an estimate of those to be deferred from the 2023 annual bonus
3. For Shannon Eisenhardt, this is the unvested restricted shares under buyout awards, after tax as detailed on page 109. For Kris Licht, includes the award under the Share Ownership Policy (SOP) granted before his appointment to the Board based on continued
employment and the achievement of shareholding requirements
4. This is an estimate of the number of shares vesting to Kris Licht and Jeff Carr in May 2024 under the 2021 LTIP, as detailed on page 116, after tax
5. For Shannon Eisenhardt, this includes the performance shares granted under buyout awards
6. Nicandro Durante’s shareholding immediately following cessation of employment on 31 December 2023. Since stepping down from the Board on 31 December 2023, Nicandro has been subject to the post-employment shareholding requirements of 100,000 shares
(or his actual holding on leaving if lower) for two years following cessation of employment (to 31 December 2025). Shares purchased by Nicandro are not subject to the post-employment shareholding requirement
119 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
2023 LTIP awards and other awards granted in 2023 (audited)
The table below sets out the LTIP awards and other awards made to Kris Licht, Shannon Eisenhardt, Jeff Carr and Nicandro Durante during 2023. Dividend equivalents accrue on performance shares during the
performance period, but will only pay out on vested performance shares. Vesting of these awards in full requires achievement of stretching performance conditions over the three-year period. In line with the
Directors’ Remuneration Policy, for Executive Directors there is a further two-year holding period for the 2023 LTIP commencing after the end of the three-year performance period. Both Nicandro and Jeff have been
treated as a ‘good leaver’ and their 2023 LTIPs will be pro-rated for the performance period worked as Executive Directors, subject to the same performance conditions and vest according to the original timescales.
Date of grant
Shares over
which awards
granted
Market price at
date of award
(£)
1
Exercise price
(£)
2
Face value
(£)
3
Face value less
exercise price
(£) Performance period Exercise/vesting period Holding period
Performance shares
Kris Licht 21 Mar 2023 40,000 59.18 n/a 2,367,200 n/a 1 Jan 2023–31 Dec 2025 Mar 2026 1 Jan 2028
Shannon Eisenhardt 26 Oct 2023 29,453 55.94 n/a 1,647,601 n/a 1 Jan 2023–31 Dec 2025 Mar 2026 1 Jan 2028
Jeff Carr 21 Mar 2023 40,000 59.18 n/a 2,367,200 n/a 1 Jan 2023–31 Dec 2025 Mar 2026 1 Jan 2028
Nicandro Durante 21 Mar 2023 75,000 59.18 n/a 4,438,500 n/a 1 Jan 2023–31 Dec 2025 Mar 2026 1 Jan 2028
Performance share options
Kris Licht 21 Mar 2023 80,000 59.18 58.28 4,734,400 72,000 1 Jan 2023–31 Dec 2025 Mar 2026–Mar 2033 1 Jan 2028
Shannon Eisenhardt 26 Oct 2023 58,905 55.94 58.87 3,295,146 0 1 Jan 2023–31 Dec 2025 Mar 2026–Mar 2033 1 Jan 2028
Jeff Carr 21 Mar 2023 80,000 59.18 58.28 4,734,400 72,000 1 Jan 2023–31 Dec 2025 Mar 2026–Mar 2033 1 Jan 2028
Nicandro Durante 21 Mar 2023 150,000 59.18 58.28 8,877,000 135,000 1 Jan 2023–31 Dec 2025 Mar 2026–Mar 2033 1 Jan 2028
Buyout awards
4
Shannon Eisenhardt 26 Oct 2023 2,782 55.94 n/a 155,625 n/a n/a Dec 2023 n/a
26 Oct 2023 2,782 55.94 n/a 155,625 n/a n/a Dec 2024 n/a
26 Oct 2023 3,526 55.94 n/a 197,244 n/a 1 Jun 2021–31 May 2024 Aug 2024 n/a
26 Oct 2023 5,248 55.94 n/a 293,573 n/a 1 Jan 2022–31 Dec 2024 Aug 2025 n/a
1. The market price at date of award is the closing share price on the date of grant
2. The exercise price is based on the average closing share price over the five business days prior to the date of grant
3. For performance shares, the face value is based on the share price at the date of award and assumes the stretching performance criteria are met to achieve full vesting. For performance-based share options, the face value in the table above is calculated as the
number of share options multiplied by the market price at date of award. However, the actual value to a participant at the time of exercise will be the difference between market price at that time and the exercise price for the number of share options vesting,
after the assessment of performance against the stretching performance criteria set. It should be noted that the ‘face value’ shown above would therefore only be realised if the stretching performance conditions are met in full and the share price at the time
ofexercise is double the exercise price
4. These are buyout awards granted to Shannon in respect of legacy awards from her previous employer. The two awards of 2,782 shares are subject to continued employment, the award of 3,526 shares is subject to Nike performance and the award of 5,248 shares
is subject to Reckitt performance
Unchanged from previous years, the Reckitt 2023 LTIP awards are based 40% on NR, 25% on ROCE, 25% on relative TSR and 10% on ESG measures.
NR continues to be measured as LFL growth over three years. ROCE is measured based on the final year of the performance period and is a measure of how efficient the Group is at converting its capital into
earnings. For LTIP purposes ROCE is measured on a constant currency basis. In addition, LTIP targets include impairments prior to the start of the performance period, whereas in the calculation elsewhere in the
Annual Report total assets have been adjusted to add back impairments of Goodwill, except where the impaired asset has been disposed or partially disposed. If there are any impairments during the performance
period, the Committee will ensure that this does not lead to an increase in the vesting by adjusting the capital employed accordingly and to ensure a LFL comparison to the targets. Relative TSR is measured against
a peer group comprising 20 relevant peer companies, with the addition of Haleon from the 2023 LTIP. The targets associated with the 2023 LTIP awards were disclosed in the 2022 Annual Report on Remuneration.
Directors’ Remuneration Report continued
120 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Wider workforce pay arrangements
Reckitt cascades its reward policy fairly and consistently throughout the organisation and the
Remuneration Committee considers the arrangements for the wider workforce when setting
ExecutiveDirectors’ remuneration. During the year, the Committee considered workforce remuneration
and related policies on several occasions, as well as the alignment of incentives and rewards with culture.
Information reviewed by the Remuneration Committee includes salary structures, bonus design and
targets, the LTIP, share ownership, our global mobility policies, provision of benefits and Reckitt’s
all-employee share plans. The Committee is pleased to note from this review that the Company’s
remuneration policies continue to be aligned with those of the Executive Directors, with a cascade
throughout the organisation.
We continued to ensure that all our employees are paid fairly by being an accredited Living Wage
Employer and further developing the Sustainable Livelihood Framework in 2023. We also continued
withvarious initiatives on Diversity and Inclusion, such as the Stronger Together conversations and our
Conscious Inclusion programme. Focusing on further developing our people, we introduced several
learning programmes such as functional learning academies and mentor and coaching programmes.
Employee wellbeing has also been a key area of focus in 2023. We continued to host monthly wellbeing
webinars and introduced a Better Site Life programme for our factory-based colleagues. We also
expanded our people leader coaching programme to everyone and introduced a new Caregivers
Support programme in partnership with HINTSA as well as curated content for moments that matter.
Our annual employee survey gathered an impressive 87% response rate in 2023, revealing key highlights
such as 80% believe in our Purpose, 82% have pride in working at Reckitt, and 82% are in agreement
that‘we are achievers.’ Reckitt was recognised by Top Employers Institute as a Top Employer 2023 in 15
countries, which, coupled with a 78% recommendation rate from our colleagues, demonstrates Reckitt’s
sustained commitment to its employees.
For more details please refer to the People and culture section on pages 113-114.
At Reckitt, we are proud of our people and their achievements, as well as our reward policies and
practices that reflect our values and culture. We continue to focus on maintaining an open, transparent
culture by promoting continuing dialogue across the Company. During 2023, Mary Harris’s activity as the
Designated Non-Executive Director for Engagement with Company’s Workforce has allowed her to feed
back the views of the workforce to the Remuneration Committee as well as the wider Board. Each year
the Company holds several engagement sessions with employees and organises site visits during which
townhall meetings and smaller group discussions with our people take place. Details of this engagement
can be found in the Section 172 Statement, which can be found on pages 76-77.
The table on page 121 summarises the remuneration structure for the wider workforce.
Directors’ Remuneration Report continued
121 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Salary Annual bonus Long-term incentive Pension All employee shares Share ownership Benefits
Salary increases are
based on individual
performance ratings,
talent ratings, and local
market practices and
conditions e.g. inflation.
For 2024, the salary
increase budget for
thewider UK workforce
was 5.5% to 6%.
The average total pay
across the Group in 2023
was £57,057.
The median CEO pay
ratio is 1:99 (page 123).
Reckitt is accredited
bythe Living Wage
Foundation and all our
employees are paid at
least the living wage
intheir location.
Thiscertifies our
commitment to
employees that they
willreceive a wage that
not only exceeds the
minimum wage but also
recognises the actual
cost of living in the UK.
Our APP is consistently
implemented across the
organisation with 16,000
participating employees.
Target bonuses and
maximum multipliers
increase with progression
and promotion.
Bonus payouts, aligned
with Executive Directors,
are tied to Reckitt’s
financial performance.
All employees are
incentivised based on
net revenue and a profit
measure, varying by role.
Most roles include a third
measure, such as NWC.
Additional bonus plans
for specific areas like
sales and factories are
inoperation.
Reckitt grants LTIP
awards to the GEC,
GroupLeadership
teamand Senior
Management team.
Awards under our Middle
Manager High Potential
awards are made to
selected employees
below these levels
toreward long-term
performance and
valuecreation.
The 2024 awards use
thesame measures
andperformance
periodas for the
Executive Directors.
Awards are a fixed
number of options
andshares, based
onemployee level,
performance and
potential. In addition,
participants below the
GEC receive restricted
shares awards. Managers
can recommend
additional awards
tokeyemployees.
A pension/gratuity
scheme is offered to
more than 80% of our
global employees.
Countries where pension
provision is not prevalent
in the local market and/or
is provided by the state
remain an exception to
the above.
In the UK, all Reckitt
employees are eligible
toreceive a Company
pension contribution
ofat least 10% of
pensionable salary,
irrespective of
anypersonal
contributionmade.
We offer a global share
plan for all employees to
buy Reckitt shares at a
discount over three years.
This is offered to over 95%
of our employees globally
where local legislations
permit, and is supported
by a network of 120
localchampions
andcommunicated
in24languages.
At the end of 2023, around
14,000 Reckitt employees
were participating in one
of our three share plans,
with just under a total of
£76 million of employee
savings in our all-employee
share plans, or about
£5,500 on average per
participating employee.
We allow and encourage
a12-month savings
sabbatical for employees
on maternity leave.
Reckitt is proud of our
ownership culture.
Our GEC and Group
Leadership team have
shareholding requirements
with eight years within
appointment to reach target.
These are very demanding
and reviewed annually by the
Remuneration Committee.
Amongst the GEC, the total
shareholding requirement
isaround £56 million
1
and
theaverage shareholding
requirement among this
group, excluding the CEO,
isc.511% of salary.
Aggregate actual holding
forthe GEC is £26 million
1
,
equivalent to an average
of297% of salary.
Total shareholding
requirement for all
employeeswith
requirementsis £86million
1
,
equivalent to an average
of401% of salary.
Current actual holding is
£56million
1
and the actual
average holding is 263%
ofsalary.
We provide regularly reviewed, market-
competitive and inclusive benefits for
allour employees. Core benefits include:
Life insurance for all employees at least
2x base salary.
Global parental leave policy. At least
26weeks paid maternity leave and
fourweeks paid paternity leave.
Employee Assistance Programme in
every country which has helped our
employees during the pandemic and
beyond.
Health insurance for most employees,
where the state does not cover it, with
spouse and/or children also covered in
some markets. Video GP access in the
UKand the US.
International Transfer Policy for global
mobility and career development.
Employees transfer on local terms basis.
Additional benefits for some moves,
suchas international healthcare, pension,
school fees, tax support and home leave.
Directors’ Remuneration Report continued
122 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Salary Annual bonus Long-term incentive Pension All employee shares Share ownership Benefits
Comparison with Executive Director remuneration
Salary increases take
into account the
approach for the wider
workforce. Salaries are
also set competitively
against peers in support
of the recruitment
andretention of
Executive Directors.
The CEO and CFO did
not receive a salary
increase for 2024.
For Executive Directors,
bonuses are directly
related to Reckitt’s
financial performance:
NR, adjusted profit
before income tax
targets, as well as
NWCwhich acts as
adownward modifier
only. APP operates on
amultiplicative basis,
inthe same way as for
the wider workforce.
One-third of annual
bonus payments for
Executive Directors are
subject to a three-year
deferral into awards over
Reckitt shares.
We have malus and
clawback and other
safeguards in place to
manage any potential risk
that may arise from the
use of the APP.
Executive Directors’
LTIPgrants comprise
performance share
options and performance
share awards (based on
afixed number), which
for the 2024 awards
willvest subject
totheachievement
ofLFLNR, ROCE,
relativeTSR and ESG
performance targets.
In addition to the LTIP’s
three-year performance
period, Executive
Directors are subject
toan additional
two-yearholding
periodcommencing
atthe end of the
performance period.
Under the Policy, our
Executive Directors
areeligible to receive
aCompany pension
contribution of 10% of
salary, in line with the
wider workforce in
theUK.
They are eligible to take
this as a cash alternative.
Executive Directors are
eligible to participate
inthe all-employee
Sharesave Scheme on
thesame basis as all
employees.
The Executive Directors have
shareholding requirements
of200,000 shares for the
CEOand 100,000 for the
CFO,themost demanding
requirements in the UK
market
2
. These are equivalent
to c.1,010% and c.731% of
salary
1
, respectively.
Executive Directors are
additionally subject to
apost-employment
shareholding requirement
which is enforced through
restrictions put in place by
ourshare plan administrator.
The table on page 118 sets out
the progress of the Executive
Directors towards their
shareholding requirements.
Executive Directors receive benefits
which consist primarily of the provision of
a Company car/allowance, risk insurances
and healthcare.
In addition, Executive Directors are
eligible for the benefits available to the
wider UK workforce.
1. Based on the average closing share price in Q4 2023 of £55.56
2. Compared against constituents of the FTSE 30
Directors’ Remuneration Report continued
123 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Gender pay gap
The Board reviews the Company’s gender pay gap and publishes an annual gender pay report that can
befound on our website under the Fairer Society heading of Our Impact section. To increase transparency
on this issue Reckitt voluntarily discloses the gender pay gap for our 10 largest markets by workforce size,
including the UK, which together make up around 70% of our global permanent workforce.
As disclosed in Our People Report, Reckitt has set targets to increase the number of women insenior
leadership positions and has a number of initiatives to increase this representation.
A summary of the gender pay statistics is also included below:
The gender pay gap in the UK as at 5 April 2023 is
Median -10.6% Mean 3.7%
The gender pay gap in the UK as at 5 April 2022 is
Median -10.8% Mean 2.4%
Further data and information on the initiatives Reckitt is taking on diversity and inclusion are set out in
Our People Report.
CEO pay ratio
The table below provides pay ratios of the CEO’s total remuneration to the remuneration of UK
employees at the lower quartile, median and upper quartile. This is in line with UK reporting requirements.
For 2023, the total pay and benefits paid to both Nicandro Durante and Kris Licht whilst in the role of CEO
have been combined to calculate the total CEO pay for 2023.
CEO Year Method
25th percentile
pay ratio Median pay ratio
75th percentile
pay ratio
2023 Option A 1:136 1:99 1:57
2022 Option A 1:82 1:61 1:34
2021 Option A 1:170 1:121 1:78
2020 Option A 1:244 1:177 1:100
2019 Option A 1:158 1:115 1:70
The calculations reflect the application of Reckitt’s reward policy across the organisation as set out in the
section on wider workforce pay arrangements.
In particular, the Remuneration Committee believes the pay ratio is consistent with the Group’s wider
policies on employee pay, reward and progression. Reckitt ensures that employees are paid fairly for
their role, based on the location they work in and their performance in role. As such, the base salary,
annual bonus and benefits are based on the same principles for the identified employees as they are
forthe CEO. During 2023 Nicandro Durante was CEO until 30 September and Kris Licht was CEO from
1 October; in calculating the CEO pay ratio we have therefore used the aggregate of the amounts paid
toeach of them in respect of their service as CEO. The median pay ratio has increased from 2022 which
reflects the fact that the CEO’s remuneration fluctuates year-on-year as a significant proportion of the
package is variable pay and in 2022 the annual bonus paid to the CEO was lower than 2023.
In calculating the ratio we have used Option A, in line with shareholder guidelines. The employees used
inthe calculations were selected on 5 March 2024 following the end of the financial year.
For identifying the three employees at the lower quartile, median and upper quartile, the following
methodology has been used:
– All UK employees’ total remuneration as at 31 December 2023 has been considered, excluding leavers
and employees who were absent for more than 20 days during the financial year, as these would
distort the ratio
– Full-time equivalent salary, variable pay, allowances and benefits (using the part-time values and
converting these to full-time equivalent values) have been calculated. In order to calculate the value
of taxable benefits we have taken the P11D value, due to ease of accessing data. Actual pension
contributions have been used, and, where appropriate, converted to full-time equivalents
The table below summarises the identified employees in 2023:
25th percentile
(£)
Median pay
(£)
75th percentile
(£)
Total employee pay and benefits 39,069 53,506 93,980
Salary component 29,528 40,845 66,260
In addition, Note 5 to the Financial Statements sets out the total employment costs and average number
of employees globally, during 2023. Based on these, the average global pay during 2023 was £57,057 and
consequently the pay ratio between the CEO and average global employee was 1:93.
Directors’ Remuneration Report continued
124 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Implementation of Directors’ Remuneration Policy in 2024
Salary
As set out earlier in this report, neither the CEO nor CFO received a salary increase for 2024.
Thebudgeted average increase for the UK workforce was 5.5% to 6% depending on location.
TheCEO’ssalary for 2024 is £1,100,000 and the CFO’s is £760,000.
Pension
The CEO and CFO are eligible to receive a pension contribution, or equivalent cash allowance,
of10%ofsalary, which is in line with the Company’s level of contribution for all UK employees.
2024 Annual bonus
There are no changes to the bonus opportunity for the CEO and CFO, remaining at 120% and 100% of
salary at target, respectively. Bonuses for 2024 will remain based on Reckitt’s NR and adjusted profit
before income tax targets, measured in GBP at a constant exchange rate, with the outcome under each
of the measures combined multiplicatively to give a maximum bonus outcome of 3.57x the target bonus
opportunity if both targets are met.
As with the 2023 bonus, the NWC metric will act as a downward modifier, applying on a multiplicative
basis to the combined outcome of the NR and adjusted profit before income tax targets, with a maximum
multiplier of 1x. One-third of any bonus earned will be deferred into Reckitt shares for three years.
As it does every year, the Committee will continue to evaluate the performance of both the Group and
the Executive Directors in the round and with regard to broader circumstances to assess whether the
level of annual bonus payout is appropriate and justified, before determining the final bonus payout.
We have not disclosed the performance target ranges for 2024 as we consider them to be commercially
sensitive. However, we commit to retrospectively disclosing the performance ranges in the Directors’
Remuneration Report for the year ending 31 December 2024.
2024 LTIP awards
Award levels
There are no changes to the LTIP award levels for the CEO or CFO for 2024. These have been reviewed in
light of share price performance, Group performance and individual performance. Kris Licht’s 2024 LTIP
award will consist of 150,000 performance share options and 75,000 performance shares and Shannon
Eisenhardt’s award will be 80,000 performance share options and 40,000 performance shares. These
awards are expected to be made in early March 2024, following the full-year results announcement. Jeff
Carr will not receive a 2024 LTIP award.
Performance conditions
The LTIP performance metrics and their associated weightings are unchanged from the 2023 LTIP awards
and are as follows:
– LFL NR growth (40% weighting)
– ROCE (25% weighting)
– Relative TSR (25% weighting)
– ESG (10% weighting)
The Committee went through a robust process when setting these targets, taking into account a number
of factors and different reference points and the Committee considers that the targets set are very
stretching. Awards granted in 2024 will vest in line with the descriptions below, which require significant
outperformance of targets.
LFL NR growth
NR is measured as LFL growth over three years. At the time these targets were set the Committee took
into account market consensus and our stated ambition for LFL NR growth is mid-single-digit in the
medium term. In this context, the Remuneration Committee believes that the performance ranges are
appropriately stretching and incentivise management to deliver outperformance. 20% of this element will
vest for achieving 2.0% per annum growth increasing to full vesting for achieving 5.0% per annum growth.
ROCE
ROCE is measured in the final year of the performance period and is a measure of how efficient the
Group is at converting its capital into earnings. For LTIP purposes, ROCE is measured on a constant
currency basis. In addition, LTIP targets include impairments prior to the start of the performance period,
whereas in the calculation elsewhere in the Annual Report total assets have been adjusted to add back
impairments of Goodwill, except where the impaired asset has been disposed or partially disposed.
If there are any impairments during the performance period, the Committee will ensure that this does
not lead to an increase in the vesting by adjusting the capital employed accordingly and to ensure a LFL
comparison to the targets. 20% of this element will vest for achieving 14.9% increasing to full vesting for
achieving 16.9%.
Relative TSR
Relative TSR directly aligns LTIP participants with the shareholder experience and will only reward for
TSRoutperformance against our peers.
As it does every year, the Committee reviewed the constituents of the peer group to ensure that they
remain appropriate to assess performance against and also considers whether any additional peers
should be added. The outcome of this review was that all of the current peer companies remain
appropriate and that Kenvue (which was listed as an independent business in 2023) should be added
tothe peer group.
Directors’ Remuneration Report continued
125 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Therefore, the peer group for the 2024 LTIP awards comprises 21 companies with which we compete
forcapital and to which shareholders compare us and is also an appropriate group against which
toincentivise LTIP participants to outperform. The peer companies are primarily drawn from the
constituents of the MSCI World House and Personal Products Index, with others forming part of the
broader ‘FMCG’ industry which are subject to similar industry dynamics and market challenges as Reckitt.
The constituents will be reviewed on an annual basis and, in particular, as new comparators come to the
market. The TSR peer group for the 2024 LTIP award is set out below:
Beiersdorf Estée Lauder Kimberly-Clark Shiseido
Church & Dwight Haleon Lindt Unicharm
Clorox Henkel L’Oréal Unilever
Colgate Palmolive JDE Mondelēz
Danone Kao Nestlé
Essity Kenvue Procter & Gamble
Under the relative TSR measure, 20% of the award will vest for TSR at the median of the peer group,
increasing to full vesting for upper quartile performance or above.
ESG
ESG measures were introduced from the 2022 LTIP to align participants with, and incentivise delivery of,
our 2030 Sustainability Ambitions. There are two equally weighted metrics for the 2024 LTIP award. The
ESG targets are based on rigorous methodology, are independently assured and, in the case of our carbon
emissions, support our delivery of externally validated SBTs on emissions reduction. Targets are based on
achievement in the final year of the performance period and take into account the plans that we have to
achieve the Sustainability Ambitions. The measures and targets are as follows:
i. Percentage of net revenue from more sustainable products – this has been an annual reporting KPI
since 2012 and supports our ambition of 50% of NR being from more sustainable products by 2030.
Thisis measured using our SIC. The calculator evaluates the sustainability impact of every new product
versus existing products and established benchmarks. It helps measure carbon, water, plastics,
ingredients and packaging footprints in new products for our global brands, targeting their reduction
to enable more sustainable products in the future. It includes Scope 3 product emissions (including
thecarbon and water impact from consumer use), which is the most impactful lifecycle stage of our
products. We achieved 29.6% of NR from more sustainable products in 2023 and have set the targets
for this measure based on the Plan to 2030, such that 20% of this element will vest for achieving 43%
ofNR from more sustainable products increasing to full vesting for achieving 46% in 2026.
ii. Percentage reduction in GHG emissions in operations – this supports the delivery of our externally
validated SBTs for 2030 to help maintain global warming at less than 1.5°C, including a 65% reduction
inGHG emissions in operations against our 2015 baseline. For the purposes of reward outcomes,
anyoffsetting activities will not count towards achievement of these targets. A total of 20% of this
element will vest for achieving a 67% reduction in GHG emissions in operations by 2026, increasing
tofull vesting for achieving a 70% reduction. The threshold of a 67% reduction is above the goal that
we set for ourselves by 2030, with the maximum target of a 70% reduction significantly beyond this,
requiring us to exceed our 2030 SBT ahead of schedule. These targets are considered stretching
taking into account internal forecasts.
Summary of 2024 LTIP targets
Performance will be assessed for each measure, at the end of the three-year performance period,
onasliding scale as set out below:
Threshold
(20% vesting)
Maximum
(100% vesting)
LFL NR growth (3-year CAGR)
(40% weighting) 2.0% 5.0%
ROCE (final year) on a constant foreign exchange basis
(25% weighting) 14.9% 16.9%
Relative TSR
(25% weighting) Median Upper quartile
ESG: % of NR from more sustainable products (final year)
(5% weighting) 43% 46%
ESG: % reduction in GHG emissions in operations (final year)
(5% weighting) 67% 70%
Directors’ Remuneration Report continued
126 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
ADDITIONAL REMUNERATION DISCLOSURES
Percentage change in the remuneration of Directors
We are required to publish the annual percentage change in remuneration (salary or fees, benefits and annual bonus) for each Director compared to the annual average percentage change in remuneration for the
employees (excluding Directors) of the Parent Company. Since the CEO and CFO are the sole employees of Reckitt Benckiser Group plc, this statutory disclosure is not possible. In the table below we are therefore
voluntarily disclosing the percentage change in remuneration for all UK employees in order to provide a representative comparison. The Company considers UK employees to be an appropriate comparator group as
the Executive Directors’ remuneration arrangements are similar in structure to the majority of these employees and it reflects the economic environment where the Executive Directors are employed. The analysis
isbased on a consistent set of employees for each comparison, i.e. the same individuals or roles appear in the 2022/23 comparison, and similarly for previous year comparisons.
2022/23 2021/22 2020/21 2019/20
Salary/fee Benefits Bonus Salary/fee Benefits Bonus Salary/fee Benefits Bonus Salary/fee Benefits Bonus
All UK employees
1
6.5% 1.6%
2
6.1% 4.1% 2.1%
2
15.6% 5.9% 6.2%
2
-8.9% 4.5% 1.5%
2
505.4%
Chris Sinclair (Chair of the Board) 5.3% – – 10.0% – – 3.6% – – 10.0% – –
Olivier Bohuon
3
23.2% – – 2.6% – – – – – – – –
Andrew Bonfield
4
-0.7% – – 6.2% – – 2.4% – – 4.1% – –
Jeff Carr (CFO)
5
5.4% 0.4% -13.5% 3.0% 0.4% 12.8% 41.5% 37.3% 29.3% – – –
Jeremy Darroch
6
516.2% – – – – – – – – – – –
Nicandro Durante (former CEO)
7
139.8% 46.5% 148.7% 178.0% – – 1.9% – – 14.1% – –
Shannon Eisenhardt (CFO Designate)
8
– – – – – – – – – – – –
Mary Harris -1.6% – – -3.8% – – 2.0% – – 14.4% – –
Tamara Ingram
9
– – – – – – – – – – – –
Mehmood Khan 3.4% – – 2.6% – – 2.7% – – 4.7% – –
Pam Kirby 2.6% – – 2.0% – – 2.0% – – 7.3% – –
Kris Licht (CEO)
10
– – – – – – – – – – – –
Alan Stewart
11
17.2% – – – – – – – – – – –
Elane Stock 3.4% – – 2.6% – – 2.7% – – 4.7% – –
Margherita Della Valle
12
3.4% – – 2.6% – – 105.4% – – – – –
1. The percentages for ‘All UK employees’ reflect the average percentage change in full-time equivalent salary, taxable benefits and allowances, and bonus for colleagues based in the UK between 2019/20, 2020/21, 2021/22 and 2022/23. It only includes colleagues
employed in both years in the comparison
2. The percentage change in taxable benefits for all UK employees excludes international transfer benefits as this is volatile from year to year based on each individual’s circumstances
3. Olivier Bohuon was appointed to the Board on 1 January 2021 and so no comparison is shown for 2020/21 and 2019/20
4. Andrew Bonfield held the role of Senior Independent Director on an interim basis from 1 September to 31 October 2022. The additional fees for this period are included above
5. Jeff Carr joined on 9 April 2020 as the CFO of the Company so no comparison is shown for 2019/20. The percentage change shown for 2020/21 reflects actual remuneration received during 2020 for service from Jeff Carr’s appointment on 9 April 2020 to
31 December 2020
6. Jeremy Darroch was appointed to the Board on 1 November 2022 and so no comparisons are shown for 2021/22 and before. The comparison for 2022/23 reflects that the 2022 fee was only received for part of the year
7. Nicandro Durante stepped down as a NED on 1 September 2022 and became Executive Director from 2 September 2022. The percentage change figures for 2021/22 and 2022/23 reflect an aggregate of remuneration paid for both his Executive and Non-Executive
roles during 2022
8. Shannon Eisenhardt joined on 17 October 2023 as the CFO Designate of the Company and so no comparison is shown
9. Tamara Ingram was appointed to the Board on 1 February 2023 so no comparison is shown
10. Kris Licht was appointed to the Board as an Executive Director on 1 June 2023 so no comparison is shown
11. Alan Stewart was appointed to the Board on 1 February 2022 and so no comparison is shown for 2021/22 and before. The percentage change figures for 2022/23 reflect that the 2022 fee was only received for part of the year
12. Margherita Della Valle joined on 1 July 2020 so no comparison is shown for 2019/20. The comparison for 2020/21 reflects that the 2020 fee was only received for part of the year
Directors’ Remuneration Report continued
127 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Relative importance of spend on pay
The table below shows shareholder distributions (i.e. dividends and share buybacks) and total employee
pay expenditure for 2022 and 2023, along with the percentage change in both.
2023
(£m)
2022
(£m)
% change
2022/23
Total shareholder distribution
1
1,546 1,249 23.8%
Total employee expenditure
2
2,569 2,408 6.7%
1. Details of shareholder distribution are set out in Notes 24 and 28 to the Financial Statements and are made up of dividends of
£1,339 million and share buybacks of £207 million
2. Details of employee expenditure are set out in Note 5 to the Financial Statements
Exit payments made in the year (audited)
Details of Nicandro Durante’s and Jeff Carr’s leaving arrangements are provided earlier in this report.
Payments to past Directors (audited)
No other benefits or payments were delivered to former Directors in the year in excess of the minimum
threshold of a pre-tax value of £15,000 set by the Remuneration Committee for this purpose.
Performance graph
The graph below shows the TSR of the Company and the UK FTSE 100 Index over the period since
1 January 2014. This shows the growth in the value of a hypothetical holding of £100 invested
on31 December 2013. The FTSE 100 Index was selected on the basis that it contains companies
ofacomparable size, in the absence of an appropriate industry peer group in the UK.
TSR since 1 January 2014
£ value of £100 invested at 1 January 2014
Source: Thompson Reuters Datastream
2023 20242014 2015 2016 2017 2018 2019 2020 2021 2022
80
100
140
160
120
180
101
114
99
141
118
158
133
162
121
144
142
151
125
166
156
154
168
150
149
166
Reckitt
FTSE 100
The table below sets out the single figure of total remuneration for the role of CEO over the last 10 years.
(£000)
CEO single figure of
remuneration Kris Licht
Nicandro
Durante
Laxman
Narasimhan
Rakesh
Kapoor
Annual
bonus (as a
percentage
of maximum)
LTIP vesting
(as a
percentage
of maximum)
2014 12,787 72% 40%
2015 25,527 100% 80%
2016 15,289 0% 50%
2017 8,999 0% 50%
2018 14,314 84% 65%
2019 4,599
1
938 12%
2
0%
3
2020 8,434
1
100% 0%
3
2021 5,967 91% 21.5%
2022 2,118 918 100%
4
100%
5
2023 3,619
6
5,260 82% 78%
7
1. Includes buyouts in respect of legacy arrangements from previous employer
2. Zero for Rakesh Kapoor
3. Laxman Narasimhan was not with the Group at the time these awards were granted
4. Laxman Narasimhan was not eligible for a 2022 APP following his resignation as CEO
5. Nicandro Durante was a NED at the time these awards were granted and therefore did not receive an award and Laxman
Narasimhan’s award lapsed following his resignation as CEO
6. Includes the LTIP which was granted in relation to Kris Licht’s previous role which did not sit on the Board
7. Nicandro Durante was not with the Group at the time these awards were granted. The awards for Kris Licht were in relation
tohis previous role which did not sit on the Board
Directors’ Remuneration Report continued
128 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Single total figure of 2023 remuneration for NEDs and implementation for 2024 (audited)
The following NED fee policy will apply from 1 January 2024. The table also sets out the fees that were
inplace for the year ended 31 December 2023.
2024 fees 2023 fees
Cash fee
(£)
Fee
delivered in
Reckitt
shares
(£)
Cash fee
(£)
Fee delivered
in Reckitt
Shares
(£)
Base fees
Chair of the Board 510,000 170,000 495,000 165,000
Non-Executive Director 82,500 27,500 76,500 25,500
Additional fees
Chair of Committee 35,000 – 35,000 –
Member of Committee 20,000 – 20,000 –
Designated Non-Executive Director for Engagement
with Company’s Workforce 20,000 – 20,000 –
Senior Independent Director 35,000 – 30,000 –
The fee for the Chair of the Board has been increased to £680,000, an increase of 3%. The base fee
forNEDs has been increased to £110,000, an increase of 7.8%. This increase partly reflects the increased
time commitment required to meet the scope and complexity of the NED role over the last few years.
This represents a c. 5.1% to 6.6% increase in total fees, depending on responsibilities. The proportion
delivered in Reckitt shares continues to be 25% of the base fee, being £170,000 for the Chair and £27,500
for the NEDs. We will continue to review NED fees to ensure they are appropriate and competitive
against the market.
In addition, NEDs are eligible to receive support from the Company to complete a UK tax return,
ifrequired.
The table below sets out a single figure for the total remuneration received by each NED for the year
ended 31 December 2023 and the prior year:
2023 fees 2022 fees
Cash
(£)
Shares
(£)
Total
(£)
Cash
(£)
Shares
(£)
Total
(£)
Chris Sinclair 495,000 165,000 660,000 470,250 156,750 627,000
Olivier Bohuon 119,833 25,500 145,333 93,500 24,500 118,000
Andrew Bonfield
1
111,500 25,500 137,000 113,500 24,500 138,000
Jeremy Darroch
2
126,500 25,500 152,000 24,667 – 24,667
Mary Harris 116,500 25,500 142,000 119,750 24,500 144,250
Tamara Ingram
3
88,458 23,375 111,833 – – –
Mehmood Khan 96,500 25,500 122,000 93,500 24,500 118,000
Pam Kirby 131,500 25,500 157,000 128,500 24,500 153,000
Alan Stewart
4
111,500 25,500 137,000 94,458 22,458 116,916
Elane Stock 96,500 25,500 122,000 93,500 24,500 118,000
Margherita Della Valle 96,500 25,500 122,000 93,500 24,500 118,000
1. Andrew Bonfield held the role of Senior Independent Director on an interim basis from 1 September to 31 October 2022.
Theadditional fees for this period are included above
2. Jeremy Darroch joined the Board on 1 November 2022. Fees shown for 2022 are paid from this date
3. Tamara Ingram joined the Board on 1 February 2023. Fees shown are paid from this date
4. Alan Stewart joined the Board on 1 February 2022. Fees shown for 2022 are paid from this date
Travel and expenses for NEDs are incurred in the normal course of business, for example, in relation
toattendance at Board and Committee meetings. The costs associated with these are all met by
theCompany.
Directors’ Remuneration Report continued
129 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Summary of shareholder voting at the 2023 AGM
The following table shows the results of the voting on the 2022 Directors’ Remuneration Report at the
2023 AGM and 2022 Directors’ Remuneration Policy at the 2022 AGM:
Votes for
For
%
Votes
against
Against
% Total
Votes
withheld
Approve the 2022 Directors’
Remuneration Report 513,944,128 93% 39,845,715 7% 553,789,843 1,961,573
Approve the Directors’
Remuneration Policy 493,637,970 92% 45,472,574 8% 539,110,544 3,364,148
The Remuneration Committee had extensive dialogue with shareholders during 2021 on the 2022
Remuneration Policy, including engaging with shareholders representing more than 50% of our
shareholder register. The majority of shareholders and advisory bodies providing input were supportive
of the changes we made to our Remuneration Policy and this was demonstrated by the high levels of
support received for both the Policy and Annual Report on Remuneration at the 2022 AGM. Following his
appointment as Chair of the Remuneration Committee, Alan Stewart also met with a number of major
shareholders in November 2022.
Directors’ service contracts
NEDs have letters of engagement which set out their duties and time commitment expected. They
areappointed for an initial three-year term, subject to election and annual re-election by shareholders.
Appointments are renewable for subsequent three-year terms by mutual consent. Details are set
outbelow:
Length of service as of
31December 2023
Date of appointment Years Months
Chris Sinclair 10 February 2015 (appointed Chair of the Board on 3 May 2018) 8 11
Olivier Bohuon 1 January 2021 3 0
Andrew Bonfield 1 July 2018 5 6
Jeremy Darroch 1 November 2022 1 2
Mary Harris 10 February 2015 8 11
Tamara Ingram 1 February 2023 0 11
Mehmood Khan 1 July 2018 5 6
Pam Kirby 10 February 2015 8 11
Alan Stewart 1 February 2022 1 11
Elane Stock 1 September 2018 5 4
Margherita Della Valle 1 July 2020 3 6
The CEO and CFO service contracts contain a 12-month notice period. Kris Licht was appointed CEO
Designate on 1 May 2023 and to the Board as Executive Director effective 1 June 2023, before assuming
the role of CEO on 1 October 2023. Shannon Eisenhardt was appointed Executive Director to the Board
and CFO Designate on 17 October 2023. Directors’ service contracts and letters of engagement are
available for inspection at the Company’s registered office.
Advisors
Deloitte LLP (Deloitte) was appointed by the Remuneration Committee as independent advisor
effectivefrom 1 January 2014 following a review of the advisor in late 2013. The Committee
undertakesdue diligence periodically to ensure that Deloitte remains independent of the Company
andthat the advice provided is impartial and objective. Deloitte is a founding member of and
signatoryto the Code of Conduct for Remuneration Consultants, details of which can be found at
www.remunerationconsultantsgroup.com. During 2023, Deloitte LLP also provided the Group with
adviceand compliance support in a number of areas, including corporate, indirect and employment
taxes, global mobility, and advisory and technology consulting.
These services were provided under separate engagement terms and the Committee is satisfied that
the provision of these services did not impair Deloitte’s ability to advise the Committee independently.
Deloitte’s total fees for the provision of remuneration services were £230,000 on the basis of time and
materials. It should be noted that although we are only required to disclose the value of fees for services
which materially assisted the Remuneration Committee, as with previous years, we have disclosed the
full value of remuneration services from Deloitte, which includes advice to management and to the
Remuneration Committee.
Directors’ Remuneration Report continued
130 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ interests in shares and options under the LTIP
1
and buyout awards (audited)
Grant date At 01.01.23
Granted during
the year
Exercised/vested
during the
year (including
dividend shares)
2
Lapsed during
the year At 31.12.23
Option price
(£)
Market price at
date of award
(£)
Market price
at date of
exercise/vesting
(£) Exercise/vesting period
Kris Licht
Performance-based share options 01.05.20 50,000 – – – 50,000 65.20 – – May 2023–May 2030
28.05.21 50,000 – – – 50,000 64.67 – – May 2024–May 2031
20.05.22 80,000 – – – 80,000 63.32 – – May 2025–May 2032
21.03.23 – 80,000 – – 80,000 58.28 – – Mar 2026–Mar 2033
Performance-based share awards 01.05.20 25,000 – 25,000 – – – 65.70 62.90 May 2023
28.05.21 25,000 – – – 25,000 – 63.68 – May 2024
20.05.22 40,000 – – – 40,000 – 62.42 – May 2025
21.03.23 – 40,000 – – 40,000 – 59.18 – Mar 2026
Shannon Eisenhardt
Performance-based share options 26.10.23 – 58,905 – – 58,905 58.87 – – Mar 2026–Oct 2033
Performance-based share awards 26.10.23 – 29,453 – – 29,453 – 55.94 – Mar 2026
Buyout awards 26.10.23 – 2,782 2,782 – – – 55.94 53.82 –
Buyout awards 26.10.23 – 2,782 – – 2,782 – 55.94 – Dec 2024
Buyout awards 26.10.23 – 3,526 – – 3,526 – 55.94 – Aug 2024
Buyout awards 26.10.23 – 5,248 – – 5,248 – 55.94 – Aug 2025
Jeff Carr
Performance-based share options 01.05.20 80,000 – – – 80,000 65.20 – – May 2023–May 2030
28.05.21 80,000 – – – 80,000 64.67 – – May 2024–May 2031
20.05.22 80,000 – – – 80,000 63.32 – – May 2025–May 2032
21.03.23 – 80,000 – – 80,000 58.28 – – Mar 2026–Mar 2033
Performance-based share awards 01.05.20 40,000 – 40,000 – – – 65.70 62.90 May 2023
28.05.21 40,000 – – – 40,000 – 63.68 – May 2024
20.05.22 40,000 – – – 40,000 – 62.42 – May 2025
21.03.23 – 40,000 – – 40,000 – 59.18 – Mar 2026
Nicandro Durante
Performance-based share options 06.09.22 150,000 – – 83,334 66,666 64.77 – – May 2025–Sep 2032
21.03.23 – 150,000 – 100,000 50,000 58.28 – – Mar 2026–Mar 2033
Performance-based share awards 06.09.22 75,000 – – 41,667 33,333 – 64.58 – May 2025
21.03.23 – 75,000 – 50,000 25,000 – 59.18 – Mar 2026
1. Vesting of LTIP awards is subject to performance conditions set by the Remuneration Committee and the awards are subject to an additional two-year holding period commencing at the end of the performance period
2. Dividend equivalents accrue on performance shares during the vesting period from the 2022 LTIP awards onwards and will be disclosed on vesting
Directors’ Remuneration Report continued
131 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Directors’ interests in shares in the Deferred Bonus Plan
1
(audited)
Grant date At 01.01.23
Granted during
the year
Exercised/
vested during
the year
Lapsed during
the year At 31.12.23
Option price
(£)
Market price at
date of award
(£)
Market price at
date of vesting
(£) Vesting period
Kris Licht
Deferred Bonus Plan 25.03.21 8,059 – – – 8,059 – 64.22 – Mar 2024
Deferred Bonus Plan 21.03.22 5,997 – – – 5,997 – 57.92 – Mar 2025
Deferred Bonus Plan 21.03.23 – 10,041 – – 10,041 – 58.28 – Mar 2026
Jeff Carr
Deferred Bonus Plan 25.03.21 9,163 – – – 9,163 – 64.22 – Mar 2024
Deferred Bonus Plan 21.03.22 13,131 – – – 13,131 – 57.92 – Mar 2025
Deferred Bonus Plan 21.03.23 – 14,721 – – 14,721 – 58.28 – Mar 2026
Nicandro Durante
Deferred Bonus Plan 21.03.23 – 8,895 – – 8,895 – 58.28 – Mar 2026
1. One-third of the annual bonus is delivered in the form of conditional share awards which are deferred for three years
2. Dividend equivalents accrue on deferred bonus shares during the vesting period and will be disclosed on vesting
Executive employees may also participate in the all-employee Sharesave Scheme on the same basis as all other employees. The table below details options held.
Sharesave Scheme Grant date At 01.01.23
Granted during
the year
Exercised during
the year
Lapsed during
the year At 31.12.23
Option price
(£)
Market price
atexercise
(£) Exercise period
Jeff Carr 31.08.21 403 – – – 403 44.56 – Feb 2025–Jul 2025
There have been no changes to the Directors’ interests as set out in the above tables between 31 December 2023 and 21 March 2024.
132 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Directors’ Remuneration Report continued
Directors’ interests in the share capital of the Company (audited)
The Directors in office at the end of the year and those in office at 21 March 2024 had the following
beneficial interests in the ordinary shares of the Company:
21 March
2024
31 December
2023
31 December
2022
Chris Sinclair 14,322 14,322 12,733
Olivier Bohuon 1,149 1,149 931
Andrew Bonfield 1,121 1,121 873
Jeff Carr 51,069 51,069 30,000
Jeremy Darroch 234 234 0
Nicandro Durante
1
1,105 1,105 1,105
Shannon Eisenhardt
2
1,471 1,471 –
Mary Harris 3,262 3,262 3,017
Tamara Ingram
3
215 215 –
Mehmood Khan 1,083 1,083 833
Pam Kirby 5,462 5,462 5,219
Kris Licht
4
25,995 25,995 13,271
Alan Stewart 427 427 191
Elane Stock 2,992 2,992 2,732
Margherita Della Valle 738 738 504
Marybeth Hays
5
0 – –
1. Nicandro Durante stepped down from the Board on 31 December 2023 and his interest in shares is shown up to this date
2. Shannon Eisenhardt joined the Board on 17 October 2023
3. Tamara Ingram joined the Board on 1 February 2023
4. Kris Licht joined the Board on 1 June 2023
5. Marybeth Hays joined the Board on 1 February 2024
6. No person who was a Director (or a Director’s connected person) on 31 December 2023 and at 21 March 2024 had any notifiable
share interests in any subsidiary
7. The Company’s Register of Directors’ Interests (which is open to inspection) contains full details of Directors’ shareholdings
and options to subscribe for shares
As approved and signed on behalf of the Board of Directors.
Alan Stewart
Chair of the Remuneration Committee
Reckitt Benckiser Group plc
21 March 2024
This Directors’ Remuneration Report has been prepared in accordance with the provisions of the Companies Act 2006 and
Schedule 8 of the Large and Medium-sized Companies and Groups (Accounts and Reports) Regulations 2008 (asamended).
Thereport meets the requirements of the FCA Listing Authority’s Listing Rules and the Disclosure Guidance and Transparency
Rules. Inthis report we describe how the principles of good governance relating to Directors’ remuneration, as set out in the
UKCorporate Governance Code (July 2018) (theCode), are applied in practice. The Remuneration Committee confirms that
throughout the financial year the Company has complied withthese governance rules and best practice provisions.
133 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATIONSTRATEGIC REPORT GOVERNANCE
REPORT OF THE
DIRECTORS
Introduction
We present below our Directors’ Report for
the year ended 31 December 2023. Certain
matters required to be included in this Directors’
Report are included in the Strategic Report
on pages 2 to 61, including an indication of the
likely future developments of the business,
research and development activities of
the Group and details of important events
affecting the Company. TheCorporate
Governance Report can be found on pages62
to 136 and is deemed to be incorporated
into this Directors’ Report by reference.
Further disclosure requirements which are
deemed to form part of the management report
can be found on the following pages of this Annual
Report, and are incorporated into this Directors’
Report by reference:
Acquisitions and disposals 199
Awards under employee share
schemes and long-term
incentive schemes 197-198
Corporate Governance Statement
including internal control and
risk management statements 62-81
Statement of Directors’ Responsibilities,
including disclosure of information
to the Auditor 137
Disclosure of Greenhouse Gas
(GHG) emissions 14; 218-222
Employment policy and
employee involvement 19-21
Engagement with employees,
suppliers, customers and others 37-40; 76-77
Environmental, social
and governance (ESG) matters 14; 47-54
Financial risk management
and financial instruments 181-189
Future developments in the business 2-61
Post Balance Sheet events 200
Research and development activities 22-24
Shareholder information 228-231
Sustainability and
corporate responsibility 14; 47-54
Viability Statement 61
Charitable donations 51-53
Subsidiary undertakings
(including overseas branches) 208-217
Information on the Board’s stakeholder engagement
and activities can be found on pages 37 to 40 and
further information is also set out in the Section 172
Statement, which can be found on pages 76 to 77.
There is no additional information requiring
disclosure under Listing Rule 9.8.4R.
Results and dividends
The Consolidated Income Statement can be
foundon page 156. The profit for the year
attributable toequity shareholders of the
Company amounted to £1,682 million.
The Directors resolved to pay an interim
dividendof 76.6 pence per ordinary share
(2022:73.0 pence), which was paid to
shareholderson 15 September 2023.
The Directors recommend a final dividend for the
year of 115.9 pence per share (2022: 110.3pence)
which, together with the interim dividend,
makesa total dividend for the year of 192.5 pence
per share (2022: 183.3 pence). During the year
no shareholders waived their right to receive
dividend payments. The final dividend, if approved
by the shareholders at the forthcoming Annual
General Meeting (AGM) of the Company, will
be paid on 24 May 2024 to shareholders on the
register at the close of business on 12 April 2024.
Directors
Details of the Company’s Directors who served
during the financial year ended 31 December
2023 and details of Directors appointed during
2024 can be found on pages 65 to 68.
The rules governing the appointment and
retirement of Directors are set out in the
Company’s Articles of Association (the Articles)
and all appointments are made in accordance with
the Code. Under the terms of reference of the
Nomination Committee, all Director appointments
must be recommended by the Nomination
Committee for approval by the Board of Directors.
All Directors must submit themselves for re-election
each year at the AGM. With the exception of Chris
Sinclair, Pam Kirby and Alan Stewart, all Directors
will offer themselves for election or re-election
at the 2024 AGM in compliance with the Code.
Details of the Directors standing for election or
re-election can be found in the 2024 Notice of AGM.
Information on the service agreements of
Executive Directors can be found in the
Directors’ Remuneration Report on pages100
to 132. The letters of appointment of the
Non-Executive Directors are available for
inspection at the Company’s registered office.
Powers of Directors
The Board of Directors is responsible for the
management of the business of the Company
and may exercise all powers of the Company
subject to the provisions of the Company’s
Articles and the CA 2006. 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 Articles is available on the
Company’s website at www.reckitt.com or
can be obtained upon written request from
the Company Secretary or the UK Registrar
of Companies, Companies House.
Directors’ insurance and indemnities
The Company indemnifies the Directors and
Officers of the Company and any Group subsidiary
to the extent permitted by Section 236 of CA
2006 in respect of the legal defence costs for
claims against them and third-party liabilities.
The indemnity would not provide cover for a
Director or Officer if that individual was found
to have acted fraudulently or dishonestly.
The Directors’ and Officers’ liability insurance
cover was maintained throughout the year ended
31 December 2023 at the Company’s expense.
134 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATIONSTRATEGIC REPORT GOVERNANCE
Report of the Directors continued
Directors’ interests
A statement of Directors’ interests in the
share capital of the Company is shown on
page 132 of the Directors’ Remuneration
Report. Detailsof Executive Directors’ options
to subscribe for shares in the Company are
included on pages 130 and 131 in the audited
part of the Directors’ Remuneration Report.
During the year, none of the Directors had a
material interest in any derivative or financial
instrument relating to the Company’s shares.
Details of the Directors’ remuneration are
disclosed in the Directors’ Remuneration Report on
pages 126-132. No Director has a material interest
in any ‘contract of significance’ (as defined by the
FCA) to which the Company, or any of its subsidiary
undertakings, is a party as at 31 December 2023.
Share capital
As at 31 December 2023, the Company’s issued
share capital consisted of 736,535,179 ordinary
shares of 10 pence each of which 714,028,649 were
with voting rights and 22,506,530 ordinary shares
were held in treasury. Each share carries the right
to one vote at general meetings of the Company.
Details of changes to the ordinary shares issued
and of options and awards granted during the year
are set out in Note 24 to the Financial Statements.
The rights and obligations attached to the
ordinary shares are contained in the Company’s
Articles. There are no restrictions on the voting
rights attached to the Company’s ordinary shares
or the transfer of securities in the Company
except in the case of transfers of securities:
– That certain restrictions may from time to
timebe imposed by laws and regulations
(forexample, insider trading laws)
– Pursuant to the Listing Rules of the United
Kingdom Listing 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
which carry 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.
Allotment of shares
At the 2023 AGM, authority was granted to
the Directors under Section 551 of CA 2006 to
allot shares or grant rights to subscribe for, or
convert any security into, shares of the Company.
The authority granted to the Directors will
expire at the conclusion of this year’s AGM.
At the 2024 AGM, a resolution will be proposed
to the shareholders to renew the Directors’
authority to allot equity shares 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 accordance with the Investment Association
Share Capital Management Guidelines,
Directors will once again seek authority to allot
further ordinary shares, in connection with
apre-emptive offer by way of a rights issue,
up to a further one-third of the Company’s
existing issued share capital on the same
date. The authorities sought would, if granted,
expire at the earlier of six months after the
Company’s next accounting reference date,
orat the conclusion of the AGM of the Company
held in 2025, whichever is the sooner.
Under Section 561 of CA 2006, shareholders have
a right of first refusal in relation to certain issues
of new shares. A special resolution will also be
proposed to renew the Directors’ power to allot
shares in the capital of the Company without
complying with the pre-emption rights in the CA
2006 in certain circumstances up to a maximum
of 10% of the Company’s issued share capital.
This disapplication authority sought is in line
with institutional shareholder guidance and,
inparticular, with the Pre-Emption Group
Statement of Principles issued in November 2023.
This authority will maintain the Company’s
flexibility in relation to future share issues, including
issues required to finance business opportunities,
should appropriate circumstances arise.
Authority to purchase own shares
Authority was granted to the Directors at the 2023
AGM for the purposes of Section 701 of CA 2006 to
repurchase shares in the market and this authority
remains valid until the conclusion of this year’s AGM.
On 25 October 2023, the Company announced,
consistent with its capital allocation framework,
a £1 billion share buyback programme to be
carried out over 12 months (the Programme).
On 30 October, the Company announced
the commencement of the first tranche of
that Programme to return up to £250 million
to shareholders, and which completed on
30 January 2024. On 20 December 2023,
theCompany announced the second
trancheof the Programme to return a
furtherup to £250 million to shareholders,
and which commenced on 1 February 2024.
During the financial year ended 31 December 2023,
the Company purchased in aggregate 3,782,835
ordinary shares of 10 pence each and subsequently
transferred them to treasury. The total cost of
the shares purchased during the financial year
ended 31 December 2023 was £207 million.
Afurther 4,303,628 ordinary shares have been
repurchased between 1 January 2024 and the
date of this Report at a total cost of £233 million.
As at the date of this Report there are 27,645,021
ordinary shares held in treasury (representing
3.89% of the issued ordinary shares) for the
purposes of satisfying the Company’s obligations
under employee equity incentive schemes.
Shares held in treasury are not eligible to
participate in dividends and do not carry
anyvoting rights.
At the 2024 AGM, the Directors will seek to renew
the authority granted to them. Such authority,
if approved, will be limited to a maximum of
70,880,000 ordinary shares, representing less
than 10% of the Company’s issued ordinary share
capital (excluding treasury shares) calculated as
at the latest practicable date prior to publication
of the Notice of AGM, and sets the minimum
and maximum prices which may be paid.
135 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATIONSTRATEGIC REPORT GOVERNANCE
Report of the Directors continued
Change of control and significant agreements
There are a number of agreements that take
effect, alter or terminate upon a change of
controlof the Company following a takeover.
Theshareholder agreement between the
Company and JAB Holdings B.V. (JAB) at the
timeof the merger in 1999 entitled JAB to
nominate Board Directors.
A holding in excess of 20% or 10% of the
Company’s ordinary shares entitles JAB
tonominate two Directors or one Director
respectively. JAB’s current holding is below
thisamount and there is currently no nominated
Director on the Board. 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, except
that provisions of the Company’s share plans may
cause options and awards granted under such
plans to vest on a takeover, and if the employment
of an Executive Director or other employee is
terminated by the Company following a takeover
then there may be an entitlement to appropriate
notice and/or compensation as provided in
applicable contracts or terms of employment.
There is no information that the Company is
required to disclose about persons with whom it
has contractual or other arrangements with, which
are essential to the business of the Company.
Employees
During 2023, the Group employed over 40,000
(2022: 40,000) employees worldwide, of whom
5,038 (2022: 4,870) were employed in theUK.
The Group 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,
race, ethnicity, disability, sexual orientation or
any other protected characteristics. Employment
applications are considered on the basis of
aptitude and ability, and fair consideration is given
to all applications regardless of nationality, age,
gender, religion, race, ethnicity, disability, sexual
orientation, or any other protected characteristics.
We have issued specific guidance on inclusive
recruitment practices for managers with
hiring responsibilities. Where an employee
has an existing disability or becomes disabled
during their employment, practical efforts are
made to assist the employee in continuing
their employment and arranging appropriate
support such as workplace adjustments.
All employees, are treated in a fair and inclusive
way throughout their careers, whether
that means accessing training, learning and
development opportunities and career
progression. Further details of our Inclusion
and Anti-Harassment policies can be found
at www.reckitt.com and on pages 19-21.
It is essential to the continued improvement
in performance, efficiency and productivity
throughout the Group that each employee
understands the Group’s strategies, policies and
procedures. Open and regular communication
with employees at all levels is an essential part
of the performance management process.
On-the-job learning and continuous development
take place throughout the year, with all employees
having a formal annual Performance Development
Review with their line manager to discuss business
objectives and create a Personal Development
Plan. This is also an important opportunity for
employees to discuss their ongoing development
and career ambitions. Weencourage continuous
development conversations throughout the
year. These annual reviews also provide a
way of identifying candidates for our Future
Leader Development Programmes.
The Group operates multi-dimensional two-way
internal communications programmes which
include the provision of a Group intranet and
the publication of regular Group newsletters.
Opinions of employees are sought on a variety
of issues through mechanisms including global
surveys, opinion polls, team meetings and
feedback forums. Further information on the
Group’s employee engagement activities
is included on pages 19-21, 38 and 77.
We regularly check in with our employees
through townhall meetings and our intranet.
We also hold forums, focus groups and
listening sessions with leaders to give us
timely insights on topics which matter most.
A continuing programme of learning and
development reinforces the Group’s commitment
to employee development. The Group
recognises the importance of employee health
and wellbeing as set out on pages 19 to 21.
Reckitt’s Leadership Behaviours are vital
to how we embed our culture and achieve
strong and sustainable performance. We have
defined leadership behaviours that capture
our uniqueness, capitalise on our strengths and
challenge us to do better. At Reckitt, we Own,
Create, Deliver and Care. These behaviours are
for everyone in the organisation and are part
of our annual performance and development
reviews. We create an inclusive environment for
employees to act with integrity, responsibility
and consistency in line with our Purpose, Fight
and Compass set out on pages 8 and 19-21.
Employee matters, incentives
andshareownership
Group incentive schemes reinforce financial and
economic factors affecting the performance
of the business. Employees typically have
three to five performance objectives which
are directly linked to their job and their specific
contribution to the overall performance of the
Group. In addition, presentations, videos and
Q&A sessions are held for employees around
the world on publication of the Group’s financial
results to provide employees with awareness of
the financial and economic factors affecting the
Company’s performance, and so that employee
views are fed back to management and taken
into account when decisions are made.
The Company operates three all-employee
share plans. Through these schemes, the Board
encourages employees to become shareholders
and to participate in the Group’s employee share
ownership plans, should they wish. Savings-related
share plans covering most of the world give
employees the opportunity to acquire shares in
the Company by means of making regular savings.
We currently have just under 14,000 colleagues
participating in one of Reckitt’s all-employee
share plans. Further details on our all-employee
share plans and awards made under executive
share plans can be found in Note 24 on pages
196 to 198 of the Financial Statements.
136 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATIONSTRATEGIC REPORT GOVERNANCE
Report of the Directors continued
Political donations
During the year, the Company and its subsidiaries did not make any political donations or incur
anypolitical expenditure, nor were any contemplated. In keeping with previous practice, at the
forthcoming AGM shareholders will be asked to approve, on a precautionary basis, for the Company
andits subsidiaries to make political donations and incur political expenditure for the period ending
31 December 2024.
Financial instruments and risk
The financial risk management objectives and policies of the Group are set out in Note 15, from page 181
of the Financial Statements. The Note sets out information on the Company’s policy for hedging each
major type of forecasted transactions for which hedge accounting is used, and our exposure to currency,
price risk, credit risk, liquidity risk and cash flow risk in relation to the use of financial instruments.
Amendment to Articles of Association
The Articles of the Company were adopted in 2012 and amended in 2015 and 2021. Any amendments
tothe Articles may be made in accordance with the provisions of CA 2006, by special resolution
oftheshareholders.
Independent Auditor
The External Auditor, KPMG, has indicated its willingness to continue in office and a resolution proposing
the reappointment of KPMG, and to authorise the Audit Committee to determine its remuneration
for the financial year ending 31 December 2024, will be proposed at the forthcoming AGM.
Substantial shareholdings
As at 31 December 2023, the Company had received the following notices of substantial interests
(3%ormore) in the total voting rights of the company:
Holder Notification Interest Rights
Massachusetts Financial Services Company 16 January 2013
1
Indirect 5.00
Morgan Stanley Investment Management Limited 20 October 2022
2
Direct 5.04
1. Under a Section 793 CA 2006 request, Massachusetts Financial Services Company confirmed on 17 January 2024 that
itsaggregate holding had decreased. The voting percentage was not disclosed
2 Under a Section 793 CA 2006 request, Morgan Stanley Investment Management Limited confirmed on 24 January 2024 that
itsaggregate holding had decreased. The voting percentage was not disclosed
As at 15 March 2024, the company has not received any further notifications under DTR 5 of the
Disclosure Guidance and Transparency Rules.
Application of the UK Corporate Governance Code 2018
We report against the requirements of the Code issued by the Financial Reporting Council. Details of how
the Company has applied the Code principles and provisions can be found in the Corporate Governance
Report on pages 62 to 132.
Annual General Meeting (AGM)
The forthcoming AGM of Reckitt Benckiser Group plc will be held on Thursday, 2 May 2024 at 2pm at the
London Heathrow Marriott Hotel, Bath Road, Hayes, Middlesex UB3 5AN.
A separate Notice of Meeting, setting out the resolutions to be proposed to shareholders, is available at
www.reckitt.com/investors/annual-general-meetings/. The Board considers that each of the resolutions
is in the best interests of the Company and its shareholders as a whole. The Directors unanimously
recommend that shareholders vote in favour of all the resolutions, as they intend to do so in respect
oftheir own beneficial holdings.
By Order of the Board
Catheryn O’Rourke
Company Secretary
Reckitt Benckiser Group plc
21 March 2024
103-105 Bath Road
Slough, Berkshire
SL1 3UH
Company registration number: 6270876
Legal Entity Identifier: 5493003JFSMOJG48V108
137 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATIONSTRATEGIC REPORT GOVERNANCE
In respect of the Annual Report and Financial Statements
The Directors are responsible for preparing
the Annual Report and the Group and Parent
Company financial statements in accordance
with applicable law and regulations.
Company law requires the Directors to prepare
Group and Parent Company financial statements
for each financial year. Under that law, we are
required to prepare the Group financial statements
in accordance with UK-adopted international
accounting standards and applicable law and have
elected to prepare the Parent Company financial
statements in accordance with UK accounting
standards and applicable law (UK Generally
Accepted Accounting Practice), including FRS 102,
the Financial Reporting Standard applicable in the
UK and Republic of Ireland. The Group, in addition
to complying with its legal obligation to apply UK-
adopted international accounting standards, has
also applied IFRS Accounting Standards as issued by
the International Accounting Standards Board (IASB).
Under company law the Directors must 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 Parent Company
and of the Group’s profit or loss for that period. In
preparing each of the Group and Parent Company
financial statements, the Directors are required to:
– select suitable accounting policies and then
apply them consistently;
– make judgements and estimates that are
reasonable, relevant and reliable and, in respect
of the Parent Company financial statements
only, prudent;
– for the Group financial statements, state
whether they have been prepared in
accordance with UK-adopted international
accounting standards and, due to a requirement
of the US SEC, state they have been prepared
inaccordance with IFRS Accounting Standards
as issued by the IASB;
– for the Parent Company financial statements,
state whether applicable UK accounting
standards have been followed, subject to any
material departures disclosed and explained
inthe Parent Company financial statements;
– assess the Group and Parent Company’s
abilityto continue as a going concern,
disclosing, as applicable, matters related
togoing concern; and
– use the going concern basis of accounting
unless they either intend to liquidate the Group
or the Parent Company or to cease operations,
or have no realistic alternative but to do so.
The Directors are responsible for keeping
adequate accounting records that are sufficient
to show and explain the Parent Company’s
transactions and disclose with reasonable
accuracy at any time the financial position ofthe
Parent Company and enable them to ensure
that its financial statements comply with the
Companies Act 2006. They are responsible
for such internal controls as they determine
are necessary to enable the preparation of
financial statements that are free from material
misstatement, whether due to fraud or error,
and have general responsibility for taking
such steps as are reasonably open to them to
safeguard the assets of the Group and to prevent
and detect fraud and other irregularities.
Under applicable law and regulations, the Directors
are also responsible for preparing a Strategic
Report, Directors’ Report, Directors’ Remuneration
Report and Corporate Governance Statement that
complies with that law and those regulations.
The Directors are responsible for the maintenance
and integrity of the corporate and financial
information included on the Company’s website.
Legislation in the UK governing the preparation
and dissemination of financial statements may
differ from legislation in other jurisdictions.
In accordance with Disclosure Guidance and
Transparency Rule (DTR) 4.1.16R, the financial
statements will form part of the annual financial
report prepared under DTR 4.1.17R and 4.1.18R.
The external auditor’s report on these financial
statements provides no assurance over whether
the annual financial report has been prepared
in accordance with those requirements.
Responsibility statement of the Directors
inrespect of the annual financial report
Each of the Directors, whose names and functions
are listed on pages 65 to 68 of the Annual Report,
confirm that to the best of their knowledge:
– the financial statements, prepared in
accordance with the applicable set of
accounting standards, give a true and fair
viewof the assets, liabilities, financial position
andprofit or loss of the Company and the
undertakings included in the consolidation
takenas a whole; and
– the Annual Report and financial statements
include a fair review of the development and
performance of the business and the position
ofthe issuer and the undertakings included in
the consolidation taken as a whole, together
with a description of the principal risks and
uncertainties that they face.
We consider the Annual Report and financial
statements, taken as a whole, is fair, balanced
and understandable and provides the
information necessary for shareholders to
assess the Group and Parent’s position and
performance, business model and strategy.
In the case of each Director in office at the
date the Directors’ report is approved:
– so far as we are aware, there is no relevant audit
information of which the Group’s and Parent’s
auditors are unaware; and
– we have taken all the steps that we ought
tohave taken as a director in order to
makeourselves aware of any relevant audit
information and to establish that the Group and
Parent’s auditors are aware of that information.
On behalf of the Board
Catheryn O’Rourke
Company Secretary
Reckitt Benckiser Group plc
103-105 Bath Road
Slough, Berkshire
SL1 3UH
21 March 2024
STATEMENT OF DIRECTORS’
RESPONSIBILITIES
138 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Independent Auditor’s Report
To the members of Reckitt Benckiser Group plc
1. Our opinion is unmodified
In our opinion:
– the financial statements of Reckitt Benckiser Group plc give a true and fair view of the state of the
Group’s and of the Parent Company’s affairs as at 31 December 2023, and of the Group’s profit for
the year then ended;
– the Group`s financial statements have been properly prepared in accordance with UK-adopted
international accounting standards;
– the Parent Company`s financial statements have been properly prepared in accordance with UK
accounting standards, including FRS 102 The Financial Reporting Standard applicable in the UK and
Republic of Ireland; and
– the Group and Parent Company financial statements have been prepared in accordance with the
requirements of the Companies Act 2006.
Additional opinion in relation to IFRS Accounting Standards as issued by the IASB:
– As explained in Note 1 to the Group financial statements, the Group, in addition to complying with
its legal obligation to apply UK-adopted international accounting standards, has also applied IFRS
Accounting Standards as issued by the International Accounting Standards Board (“IASB”).
– In our opinion the Group financial statements have been properly prepared in accordance with
IFRS Accounting Standards as issued by the IASB.
What our opinion covers
We have audited the Group and Parent Company financial statements of Reckitt Benckiser Group plc
(“the Company”) for the year ended 31 December 2023 (“FY23”) included in the Annual Report, which
comprise:
Group (Reckitt Benckiser Group plc and its subsidiaries) Parent Company (Reckitt Benckiser Group plc)
Group Income Statement, Group Statement of
Comprehensive Income, Group Balance Sheet,
Group Statements of Changes in Equity, Group
Cash Flow Statement and Notes 1 to 33 to the
Group financial statements, including the
accounting policies in note 1.
Parent Company Balance Sheet, Parent Company
Statement of Changes in Equity and Notes 1 to 12
to the Parent Company financial statements,
including the accounting policies in Note 1.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (UK) (“ISAs (UK)”) and
applicable law. Our responsibilities are described below. We believe that the audit evidence we have
obtained is a sufficient and appropriate basis for our opinion. Our audit opinion and matters included in
this report are consistent with those discussed and included in our reporting to the Audit Committee.
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in accordance
with, UK ethical requirements including the FRC Ethical Standard as applied to listed public interest entities.
2. Overview of our audit
Factors driving our view of risks
Following our FY22 audit, and considering developments affecting the Group since then, we have
updated our risk assessment.
The risk of impairment associated with the IFCN CGU has increased since last year due to the impact of
higher interest rates on the discount rate, and increased uncertainty over forecast growth assumptions in
light of the return of a key competitor to market and increased regulatory pressures in the US.
We also identified a new Key Audit Matter for FY23 associated with the accounting treatment of the
purchase of the remaining interests in the Group’s majority owned entities in mainland China and Hong
Kong (“RB Manon”) from its existing minority shareholders. The risk focuses on the judgement applied in
allocating the total amount payable between the purchase of the non-controlling interest which is taken
to equity in FY23, and services provided by the minority shareholders which are charged to the income
statement over the service period.
We have assessed that the risk relating to contingent liabilities has increased from FY22 following an
adverse verdict in the first NEC case. This increases the probability of outflow of economic benefit and
increases the level of judgement involved in the ability to reliably estimate any such outflow.
We have not observed a change in the level of risk in relation to the remaining Key Audit Matters.
Our risk assessment also considered compliance with laws and regulations, specifically those that could
reasonably be expected to have a material effect on the financial statements.
Our risk assessment also considered compliance with laws and regulations, specifically those that could
reasonably be expected to have a material effect on the financial statements.
Key Audit Matters Vs FY22 Item
Recoverability of IFCN CGU’s goodwill and indefinite life intangible assets 5.1
Recoverability of Biofreeze CGU’s goodwill and indefinite life intangible assets 5.2
Revenue recognition in relation to trade spend arrangements and associated accruals 5.3
Contingent liabilities arising from the US litigation concerning Necrotising Enterocolitis
(NEC) and the amendment to the South Korean Humidifier Sanitiser (HS) law
5.4
Accounting for the forward purchase of shares held by the non-controlling interest of
“RB Manon”
New 5.5
Provisions for uncertain tax positions 5.6
139 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Independent Auditor’s Report continued
Recoverability of the Parent Company’s investment in Reckitt Benckiser Limited 5.7
Audit Committee interaction
During the year, the Audit Committee met five times. KPMG attend all Audit Committee meetings and are
provided with an opportunity to meet with the Audit Committee in private sessions without the
Executive Directors being present. For each Key Audit Matter, we have set out communications with the
Audit Committee in section 5, including matters that required particular judgement for each.
The matters included in the Audit Committee Chair’s report on page 88 are materially consistent with our
observations of those meetings.
Our Independence
We have fulfilled our ethical responsibilities under, and we remain independent of the Group in
accordance with, UK ethical requirements including the FRC Ethical Standard as applied to listed public
interest entities.
We have not performed any non-audit services during FY23 or subsequently which are prohibited by the
FRC Ethical Standard.
We were first appointed as auditor by the shareholders for the year-ended 31 December 2018.The period
of total uninterrupted engagement is for the 6 financial years ended 31 December 2023.
The group engagement partner is required to rotate every 5 years. As these are the second set of the
Group’s financial statements signed by Andrew Bradshaw, he will be required to rotate off after the FY26
audit.
The average tenure of partners responsible for component audits as set out in section 8 below is 2 years,
with the shortest being 1 and the longest being 6. There were no key audit partners with tenure over 5
years.
Total audit fee £19.4m
Audit related fees (including interim review) £0.9m
Other services £0.4m
Non-audit fee as a % of total audit and audit related fee % 6.4%
Date first appointed 3rd May 2018
Uninterrupted audit tenure 6 years
Next financial period which requires a tender 2028
Tenure of Group Engagement Partner 2 years
Average tenure of component signing partners 2 years
Materiality
(item 7 below)
The scope of our work is influenced by our view of materiality and our assessed risk of material
misstatement.
We have determined overall materiality for the Group`s financial statements as a whole at £140m (FY22:
£130m) and for the Parent Company’s financial statements as a whole at £70m (FY22: £65m).
Consistent with FY22, we determined that normalised profit before tax from continuing operations
(“PBTCO”) remains the most appropriate benchmark for the Group. Reckitt Benckiser Group plc is well
established and operates in a stable environment across multiple geographies. Therefore, users of the
financial statements will be primarily interested in profitability of the Group and its ability to generate
returns for shareholders, of which the most relevant benchmark is PBTCO. As such, we based our group
materiality on normalised PBTCO, of which it represents 4.5% (FY22: 4.1%).
Materiality for the Parent Company’s financial statements was determined with reference to a
benchmark of Parent Company total assets of which it represents 0.46%% (FY22: 0.45%).
0 25 50 75 100 125 150
130
140
Group Materiality
85
105
Group Performance Materiality
75
75
Highest Component Materiality
65
70
Parent Company Materiality
8
8
Lowest Component Materiality
5
6
Audit Misstatement
Posting Threshold
FY22 £mFY23 £m
2. Overview of our audit continued
140 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Independent Auditor’s Report continued
Group scope
(item 8 below)
We have performed risk assessment and planning procedures to determine which of the Group’s
components are likely to include risks of material misstatement to the Group’s financial statements, the
type of procedures to be performed at these components and the extent of involvement required from
our component auditors around the world.
The Group operates in more than 60 countries across six continents with the largest market being the United
States of America. The Group is organised into three Global Business Units: Hygiene, Health and Nutrition.
We scoped the audit by obtaining an understanding of the Group and its environment and assessing the
risk of material misstatement at the group and component level.
We have considered components on the basis of their contribution to net revenue, total normalised
profits and losses that made up profit before tax and total assets.
Of the Group’s 380 (FY22: 406) reporting components, we instructed 52 components (FY22: 53) across
23 countries (FY22: 23 countries) to perform full scope audits for group purposes and two components to
perform specified audit procedures (FY22: one).
The components within the scope of our work accounted for the percentages illustrated opposite.
Our scoping provided 81% coverage of net revenue (FY22: 79%), 87% coverage of total assets (FY22:
85%), and 78% coverage of profits and losses that made up profit before tax (FY22: 77%).
In addition, we have performed group level analysis on the remaining components to determine whether
further risks of material misstatement exist in those components.
We consider the scope of our audit, as communicated to the Audit Committee, to be an appropriate
basis for our audit opinion.
Coverage of group financial statements
80%
Net revenue
19%
1%
1%
86%
Total assets
13%
67%
22%
Profit before tax
11%
Full scope audits Specified audit procedures
Remaining components
The impact of climate change on our audit
In planning our audit, we have considered the potential impact of risks arising from climate change on the
Group’s business and its financial statements. The Group has set out its targets as part of their 2030
Sustainability Ambitions, which include energy, emissions, water, waste and packaging related metrics.
This includes two targets validated by the Science Based Targets initiative (“SBTi”) to reduce absolute
operational Scope 1 and 2 GHG emissions by 65%, absolute product carbon footprint emissions by 50%
both by 2030 from a 2015 base year. Other targets aim to reduce water use per tonne of production by
30% by 2025 from a 2015 base year, increase the use of renewable electricity to 100% by 2030 and for
100% of plastic packaging to be recyclable or reusable by 2025. Further information is provided in the
Strategic Report on page 47 and in the Sustainability Performance Review on page 14.
Whilst the Group has set these targets, in note 1 to the consolidated financial statements the Directors
have stated that they have considered the impact of climate change risks and that they do not believe
that there is a material impact on the financial reporting judgements and estimates and as a result the
valuations of the Group’s assets and liabilities have not been significantly impacted by these risks as at
31 December 2023.
As a part of our audit we have performed a risk assessment to determine if the potential impacts of
climate change may materially affect the financial statements and our audit. We did this by making
enquiries of management and inspecting internal and external reports in order to independently assess
the climate-related risks and their potential impact. We held discussions with our own climate change
professionals to challenge our risk assessment.
The most likely potential impact of climate risk and plans on these financial statements would be on the
forward-looking assessments of non-current assets.
We have considered the sensitivity of the assumptions used in the impairment testing of goodwill and
indefinite-life intangible assets. Given that the climate change related assumptions are not considered a
major source of estimation uncertainty, the carrying amounts of these assets in the financial statements
are not considered to be materially sensitive to the impact of risks arising from climate change. We
considered the impact of ESG related costs on the value in use of the Group’s CGUs, the impact of such
costs on cash flows is minimal and not considered a key assumption when assessing impairment. We
have considered the impact of climate change targets on the fair value of pension assets, however given
the nature of the assets being primarily bonds and insurance contracts, this has not been considered to
be a key assumption in the valuation. We have also considered the costs and consumer preferences
impact of climate change as part of our consideration of the going concern basis of preparation.
We determined that climate related risks do not have a significant impact on our audit or key audit
matters. We have read the Group’s disclosures of climate related information in the Strategic Report and
the Group’s TCFD Summary on page 218 and considered consistency with the financial statements and
our audit knowledge.
2. Overview of our audit continued
141 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Independent Auditor’s Report continued
3. Going concern, viability and principal risks and uncertainties
The Directors have prepared the financial statements on the going concern basis as they do not intend
toliquidate the Group or the Parent Company or to cease their operations, and as they have concluded
that the Group’s and the Parent Company’s financial position means that this is realistic. They have also
concluded that there are no material uncertainties that could have cast significant doubt over their ability
to continue as a going concern for at least a year from the date of approval of the financial statements
(“the going concern period”).
Going concern
We used our knowledge of the Group, its industry, and the general economic environment to identify the
inherent risks to its business model and analysed how those risks might affect the Group’s and Parent
Company’s financial resources or ability to continue operations over the going concern period. The risks
that we considered most likely to adversely affect the Group’s and Parent Company’s available financial
resources and metrics relevant to debt covenants over this period were:
– The failure to identify, assess and proactively respond to new or changing regulations could result in
increased regulatory scrutiny, costly product reformation or product recalls, potential litigation and
removal of the license to sell a product.
– A reliance on limited number of suppliers, geographic concentration, or an excessive dependence on
specific routes, sub-suppliers or technologies could render the supply chain vulnerable to disruption.
– Geopolitical events, including threats of conflict, trade wars, economic sanctions and political
polarisation, could disrupt operations.
– Failure to identify or respond to a product quality and/or safety issue may result in potential consumer
harm or death, financial settlements, costly recalls and reputational damage.
– Reliance on a few key manufacturing sites to produce products exposes the Group to unexpected
shutdown at one of these sites.
– Adverse economic conditions, together with high level of volatility and unpredictability in the
macroeconomic environment, could impact consumer demand for the Group’s brands.
We considered whether these risks could plausibly affect the liquidity or covenant compliance in the
going concern period by comparing severe, but plausible downside scenarios that could arise from these
risks individually and collectively against the level of available financial resources and covenants
indicated by the Group’s financial forecasts.
Our procedures also included an assessment of whether the going concern disclosure in note 1 to the financial
statements gives a complete and accurate description of the Directors’ assessment of going concern.
Accordingly, based on those procedures, we found the Directors’ use of the going concern basis of
preparation without any material uncertainty for the Group and Parent Company to be acceptable.
However, as we cannot predict all future events or conditions and as subsequent events may result in
outcomes that are inconsistent with judgements that were reasonable at the time they were made, the
above conclusions are not a guarantee that the Group or the Parent Company will continue in operation.
Our conclusions
– We consider that the Directors’ use of the going concern basis of accounting in the preparation of the
financial statements is appropriate;
– We have not identified, and concur with the Directors’ assessment that there is not, a material
uncertainty related to events or conditions that, individually or collectively, may cast significant doubt
on the Group’s or Parent Company’s ability to continue as a going concern for the going concern
period;
– We have nothing material to add or draw attention to in relation to the Directors’ statement in note 1
tothe financial statements on the use of the going concern basis of accounting with no material
uncertainties that may cast significant doubt over the Group and Parent Company’s use of that basis for
the going concern period and we found the going concern disclosure in note 1 to be acceptable; and
– The related statement under the Listing Rules set out on page 137 is materially consistent with the
financial statements and our audit knowledge.
Disclosures of emerging and principal risks and longer-term viability
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency between
the Directors’ disclosures in respect of emerging and principal risks and the viability statement, and the
financial statements and our audit knowledge.
Based on those procedures, we have nothing material to add or draw attention to in relation to:
– the Directors’ confirmation within the Viability Statement on page 61 that they have carried out a
robust assessment of the emerging and principal risks facing the Group, including those that would
threaten its business model, future performance, solvency and liquidity;
– the Principal and Emerging Risks disclosures describing these risks and how emerging risks are
identified and explaining how they are being managed and mitigated; and
– the Directors’ explanation in the Viability Statement of how they have assessed the prospects of the
Group, over what period they have done so and why they considered that period to be appropriate,
and their statement as to whether they have a reasonable expectation that the Group will be able to
continue in operation and meet its liabilities as they fall due over the period of their assessment,
including any related disclosures drawing attention to any necessary qualifications or assumptions.
We are also required to review the Viability Statement set out on page 61 under the Listing Rules.
Our work is limited to assessing these matters in the context of only the knowledge acquired during our
financial statements audit. As we cannot predict all future events or conditions and as subsequent
events may result in outcomes that are inconsistent with judgements that were reasonable at the time
they were made, the absence of anything to report on these statements is not a guarantee as to the
Group’s and Parent Company’s longer-term viability.
142 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Our reporting
We have nothing material to add or draw attention to in relation to these disclosures.
We have concluded that these disclosures are materially consistent with the financial statements and our
audit knowledge.
4. Emphasis of matter: Uncertain outcome of NEC litigation
We draw attention to notes 9, 20 and 33 which disclose that the Group is subject to product liability
actions in the United States in relation to alleged links between one of its infant formula products and
Necrotising Enterocolitis (NEC), a gastrointestinal condition in preterm infants. On 13 March 2024 an
adverse legal ruling awarded one plaintiff $60 million in the only trial to date. The Directors have
disclosed a contingent liability in respect of these matters, no amounts are included within provisions
and no related net cash outflows have been included in the value in use of the related IFCN CGU.
Our opinion is not modified in respect of this matter.
5. Key audit matters
What we mean
Key audit matters are those matters that, in our professional judgement, were of most significance in the
audit of the financial statements and include the most significant assessed risks of material misstatement
(whether or not due to fraud) identified by us, including those which had the greatest effect on:
– the overall audit strategy;
– the allocation of resources in the audit; and
– directing the efforts of the engagement team.
We include below the key audit matters in decreasing order of audit significance together with our key
audit procedures to address those matters and our results from those procedures. These matters were
addressed, and our results are based on procedures undertaken, for the purpose of our audit of the
financial statements as a whole. We do not provide a separate opinion on these matters.
5.1 Recoverability of the goodwill and indefinite life intangible assets relating to the IFCN CGU (Group)
Financial Statement Elements
FY23 FY22
Goodwill and indefinite life intangible assets (IFCN) £5,104m £6,231m
Impairment charge (IFCN) £810m –
Our assessment of risk vs FY22
Vs FY22
Our assessment is that the risk has increased compared to FY22 due to the impact of
higher interest rates on the discount rate, and increased uncertainty over forecast growth
assumptions in light of the return of a key competitor to market and increased regulatory
pressures in the US.
Our results
FY23: Acceptable
FY22: Acceptable
Description of the Key Audit Matter
The risk: forecast-based assessment
The recoverability of goodwill and indefinite life intangible assets relating to the Infant and Child Nutrition
(“IFCN”) cash generating unit (“CGU”) is assessed using value in use which is based on forecast financial
information within a discounted cash flow model (“the IFCN Model”).
Key assumptions in the IFCN Model include the discount rate, forecast financial performance, in particular
net revenue and margin growth, and external factors impacting forecast category growth and terminal
growth rates.
In the current year the Group recognised an impairment charge against goodwill relating to the IFCN CGU
of £810m (FY22: nil), reflecting the impact of higher interest rates on the discount rate, and increased
uncertainty over net revenue and margin growth assumptions in light of the return of a key competitor to
market and increased regulatory pressures in the US.
The effect of these matters is that, as part of our risk assessment, we determined that the recoverable
amount of the IFCN CGU, and consequently the impairment charge, has a high degree of estimation
uncertainty with a potential range of reasonable outcomes greater than our materiality for the financial
statements as a whole, and possibly many times that amount.
We also identified a fraud risk related to the estimation of the recoverable amount of the goodwill and
intangible assets relating to the IFCN CGU in response to possible pressures on the Group to realise value
from significant acquisitions.
Independent Auditor’s Report continued
3. Going concern, viability and principal risks and uncertainties continued
143 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Our response to the risk
Our procedures to address the risk included:
Sensitivity analysis: We considered the sensitivity of the recoverable amount of the goodwill and
intangible assets relating to the IFCN CGU to reasonably possible changes in assumptions and focused
our attention on those assumptions which we considered the most critical to the recoverable amount of
the IFCN CGU.
Benchmarking assumptions: In response to the risk of fraud, we evaluated the net revenue growth
assumptions in the IFCN Model with reference to historic performance and external market data relating
to projected growth for the relevant categories.
We critically challenged the Group’s assumptions relating to forecast market shares, considering
recovery of a key competitor’s supply shortages in the North American market, through comparison to
historical trends and external data sources.
We benchmarked margin and other costs assumptions against historical achievement, external cost
inflation growth forecasts and our assessment of the Group’s historic ability to achieve productivity
savings. We also benchmarked the terminal growth rate assumption against market forecasts.
Personnel interviews: We compared judgements made centrally to discussions we held directly with the
relevant members of the Global Business Unit and country management. We considered and challenged
the Group’s assumptions and corroborated these views with the Group’s in-market teams.
Valuation expertise: Using our own valuation specialists, we challenged the appropriateness of key
assumptions underlying the estimation of the recoverable amounts of the goodwill and intangible assets
relating to the IFCN CGU, this included the discount rate used in the IFCN Model. We assessed whether
the premium applied to the discount rate was appropriate considering the inherent forecasting
uncertainty. We also benchmarked the recoverable amount of the IFCN CGU using implied earnings
multiples to comparable companies and historic transactions within the industry, as well as considering
latest market conditions.
Assessing transparency: We assessed whether the Group’s disclosures in note 9 of the sensitivity of the
outcome of the impairment assessment to changes in key assumptions reflected the risks inherent in the
recoverable amount of goodwill and indefinite life intangible assets relating to the IFCN CGU.
We performed the tests above rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to audit of the impairment assessment of goodwill and indefinite life intangible
assets relating to the IFCN CGU, including details of our planned substantive procedures and the
extent of our control reliance.
– For the recoverable amounts of the IFCN CGU, whether and where the Group’s estimate lay within
our reasonable range.
– The adequacy of the disclosures, particularly as they relate to the sensitivity of the recoverable
amount of the IFCN CGU to key assumptions including net revenue growth, margin growth,
discount rate and terminal growth rate.
Areas of particular auditor judgement
We identified an area of particular auditor judgement to be the assessment of whether the Directors’
overall estimate of the recoverable amount of the IFCN CGU, considering key assumptions including
net revenue, gross margin, discount rate and terminal growth rate, fell within our acceptable range.
We also identified an area of particular auditor judgement to be the assessment of the Directors’
conclusion regarding the post balance sheet adverse verdict in the first NEC case’s effect on the
recoverable amount of the IFCN CGU and whether that continued to fall within our acceptable range.
Our results
We found the goodwill and indefinite life intangible asset balances relating to the IFCN CGU and the
related impairment charge to be acceptable (FY22 result: the Group’s conclusion that there is no
impairment of the goodwill and intangible assets relating to the IFCN CGU to be acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 92 for
details on how the Audit Committee considered recoverability of goodwill and indefinite life intangible
assets relating to the IFCN CGU as an area of significant attention, page 167 for the accounting policy on
recoverability of goodwill and indefinite life intangible assets and note 9 for the financial disclosures.
5.2 Recoverability of Biofreeze CGU goodwill and indefinite life intangible assets
Financial Statement Elements
FY23 FY22
Goodwill and indefinite life intangible assets (Biofreeze) £613m £807m
Impairment charge (Biofreeze) £0m £152m
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144 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Our assessment of risk vs FY22
Vs FY22
In FY22 no headroom existed between the recoverable amount and the net book value of
the Biofreeze CGU following an impairment recognised as a result of category slowdown in
an unfavourable macroeconomic environment. Our assessment is that the risk is similar in
FY23 in relation to the impairment test carried out on 30 September 2023.
Our results
FY23: Acceptable
FY22: Acceptable
Description of the Key Audit Matter
The risk: forecast-based impairment assessment
The recoverability of goodwill and indefinite life intangible assets relating to the Biofreeze cash
generating unit (“CGU”) is assessed using value in use which is based on forecast financial information
within a discounted cash flow model (“the Biofreeze Model”).
In FY22 the Group recognised an impairment charge of £152m, that reflected underperformance driven
by category slowdown in an unfavourable macroeconomic environment. Following this impairment, no
headroom existed between the recoverable amount and net book value.
Key assumptions in the Biofreeze Model include the discount rate, forecast financial performance, in
particular net revenue and margin growth, and external factors impacting forecast category growth and
terminal growth rates.
On 30 September 2023, in light of changes in level at which goodwill associated with Biofreeze was
monitored, the Group reallocated the goodwill into the Health group of cash generating units (GCGU).
Due to limited headroom, an impairment assessment of the Biofreeze CGU inclusive of goodwill was
carried out immediately ahead of the goodwill reallocation.
The effect of these matters is that, as part of our risk assessment, we determined that the recoverable
amount of the Biofreeze CGU at 30 September 2023 has a high degree of estimation uncertainty with a
potential range of reasonable outcomes greater than our materiality for the financial statements as a
whole, and possibly many times that amount.
We also identified a fraud risk related to the estimation of the recoverable amount of goodwill and
intangible assets relating to the Biofreeze CGU in response to possible pressures on the Group to realise
value from significant acquisitions.
Our response to the risk
Our procedures to address the risk included:
Sensitivity analysis: We considered the sensitivity of the recoverable amount of the goodwill and
indefinite life intangible assets relating to the Biofreeze CGU to reasonably possible changes in
assumptions and focused our attention on those assumptions which we considered the most critical to
the recoverable amount of the Biofreeze CGU.
Benchmarking assumptions: In response to the risk of fraud, we evaluated the net revenue growth
assumptions in the Biofreeze model with reference to historic performance and external market data
relating to projected growth for the relevant categories.
We critically challenged the Group’s assumptions relating to price and volume growth through
comparison to external market data sources and evaluated the Group’s assumptions for achieving
growth through planned innovation and international growth by assessing against historic performance
and comparison to external data sources.
We benchmarked margin and other costs assumptions against historical trends, and our assessment of
the Group’s historic ability to achieve productivity savings. We also benchmarked the terminal growth
rate assumption against market inflation forecast.
Personnel interviews: We compared judgements made centrally to discussions we held directly with the
relevant members of global business units and country management. We considered and challenged the
Group’s assumptions and corroborated these views with the Groups’ in-market teams.
Valuation expertise: Using our own valuation specialists, we challenged key assumptions including the
discount rate and terminal growth rate used in the Biofreeze Model. We assessed whether the premium
applied to the discount rate was appropriate considering the operational integration of Biofreeze
processes into the wider Health business unit. We also benchmarked the recoverable amount of the
Biofreeze CGU using implied earnings multiples with comparable companies, historic transactions within
the industry, and to Biofreeze’s acquisition multiple, as well as considering latest market conditions.
Assessing transparency: We assessed whether the Group’s disclosures in note 9 of the sensitivity of the
outcome of the impairment assessment to changes in key assumptions reflected the risks inherent in the
recoverable amount of goodwill and indefinite life intangible assets relating to the Biofreeze CGU at
30 September 2023. In particular we assessed whether appropriate disclosures were provided to explain
the circumstances leading to reallocation of goodwill and the results of impairment assessment
performed ahead of this reallocation.
We performed the tests above rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
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Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to impairment assessment of goodwill and indefinite life intangible assets relating to
the Biofreeze CGU, including details of our planned substantive procedures and the extent of our
control reliance.
– For the recoverable amounts of the Biofreeze CGUs, whether and where the Group’s estimate lay
within our reasonable range.
– The adequacy of the disclosures, particularly as they relate to the sensitivity of the recoverable
amounts of the Biofreeze CGU to key assumptions including net revenue growth, margin growth,
discount rate and terminal growth rate.
Areas of particular auditor judgement
We identified an area of particular auditor judgement to be the assessment of whether the Directors’
overall estimate of the recoverable amounts of the Biofreeze CGU, considering key assumptions
including net revenue, gross margin, discount rate and terminal growth rate, fell within our
acceptable range.
Our results
We found the Group’s conclusion ahead of reallocation of goodwill to Health GCGU that there is no
impairment of goodwill and indefinite life intangible assets relating to the Biofreeze CGU to be
acceptable; (FY22 result for the Biofreeze CGU we found the goodwill and indefinite life intangible
assets balance, and the related impairment charge, to be acceptable.
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 92 for
details on how the Audit Committee considered recoverability of goodwill and indefinite life intangible
assets relating to the Biofreeze CGU as an area of significant attention, page 167 for the accounting
policy on recoverability of goodwill and indefinite life intangible assets and note 9 for the financial
disclosures.
5.3 Revenue recognition in relation to trade spend arrangements and associated accruals (Group)
Financial Statement Elements
FY23 FY22
Trade spend accruals £1,125m £1,137m
Our assessment of risk vs FY22
Vs FY22
We have not identified any significant changes to our assessment of the level of risk
relating to trade spend arrangements and related accruals compared to FY22.
Our results
FY23: Acceptable
FY22: Acceptable
Description of the Key Audit Matter
The risk: subjective estimate
The Group regularly enters into complex arrangements providing pricing, placement and other
promotional rebates and allowances to its customers. These trade spend arrangements can vary in
complexity by market, product category and customer.
Revenue is measured net of outflows arising from such arrangements which, for agreements or practices
spanning a period end, requires an estimate of the extent and value of future activity. These estimates
can be subjective and require the use of assumptions that are susceptible to management bias and fraud.
The Group operates a variable compensation scheme with outturns directly linked to financial
performance against targets. Strong financial performance could create an incentive to defer revenues
into the next financial year by overstating trade spend accruals. Weaker financial performance may also
create an incentive to understate trade spend accruals. Whilst the risk of a material misstatement in an
individual market is remote, there is a risk that inappropriate judgements in multiple markets may, in
aggregate, materially misstate the Group’s financial statements.
The effect of these matters is that, as part of our risk assessment, we determined that trade spend
accruals carry a high degree of estimation uncertainty, with a potential range of reasonable outcomes
greater than our materiality for the Group’s financial statements as a whole.
Our response to the risk
Our procedures to address the risk included:
Accounting policies: We critically assessed the appropriateness of the Group’s accounting policies
relating to trade spend against requirements of IFRS 15 Revenue from Contracts with Customers.
Historical comparisons: For a selection of the more judgemental accruals, our component teams
assessed the historical accuracy of the accruals by:
– comparing those recognised in the prior year to the actual trade spend subsequently incurred; and
– where there were significant differences, considering whether such differences related to a change in
estimate or an error to respond to the risk of fraud and error, and evaluating whether any
overstatement or understatement identified was material.
Tests of detail: Testing was focused on those trade spend accruals we considered to be more
judgemental, or potentially subject to management bias or fraud. We performed procedures to a
precision level sufficient to address the risk of fraud. For a sample of these trade spend accruals, our
component teams:
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– reperformed the calculation to assess whether it was mathematically accurate;
– identified the key assumptions in the calculation of each accrual selected, such as forecast sales
volumes, rebate structure and settlement mechanism;
– agreed those key assumptions to relevant documentation, such as invoices received after the balance
sheet date, customer agreements or third-party consumption data; and
– assessed whether the key assumptions were consistent with external data points and the Group’s
historic experience of comparable trade spend arrangements.
Expectation vs outcome: We performed analytical procedures over the aggregated balance at a group
level, and our component teams completed disaggregated analytical procedures over the individual
balances.
Assessing transparency: We assessed the adequacy of the Group’s disclosures in note 1 in relation to the
degree of estimation in the trade spend accruals and the resulting amount of trade spend deducted
from Net Revenue.
We performed the detailed tests above rather than seeking to rely on any of the Group’s controls
because our knowledge of the design of these controls and related IT controls indicated that we would
not be able to obtain the required evidence to support reliance on controls.
Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to the audit of the trade spend accruals including details of our planned substantive
procedures and the extent of our control reliance.
– As described in section 6, our response to the additional specific fraud risk identified relating to
the investigation commissioned by the Directors in two Middle Eastern markets that identified an
understatement of trade spend accruals and our related findings.
– Our assessment of findings from our component team’s procedures, including the historical
comparisons of FY22 accruals and whether those indicated material errors, and whether the FY23
accruals in relation to trade spend were acceptable.
Areas of particular auditor judgement
We performed an assessment of whether the Group`s overall estimate, considering the Group’s
accounting policies, and the complex nature of the agreements entered into, is acceptable. We also
considered whether an unadjusted overstatement identified through our procedures directly related
to the key audit matter was material.
Our results
We found the trade spend accruals recognised to be acceptable (FY22 result: acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 88 for
details on how the Audit Committee considered revenue recognition in relation to trade spend
arrangements and associated accruals as an area of significant attention, page 168 for the accounting
policy on revenue recognition in relation to trade spend arrangements and associated accruals, and
note1 for the financial disclosures.
5.4 Contingent liabilities arising from the US litigation concerning Necrotising Enterocolitis (NEC) and the
amendment to the South Korean Humidifier Sanitiser (HS) law (Group)
Financial Statement Elements
Financial statements disclosure in note 20 and note 33
Our assessment of risk vs FY22
Vs FY22
We have assessed that the risk relating to contingent liabilities has increased from FY22
following an adverse verdict in the first NEC case. This increases the probability of
outflow of economic benefit and increases the level of judgement involved in the ability
to reliably estimate any such outflow.
We have not identified any significant change to the level of risk relating to contingent
liabilities arising from the amendment to the South Korean Humidifier Sanitiser (HS) Law
compared to FY22
Our results
FY23: Acceptable
FY22: Acceptable
Description of the Key Audit Matter
The risk: dispute outcome
The Group is named in a number of litigations relating to NEC in the United States and HS issues in South
Korea.
The South Korean HS law amendment enacted on 25 September 2020 significantly altered the legal
framework under which HS claims were previously made and settled. As a result, judgement is needed to
assess whether the recognition criteria for a provision have been met for additional litigation under the
HS law amendment.
An adverse verdict in the first NEC case on 13 March 2024 increases the probability of economic outflow
and increases the level of judgement involved in the ability to reliably estimate any such outflow in
relation to the NEC product liability actions in the United States.
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The amounts involved in these litigations are potentially significant, and the application of accounting
standards to determine the amount, if any, to be provided for, is inherently subjective. Given the
uncertainty relating to the likelihood, amount and timing of any possible economic outflow, there is a risk
over the classification of any liability as a provision or a contingent liability and the transparency of
disclosures therein.
Our response to the risk
Our procedures to address the risk included:
Inquiry of lawyers: We inquired of the Group’s internal and external counsel to obtain an understanding
of developments. In relation to the HS matter we inquired into the progress of litigation and the
establishment of a mediation panel between HS companies and claimant groups. In relation to the NEC
litigation we inquired as to the progress through discovery and the likely prospects of successfully
defending the cases based on available evidence, including scientific evidence, and therefore the ability
to reliably estimate any economic outflow. We requested and received formal correspondence directly
from the Group’s external counsel for both the HS matter and NEC litigations that evaluated the current
status of legal proceedings.
We corroborated the consistency of the judgement made by the Directors to inquiries with both internal
and external legal counsel.
Assessing transparency: We assessed the adequacy of the Group’s disclosures of contingent liabilities
related to the NEC litigations and the HS matter in note 20, particularly the uncertainties relating to the
amount and timing of any resulting outflow.
We performed the tests above rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to the assessment over the ongoing litigation relating to NEC in the United States
and the HS issue in South Korea.
– Our conclusions on the appropriateness of the Group’s methodology and accounting policies.
– The adequacy of the disclosures, particularly as it relates to the uncertainties in relation to the
amount and timing of any resulting outflow.
Areas of particular auditor judgement
We identified an area of particular auditor judgement to be consideration of whether the contingent
liability disclosure is sufficiently transparent in respect of the uncertainties that exist in relation to the
amount and timing of any resulting outflow.
Our results
We found the Group’s assessment that the impact of the HS law amendment as contingent liabilities
and transparency of disclosure to be acceptable (FY22 result: acceptable).
We found the Group’s assessment that the potential outflows from the NEC litigations are
treatedasa contingent liability and the transparency of the related disclosure to be acceptable
(FY22result:acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 88 for
details on how the Audit Committee considered contingent liabilities arising from the amendment to the
South Korean HS law and NEC litigation in the United States as areas of significant attention, page 168 for
the accounting policy on contingent liabilities arising from the amendment to the South Korean HS law,
and note 20 for the financial disclosures.
5.5 Accounting for the forward purchase of shares held by the non-controlling interest of
“RBManon”(Group)
Financial Statement Elements
FY23 FY22
Trade and other payables £158m n/a
Forward purchase of shares held by NCI (within Total Equity) £167m n/a
Our assessment of risk vs FY22
Vs FY22
On 25 May 2023 the Group entered into a new agreement outlined below, and therefore
this is a new risk for FY23.
New
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Our results
FY23: Acceptable
FY22: n/a
Description of the Key Audit Matter
The risk: accounting treatment
The Group has entered into an agreement to acquire the remaining interests in the Group’s majority
owned entities in mainland China and Hong Kong (“RB Manon”) from its existing minority shareholders.
The estimated present value of the total amounts payable under the agreement is £298 million and is not
a key source of estimation uncertainty. However, the agreement has two components – purchase of the
non-controlling interest which is taken to equity, and services provided by the minority shareholders
which are charged to the income statement over the service period.
Significant judgement is required to allocate the total amount payable between equity and the income
statement in future periods.
We also identified a fraud risk in response to possible pressures to reduce future income statement
expenses.
Our response to the risk
Our procedures to address the risk included:
Accounting analysis: We interpreted the relevant standards and best application in relation to the terms
of the deal in order to assess the Group’s valuation of the component parts.
Valuation expertise: Using our own valuation specialists, we challenged the value of the non-controlling
interest in the RB Manon business determined by the valuation specialists engaged by the Group. Our
valuations specialists have also reviewed and challenged specialists engaged by the Group on their
valuation methodologies and approaches to calculate the fair value and key assumptions such as WACC,
marketability considerations and any minority / controls considerations.
Benchmarking assumptions: We performed benchmarking to previous transactions with the parties
involved in RB Manon.
Assessing transparency: We assessed the adequacy of the Group’s disclosures in explaining the various
component parts of the deal, the accounting judgements made and how the values of the components
were calculated.
We performed the tests above rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to the audit of the accounting treatment for the transaction, including details of our
planned substantive procedures and the extent of our control reliance.
– Our approach to the audit of the accounting judgement relating to the allocation of the amount
payable in relation to the two components of the transaction.
– The adequacy of the disclosures,
Areas of particular auditor judgement
We identified an area of particular auditor judgement to be the assessment of whether the Directors’
overall accounting judgement of the allocation of the total consideration to the deal components
(i.e. payment for transitional services or equity) is acceptable.
Our results
We found the Group’s accounting treatment to be acceptable (FY22 result: not applicable, as this was
not a key audit matter in FY22).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 88 for
details on how the Audit Committee considered accounting for the share purchase agreement for the
non-controlling interest of RB Manon as an area of significant attention, page 167 for the accounting
policy on the relevant treatment and note 30 for the financial disclosures.
5.6 Provisions for uncertain tax positions (Group)
Financial Statement Elements
FY23 FY22
Uncertain tax positions £619m £722m
Our assessment of risk vs FY22
Vs FY22
We have not identified any significant changes to our assessment of the level of risk
relating to provisions for uncertain tax positions compared to FY22.
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Our results
FY23: Acceptable
FY22: Acceptable
Description of the Key Audit Matter
The risk: subjective estimate
Due to the Group operating across a number of different tax jurisdictions, and the complexities of
transfer pricing and other international tax legislation, it is subject to periodic challenge by local tax
authorities on a range of tax matters arising in the normal course of business.
These challenges by the local tax authorities include but are not limited to:
– transfer pricing arrangements relating to the Group’s operating model;
– transfer pricing arrangements relating to the ownership of intellectual property rights that are used
across the Group;
– deductibility of interest on intra-group borrowings; and
– the European Commission’s ongoing State Aid investigations into transfer pricing ruling practices of
certain member states.
Provisions for uncertain tax positions require judgements and estimates to be made in relation to tax issues
and exposures where the Group may be challenged by local tax authorities on its interpretation of tax
legislation. Auditor judgement is required to assess whether the Directors’ overall estimate falls within an
acceptable range. This takes into account the method and assumptions underpinning exposures calculated
such as: the clarity of relevant legislation and related guidance; advice from in-house specialists; opinions
of professional firms; past experience; and precedents set by a particular tax authority.
The effect of these matters is that, as part of our risk assessment, we determined that the estimates of
uncertain tax positions have a high degree of estimation uncertainty, with a potential range of reasonable
outcomes greater than our materiality for the Group`s financial statements as a whole and possibly many
times that amount.
Our response to the risk
Our procedures to address the risk included:
Our tax expertise: We used our own international and local tax specialists to assist us to:
– Inspect and assess the Group’s centrally prepared transfer pricing policies to determine whether they
reflect the risks, activities and substance of each of the entities within the supply chain; and
– Assess the Group’s tax positions, its correspondence with the relevant tax authorities, and to analyse
and challenge the assumptions used to determine provisions for tax uncertainties based on our
knowledge and experiences of the application of tax legislation.
Historical comparisons: We assessed the historical accuracy of the provisions, with reference to any
recent tax authority audits and related results, and we considered the impact on the remaining provision.
Assessing transparency: We assessed the adequacy of the Group’s disclosures in notes 1 and 22 in
respect of uncertain tax positions.
We performed the tests above rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedures described.
Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to the audit of the provisions for uncertain tax positions, including details of our
planned substantive procedures and the extent of our control reliance.
– For the provisions for uncertain tax positions, whether and where the Group’s estimate lay within
our reasonable range.
– The adequacy of the disclosures, particularly as it relates to the sensitivity of the uncertain tax
position to possible changes in key assumptions.
Areas of particular auditor judgement
We identified an area of particular auditor judgement to be the clarity of the associated disclosure in
relation to the estimation uncertainty associated with uncertain tax positions.
Our results
We found the level of the uncertain tax provisioning to be acceptable (FY22 result: acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 88 for
details on how the Audit Committee considered provisions for uncertain tax positions as an area of
significant attention, page 167 for the accounting policy on uncertain tax positions and note 22 for the
financial disclosures.
5.7 Recoverability of the Parent Company’s investment in the subsidiary, reckitt benckiser limited (Parent
Company)
Financial Statement Elements
FY23 FY22
Parent company investment £15,174m £15,078m
Our assessment of risk vs FY22
Vs FY22
We have not identified any significant changes to our assessment of the level of risk
relating to the recoverability of the Parent Company’s investment in the subsidiary,
Reckitt Benckiser Limited, compared to FY22.
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150 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
Our results
FY23: Acceptable
FY22: Acceptable
Description of the Key Audit Matter
The risk: low risk, high value
The carrying amount of the Parent Company’s investment in its subsidiary, Reckitt Benckiser Limited,
represents 98.7% (FY22: 99.6%) of the Parent Company’s total assets. Its recoverability is not at a high risk
of significant misstatement or subject to significant judgement. However, due to its materiality in the
context of the Parent Company`s financial statements, this is considered to be the area that had the
greatest effect on our overall Parent Company audit.
Our response to the risk
Our procedures to address the risk included:
Comparing valuations: We compared the carrying amount of the investment to the market capitalisation
of the Group as Reckitt Benckiser Limited, either directly or indirectly, owns all other subsidiaries of the
Group.
We performed the test above rather than seeking to rely on any of the Group’s controls because the
nature of the balance is such that we would expect to obtain audit evidence primarily through the
detailed procedure described.
Communications with the Reckitt Benckiser Group plc’s Audit Committee
Our discussions with and reporting to the Audit Committee included:
– Our approach to the assessment of the carrying amount of the Parent Company’s investment in
the subsidiary, including details of our planned substantive procedures and the extent of our
control reliance.
– For the carrying amount, our assessment of whether the conclusion that there is no impairment of
the Parent Company’s investment in the subsidiary is acceptable.
Our results
We found the Group’s conclusion that there is no impairment of its investment in the subsidiary to be
acceptable (FY22: acceptable).
Further information in the Annual Report and Accounts: See the Audit Committee Report on page 88 for
details on how the Audit Committee considered recoverability of the Parent Company’s investment in
the subsidiary, Reckitt Benckiser Limited as an area of significant attention, page 204 for the accounting
policy on recoverability of the Parent Company’s investment in the subsidiary, Reckitt Benckiser Limited,
and note 2 of Parent Company accounts for the financial disclosures.
6. Our ability to detect irregularities, and our response
Fraud – Identifying and responding to risks of material misstatement due to fraud
Fraud risk assessment
To identify risks of material misstatement due to fraud (“fraud risks”) we assessed events or conditions
that could indicate an incentive or pressure to commit fraud or provide an opportunity to commit fraud.
Our risk assessment procedures included:
– Consultation with our own forensic specialists to assist us in identifying fraud risks based on their
experience of comparable businesses, similar sector, as well as of the geographies in which the Group
operates. The forensic specialists participated in the initial fraud risk assessment discussions and were
consulted throughout the audit when further guidance was deemed necessary;
– Enquiry of the Directors, operational managers, the General Counsel, the Chief Ethics and Compliance
Officer and members of the internal audit function to assess whether they have knowledge of any
actual, suspected or alleged fraud, as well as inspection of minutes of meetings of the Board, Audit
Committee, Executive Committee, Corporate Responsibility, Sustainability, Ethics and Compliance
(CRSEC) Committee, and Annual General Meeting;
– Inspection of the Group’s policies and procedures to prevent, detect and respond to the risks of fraud,
internal audit reports issued during the year and reports to the Group’s whistleblowing hotline and the
responses to those reports, including those concerning investigations;
– Consideration of the Group’s results against performance targets and the Group’s remuneration policies.
Risk communications
We communicated identified fraud risks throughout the audit team and remained alert to any indications
of fraud throughout the audit. This included communication from the group to component audit teams of
relevant fraud risks identified at the group level and request to all component audit teams to report to the
group audit team any instances of fraud that could give rise to a material misstatement at the Group level.
Fraud risks
We assessed that there is an inherent risk that group and component management could make
inappropriate accounting entries or have bias when making accounting estimates and judgements.
Wedetermined that these risks would most likely manifest themselves in three key areas being:
– Trade spend and other associated accruals may be manipulated to alter the timing of recognition of
revenue and profit particularly in light of the investigation commissioned by the Directors in two
Middle Eastern markets that identified an understatement of trade spend accruals;
– Management bias in the estimation of the recoverable amount of the IFCN and Biofreeze CGUs in
response to possible pressures to realise value from significant acquisitions;
– Management bias when applying judgement in relation to accounting treatment of the purchase of the
non-controlling interest in RB Manon, where there may be bias in respect of the allocation of the total
amount payable between equity and transition services to minimise future income statement impact.
Independent Auditor’s Report continued
5. Key audit matters continued
151 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
As required by auditing standards, and after considering the impact of the Group’s results against
performance targets, we performed procedures to address the risk of management override of controls,
the risk of fraudulent revenue recognition, and the risk of management bias associated with estimation
of the recoverable amounts of the IFCN and Biofreeze CGUs and the accounting treatment of RB Manon
transaction.
Link to KAMs
Further detail in respect of the fraud risks is set out in the key audit matter disclosures 5.1, 5.2, 5.3 and 5.4
in section 5 of this report.
Procedures to address fraud risks
We also performed procedures including:
– For all components within scope, identifying journal entries to test based on risk criteria and comparing
the identified entries to supporting documentation. These included unusual journal entries associated
with trade spend and other operational expenditure accruals.
– For all components within scope, additional procedures to incorporate an element of unpredictability,
in relation to trade spend and other associated accruals.
As a result of the investigation commissioned by the Directors in two Middle Eastern markets that
identified an understatement of trade spend accruals (and explained by the Directors on page 93, we
considered the implications for our audit. To address the additional specific fraud risk identified in a small
number of components we:
– Reduced materiality in the two impacted full scope components’ audits by 50% and performance
materiality from 75% to 50%.
– Performed incremental procedures over net revenue in the impacted components and three other full
scope components across the Group, to address the possible risk of contagion.
– Identified a further Middle Eastern component that was not previously in scope for the group audit and
carried out specified procedures over net revenue in that component.
Actual or suspected fraud discussed with the Audit Committee
We discussed with the Audit Committee matters relating to actual or suspected fraud, which included
the results of the investigation commissioned by the Directors in two Middle Eastern markets that
identified an understatement of trade spend accruals (as explained by the Directors on page 93 and the
results of our related procedures.
Laws and regulations – Identifying and responding to risks of material misstatement relating to
compliance with laws and regulations
Laws and regulations risk assessment
We identified areas of laws and regulations that could reasonably be expected to have a material effect
on the financial statements from our general commercial and sector experience. We held enquiries with
the Directors and other management (as required by auditing standards) and inspected regulatory and
legal correspondence received by the Group. We held enquiries with the Group’s external legal counsel
where considered necessary, and we also inspected the policies and procedures regarding compliance
with laws and regulations.
As the Group is regulated, our assessment of risks involved gaining an understanding of the control
environment including the entity’s procedures for complying with regulatory requirements.
Risk communications
We communicated identified laws and regulations throughout our team and remained alert to any
indications of non-compliance throughout the audit. This included communication from the group to all
component audit teams of relevant laws and regulations identified at the group level, and a request for
component auditors to report to the Group audit team any instances of non-compliance with laws and
regulations that could give rise to a material misstatement at the group level.
Direct laws context and link to audit
The potential effect of these laws and regulations on the financial statements varies considerably. The
Group is subject to laws and regulations that directly impact the financial statements including financial
reporting legislation (including related companies’ legislation), distributable profits legislation, and
taxation legislation (direct and indirect). We assessed the extent of compliance with these laws and
regulations as part of our procedures on the related financial statements items.
Most significant indirect law/regulation areas
The Group is subject to many other laws and regulations where the consequences of non-compliance
could have a material effect on amounts or disclosures in the financial statements, for instance through
the imposition of fines or litigation or the loss of the Group’s permission to operate in countries where
the non-adherence to laws could prevent trading in such countries.
We identified the following areas as those most likely to have such an effect:
– Employee health and safety, reflecting the nature of the Group’s production and distribution process;
– Anti-bribery and corruption, reflecting that the Group operates in a number of countries where there is
an opportunity to engage in bribery given more limited regulation;
– Interaction with healthcare professionals, reflecting the nature of the Group’s products in the Health
and Nutrition Global Business Units;
– Global competition laws, reflecting the nature of the Group’s business and certain market share
positions;
Independent Auditor’s Report continued
6. Our ability to detect irregularities, and our response continued
152 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
– Consumer product law such as product safety, quality standards and product claims, reflecting the
nature of the Group’s diverse product base;
– Data privacy laws, reflecting the Group’s growing amounts of personal data held;
– Intellectual property legislation, reflecting the potential of the Group to infringe trademarks, copyright
and patents; and
– Environmental regulation, reflecting the nature of the Group’s production and distribution process.
Auditing standards limit the required audit procedures to identify non-compliance with these laws and
regulations to enquiry of the Directors and other management and inspection of regulatory and legal
correspondence, if any. Therefore if a breach of operational regulations is not disclosed to us or evident
from relevant correspondence, an audit will not detect that breach.
Link to KAMs
Further detail in respect of the effect of ongoing litigations relating to NEC in the United States and the
HS Law Amendment in South Korea is set out in the key audit matter disclosures 5.4 in section 5 of this
report.
Context
Context of the ability of the audit to detect fraud or breaches of law or regulation
Owing to the inherent limitations of an audit, there is an unavoidable risk that we may not have detected
some material misstatements in the financial statements, even though we have properly planned and
performed our audit in accordance with auditing standards. For example, the further removed non-
compliance with laws and regulations is from the events and transactions reflected in the financial
statements, the less likely the inherently limited procedures required by auditing standards would
identify it. In addition, as with any audit, there remained a higher risk of non-detection of fraud, as fraud
may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal
controls. Our audit procedures are designed to detect material misstatement. We are not responsible for
preventing non-compliance or fraud and cannot be expected to detect non-compliance with all laws
and regulations.
7. Our determination of materiality
The scope of our audit was influenced by our application of materiality. We set quantitative thresholds
and overlay qualitative considerations to help us determine the scope of our audit and the nature, timing
and extent of our procedures, and in evaluating the effect of misstatements, both individually and in the
aggregate, on the financial statements as a whole.
£140m
(FY22: £130m)
Materiality for the Group`s financial statements as a whole
What we mean
A quantitative reference for the purpose of planning and performing our audit.
Basis for determining materiality and judgements applied
Materiality for the Group`s financial statements as a whole was set at £140m (FY22: £130m). This was
determined with reference to a benchmark of normalised profit before tax from continuing operations
(“PBTCO”). When using a benchmark of normalised profit before tax to determine overall materiality, our
approach for listed entities considers a guideline range of 3% – 5% of the measure. In setting overall
group materiality, we applied a percentage of 4.5% (FY22: 4.1%) to the benchmark.
Consistent with FY22, we determined that normalised PBTCO remains the most appropriate benchmark
for the Group. Reckitt Benckiser Group plc is well established and operates in a stable environment
across multiple geographies. Therefore, users of the financial statements will be primarily interested in
the profitability of the Group and its ability to generate a return for shareholders, of which the most
relevant benchmark is normalised PBTCO.
We normalised PBTCO (FY22: normalised PBTCO) by adding back adjustments that do not represent the
normal, continuing operations of the Group. The items we adjusted for were impairment of goodwill and
other adjusting items as disclosed on page 226 in the table reconciling the Group’s IFRS measures to its
adjusted measures for the year ended 31 December 2023, totalling £695 million net (FY22: £90 million,
adjustments related to the impairment of goodwill, and other adjusting items as disclosed on pages 226.
Materiality for the Parent Company`s financial statements as a whole was set at £70m (FY22: £65m),
determined with reference to a benchmark of Parent Company total assets of which it represents 0.46%
(FY22: 0.45%). The Parent Company’s principal activity is holding the investment in Reckitt Benckiser Limited,
and therefore the total assets are the most relevant benchmark to the users of the financial statements.
£105m
(FY22: £85m)
Performance materiality
What we mean
Our procedures on individual account balances and disclosures were performed to a lower threshold,
performance materiality, so as to reduce to an acceptable level the risk that individually immaterial
misstatements in individual account balances add up to a material amount across the financial
statements as a whole.
Basis for determining performance materiality and judgements applied
We have considered performance materiality at a level of 75% (FY22: 65%) of materiality for Reckitt
Benckiser Group`s financial statements as a whole to be appropriate.
Independent Auditor’s Report continued
6. Our ability to detect irregularities, and our response continued
153 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
The Parent Company performance materiality was set at £52m (FY22: £49m), which equates to 75%
(FY22:75%) of materiality for the Parent Company`s financial statements as a whole.
Performance materiality was set at 75% of components` materiality for all full scope components, with
the exception of two Middle East components where the performance materiality was set at 50% of
materiality (as described in section 6).
We applied this percentage in our determination of performance materiality because we did not
identifyany factors indicating an elevated level of risk. In FY22, we applied a lower percentage in our
determination of group performance materiality based on the level of identified misstatements and
control deficiencies during the prior period.
£6m
(FY22: £5m)
Audit misstatement posting threshold
What we mean
This is the amount below which identified misstatements are considered to be clearly trivial from a
quantitative point of view. We may become aware of misstatements below this threshold which could
alter the nature, timing and scope of our audit procedures, for example if we identify smaller
misstatements which are indicators of fraud.
This is also the amount above which all misstatements identified are communicated to Reckitt Benckiser
Group plc’s Audit Committee.
Basis for determining the audit misstatement posting threshold and judgements applied
We set our audit misstatement posting threshold at 4.3% (FY22: 3.9%) of our materiality for the Group`s
financial statements. We also report to the Audit Committee any other identified misstatements that
warrant reporting on qualitative grounds.
The overall materiality for the Group`s financial statements of £140m (FY22: £130m) compares as follows
to the main financial statement caption amounts:
Net revenue Profit before tax Total assets
FY23 FY22 FY23 FY22 FY23 FY22
Financial statement Caption £14,607m £14,453m £2,401m £3,067m £27,136m £28,742m
Group Materiality as %
ofcaption 1.0% 0.9% 6.2% 4.2% 0.5% 0.5%
8. The scope of our audit
Group scope
What we mean
How the group audit team determined the procedures to be performed across the Group.
The Group has 380 (FY22: 406) reporting components. In order to determine the work performed at the
reporting component level, we identified those components which we considered to be of individual
financial significance and those remaining components on which we required procedures to be
performed to provide us with the evidence we required in order to conclude on the Group`s financial
statements as a whole.
We determined individually financially significant components as those contributing at least 10% (2022:
10%) of revenue or total assets. We selected revenue and total assets because these are the most
representative of the relative size of the components. We identified 1 (2022: 1) component as individually
financially significant component and performed a full scope audit on this component.
In addition, to enable us to obtain sufficient appropriate audit evidence for the Group`s financial
statements as a whole, we selected 51 (2022: 52) components on which to perform full scope audits.
We subjected 2 (2022: 1) components to specified audit procedures. We carried out procedures over
expenses for one component that was not individually significant but was included in the scope of our
work on the Group’s financial statements in order to provide further coverage over the Group’s results.
Additionally, following the investigation in the Middle East described in section 6, we carried out specified
procedures over net revenue and trade receivables for a component that was not previously in scope.
The components within the scope of our work accounted for the following percentages of the Group’s
results, with the prior year comparatives indicated in brackets:
Scope
Number of
components Range of materiality
Percentage
of the
Group’s net
revenue
Percentage
of the
Group’s
profit
beforetax
Percentage
of he Group’s
total assets
Full Scope 52 (53) £8m to £75m (£8m to £75m) 80% (79%) 67% (68%) 86% (85%)
Specified procedures 2 (1) £40m to £65m (£64m) 1% (0%) 11% (9%) 1% (0%)
Total 54 (54) £8m to £75m (£8m to £75m) 81% (79%) 78% (77%) 87% (85%)
The remaining 19% (2022: 21%) of net revenue, 22% (2022: 23%) of total profits and losses that made up
profit before tax and 14% (2022: 15%) of total assets is represented by 326 (2022: 354) reporting
components, none of which individually represented more than 2% (2022: 2%) of any of total group
revenue, total profits and losses that made up group profit before tax or total group assets. For these
components, we performed analysis at an aggregated group level to re-examine our assessment that
there were no significant risks of material misstatement within these.
The work on 50 of the 54 components (2022: 51 of the 54 components) was performed by component
auditors and the rest, including the audit of the Parent Company, was performed by the group audit team.
The components within the scope of our work accounted for the percentages illustrated in section 2 –
Group Scope.
Independent Auditor’s Report continued
7. Our determination of materiality continued
154 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
The group audit team has also performed audit procedures on the following areas on behalf of the components:
– Testing of IT Systems
– Items excluded from normalised group PBTCO; and
– Testing of revenue recorded through a common service provider
IT systems and part of revenue are managed centrally, and items excluded from normalised group PBTCO
are adjusted at group level. Therefore, these items were audited by the group audit team. The group
audit team communicated the results of these procedures to the component teams where relevant.
The scope of the audit work performed was fully substantive as we did not rely upon the Group’s internal
control over financial reporting.
Group audit team oversight
What we mean
The extent of the group audit team’s involvement in component audits.
The group audit team is required to instruct the component teams about their responsibilities in relation to
the consolidated group audit and to understand the approach taken by component auditors to meet these
responsibilities. The group audit team is also required to understand the conclusions reached by component
auditors and to review and challenge the work they have performed to reach these conclusions.
The group audit team physically visited 18 countries in November and December 2023 to attend
management balance sheet reviews ahead of the year end (2022: 19). The group team also attended four
meetings virtually. In addition, the group audit team held an Auditor’s Global Conference in London
attended by partners and managers for 50 in-scope components, where the use of Data and Analytics,
updates to group level significant risks, the Group’s internal controls transformation and FY23 audit
strategy were discussed:
We had regular contact with our component auditors throughout the year, including issuing instructions
to components auditors on the scope of their work, risk assessment and challenge meetings at planning
and final phases of the audit and inspection of component audit teams’ key working papers within the
component audit files.
Additionally, in relation to the fraud identified in the Middle East the group audit team worked closely
with and made requests of the Group’s Ethics and Compliance team and external legal counsel leading
the investigation, supported by our own forensics specialists. We subjected the two Middle East in-scope
components to additional procedures, which were directed and overseen by the group audit team
The group audit team, including the Group Engagement Partner, were in daily communication with the
Middle East components throughout the investigation and a supplemental physical visit to the region was
undertaken in March 2024 to perform further in-depth review of their audit files, along with further
discussions with the component teams and regional management.
9. Other information in the Annual Report
The Directors are responsible for the other information presented in the Annual Report together with the
financial statements. Our opinion on the financial statements does not cover the other information and,
accordingly, we do not express an audit opinion or, except as explicitly stated below, any form of
assurance conclusion thereon.
All other information
Our responsibility
Our responsibility is to read the other information and, in doing so, consider whether, based on our
financial statements audit work, the information therein is materially misstated or inconsistent with the
financial statements or our audit knowledge.
Our reporting
Based solely on that work we have not identified material misstatements or inconsistencies in the other
information.
Strategic Report and Directors’ Report
Our responsibility and reporting
Based solely on our work on the other information described above we report to you as follows:
– we have not identified material misstatements in the Strategic Report and the Directors’ Report;
– in our opinion the information given in those reports for the financial year is consistent with the
financial statements; and
– in our opinion those reports have been prepared in accordance with the Companies Act 2006.
Directors’ Remuneration Report
Our responsibility
We are required to form an opinion as to whether the part of the Directors’ Remuneration Report to be
audited has been properly prepared in accordance with the Companies Act 2006.
Our reporting
In our opinion the part of the Directors’ Remuneration Report to be audited has been properly prepared
in accordance with the Companies Act 2006.
Corporate governance disclosures
Our responsibility
We are required to perform procedures to identify whether there is a material inconsistency between
the financial statements and our audit knowledge, and:
– the Directors’ statement that they consider that the annual report and financial statements taken as a
whole is fair, balanced and understandable, and provides the information necessary for shareholders
to assess the Group’s position and performance, business model and strategy;
Independent Auditor’s Report continued
8. The scope of our audit continued
155 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS GOVERNANCE STRATEGIC REPORT OTHER INFORMATION
– the section of the annual report describing the work of the Audit Committee, including the significant
issues that the Audit Committee considered in relation to the financial statements, and how these
issues were addressed; and
– the section of the annual report that describes the review of the effectiveness of the Group’s risk
management and internal control systems.
Our reporting
Based on those procedures, we have concluded that each of these disclosures is materially consistent
with the financial statements and our audit knowledge.
We are also required to review the part of the Corporate Governance Statement relating to the Group’s
compliance with the provisions of the UK Corporate Governance Code specified by the Listing Rules for
our review.
We have nothing to report in this respect.
Other matters on which we are required to report by exception
Our responsibility
Under the Companies Act 2006, we are required to report to you if, in our opinion:
– adequate accounting records have not been kept by the Parent Company, or returns adequate for our
audit have not been received from branches not visited by us; or
– the Parent Company’s financial statements and the part of the Directors’ Remuneration Report to be
audited are not in agreement with the accounting records and returns; or
– certain disclosures of Directors’ remuneration specified by law are not made; or
– we have not received all the information and explanations we require for our audit.
Our reporting
We have nothing to report in these respects.
10. Respective responsibilities
Directors’ responsibilities
As explained more fully in their statement set out on page 137, the Directors are responsible for: the
preparation of the financial statements including being satisfied that they give a true and fair view; such
internal control as they determine is necessary to enable the preparation of financial statements that are
free from material misstatement, whether due to fraud or error; assessing the Group and Parent
Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern; and using the going concern basis of accounting unless they either intend to liquidate the Group
or the Parent Company or to cease operations, or have no realistic alternative but to do so.
Auditor’s responsibilities
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are
free from material misstatement, whether due to fraud or error, and to issue our opinion in an auditor’s
report. Reasonable assurance is a high level of assurance, but does not guarantee that an audit
conducted in accordance with ISAs (UK) will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
the financial statements.
A fuller description of our responsibilities is provided on the FRC’s website at
www.frc.org.uk/auditorsresponsibilities.
The Company is required to include these financial statements in an annual financial report prepared
under Disclosure Guidance and Transparency Rule 4.1.17R and 4.1.18R. This auditor’s report provides no
assurance over whether the annual financial report has been prepared in accordance with those
requirements.
11. The purpose of our audit work and to whom we owe our responsibilities
This report is made solely to the Company’s members, as a body, in accordance with Chapter 3 of Part 16
of the Companies Act 2006 and the terms of our engagement by the Company. Our audit work has been
undertaken so that we might state to the Company’s members those matters we are required to state to
them in an auditor’s report, and the further matters we are required to state to them in accordance with
the terms agreed with the company, and for no other purpose. To the fullest extent permitted by law, we
do not accept or assume responsibility to anyone other than the Company and the Company’s members,
as a body, for our audit work, for this report, or for the opinions we have formed.
Andrew Bradshaw (Senior Statutory Auditor)
for and on behalf of KPMG LLP, Statutory Auditor
Chartered Accountants
15 Canada Square
London
21 March 2024
Independent Auditor’s Report continued
9. Other information in the Annual Report continued
156 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Note

|  | 2023 | 2022
|  | £m | £m
CONTINUING OPERATIONS |  |  |
Net Revenue | 2 | 14 ,6 07 | 14 ,453
Cost of sales |  | (5,847) | (6,09 2)
Gross profit |  | 8 , 76 0 | 8 , 3 61
Impairment of goodwill |  | (8 1 0) | (1 67)
Other operating expenses |  | (5, 41 9) | (4 ,9 4 5)
Net operating expenses | 3 | (6 , 2 2 9) | (5 ,1 1 2)
Operating profit | 2 | 2, 531 | 3, 249
Finance income | 6 | 210 | 130
Finance expense | 6 | (3 4 0) | (29 1)
Impairment of equity-accounted investments | 11 | – | (1 9)
Share of loss of equity-accounted investments, net of tax | 11 | – | (2)
Profit before income tax |  | 2,401 | 3 , 0 67
Income tax charge | 7 | (75 3) | (711)
Net profit from continuing operations |  | 1,648 | 2,35 6
Net profit/(loss) from discontinued operations | 32 | 9 | (7)
Net profit |  | 1,657 | 2, 349
Attributable to non-controlling interests |  | 14 | 19
Attributable to owners of the parent company |  | 1,6 43 | 2, 330
Net profit |  | 1,657 | 2, 349
Basic earnings/(loss) per ordinary share |  |  |
From continuing operations (pence) | 8 | 2 2 7. 9 | 3 2 6 .7
From discontinued operations (pence) | 8 | 1.3 | (1 .0)
From total operations (pence) | 8 | 2 2 9. 2 | 32 5 .7
Diluted earnings/(loss) per ordinary share |  |  |
From continuing operations (pence) | 8 | 22 7. 4 | 32 5 .7
From discontinued operations (pence) | 8 | 1.3 | (1 .0)
From total operations (pence) | 8 | 22 8 .7 | 3 2 4 .7

Note

|  | 2023 | 2022
|  | £m | £m
Net profit |  | 1,657 | 2, 349
Other comprehensive income/(expense) |  |  |
Items that have or may be reclassified to the Income Statement in subsequent years |  |  |
Net exchange (loss)/gain on foreign currency translation, net of tax | 7, 26 | (6 3 9) | 1,065
Reclassification of foreign currency translation reserves on disposal or liquidation of foreign operations, net of tax | 7, 26 | (131) | (56)
Gains/(losses) on net investment hedges, net of tax | 7, 26 | 42 | (115)
Fair value (losses) on cash flow hedges, net of tax | 7, 26 | (1 6) | (32)
Reclassification of cash flow hedges to the income statement | 7, 26 | (2 3) | 34
|  | (767) | 896
Items that will not be reclassified to the Income Statement in subsequent years |  |  |
Remeasurements of defined benefit pension plans, net of tax | 7 | (2 6) | 24
Revaluation of equity instruments – FVOCI, net of tax | 7 | (1 0) | (87)
|  | (3 6) | (6 3)
Other comprehensive (expense)/income, net of tax |  | (8 03) | 833
Total comprehensive income |  | 854 | 3 ,1 8 2
Attributable to non-controlling interests |  | 13 | 20
Attributable to owners of the parent company |  | 8 41 | 3 ,1 6 2
Total comprehensive income |  | 854 | 3 ,1 8 2
Total comprehensive income attributable to owners of the parent company arising from: |  |  |
Continuing operations |  | 832 | 3 ,1 6 9
Discontinued operations |  | 9 | (7)
|  | 8 41 | 3 ,1 6 2

Group Income Statement
For the year ended 31 December 2023
Group Statement of Comprehensive Income
For the year ended 31 December 2023
157 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Note

|  | 2023 | 2022
|  | £m | £m
ASSETS |  |  |
Non-current assets |  |  |
Goodwill and other intangible assets | 9 | 1 8,588 | 20 ,203
Property, plant and equipment | 10 | 2,399 | 2 , 47 3
Equity instruments | 11 | 118 | 86
Deferred tax assets | 12 | 2 87 | 24 4
Retirement benefit surplus | 23 | 270 | 294
Other non-current receivables | 14 | 172 | 1 57
Total non-current assets |  | 21,834 | 23 , 457
Current assets |  |  |
Inventories | 13 | 1,637 | 1, 825
Trade and other receivables | 14 | 2,062 | 2, 082
Derivative financial instruments | 15, 17 | 64 | 59
Current tax recoverable |  | 80 | 155
Cash and cash equivalents | 16 | 1,3 87 | 1 ,1 5 7
Assets held for sale | 31 | 72 | 7
Total current assets |  | 5,3 02 | 5, 285
Total assets |  | 2 7, 1 3 6 | 2 8 , 74 2
LIABILITIES |  |  |
Current liabilities |  |  |
Short-term borrowings | 17 | (1 , 67 9) | (1 ,7 2 1)
Provisions for liabilities and charges | 18 | (1 42) | (227)
Trade and other payables | 21 | (5 , 5 0 6) | (5 , 5 47)
Derivative financial instruments | 15, 17 | (78) | (55)
Share repurchase liability | 24 | (296) | –
Current tax liabilities | 22 | (6 2 0) | (79 1)
Liabilities held for sale | 31 | (17) | –
Total current liabilities |  | (8,338) | (8 , 3 41)
Non-current liabilities |  |  |
Long-term borrowings | 17 | (6 , 8 5 8) | (7 , 163)
Deferred tax liabilities | 12 | (2 ,8 9 9) | (3, 037)
Retirement benefit obligations | 23 | (2 3 3) | (24 0)
Provisions for liabilities and charges | 18 | (57) | (59)
Derivative financial instruments | 15, 17 | (187) | (249)
Non-current tax liabilities | 22 | (28) | (5 4)
Other non-current liabilities | 21 | (67) | (116)
Total non-current liabilities |  | (1 0, 32 9) | (1 0 ,9 18)
Total liabilities |  | (1 8 , 6 67) | (1 9, 2 5 9)
Net assets |  | 8,4 69 | 9 ,483

Note

|  | 2023 | 2022
|  | £m | £m
EQUITY |  |  |
Capital and reserves |  |  |
Share capital | 24 | 74 | 74
Share premium |  | 254 | 254
Merger reserve |  | (1 4, 22 9) | (1 4, 2 29)
Other reserves | 26 | (1, 060) | (2 94)
Retained earnings |  | 23,409 | 2 3,638
Attributable to owners of the parent company |  | 8,448 | 9, 4 4 3
Attributable to non-controlling interests |  | 21 | 40
Total equity |  | 8,4 69 | 9 ,483

The accompanying notes form part of these Financial Statements. The Financial Statements on pages 156
to 200 were approved by the Board of Directors and signed on its behalf on 21 March 2024 by:
Christopher Sinclair Kris Licht
Director Director
Reckitt Benckiser Group plc Reckitt Benckiser Group plc
Group Balance Sheet
As at 31 December 2023
158 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Note
2

|  |  |  |  |  |  | Total |  |
|  |  |  |  |  |  | attributable |  |
|  |  |  |  |  |  | to owners of | Non- |
|  | Share | Share | Merger | Other | Retained | the parent | controlling | Total
|  | capital | premium | reserves 1 | reserves | earnings | company | interests | equity
|  | £m | £m | £m | £m | £m | £m | £m | £m
Balance at 1January2022 |  | 74 | 253 | (1 4, 22 9) | (1 ,1 8 9) | 22, 49 0 | 7, 3 9 9 | 54 | 7, 4 5 3
Comprehensive income |  |  |  |  |  |  |  |  |
Net income |  | – | – | – | – | 2, 330 | 2,330 | 19 | 2, 3 49
Other comprehensive income/(expense) |  | – | – | – | 895 | (6 3) | 8 32 | 1 | 833
Total comprehensive income |  | – | – | – | 8 95 | 2 , 2 67 | 3, 162 | 20 | 3 ,1 8 2
Transactions with owners |  |  |  |  |  |  |  |  |
Treasury shares reissued | 24 | – | 1 | – | – | 53 | 54 | – | 54
Issuance of shares to non-controlling interest |  | – | – | – | – | – | – | 1 | 1
Share-based payments | 25 | – | – | – | – | 78 | 78 | – | 78
Tax on share awards | 7 | – | – | – | – | (1) | (1) | – | (1)
Cash dividends | 28 | – | – | – | – | (1 , 249) | (1, 249) | (3 5) | (1 , 2 8 4)
Total transactions with owners |  | – | 1 | – | – | (1 ,1 1 9) | (1 ,1 1 8) | (3 4) | (1 ,1 5 2)
Balance at 31 December 2022 |  | 74 | 254 | (1 4, 22 9) | (2 9 4) | 23,638 | 9, 4 4 3 | 40 | 9 ,483
Comprehensive income |  |  |  |  |  |  |  |  |
Net income |  | – | – | – | – | 1,6 43 | 1,6 43 | 14 | 1 , 6 57
Other comprehensive expense |  | – | – | – | (76 6) | (3 6) | (80 2) | (1) | (80 3)
Total comprehensive (expense)/income |  | – | – | – | (76 6) | 1, 607 | 8 41 | 13 | 854
Transactions with owners |  |  |  |  |  |  |  |  |
Treasury shares reissued | 24 | – | – | – | – | 48 | 48 | – | 48
Purchase of ordinary shares by employee share ownership trust |  | – | – | – | – | (2) | (2) | – | (2)
Repurchase of ordinary shares | 24 | – | – | – | – | (5 03) | (5 03) | – | (50 3)
Share-based payments | 25 | – | – | – | – | 1 02 | 102 | – | 1 02
Tax on share awards | 7 | – | – | – | – | 1 | 1 | – | 1
Cash dividends | 28 | – | – | – | – | (1, 3 39) | (1, 3 39) | (8) | (1 , 3 47)
Forward purchase of shares held by non-controlling interest | 30 | – | – | – | – | (1 43) | (1 43) | (24) | (167)
Total transactions with owners |  | – | – | – | – | (1,836) | (1,836) | (32) | (1,868)
Balance at 31 December 2023 |  | 74 | 254 | (1 4, 22 9) | (1,060) | 23 ,409 | 8,448 | 21 | 8,4 69

1. The merger reserve relates to the 1999 combination of Reckitt & Colman plc and Benckiser N.V. and a Group reconstruction in 2007 treated as a merger under Part 27 of the Companies Act 2006
2. Refer to Note26 for an explanation of other reserves
Group Statement of Changes in Equity
For the year ended 31 December 2023
159 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Note

|  | 2023 | 2022
|  | £m | £m
CASH FLOWS FROM OPERATING ACTIVITIES |  |  |
Profit before tax |  | 2,401 | 3 , 0 67
Net finance expense | 6 | 130 | 1 61
Share of loss and impairment of equity-accounted investments | 11 | – | 21
Operating profit from continuing operations |  | 2,531 | 3 , 249
Profit on sale of property, plant and equipment and intangible assets |  | (3 4) | (82)
Depreciation, amortisation and impairment | 9, 10 | 1, 290 | 6 07
Share-based payments | 25 | 102 | 78
Decrease / (increase) in inventories |  | 118 | (25 4)
Increase in trade and other receivables |  | (87) | (23)
Decrease in payables and provisions |  | (91) | (145)
Cash generated from continuing operations |  | 3,829 | 3, 430
Interest paid |  | (293) | (243)
Interest received |  | 30 | 34
Tax paid |  | (922) | (83 1)
Net cash flows attributable to discontinued operations | 32 | (8) | 7
Net cash generated from operating activities |  | 2 ,636 | 2, 397
CASH FLOWS FROM INVESTING ACTIVITIES |  |  |
Purchase of property, plant and equipment | 10 | (34 8) | (362)
Purchase of intangible assets | 9 | (10 1) | (81)
Proceeds from the sale of property, plant and equipment |  | 63 | 84
Proceeds from sale of intangible assets and related businesses, net of cash disposed |  | 1 | 247
Acquisition of businesses, net of cash acquired | 29 | (81) | (12)
Other investing activities |  | – | (15)
Net cash used in investing activities |  | (4 6 6) | (13 9)

Note

|  | 2023 | 2022
|  | £m | £m
CASH FLOWS FROM FINANCING ACTIVITIES |  |  |
Treasury shares reissued | 24 | 48 | 54
Purchase of ordinary shares by employee share ownership trust |  | (2) | –
Repurchase of ordinary shares | 24 | (207) | –
Proceeds from borrowings | 17 | 1,638 | 2 , 2 74
Repayment of borrowings | 17 | (1, 855) | (3 , 8 07)
Dividends paid to owners of the parent company | 28 | (1 ,3 39) | (1 , 249)
Dividends paid to non-controlling interests |  | (8) | (35)
Other financing activities |  | (8 4) | 383
Net cash used in financing activities |  | (1,809) | (2, 3 8 0)
Net increase / (decrease) in cash and cash equivalents |  | 3 61 | (12 2)
Cash and cash equivalents at beginning of the year |  | 1, 156 | 1 , 2 59
Exchange (losses) / gains |  | (1 37) | 19
Cash and cash equivalents at end of the year |  | 1,380 | 1 ,1 5 6
Cash and cash equivalents comprise: |  |  |
Cash and cash equivalents | 16 | 1, 387 | 1 ,1 5 7
Overdrafts | 17 | (7) | (1)
|  | 1,380 | 1 ,1 5 6

1
2
1. Cash flows from other financing activities are principally composed of cash receipts and payments on derivative contracts
used to hedge foreign exchange gains or losses on non-Sterling financing assets and financing liabilities between the Group’s
treasury company and fellow Group subsidiaries
2. Included within cash and cash equivalents is £2 29million of cash (2022:£276million) which is restricted for use by the Group
but is available on demand and freely available for use within the relevant subsidiary (see Note16)
Group Cash Flow Statement
For the year ended 31 December 2023
160 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
1 Accounting Policies
The principal accounting policies adopted in the preparation of these Financial Statements are set out
below. Unless otherwise stated, these policies have been consistently applied to all the years presented.
Basis of preparation
These Financial Statements have been prepared in accordance with the recognition, measurement and
presentation requirements of UK-adopted International Accounting Standards and in accordance with
International Financial Reporting Standards (IFRS Accounting Standards) as issued by the International
Accounting Standards Board (IASB).
These Financial Statements have been prepared under the historical cost convention, as modified by the
revaluation of certain financial assets and liabilities (including derivative instruments) at fair value through
profit or loss or other comprehensive income. A summary of the Group’s accounting policies is set out
below. Historical cost is generally based on the fair value of the consideration given in exchange for
goods and services.
The preparation of Financial Statements that conform to IFRS requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at the Balance Sheet date
and revenue and expenses during the reporting period. Although these estimates are based on
management’s best knowledge at the time, actual amounts may ultimately differ from those estimates.
New standards, amendments and interpretations
The following amended standards and interpretations were adopted by the Group during the year
ending 31 December 2023. These amended standards and interpretations have not had a significant
impact on the consolidated Financial Statements.
– Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12)
– Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2)
– Definition of Accounting Estimates (Amendments to IAS 8)
– IFRS 17 Insurance Contracts
On 23 May 2023, the International Accounting Standards Board issued International Tax Reform—Pillar
Two Model Rules – Amendments to IAS 12. The Group has applied the mandatory temporary exception to
the accounting for deferred taxes arising from the jurisdictional implementation of the Pillar Two rules set
out therein.
The following new and amended standards are effective for annual periods beginning on or after
1 January 2024. The Group has not early adopted the new or amended standards, where applicable,
in preparing these consolidated Financial Statements. These amendments are not expected to have
a material impact on the Group in the current or future reporting periods:
– Classification of Liabilities as Current or Non-current (Amendments to IAS 1)
– Lease Liability in a Sale and Leaseback (Amendments to IFRS 16)
– Supplier financing arrangements (Amendments to IAS 7 and IFRS 7)
– Lack of exchangeability (Amendments to IAS 21)
– Non-current liabilities with covenants (Amendments to IAS 1)
Going concern
Having assessed the principal risks and other matters discussed in connection with the Viability
Statement, the Directors considered it appropriate to adopt the going concern basis of accounting in
preparing the consolidated Financial Statements. When reaching this conclusion, the Directors took into
account the Group’s overall financial position, exposure to principal risks and future business forecasts.
At 31 December 2023, the Group had cash and cash equivalents (excluding restricted cash) of £1.2 billion.
The Group also had access to committed borrowing facilities of £4.5 billion, which were undrawn at year
end and of which £4.45 billion are not subject to renewal until 2025 onwards. Further detail is contained
within the Viability Statement on page 61 and within the liquidity disclosures in Note 15.
Basis of consolidation
The consolidated Financial Statements include the results of Reckitt Benckiser Group plc, a company
registered in the UK, and all its subsidiary undertakings made up to the same accounting date. Subsidiary
undertakings are those entities controlled by Reckitt Benckiser Group plc. Control exists where the
Group is exposed to, or has the rights to variable returns from its involvement with, the investee and has
the ability to use its power over the investee to affect its returns.
Intercompany transactions, balances and unrealised gains on transactions between Group companies
have been eliminated on consolidation. Unrealised losses have also been eliminated to the extent that
they do not represent an impairment of a transferred asset. The accounting policies of subsidiaries have
been changed where necessary to ensure consistency with accounting policies adopted by the Group.
Climate Change
In preparing the Financial Statements, management have considered the impact of climate change,
specifically with reference to the disclosures included in the Strategic Report and the Group’s 2030
Sustainability Ambitions, in particular in relation to impairment testing of intangible assets. These factors
have not had a significant effect on the Group’s critical accounting estimates and judgments made with
respect to the current year.
Notes to the Financial Statements
161 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Foreign currency translation
Items included in the Financial Statements of each of the Group’s entities are measured using the
currency of the primary economic environment in which the entity operates (the functional currency). The
consolidated Financial Statements are presented in Sterling, which is the Group’s presentational currency.
Foreign currency transactions are translated into the functional currency using exchange rates prevailing
at the dates of the transactions. Foreign exchange gains and losses resulting from the settlement
of foreign currency transactions and from the translation of foreign currency denominated monetary
assets and liabilities are recognised in the Income Statement, except where hedge accounting is applied.
The Financial Statements of subsidiary undertakings with a non-Sterling functional currency are
translated into Sterling on the following basis:
– Assets and liabilities: at the rate of exchange ruling at the year end date
– Income Statement items: at the average rate of exchange for the year
Exchange differences arising from the translation of the net investment in subsidiary undertakings
with a non-Sterling functional currency, and of borrowings and other currency instruments designated
as hedges of such investments, are recorded in equity on consolidation.
Business combinations
The acquisition method is used to account for the acquisition of subsidiaries and businesses.
Identifiable net assets acquired (including intangible assets) in a business combination are measured
initially at their fair values at the acquisition date.
Where the measurement of the fair value of identifiable net assets acquired is incomplete at the end
of the reporting period in which the combination occurs, the Group will report provisional fair values.
Final fair values are determined within a year of the acquisition date and retrospectively applied.
The excess of the consideration transferred and the amount of any non-controlling interest over the fair
value of the identifiable assets (including intangibles), liabilities and contingent liabilities acquired is
recorded as goodwill.
The consideration transferred is measured at the fair value of the assets given, equity instruments issued
(if any), and liabilities assumed or incurred at the date of acquisition.
Acquisition-related costs are expensed as incurred.
The results of the subsidiaries and businesses acquired are included in the consolidated Financial
Statements from the acquisition date.
Assets held for sale and disposal groups
Non-current assets, or disposal groups comprising assets and liabilities, are classified as held for sale and
presented separately in the Balance Sheet when the following criteria are met: the Group is committed
to selling the asset or disposal group; it is available for immediate sale in its current condition; an active
plan of sale has commenced and been approved in line with Group policy; and in the judgement of Group
management it is highly probable that the sale will be completed within 12 months.
Immediately before the initial classification of the assets and disposal groups as held for sale, the
carrying amounts of the assets (or all the assets and liabilities in the disposal groups) are measured
in accordance with the applicable accounting standards. Goodwill (including cost and accumulated
impairment) is allocated to the disposal group using a relative value approach, unless a different method
better reflects goodwill associated with the disposal.
Assets held for sale and disposal groups are subsequently measured at the lower of their carrying
amount and fair value less costs of disposal. Impairment losses on initial classification as held for sale, and
subsequent gains and losses on remeasurement to fair value less costs of disposal, are recognised in the
Income Statement. Once classified as held for sale, intangible assets and property, plant and equipment
are no longer amortised or depreciated.
Disposals of intangible assets and subsidiaries
The financial performance of subsidiaries and businesses are included in the consolidated Financial
Statements up to the point at which the Group ceases to have control over that subsidiary. Intangible
assets not disposed of through the sale of shares in subsidiaries are treated as disposed at the point
that the Group ceases to control the asset.
The difference between the fair value of the consideration (net of costs) and the carrying value of the
assets and liabilities disposed is recognised as a gain or loss in the Income Statement. Any amounts
previously recognised in other comprehensive income in respect of that subsidiary or asset, including
exchange gains or losses on foreign currency translation, are accounted for as if the Group had directly
disposed of related assets and liabilities. This results in a reclassification of amounts previously
recognised in other comprehensive income to the Income Statement and included within the loss
on disposal of intangible assets and related businesses.
Where the assets and liabilities disposed represent a partial disposal of a cash generating unit to which
goodwill has been allocated, goodwill is allocated using a relative value approach to the disposal group,
unless a different method better reflects goodwill associated with the disposal.
Where the tax base will not be transferred with the disposed assets, the deferred tax balances relating
to the intangible assets are not considered part of the assets disposed and are instead credited or
charged to the Income Statement within income tax expense.
Notes to the Financial Statements continued
1 Accounting Policies continued
162 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Liquidation of subsidiaries
The Group liquidates subsidiaries that are no longer required in order to simplify the Group structure.
As part of this process, the Group ensures any outstanding matters relating to the subsidiary are resolved
before liquidation. Any amounts previously recognised in other comprehensive income in respect of
that subsidiary, including exchange gains and losses on foreign currency translation, are reclassified
to the Income Statement on disposal which is typically on entering liquidation. The amounts previously
recognised in other comprehensive income are included within finance income in the Income Statement.
Non-controlling interests
On an acquisition-by-acquisition basis, the non-controlling interest is measured at either fair value
or a proportionate share of the acquiree’s net assets.
Purchases of non-controlling interests are accounted for as transactions with the owners and therefore
no goodwill is recognised as a result of such transactions.
Revenue
Revenue from the sale of products is recognised in the Group Income Statement as and when
performance obligations are satisfied by transferring control of the product or service to the customer.
Net Revenue is defined as the amount invoiced to external customers during the year and comprises,
as required by IFRS 15, gross sales net of trade spend, customer allowances for credit notes, returns
and consumer coupons. The methodology and assumptions used to estimate credit notes, returns and
consumer coupons are monitored and adjusted regularly in the light of contractual and legal obligations,
historical trends, past experience and projected market conditions.
Trade spend, which consists primarily of customer pricing allowances, placement/listing fees
and promotional allowances, is governed by sales agreements with the Group’s trade customers
(retailers and distributors). Trade spend also includes reimbursement arrangements under the Special
Supplemental Nutrition Program for Women, Infants and Children (WIC), payable to the respective
US state WIC agencies.
Accruals are recognised under the terms of these agreements to reflect the expected activity level
and the Group’s historical experience. These accruals are reported within trade and other payables.
Value-added tax and other sales taxes are excluded from Net Revenue.
Operating segments
Operating segments are reported in a manner consistent with the internal reporting provided to
the Chief Operating Decision Maker (CODM). The CODM, who is responsible for allocating resources
and assessing performance of the operating segments, has been identified as the Group
Executive Committee.
Research and development
Research expenditure is expensed in the year in which it is incurred.
Development expenditure is expensed in the year in which it is incurred, unless it meets the requirements
of IAS 38 to be capitalised and then amortised over the useful life of the developed product.
Income tax
Income tax on the profit for the year comprises current and deferred tax. Income tax is recognised in
the Income Statement except to the extent that it relates to items recognised in other comprehensive
income or directly in equity, in which case the tax is also recognised in other comprehensive income
or directly in equity, respectively.
Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or
substantively enacted in each jurisdiction at the Balance Sheet date, and any adjustment to tax payable
in respect of previous years.
Deferred tax is provided in full, using the liability method, on temporary differences arising between
the tax bases of assets and liabilities and their carrying amounts in the consolidated Financial
Statements. Deferred tax is not accounted for if it arises from the initial recognition of an asset or
liability in a transaction (other than a business combination) that affects neither accounting nor taxable
profit or loss at that time. Deferred tax is determined using tax rates (and laws) that have been enacted
or substantively enacted at the Balance Sheet date and are expected to apply when the deferred tax
asset or liability is settled. Deferred tax assets are recognised to the extent that it is probable that future
taxable profit will be available against which the temporary differences can be utilised.
Deferred tax is provided on temporary differences arising on investments in subsidiaries except where
the investor is able to control the timing of the reversal of the temporary differences and it is probable
that the temporary difference will not reverse in the foreseeable future.
Deferred tax assets and liabilities within the same tax jurisdiction are offset where there is a legally
enforceable right to offset current tax assets against current tax liabilities and where there is an intention
to settle these balances on a net basis.
Notes to the Financial Statements continued
1 Accounting Policies continued
163 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Goodwill and other intangible assets
(i) Goodwill
Goodwill is allocated to the cash generating unit (CGU), or group of CGUs (GCGU), to which it relates
and is tested annually for impairment. Goodwill is carried at cost less accumulated impairment losses.
(ii) Brands
Separately acquired brands are shown at cost less accumulated amortisation and impairment.
Brands acquired as part of a business combination, and that are separately identifiable, are recognised
at fair value and amortised over their useful economic life as determined at the acquisition date
(up to 20 years), except when their life is determined as being indefinite.
Applying indefinite lives to certain acquired brands is appropriate due to the stable long-term nature
of the business and the enduring nature of the brands. A core element of the Group’s strategy is to invest
in building its brands through an ongoing programme of product innovation and continuing marketing
investment. Within the Group, a brand typically comprises an assortment of base products and more
innovative products. Both contribute to the enduring nature of the brand. The base products establish
the long-term positioning of the brand while a succession of innovations attracts ongoing consumer
interest and attention. Indefinite life brands are allocated to the CGUs or GCGUs to which they relate
and are tested annually for impairment.
The Directors also review the useful economic life of brands annually, to ensure that these lives are still
appropriate. If a brand is considered to have a finite life, its carrying value is amortised over its remaining
estimated useful economic life.
(iii) Software
Expenditure relating to the acquisition of computer software licences and systems are capitalised
at cost. The assets are amortised on a straight-line basis over a period of seven years for systems
and five years or less for all other software licences.
(iv) Distribution rights
Payments made in respect of product registration, acquired and reacquired distribution rights are
capitalised where the rights comply with the above requirements for recognition of acquired brands.
If the registration or distribution rights are for a defined time period, the intangible asset is amortised
over that period. If no time period is defined, the intangible asset is treated in the same way as
acquired brands.
(v) Customer contracts
Acquired customer contracts are capitalised at cost. These costs are amortised on a straight-line basis
over the period of the contract.
(vi) Customer relationships
Customer relationships are shown at cost less accumulated amortisation and impairment. Customer
relationships acquired as part of a business combination, and that are separately identifiable, are
recognised at fair value and amortised over their useful economic life as determined at the acquisition
date (up to 10 years).
(vii) Acquired intellectual property
Intellectual property rights acquired as part of the business and that are separately identifiable are
recognised at fair value and amortised over their useful economic life as determined at the acquisition
date (up to 20 years).
Amortisation of intangible assets in (ii) to (vii) is charged to cost of goods sold or net operating expenses
depending on the use of the asset.
Property, plant and equipment
Property, plant and equipment is stated at cost less accumulated depreciation and impairment, with
the exception of freehold land, which is shown at cost less impairment. Cost includes expenditure
that is directly attributable to the acquisition of the asset. Except for freehold land and assets under
construction, the cost of property, plant and equipment is depreciated on a straight-line basis over the
period of the expected useful life of the asset. For this purpose, expected lives are determined within
the following limits:
– freehold buildings: not more than 50 years;
– leasehold land and buildings: the lesser of 50 years or the life of the lease; and
– owned plant and equipment: not more than 15 years (except for environmental assets and spray dryers
which are not more than 30 years).
In general, production plant and equipment and office equipment are depreciated over 10 years or less
and motor vehicles and computer equipment over 5 years or less.
Assets’ residual values and useful lives are reviewed, and adjusted if necessary, at each Balance Sheet
date. Property, plant and equipment is reviewed for impairment if events or changes in circumstances
indicate that the carrying amount may not be appropriate. Freehold land is reviewed for impairment on
an annual basis.
Gains and losses on the disposal of property, plant and equipment are determined by comparing the
asset’s carrying value with any sale proceeds and are included in the Income Statement.
Notes to the Financial Statements continued
1 Accounting Policies continued
164 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Leases
The Group has various lease arrangements for buildings (such as offices and warehouses), cars,
and IT and other equipment. Lease terms are negotiated on an individual basis locally and subject to
domestic rules and regulations. At the inception of a lease contract, the Group assesses whether the
contract conveys the right to control the use of an identified asset for a certain period in exchange
for consideration, in which case it is identified as a lease. The Group recognises a right of use asset and
a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except
for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value
assets. Low value leases are those with an underlying asset value of USD 5,000 or less. For these leases,
the Group recognises the lease payments as an operating expense on a straight-line basis over the term
of the lease.
Right of use assets
At commencement date, right of use assets are measured at cost, which comprises the following:
– the initial measurement of the lease liability;
– prepayments before commencement date of the lease;
– initial direct costs; and
– costs to restore.
Subsequent to initial recognition right of use assets are depreciated on a straight-line basis over the
duration of the contract. Right of use assets are assessed for impairment where indicators of impairment
are present.
Lease liabilities
At commencement date, lease liabilities are measured at the present value of lease payments not yet
paid including:
– fixed payments excluding lease incentive receivables;
– future contractually agreed fixed increases; and
– payments related to renewals or early termination, when options to renew or for early termination
are reasonably certain to be exercised.
Subsequent to initial recognition lease liabilities are increased by the interest costs on the lease liabilities
and decreased by lease payments made. Lease liabilities held are remeasured to account for revised
future payments.
Impairment of assets
Assets that have indefinite lives, including goodwill and brands, are tested annually for impairment
at the level where cash flows are considered to be largely independent. This testing is performed
at either the CGU or GCGU level. All CGUs and GCGUs are tested for impairment if there is an event
or circumstance that indicates that their carrying value may not be recoverable. If the carrying
value exceeds its recoverable amount an impairment loss is recognised in the Income Statement.
The recoverable amount is the higher of the CGU’s or GCGU’s value-in-use and its fair value less costs
of disposal.
Value-in-use is calculated with reference to the future and terminal cash flows expected to be
generated by each CGU or GCGU (or group of assets where cash flows are not identifiable to specific
assets). The discount rates used in the impairment reviews are based on weighted average cost of
capital (WACC) specific to each CGU and GCGU, with the WACC converted to the implied pre-tax rates.
Fair value less costs of disposal is calculated using a discounted cash flow approach prepared on a
market participant basis, with a post-tax discount rate applied to projected risk-adjusted post-tax cash
flows and terminal value.
Inventories
Inventories are stated at the lower of cost and net realisable value. Cost comprises materials, direct labour
and an appropriate portion of overhead expenses (based on normal operating capacity) required to get
the inventory to its present location and condition. Inventory valuation is determined on a first in, first out
(FIFO) basis. Net realisable value represents the estimated selling price less applicable selling expenses.
Trade and other receivables
Trade and other receivables are initially recognised at the fair value of consideration less transaction
costs and subsequently held at amortised cost, less provision for discounts and doubtful debts.
Allowance losses are calculated by reviewing lifetime expected credit losses using historic and forward-
looking data on credit risk.
Trade and other payables
Trade and other payables are initially recognised at fair value including transaction costs and
subsequently carried at amortised cost.
Cash and cash equivalents
Cash and cash equivalents comprise cash balances and other deposits with a maturity of less than three
months when deposited.
For the purpose of the Cash Flow Statement, bank overdrafts that form an integral part of the Group’s
cash management, and are repayable on demand, are included as a component of cash and cash
equivalents. Bank overdrafts are included within short-term borrowings in the Balance Sheet.
Notes to the Financial Statements continued
1 Accounting Policies continued
165 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Borrowings
Interest-bearing borrowings are recognised initially at fair value less, where permitted by IFRS 9, any
directly attributable transaction costs. Subsequent to initial recognition, interest-bearing borrowings
are stated at amortised cost with any difference between cost and redemption value being recognised
in the Income Statement over the period of the borrowings on an effective interest basis.
Cash flows relating to interest are presented within operating cash flows. Proceeds and repayment of
principal amounts are presented as financing cash flows and are presented gross, except for borrowings
with maturities of less than three months (including commercial paper), which are presented net.
Derivative financial instruments and hedging activity
The Group may use derivatives to manage its exposures to fluctuating interest and foreign exchange rates.
These instruments are initially recognised at fair value on the date the contract is entered into and are
subsequently remeasured at their fair value. The method of recognising the resulting gain or loss depends on
whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.
At the inception of designated hedge relationships, the Group documents its risk management objectives
and strategy for undertaking various hedging transactions. The Group also documents its assessment,
both at hedge inception and on an ongoing basis, of whether the derivatives that are used in hedging
transactions are highly effective in offsetting changes in cash flows or fair values of hedged items.
The Group designates certain derivatives as either:
– hedges of a particular risk associated with a recognised asset or liability or a highly probable forecast
transaction (cash flow hedges); or
– hedges of the fair value of recognised assets or liabilities or a firm commitment (fair value hedges).
Derivatives designated as cash flow hedges
The effective portion of changes in the fair value of derivatives that are designated and qualify as cash
flow hedges is recognised in other comprehensive income and accumulated in the hedging reserve.
Any gain or loss relating to the ineffective portion is recognised immediately in the Income Statement.
When the hedged forecast transaction subsequently results in the recognition of a non-financial item
such as inventory, the amount accumulated in the hedging reserve and the cost of hedging reserve
is included directly in the initial cost of the non-financial item when it is recognised. For all other
transactions, the amounts accumulated in the hedging reserve are recycled to the Income Statement
in the period (or periods) when the hedged item affects the Income Statement.
If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires,
is terminated, or is exercised, then hedge accounting is discontinued prospectively. The amount that has
been accumulated in the hedging reserve remains in equity until it is either included in the cost of a
non-financial item or recycled to the Income Statement.
Derivatives designated as fair value hedges
Fair value hedges are used to manage the currency and/or interest rate risks to which the fair value
of certain assets and liabilities are exposed. Changes in the fair value are recognised in the Income
Statement, together with any changes in the fair value of the hedged asset or liability that are
attributable to the hedged risk. If such a hedge relationship no longer meets hedge accounting criteria,
fair value movements on the derivative continue to be taken to the Income Statement while any fair
value adjustments made to the underlying hedged item to that date are amortised through the Income
Statement over its remaining life using the effective interest rate method.
Changes in the fair value of any derivative instruments that do not qualify for hedge accounting are
recognised immediately in the Income Statement.
Net investment hedges
Gains and losses on those hedging instruments designated as hedges of the net investments in foreign
operations are recognised in other comprehensive income to the extent that the hedging relationship
is effective. Gains and losses accumulated in the foreign currency translation reserve are recycled
to the Income Statement when the foreign operation is disposed of.
Equity investments
Equity investments are investments that are neither held for trading nor classified as investments in
subsidiaries, associates or joint arrangements. Subsequent to their initial recognition, equity investments
are stated at their fair value. Gains and losses arising from subsequent changes in the fair value are
recognised in the Income Statement or in other comprehensive income on a case-by-case basis.
Accumulated gains and losses included in other comprehensive income are not recycled to the Income
Statement. Dividends from other investments are recognised in the Income Statement.
Investment in associates
Investments in associates are accounted for using the equity method. An associate is an entity over
which the Group has significant influence, being the power to participate in the investee’s financial and
operating policy decisions without control or joint control.
Interests in associates are stated in the consolidated Balance Sheet at cost, adjusted for the movement
in the Group’s share of their net assets and liabilities. The Group’s share of the profit or loss after tax
of associates is included in the Group’s consolidated profit before taxation. Unrealised intragroup profits
or losses from transactions are offset against the carrying amount of the investment on a pro-rata basis
during consolidation, if material.
When the Group’s share of losses exceeds its interest in an associate, the Group does not recognise
further losses, unless it has incurred obligations or made payments on behalf of the associate.
The Financial Statements of the companies accounted for using the equity method are prepared
in accordance with uniform accounting and measurement methods throughout the Group.
Notes to the Financial Statements continued
1 Accounting Policies continued
166 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Employee share schemes
Incentives in the form of shares are provided to employees under equity-settled share option
and restricted share schemes, which have various combinations of market-based and non-market
performance conditions, service conditions, and non-vesting conditions.
The fair value determined at the award grant date takes into account the probability of any relevant
market-based performance conditions and non-vesting conditions being satisfied and is subsequently
expensed on a straight-line basis over the vesting period, based on the Group’s estimate of equity
instruments that will eventually vest. This estimate takes into account the expected outcome for
relevant non-market performance conditions and service conditions but assumes satisfaction of all
market-based performance conditions and non-vesting conditions. At each Balance Sheet date, the
Group revises its estimate of the number of equity instruments expected to vest. The impact of the
revision of the original estimates, if any, is recognised in the Income Statement such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
Additional employer costs, including social security taxes, in respect of options and awards are charged
to the Income Statement over the same period with a corresponding liability recognised.
Pension commitments
Group companies operate defined contribution and (funded and unfunded) defined benefit
pension plans.
The cost of providing pensions to employees who are members of defined contribution plans is charged
to the Income Statement as contributions are made. The Group has no further payment obligations once
the contributions have been paid.
The deficit or surplus recognised in the Balance Sheet in respect of defined benefit pension plans is
the present value of the defined benefit obligation at the Balance Sheet date, less the fair value of the
plan assets. The defined benefit obligation is calculated annually by independent actuaries using the
projected unit credit method. The present value of the defined benefit obligation is determined by
discounting the estimated future cash flows by the yield on high-quality corporate bonds denominated
in the currency in which the benefits will be paid, and that have a maturity approximating to the terms of
the pension obligations. The costs of providing these defined benefit plans are accrued over the period
of employment. Actuarial gains and losses are recognised immediately in other comprehensive income.
Past service costs are recognised immediately in the Income Statement.
The net interest amount is calculated by applying the discounted rate used to measure the defined
benefit obligation at the beginning of the period to the net defined benefit liability/asset.
The net pension plan interest is presented as other finance income/other finance expense.
Post-retirement benefits other than pensions
Some Group companies provide post-retirement medical care to their retirees. The costs of providing
these benefits are accrued over the period of employment and the liability recognised in the Balance
Sheet is calculated using the projected unit credit method and is discounted to its present value and
the fair value of any related asset is deducted.
Provisions
Provisions are recognised when the Group has a present legal or constructive obligation as a result
of past events; it is more likely than not that there will be an outflow of resources to settle that
obligation; and the amount can be reliably estimated. Provisions are valued at the present value of the
Directors’ best estimate of the expenditure required to settle the obligation at the Balance Sheet date.
Where it is possible that an outflow of resources may be required to settle the obligation or it is not
possible to make a reliable estimate of the estimated financial impact, appropriate disclosure is made
but no provision recognised.
Repurchase and reissuance of ordinary shares
When shares recognised as equity are repurchased, the amount of the consideration paid, including
directly attributable costs, is recognised as a charge to equity. Repurchased shares are classified as
Treasury shares and are presented in retained earnings. When Treasury shares are sold or reissued
subsequently, the amount received is recognised as an increase in equity and any resulting surplus
is presented within share premium or deficit presented within retained earnings.
Dividend distribution
Dividends to owners of the parent company are recognised as a liability in the period in which the
dividends are approved by the company’s shareholders. Interim dividends are recorded in the period
in which they are approved and paid.
Dividend payments are recorded at fair value. Where non-cash dividend payments are made, gains arising
as a result of fair value remeasurements are recognised in the Income Statement in the same period.
Accounting estimates and judgements
In preparing these consolidated Financial Statements, management has made judgements and estimates
that affect the application of the Group’s accounting policies and the reported amounts of assets,
liabilities, income and expenses. Actual amounts and results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only
that period, or in the period of the revision and future periods if the revision affects both current
and future periods.
Notes to the Financial Statements continued
1 Accounting Policies continued
167 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Critical judgements in applying the Group’s accounting policies
Over the course of the year, management has made a number of critical judgements in the application
of the Group’s accounting policies. These include the following:
– management has made judgments relating to the allocation of consideration between the different
elements in the forward contract to purchase the non-controlling interest in RB Manon as outlined
in Note 30;
– management has identified matters (including the Korea Humidifier Sanitiser, Necrotizing Enterocolitis
and Phenylephrine issues) that may incur liabilities in the future but does not recognise these liabilities
when it is too early to determine the likely outcome or make a reliable estimate (Note 18, Note 20);
– the continuing enduring nature of the Group’s brands supports the indefinite life assumption for
certain of these assets (Note 9); and
– assumptions are made as to the recoverability of tax assets especially as to whether there will be
sufficient future taxable profits in the same jurisdictions to fully utilise losses in future years (Note 12).
Key sources of estimation uncertainty
Each year, management is required to make a number of assumptions regarding the future. The related
year end accounting estimates will, by definition, seldom equal the final actual results. The estimates
and assumptions that have a significant risk of causing a material adjustment to the carrying amounts
of assets and liabilities within the next financial year are addressed below.
Goodwill and indefinite life intangible assets:
Under IFRS, goodwill and other indefinite life intangible assets must be tested for impairment on at least
an annual basis. As disclosed further in Note 9, this testing generally requires management to make
multiple estimates, for example around individual market pressures and forces, future price and volume
growth, future margins, terminal growth rates and discount rates.
The recoverability of the Group’s goodwill and indefinite-lived intangible assets in relation to IFCN is
sensitive to reasonably possible changes in key assumptions. Further information on key estimates and
assumptions, including details on the sensitivities of the value-in-use estimates to reasonable changes
in key assumptions, is included in Note 9.
Tax:
The actual tax paid on profits is determined based on tax laws and regulations that differ across the
numerous jurisdictions in which the Group operates. Assumptions are made in applying these laws to
the taxable profits in any given period in order to calculate the tax charge for that period. Where the
eventual tax paid or reclaimed is different to the amounts originally estimated, the difference is charged
or credited to the Income Statement in the period in which it is determined (Note 7).
The Group operates in an international tax environment and is subject to tax examinations and
uncertainties in a number of jurisdictions. The issues involved can be complex and disputes may take a
number of years to resolve. Each uncertainty is separately assessed and management applies judgement
in the recognition and measurement of the uncertainty based on the relevant circumstances. The
exposure recognised is calculated based on the expected value method or the most likely outcome
method, depending on whether there are a wide range of possible outcomes or if resolution of the
uncertainty is concentrated on one outcome. In particular, the range of possible outcomes relating to
transfer pricing exposures can be wide and, in these scenarios, the expected value method is employed.
The accounting estimates and judgements considered include:
– status of the unresolved matter;
– clarity of relevant legislation and related guidance;
– pre-clearances issued by taxing authorities;
– advice from in-house specialists and opinions of professional firms;
– resolution process and range of possible outcomes;
– past experience and precedents set by the particular taxing authority;
– decisions and agreements reached in other jurisdictions on comparable issues;
– unutilised tax losses, tax credits and availability of mutual agreement procedures between tax
authorities; and
– statute of limitations.
Management is of the opinion that the carrying values of the liability for uncertain tax positions made in
respect of these matters represent its best estimate once all facts and circumstances have been taken
into account. Nevertheless, the final amounts paid to discharge the liabilities arising (either through
negotiated settlement or litigation) may be different from the position recognised. The net liabilities
recognised in respect of uncertain tax positions as at 31 December 2023 are £619 million
(2022: £722 million) (Note 22).
Notes to the Financial Statements continued
1 Accounting Policies continued
168 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Trade spend:
The Group provides for amounts payable to our trade customers for promotional activity and
government reimbursement arrangements. Where an activity spans the year end, an accrual is reflected
in the consolidated Financial Statements based on our estimation of customer and consumer uptake
during the relevant period and the extent to which temporary funded activity has occurred. As there is a
timing difference between that initial estimation and final settlement of trade spend with our customers,
differences can result on final settlement. As at 31 December 2023, the Group recognised total accruals
of £1,125 million (2022: £1,137 million) in respect of amounts payable to trade customers and government
bodies for trade spend. The Group’s trade spend arrangements vary considerably by market and
category, and the Group’s trade spend accruals are made up of many individually small accruals.
Therefore, an aggregated disclosure of sensitivity analysis on the key inputs to trade spend accrual
estimates would not be practicable nor meaningful. Nevertheless, a 13% (2022: 11%) difference between
those initial estimates and final settlement would cause a material charge or credit to the Income
Statement in the next financial year. During 2023, adjustments to trade spend accruals as at 31 December
2022, due to changes in accounting estimates, were £132 million (2022: £110 million adjustment to trade
spend accruals as at 31 December 2021, due to changes in accounting estimates).
Legal provisions:
The Group recognises legal provisions when the Group has a present legal or constructive obligation as
a result of past events; it is more likely than not that there will be an outflow of resources to settle that
obligation; and the amount can be reliably estimated. The level of provisioning in relation to civil and/or
criminal investigations is an area where management and legal judgement are important, with individual
provisions being based on best estimates of the possible loss, considering all available information,
external advice and historical experience. As at 31 December 2023, the Group recognised legal
provisions of £137 million (2022: £221 million) in relation to a number of historical regulatory and other
matters in various jurisdictions.
2 Operating Segments
The Group’s operating segments comprise the Hygiene, Health and Nutrition business units reflecting
the way in which information is presented to and reviewed by the Group’s Chief Operating Decision
Maker (CODM) for the purposes of making strategic decisions and assessing Group-wide performance.
The CODM is the Group Executive Committee. This Committee is responsible for the implementation of
strategy (approved by the Board), the management of risk (delegated by the Board) and the review of
Group operational performance and ongoing business integration.
The Group Executive Committee assesses the performance of these operating segments based on
Net Revenue from external customers and segment profit being adjusted operating profit. Intercompany
transactions between operating segments are eliminated. Finance income and expense are not
allocated to segments, as each is managed on a centralised basis.
The segment information for the operating segments for the year ended 31 December 2023 and
31 December 2022 is as follows:

|  |  |  | Adjusting |
| Hygiene | Health | Nutrition | items | Total
Year ended 31 December 2023 | £m | £m | £m | £m | £m
Net revenue | 6,135 | 6,062 | 2,410 | – | 14,607
Depreciation and amortisation |  |  |  |  |
(Note 9 & 10) | (155) | (193) | (96) | (26) | (470)
Operating profit | 1,236 | 1,690 | 447 | (842) | 2,531
Net finance expense |  |  |  |  | (130)
Profit before income tax |  |  |  |  | 2,401
Income tax charge |  |  |  |  | (753)
Net profit from continuing operations |  |  |  |  | 1,648

|  |  |  | Adjusting |
| Hygiene | Health | Nutrition | items | Total
Year ended 31 December 2022 | £m | £m | £m | £m | £m
Net revenue | 5,960 | 5,992 | 2,501 | – | 14,453
Depreciation and amortisation | (135) | (177) | (90) | (35) | (437)
Operating profit | 1,214 | 1,648 | 577 | (190) | 3,249
Net finance expense |  |  |  |  | (161)
Impairment of equity-accounted |  |  |  |  |
investments |  |  |  |  | (19)
Share of loss of equity-accounted |  |  |  |  |
investments, net of tax |  |  |  |  | (2)
Profit before income tax |  |  |  |  | 3,067
Income tax charge |  |  |  |  | (711)
Net profit from continuing operations |  |  |  |  | 2,356

Financial information for the Hygiene, Health and Nutrition operating segments is presented on an
adjusted basis which excludes certain cash and non-cash items. These items have a pattern of recognition
that is largely uncorrelated with the trading performance of the business. Financial information on an
adjusted basis is consistent with how management reviews the business for the purpose of making
operating decisions. Further detail on adjusting items, which includes in the year to 31 December 2023
the £810 million impairment of IFCN goodwill (see Note 9) is included on pages 223-227.
Notes to the Financial Statements continued
1 Accounting Policies continued
169 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The company is domiciled in the UK. The split of Net Revenue from external customers and Non-current
assets (other than equity instruments, deferred tax assets and retirement benefit surplus assets) between
the UK, the US (being the biggest country outside the country of domicile) and that from all other countries is:
2023
UK

|  |  | All other |
|  | US | countries | Total
| £m | £m | £m | £m
Net Revenue | 886 | 4,538 | 9,183 | 14,607
Goodwill and other intangible assets | 1,903 | 9,646 | 7,039 | 18,588
Property, plant and equipment | 290 | 768 | 1,341 | 2,399
Other non-current receivables (excluding Derivative |  |  |  |
financial instruments) | 12 | 18 | 92 | 122

2022

|  |  | All other |
| UK | US | countries | Total
| £m | £m | £m | £m
Net Revenue | 778 | 4,603 | 9,072 | 14,453
Goodwill and other intangible assets | 1,875 | 10,905 | 7,423 | 20,203
Property, plant and equipment | 314 | 828 | 1,331 | 2,473
Other non-current receivables | 22 | 54 | 81 | 157

Major customers are typically large grocery chains, multiple retailers and e-commerce platforms.
The Group’s customer base is diverse with no individual customer accounting for more than 10%
of net revenue (2022: no individual more than 10% of revenue).
3 Analysis of Net Operating Expenses

| 2023 | 2022
| £m | £m
Distribution costs | (3,703) | (3,438)
Research and development costs | (337) | (325)
Other administrative expenses | (1,382) | (1,205)
Impairment of goodwill | (810) | (167)
Gain on disposal of intangible assets and related businesses | – | 14
Other net operating income | 3 | 9
Net operating expenses | (6,229) | (5,112)

Other administrative expenses includes a net foreign exchange loss of £6 million (2022: loss of
£13 million). In 2023, Other administrative expenses includes a gain of £36 million (2022: £59 million)
relating to property disposals .
Impairment of goodwill of £810 million in 2023 relates to the IFCN business, which comprises the Nutrition
operating segment. The impairment of goodwill in 2022 of £167 million principally comprises a charge of
£152 million from the impairment of goodwill related to the acquisition of Biofreeze (see Note 9).
Biofreeze is reported in the Health operating segment.
4 Auditor Remuneration
During the year, the Group (including its overseas subsidiaries) obtained the following services from the
company’s Auditor and its associates:

| 2023 | 2022
| £m | £m
Audit services pursuant to legislation |  |
Audit of the Group’s Annual Report and Financial Statements | 8.9 | 8.4
Audit of the Financial Statements of the Group’s subsidiaries | 10.5 | 11.1
Audit-related assurance services | 0.9 | 0.8
Total audit and audit-related services | 20.3 | 20.3
Fees payable to the company’s Auditor and its associates for other services |  |
Other assurance services | 0.4 | 2.7
Total non-audit services | 0.4 | 2.7
| 20.7 | 23.0

5 Employee Costs
Total employee costs, including those for Directors, were:
Note

|  | 2023 | 2022
|  | £m | £m
Wages and salaries |  | 2,126 | 1,988
Social security costs |  | 281 | 281
Other pension costs | 23 | 60 | 61
Share-based payments | 25 | 102 | 78
Total staff costs |  | 2,569 | 2,408

Executive and Non-Executive Directors’ aggregate emoluments are disclosed on pages 100-132 of the
Directors’ Remuneration Report. Compensation awarded to key management (defined as the members
of the Group Executive Committee and the Non-Executive Directors) was:

| 2023 | 2022
| £m | £m
Short-term employee benefits | 31 | 26
Post-employment and other long-term benefits | – | –
Share-based payments | 22 | 15
| 53 | 41

Notes to the Financial Statements continued
2 Operating Segments continued
170 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Staff numbers
The monthly average number of people employed by the Group, including Directors, during the year was:

| 2023 | 2022
| ’000 | ’000
North America | 5.2 | 5.1
Europe/ANZ | 14.2 | 14.3
Rest of world | 20.7 | 20.6
| 40.1 | 40.0

6 Net Finance Expense

| 2023 | 2022
| £m | £m
Finance income |  |
Foreign exchange net gain on liquidation of subsidiaries | 130 | 69
Interest income on cash and cash equivalents | 41 | 29
Pension net finance income | 8 | 5
Foreign exchange gains on intercompany financing, net of hedging | 21 | –
Finance income on tax balances | – | 26
Other finance income | 10 | 1
Total finance income | 210 | 130
Finance expense |  |
Interest payable on borrowings | (295) | (233)
Foreign exchange losses on intercompany financing, net of hedging | – | (24)
Finance expense on tax balances | (22) | –
Other finance expense | (23) | (34)
Total finance expense | (340) | (291)
Net finance expense | (130) | (161)

As a result of the simplification of the Group’s legal entity structure, a number of entities were liquidated.
Upon liquidation, the cumulative foreign exchange reserves were recycled to the Income Statement,
resulting in a net foreign exchange gain of £130 million (2022: a net foreign exchange gain of £69 million).
7 Income Tax Expense

| 2023 | 2022
| £m | £m
Current tax | 783 | 766
Adjustment in respect of prior periods | 22 | (23)
Total current tax | 805 | 743
Origination and reversal of temporary differences | (51) | (20)
Impact of changes in tax rates | (1) | (5)
Total deferred tax | (52) | (25)
Cumulative foreign exchange on deferred tax balances reclassified to the Income Statement | – | (7)
Income tax charge | 753 | 711

Current tax includes tax incurred by UK entities of £108 million (2022: £177 million). This is comprised
of UK corporation tax of £63 million (2022: £126 million) and overseas tax suffered of £45 million
(2022: £51 million). UK current tax is calculated at 23.5% (2022: 19%) of the estimated assessable profit
for the year, net of relief for overseas taxes where available. Taxation in other jurisdictions is calculated
at the rates prevailing in the relevant jurisdictions.
Cash tax paid in the year was £922 million (2022: £831 million). The variance from the current year
tax charge of £783 million is attributable to movements on uncertain tax positions (shown in Note 22)
and timing differences arising between the accrual and payment of current income tax liabilities.
Origination and reversal of temporary differences includes adjustments in respect of prior periods
of £11 million expense (2022: £19 million benefit).
Cumulative foreign exchange on deferred tax balances reclassified to the Income Statement is £nil
(2022: £7 million). This balance relates to deferred tax on assets disposed in 2022 (see Note 29).
Notes to the Financial Statements continued
5 Employee Costs continued
171 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The total tax charge on the Group’s profit for the year can be reconciled to the notional tax charge
calculated at the UK tax rate as follows:
Continuing operations

| 2023 | 2022
| £m | £m
Profit before income tax | 2,401 | 3,067
Tax at the notional UK corporation tax rate of 23.5% (2022: 19%) | 564 | 583
Effect of: |  |
Overseas tax rates | 43 | 114
Movement in provision related to uncertain tax positions | (50) | (58)
Net impact of divestments and assets reclassified to held for sale | (6) | (25)
Unrecognised tax losses, other unrecognised tax assets and deferred tax |  |
liability on unremitted earnings | (34) | 71
Cumulative foreign exchange on deferred tax balances reclassified to the Income Statement | – | (7)
Withholding and local taxes | 30 | 47
Reassessment of prior year estimates | 33 | (42)
Impact of changes in tax rates | (1) | (5)
Non-taxable foreign exchange gain arising from legal entity simplification |  |
(Note 6) | (31) | (13)
Non-deductible impairment of goodwill | 190 | 28
Other permanent differences | 15 | 18
Income tax charge | 753 | 711

Our effective tax rate in any given financial year reflects a variety of factors that may not be present
in succeeding financial years and may be affected by variations in profit mix and changes in tax laws,
regulations and related interpretations.
The Group is within the scope of the OECD Pillar Two rules which take effect on 1 January 2024. The UK
government substantively enacted legislation on 20 June 2023 that translated the Pillar Two rules into UK
law. The impact of the Pillar Two rules is not expected to be in excess of a 0.5% increase to the Group’s
Effective Tax Rate. This excludes the effect of changes to tax rates introduced by countries in response
to the Pillar Two rules.
The Group has applied the temporary mandatory exception from accounting for deferred taxes arising
from the Pillar Two model rules as set out in ‘International Tax Reform – Pillar Two Model Rules
(Amendments to IAS 12)’ issued by the IASB in May 2023.
The effect of overseas tax rates represents the impact of profits arising outside the UK that are taxed
at different rates to the UK rate. The UK tax rate increased from 19% to 25% on 1 April 2023. The 2023 rate
of 23.5% represents the blended UK tax rate over the 12 month period to 31 December 2023.
Withholding and local taxes suffered in the year are adjusted for previously accrued deferred tax
liabilities on unremitted earnings.
The reassessment of prior year estimates includes settlements reached following conclusion of tax
authority review and differences between final tax return submissions and liabilities accrued in these
Financial Statements.
The 2023 impact of non-deductible goodwill impairment is attributable to IFCN. The 2022 impact related
to non-deductible goodwill impairment attributable to Biofreeze.
UK deferred tax assets and liabilities have been calculated based on the substantively enacted rate of
25% after factoring in the expected timing of reversal of the related temporary differences (2022: 25%).
We conduct business operations in a number of countries and are therefore subject to tax and
intercompany pricing laws in multiple jurisdictions. We have in the past faced, and may in the future
face, audits and challenges brought by tax authorities, and we are involved in ongoing tax investigations
in a number of countries. If material challenges were to be successful, our effective tax rate may
increase, we may be required to modify structures at significant costs to us, we may also be subject
to interest and penalty charges and we may incur costs in defending litigation or reaching a settlement.
Any of the foregoing could materially and adversely affect our business, financial condition and results
of operations.
There have been no substantive updates to the EC State Aid matters referred to in the 2022 notes to the
financial statements.
Notes to the Financial Statements continued
7 Income Tax Expense continued
172 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The tax (charged)/credited relating to components of other comprehensive income is as follows:

|  | 2023 |  |  | 2022 |
|  | Tax (charge)/ |  |  | Tax (charge)/ |
| Before tax | credit | After tax | Before tax | credit | After tax
| £m | £m | £m | £m | £m | £m
Net exchange (losses)/gains |  |  |  |  |  |
on foreign currency |  |  |  |  |  |
translation | (639) | – | (639) | 1,065 | – | 1,065
Reclassification of foreign |  |  |  |  |  |
currency translation |  |  |  |  |  |
reserves on disposals or liquidation of foreign |  |  |  |  |  |
operations | (131) | – | (131) | (56) | – | (56)
Gains/(losses) on cash flow |  |  |  |  |  |
and net investment hedges | 14 | (11) | 3 | (112) | (1) | (113)
Remeasurement of defined |  |  |  |  |  |
benefit pension plans |  |  |  |  |  |
(Note 23) | (42) | 16 | (26) | 29 | (5) | 24
Revaluation of equity instruments | (10) | – | (10) | (109) | 22 | (87)
Other comprehensive |  |  |  |  |  |
(expense)/income | (808) | 5 | (803) | 817 | 16 | 833
Current tax |  | – |  |  | 13 |
Deferred tax (Note 12) |  | 5 |  |  | 3 |
|  | 5 |  |  | 16 |

The tax charged directly to the Statement of Changes in Equity during the year is as follows:

| 2023 | 2022
| £m | £m
Current tax | 1 | (1)
| 1 | (1)

8 Earnings Per Share

| 2023 | 2022
| pence | pence
Basic earnings per share |  |
From continuing operations | 227.9 | 326.7
From discontinued operations | 1.3 | (1.0)
Total basic earnings per share | 229.2 | 325.7
Diluted earnings per share |  |
From continuing operations | 227. 4 | 325.7
From discontinued operations | 1.3 | (1.0)
Total diluted earnings per share | 228.7 | 324.7

Basic
Basic earnings per share is calculated by dividing the net income attributable to owners of the parent
company from continuing operations (2023: £1,634 million income, 2022: £2,337 million income) and
discontinued operations (2023: £9 million income; 2022: £7 million loss) by the weighted average number
of ordinary shares in issue during the year (2023: 716,700,954; 2022: 715,284,629).
Diluted
Diluted earnings per share is calculated by adjusting the weighted average number of shares outstanding
to assume conversion of all potentially dilutive ordinary shares. The company has the following
categories of potentially dilutive ordinary shares: Executive Share Awards (including Executive Share
Options and Executive Restricted Share Scheme Awards) and Employee Sharesave Scheme Options.
The options only dilute earnings when they result in the issue of shares at a value below the market price
of the share and when all performance criteria (if applicable) have been met as at the balance sheet
date. As at 31 December 2023, there were 15,150,221 (2022: 14,219,133) Executive Share Awards excluded
from the dilution because the exercise price for the options was greater than the average share price for
the year or the performance criteria have not been met.

| 2023 | 2022
| average number | average number
| of shares | of shares
On a basic basis | 716,700,954 | 715,284,629
Dilution for Executive Share Awards | 1,368,088 | 1,858,996
Dilution for Employee Sharesave Scheme Options | 214,492 | 350,982
On a diluted basis | 718,283,534 | 717,494,607

Notes to the Financial Statements continued
7 Income Tax Expense continued
173 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
9 Goodwill and Other Intangible Assets

| Brands | Goodwill | Software | Other | Total
| £m | £m | £m | £m | £m
Cost |  |  |  |  |
At 1 January 2022 | 13,448 | 10,212 | 547 | 266 | 24,473
Additions | – | – | 77 | 4 | 81
Arising on business combinations | – | (2) | – | 7 | 5
Disposals | (59) | (6) | (3) | – | (68)
Reclassifications | – | – | 16 | (16) | –
Exchange adjustments | 1,136 | 832 | 16 | 17 | 2,001
At 31 December 2022 | 14,525 | 11,036 | 653 | 278 | 26,492
Additions | – | – | 101 | – | 101
Arising on business combinations | – | 17 | – | 39 | 56
Disposals | (1) | – | – | – | (1)
Reclassification from tangible fixed |  |  |  |  |
assets | – | – | 4 | – | 4
Reclassifications to held for sale | (124) | – | – | – | (124)
Exchange adjustments | (583) | (660) | (5) | (4) | (1,252)
At 31 December 2023 | 13,817 | 10,393 | 753 | 313 | 25,276
Accumulated amortisation and impairment |  |  |  |  |
At 1 January 2022 | 342 | 4,884 | 252 | 127 | 5,605
Amortisation and impairment | 21 | 167 | 68 | 19 | 275
Disposals | – | – | (1) | – | (1)
Reclassifications | – | – | 8 | (8) | –
Exchange adjustments | 16 | 376 | 8 | 10 | 410
At 31 December 2022 | 379 | 5,427 | 335 | 148 | 6,289
Amortisation | 20 | – | 79 | 8 | 107
Impairment | – | 810 | 2 | – | 812
Disposals | (1) | – | – | – | (1)
Reclassifications to held for sale | (77) | – | – | – | (77)
Exchange adjustments | (10) | (422) | (4) | (6) | (442)
At 31 December 2023 | 311 | 5,815 | 412 | 150 | 6,688
Net book value |  |  |  |  |
At 31 December 2022 | 14,146 | 5,609 | 318 | 130 | 20,203
At 31 December 2023 | 13,506 | 4,578 | 341 | 163 | 18,588

The amount stated for brands represents the fair value of brands acquired since 1985 at the date of
acquisition. Other includes product registration, distribution rights, capitalised product development
costs and customer contracts.
Software includes intangible assets under construction of £88 million (2022: £40 million).
The net book values of significant brand intangible assets acquired through business combinations are
as follows:

| Acquisition | 2023 | 2022
Acquisition | year | £m | £m
Mead Johnson Nutrition Company | 2017 | 4,480 | 4,740
SSL International | 2010 | 1,847 | 1,918
Boots Healthcare International | 2006 | 1,405 | 1,440
Adams Respiratory Therapeutics | 2008 | 1,210 | 1,275
Schiff Nutrition International | 2012 | 1,032 | 1,088
L&F Household | 1994 | 834 | 877
Lanai Holdings | 2021 | 644 | 680
American Home Products Corporation | 1990 | 439 | 459
Bristol-Myers Squibb OTC | 2013 | 362 | 338
K-Y | 2014 | 280 | 280

The majority of brands, all of goodwill and certain other intangible assets are considered to have
indefinite lives (see Note 1) and therefore are subject to an annual impairment review. The MJN global
brand and acquired customer relationships are deemed to have a finite life and are amortised
accordingly. Amortisation is recognised in net operating expenses or cost of goods sold depending
on the use of the asset.
The net book values of indefinite and finite life intangible assets are as follows:

| 2023 | 2022
Net book value | £m | £m
Indefinite life assets |  |
Brands | 13,415 | 14,034
Goodwill | 4,578 | 5,609
Other | 107 | 65
Total indefinite life assets | 18,100 | 19,708
Finite life assets |  |
Brands | 91 | 112
Software | 341 | 318
Other | 56 | 65
Total finite life assets | 488 | 495
Total net book value of intangible assets | 18,588 | 20,203

Notes to the Financial Statements continued
174 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Cash Generating Units
Goodwill and other intangible assets with indefinite lives are allocated to either individual cash
generating units (CGUs), or groups of cash generating units (together GCGUs). The goodwill and
intangible assets with indefinite lives are tested for impairment at the level at which identifiable cash
inflows are largely independent. Generally, this is at a GCGU level, but for certain intangible assets this
is at a CGU level.
After considering all the evidence available, including how brand and production assets generate cash
inflows and how management monitors the business, the Directors have concluded that for the purpose
of impairment testing of goodwill and other intangible assets, the Group’s GCGUs are Health, Hygiene
and IFCN.
An analysis of the net book value of indefinite life assets and goodwill by GCGU/CGU is shown below:

|  | 2023 |
| Indefinite |  |
| life assets | Goodwill | Total
GCGU/CGU | £m | £m | £m
Health | 7,258 | 3,849 | 11,107
Hygiene | 1,844 | 45 | 1,889
IFCN | 4,420 | 684 | 5,104
| 13,522 | 4,578 | 18,100

1
1. Indefinite lived intangible assets and goodwill for VMS, and goodwill for Biofreeze, were transferred to the Health GCGU in 2023

|  | 2022 |
| Indefinite |  |
| life assets | Goodwill | Total
GCGU/CGU | £m | £m | £m
Health | 5,779 | 3,556 | 9,335
Hygiene | 1,924 | 45 | 1,969
IFCN | 4,661 | 1,570 | 6,231
VMS | 1,089 | 277 | 1,366
Biofreeze | 646 | 161 | 807
| 14,099 | 5,609 | 19,708

1
1
Within the Health GCGU, the cash flows associated with Intimate Wellness and Biofreeze brands are
separately identifiable. As a result, the carrying values of these indefinite life assets have been tested
for impairment as separate CGUs. This is in addition to the impairment testing performed over the
Health GCGU.
Indefinite life assets excluding goodwill

| 2023 | 2022
| £m | £m
Intimate Wellness | 2,143 | 2,213
Biofreeze | 613 | 646

Annual Impairment Review
Goodwill and other indefinite life intangible assets must be tested for impairment on at least an annual
basis. An impairment loss is recognised when the recoverable amount of a GCGU or CGU falls materially
below its net book value at the date of testing.
The determination of recoverable amount, being the higher of value-in-use and fair value less costs to
dispose, is inherently judgemental and requires management to make multiple estimates, for example
around individual market pressures and forces, future price and volume growth, future margins, terminal
growth rates and discount rates.
When forecasting the annual cash flows that support the recoverable amount, the Group generally uses
its short-term budgets and medium-term strategic plans, with additional senior management and
Board-level review. Cash flows beyond the five-year period are projected using terminal growth rates.
These rates do not exceed the long-term average growth rate for the products and markets in which
the GCGU or CGU operates.
The cash flows are discounted back to their present value using a pre-tax discount rate considered
appropriate for each GCGU and CGU. These rates have been derived from management’s views
on the relevant weighted average cost of capital, subsequently converted to the pre-tax equivalent
discount rate.
For the Health and Hygiene GCGUs, and the Intimate Wellness and Biofreeze CGUs, as at 31 December
2023 any reasonably possible change in the key valuation assumptions would not imply possible
impairment. The recoverable amount for each of these GCGUs and CGU was determined utilising the
value-in-use basis (2022: value-in-use basis) with key assumptions including a pre-tax discount rate of
11% for Health, Hygiene and Intimate Wellness (2022: 9% for Health, Hygiene and Intimate Wellness with
10% for VMS), 11% for Biofreeze (2022: 12%) and a terminal growth rate of either 2.5% for Health, Intimate
Wellness and Biofreeze (2022: 2.5% for Health, Intimate Wellness, Biofreeze and VMS), or 2% for Hygiene
(2022: 2%).
IFCN
Since the disposal of the IFCN China business in September 2021, the IFCN CGU has represented the
Group’s remaining IFCN business principally in North America, Latin America and ASEAN. In impairment
assessments conducted in both 2021 and 2022, management determined that the recoverable amount
of IFCN was higher than its’ carrying value such that no impairment was required.
Notes to the Financial Statements continued
9 Goodwill and Other Intangible Assets continued
175 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
During 2023 the market environment for IFCN continued to be influenced by the infant formula supply
shortages in the US which resulted from the temporary closure of a major factory belonging to a
competitor. The infant formula supply shortages have resulted in an evolving regulatory environment,
which developed over the course of 2023. Compliance with enhanced regulatory requirements
is expected to increase the capital requirement for the IFCN business and to impact the cost of
manufacture in future periods.
As a result of these regulatory factors which developed over the course of 2023, and to incorporate the
effect of higher interest rates, management has increased the pre-tax discount rate used to determine
the value-in-use of the IFCN CGU.
This resulted in the IFCN net book value exceeding its recoverable amount, therefore management has
recorded an impairment loss against IFCN goodwill of £810 million to record the IFCN CGU at its
recoverable amount of £4,615 million.
The recoverable amount for IFCN has been calculated on a value-in-use basis (2022: value-in-use basis).
The value-in-use of IFCN was determined utilising a discounted cash flow approach with future cash
flows derived from a detailed five-year financial plan. Cash flows beyond the five-year plan are
projected using a terminal growth rate. The valuation used a pre-tax discount rate of 11% (2022: 9%)
and an IFCN specific terminal growth rate of 2.0% (2022: 2.0%).
The determination of the recoverable amount for IFCN at 31 December 2023 incorporates certain
assumptions, some of which are subject to considerable uncertainty. These assumptions include but are
not limited to the costs of complying with the evolving regulatory landscape, the level at which US
market shares stabilise, net revenue growth rates, the commercial success of new product launches and
the expansion of specialty nutrition. The value in use does not include any possible net cash outflows in
respect of current and future NEC litigation (note 20 and 33). As no headroom exists between the IFCN
recoverable amount and net book value, any changes to these assumptions (including relating to the NEC
litigation), or any deterioration in other macro or business-level assumptions supporting the IFCN
recoverable amount could necessitate the recognition of impairment losses in future periods.
The key assumptions used in the estimation of value-in-use of IFCN are outlined below.

| 2023
Pre-tax discount rate | 11%
Terminal growth rate | 2.0%
Net revenue compound annual growth rate (CAGR) for the period 2023-2028 | 1.5%
Gross margin CAGR for the period 2023-2028 | 2.2%

1
1. The net revenue CAGR for the period 2024-2028 is circa 4%, following rebasing of Nutrition net revenue in 2024
The key estimates incorporated within the determination of the IFCN recoverable amount are
summarised below:
Key estimates Commentary
Market In the US, management expects birth rates to be relatively stable. Tendering
for WIC contracts continues to be highly competitive.
Within LATAM and ASEAN, management expects conditions to stabilise after
recent inflationary price increases.
Net Revenue In the short to medium term, the valuation model assumes a five-year CAGR
of 1.5%. This is expected to be achieved through ongoing premiumisation,
inflationary price increases and revenues from new products/category
launches including the expansion of speciality nutrition.
Margins In the short to medium term, the valuation model assumes IFCN margins
(both gross and operating) to increase over the medium term as IFCN drives
efficiencies and improved product mix.
Discount rate Management determined an IFCN-specific weighted average cost of capital
(WACC) and the implied pre-tax discount rate with the support of a third-party
expert. In addition, management performed benchmarking against other
comparable companies.
Terminal growth rate Management engaged a third-party expert to help calculate an IFCN-specific
terminal growth rate. Management is satisfied with the reasonableness of the
terminal growth rate when compared against independent market growth
projections and long-term country inflation rates.
The table below shows the sensitivity of the recoverable amount to reasonably possible changes in key
assumptions. The table assumes no related response by management (for example, to drive further cost
savings) and is hence theoretical in nature.

| 2023
| £m
Expected Net Revenue growth rates (2024 to 2028) adjusted by 100bps | +410/-400
Expected EBIT growth rates (2024 to 2028) adjusted by 100bps | +/-260
Terminal growth rate (applied from 2029) adjusted by 50bps | +290/-250
Pre-tax discount rate adjusted by 50bps | +270/-240

Notes to the Financial Statements continued
9 Goodwill and Other Intangible Assets continued
176 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Biofreeze
On 12 July 2021, the Group acquired 100% of the equity interests in Lanai Holdings, owner of the Biofreeze
and TheraPearl brands, for cash consideration of $1,060 million (£766 million). Biofreeze is a leader in
over-the-counter topical pain relief, with a strong footprint in the North America retail and clinical
channels and a growing international presence.
During 2022, Biofreeze performed below expectations following a short-term category slowdown,
in part due to macroeconomic conditions. This underperformance, together with the macroeconomic
environment, introduced additional uncertainty into future Biofreeze cash flows. To reflect this
uncertainty, management increased the pre-tax discount rate used to determine value-in-use to 12.0%.
This resulted in the book value of the Biofreeze CGU exceeding its recoverable amount at 31 December
2022, therefore in 2022 management recorded a goodwill impairment of £152 million to record Biofreeze
at its recoverable amount of £698 million ($843 million). Following this impairment, at 31 December 2022
no headroom remained between the Biofreeze recoverable amount and net book value.
During the second half of 2023, the integration of Biofreeze into the Health business was completed.
Following this integration, Biofreeze goodwill is monitored at the Health GCGU level and Biofreeze
goodwill has accordingly been transferred to the Health GCGU. An impairment review of the Biofreeze
CGU inclusive of goodwill was performed immediately prior to the transfer of the goodwill, with this
review performed as at 30 September 2023. Biofreeze goodwill was deemed recoverable immediately
prior to transfer to the Health GCGU.
The recoverable amount for the Biofreeze CGU has been determined on a value-in-use basis using
a discounted cash flow approach, with future cash flows derived from a detailed five-year plan.
Cash flows beyond the five-year plan have been projected using a terminal growth rate of 2.5%.
The determination of the recoverable amount for Biofreeze in the 2023 impairment assessment
incorporates certain key assumptions, some of which are subject to considerable uncertainty.
These assumptions include but are not limited to anticipated market share improvement,
the commercial success of new product launches and international market expansion.
The key assumptions used in the estimation of value-in-use of Biofreeze at 30 September 2023 and
31 December 2022 are outlined below:

| 30 September 2023
Pre-tax discount rate | 11%
Terminal growth rate | 2.5%
Net revenue compound annual growth rate (CAGR) for the period 2023-2028 | 11%
Gross margin CAGR for the period 2023-2028 | 12%

| 31 December 2022
Pre-tax discount rate | 12%
Terminal growth rate | 2.5%
Net revenue compound annual growth rate (CAGR) for the period 2022-2027 | 11%
Gross margin CAGR for the period 2022-2027 | 14%

They key estimates incorporated within the determination of the Biofreeze recoverable amount
at 30 September 2023 and 31 December 2022 are summarised below:
Key estimates Commentary
Net Revenue In the short to medium term, the valuation model assumes a five-year CAGR
of 11% (2022: 11%), to be delivered through category growth and market share
growth driven by a mix of innovation arising from format expansion of existing
products and international expansion.
Margins In the short to medium term, the valuation model assumes Biofreeze margins
(both gross and operating) to increase from current levels as Biofreeze
benefits from productivity initiatives on integrating into Reckitt. In the year
ended 31 December 2022, there were temporary factors which negatively
impacted margins.
Discount rate Management determined the Biofreeze-specific weighted average cost
of capital (WACC) and the implied pre-tax discount rate with the support
of a third-party expert.
Terminal growth rate Management is satisfied with the reasonableness of the terminal growth
rate when compared against independent market growth projections and
long-term country inflation rates.
Notes to the Financial Statements continued
9 Goodwill and Other Intangible Assets continued
177 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The table below shows the percentage movement in the 2023 key assumptions that (individually)
would be required to reach the point at which the Biofreeze value in use approximates its carrying value.

| 30 September 2023
Expected Net Revenue growth rates (2024-2028) | 180bps decrease
Expected EBIT growth rates (2024-2028) | 290bps decrease
Terminal growth rate | 100bps decrease
Pre-tax discount rate | 100bps increase

VMS
During the year to 31 December 2023 the integration of VMS into the Health GBU was completed,
and as a result the VMS indefinite lived intangible assets and goodwill were included in the Health
GCGU. Prior to integration an impairment review was performed. No separate impairment review for VMS
has therefore been performed at 31 December 2023. In the year to 31 December 2022 the recoverable
amount of the VMS CGU was determined utilising the value-in-use basis with key assumptions including
a pre-tax discount rate of 10%, and a terminal growth rate of 2.5%.
10 Property, Plant and Equipment

| Land and | Plant and | Right of | Assets under |
| buildings | equipment | use assets | construction | Total
| £m | £m | £m | £m | £m
Cost |  |  |  |  |
At 1 January 2022 | 1,220 | 2,073 | 461 | 408 | 4,162
Additions | 26 | 80 | 137 | 256 | 499
Disposals | (19) | (75) | (58) | (6) | (158)
Reclassifications (including held for sale) | 91 | 168 | (1) | (293) | (35)
Exchange adjustments | 91 | 122 | 41 | 29 | 283
At 31 December 2022 | 1,409 | 2,368 | 580 | 394 | 4,751
Additions | 13 | 38 | 56 | 301 | 408
Disposals | (17) | (48) | (53) | (6) | (124)
Reclassifications (including held for sale) | 92 | 231 | 11 | (349) | (15)
Exchange adjustments | (34) | (59) | (27) | (11) | (131)
At 31 December 2023 | 1,463 | 2,530 | 567 | 329 | 4,889
Accumulated depreciation and impairment |  |  |  |  |
At 1 January 2022 | 482 | 1,341 | 156 | 5 | 1,984
Charge for the year | 62 | 184 | 83 | – | 329
Disposals | (12) | (66) | (45) | (4) | (127)
Impairment | – | 1 | – | 2 | 3
Reclassifications (including held for sale) | (6) | (18) | (3) | – | (27)
Exchange adjustments | 30 | 69 | 15 | 2 | 116
At 31 December 2022 | 556 | 1,511 | 206 | 5 | 2,278
Charge for the year | 68 | 199 | 96 | – | 363
Disposals | (16) | (42) | (28) | – | (86)
Impairment | 4 | 4 | – | – | 8
Reclassifications (including held for sale) | (1) | (3) | – | – | (4)
Exchange adjustments | (16) | (41) | (11) | (1) | (69)
At 31 December 2023 | 595 | 1,628 | 263 | 4 | 2,490
Net book value |  |  |  |  |
As at 31 December 2022 | 853 | 857 | 374 | 389 | 2,473
As at 31 December 2023 | 868 | 902 | 304 | 325 | 2,399

Notes to the Financial Statements continued
9 Goodwill and Other Intangible Assets continued
178 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
At 31 December 2023, the Group’s right of use assets included land and buildings of £276 million
(2022: £350 million) and other assets of £28 million (2022: £24 million). The depreciation charged on
the right of use assets comprises £82 million (2022: £70 million) on the land and buildings and £14 million
(2022: £13 million) on the other assets.
At 31 December 2023, the Group has commitments to purchase property, plant and equipment
of £69 million (2022: £76 million).
11 Equity Instruments

|  |  | 2023 |  |  |  | 2022 |
|  | Fair value | Fair value |  |  | Fair value | Fair value |
|  | through | through other |  |  | through | through other |
| Equity | profit or | comprehensive |  | Equity | profit or | comprehensive |
| method | loss | income | Total | method | loss | income | Total
| £m | £m | £m | £m | £m | £m | £m | £m
Equity |  |  |  |  |  |  |  |
investments | – | 45 | 69 | 114 | – | – | 82 | 82
Investments in associates | 4 | – | – | 4 | 4 | – | – | 4
| 4 | 45 | 69 | 118 | 4 | – | 82 | 86

Equity investments at 31 December 2023 and 2022 is composed of a number of listed and unlisted equity
investments in which the Group has a minority stake.
In 2023, equity investments includes investments of £45 million principally in equity mutual funds which
are made in the name of the Group, but the proceeds of which are provided to employees as part of their
compensation arrangements. In 2022 these equity investments were previously included in non-current
receivables. The related liability is included in other non-current liabilities (Note 21) .
The Group also holds a number of individually immaterial investments in associates over which it
exercises a significant influence. In 2023, there are no impairments and gains or losses associated
with equity accounted investments are less than £1 million. In 2022, investments accounted for using
the equity method relate predominantly to the Group’s investment in Your.MD AS (trading as Healthily)
which was fully impaired. In 2022, the Group’s share of the result of Healthily amounted to a loss of
£2 million and the Group recognised an impairment charge of £19 million within the Group Income
Statement with respect to this investment.
12 Deferred Tax
Deferred tax

| Accelerated |  | Short-term |  | Retirement |
| capital | Intangible | temporary |  | benefit |
| allowances | assets | differences | Tax losses | obligations | Total
| £m | £m | £m | £m | £m | £m
At 1 January 2023 | (54) | (3,274) | 503 | 46 | (14) | (2,793)
Credited/(charged) to the Income Statement | (10) | 11 | 39 | 19 | (7) | 52
Credited/(charged) to other comprehensive income | – | – | (11) | – | 16 | 5
Arising on business |  |  |  |  |  |
combinations | – | – | (1) | – | – | (1)
Exchange differences | 4 | 142 | (19) | (1) | (1) | 125
At 31 December 2023 | (60) | (3,121) | 511 | 64 | (6) | (2,612)

| Accelerated |  | Short-term |  | Retirement |
| capital | Intangible | temporary | Tax | benefit |
| allowances | assets | differences | losses | obligations | Total
2023 | £m | £m | £m | £m | £m | £m
Deferred tax assets | 16 | (38) | 237 | 62 | 10 | 287
Deferred tax liabilities | (76) | (3,083) | 274 | 2 | (16) | (2,899)
Deferred tax | (60) | (3,121) | 511 | 64 | (6) | (2,612)

| Accelerated |  | Short-term |  | Retirement |
| capital | Intangible | temporary | Tax | benefit |
| allowances | assets | differences | losses | obligations | Total
Deferred tax | £m | £m | £m | £m | £m | £m
At 1 January 2022 | (49) | (3,023) | 442 | 27 | (6) | (2,609)
Credited/(charged) to the Income Statement | 2 | 1 | 16 | 15 | (9) | 25
Credited/(charged) to other comprehensive income | – | – | 8 | – | (5) | 3
Exchange differences | (7) | (252) | 37 | 4 | 6 | (212)
At 31 December 2022 | (54) | (3,274) | 503 | 46 | (14) | (2,793)

| Accelerated |  | Short-term |  | Retirement |
| capital | Intangible | temporary |  | benefit |
| allowances | assets | differences | Tax losses | obligations | Total
2022 | £m | £m | £m | £m | £m | £m
Deferred tax assets | 20 | (36) | 221 | 28 | 11 | 244
Deferred tax liabilities | (74) | (3,238) | 282 | 18 | (25) | (3,037)
Deferred tax | (54) | (3,274) | 503 | 46 | (14) | (2,793)

Notes to the Financial Statements continued
10 Property, Plant and Equipment continued
179 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Deferred tax assets and liabilities have been offset where they relate to income taxes levied by the same
taxation authority.
Unrecognised deferred tax assets
The Group has reviewed its treatment of unrecognised corporation tax losses subject to recapture and
will now disclose these amounts in the notes to the financial statements, resulting in the disclosure of
incremental losses totalling £1,889 million gross at 31 December 2023. The amount of unrecognised
corporation tax losses subject to recapture that were not included in the disclosure at 31 December 2022
was £1,736 million gross.
Deferred tax assets on certain corporation tax losses and other short term temporary differences
totalling £4,734 million gross (2022: £3,029 million gross) have not been recognised at 31 December 2023
as the likelihood of future economic benefit is not sufficiently assured. These assets will be recognised if
utilisation of the losses and other temporary differences become probable.
Unrecognised deferred tax liabilities
The aggregate amount of gross temporary differences associated with investments in subsidiaries,
branches and associates and interest in joint ventures, for which deferred tax liabilities have not been
recognised at 31 December 2023 is £7,833 million (2022: £7,630 million).
Deferred tax on short-term temporary differences of £511 million (2022: £503 million) are comprised of
accrued expenses deductible for tax on a cash basis of £404 million (2022: £418 million), other short–term
temporary differences of £140 million (2022: £143 million) and net of deferred tax liabilities on unremitted
earnings of £33 million (2022: £58 million).
13 Inventories

| 2023 | 2022
| £m | £m
Raw materials and consumables | 401 | 471
Work in progress | 82 | 88
Finished goods and goods held for resale | 1,154 | 1,266
Total inventories | 1,637 | 1,825

The total cost of inventories recognised as an expense and included in cost of sales amounted to
£5,577 million (2022: £5,810 million). This includes inventory write-offs and losses of £111 million
(2022: £184 million).
The Group inventory provision at 31 December 2023 was £108 million (2022: £164 million).
14 Trade and Other Receivables
Amounts falling due within one year Note

|  | 2023 | 2022
|  | £m | £m
Trade receivables |  | 1,741 | 1,766
Less: Provision for impairment of receivables |  | (36) | (42)
Trade receivables – net |  | 1,705 | 1,724
Other receivables | 14b | 266 | 264
Prepayments and accrued income |  | 91 | 94
Trade and other receivables |  | 2,062 | 2,082

The carrying amounts of the Group’s trade and other receivables are denominated in the
following currencies:
Currency analysis

| 2023 | 2022
| £m | £m
US dollar | 575 | 678
Euro | 302 | 289
Sterling | 173 | 165
Brazilian real | 170 | 132
Other currencies | 842 | 818
Trade and other receivables | 2,062 | 2,082

The maximum exposure to credit risk at the year end is the carrying value of each class of receivable
mentioned above.
12 Deferred Tax continued
Notes to the Financial Statements continued
180 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
a. Trade receivables
Trade receivables consist of amounts due from customers. The Group’s customer base is large
and diverse and consequently there is limited concentration of credit risk. Credit risk is assessed
at a subsidiary and Group level and takes into account the financial positions of customers, past
experience, future expectations and other relevant factors. Individual credit limits are established
based on those factors.
The following table provides an ageing analysis of trade receivables at year end:

| 2023 | 2022
| £m | £m
Not overdue | 1,455 | 1,543
Up to 3 months overdue | 250 | 157
Over 3 months overdue | 36 | 66
Trade receivables | 1,741 | 1,766

At 31 December 2023, a provision of £36 million (2022: £42 million) was recorded against certain trade
receivables based on a forward-looking assessment of the lifetime expected credit loss as required by
IFRS 9. This assessment considered the ageing profiles of specific trade receivable balances along with
the risk of future customer defaults.
As at 31 December 2023, trade receivables of £250 million (2022: £181 million) were past due but not
impaired. These receivables were not impaired because having considered their nature and historical
collection, recovery of the unprovided amounts is expected in due course.
b. Other receivables
Other receivables includes recoverable indirect tax of £187 million (2022: £191 million) .
Notes to the Financial Statements continued
c. Other non-current receivables
Other non-current receivables consists of:

| 2023 | 2022
| £m | £m
Other receivables | 72 | 73
Equity mutual funds (Note 11) | – | 42
Prepayments | 20 | 25
Non-current tax recoverable | 30 | 17
Derivative financial instruments | 50 | –
Other non-current receivables | 172 | 157

In 2023, the amount in relation to Equity mutual funds was reclassed from receivables to equity
instruments (Note 11)
d. Financial instruments (Note 15)
At 31 December 2023, £1,836 million (2022 restated
1
: £1,879 million) of the current and non-current
receivables totalling £2,234 million (2022: £2,239 million) are financial assets. These mainly related to
amounts owed from customers or government bodies and are typically non-interest bearing. Amounts
that are not financial assets are mostly prepayments, recoverable sales tax and employee benefit assets.
1. Restated to exclude £192 million of recoverable sales tax assets that were previously included within financial assets
14 Trade and Other Receivables continued
181 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
15 Financial Instruments and Financial Risk Management
Financial instruments by category

|  |  |  | At 31 December 2023 |  |  |  |  | At 31 December 2022 |  |
|  |  |  |  | Fair value |  |  |  |  | Fair value |
|  |  | Derivatives | Fair value through other |  |  | Derivatives | Fair value through other |
|  | Amortised | used for | through | comprehensive | Carrying | Amortised | used for | through | comprehensive | Carrying
|  | cost | hedging | profit or loss | income | value total | cost | hedging | profit or loss | income | value total
| Note | £m | £m | £m | £m | £m | £m | £m | £m | £m | £m
Assets as per the Balance Sheet |  |  |  |  |  |  |  |  |  |  |
Current and non-current trade and other receivables | 14d | 1,836 | – | – | – | 1,836 | 1,879 | – | – | – | 1,879
Derivative financial instruments |  |  |  |  |  |  |  |  |  |  |
FX forward exchange contracts | 17 | – | 48 | 16 | – | 64 | – | 34 | 25 | – | 59
Cross currency interest rate swaps | 17 | – | 50 | – | – | 50 | – | – | – | – | –
Equity instruments | 11 | – | – | 45 | 69 | 114 | – | – | – | 82 | 82
Cash and cash equivalents | 16 | 1,387 | – | – | – | 1,387 | 1,157 | – | – | – | 1,157
Liabilities as per the Balance Sheet |  |  |  |  |  |  |  |  |  |  |
Current and non-current trade and other payables | 21 | 5,276 | – | – | – | 5,276 | 5,344 | – | – | – | 5,344
Share repurchase liability | 24 | 296 | – | – | – | 296 | – | – | – | – | –
Borrowings (commercial paper, loans and overdrafts and other non-current borrowings) | 17 | 43 | – | – | – | 43 | 1,252 | – | – | – | 1,252
Lease liabilities | 19 | 327 | – | – | – | 327 | 389 | – | – | – | 389
Senior notes | 17 | 1,292 | – | – | – | 1,292 | 1,369 | – | – | – | 1,369
Bonds | 17 | 6,875 | – | – | – | 6,875 | 5,874 | – | – | – | 5,874
Derivative financial instruments |  |  |  |  |  |  |  |  |  |  |
FX forward exchange contracts | 17 | – | 20 | 58 | – | 78 | – | 22 | 34 | – | 56
Interest rate swaps | 17 | – | 115 | – | – | 115 | – | 164 | – | – | 164
Cross currency interest rate swaps | 17 | – | 72 | – | – | 72 | – | 84 | – | – | 84
1. Restated (see Note 14d) |  |  |  |  |  |  |  |  |  |  |

1
1
1
The categories in this disclosure are determined by IFRS 9. Lease liabilities are outside the scope of IFRS 9, but they remain within the scope of IFRS 7, and therefore have been shown separately. In 2023 borrowings largely relate to bank loans and overdrafts
(2022: commercial paper). As at 31 December 2022, the Group had commercial paper in issue amounting to €841 million (nominal value) at rates between 0.92% and 2.74% with maturities ranging from 6 January 2023 to 30 June 2023, and $550 million (nominal value)
at rates between 4.55% and 4.95% with maturities ranging from 3 January 2023 to 23 March 2023.
The fair value measurement hierarchy levels have been defined as follows:
– Quoted prices (unadjusted) in active markets for identical assets or liabilities (level 1)
– Inputs other than quoted prices included within level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices) (level 2). If all significant inputs required to fair
value an instrument are observable, the instrument is included in level 2
– Inputs for the asset or liability that are not based on observable market data (i.e. unobservable inputs) (level 3)
Notes to the Financial Statements continued
182 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The following table categorises the Group’s financial assets and liabilities held at fair value by the
valuation methodology applied in determining their fair value.

|  |  | At 31 December 2023 |  |  |  | At 31 December 2022 |
| Level 1 | Level 2 | Level 3 | Total | Level 1 | Level 2 | Level 3 | Total
| £m | £m | £m | £m | £m | £m | £m | £m
Assets as per the Balance Sheet |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  |  |  |  |  |
FX forward exchange |  |  |  |  |  |  |  |
contracts | – | 64 | – | 64 | – | 59 | – | 59
Cross currency interest |  |  |  |  |  |  |  |
rate swaps | – | 50 | – | 50 | – | – | – | –
Equity instruments | 22 | 45 | 47 | 114 | 29 | – | 53 | 82
Liabilities as per the Balance Sheet |  |  |  |  |  |  |  |
Derivative financial instruments |  |  |  |  |  |  |  |
FX forward exchange |  |  |  |  |  |  |  |
contracts | – | 78 | – | 78 | – | 56 | – | 56
Interest rate swaps | – | 115 | – | 115 | – | 164 | – | 164
Cross currency interest |  |  |  |  |  |  |  |
rate swaps | – | 72 | – | 72 | – | 84 | – | 84

The fair value of forward foreign exchange contracts was determined using forward exchange rates
derived from market sourced data at the Balance Sheet date, with the resulting value discounted back
to present value (level 2 classification). The fair value of the interest rate swap contracts and the cross
currency interest rate swaps was calculated using discounted future cash flows at floating market rates
(level 2 classification).
The fair value of equity instruments at 31 December 2023 and 31 December 2022 was determined using
quoted share price information (level 1 classification), other observable market data (level 2 classification)
and other non-market information (level 3 classification).
Except for the bonds and senior notes, the carrying values of other financial assets and liabilities held
at amortised cost approximate their fair values. The fair value of the bonds as at 31 December 2023 is
a liability of £6,788 million (2022: £5,612 million) and the fair value of the senior notes as at 31 December
2023 is a liability of £1,203 million (2022: £1,250 million). The fair value of the bonds and senior notes was
derived using quoted market rates in an active market (level 1 classification).
Offsetting financial assets and financial liabilities
The majority of the Group’s derivative agreements are entered into under International Swaps and
Derivatives Association (ISDA) master netting agreements. In certain circumstances – for example,
when a credit event such as a default occurs – all outstanding transactions under the agreement are
terminated, the termination value is assessed and only a single net amount is payable in settlement
of all transactions.
The ISDA agreements do not meet the criteria for offsetting in the statement of financial position. This is
because the Group does not currently have any legally enforceable right to offset recognised amounts,
because the right to offset is enforceable only on the occurrence of future events such as a default event.
The following table sets out the carrying amounts of recognised financial instruments that are subject to
the above agreements.

| Gross amounts of |  |
| recognised financial | Related financial |
| assets/liabilities in the | instruments that |
| Balance Sheet | are not offset | Net amount
At 31 December 2023 | £m | £m | £m
Financial assets |  |  |
Derivative financial instruments | 114 | (39) | 75
Financial liabilities |  |  |
Derivative financial instruments | (265) | 39 | (226)

At 31 December 2022

| Gross amounts of |  |
| recognised financial | Related financial |
| assets/liabilities in the | instruments that |
| Balance Sheet | are not offset | Net amount
| £m | £m | £m
Financial assets |  |  |
Derivative financial instruments | 59 | (36) | 23
Financial liabilities |  |  |
Derivative financial instruments | (304) | 36 | (268)

Financial risk management
The Group’s multinational 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.
Notes to the Financial Statements continued
15 Financial Instruments and Financial Risk Management continued
183 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The Group’s financing and financial risk management activities are centralised into Group Treasury (GT)
to achieve benefits of scale and control. GT manages financial exposures of the Group centrally in a
manner consistent with underlying business risks. GT manages only those risks and flows generated
by the underlying commercial operations; 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 GT function is subject to periodic
independent reviews and audits, both internal and external.
1. Market risk
(a) Currency risk
The Group operates internationally and enters into transactions in many currencies and as such is
exposed to foreign exchange risk arising from various currency exposures. Foreign exchange risk
arises from future commercial transactions, recognised assets and liabilities and net investments
in foreign operations.
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.
It is the Group’s policy to monitor and, 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 remittances of foreign currency dividends and loans. Where the Group
enters into hedges and applies hedge accounting, hedges are documented and tested for effectiveness
on an ongoing basis with any ineffectiveness recorded in the Income Statement.
The local business units enter into forward foreign exchange contracts with GT to manage these
exposures where practical and allowed by local regulations. GT matches the Group exposures, and
hedges the position where possible, using spot and forward foreign currency exchange contracts.
The Group’s strategy is to minimise Income Statement volatility by monitoring foreign currency balances,
external financing, and external hedging arrangements. The Group’s hedging profile is regularly reviewed
to ensure it is appropriate and to mitigate these risks as far as possible.
The notional principal amount of the outstanding forward foreign exchange contracts at 31 December
2023 was £8,426 million receivable (2022: £5,395 million) and £8,440 million payable (2022: £5,376 million).
The Group held forward foreign exchange contracts designated as cash flow hedges primarily in Euro,
Sterling, US dollar, Canadian dollar, Australian dollar, Mexican peso and Turkish lira. The notional value of
the payable leg resulting from these financial instruments was as follows:
Cash flow hedge profile

| 2023 | 2022
| £m | £m
Euro | 434 | 343
Sterling | 258 | 247
US dollar | 227 | 218
Canadian dollar | 110 | 96
Australian dollar | 92 | 92
Mexican peso | 78 | 74
Turkish lira | 58 | 73
Other | 392 | 394
| 1,649 | 1,537

These forward foreign exchange contracts are mainly expected to mature over the period January 2024 to
December 2024 (2022: January 2023 to December 2023). Of the total amount, £12 million (2022: £20 million)
is due between January 2025 and January 2026 (2022: January 2024 and January 2026).
Cash flow hedging is applied with the economic relationship and expected effectiveness being assessed
at inception, with any ineffectiveness recognised in the Income Statement. The ineffective portion
recognised in the Income Statement arising from cash flow hedges is immaterial (2022: immaterial).
Gains and losses recognised in other comprehensive income and the hedging reserve on forward exchange
contracts in 2023 of £39 million loss, net of tax (2022: £2 million gain, net of tax) are recognised in the Income
Statement in the periods in which the hedged forecast transaction affects the Income Statement .
Notes to the Financial Statements continued
15 Financial Instruments and Financial Risk Management continued
184 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
At 31 December 2023, the Group had forward contracts used for cash flow hedging with total fair value
of £1 million liability (2022: £12 million asset). These contracts are denominated in a diverse range of
currency pairings, where a fluctuation of 5% in any one of the contract pairings, with all others remaining
constant, would have a maximum effect of £4 million (2022: £7 million) on shareholder equity, until the
point at which the contracts mature and the forecast transaction occurs. The four largest contract
pairings in order of nominal value were Euro/Polish zloty, US Dollar/Thai Baht, Euro/Australian Dollar
and Euro/Canadian Dollar.
Where the Group is exposed to currency risk on its borrowings, the Group seeks to minimise the impact
of foreign exchange on the Income Statement through placing debt within a net investment hedge
or using financial instruments.
During the year, the US dollar bond totalling $500 million (2022: $500 million) which was used as the
hedging instrument in a net investment hedge matured and was replaced by forward currency swap
contracts totalling $500 million as the hedging instruments in a net investment hedge.
At 31 December 2023, the Group had designated a 2030 Euro bond totalling €850 million (2022: Euro bond
totalling €850 million) and forward currency swap contracts totalling €1,479 million (2022: commercial
paper totalling €750 million) as the hedging instruments in a net investment hedge relationship. During
the year commercial paper of €750 million (2022: forward currency swap contracts of €750 million) were
also in a hedge relationship. During 2023, the commercial paper contracts matured and were replaced
with the forward currency swap contracts. Possible sources of ineffectiveness include any impairments
to the Group’s net investments in Euros. The hedges are documented and are assessed for effectiveness
on an ongoing basis.
The net gain or loss under these arrangements is recognised in other comprehensive income. The net
effect on other comprehensive income for the year ended 31 December 2023 was a £42 million gain
(2022: £115 million loss). If Sterling weakens by 5% against the US dollar and Euro, the maximum impact
on shareholders’ equity due to the net investment hedging on US dollar forward currency swap contracts
and Euro bond/forward currency swaps would be £20 million loss and £101 million loss respectively
(2022: £22 million loss and £75 million loss respectively).
In 2020, the Group issued a €850 million bond due in 2026. Concurrent with the issue of the bond, the
Group entered into a €850 million cross currency interest rate swap on similar terms to the 2026 bond
to mitigate foreign exchange currency risk, for which hedge accounting has been applied. Sources
of ineffectiveness on this hedge relationship will come from a difference in credit ratings between
the counterparties.
In 2023, the Group issued a €650 million bond due in 2028 and a €750 million bond due in 2033.
Concurrent with the issue of these bonds, the Group also entered into a cross currency interest rate
swap on similar terms to the 2028 bond and the 2033 bond, to mitigate foreign exchange currency risk,
for which hedge accounting has been applied. Sources of ineffectiveness on these hedge relationships
will come from a difference in credit ratings between the counterparties and modifications to the terms
of either hedged item or instrument. At 31 December 2023 no material ineffectiveness (2022: no material
ineffectiveness) has been recognised in the Income Statement. The interest rate element of the swap is
discussed in interest rate risk below.
The remaining major monetary financial instruments (liquid assets, receivables, interest and non-interest
bearing liabilities) are either denominated in the functional currency of the Group or the functional
currency of the local entity.
The gains and losses from fair value movements on derivatives held at fair value through profit or loss,
recognised in the Income Statement in 2023, was a £109 million loss (2022: £443 million gain). These
derivatives are used to hedge foreign exchange gains and losses on non-Sterling financing assets and
financing liabilities between the Group’s treasury company and fellow Group subsidiaries.
(b) Cost inflation risk
Due to the nature of its business the Group is exposed to commodity, freight and other inflation
risks. Short-term volatility in pricing of these products is mitigated through medium-term contracts,
inventories of key materials and financial hedging. Over the medium and long term, the Group mitigates
the impact of inflation through: implementing pricing and revenue growth management; identifying
productivity and efficiencies; and improving sales mix.
Notes to the Financial Statements continued
15 Financial Instruments and Financial Risk Management continued
185 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
(c) Interest rate risk
The Group has both interest-bearing and non-interest bearing assets and liabilities. The Group monitors
its interest income and expense rate exposure on a regular basis. The Group sets its desired level of fixed
and floating rate exposure as part of its interest risk management strategy. The mix of fixed and floating
exposure on interest-bearing assets or liabilities is managed by using a mixture of fixed and floating rate
deposits, borrowings and interest rate derivatives.
In 2020 the Group issued two €850 million bonds due in 2026 and 2030. In order to maintain a level
of floating rate debt in line with the Group’s interest management strategy the Group entered into
a €850 million cross currency interest rate swap on similar terms to the 2026 bond and an interest rate
swap on the coupon payments due on the 2030 bond. The accounting for the foreign exchange element
of the cross currency swap is described above. The interest rate element swaps the fixed coupon
payments on the bond for floating rate (the cross currency interest rate swap with reference to adjusted
reference rates following GBP LIBOR cessation, and the interest rate swap with reference to EURIBOR).
The interest rate swaps have been placed into a fair value hedge relationship with the related bonds.
During 2023, the Group entered into a £747 million nominal value floating-to-fixed interest rate swap
due in 2026 to reduce the level of exposure to floating interest rates. This interest rate swap has been
designated as a cash flow hedge against the payments made on the floating leg of the Group’s existing
cross-currency interest rate swap. Sources of ineffectiveness on this hedge relationship may come from
a difference in credit ratings between the counterparties and modifications to the terms of either the
hedged item or the hedging instrument. At 31 December 2023 no material ineffectiveness has been
included in the Income Statement.
In 2023 the Group issued a €650 million bond due in 2028 and a €750 million bond due in 2033. In order to
maintain a level of fixed or floating rate debt in line with the Group’s interest management strategy the
Group entered into €650 million of cross currency interest rate swaps on similar terms to the 2028 bond
and €750 million cross currency interest rate swaps on similar terms to the 2033 bond. The accounting for
the foreign exchange and interest rate element of the cross currency swaps have been described above.
On the €650 million bond due in 2028, the cross currency interest rate swaps the fixed Euro coupon
payments on the bond for fixed GBP payments. On the €750 million bond due in 2033, the cross currency
interest rate swap swaps the fixed coupon payments on the bond for a GBP floating rate (with reference
to SONIA) payments. The €650 million cross-currency interest rate swap has been placed into a cash flow
hedge relationship with the bond due in 2028, and the €750 million has been placed into a fair value
hedge relationship with the bond due in 2033.
Sources of ineffectiveness on these hedge relationships will come from a difference in credit ratings
between the counterparties and modifications to the terms of either the hedged item or the hedging
instrument. At 31 December 2023 no material ineffectiveness (2022: no material ineffectiveness)
has been recognised in the Income Statement.
Various scenarios are simulated taking into consideration refinancing, renewal of existing positions,
alternative financing and hedging. Based on these scenarios, the Group calculates the impact on the
Income Statement of a defined interest rate shift. For each simulation, the same interest rate shift is used
for all currencies, calculated on a full-year and pre-tax basis.
The scenarios are only run for liabilities that represent the major interest-bearing positions. Based on the
simulations performed, the impact on the Income Statement of a 50 basis-point shift in interest rates
would be a maximum increase of £11 million (2022: £13 million) or decrease of £11 million (2022: £13 million),
respectively for the liabilities covered. The simulation is done on a periodic basis to verify that the
maximum loss simulated is within the limit given by management. There is also an impact on the Income
Statement of a 50 basis-point shift of £4 million (2022: £nil) on an asset that is inherently linked to a liability
included above, resulting in a net impact of £7 million.
2. Credit risk
The Group has no significant concentrations of credit risk. Credit risk arises from cash and cash
equivalents, derivative financial instruments, deposits with banks and financial institutions, as well as
credit exposures to customers. The assessment of lifetime expected credit losses relating to trade and
other receivables is detailed in Note 14. 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 Group uses BBB and higher rated counterparties to manage risk and only uses sub-BBB
rated counterparties by exception. 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 of Directors.
Derivative financial instruments are only traded with counterparties approved in accordance with the
approved policy. Derivative risk is measured using a risk weighting method.
Notes to the Financial Statements continued
15 Financial Instruments and Financial Risk Management continued
186 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The Group has counterparty risk from asset positions held with financial institutions. This is comprised
of short-term investments, cash and cash equivalents and derivative positions. For risk management
purposes the Group assesses the exposure to major financial institutions by looking at the deposits,
cash and cash equivalents and a percentage of the nominal amount of derivative contracts taking into
account the time to maturity and the nature of the product. The following table summarises the Group’s
assessment of its exposure. The financial institutions listed in the tables are not comparable year on year.
Counterparty

|  | 2023 |
|  | Limit | Exposure
| Credit rating | £m | £m
Financial institution A | A+ | 250 | 151
Financial institution B | A | 200 | 149
Financial institution C | A+ | 250 | 149
Financial institution D | A+ | 250 | 143
Financial institution E | A+ | 250 | 128
Financial institution F | A+ | 250 | 108
Financial institution G | A | 200 | 106
Financial institution H | A+ | 250 | 106
Financial institution I | AAAm | 200 | 100
Financial institution J | A | 200 | 99

Counterparty

|  | 2022 |
|  | Limit | Exposure
| Credit rating | £m | £m
Financial institution A | A+ | 250 | 187
Financial institution B | A+ | 250 | 179
Financial institution C | A+ | 250 | 162
Financial institution D | A+ | 250 | 145
Financial institution E | A | 200 | 108
Financial institution F | A | 200 | 100
Financial institution G | A+ | 250 | 87
Financial institution H | BBB+ | 125 | 83
Financial institution I | AA- | 275 | 63
Financial institution J | A | 200 | 59

3. Liquidity risk
Liquidity risk is the risk that the Group cannot repay financial liabilities as and when they fall due.
The Group’s liquidity risk is concentrated towards bond and senior note principal repayments due
between 2024 and 2044.
At the end of 2023, the Group had long-term debt excluding lease liabilities of £6,609 million
(2022: £6,852 million), of which £6,010 million (2022: £5,196 million) is repayable in more than two years.
In addition, the Group has committed borrowing facilities totalling £4,500 million (2022: £4,500 million),
of which £4,450 million (2022: £4,450 million) expires after more than two years. These facilities are
provided by high-quality international banks, are undrawn at year end and contain a financial covenant
which is not expected to restrict the Group’s future operations. The committed borrowing facilities,
together with central cash and investments, are considered sufficient to meet the Group’s projected
cash requirements.
All borrowing facilities are at floating rates of interest.
The facilities have been arranged to cover general corporate purposes, including support for commercial
paper issuance. All facilities incur commitment fees at market rates.
The Group’s borrowing limit at 31 December 2023 calculated in accordance with the Articles of
Association was £25,344 million (2022: £28,329 million).
The following table analyses the Group’s financial liabilities and derivatives into relevant maturity
groupings based on the remaining period at the Balance Sheet date to the contractual maturity date. The
amounts disclosed in the table are the contractual undiscounted cash flows which have been calculated
using spot rates and interest rates at the relevant Balance Sheet date, including interest to be paid.

|  | Less than | Between | Between | Over
| Total | 1 year | 1 and 2 years | 2 and 5 years | 5 years
At 31 December 2023 | £m | £m | £m | £m | £m
Bonds | (7,983) | (1,731) | (138) | (3,586) | (2,528)
Senior notes | (1,858) | (56) | (645) | (96) | (1,061)
Trade and other payables | (5,276) | (5,208) | (68) | – | –
Share repurchase liability | (296) | (296) | – | – | –

|  | Less than | Between | Between | Over
| Total | 1 year | 1 and 2 years | 2 and 5 years | 5 years
At 31 December 2022 | £m | £m | £m | £m | £m
Commercial paper | (1,200) | (1,200) | – | – | –
Bonds | (6,650) | (554) | (1,757) | (3,026) | (1,313)
Senior notes | (2,017) | (59) | (59) | (747) | (1,152)
Trade and other payables | (5,344) | (5,270) | (74) | – | –

Notes to the Financial Statements continued
15 Financial Instruments and Financial Risk Management continued
187 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The table below analyses the Group’s derivative financial instruments which will be settled on a gross
basis into relevant maturity groupings based on the remaining period between the Balance Sheet date
and the contractual maturity date. The amounts disclosed in the table are the contractual undiscounted
cash flows which have been calculated using spot rates at the relevant Balance Sheet date.

| Less than | Between | Between | Over
| 1 year | 1 and 2 years | 2 and 5 years | 5 years
At 31 December 2023 | £m | £m | £m | £m
FX forward exchange contracts |  |  |  |
Outflow | (8,428) | (6) | (6) | –
Inflow | 8,414 | 6 | 6 | –
Cross currency interest rate swaps |  |  |  |
Outflow | (116) | (116) | (1,534) | (824)
Inflow | 48 | 48 | 1,440 | 776
Interest rate swaps |  |  |  |
Outflow | (67) | (67) | (126) | (55)
Inflow | 44 | 44 | 35 | 11

| Less than | Between | Between | Over
| 1 year | 1 and 2 years | 2 and 5 years | 5 years
At 31 December 2022 | £m | £m | £m | £m
FX forward exchange contracts |  |  |  |
Outflow | (5,356) | (7) | (13) | –
Inflow | 5,376 | 7 | 12 | –
Cross currency interest rate swaps |  |  |  |
Outflow | (25) | (25) | (785) | –
Inflow | 3 | 3 | 758 | –
Interest rate swaps |  |  |  |
Outflow | (21) | (21) | (63) | (53)
Inflow | 6 | 6 | 17 | 17

Cash flow forecasting is performed by the local business units and on an aggregated basis by GT. GT
monitors rolling forecasts of the Group’s liquidity requirements to ensure it has sufficient cash to meet
operational needs while maintaining sufficient headroom on its undrawn committed borrowing facilities.
Funds over and above those required for short-term working capital purposes by the local businesses are
generally remitted to GT. 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.
4. Capital management
The Group considers capital to be net debt plus total equity. Net debt is calculated as total financing
liabilities less cash and cash equivalents and short-term deposits. Total equity includes share capital,
reserves and retained earnings as shown in the Group Balance Sheet.
Note

|  | 2023 | 2022
|  | £m | £m
Cash and cash equivalents including overdrafts |  | 1,380 | 1,156
Financing liabilities | 17 | (8,670) | (9,140)
Net debt |  | 7,290 | 7,984
Total equity |  | 8,469 | 9,483
|  | 15,759 | 17,467

The 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 2023, the Group provided returns to shareholders in the form of dividends and through buying back
shares. Refer to Note 24 for further details.
The Group monitors net debt which at year end was £7,290 million (2022: £7,984 million). In 2023 the
Group began a share buyback programme funded by surplus free cash flow (see Note 24) in line with
the Group’s capital allocation policy of returning surplus cash to shareholders.
Supply chain finance
The Group participates in a supply chain finance programme (SCF) under which certain suppliers to
the Group are able to access an SCF arrangement that enables them to fund their working capital. The
principal purpose of this programme is to facilitate efficient payment processing and enable the willing
suppliers to sell their receivables due from the Group to a bank before their due date. The Group does
not incur any additional interest towards the bank on the amounts due to the suppliers. As part of this
facility the Group has confirmed to certain financial institutions that it will make payments of £358 million
(2022: £330 million) to these suppliers as they fall due. These amounts are recorded within trade payables
on the Balance Sheet and all cash flows associated with the programme are included within operating
cash flows as they continue to be part of the normal operating cycle of the Group and their principal
nature remains operating, being payments for the purchase of goods and services .
Notes to the Financial Statements continued
15 Financial Instruments and Financial Risk Management continued
188 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
16 Cash and Cash Equivalents

| 2023 | 2022
| £m | £m
Cash at bank and in hand | 647 | 662
Short-term bank deposits | 740 | 495
Cash and cash equivalents | 1,387 | 1,157

The Group operates in a number of territories where there are either foreign currency exchange
restrictions, or where it is difficult for the Group to extract cash readily and easily in the short-term.
As a result, £229 million (2022: £276 million) of cash included in cash and cash equivalents is restricted
for use by the Group, yet available for use in the relevant subsidiary’s day-to-day operations.
17 Financial Liabilities – Borrowings
Note

|  | 2023 | 2022
|  | £m | £m
Current |  |  |
Bank loans and overdrafts |  | 30 | 40
Commercial paper |  | – | 1,190
Bonds |  | 1,571 | 413
Lease liabilities | 19 | 78 | 78
Total short-term borrowings |  | 1,679 | 1,721
Non-current |  |  |
Bonds |  | 5,304 | 5,461
Senior notes |  | 1,292 | 1,369
Other non-current borrowings |  | 13 | 22
Lease liabilities | 19 | 249 | 311
Total long-term borrowings |  | 6,858 | 7,163
Total borrowings |  | 8,537 | 8,884
Derivative financial instruments – as shown below Less overdrafts presented in cash and cash equivalents in the |  | 140 | 257
Cash Flow Statement |  | (7) | (1)
Total financing liabilities |  | 8,670 | 9,140

1
1. Bank loans are denominated in a number of currencies: all are unsecured and bear interest based on market short-term
interest rates
The Group uses derivative financial instruments to hedge certain elements of interest rate and exchange
risk on its financing liabilities. The split between these items and other derivatives on the Balance Sheet
is shown below:

|  | Assets |  | Liabilities
2023 (£m) | Current | Non-current | Current | Non-current
Derivative financial instruments (financing liabilities) | 45 | 50 | (58) | (177)
Derivative financial instruments |  |  |  |
(non-financing liabilities) | 19 | – | (20) | (10)
At 31 December 2023 | 64 | 50 | (78) | (187)

1
1. Included within other non-current receivables on the balance sheet

| Assets |  |  | Liabilities
2022 (£m) | Current | Non-current | Current | Non-current
Derivative financial instruments (financing liabilities) | 25 | – | (34) | (248)
Derivative financial instruments |  |  |  |
(non-financing liabilities) | 34 | – | (21) | (1)
At 31 December 2022 | 59 | – | (55) | (249)

Reconciliation of movement in financing liabilities to the Cash Flow Statement

| 2023 | 2022
| £m | £m
At 1 January | 9,140 | 9,637
Proceeds from borrowings | 1,638 | 2,274
Repayment of borrowings | (1,855) | (3,807)
Other financing cash flows | (84) | 383
Total financing cash flows | (301) | (1,150)
New lease liabilities | 44 | 134
Exchange, fair value and other movements | (213) | 519
Total non-cash financing items | (169) | 653
At 31 December | 8,670 | 9,140

Notes to the Financial Statements continued
189 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Maturity of borrowings (excluding lease liabilities)

| 2023 | 2022
| £m | £m
Bank loans and overdrafts repayable: |  |
Within one year or on demand | 30 | 40
Other borrowings repayable: |  |
Within one year: |  |
Commercial paper | – | 1,190
Bonds | 1,571 | 413
After one year and in less than five years: |  |
Bonds | 3,205 | 4,381
Senior notes | 599 | 636
After five years or longer: |  |
Bonds | 2,099 | 1,080
Senior notes | 693 | 733
Other non-current borrowings | 13 | 22
| 8,180 | 8,455
Gross borrowings (unsecured) | 8,210 | 8,495

18 Provisions for Liabilities and Charges

| Legal | Other | Total
| provisions | provisions | provisions
| £m | £m | £m
At 1 January 2022 | 180 | 55 | 235
Charged to the Income Statement | 62 | 15 | 77
Utilised during the year | (8) | (3) | (11)
Released to the Income Statement | (17) | (12) | (29)
Reclassifications | (3) | 5 | 2
Exchange adjustments | 7 | 5 | 12
At 31 December 2022 | 221 | 65 | 286
Charged to the Income Statement | 7 | 14 | 21
Utilised during the year | (63) | (1) | (64)
Released to the Income Statement | (17) | (11) | (28)
Reclassification | 1 | (2) | (1)
Exchange adjustments | (12) | (3) | (15)
At 31 December 2023 | 137 | 62 | 199

Provisions have been analysed between current and non-current as follows:

| 2023 | 2022
| £m | £m
Current | 142 | 227
Non-current | 57 | 59
| 199 | 286

Provisions are recognised when the Group has a present or constructive obligation as a result of past
events, it is more likely than not that there will be an outflow of resources to settle that obligation,
and the amount can be reliably estimated. As at 31 December 2023, the Group recognised legal
provisions of £137 million (2022: £221 million) in relation to a number of historical regulatory and other
matters in various jurisdictions.
These provisions relate to matters where the Group is currently involved with, or potentially will be
involved in, litigation. The provision represents the Group’s best estimate of the likely settlement. Due
to the uncertain nature of the resolution of the majority of these matters, £109 million (2022: £184 million)
is recorded as a current provision as it is possible the matters could be settled in the next 12 months;
however, it is possible that they may not be.
Other provisions include environmental obligations throughout the Group, the majority of which are
expected to be utilised within five years.
19 Lease Liabilities
Maturity analysis – contractual undiscounted cash flows

| 2023 | 2022
| £m | £m
Within one year | 81 | 80
Later than one and less than five years | 199 | 253
After five years | 103 | 135
Total undiscounted lease liabilities at 31 December | 383 | 468
Lease liabilities included in the statement of financial position at 31 December | 327 | 389
Current | 78 | 78
Non-current | 249 | 311

Interest charged on lease liabilities amounted to £14 million (2022: £16 million).
Notes to the Financial Statements continued
17 Financial Liabilities – Borrowings continued
190 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
20 Contingent Liabilities and Assets
Humidifier Sanitiser issue
The Humidifier Sanitiser (HS) issue in South Korea was a tragic event. The Group continues to make both
public and personal apologies to the victims who have suffered lung injury as a result of the Oxy HS
product and the role that the Oxy HS product played in the issue.
As previously reported, over the last several years the South Korean government has designated a
number of diseases as HS injuries, in addition to the HS lung injury for which Reckitt Korea’s compensation
plan was established. These include asthma, toxic hepatitis, child interstitial lung disease (ILD), bronchitis,
upper airway disease, pneumonia, skin disease (accompanied by respiratory injuries) and depression
(accompanied by respiratory injuries).
The Korean National Assembly passed a bill on 6 March 2020 to amend the HS law with the main changes
in the amendment relating to: (i) the definition of HS injury; (ii) the legal presumption of causation
(shifting the burden of proof for causation to the defendant if the plaintiff demonstrates ‘epidemiological
correlation’ between HS exposure and their injury), and (iii) amendments to the fund set up by the
government and funded by the government and HS companies (the Special Relief Fund (SRF), now called
the Injury Relief Fund (IRF)) to provide expanded support payments to HS victims which would cover
all elements of court awarded damages except mental distress, aside from KRW 100 million consolation
payments for death cases, and partial lost income.
The Group currently has a provision of £27 million (2022: £77 million) in relation to the HS issue in
South Korea. In addition, there are further potential costs that are not considered probable and cannot
be reliably estimated at the current time. The impact of the HS law amendments will require further
monitoring and analysis, in particular those which will be subject to court interpretation, such as the new
epidemiological correlation standard, any limitation applied by courts to damage awards, the interest
rate applied by individual courts to damage awards and external factors such as the rate of future IRF
applications/recognitions. Accordingly, it is not possible to make any reliable estimate of liability for
individuals recognised by the government as having HS injuries.
Necrotizing Enterocolitis (NEC)
Product liability actions relating to NEC have been filed against certain Group subsidiary companies, or
against Group subsidiary companies and Abbott Laboratories, in state and federal courts in the United
States. The actions allege injuries relating to NEC in preterm infants. Plaintiffs contend that human milk
fortifiers (HMF) and preterm formulas containing bovine-derived ingredients cause NEC, and that
preterm infants should receive a diet exclusively of breast milk. The Company has denied the material
allegations of the claims. It contends that its products provide critical tools to expert neonatologists for
the nutritional management of preterm infants for whom human milk, by itself, is not available or
nutritionally sufficient. The products are used under the supervision of medical doctors. Any potential
costs relating to these actions are not considered probable. Given the uncertainty on the number of
cases, their validity and range of possible outcomes on each valid case, the possible economic outflow
cannot be reliably estimated, but may be significant (see note 33).
Phenylephrine
Starting in September 2023, putative class action lawsuits have been filed against the Group and
competitor companies in various United States jurisdictions that generally allege that the defendants
made misrepresentations about the effectiveness of products containing phenylephrine. In December
2023, the Judicial Panel on Multidistrict Litigation (JPML) transferred all currently pending federal court
cases and any similar, subsequently filed cases to a coordinated multi-district litigation (MDL) in the
Eastern District of New York for pre-trial purposes. The Group is defending these cases, which all remain
in preliminary stages. Potential costs relating to these actions are not considered probable and cannot
be reliably estimated at the current time.
Other
From time to time, the Group is involved in discussions in relation to ongoing tax matters in a number
of jurisdictions around the world. Where appropriate, the Directors make provisions based on their
assessment of each case (see Note 7).
21 Trade and Other Payables

| 2023 | 2022
| £m | £m
Trade payables | 2,194 | 2,366
Other payables | 118 | 123
Forward share purchase liability | 158 | –
Other tax and social security payable | 163 | 172
Interest accrued on tax balances | 122 | 105
Indemnity provisions for disposed businesses | 48 | –
Accruals | 2,703 | 2,781
Trade and other payables | 5,506 | 5,547

1
1. During the year, the £167 million (Note 30) recognised through equity has been re-estimated to £158 million at 31 December
2023, resulting in a £9 million credit to other finance income
Included within accruals is £1,125 million (2022: £1,137 million) in respect of amounts payable to trade
customers and government bodies for trade spend.
Other non-current liabilities

| 2023 | 2022
| £m | £m
US employee-related payables | 45 | 42
Indemnity provisions for disposed businesses | – | 51
Other | 22 | 23
Other non-current liabilities | 67 | 116

Notes to the Financial Statements continued
191 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Financial instruments (Note 15)
At 31 December 2023, £5,276 million (2022: £5,344 million) of the current and non-current trade and
other payables totalling £5,573 million (2022: £5,663 million) are financial liabilities. These mainly relate
to amounts owed to suppliers in respect of goods or services and are typically non-interest bearing.
Amounts that are not financial instruments comprise employee-related liabilities, social security liabilities
and accrued interest.
22 Current and Non-current Tax Liabilities

| 2023 | 2022
| £m | £m
Current tax liabilities | 620 | 791
Non-current tax liabilities | 28 | 54
Total current and non-current tax liabilities | 648 | 845

Certain tax positions taken by us are based on industry practice, tax advice and drawing similarities
from our facts and circumstances to those in case law. In particular, international transfer pricing is an
area of taxation that depends heavily on the underlying facts and circumstances and generally involves
a significant degree of judgement.
Tax assets and liabilities are offset where there is a legally enforceable right to do so. Included within
current tax liabilities is an amount of £619 million (2022: £722 million) relating to uncertain tax positions
primarily in respect of transfer pricing. Within this, £187 million (2022: £194 million) relates to amounts
recognised using the most likely outcome method, where the resolution of the uncertainty is concentrated
on one binary outcome. There is no individual tax uncertainty calculated with this method that is material
to the Financial Statements.
Also within uncertain tax positions is an amount of £432 million (2022: £528 million) recognised using
the expected value method. The liabilities calculated using this method are not material in isolation,
are individually assessed and cover multiple jurisdictions and issues. Therefore, it is not meaningful to
provide aggregated sensitivity estimates. The sources of estimation uncertainty underlying this amount
are shown in Note 1.
The recognition of uncertain tax positions is reviewed regularly for changes in circumstances and
estimates are updated as potential resolutions for the tax uncertainties are encountered through specific
audits or wider case law. As a result, given the size, possible range of outcomes and timing of resolution,
there is a significant risk of material adjustment to the aggregate carrying amount of these liabilities
within the next financial year.
The disputes underlying the liability recognised in respect of uncertain tax positions may take
several years to resolve (see Note 1). Notwithstanding this, the carrying amount of £619 million
(2022: £722 million) has been presented as a current liability. The associated interest accrued on
uncertain tax positions of £122 million (2022: £105 million) also is presented as a current liability.
23 Pension and Post-Retirement Commitments
Plan details
The Group operates a number of defined benefit and defined contribution pension plans around the
world covering many of its employees, which are principally funded. The Group’s most significant pension
plan (UK) is set up under Trust and is a separate entity from the Group. It has two sections, a defined
contribution section which remains open and a defined benefits section, which closed to accrual from
31 December 2017. Members have a normal retirement age of 65. Trustees of the plan are appointed by
the Group, active members and pensioner membership, and are responsible for the governance of the
plan, including paying all administrative costs of the defined benefit section and compliance with
regulations. The defined benefit section of the plan is funded by the payment of contributions as
required, following each Triennial Valuation.
For the principal UK plan, a full independent actuarial valuation is carried out on a triennial basis.
The most recent valuation was carried out as at 5 April 2022 and as the plan was in surplus on its
technical provisions funding basis, no contributions are required to be paid by the Group in 2024
(2023: £nil). Funding levels are monitored on an annual basis.
The Group continues to monitor the impact of UK High Court rulings clarifying the requirements to
equalise the Guaranteed Minimum Pension element of benefits for men and women within the UK
Pension schemes from Guaranteed Minimum Pension accrued from post 17 May 1990 pensionable
service. A method has been agreed with the pension trustees from all defined benefit schemes
in the UK and no benefit changes or back payments have yet been made to members.
The Group also operates a number of other post-retirement plans in certain countries. The two
major plans are the US Retiree Health Care Plan and the Mead Johnson & Company, LLC Medical Plan
(together, the US (Medical) plans). In the US Retiree Health Care Plan, salaried participants become
eligible for retiree healthcare benefits after they reach a combined ‘age and years of service rendered’
figure of 70, although the age must be a minimum of 55. This plan closed to new members in 2009. In the
Mead Johnson & Company, LLC Medical Plan, acquired as part of the acquisition of MJN on 15 June 2017,
participants become eligible for retiree healthcare benefits if they leave employment after the age of 65,
leave after the age of 55 and have completed 10 years of service, or have their employment involuntarily
terminated after the age of 55. A Benefits Committee is appointed by the Group for both of these plans,
responsible for the governance of the US plans, including paying all administrative costs and compliance
with regulations. Both of these plans are unfunded.
Notes to the Financial Statements continued
21 Trade and Other Payables continued
192 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
For the US (Medical) plans, a full independent actuarial valuation is carried out on an annual basis.
The most recent valuation was carried out on 1 January 2024. For both of these plans, funding levels
are monitored on an annual basis with contributions made equal to the claims made each year.
It is expected that the combined contributions in 2024 will be £8 million (2023: £7 million).
For the purpose of IAS 19, the projected unit valuation method was used for the UK and US plans,
as per the principal UK plan triennial valuation results (at 5 April 2022) and the US (Medical) plan annual
valuations to 31 December 2023. The UK plans have a weighted average duration of the deferred benefit
obligation of 12.4 years (2022: 13.5 years). This decrease is predominantly driven by significant rises
in bond yields over the year to 31 December 2023.
Significant actuarial assumptions
The significant actuarial assumptions used in determining the Group’s net liability for the UK and US
(Medical) plans as at 31 December were:

| 2023 |  | 2022 |
| UK | US (Medical) | UK | US (Medical)
| % | % | % | %
Rate of increase in pensionable salaries | N/A | – | N/A | –
Rate of increase in deferred pensions during deferment | 2.8 | – | 3.4 | –
Rate of increase in pension payments | 3.05 | – | 3.25 | –
Discount rate | 4.7 | 4.9 | 5.0 | 5.2
Inflation assumption – RPI | 3.2 | – | 3.4 | –
Annual medical cost inflation | – | 5.0-8.0 | – | 5.0-8.0

Assumptions regarding future mortality experience are set in accordance with published statistics and
experience in each territory. The expected lifetime of a participant aged 60 and the expected lifetime
of a participant who will be aged 60 in 15 years (20 years in the US) are detailed below:

| 2023 |  | 2022 |
| UK years | US years | UK years | US years
Number of years a current pensioner |  |  |  |
is expected to live beyond 60: |  |  |  |
Male | 27.2 | 25.3 | 27.5 | 25.2
Female | 28.8 | 27.4 | 29.0 | 27.3
Number of years a future pensioner |  |  |  |
is expected to live beyond 60: |  |  |  |
Male | 28.4 | 27.0 | 28.8 | 26.9
Female | 30.0 | 28.9 | 30.4 | 28.9

For the principal UK plan, the mortality assumptions were based on the standard SAPS mortality table
3NMA for males (scaled by 98%) and table 3NFA for females (scaled by 117%). Allowance for future
changes is made by adopting the 2022 edition of the CMI series with a long-term improvement trend of
1.5% per annum from 2013 onwards. Allowance is made for future improvements in mortality by adopting
the CMI’s published 2022 improvement tables with a long-term improvement trend of 1.5% per annum
from 2013 onwards, an initial addition to mortality improvements of 0.25% pa, the core period smoothing
parameter of 7.0 and a default weighting of 0% / 0% / 25% applied to 2020 / 2021 / 2022 calendar year
data. For the US plan the mortality assumptions were determined using the Pri-2012 Total Dataset and
projected with Mortality Improvement Scale MP-2021.
While COVID-19 has had an impact on mortality in the year ended 31 December 2022 and 2023, the
long-term impact on future mortality trends is currently unknown and consequently no adjustment
has been made to mortality assumptions in this regard, beyond adjusting the weighting in the mortality
tables described above.
Amounts recognised on the Balance Sheet
The amounts recognised on the Balance Sheet are as follows:

| 2023 | 2022
| £m | £m
Balance Sheet liability for: |  |
US (Medical) | (73) | (81)
Other | (160) | (159)
Liability on Balance Sheet | (233) | (240)
Balance Sheet assets for: |  |
UK | 206 | 241
Other | 64 | 53
Asset on Balance Sheet | 270 | 294
Net pension asset | 37 | 54

The UK surplus of £206 million (2022: £241 million) relates mainly to the Reckitt Benckiser Pension Fund.
This surplus has been recognised as the Group has concluded it has an unconditional right to a refund of
any surplus once all member benefits have been paid. The Group’s judgement is based on legal advice
that the Trustees would be unable to unconditionally wind up the plan or enhance members’ benefits
without the Group’s consent.
Notes to the Financial Statements continued
23 Pension and Post-Retirement Commitments continued
193 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The funded and unfunded amounts recognised on the Balance Sheet are determined as follows:

|  | 2023 |  |  |  | 2022 |  |
|  | US |  |  |  | US |  |
| UK | (Medical) | Other | Total | UK | (Medical) | Other | Total
| £m | £m | £m | £m | £m | £m | £m | £m
Present value of funded |  |  |  |  |  |  |  |
obligations | (969) | – | (400) | (1,369) | (941) | – | (373) | (1,314)
Fair value of plan assets | 1,178 | – | 443 | 1,621 | 1,186 | – | 426 | 1,612
Surplus of funded plans | 209 | – | 43 | 252 | 245 | – | 53 | 298
Present value of unfunded |  |  |  |  |  |  |  |
obligations | – | (73) | (139) | (212) | – | (81) | (159) | (240)
Irrecoverable surplus | (3) | – | – | (3) | (4) | – | – | (4)
Net pension surplus/ |  |  |  |  |  |  |  |
(liability) | 206 | (73) | (96) | 37 | 241 | (81) | (106) | 54

Group plan assets are comprised as follows:

|  | 2023 |  |  |  | 2022 |  |
|  | US |  |  |  | US |  |
| UK | (Medical) | Other | Total | UK | (Medical) | Other | Total
| £m | £m | £m | £m | £m | £m | £m | £m
Equities | 60 | – | 99 | 159 | 134 | – | 92 | 226
Government bonds | 136 | – | 108 | 244 | 167 | – | 157 | 324
Corporate bonds | 290 | – | 150 | 440 | 265 | – | 135 | 400
Real estate/property – |  |  |  |  |  |  |  |
unquoted | 28 | – | 11 | 39 | 82 | – | 19 | 101
Insurance contracts | 273 | – | – | 273 | 272 | – | – | 272
Other assets – unquoted | 391 | – | 75 | 466 | 266 | – | 23 | 289
Fair value of plan assets | 1,178 | – | 443 | 1,621 | 1,186 | – | 426 | 1,612

Notes to the Financial Statements continued
23 Pension and Post-Retirement Commitments continued In 2021 and 2020, the Trustees of three of the UK pension plans entered into annuity buy-in agreements
which cover, in aggregate, £273 million of pension liabilities valued under IAS 19 at 31 December 2023
(£272 million of pension liabilities valued under IAS 19 at 31 December 2022). The agreements involved
the purchase of bulk annuity policies under which the insurer will pay the UK pension funds amounts
equivalent to the benefits payable to members. These purchases were conducted by the trustees to
ensure the pension fund had an asset that would match its obligation to members. The policies are
valued in accordance with IAS 19 by the plans’ actuary such that the fair value on the annuity policies is
deemed to be the present value of the related obligation measured using the assumptions underpinning
the valuation of the defined benefit obligation. The pension liabilities remain with, and the matching
annuity policies are held within, the UK pension funds. As this was an investment decision by the trustees,
the immaterial reduction in the valuation of plan assets (due to the difference between the purchase
price of the annuity policy and the accounting value of the buy-in asset) arising on each buy-in was
recorded within other comprehensive income. The Trustees have not entered any such buy-in
agreements in 2022 or 2023.
At 31 December 2023 the Group has not committed to any buy-out arrangements in respect of any
of the UK pension schemes.
Included in other assets are £319 million (2022: £235 million) relating to liability driven investment funds.
This is a bespoke pooled investment vehicle with underlying listed bonds, equities and structured notes.
The fair value of the vehicle is provided by the fund manager based on the underlying value of the
securities held within the vehicle. The trustees purchased these investments in 2021 to lower risk within
the portfolio without reducing potential returns. These investments have a low leverage percentage and
sufficient capital collateral in place. The remaining other assets are cash.
The present value of obligations for the combined UK plans and the US (Medical) plans at last valuation
date is attributable to participants as follows:

| 2023 |  | 2022 |
| UK | US (Medical) | UK | US (Medical)
| £m | £m | £m | £m
Active participants | (1) | (19) | (1) | (34)
Participants with deferred benefits | (334) | (1) | (307) | (1)
Participants receiving benefits | (634) | (53) | (633) | (46)
Present value of obligation | (969) | (73) | (941) | (81)

194 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The movement in the Group’s net surplus/(deficit) is as follows:

|  | Present value of obligation |  |  |  |  | Fair value of plan assets |
| UK | US (Medical) | Other | Total | UK | US (Medical) | Other | Total
| £m | £m | £m | £m | £m | £m | £m | £m
At 1 January 2022 | 1,486 | 107 | 650 | 2,243 | (1,788) | – | (496) | (2,284)
Current service cost | – | 1 | 8 | 9 | – | – | – | –
Administrative costs | 3 | – | – | 3 | – | – | – | –
Interest expense/(income) | 27 | 4 | 12 | 43 | (34) | – | (14) | (48)
| 30 | 5 | 20 | 55 | (34) | – | (14) | (48)
Remeasurements: |  |  |  |  |  |  |  |
Return on plan assets, excluding amounts included in interest income | – | – | – | – | 565 | – | 96 | 661
(Gains) from changes in demographic assumptions | (2) | (11) | – | (13) | – | – | – | –
(Gains) from change in financial assumptions | (518) | (22) | (151) | (691) | – | – | (2) | (2)
Experience (gains)/losses | 16 | (3) | 3 | 16 | – | – | – | –
| (504) | (36) | (148) | (688) | 565 | – | 94 | 659
Exchange differences | – | 12 | 54 | 66 | – | – | (41) | (41)
Contributions – employers | – | – | – | – | – | (7) | (13) | (20)
Benefit payments | (71) | (7) | (44) | (122) | 71 | 7 | 44 | 122
As at 31 December 2022 | 941 | 81 | 532 | 1,554 | (1,186) | – | (426) | (1,612)
Current service cost | – | – | 10 | 10 | – | – | – | –
Administrative costs | 3 | – | 3 | 6 | – | – | – | –
Interest expense/(income) | 47 | 4 | 12 | 63 | (58) | – | (13) | (71)
| 50 | 4 | 25 | 79 | (58) | – | (13) | (71)
Remeasurements: |  |  |  |  |  |  |  |
Return on plan assets, excluding amounts included in interest income | – | – | – | – | 5 | – | 10 | 15
(Gains) from changes in demographic assumptions | (16) | – | (1) | (17) | – | – | – | –
Losses from change in financial assumptions | 34 | 2 | (15) | 21 | – | – | – | –
Experience (gains)/losses | 21 | (5) | 7 | 23 | – | – | – | –
| 39 | (3) | (9) | 27 | 5 | – | 10 | 15
Exchange differences | – | (4) | (20) | (24) | – | – | 20 | 20
Contributions – employers | – | – | – | – | – | (5) | (23) | (28)
Benefit payments | (61) | (5) | (26) | (92) | 61 | 5 | 26 | 92
Scheme assets and obligations previously presented net | – | – | 37 | 37 | – | – | (37) | (37)
As at 31 December 2023 | 969 | 73 | 539 | 1,581 | (1,178) | – | (443) | (1,621)

1
1. During the year, the Group identified one country where the pension assets and obligation was presented net, the presentation has been corrected to show gross presentation
Notes to the Financial Statements continued
23 Pension and Post-Retirement Commitments continued
195 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Amounts recognised in the Income Statement
The charge for the year ended 31 December is shown below:

| 2023 | 2022
| £m | £m
Defined contribution plans | 44 | 49
Defined benefit plans (net charge excluding interest) |  |
UK | 3 | 3
US (Medical) | – | 1
Other | 13 | 8
Total pension costs included in operating profit (Note 5) | 60 | 61
Pension net finance income included in net finance expense (Note 6) | (8) | (5)
Income Statement charge included in profit before income tax | 52 | 56
Remeasurement gains/(losses) for 2 : |  |
UK | (44) | (61)
US (Medical) | 3 | 36
Other | (1) | 54
| (42) | 29

1
1. The Income Statement charge recognised in operating profit includes current service cost, past service cost and
administrative costs
2. Remeasurement gains excludes £1 million (2022: £nil) recognised in OCI for irrecoverable surplus
Sensitivity of significant actuarial assumptions
The sensitivity of the UK defined benefit obligation to changes in the principal assumptions is shown below:

|  | Change in defined
2023 | Change in assumption | benefit obligation
Discount rate | Increase 0.1% | Decrease by 1.2%
Discount rate | Increase 1.0% | Decrease by 10.7%
RPI increase | Increase 0.1% | Decrease by 1.0%
RPI increase | Increase 1.0% | Increase by 8.9%
Life expectancy | Members live 1 year longer | Increase by 3.3%

|  | Change in defined
2022 | Change in assumption | benefit obligation
Discount rate | Increase 0.1% | Decrease by 1.3%
Discount rate | Increase 1.0% | Decrease by 11.5%
RPI increase | Increase 0.1% | Increase by 0.7%
RPI increase | Increase 1.0% | Increase by 9.2%
Life expectancy | Members live 1 year longer | Increase by 3.2%

The above sensitivity analyses are based on a change in an assumption while holding all other
assumptions constant. In practice, this is unlikely to occur, and changes in some of the assumptions
may be correlated.
Impact of medical cost trend rates
A 1% change in the assumed healthcare cost trend rates would have an immaterial impact on the service
cost, interest cost and post-retirement benefit obligation.
Risk and risk management
Through its defined benefit pension plans and post-employment medical plans, the Group is exposed
to a number of risks, the most significant of which are detailed as follows:
Asset volatility: The plan liabilities are calculated using a discount rate set with reference to corporate
bond yields. If plan assets underperform this yield, this will create a deficit/reduce the surplus. The US
plans hold a significant proportion of equities, which are expected to outperform corporate bonds in
the long term while providing volatility and risk in the short-term. However, the Group believes that
due to the long-term nature of the plan liabilities and the strength of the supporting group, a level of
continuing equity investment is an appropriate element of the Group’s long-term strategy to manage
the plans efficiently .
Notes to the Financial Statements continued
23 Pension and Post-Retirement Commitments continued
196 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Changes in bond yields: An increase in government and corporate bond yields will decrease plan
liabilities, although this will be partially offset by a decrease in the value of the plans’ bond holdings.
For example, following the increase in market bond yields in the year ended 31 December 2022, the UK
plans’ liabilities reduced by £545 million, offset by a reduction in the plans’ bond holdings by £602 million,
resulting in a £57 million net decrease to the plans’ surplus.
Inflation risk: Some of the Group’s pension obligations are linked to inflation, and higher inflation will
lead to higher liabilities (although, in most cases, caps on the level of inflationary increases are in place
to protect the plan against extreme inflation). In order to manage inflationary risks, the Trustees’
investment strategy within the UK plan provides a high level of protection against higher expected
long-term inflation through investments in index-linked gilts, liability driven investments and insurance
contracts. In the US plans, the pensions in payment are not linked to inflation, so this is a less material risk.
Life expectancy: The majority of the plans’ obligations are to provide benefits for the life of the member.
Whilst the plans allow for an increase in life expectancy, increases above this assumption will result in an
increase in the plans’ liabilities. This is particularly significant in the UK plan, where inflationary increases
to benefits result in higher sensitivity to improvements in life expectancy. In 2020 the principal UK
scheme reduced its exposure by purchasing an insurance product that will pay the pensions of some
of the plan’s pensioners. In 2021 two other UK pension schemes purchased a similar insurance policy
covering 100% of their members’ benefits.
Change in regulations: The Group is aware that future changes to the regulatory framework may impact
the funding basis of the various plans in the future. The Group’s pensions department monitors the
changes in legislation and analyses the risks as and when they occur.
Investments are well diversified, such that the failure of any single investment would not have a material
impact on the overall level of assets. A portion of assets consists of unit linked insurance policies with
underlying investments in quoted equities and quoted bonds, although the Group also invests in property
and cash. The Group believes that quoted equities offer the best returns over the long term with an
acceptable level of risk. The Trustees of all the UK funds have moved the majority of their assets to
low-cost investment funds in consultation with the Group whilst maintaining prudent diversification and
appropriate interest and inflation hedging. The Trustees and the Group have aligned goals in respect of
climate risk which includes a 50% reduction in carbon footprint ambition by 2030.
24 Share Capital

|  | Nominal
| Equity ordinary | value
Issued and fully paid | shares number | £m
At 31 December 2022 | 736,535,179 | 74
At 31 December 2023 | 736,535,179 | 74

The holders of ordinary shares (par value 10 pence) are entitled to receive dividends (Note 28) as
declared from time to time and are entitled to one vote per share at meetings of the parent company.
Repurchase of ordinary shares
In October 2023, the Group announced a share buyback programme of an initial amount of £1 billion to be
effected over 12 months. During 2023, as part of this share buyback programme, the Group entered into
commitments to purchase £500 million of ordinary shares.
A share repurchase liability of £296 million has been recognised in the balance sheet as at 31 December 2023
(2022: £nil), reflecting contractual obligations to purchase ordinary shares (including associated costs).
During the year to 31 December 2023, 3,782,835 shares have been purchased at a total cost of
£207 million. Repurchased ordinary shares have been included in the treasury shares (see below).
Allotment of ordinary shares and release of treasury shares
During the year nil ordinary shares (2022: nil ordinary shares) were allotted, 2,047,518 ordinary shares
were released from Treasury (2022: 1,351,767) and 3,782,835 ordinary shares (2022: nil ordinary shares)
were bought back, to satisfy vesting/exercises under the Group’s various share schemes as follows:
Ordinary shares of 10p

|  |  | 2023 |  | 2022
| Number of |  | Consideration | Number of | Consideration
| shares |  | £m | shares | £m
Released from Treasury |  |  |  |  |
Executive Share Options – exercises | 380,348 |  | 19 | 372,711 | 18
Restricted Shares Awards – vesting | 1,037,96 | 0 | – | 313,293 | –
Total under Executive Share Option |  |  |  |  |
and Conditional Award Schemes |  | 1,418,308 | 19 | 686,004 | 18
Savings-related Share Option Schemes |  |  |  |  |
–exercises |  | 629,210 | 29 | 665,763 | 36
Total released from Treasury |  | 2,047,518 | 48 | 1,351,767 | 54
Bought into Treasury |  |  |  |  |
Repurchase of shares |  | (3,782,835) | (207) | – | –
Total |  | (1,735,317) | (159) | 1,351,767 | 54

Notes to the Financial Statements continued
23 Pension and Post-Retirement Commitments continued
197 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
In 2023, 2,047,518 Treasury shares were released (2022: 1,351,767) and 3,782,835 ordinary shares
(2022: nil ordinary shares) were bought back, leaving a balance held at 31 December 2023 of 22,506,530
(2022: 20,771,213). Proceeds received from the reissuance of Treasury shares to exercise share options
were £48 million (2022: £54 million).
25 Share-Based Payments
The Group operates a number of incentive schemes, including a Long-Term Incentive Plan (LTIP), and
various other share schemes. All schemes are equity-settled. The total charge for share-based payments
for the year was £102 million (2022: £78 million).
Executive share awards
Executive share awards granted to the senior management team under the LTIP consist of Performance
Share Options, Performance Shares, and Time-Vested Shares. For Performance Share Options and
Performance Shares, vesting is conditional on achievement of specified performance targets over
a three-year period as well as continued employment. For Time-Vested Shares, vesting is conditional
only on three years of continued employment. For Performance Share Options, the exercise price is
determined on the grant date and becomes payable on exercise, which may be up to seven years after
the options have vested. Performance Shares and Time-Vested Shares entitle the recipient to receive
shares at no cost following satisfaction of the vesting conditions.
The performance metrics and associated weightings for the 2022 and 2023 LTIP awards are as follows:

LTIP performance metrics – 2022 and 2023 awards | Weighting
Like-for-like Net Revenue growth | 40%
Return on Capital Employed (ROCE) | 25%
Relative Total Shareholder Return (TSR) | 25%
ESG | 10%

LTIP awards with a market-based TSR performance condition were first granted in 2022. For LTIP awards
granted before 2022, LTIP awards included only non-market-based performance conditions.
For the Executive Committee and members of the Group Leadership Team, vesting conditions must be
met over the three-year performance period and are not retested. For awards granted to other members
of the senior management team before 2021, the targets can be retested in years four or five of the
scheme. If any target has not been met, any remaining shares or options which have not vested will
lapse. For awards granted in May 2021 and thereafter, vesting conditions must be met over the three-
year period and are not retested.
Other share awards
Other share awards include savings-related share options (offered to all staff within the relevant
geographic area) and a number of Senior Executive Share Ownership Policy Plan (SOPP) awards.
Other share awards have contractual lives of between three and eight years and are generally not
subject to any vesting conditions other than the employee’s continued employment.
Individual tranches of these other share awards are not material for detailed disclosure and therefore
information about these awards is presented only on an aggregated basis.
Valuation of share awards
The fair value of share options granted is calculated using a Black-Scholes model. Performance Share
Options and Performance Shares which include the market-based TSR performance target are valued
by a third-party expert using a Monte Carlo model. For Performance Shares with non-market-based
performance conditions and for Time-Vested Shares, the fair value is the share price on the date of
grant. From 2022 onwards, no adjustment to the market price at grant is required because all new
Performance Shares and Time-Vested Shares accrue dividend equivalents. Performance Options do
not accrue dividend equivalents.
The weighted average fair value of the LTIP Performance Share Options granted in the year and the key
assumptions made in arriving at that fair value were as follows:

|  | Performance Share Options
| 2023 | 2022
Exercise price | £58.28 | £63.32
Performance period | 2023-25 | 2022-24
Share price on grant date | £59.18 | £62.42
Volatility | 22.6% | 22.5%
Dividend yield | 3.1% | 2.2%
Expected life | 6.6 years | 4 years
Risk-free interest rate | 3.2% | 1.3%
Weighted average fair value per award | £10.49 | £8.32

An estimate of future volatility is made with reference to historical volatility over a similar time period to
the performance period of the option. Historical volatility is calculated based on the annualised standard
deviation of the Group’s daily share price movement, which approximates the continuously compounded
rate of return on the share.
The weighted average fair value of the LTIP Performance Shares granted in the year was £51.38 per
award (2022: £57.73 per award).
Notes to the Financial Statements continued
24 Share Capital continued
198 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Movements in the year
The following table shows movements in the total number of outstanding awards across all award types:

|  | Year ended |  | Year ended
| 31 December 2023 |  | 31 December 2022
|  | Weighted |  | Weighted
|  | average |  | average
| Number of | exercise | Number of | exercise
| awards | price | awards | price
Outstanding at 1 January | 18,707,602 | £44.99 | 17,985,398 | £45.14
Granted | 4,806,191 | £36.92 | 5,717,048 | £41.77
Exercised | (2,084,209) | £23.51 | (1,388,034) | £38.56
Lapsed | (2,866,834) | £45.48 | (3,606,810) | £43.09
Outstanding at 31 December | 18,562,750 | £45.24 | 18,707,602 | £44.99
Exercisable at 31 December | 3,009,018 | £61.36 | 1,631,807 | £57.54

The weighted average share price for the year was £58.38 (2022: £61.09).
Summary of outstanding awards
For awards outstanding at the year end the weighted average remaining contractual life is 5.3 years
(2022: 4.6 years) and the range of exercise prices is as follows:

| Price to be paid |  |  | Number of awards
| £ |  |  | outstanding
|  |  | at 31 December | at 31 December
| From | To | 2023 | 2022
LTIP – performance share options | 38.06 | 78.00 | 11,522,463 | 10,545,453
LTIP – performance shares | – | – | 3,584,219 | 3,815,827
LTIP – time-vested shares | – | – | 861,596 | 655,717
SOPP | – | – | 150,200 | 177,400
Savings-related share options | 44.56 | 62.44 | 2,444,272 | 3,513,205
Total |  |  | 18,562,750 | 18,707,602

For LTIP awards with non-market performance conditions, assumptions regarding the number of awards
that will eventually vest are based on the Directors’ expectations in light of the Group’s business model
and relevant published targets.
Under the terms of the schemes, early exercise may only be granted in exceptional circumstances and
therefore the effect of early exercise is not incorporated into the calculation of the charge.
No material modifications have occurred requiring revision to the share-based payment charge for the
outstanding awards.
26 Other Reserves

|  | Foreign |
|  | currency | Total
| Hedging | translation | other
| reserve | reserve | reserves
Attributable to owners of the parent | £m | £m | £m
Balance at 1 January 2022 | 11 | (1,200) | (1,189)
Other comprehensive income/(expense): |  |  |
Fair value gains on cash flow hedges, net of tax | (32) | – | (32)
Reclassification of cash flow hedges to the income statement | 34 | – | 34
Net exchange losses on foreign currency translation, net of tax | – | 1,064 | 1,064
Losses on net investment hedges, net of tax | – | (115) | (115)
Reclassification of foreign currency translation reserves on disposal or liquidation of foreign operations, net of tax | – | (56) | (56)
Total other comprehensive income/(expense) for the year | 2 | 893 | 895
Balance at 31 December 2022 | 13 | (307) | (294)
Other comprehensive income/(expense): |  |  |
Fair value losses on cash flow hedges, net of tax | (16) | – | (16)
Reclassification of cash flow hedges to the income statement | (23) | – | (23)
Net exchange losses on foreign currency translation, net of tax | – | (638) | (638)
Gains on net investment hedges, net of tax | – | 42 | 42
Reclassification of foreign currency translation reserves on disposal or liquidation of foreign operations, net of tax | – | (131) | (131)
Total other comprehensive expense for the year | (39) | (727) | (766)
Balance at 31 December 2023 | (26) | (1,034) | (1,060)

The hedging reserve comprises the effective portion of the cumulative net change in fair value of cash
flow hedging instruments related to hedge transactions that are extant at year end.
The foreign currency translation reserve contains the accumulated foreign exchange differences from
the translation of the Financial Statements of the Group’s foreign operations arising when the Group’s
entities are consolidated. The reserve also contains the translation of liabilities that hedge the Group’s
net exposure in a foreign currency.
During the year ended 31 December 2023, a net gain of £131 million (2022: £56 million net gain) was
reclassified to the Income Statement from foreign currency reserves following the disposal or liquidation
of foreign operations, of which a net gain of £130 million (2022: £69 million net gain) related to the
liquidation of subsidiaries (see Note 6 for further details) and a gain of £1 million (2022: £13 million loss)
comprised of £1 million (2022: £20 million) arising from the disposal of certain businesses (see Note 29),
less related tax credits of £nil (2022: £7 million) (see Note 7) .
Notes to the Financial Statements continued
25 Share-Based Payments continued
199 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
27 Related Party Transactions
The Group has related party relationships with its Directors and key management personnel (Note 5).
28 Dividends

|  | 2023 | 2022
|  | £m | £m
Cash dividends on equity ordinary shares: |  |  |
2022 | Final paid: 1 1 0. 3 p (2021: Final paid 1 0 1 . 6 p) per share | 790 | 726
2023 | Interim paid: 76. 6p (2022: Interim paid: 73 p) per share | 549 | 523
Total dividends for the year |  | 1,339 | 1,249

The Directors are proposing a final dividend in respect of the financial year ended 31 December 2023
of 11 5 .9 pence per share which will absorb an estimated £828 million of shareholders’ funds. If approved
by shareholders it will be paid on 24 May 2024 to shareholders who are on the register on 12 April 2024,
with an ex-dividend date of 11 April 2024.
29 Acquisitions and Disposals
Acquisitions
On 25 September 2023, the Group acquired a business distributing Reckitt products in the Kingdom of
Saudi Arabia. This has been accounted for as a business combination with the purchase consideration
£79 million, of which a preliminary fair value of £56 million has been allocated to goodwill and intangible
assets, and a preliminary fair value of £23 million to inventories acquired.
During 2022, the Group did not complete any acquisitions.
Disposals
During 2022, the Group completed the disposals of Dermicool and E45 on 25 March 2022 and 1 April 2022,
respectively, with combined net cash proceeds of £243 million. The net assets disposed primarily
comprised goodwill and other intangible assets at a book value of £204 million. In addition, cumulative
foreign exchange losses of £10 million have been reclassified to the Income Statement.
The Group recognised a net pre-tax gain of £14 million upon disposal of these brands, recorded within
net operating expenses in the Income Statement. Both Dermicool and E45 formed part of the Health
operating segment.
There were no disposals during 2023.
30 Forward Purchase of Shares Held by Non-Controlling Interest
On 25 May 2023 the Group entered into an agreement pursuant to which it will proceed to acquire the
remaining interests associated with the Company’s majority owned activities in mainland China and Hong
Kong (“RB Manon”) from its existing minority shareholders. The aggregate percentage interest of the
minority shareholders in each of the three relevant Reckitt subsidiaries is currently between 20% and
24.95%. RB Manon undertakes non-exclusive distribution of certain Reckitt brands in mainland China,
Hong Kong and other Asian Pacific countries. The transaction will be implemented through the purchase
of the non-controlling shareholdings in three subsidiaries of Reckitt held by the minority shareholders.
This will occur in multiple stages, which are expected to take place through to 31 December 2038,
although the agreement contains provisions for the purchase of shares to be made sooner.
The amounts payable to the minority shareholders take the form of consideration for the shares and
dividends that may be paid on the shares prior to their acquisition. Amounts payable to the minority
shareholders are dependent on the business performance of RB Manon. As at 25 May 2023, the estimated
present value of the total amounts payable under the agreement was £298 million based on projections
of future revenues and profitability of the RB Manon business, using a discount rate of 5.5% based on the
Group’s borrowing costs in China.
The agreement has different elements which are accounted for separately. As there are no specific
accounting standards prescribing the allocation of value in this arrangement, judgment is required to
allocate the total amount payable. The main elements relate (1) to a forward contract for the purchase
of a non-controlling interest in RB Manon and (2) services provided by the minority shareholders in
relation to the transition of leadership and shares in RB Manon. The amount allocated to the forward
purchase of shares has been based on its estimated value, with the residual amount allocated to the
services to transition the leadership and shares as the value of these services are not estimable on
a standalone basis.
An amount of £167 million has been allocated to the forward purchase of shares, which represents the
minimum exit value under the agreement that minority shareholders could realise for their shares absent
any transitional arrangements. This amount has been recorded as a liability with £143 million charged
to retained earnings and the remaining £24 million to extinguish the existing non-controlling interest.
Any future changes to the present value of this liability will be recorded to the Income Statement.
The Group considers that any reasonable possible change in key assumptions would not lead to a
material adjustment to this estimated present value in the next year. The remaining £131 million has
been allocated to the transitional services element, which will be recognised as a liability and charged
to the Income Statement over the performance period for these services.
Notes to the Financial Statements continued
200 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
31 Assets Held For Sale
Assets and liabilities held for sale of £55 million, principally intangible assets, relate to the anticipated
disposal of certain brands within the Health Operating Segment for which the relevant sale progress
is ongoing. The relevant disposal is expected to complete in the first half of 2024 and contribute c.0.5%
revenue into the Group’s 2023 Net Revenue.
32 Discontinued Operations
The income from discontinued operations of £9 million (2022: £7 million loss) relates to the Group’s
disposal of the RB Pharmaceuticals business (now Indivior plc).
33 Post Balance Sheet Events
On 13 March 2024, a state court jury in Belleville, Illinois awarded $60 million to a mother of a child who
was born prematurely and died 25 days later from Necrotizing Enterocolitis (NEC). Reckitt believe the
allegations from the plaintiff’s lawyers in this case were not supported by the science or the experts in
the medical community. Reckitt are actively considering all options, and at this time an economic outflow
is not considered probable. There is a possible outcome that may be unfavourable, however, the Group
may benefit from relevant product liability insurance subject to limits and deductibles that the Group
considers to be reasonable. All policies contain exclusion and limitations and there can be no assurance
that insurance will be available or adequate to cover this case. More details on NEC claims generally can
be found in Note 20.
Notes to the Financial Statements continued
201 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
The five-year summary below is presented on an IFRS basis. The years ending 31 December 2019, 31 December 2020, 31 December 2021, 31 December 2022 and 31 December 2023 show the results for
continuingoperations.
Income Statement
2023
£m
2022
£m
2021
£m
2020
£m
2019
£m
Net Revenue 14,607 14,453 13,234 13,993 12,846
Operating profit/(loss) 2,531 3,249 (804) 2,160 (1,954)
Net finance (expense)/income (130) (161) 547 (286) (153)
Share of loss and impairment of equity-accounted investees, net of tax – (21) (3) (1) –
Profit/(loss) before income tax 2,401 3,067 (260) 1,873 (2,107)
Income tax (charge)/credit (753) (711) 208 (720) (665)
Attributable to non-controlling interests (14) (19) (11) (16) (13)
Net profit/(loss) attributable to owners of the parent company from continuing operations 1,634 2,337 (63) 1,137 (2,785)
Balance Sheet
Net assets 8,469 9,483 7,453 9,159 9,407
Key Statistics – IFRS basis
Operating margin 17. 3% 22.5% (6.1%) 15.4% (15.2%)
Diluted earnings per share, continuing 227. 4p 325.7p (8.8p) 159.3p (393.0p)
Declared total dividends per ordinary share 192.5p 183.3p 174.6p 174.6p 174.6p
Five Year Summary (Unaudited)
202 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Note
2023
£m
2022
£m
Fixed assets
Investments 2 15,174 15,078
Current assets
Debtors due within one year 3, 6 185 40
Debtors due after more than one year 4, 6 14 21
199 61
Current liabilities
Creditors due within one year 5, 6 (5,361) (7,846)
Share repurchase liability 8 (296) –
Net current liabilities (5,458) (7,785)
Total assets less current liabilities 9,716 7,293
Provisions for liabilities and charges 7 (26) (44)
Net assets 9,690 7,249
EQUITY
Share capital 8 74 74
Share premium 254 254
Retained earnings 9,362 6,921
Total equity 9,690 7,249
Reckitt Benckiser Group plc has made a profit of £4,135 million (2022: £4,276 million) for the financial year.
The Financial Statements on pages 202-217 were approved by the Board of Directors and signed on its
behalf on 21 March 2024 by:
Christopher Sinclair Kris Licht
Director Director
Reckitt Benckiser Group plc Reckitt Benckiser Group plc
Company Number: 06270876
Share
capital
£m
Share
premium
£m
Retained
earnings
£m
Total
equity
£m
Balance at 1January2022 74 253 3,763 4,090
Comprehensive income
Profit for the financial year – – 4,276 4,276
Total comprehensive income – – 4,276 4,276
Transactions with owners
Treasury shares reissued – 1 53 54
Share-based payments 1 1
Capital contribution in respect of share-based payments – – 77 77
Cash dividends – – (1,249) (1,249)
Total transactions with owners – 1 (1,118) (1,117)
Balance at 31 December 2022 74 254 6,921 7,249
Comprehensive income
Profit for the financial year – – 4,135 4,135
Total comprehensive income – – 4,135 4,135
Transactions with owners
Treasury shares reissued – – 48 48
Purchase of ordinary shares by employee share
ownership trust – – (2) (2)
Repurchase of shares – – (503) (503)
Share-based payments – – 6 6
Capital contribution in respect of share-based payments – – 96 96
Cash dividends – – (1,339) (1,339)
Total transactions with owners – – (1,694) (1,694)
Balance at 31 December 2023 74 254 9,362 9,690
Reckitt Benckiser Group plc has £8,521million (2022:£6,182million) of its retained earnings available for
distribution. Details of Treasury shares and other equity transactions are included in Note24 of the Group
Financial Statements.
Parent Company Balance Sheet
As at 31 December 2023
Parent Company Statement of Changes in Equity
For the year ended 31 December 2023
203 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
1 Parent Company Accounting Policies
The principal accounting policies are summarised below. They have all been applied consistently
throughout the year and the preceding year.
General information and basis of accounting
Reckitt Benckiser Group plc is a company incorporated in the United Kingdom, registered in England and
Wales under the Companies Act 2006, and is a public limited company. The address of the registered
office is given on page 230.
The Company is the parent of the Reckitt Benckiser Group and its principal activity is to act as a holding
company for the Group. The nature of the Group’s operations and its principal activities are set out in the
Strategic Report on pages 2 to 61.
New standards, amendments and interpretations
The following amended standards and interpretations were adopted bythe Company during the year
ending 31 December 2023. This amended standard has not had a significant impact on the Company
Financial Statements.
– Amendments to FRS 102 – International tax reform – Pillar Two model rules
Statement of compliance
The Financial Statements have been prepared under the historical cost convention and in compliance
with United Kingdom Accounting Standards, including Financial Reporting Standard 102, The Financial
Reporting Standard applicable in the United Kingdom and the Republic of Ireland (FRS 102) and the
Companies Act 2006.
The functional currency of Reckitt Benckiser Group plc is considered to be Pounds Sterling because that
is the currency of the primary economic environment in which the Company operates.
As permitted by s408 of the Companies Act 2006, a Statement of Comprehensive Income is not
presented for Reckitt Benckiser Group plc.
Going concern
Having assessed the principal risks and other matters discussed in connection with the Group’s Viability
Statement as set out on page 61 of the Group Annual Report, the Directors considered it appropriate
toadopt the going concern basis of accounting in preparing the Company Financial Statements.
Whenreaching this conclusion, the Directors took into account the Company’s overall financial position
and exposure to principal risks.
Financial Reporting Standard 102 – Reduced Disclosure Exemptions
FRS 102 allows a qualifying entity certain disclosure exemptions, subject to certain conditions, which have
been complied with.
The Company has taken advantage of the following exemptions:
(i) from preparing a Statement of Cash Flows, on the basis that it is a qualifying entity and the Group
Cash Flow Statement, included in these Financial Statements, includes the Company’s cash flows; and
(ii) from disclosing the Company key management personnel compensation, as required by FRS 102
paragraph 33.7.
The Company’s results are included in the publicly available consolidated Financial Statements of
ReckittBenckiser Group plc and these Financial Statements may be obtained from 103-105 Bath Road,
Slough, Berkshire SL1 3UH or at www.reckitt.com.
Foreign currency translation
Transactions denominated in foreign currencies are translated using exchange rates prevailing at the
dates of the transactions. Foreign exchange gains and losses resulting from the settlement of foreign
currency transactions and from the translation at year end exchange rates of monetary assets and
liabilities denominated in foreign currencies are recognised in the Statement of Comprehensive Income.
Taxation
The tax charge/credit is based on the result for the year and takes into account taxation deferred due
totiming differences between the treatment of certain items for taxation and accounting purposes.
Deferred tax liabilities are provided for in full and deferred tax assets are recognised to the extent that
they are considered recoverable.
A net deferred tax asset is considered recoverable if it can be regarded as more likely than not that there
will be suitable taxable profits against which to recover carried forward tax losses and from which the
future reversal of underlying timing differences can be deducted.
Deferred tax is recognised in respect of all timing differences that have originated but not reversed at
the Balance Sheet date, where transactions or events that result in an obligation to pay more tax in the
future or a right to pay less tax in the future have occurred at the Balance Sheet date.
Deferred tax is measured at the average tax rates that are expected to apply in the periods in which the
timing differences are expected to reverse, based on tax rates and laws that have been enacted or
substantively enacted by the Balance Sheet date. Deferred tax is measured on an undiscounted basis.
The Company has applied the temporary mandatory exception from accounting for deferred taxes
arising from the Pillar Two model rules as set out in ‘International Tax Reform – Pillar Two Model Rules
(Amendments to FRS102)’ issued by the FRC in July 2023.
Notes to the Parent Company Financial Statements
204 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Fixed asset investments
Fixed asset investments are stated at the lower of cost or their recoverable amount, which is determined
as the higher of net realisable value and value-in-use. A review of the potential impairment of an
investment is carried out by the Directors if events or changes in circumstances indicate that the
carrying value of the investment may not be recoverable. Such impairment reviews are performed
inaccordance with FRS 102 Section 27 ‘Impairment of assets’.
Employee share schemes
Incentives in the form of shares are provided to employees under equity-settled share option and
restricted share schemes, which have various combinations of market-based and non-market
performance conditions, service conditions, and non-vesting conditions.
The fair value determined at the award grant date takes into account the probability of any relevant
market-based performance conditions and non-vesting conditions being satisfied and is subsequently
expensed on a straight-line basis over the vesting period, based on the Company’s estimate of equity
instruments that will eventually vest. This estimate takes into account the expected outcome for relevant
non-market performance conditions and service conditions but assumes satisfaction of all market-based
performance conditions and non-vesting conditions. At each Balance Sheet date, the Company revises its
estimate of the number of equity instruments expected to vest. The impact of the revision of the original
estimates, if any, is recognised in the Statement of Comprehensive Income such that the cumulative
expense reflects the revised estimate, with a corresponding adjustment to equity reserves.
Additional employer costs, including social security taxes, in respect of options and awards are charged to
the Statement of Comprehensive Income over the same period with a corresponding liability recognised.
The grant by the Company of options over its equity instruments to the employees of subsidiary
undertakings in the Group is treated as a capital contribution. The fair value of employee services
received, measured by reference to the grant date fair value, is recognised over the vesting period as an
increase to investment in subsidiary undertakings, with a corresponding credit to equity in the Company
Financial Statements.
Financial instruments
The Company recognises financial instruments when it becomes a party to the contractual obligations
ofthe instrument.
(i) Financial assets
Basic financial assets are initially recognised at transaction price, unless the arrangement constitutes
afinancing transaction, where the transaction is measured at the present value of the future receipts.
Such assets are subsequently carried at amortised cost.
At the end of each reporting period financial assets measured at amortised cost are assessed for
objective evidence of impairment. If an asset is impaired the impairment loss is the difference between
the carrying amount and the present value of the estimated cash flows discounted at the asset’s original
effective interest rate. The impairment loss is recognised in comprehensive income or expense.
Financial assets are derecognised when (a) the contractual rights to the cash flows from the asset expire
or are settled, or (b) substantially all the risks and rewards of the ownership of the asset are transferred
to another party, or (c) control of the asset has been transferred to another party who has the practical
ability to unilaterally sell the asset to an unrelated third party without imposing additional restrictions.
(ii) Financial liabilities
Basic financial liabilities, including loans from fellow Group companies, are initially recognised at
transaction price, unless the arrangement constitutes a financing transaction, where the debt instrument
is measured at the present value of future payments. Debt instruments are subsequently carried at
amortised cost.
Financial liabilities are derecognised when the liability is extinguished, that is when the contractual
obligation is discharged, cancelled or expires.
(iii) Derivative Financial Instruments
Derivatives, including forward foreign exchange contracts, are not basic financial instruments.
Derivatives are initially recognised at fair value on the date a derivative contract is entered into and
subsequently re-measured at their fair value.
The Company designates certain derivative financial instruments as fair value hedges against certain
debtors in USD. Gains or losses arising from changes in the foreign exchange retranslation of the hedged
item and instrument are netted in profit or loss in the period in which they arise.
Provisions
Provisions are recognised when the Company has a present legal or constructive obligation as a
resultofpast events; it is more likely than not that there will be an outflow of resources to settle that
obligation; and the amount can be reliably estimated. Provisions are valued at the present value of the
Directors’ best estimate of the expenditure required to settle the obligation at the Balance Sheet date.
Where it ispossible that a settlement may be reached or it is not possible to make a reliable estimate
ofthe estimated financial impact, appropriate disclosure is made but no provision recognised.
Where a company enters into a financial guarantee contract to guarantee the indebtedness of other
companies within its Group, the Company treats the guarantee contract as a contingent liability until
such a time as it becomes probable that the Company will be required to make a payment under
theguarantee.
Share capital transactions
When the Company purchases equity share capital, the amount of the consideration paid, including
directly attributable costs, is recognised as a charge to equity. Purchased shares are either held in
Treasury in order to satisfy employee options, or cancelled and, in order to maintain capital, an equivalent
amount to the nominal value of the shares cancelled is transferred from retained earnings.
Notes to the Parent Company Financial Statements continued
1 Parent Company Accounting Policies continued
205 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Repurchase and reissuance of ordinary shares
When shares recognised as equity are repurchased, the amount of the consideration paid, including
directly attributable costs, is recognised as a charge to equity. Repurchased shares are classified as
Treasury shares and are presented in retained earnings. When Treasury shares are sold or reissued
subsequently, the amount received is recognised as an increase in equity and the resulting surplus
ispresented within share premium.
Dividend distribution
Dividends to owners of the parent company are recognised as a liability in the period in which the
dividends are approved by the company’s shareholders. Interim dividends are recorded in the period
inwhich they are approved and paid.
Accounting estimates and judgements
In preparing these Financial Statements, management has made judgements and estimates that affect
the application of the Company’s accounting policies and the reported amounts of assets, liabilities,
income and expenses. Actual amounts and results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting
estimates are recognised in the period in which the estimate is revised if the revision affects only
thatperiod, or in the period of the revision and future periods if the revision affects both current
andfuture periods.
Key sources of estimation uncertainty
Each year, management is required to make a number of assumptions regarding the future. The related
year end accounting estimates will, by definition, seldom equal the final actual results. The estimates
andassumptions that have a significant risk of causing a material adjustment to the carrying amounts
ofassets and liabilities within the next financial year are addressed below.
Tax provisions
Current tax liabilities include an amount of £156million (2022:£132million) relating to uncertain tax
positions in respect of tax deductibility of management expenses. The exposure recognised is
calculated based on the expected value method and the most likely amount method. The accounting
estimates and judgements considered include:
– status of the unresolved matter;
– clarity of relevant legislation and related guidance;
– advice from related party specialists and unrelated third parties;
– range of possible outcomes; and
– statute of limitations.
The recognition of uncertain tax positions is reviewed regularly for changes in circumstances and
estimates are updated as potential resolutions for the tax uncertainties are encountered through specific
audits or wider case law. As a result, given the size, possible range of outcomes and timing of resolution,
there is a significant risk of material adjustment to the aggregate carrying amount of these liabilities
within the next financial year.
Legal provisions
The Company recognises legal provisions in line with the Company’s provisions policy. The level of
provisioning in relation to civil and/or criminal investigations is an area where management and legal
judgment is important, with individual provisions being based on best estimates of the probable loss,
considering all available information, external advice and historical experience. As at 31 December 2023,
the Company recognised legal provisions of £26million (2022:£44million) in relation to a number of
historical regulatory matters. Refer to Note7 of the Company Financial Statements for further information.
The Company’s Directors are of the opinion that there are no other judgements and no further key
sources of estimation uncertainty in applying the Company’s accounting policies.
2 Investments
Shares in
subsidiary
undertakings
£m
Cost
At 1January2022 15,001
Additions during the year 77
At 31 December 2022 15,078
Additions during the year 96
At 31 December 2023 15,174
Provision for impairment
At 1January2022 –
At 31 December 2023 –
Net book value
At 31 December 2022 15,078
At 31 December 2023 15,174
The Directors believe that the carrying value of the investments is supported by their underlying
netassets.
The subsidiary undertakings as at 31 December 2023, all of which are included in the Group Financial
Statements, are shown in Note12 of the Company Financial Statements.
Notes to the Parent Company Financial Statements continued
1 Parent Company Accounting Policies continued
206 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
With the exception of Reckitt Benckiser Limited, none of the subsidiaries are directly held by Reckitt
Benckiser Group plc. All subsidiaries have a financial year ending 31 December with the exception of:
Reckitt Benckiser (India) Private Limited, Reckitt Benckiser Healthcare India Private Limited, Mead
Johnson Nutrition (India) Private Limited, RB Hygiene Home India Private Limited, Reckitt Piramal Private
Limited and Scholl Latin America Limited which have a year ending 31 March; Reckitt Benckiser Health
Kenya Limited which has a year ending 30 April; Reckitt Benckiser (Czech Republic) spol. s r.o which has
ayear ending 31 May; Lloyds Pharmaceuticals which has a year ending 24 August; RBHCR Health Reckitt
Costa Rica Sociedad Anónima which has a year ending 30 September and Pt Reckitt Benckiser Indonesia
which has a year ending 29 October.
Additions during the year, and in 2022, relate to the grant by the Company of options over its equity
instruments to the employees of subsidiary undertakings in the Group.
3 Debtors Due Within One Year
2023
£m
2022
£m
Amounts owed by Group undertakings 178 30
Other debtors 7 10
185 40
Amounts owed by Group undertakings are unsecured, interest free and are repayable on demand
(2022:same).
4 Debtors Due After More Than One Year
2023
£m
2022
£m
Deferred tax assets 1 1
Other receivables 13 20
14 21
Deferred tax assets consist of short-term timing differences.
5 Creditors Due Within One Year
2023
£m
2022
£m
Amounts owed to Group undertakings 5,196 7,707
Taxation and social security 157 133
Derivative liabilities 1 2
Other creditors 7 4
5,361 7,846
Included in the amounts owed to Group undertakings is an amount of £5,123million (2022:£7,609million)
which is unsecured, carries interest at the official ISDA fallback rate and is repayable on demand
(2022:same). All other amounts owed to Group undertakings are unsecured, non-interest bearing
andare repayable on demand (2022:same).
Included within taxation and social security creditors is an amount recognised in respect of uncertain
taxpositions may take several years to resolve (Note 1). Notwithstanding this, the presentation of
corporation tax liabilities has been assessed to reflect that there is not an unconditional right to defer
settlement of these liabilities and the carrying amount of £156 million (2022: £132 million) has been
presented as a current liability.
6 Financial instruments
2023
£m
2022
£m
Financial assets measured at amortised cost
Amounts owed by Group undertakings 178 30
Other receivables – current and non-current 20 30
198 60
Financial liabilities
Derivative financial instruments measured at fair value through profit or loss
Derivative liabilities (1) (2)
Financial liabilities measured at amortised cost
Amounts owed to Group undertakings (5,196) (7,707)
Share repurchase liability (296) –
Other payables (7) (4)
(5,500) (7,713)
Notes to the Parent Company Financial Statements continued
2 Investments continued
207 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
7 Provisions for Liabilities and Charges
Legal
provisions
£m
Total
provisions
£m
At 1January2022 41 41
Charged to the Statement of Comprehensive Income 14 14
Utilised during the year (7) (7)
Released to the Statement of Comprehensive Income (4) (4)
At 31 December 2022 44 44
Charged to the Statement of Comprehensive Income 1 1
Utilised during the year (18) (18)
Released to the Statement of Comprehensive Income (1) (1)
At 31 December 2023 26 26
Provisions have been analysed between current and non-current as follows:
2023
£m
2022
£m
Current 26 43
Non-current – 1
26 44
Provisions relate to legal provisions in relation to a number of historical matters.
8 Share Capital
Issued and fully paid
Equity
ordinary
shares
Nominal
value
£m
At 31 December 2022 736,535,179 74
At 31 December 2023 736,535,179 74
The holders of ordinary shares (par value 10 pence) are entitled to receive dividends as declared from
time to time and are entitled to one vote per share at meetings of the Parent Company. Dividends
proposed and paid are disclosed in Note28 of the Group Financial Statements.
The allotment of ordinary shares and release of Treasury shares are disclosed in Note24 of the Group
Financial Statements.
In addition, the Company announced a share buyback programme also disclosed in Note 24 of the Group
Financial Statements.
9 Related Party Transactions
There were no transactions with related parties other than wholly owned companies within the Group
10 Contingent Liabilities
The Company has issued a guarantee to the trustees of the Reckitt Benckiser Pension Fund covering the
obligations of certain UK subsidiaries of the Group who are the sponsoring employers of the UK defined
benefit pension fund. The guarantee covers any amounts due to the pension fund from these subsidiaries
if they fail to meet their pension obligations.
The Company issued a guarantee on behalf of Reckitt Benckiser Treasury Services plc in relation to the
issuance of a $4,500 million bond (2022: $5,000 million bond), made up of one tranche of $2,500 million
and one tranche of $2,000 million (2022: one tranche of $2,500 million, one tranche of $2,000 million and
one tranche of $500 million). The Company has issued a further guarantee in relation to the issuance of
a£500 million bond (2022: £500 million). Details are included in Note 15 of the Group Financial Statements.
During the year, the Company issued a guarantee on behalf of Reckitt Benckiser Treasury Services plc in
relation to the issuance of a €1,400 million bond, made up of one tranche of €750 million and one tranche
of €650 million. The Company has issued a further guarantee in relation to the issuance of a £300 million
bond. Details are included in Note 15 of the Group Financial Statements.
The Company issued a guarantee on behalf of Reckitt Benckiser Treasury Services plc in relation to
committed borrowing facilities totalling £4,500 million (2022: £4,500 million). Details of the facilities
areincluded in Note 15 of the Group Financial Statements.
The Company issued a guarantee on behalf of Mead Johnson Nutrition Company in relation to
outstanding senior notes of $1,550 million (2022: $1,550 million) issued by Mead Johnson Nutrition
Company prior to acquisition. The senior notes consist of one tranche of $750 million, one tranche
of$500 million and one tranche of $300 million (2022: same).
The Company has also issued a guarantee on behalf of Reckitt Benckiser Treasury Services (Nederland)
BV in relation to the issuance of two €850 million bonds (2022: two €850 million bonds). Details are
included in Note 15 of the Group Financial Statements.
The Company has provided a guarantee to certain subsidiary undertakings to exempt them from audit
under Section 479a of the Companies Act 2006. The companies to which a guarantee has been issued
forthis purpose are highlighted in Note 12.
Other contingent liabilities are disclosed in Note 20 of the Group Financial Statements.
11 Post Balance Sheet Events
There are no events subsequent to the balance sheet date that require disclosure.
Notes to the Parent Company Financial Statements continued
208 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings
In accordance with Section 409 of the Companies Act 2006
(the‘CA2006’) and Schedule 4 of The Large and Medium-sized
Companies and Groups (Accounts and Reports) Regulations 2008,
afull list of related undertakings as at 31 December 2023 is disclosed
below. All undertakings are indirectly owned by Reckitt Benckiser
Group plc, unless otherwise stated. All shares detailed below are
100% owned, unless specified otherwise. The percentage held by
the Group reflects both the proportion of nominal capital and voting
rights unless stated otherwise.
From time to time, management reviews the Group structure
andseeks to remove redundant, dormant or non-trading entities.
During the year ended 31 December 2023, five legal entities were
dissolved, liquidated or otherwise disposed of (2022: 17 legal entities).
The removal of legal entities ultimately allows management to focus
on the core business, reduces compliance obligations and cost,
andimproves transparency of the Group to external parties.
All subsidiary undertakings of Reckitt Benckiser Group plc are
included in the consolidated Financial Statements of the Group.
Thesubsidiary undertakings marked with * are exempt from the
requirements under section 479A of the CA 2006 relating to the
audit of their individual accounts, as Reckitt Benckiser Group plc
hasguaranteed them under Section 479C of the CA 2006.
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Argentina
Bucarelli 2608 PB “A”, Ciudad Autonoma de Buenos Aires, Argentina
Reckitt Benckiser Argentina S.A. Ordinary
Reckitt Benckiser Health Argentina
S.A.
Ordinary
Australia
King & Wood Mallesons, ‘Governor Phillip Tower’ Level 61, 1 Farrer Place, Sydney
NSW 2000, Australia
Mead Johnson Nutrition (Australia)
Pty Ltd
Ordinary
Level 47, 680 George Street, Sydney NSW 2000, Australia
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
RB (Hygiene Home) Australia Pty
Limited
Ordinary
Reckitt Benckiser (Australia) Pty
Limited
Ordinary,
Preference
Reckitt Benckiser Healthcare
Australia Pty Limited
Ordinary
SSL Australia Pty Ltd Ordinary
Austria
Guglgasse 15, 1110, Vienna, Austria
RB Hygiene Home Austria GmbH Ordinary
Reckitt Benckiser Austria GmbH Ordinary
Bahamas
c/o 103-105 Bath Road, Slough, Berkshire SL1 3UH, United Kingdom
Scholl Latin America Limited + – Ordinary
Bahrain
Building 330, Road 1506, Block 115, Bahrain International Investment ParK, Hidd.
Kingdom of Bahrain, Bahrain
Reckitt Benckiser Bahrain W.L.L Ordinary
Bangladesh
58-59 Nasirabad Industrial Area, Chittagong 4209, Bangladesh
Reckitt Benckiser (Bangladesh) PLC 82.9612 Ordinary
Belarus
of. 166, 66, K Liebknekhta st., Minsk, 220036, Belarus
Reckitt Benckiser BY LLC Charter
Capital
Belgium
20 Allée de la Recherche, 1070 Anderlecht, Belgium
RB Hygiene Home Belgium SA/NA Ordinary
Reckitt Benckiser (Belgium) SA/NV Ordinary
Bermuda
Clarendon House, Church Street, Hamilton HM11, Bermuda
Suffolk Insurance Limited Common
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Brazil
Av Guarapari, S/N, Galpao1 – Modulos 05 Ao 14cond Log Vianaii Bus/Park, Viana,
Es, 29.136-344, Brazil
Reckitt Benckiser (Brasil) Comercial
de Produtos de Hygiene, Limpeza e
Cosméticos Ltda. – Branch Viana
# –
Av. Portugal, nº 1.100, Setor Rua 6 Parte A12, Bairro Itaqui, Itapevi, São Paulo,
06696-060, Brazil
Reckitt Benckiser Health Comercial
Ltda
# –
Avenida Presidente Juscelino Kubitschek, n° 1909, 24° andar, Parte B, Torre Norte,
Condomínio São Paulo Corporate Towers, Vila Nova Conceição, Sao Paulo – SP,
CEP 04.543-907, Brazil
Reckitt Benckiser (Brasil) Comercial
de Produtos de Hygiene, Limpeza e
Cosméticos Ltda.
Ordinary
Mead Johnson do Brasil Comércio e
Importação de Produtos de
Nutrição Ltda.
Ordinary
Reckitt Benckiser Health Comercial
Ltda
Ordinary
Est Dona Maria Jose Ferraz Prado, 1481, Cond Dist. Park Embu, Brazil
Reckitt Benckiser (Brasil) Comercial
de Produtos de Hygiene, Limpeza e
Cosméticos Ltda. – Branch Embu
# –
Estm Maria Margarida Pinto Dona Belinha, 742, GalpaO3, Bloco I/A, Brazil
Reckitt Benckiser (Brasil) Comercial
de Produtos de Hygiene, Limpeza e
Cosméticos Ltda. – Branch Extrema
# –
Estrada Fukutaro Yida, n. 930, Bairro Cooperativa, Sao Bernardo Do Campo, Sao
Paulo, 09852-060, Brazil
Apenas Boa Nutrição Indústria de
Alimentos Ltda.
Ordinary
Rod Dom Gabriel Paulino Bueno Couto, 1606, Brazil
Reckitt Benckiser (Brasil) Ltda
– Branch Itupeva
# –
Rod Governador Mario Cova, 7270, KM 264 Parte RB, Brazil
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
209 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Notes to the Parent Company Financial Statements continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser (Brasil) Comercial
de Produtos de Hygiene, Limpeza e
Cosméticos Ltda. – Branch Serra
# –
Rodovia Antonio Heil, SC 486, km 4, Bairro Itaipava, “Armazém 1B”, Itajaí, São
Paulo, CEP 88316-003, Brazil
Mead Johnson Do Brasil Comércio E
Importação De Produtos De
Nutrição Ltda.
# –
Rodovia Raposo Tavares, 8015 km 18, Jardim Arpoador, Sao Paolo, CEP 05577-900,
Brazil
Fenla Indústria, Comércio e
Administração Ltda
Ordinary
Reckitt Benckiser (Brasil) Ltda Ordinary
Bulgaria
22 Zlaten rog Street, Floor 3, Office 4, District of Lozenets, City of Sofia, Bulgaria
Reckitt Benckiser Romania,
representative office
# –
Canada
Suite 600, 1741 Lower Water Street, Halifax NS B3J 0J2, Canada
Mead Johnson Nutrition (Canada)
Co.
Common
Suite 2300, 550 Burard Street, Vancouver BC V6C 2B5, Canada
RB Health (Canada) Inc. Common
1680 Tech Avenue, Unit 2, Mississauga ON L4W 5S9, Canada
Reckitt Benckiser (Canada) Inc. Common
Cayman Islands
PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands
Reckitt Benckiser (Cayman Islands)
Limited
Ordinary
Chile
Avenida Presidente Kennedy Lateral 5454, Oficina 1602, Vitacura, Región
Metropolitana, Chile
Reckitt Benckiser Chile S.A. Ordinary
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
China
16/F, Xu Jia Hui International Plaza, No.1033 Zhao Jia Bang Road, Shanghai, China
RB & Manon Hygiene Home
(Shanghai) Limited
+ 80.0000 Ordinary
B01, Suite 401, Unit 2, No. 9 Dongdaqiao Road, Chaoyang District, Beijing, China,
China
RB (China) Holding Co. Limited Capital
Contribution
C6-8 Site 6F, No.333 Futexi Road, Waigaoqiao Free Trade Zone, Shanghai City,
China
Reckitt Benckiser Home Chemical
Products Trading (Shanghai) Co.
Limited
Ordinary
Dangtu Economic Development District, Maanshan City, Anhui Province, China
Guilong Health Technology (Anhui)
Co., Limited
Capital
Contribution
Anhui Guilong Pharmaceutical
Trading Company Limited
Capital
Contribution
Guilong Pharmaceutical (Anhui)
Company Limited
Capital
Contribution
Ketian Aquatic Science and Technology Industrial Park, No. 3949 Kunlunshan
Avenue, Lanzhou New Area, Lanzhou City, Gansu Province, China
Lanzhou Keshi Xixili Healthcare
Technologies Co. Ltd
80.0000 Ordinary
No. 3, Canglian 1 road, ETDZ, Guangzhou, China
Reckitt & Colman (Guangzhou)
Limited
Ordinary
No. 34 East Beijing Road, Jingzhou, Hubei, 434001, China
Reckitt Benckiser Household
Products (China) Company Limited
Capital
Contribution
No. 99, Changjiang Da Road, Fuqiao Town, Taicang City, China
RB (Suzhou) Co. Ltd Capital
Contribution
No.1-13 Shangma, Aodong Road, High-tech Industrial Development Zone, Qingdao
City, Shandong Province, China
Qingdao London Durex Co., Limited Ordinary
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Qingdao New Bridge Corporate
Management Consulting Company
Limited
Ordinary
Room 1605, No.660 Shangcheng Road, Pudong District, Shanghai City, China
SSL Healthcare (Shanghai) Limited Ordinary
Room 1701, No. 1033, Zhao Jia Bang Road, Xuhui District, Shanghai, China
RB & Manon Business Co. Limited 75.0000 Capital
Contribution
Room 2109, Floor 2, No.10 Chaoyangmenwai Street, Chaoyang District, Beijing City,
China
Tai He Tai Lai Culture
Communication Co Limited
Ordinary
Unit 02, 11/F, Tower A Hedonic Center, 6 Songyue Road, Siming District, Xiamen,
China
Guilong Pharmaceutical (Anhui) Co.
Ltd – Xiamen branch
# –
Colombia
Calle 76 No 11-17, Edificio Torre, Los Nogales Piso 2, Bogota, CO, Colombia
Mead Johnson Nutrition Colombia
Ltda
Ordinary
RB (Health) Colombia S.A.S. Ordinary
Carrera 6 #45-105, Cali, Colombia
Reckitt Benckiser Colombia S.A Ordinary
Costa Rica
San Jose-Escazu En Escazu Corporate Center, Setimo Piso, Costado Sur De
Multiplaza Escazu, Costa Rica
RBHCR Health Reckitt Costa Rica
Sociedad Anónima
Common
Reckitt Benckiser (Centroamérica)
S.A.
Ordinary
Croatia
Ulica Grada Vukovara 269d, 10 000 Zagreb, Hrvatska, Croatia
Reckitt Benckiser d.o.o. Ordinary
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
210 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Cyprus
1 Lampousas Street, P.C. 1095, Nicosia, Cyprus
Gainbridge Investments (Cyprus)
Limited
Ordinary
Czech Republic
Vinohradská 2828/151, 130 00 Praha 3-Žižkov, Czech Republic
RB (Hygiene Home) Czech Republic,
spol. s.r.o.
Ordinary
Reckitt Benckiser (Czech Republic)
spol s.r.o.
Partnership
Interest
Denmark
Vandtårnsvej 83 A, 2860, Søborg, Denmark
RB Health Nordic A/S Ordinary
RB Hygiene Home Nordic A/S Ordinary
Dominican Republic
Av. Winston Churchill No. 1099 Torre Acrópolis, Piso 12, Santo Domingo, República
Dominicana
Mead Johnson Nutrition
(Dominicana), S.A.
# –
Ecuador
Av CoruñaN27-88 y Orellana, Edificio Coruña Plaza 7mo Piso, Quito, 170150,
Ecuador
RB Health Ecuador Cía. Ltda Ordinary
Oficina 4C, Av. 12 de Octubre, #26-48 y Orellana, Edificio Mirage, Piso 4, Quito,
170525, Ecuador
Reckitt Benckiser Ecuador S.A. Ordinary
Egypt
Polyom Building, 22 Off Road 90, Fifth District, Fifth Settlement, New Cairo, Cairo,
Egypt
Reckitt Benckiser Egypt Limited Ordinary
Building A1, Second Floor, Plot #A14b01, Cairo Festival City, First District, Fifth
Settlement, New Cairo, Cairo, Egypt
Reckitt Benckiser Hygiene Home
Egypt Limited
+ Ordinary
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Estonia
Harju maakond, Rae vald, Rae küla, Raeküla tee 5, 75310, Estonia
Reckitt Benckiser (Latvia) SIA Eesti
filiaal
# –
Finland
Itsehallintokuja 6, 02600 Espoo, Finland, Finland
RB Health Nordic A/S sivuliike
Suomessa
# –
RB Hygiene Home Nordic A/S,
sivuliike Suomessa
# –
France
38 rue Victor Basch- 91300 Massy, France
Airwick Industrie SAS Ordinary
RB Holding Europe Du Sud SAS Ordinary
RB Hygiene Home France SAS Ordinary
Reckitt Benckiser Chartres SAS Ordinary
Reckitt Benckiser France SAS Ordinary
Reckitt Benckiser Healthcare
France SAS
Ordinary
Germany
Darwinstrasse 2-4, 69115, Heidelberg, Germany
RB Hygiene Home Deutschland
GmbH
Capital
Contribution
Reckitt & Colman Sagrotan
Verwaltungsgesellschaft GmbH
Common
Reckitt Benckiser Detergents
GmbH
Ordinary
Reckitt Benckiser Deutschland
GmbH
Common
Reckitt Benckiser Holding GmbH &
Co KG
Capital
Contribution
Heinestrasse 9, 69469, Weinheim, Germany
Kukident GmbH Common
Robert-Koch-Straße 1, 69115, Heidelberg, Germany
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Propack Produkte fur Haushalt und
Korperpflege GmbH
Ordinary
Reckitt Benckiser Global R&D
GmbH
Common
Greece
7 Taki Kavalieratou Street, Kifissia, 145 64, Greece
Reckitt Benckiser Hellas Healthcare
S.A.
Ordinary
Reckitt Benckiser Hellas Hygiene
Home S.A.
Ordinary
Guernsey
1st and 2nd Floors, Elizabeth House, Les Ruettes Brayes, St Peter Port, GY1 1EW,
Guernsey
Reckitt Benckiser Holdings
(Channel Islands) Limited
Bonus,
Ordinary
Hong Kong
Room 2001, 20/F, Greenfield Tower, Concordia Plaza, No.1 Science Museum Road,
Tsim Sha Tsui, Kowloon, Hong Kong
RB & Manon Hygiene Home Limited 80.0000 Ordinary
Rooms 2206-11, 22 Floor, Chubb Tower, Windsor House, 311 Gloucester Road,
Causeway Bay, Hong Kong
London International Trading (Asia)
Limited
Ordinary
Oriental Medicine Company Limited Ordinary
Reckitt Benckiser Hong Kong
Limited
Ordinary
Unit 2001, 20/F, Greenfield Tower Concordia Plaza, No. 1 Science Museum Road,
Kowloon, Hong Kong
RB & Manon Business Limited 75.0000 Ordinary
Hungary
Bocskai út 134-146, Budapest, H-1113, Hungary
RB (Hygiene Home) Hungary Kft Ordinary
Reckitt Benckiser Kereskedelmi Kft Partnership
Interest
Reckitt Benckiser Tatabánya Kft Ordinary
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
211 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
India
DLF Cyber Park, 6th & 7th Floor (Tower C), 405 B, Udyog Vihar Phase III, Sector 20,
Gurugram, Haryana, 122016, India
RB Hygiene Home India Private
Limited
Ordinary
Reckitt Benckiser (India) Private
limited
Equity
Reckitt Benckiser Healthcare India
Private Limited
99.9999 Ordinary
Unit No. 54, 5th Floor, Kalpataru Square, Andheri-Kurla Road, Andheri (East),
Mumbai, Maharashtra, 400059, India
Mead Johnson Nutrition (India)
Private Limited
Ordinary
Reckitt Piramal Private Limited 99.9999 Ordinary
Indonesia
Jl. Raya Narogong, Chamber A.I, Kel. Pasirangin, Kec Cileungsi, Kab. Bogor.
Provinsi. Jawa Barat, 16820, Indonesia
PT Reckitt Benckiser Trading
Indonesia
Ordinary
Treasury Tower 58th Floor, District 8, SCBD, Jalan Jendral Sudirman Kav 52-53,
Jakarta, 12190, Indonesia
PT Mead Johnson Indonesia 90.1000 Ordinary
PT Reckitt Benckiser Indonesia Ordinary
Pt. Reckitt Benckiser Hygiene
Home Indonesia
+ Ordinary
Pt. Reckitt Benckiser Hygiene
Home Trading Indonesia
+ Ordinary
Iran, Islamic Republic of
1st Floor, unit 11, No.88 Baran Building, Sayed Road, Opposite Mellat Park,
Vali-e-Asr Avenue, Tehran, Iran, Islamic Republic of
Reckitt Benckiser Pars PJSC Ordinary
Ireland
c/o TMF Group, Ground Floor, Two Dockland Central, Guild Street, North Dock,
Dublin 1, D01 K2C5, Ireland
Dorincourt Holdings (Ireland)
Limited
Ordinary
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser Ireland Limited Ordinary
Reckitt Benckiser Management
Services Unlimited Company
Ordinary-A,
B, C, D, E, F, G,
H, I, J K
6th Floor, 2 Grand Canal Square, Dublin 2, Ireland
RB Ireland Hygiene Home
Commercial Limited
Ordinary
Israel
6A Hangar Street, PO Box 6440, I.Z., Neve Nee’man B, Hod Hasharon, 457703, Israel
Reckitt Benckiser (Near East)
Limited
Ordinary
Italy
Via Spadolini 7, 20141, Milano, Italy
Reckitt Benckiser Commercial
(Italia) Srl
Quota
Reckitt Benckiser Healthcare (Italia)
S.p.A.
Ordinary
Reckitt Benckiser Holdings (Italia)
Srl
Quota
Reckitt Benckiser Italia SpA Ordinary
Japan
3-20-14 Higashi Gotanda, Shinagawa-ku, Tokyo, 141-0022, Japan
Reckitt Benckiser Asia Pacific
Limited
# –
Sumitomo Fudosan Takanawa Park Tower 14F, 3-20-14 Higashi-Gotanda,
Shinagawa-ku, Tokyo, 141-0022, Japan
Reckitt Benckiser Japan Ltd Ordinary
Jersey
44 Esplanade, St Helier, JE4 9WG, Jersey
SSL Capital Limited Ordinary
IFC 5, St. Helier, JE1 1ST, Jersey
Reckitt & Colman (Jersey) Limited Ordinary
Reckitt & Colman Capital Finance
Limited
Ordinary-A,
Ordinary-B
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser Jersey (No.3)
Limited
Ordinary
Reckitt Benckiser Jersey (No.5)
Limited
Ordinary
Reckitt Benckiser Jersey (No.7)
Limited
Ordinary,
Redeemable
Preference
– Class A/C/D
Kazakhstan
Bld. 15/A, Koktem-1, Almaty, 050040, Kazakhstan
Reckitt Benckiser Health
Kazakhstan LLP
Charter
Capital
Office 302, Building 15a, Koktem-1, Micro District, Almaty City, Kazakhstan
Reckitt Benckiser Kazakhstan LLP Ordinary
Kenya
14 Riverside Drive, Arlington Building, 3rd Floor, Nairobi, 209/19, Kenya
Reckitt Benckiser Health Kenya
Limited
Ordinary
LR.NO.1870/1/569, 2nd Floor, Apollo Centre, Ring Road Westlands, Kenya
Reckitt Benckiser Services (Kenya)
Limited
Ordinary
Plot 209/2462, Likoni Road, Nairobi, Kenya
Reckitt Benckiser East Africa
Limited
99.9899 Ordinary
Korea, Republic of
24th Floor, Two IFC, 10 Gukjegeumyung-ro, Youngdeungpo-gu, Seoul, 07326, Korea,
Republic of
Oxy Reckitt Benckiser LLC Capital
Contribution
Latvia
Strēlnieku iela 1A – 2, Rīga, LV-1010, Latvia
Reckitt Benckiser (Latvia) SIA Ordinary
Lithuania
Vilniaus m. sav. Vilniaus m. Olimpiečių g. 1A, Lithuania
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
212 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser (Latvia) SIA LT
filialas
# –
Luxembourg
1 Rue de la Poudrerie, Leudelange, L-3364, Luxembourg
Canterbury Square Holdings S.à.r.l Ordinary-A
RB Holdings (Luxembourg) S.à.r.l Ordinary-A
RB Holdings Luxembourg (2018)
S.à.r.l
Ordinary
Reckitt Benckiser Investments (No.
1) S.à.r.l
Ordinary
Reckitt Benckiser Investments (No.
2) S.à.r.l
Ordinary
Reckitt Benckiser Investments (No.
4) S.à.r.l
Ordinary
Reckitt Benckiser Investments (No.
5) S.à.r.l
Ordinary
Reckitt Benckiser Investments (No.
7) S.à.r.l
Ordinary
Reckitt Benckiser Investments (No.
8) S.à.r.l
Ordinary
Reckitt Benckiser S.à.r.l. Ordinary-A
Reigate Square Holdings S.à.r.l. Ordinary
Reckitt Benckiser N.V. # –
Reckitt Benckiser Holdings (USA)
Limited
# –
Malaysia
Level 7, Menara Milenium, Jalan Damanlela, Pusat Bandar Damansara,
Damansara Heights 50490, Wilayah Persekutuan, Kuala Lumpur, Malaysia
Mead Johnson Nutrition (Malaysia)
Sdn Bhd
Ordinary
RB (Health) Malaysia Sdn Bhd Ordinary
Reckitt Benckiser (Malaysia) Sdn
Bhd
Ordinary
Mexico
Av de las Granjas 972, Col. Santa Barbara, Azcapotzalco, CDMX, 02230, Mexico
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Manufactura MJN, S. de R.L. de C.V. Ordinary
Av. Ejército Nacional No.769, Corporativo Miyana Torre B, Piso 6, Alcaldía Miguel
Hidalgo, Colonia Granada, CP 11520, Mexico
Mead Johnson Nutricionales de
México, S. de R.L. de C.V.
Ordinary
RB Health México, S.A. de C.V. Ordinary-A,
Ordinary-B
RB Health Services, S.A. de C.V. Ordinary
Reckitt Benckiser Mexico, S.A. de
C.V.
Ordinary
Servicios Nutricionales Mead
Johnson S.de R.L. de C.V.
Ordinary
Calzada de Tlalpan No. 2996, Col. Ex Hacienda Coapa, Del. Coyoacán, Cd. de
México, C.P. 04980, Mexico
RB Salute Mexico S.A. de C.V. Ordinary
Circuito Dr Gustavo Baz, 7, No. 7, Fracc Industrial El Pedregal, Atizapan de
Zaragoza, Edomex, Mexico
Reckitt Benckiser Services S.A. de
C.V.
Ordinary
Morocco
59 Boulevard Zerktouni, Residence Les Fleurs 6eme étage, Casablanca, Morocco
Reckitt Benckiser Morocco SARL/
AU
Ordinary
Netherlands
225 North Canal Street, Floor 25, Chicago IL IL 60606, United States
Mead Johnson One C.V. ◊ Membership
Interest
Mead Johnson Two C.V. ◊ Membership
interest
Schiphol Boulevard 267, 1118 BH, Schiphol, Netherlands
Reckitt Benckiser (ENA) B.V. Ordinary
Reckitt Benckiser Treasury Services
(Nederland) B.V.
Ordinary
Siriusdreef 14, 2132 WT, Hoofddorp, The Netherlands
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Beleggingsmaatschappij Lemore
B.V.
Ordinary
Central Square Holding B.V. Ordinary
Grosvenor Square Holding B.V. Ordinary
Hamol NL B.V. Ordinary
Maddison Square Holding B.V. Ordinary
MJN Global Holdings B.V. Ordinary
MJN Holdings (Netherlands) B.V. Ordinary
MJN Innovation Services B.V. Ordinary
New Bridge Holdings B.V. Ordinary
RB Hygiene Home Netherlands BV Ordinary
RB NL Brands B.V. Ordinary
Reckitt Benckiser (South America)
Holding B.V.
Ordinary
Reckitt Benckiser (Spain) B.V. Ordinary
Reckitt Benckiser Brands
Investments B.V.
Ordinary
Reckitt Benckiser Calgon BV Ordinary
Reckitt Benckiser Fabric Treatment
B.V.
Ordinary
Reckitt Benckiser Finish B.V. Ordinary
Reckitt Benckiser FSIA B.V. Ordinary
Reckitt Benckiser Healthcare B.V. Ordinary
Reckitt Benckiser Laundry
Detergents (No. 1) B.V.
Ordinary
Reckitt Benckiser Laundry
Detergents (No. 2) B.V.
Ordinary
Reckitt Benckiser Lime-A-Way B.V. Ordinary
Reckitt Benckiser Marc B.V. Ordinary
Reckitt Benckiser N.V. Ordinary
Reckitt Benckiser Oven Cleaners
BV
Ordinary
Reckitt Benckiser Power Cleaners
B.V.
Ordinary
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
213 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser Tiret B.V. Ordinary
Reckitt Benckiser Vanish B.V. Ordinary
RB LATAM Holding B.V. Ordinary
Reckitt Benckiser Hygiene Home
Brands B.V.
Ordinary
New Zealand
2 Fred Thomas Drive, Takapuna, Auckland, 0622, New Zealand
RB (Hygiene Home) New Zealand
Limited
Ordinary
Reckitt Benckiser (New Zealand)
Limited
Ordinary
SSL New Zealand Limited Capital
contribution
Nigeria
12, 11th Floor Heritage Place, 21 Lugard Avenue Ikoyi, Ikoyi, Lagos State, Nigeria
Reckitt Benckiser Nigeria Limited Ordinary
Norway
Henrik Ibsens gate 60A, 0255 Oslo, Norway
RB Health Nordic, NUF # –
RB Hygiene Home Nordic NUF # –
Pakistan
Tenancy 04 & 05, 3rd Floor, Corporate Office Block, Dolmen City, HC, Block 4,
Scheme 5, Clifton, Karachi, 75600, Pakistan
Reckitt Benckiser Pakistan Limited 98.6846 Ordinary
Panama
Apartment 6G, 6th Floor, Edificio Bladex, Calle Avenida La Rotonda. Business Park,
Corregimiento de Juan Diaz, Urbanización Costa Del Este, Provincia De Panamá,
Distrito de Panama, Panama
Mead Johnson Nutrition (Panama),
S.de R.L.
Ordinary
Peru
Av. Republica de Panama # 2577, Urb. Santa Catalina, La Victoria, Lima, Peru
Reckitt Benckiser Peru S.A. Ordinary
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Calle Dean Valdivia No. 148, Torre 1, Ofic. 501, Urb. Jardín, San Isidro, Lima, Peru
RB Health Peru S.R.L Ordinary
Philippines
2309 Don Chino Roces Avenue Extension, Makati City, PH 1321, Philippines
2309 Realty Corporation 44.6606 Ordinary-A,
Ordinary-B
Mead Johnson Nutrition
(Philippines), Inc.
99.9996 Ordinary
Sphinx Holdings Company, Inc. 32.8125 Common,
Preference
3rd Floor Mead Johnson Nutrition Philippines Inc., 2309 Don Chino Roces Extension,
Makati City, 1231, Philippines
Reckitt Benckiser Healthcare
(Philippines), Inc.
99.9978 Common,
Preference
Poland
Nowy Dwór Mazowiecki, Ul. Okunin 1, 05-100, Poland
RB (Hygiene Home) Poland Sp.
Z.o.o.
Ordinary
Ul. Okunin 1, 05-100 Nowy Dwor Mazowiecki, Poland
Reckitt Benckiser (Poland) S.A. Ordinary
Reckitt Benckiser Production
(Poland) SP Z.o.o.
Ordinary
Ul. Wołoska 22, 02-675, Warsaw, Poland
Reckitt Business Services Sp. z.o.o. Partnership
Interest
Mead Johnson Nutrition Trading
Poland S.p z.o.o.
Membership
Interest
Portugal
Estrada Malhada dos Carrascos, 12, Porto Alto, 2135-061, Samora Correia, Portugal
Reckitt Benckiser Porto Alto Lda Quota
Rua D. Cristóvão da Gama, n.º 1, 1º, C/D, 1400-116, Lisboa, Portugal
Reckitt Benckiser (Portugal), S.A. Ordinary
Reckitt Benckiser Healthcare, Lda Quota
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Puerto Rico
Los Frailes Industrial Park, Ave. Esmeralda, Calle C # 475, Guaynabo, 00969,
Puerto Rico
Mead Johnson Nutrition (Puerto
Rico) Inc.
# –
Romania
Iancu de Hunedoara Boulevard, Nr. 48, 11th Floor, Crystal Tower Building, 1st
District, Bucharest, 011745, Romania
Reckitt Benckiser (Romania) S.R.L Partnership
Interest
Str. Grigore Alexandrescu 89-97, Aripa Vest, Et. 5, Finish room, Sect. 1, Bucuresti,
010624, Romania
RB (Hygiene Home) Romania S.R.L. Ordinary
Russian Federation
3rd Floor, 4 Shluzovaya emb., Zamoskvorechye Municipal district, Moscow, 115114,
Russia
Reckitt Benckiser Healthcare LLC Charter
Capital
Reckitt Benckiser IP LLC Charter
Capital
4 Shluzovaya emb., Zamoskvorechye Municipal district, Moscow, 115114, Russia
Reckitt Benckiser LLC Charter
Capital
Klin City, Tereshkovoy Street, 1, 14160052 /1, Moscow Region, Russian Federation
Branch of Reckitt Benckiser LLC in
city Klin, Moscow region, Russia
# –
Saudi Arabia
Office number 51, Fifth floor, Mukmal Plaza Center, Al Hamra District Palestine
Street, Jeddah City, Saudi Arabia
Reckitt Sanabil for Trading Co LLC 51.0000 Ordinary
Singapore
12 Marina Boulevard, #19-01 Marina Bay Financial Centre, 018982, Singapore
Mead Johnson Nutrition (Asia
Pacific) Pte. Ltd.
Ordinary
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
214 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Mead Johnson Nutrition (Singapore)
Pte. Ltd.
Ordinary
Mead Johnson Nutrition Holdings
(Singapore) Pte. Ltd.
Ordinary
Reckitt Benckiser (Singapore) Pte.
Limited
Ordinary
Slovakia
Drieňová 3, 821 08 Bratislava,
Slovakia
RB (Hygiene Home) Slovakia spol.
s.r.o
Ordinary
Reckitt Benckiser (Slovak Republic),
spol s.r.o.
Partnership
Interest
South Africa
Ground Floor, North Wing, Allandale Building, 39 Magwa Crescent, Waterfall City,
Midrand, Gauteng, 2090, South Africa
Reckitt Benckiser Pharmaceuticals
(Proprietary) Limited
Ordinary
Reckitt Benckiser South Africa
Health Holdings (Pty) Limited
Ordinary
Reckitt Benckiser South Africa
Proprietary Limited
Ordinary
Spain
Carrer de Mataró, 28, 08403, Granollers, Barcelona, Spain
Reckitt Benckiser Healthcare S.A.U. Ordinary-A,
Ordinary-B
Norwich Square Holdings S.L.U. Ordinary
RB Square Holdings (Spain) S.L. Ordinary-A,
Ordinary-B
Reckitt Benckiser (España), S.L.U Ordinary
Reckitt Benckiser (Granollers) SL Ordinary
Fray Carbo, 24, 08400, Granollers, Spain
Relcamp Aie + Ordinary
No. 151, Avda. Can Fatjó, Rubi, Barcelona, Spain
SSL Healthcare Manufacturing S.A.U + Ordinary
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Sri Lanka
No.25, Shrubbery Garden, COLOMBO-04, Sri Lanka
Reckitt Benckiser (Lanka) Limited 99.9991 Ordinary
Sweden
Box 190, 101 23 Stockholm, Sweden
SSL Healthcare Sverige AB Ordinary
c/o Reckitt Benckiser Nordic A/S, Danmark Filial, Regeringsqatan 29, 111 53,
Stockholm, Sweden
RB Health Nordic A/S, filial # –
Vretenvägen 2, 4th Floor, 171 54 SOLNA, Sweden
RB Hygiene Home Nordic A/S, filial # –
Switzerland
Richtistrasse 5, 8304 Wallisellen, Switzerland
RB Hygiene Home Switzerland AG Ordinary
Reckitt Benckiser (Switzerland) AG Ordinary
Reckitt Benckiser AG Ordinary
Taiwan
6F, No. 136, Sec. 3, Ren-Ai Rd., Da-An Dist., Taipei City 10, 10657, Taiwan
Reckitt Benckiser HK Limited
Taiwan branch
# –
8 of 6F, No. 205, Section 1, Dunhua South Road, Da’an District, Taipei, Taiwan
(Province of China)
RB & Manon Business Limited
Taiwan Branch
# –
Thailand
100 Moo 5, Bangsamak Sub-District, Bangpakong District, Chachoengsao Province
24180, Thailand
SSL Manufacturing (Thailand)
Limited
44.9999 Ordinary-A,
Ordinary-B
65 Moo 12 Lardkrabang-Bangplee Road, Bangplee Yai District, Bangplee,
Samutprakarn, 10540, Thailand
Reckitt Benckiser Healthcare
Manufacturing (Thailand) Limited
45.0000 Ordinary,
Preference
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
No. 388 Exchange Tower, 14th Floor, Sukhumvit Road, Klongtoey, Bangkok, TH 10110,
Thailand
Reckitt Benckiser (Thailand)
Limited
44.9999 Ordinary
Reckitt Benckiser Holding
(Thailand) Limited
45.0000 Common,
Preference
RB Hygiene Home (Thailand)
Limited
99.5749 Common
Mead Johnson Nutrition (Thailand)
Ltd
Common/
Equity
Turkey
Esentepe Mah., Büyükdere Cad., Tekfen Blok No:209/2, Şişli, İstanbul, Turkey
Reckitt Benckiser Ev ve Hijyen
Ürünleri Levent Şubesi
# –
Esentepe Mahallesi Büyükdere Caddesi Tekfen, Tower No: 209 A Blok D:2 34394 4.,
Levent, Şişli, İstanbul, Turkey
Reckitt Benckiser Temizlik
Malzemesi Sanayive Ticaret A.S.
Capital
Contribution
Orta Mahallesi Demokrasi, Caddesi Benckiser Sitesi No.92, Tuzla, Istanbul, Turkey
Reckitt Benckiser Ev ve Hjyen
Ürünleri A.Ş.
Capital
contribution
Ukraine
28A Stepana Bandery Prospect, Bld.G, Office 80., Kiev, 04073, Ukraine
Reckitt Benckiser Household and
Health Care Ukraine LLC
Charter
Capital
Reckitt Benckiser Hygiene Home
Ukraine LLC
Charter
Capital
40-Richchia Zhovtnia avenue, 120, 1 Block, Kyiv, 03127, Ukraine
Medcom Marketing and Prodazha
Ukraine LLC
Charter
Capital
United Arab Emirates
309, Floor 3, Dubai Science Park Labrotory Complex, Dubai, United Arab Emirates
Reckitt Benckiser Arabia # –
Al Seer Corporate Office, Behind Al Tayer Motors, Sheikh Zayed Road, Al Quoz
Industrial Area 3, Dubai, 31587, United Arab Emirates
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
215 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser Arabia Trading
LLC
48.6897 Ordinary
Level 27, Tower B, JAFZA One,Jebel Ali Free Zone, Dubai, PO Box 16834, United
Arab Emirates
RB Hygiene Home Arabia FZE Ordinary
Reckitt Benckiser Arabia FZE 51.2555 Ordinary
Office 1801, 1803, 1804, Emaar Real Estate Burj Khalifa, Dubai, United Arab
Emirates
Reckitt Benckiser (RUMEA) Limited
– Dubai Branch
# –
Unit 05, Level 3, Gate Village Building 04, Dubai Investment Financial Centre, PO
BOX 677, United Arab Emirates
RB Investment Company Limited 0.5000 Ordinary-A,
Ordinary-B
United Kingdom
103-105 Bath Road, Slough, Berkshire, SL1 3UH, United Kingdom
103-105 Bath Road Limited
(Company number: 07415344)
* Ordinary
Access VC Limited 70.5900 Ordinary,
Preference
Benckiser Ordinary,
Bonus
Crookes Healthcare Limited Ordinary,
Bonus
Cupal, Limited Ordinary,
Bonus
Dakin Brothers Limited Ordinary,
Bonus
Durex Limited Ordinary
eRB Trading Limited Ordinary
FF Homecare & Hygiene Limited 70.5882 Ordinary,
Preference
Glasgow Square Limited Ordinary,
Bonus
Green,Young & Company Limited Ordinary,
Bonus
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Hamol Limited Ordinary,
Bonus
Helpcentral Limited Ordinary,
Bonus
Howard Lloyd & Company,Limited
(Company number: 00124747)
* Ordinary
LI Pensions Trust Limited Ordinary
Linden Germany A Limited Ordinary
Linden Germany B Limited Ordinary
Lloyds Pharmaceuticals Ordinary,
Bonus
London International Group Limited
(Company number: 00488344)
* Ordinary B
LRC Products Limited Ordinary
LRC Secretarial Services Limited Ordinary
MJ UK Holdings Limited Ordinary
MJN International Holdings (UK),
Ltd.
(Company number: 10773207)
* Ordinary
Nurofen Limited Ordinary
Optrex Limited
(Company number: 00301618)
* Ordinary
Pharmalab Limited Ordinary,
Bonus
R&C Nominees Limited
(Company number: 03646801)
* Ordinary
R&C Nominees One Limited Ordinary
R&C Nominees Two Limited Ordinary
RB (China Trading) Limited 80.0000 Ordinary
RB Asia Holding Limited Ordinary
RB Holdings (Nottingham) Limited
(Company number: 04367123)
* Ordinary,
Bonus
RB Luxembourg (2016) Limited
(Company number: 10490698)
* Ordinary
RB Luxembourg Holdings (TFFC)
Limited
Ordinary
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
RB Mexico Investments Limited
(Company number: 10141275)
* Ordinary
RB Reigate (2019) Ltd. Ordinary
RB Reigate (UK) Limited Ordinary,
Bonus
RB UK Commercial Limited Ordinary
RB UK Hygiene Home Commercial
Limited
Ordinary
RB USA (2019) Ltd. Ordinary
Reckitt & Colman (Overseas) Health
Limited
Ordinary
Reckitt & Colman (Overseas)
Hygiene Home Limited
Ordinary
Reckitt & Colman (Overseas)
Limited
(Company number: 00593047)
* Ordinary
Reckitt & Colman (UK) Limited
(Company number: 00341605)
* Ordinary,
Irredeemable
Cumulative
Preference
Reckitt & Colman Holdings Limited Ordinary,
Bonus
Reckitt & Colman Pension Trustee
Limited
Ordinary
Reckitt & Sons Limited
(Company number: 00561576)
* Ordinary
Reckitt Benckiser (Brands) Limited Ordinary
Reckitt Benckiser (Grosvenor)
Holdings Limited
(Company number: 05698731)
* Bonus
Reckitt Benckiser (Health) Holdings
Limited
Ordinary
Reckitt Benckiser (Hygiene Home)
Holdings Limited
Ordinary
Reckitt Benckiser (RUMEA) Limited Ordinary
Reckitt Benckiser (UK) Limited Ordinary
Reckitt Benckiser (USA) Limited Ordinary
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
216 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser Asia Pacific
Limited
Ordinary
Reckitt Benckiser Corporate
Services Limited
Ordinary
Reckitt Benckiser Expatriate
Services Limited
Ordinary
Reckitt Benckiser Finance (2005)
Limited
Ordinary,
Bonus
Reckitt Benckiser Finance (2007) Ordinary
Reckitt Benckiser Finance (2010)
Limited
(Company number: 07415340)
* Ordinary,
Bonus
Reckitt Benckiser Finance Company
Limited
(Company number: 04749202)
* Ordinary
Reckitt Benckiser Health Limited Ordinary
Reckitt Benckiser Healthcare
(Central & Eastern Europe) Limited
(Company number: 03368448)
* Ordinary
Reckitt Benckiser Healthcare (CIS)
Limited
(Company number: 03376759)
* Ordinary
Reckitt Benckiser Healthcare
(MEMA) Limited
Bonus
Reckitt Benckiser Healthcare (UK)
Limited
Ordinary
Reckitt Benckiser Healthcare
International Limited
Ordinary
Reckitt Benckiser Holdings
(Channel Islands) Limited
# –
Reckitt Benckiser Holdings
(Luxembourg) Limited
Ordinary
Reckitt Benckiser Holdings
(Overseas) Limited
(Company number: 04617051)
* Ordinary
Reckitt Benckiser Holdings (TFFC)
Limited
Ordinary,
Bonus
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser Holdings (USA)
Limited
(Company number: 04906543)
* Ordinary
Reckitt Benckiser Jersey (No.3)
Limited
# –
Reckitt Benckiser Jersey (No.5)
Limited
# –
Reckitt Benckiser Investments
Limited
Ordinary,
Bonus
Reckitt Benckiser Limited Ordinary
Reckitt Benckiser Luxembourg
(2010) Limited
(Company number: 07323959)
* Ordinary
Reckitt Benckiser Luxembourg
(No.1) Limited
Ordinary
Reckitt Benckiser Luxembourg
(No.2) Limited
Ordinary
Reckitt Benckiser Luxembourg
(No.3) Limited
Ordinary,
Bonus
Reckitt Benckiser Luxembourg
(No.4) Limited
Ordinary,
Bonus
Reckitt Benckiser Service Bureau
Limited
(Company number: 03605068)
* Ordinary
Reckitt Benckiser Treasury (2007)
Limited
(Company number: 06365837)
* Ordinary-B
Reckitt Benckiser Treasury Services
plc
Ordinary
Reckitt Benckiser Treasury Services
(Nederland) B.V.
# –
Reckitt Benckiser USA (2010) LLC # –
Reckitt Benckiser USA (2013) LLC # –
Reckitt Benckiser USA Finance
(No.1) Limited
(Company number: 04902703)
* Ordinary
Reckitt Benckiser USA Finance
(No.2) Limited
(Company number: 04902747)
* Ordinary
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Reckitt Benckiser USA Finance
(No.3) Limited
(Company number: 04902776)
* Ordinary
Reckitt Colman Chiswick (OTC)
Limited
(Company number: 00593046)
* Ordinary,
Bonus
Reckitt Seton Limited
(Company number: 01914860)
* Ordinary,
Convertible,
Cumulative
Preference
Reckitt Sonet (UK) Limited
(Company number: 02285039)
* Ordinary
Scholl Consumer Products Limited Ordinary
Sonet Dormant Company No.1
Limited
(Company number: 00220272)
* Ordinary,
Deferred
Sonet Investments Limited Ordinary,
Bonus
Sonet Overseas Investments
Limited
Ordinary,
Bonus
Sonet Prebbles Limited
(Company number: 00710779)
* Ordinary
Sonet Products Limited Ordinary
Sonet Seton UK Limited Ordinary
SSL (MG) Polymers Limited Ordinary
SSL (RB) Products Limited Ordinary
SSL International plc Ordinary
SSL Products Limited
(Company number: 01026788)
* Bonus
Tubifoam Limited Ordinary,
Bonus
W.Woodward, Limited Ordinary
United States
2400 W. Lloyd Expressway, Evansville IN 47721, United States
Mead Johnson & Company, LLC Ordinary
Mead Johnson Nutrition Company Ordinary
399 Interpace Parkway, Parsipanny NJ 07054, United States
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
217 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS STRATEGIC REPORT GOVERNANCE OTHER INFORMATION
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Biofreeze IP Holdings, LLC Membership
Interest
Blisa, LLC Ordinary
Exponential Health LLC Ordinary
Lanai Holdings 1.5, Inc. Common
Mead Johnson Nutrition
(Dominicana) S.A.
Ordinary
Mead Johnson Nutrition
(PuertoRico) Inc.
Ordinary
Mead Johnson Nutrition
(Venezuela) LLC
Ordinary
Mead Johnson Nutrition Nominees
LLC
Membership
Interest
MJ USA Holdings LLC Ordinary
MJN Asia Pacific Holdings LLC Ordinary
MJN U.S. Holdings LLC Ordinary
RB Health (US) LLC Ordinary
RB Health Manufacturing (US) LLC Ordinary
Reckitt Health Pain (US) LLC Ordinary
TheraPearl LLC Ordinary
Corporation Service Company, 251 Little Falls Drive, Wilmington, New Castle
County DE 19808, United States
LRC North America Inc. Common/
Equity,
Preference
RB Manufacturing LLC Ordinary
RB USA Holdings LLC Ordinary
Reckitt Benckiser LLC Ordinary
Reckitt Benckiser USA (2010) LLC Ordinary
Reckitt Benckiser USA (2012) LLC Membership
Shares
Reckitt Benckiser USA (2013) LLC Ordinary
SSL Holdings (USA) Inc. Ordinary
Notes to the Parent Company Financial Statements continued
12 Subsidiary Undertakings continued
Entity name Key
Overall % owned by
Group, if not 100%
Share class
name(s)
Venezuela, Bolivarian Republic of
251 Little Falls Drive, Wilmington DE 19808, United States
Mead Johnson Nutrition Venezuela
SCA
# ◊ –
Avenida Mara con Calle San José, Centro Comercial Macaracuay Plaza, Nivel C3,
Locales 5 y 12. Urb. Colinas de la California., Caracas, Venezuela, Bolivarian
Republic of
Reckitt Benckiser Venezuela S.A. Ordinary
Urb. Las Mercedes, Av. Orinoco cruce con Mucuchies Torre Nordic, Piso 1, Oficina 1 y
2, Municipio Baruta Caracas, Venezuela, Bolivarian Republic of
Mead Johnson Nutrition Venezuela,
S.C.A.
Partnership
Interest
Vietnam
Suite 402, 4th Floor, No. 235 Dong Khoi Street, Ben Nghe Ward, District 1, Ho Chi
Minh City, Vietnam
The Representative Office of
Reckitt Benckiser (Thailand) Ltd in
Ho Chi Minh City
# –
Unit 401, 4th Floor, Metropolitan Building, No. 235 Dong Khoi Street, Ben Nghe
Ward, District 1, Ho Chi Minh City, Vietnam
Mead Johnson Nutrition (Vietnam)
Company Limited
Capital
Contribution
+ In liquidation * Audit exemption # Branch ◊ Registered office different to country of registration
Key
218 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Climate-Related Financial Disclosures
In addition to these Climate-related Financial Disclosures, we provide further information on our
environmental performance and greenhouse gas emissions on page 48. We consider the potential
financial impacts of climate change in the scenario modelling within our Viability Statement on page 61
and impairment/intangibles note on page 173-177. Comprehensive detail on our scenario modelling can
befound in our Basis of Reporting Criteria available at www.reckitt.com/reporting-hub.
Governance
Board oversight
The Board, supported by the Corporate Responsibility, Sustainability, Ethics and Compliance (CRSEC)
Committee, oversees sustainability, including climate-related risks and opportunities. The Board
receivesquarterly updates on sustainability matters from the CRSEC Committee, including progress and
performance against Reckitt’s climate targets. Sustainability, including climate risk, is considered as part
of the Board’s annual review of our principal and emerging risks alongside at least an annual review of our
Sustainability Ambitions. In November, the Board also held a listening session on the impacts of climate
change on global health.
for more detail on our governance framework and mechanisms, remuneration policy and the CRSEC Committee’s activities during the year.
See pages 71-82 See pages 96-99
Management’s role
Our CEO is accountable for sustainability matters, including climate-related risks and opportunities.
TheGroup Risk, Sustainability and Compliance Committee (RSCC) is chaired by the CEO and supported
by business unit-level committees who meet and report quarterly.
Our sustainability ambitions are delivered through the Group Executive Committee (GEC) and
management team who are responsible for ensuring adequate action plans and investment are in place.
The Corporate Affairs and Sustainability function leads sustainability-related strategy development and
compliance. Programmes to meet our operational and product footprint targets are implemented by our
Brands, Supply Chain, R&D, and Safety, Quality and Regulatory Compliance teams. Following Kris Licht’s
appointment as CEO on 1 October, the GEC conducted a deep dive on Reckitt’s carbon footprint to build
awareness and understanding across the Group and agree the key steps needed to deliver on Reckitt’s
Sustainability Ambitions, specifically on Scope 3 emissions. We identified three cross-functional priorities
across IT and Data, Procurement and R&D/Innovation to help accelerate progress. These include the
enhanced capture and visibility of supplier and materials carbon data, conducting feasibility studies
onthe use of alternative and new materials, and further developing our carbon reduction roadmaps.
We conduct monthly environmental reporting at site, regional and functional level. Progress against our
targets is reviewed monthly at supply chain leadership forums and quarterly through business unit and global
business risk reviews, enabling us to manage activity and deal with emerging issues on an ongoing basis.
Supporting these formal management structures are cross-functional steering committees who provide
governance and oversight across key transition risks and sustainable product activities.
Risk management
Reckitt operates an integrated company-wide risk management process for financial and non-financial
risks performed at the functional, business unit and corporate levels. Sustainability, including the risk
ofclimate-related impacts, was first identified as a principal risk in 2019 and is considered in our annual
Group risk assessment within ‘ESG transition risk’, which includes the identification and monitoring
ofpotential impacts, mapping current controls and developing action plans.
The Group principal and emerging risk assessment is part of our integrated risk management
framework,identifying the principal and emerging risks with the greatest potential to have a substantive
or strategic impact on the Group. The assessment is completed annually in advance of the business
unitand corporate strategic planning process, taking into consideration the outcomes of detailed risk
assessments conducted in specific areas throughout the year, for example, climate-related physical and
transition risk scenario analysis. Additionally, through our ESG issues materiality assessment, sustainability
risks are reviewed every two to three years. Operational risks are assessed across sites through annual
global asset and environmental risk reviews. Our progressive work on decarbonisation, product
innovation and supply chain resilience help mitigate these risks. Within specific climate-related financial
risks we undertake arange of analysis, evaluation and mitigation activities summarised in this report.
for more detail on the group’s risk management approach and updates during the year.
See pages 55-56
Since 2018, we have conducted scenario analyses to consider the longer-term impacts of climate change
on our business and support our modelling of climate risks in greater detail (see below). We consider
physical and transition risks from climate change over the short term (up to three years) in line with our
Group risk assessment, over the medium term (three to five years) in line with our strategic planning
cycle, and over the longer term (10 years+) in line with the useful life of the brand intangible assets,
through our work with Risilience and Cambridge Centre for Risk Studies. The Risilience climate and
enterprise analytics technology provides quantitative analytics that inform risk management and
decision-making across our brands and wider organisation. This has helped extend existing corporate
risk management activity on business continuity, which might be created in terms of extreme weather
events and which are also considered in our climate risk activity.
The Risilience analysis provides quantitative earnings value at risk estimations across risk categories
overa five- and 10-year timeframe which supports financial and operational planning. We focus
activitythrough routine business and financial planning within our brands and supply chain, in annual
andthree-year cycles, in order to manage risks and deliver against our Sustainability Ambitions.
Monitoring emerging policy and regulatory frameworks, together with financial tracking of fiscal
policyrequirements on taxation, informs our planning activity and response to address transition
risksfrom climate-related policy. We continue to track litigation, functionally and within our
businessunits and markets, and are monitoring emerging regulations on climate-related reporting
anddisclosurerequirements.
219 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Climate-Related Financial Disclosures continued
During the year, we continued to enhance and refine our climate risk analysis by increasing the breadth
and depth of data in the digital twin of our business, specifically in relation to our product categories
andraw materials footprint, while also further embedding the management of climate-related risks
andopportunities into our enterprise risk management processes. We have reviewed the Group’s
physical and transition risks and opportunities, and quantified the financial values at risk.
Strategy
We remain committed to delivering our science-based targets and working towards becoming net zero
by 2040. Our Sustainability Ambitions are embedded into our business strategy for growth, and support
both resilience and opportunity for our operations and brands.
Climate scenario analysis
Our approach to understanding climate-related risks and opportunities is underpinned by our scenario
analysis. In partnership with Risilience, we continued to develop our internal data-driven model of the
business (or ‘digital twin’) which captures Reckitt’s commercial and physical footprint and allows us to
assess the impact of the five climate scenarios specified by the Intergovernmental Panel on Climate
Change’s (IPCC) Sixth Assessment Report for both physical and transition risks (SSP1–SSP 8.5). SSP1-1.9
(1.5°C) represents the most rapid transition pathway as extreme actions are taken to reduce emissions
globally with widespread policy changes to achieve net zero by 2050. SSP3-7.0 (3°C) is defined by
theclimate-related policies in place today i.e. if no further policy action is taken. These two pathways
highlight the variation in risks and opportunities in meeting our science-based targets by 2030 and
netzero ambition by 2040.
for detail on the modelled pathways used at reckitt.com/reporting-hub.
See our Basis of Reporting Criteria
We modelled the potential impact of five transition risks derived from policy development, consumer
preference change, investor sentiment, asset liabilities, climate activism and litigation, together with
acute and chronic physical risks to the value chain, including disruption to our direct and upstream
operations and the supply of natural raw materials. Specifically, we model the potential financial impacts
of climate change by region, product, facility and hazard i.e. drought, flooding, heatwave. The output
provides a five-year, quantitative earnings value at risk estimation across risk categories and a long-term
qualitative risk outlook up to 20 years. For the purposes of our disclosure, we aggregate and present
consolidated results for the Group global business. The potential material earnings value at risk is quoted
as a range reflecting the uncertainty and assumptions associated with climate-related modelling.
Climate-related risks and opportunities over the short, medium and long term
We assume that all aspects of our value chain will be susceptible to climate-related transition and
physical risks to varying degrees. This is accounted for within our potential earnings value at risk
estimations which represent gross risk for the Group as a whole.
Short to medium term
From our analysis over the past three years, two of the modelled transition risk categories (consumer
market and policy risk) consistently emerge as having the greatest potential impact in the short to
medium term, specifically from changing consumer preference in favour of low impact products and
policy-driven carbon price increases, both of which are greatest in a 1.5°C scenario. Potential risks and
opportunities identified include energy and commodity cost rises across our operations, upstream and
downstream value chain. A more likely phased policy approach and changes in consumer preference,
alongside our ongoing mitigation activity to reduce emissions across our supply networks and innovation
in more sustainable products, would not be material for Reckitt. Physical risk represents a significantly
smaller proportion of total earnings value than transition risk.
Long term
In the longer term, we expect increases in the frequency and severity of extreme weather events, water
stress and higher ambient temperatures to impact our global sites, supply networks and consumer value
chains. Changes to regional climates may lead to a reduction in the availability of natural raw materials
and associated costs and the nature of products that are most viable in certain regions may change.
Theaggregate impact of all modelled physical risks is currently not material.
The tables on page 220 summarise the potential earnings value at risk associated with our modelled risks
over the short to medium term (up to five years) and a qualitative assessment of how these risks could
evolve over the longer term (10 to 20 years). The modelled impacts are based on a 1.5°C pathway aligned
to the Paris Ambition and a 3°C pathway aligned to current policy which are considered to represent
abest and worst case scenario.
Consumer market risk
This risk models the impact of changing consumer preferences and sustainable purchasing trends.
Itconsiders the potential uptake rates of consumers transitioning from conventional to less emissions-
intensive products and services, including single use vs reusable packaging, organic vs chemical
cleaners, concentrates, and dairy vs alternative proteins. The 1.5°C pathway assumes a fast adoption of
sustainable alternatives and a significant reduction in consumer demand for less sustainable and more
carbon intensive products, whereas the 3°C pathway assumes a limited reduction in current demand.
There is potential for Reckitt brands to be variably exposed to demand loss, depending on the
environmental impact of products (including raw material composition, manufacturing and consumer
use). While we continue to see increased consumer interest in more sustainable products, there remains
a ‘say-do’ gap for the vast majority, with consumers remaining focused primarily on value and efficacy.
This exposure therefore has negligible current impact. Nonetheless, our sustainable product innovation
programme continues to inform our product development pipeline and supports our ambition for 50%
ofnet revenue to be derived from more sustainable products by 2030. Using our Sustainable Innovation
Calculator to inform new and existing product development helps us design for lower carbon and water
footprints in use, which mitigates physical risks in the marketplace and helps us to meet emerging
consumer preferences. Further details on our approach to innovation can be found on pages 22-24.
220 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Climate-Related Financial Disclosures continued
The risk values below represent gross risk to the Group and assume none of the mitigating actions
outlined above are in place.
Pathway
Unmitigated
potential
annual impact
5-year horizon
5–10-year modelled scenario impacts
andassumptions
10–20-year modelled scenario impacts
andassumptions
3°C Not material – Conventional shopping preferences continue, with existing levels of
uptake for sustainable options continuing, resulting in only minimal
decline in demand for conventional products
1.5°C £0–£130m – Consumers increasingly switch
from non-sustainable products
tomore sustainable options
– Low-carbon alternative
productsprogressively increase
market share, supported by
policy frameworks including
carbon labelling
– Market demand for sustainable
products and services
becomesmainstream
– As we move towards 2050,
consumer habits have to shift
more dramatically to meet global
emissions reduction targets
Other transition and physical risks
Other modelled risk categories include:
– Policy risk – an increase in future carbon pricing where carbon pricing policies (either emissions
trading systems or carbon taxes) are implemented variably in all jurisdictions
– Technology risk – the risk of asset impairment under different climate-related economic transitions
– Investor sentiment – the risks and effects stemming from changes to the discount rate, relative
totheeconomic sector, transition pathway, debt and equity structure
– Litigation/Reputation – the potential for litigation or civil/criminal penalties for a company’s
climate-related activities, including greenwashing and pollution, and the risk of consumer boycotts
– Market disruption – the disruption to sales due to customer demand fluctuations induced by
regional-scale climate threats including heatwaves, droughts and freezes
– Facility disruption risk – the risk of physical damage to assets from extreme weather events, financial
losses from stock, contents and buildings damage, and operational disruption due to the reduction
incapacity
– Raw materials supply risk – changes in the supply of raw materials under the influence of a changing
climate and the potential impact of decreases in yield
Individually, these modelled risk categories are not material to our business under the five
scenariosassessed. The aggregate potential impact of these risks manifesting in a 1.5°C pathway
(whichrepresents a worst-case-scenario) is outlined below. The risk values below represent gross
risktothe group and assume no mitigating actions are in place.
Pathway
Unmitigated
potential
annual impact
5-year horizon 5–10-year modelled scenario impacts andassumptions
10–20-year modelled scenario
impacts and assumptions
3°C Not
material
– Carbon prices remain between $5-8 ($/tCO
2
e) up to 2050, with inconsistent
global implementation. Sectors covered by policies today remain static and
arenot expanded
– Inaction by governments and corporates results in an acceleration of climate
change, increasing public and consumer activism is used as a mechanism for
corporate accountability
– Exposure to climate-related litigation varies depending on historical emissions
responsibility and the extent of current commitment and action on addressing
future emissions
– The ‘consumer staples’ sector experiences relatively low exposure to risk
capital flight during economic transition
– Local distribution of goods from warehouse to point of sale is disrupted and/or
consumer demand fluctuates as a result of climate-related weather events
– Increase in the severity of climate hazards and extreme weather events
including heatwaves, freezes, droughts, flooding and windstorms
– Raw materials production fluctuates as a result of climate variability
andlong-term climate change
1.5°C £0–£130m – Carbon prices increase to $83 ($/tCO
2
e) over the
next five years, radical action by governments to
reduce emissions, driven by carbon price mechanisms
– Assets intrinsically linked to the use of fossil fuels
become impaired in direct proportion to the rate
atwhich fossil fuels are phased out
– Public sentiment towards climate change remains
strong and persistent and decarbonsation pathways
are met or exceeded without major disruption to
economic activity. ‘Consumer staples’ sector
experiences relatively low exposure to risk capital
flight during economic transition
– Radical action by
governments to
reduce emissions,
driven by carbon
price mechanisms.
Carbon prices
increase significantly,
with rapid adoption
across developed
economies
221 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Climate-Related Financial Disclosures continued
Impact on business, strategy and financial planning
The rate of global decarbonisation and implementation of associated policy frameworks are critical
determinants of the magnitude of climate-related impacts on Reckitt.
We are actively working to reduce our GHG emissions in line with our 2030 reduction targets for
Scopes1and 2 and our total product carbon footprint, and our commitment to achieving net zero by
2040. Our net zero roadmap identifies where we are targeting decarbonisation opportunities in our
operations, products and value chain. Raw materials and packaging account for around 60% of Reckitt’s
carbon footprint. Downstream logistics in our control account for 12% and retail (including customer
operations, customer travel and e-commerce) accounts for 17%. The complexity of our global value
chainrequires multiple interventions with our suppliers and customers to decarbonise. Specifically,
weare focusing on several initiatives to reduce CO
2
e in materials by:
– targeting suppliers to use renewable energy in their operations;
– using less ingredients while maintaining the efficacy of products;
– using alternative ingredients with a lower CO
2
e footprint. Such substitution may take longer ifdifferent
ingredients require qualification, particularly in regulated products;
– reducing the water in our products by developing concentrates which reduces the transport footprint
and packaging use; and
– using recycled materials – our targeted switch to 25% PCR and using less virgin plastic will deliver CO
2
e
savings that we will model across the value chain.
This activity contributes to reducing our exposure to increases in carbon pricing and other transition
related risks. We have assumed that together with shifts in consumer behaviour and general market
pricing we are able to mitigate the risks identified above.
Our strategy concentrates on three key areas:
1. Our operations
Optimising our processes to reduce carbon emissions through continued and increasing support for
renewable electricity and low-carbon energy
For Scopes 1 and 2, we are targeting progressive improvements in carbon reduction. Switching from gas
in low-mid thermal energy needs is a near-term focus alongside the continued sourcing of renewable
electricity. Energy efficiency is now considered a business-as-usual focus more than a driver of carbon
reduction. Capital allocation for environmental improvements on carbon are built into current planning
and progress is reviewed monthly.
Potential damage to assets and the frequency of such events arising from extreme weather and other
potential climate-related events (including associated remediation costs) are reviewed through our risk
management and business continuity programmes, and connect into our financial programmes on
insurance. Site location planning and building design considers temperature, adverse weather and water
stress risks. Additionally, water stress risks are mitigated by our water efficiency and catchment area
management activity, which aims for all sites in water-stressed locations to be water positive by 2030.
Further details on our wider environmental targets and performance can be found on pages 48-50.
2. Product innovation
Meeting emerging consumer demand for more sustainable products, developing products that are
well placed for a low-carbon, low-water policy and physical environment, alongside increased use
ofrecycled and recyclable materials
A range of tools assesses climate-related factors across the product lifecycle from material sourcing to
consumer use, as part of our innovation process. These provide insights into the climate-related risks and
opportunities associated with our products via our Sustainable Innovation Calculator, which help steer
our R&D teams during development of new, more sustainable products. The calculator considers water
and carbon footprint, plastics and packaging, and ingredients metrics. Such product innovation provides
opportunity for growth, by meeting emerging consumer demands and expectations and developing
products that are well placed for emerging fiscal policy and physical environments.
3. Supply chain resilience
Building more resilient supply chains at site level and for key natural raw materials, and engaging
oursuppliers to help measure, track and reduce supplier-related carbon emissions
Our procurement teams continually review supply chains to mitigate the impact of commodity cost rises.
In the longer term, this may also involve the use of alternative ingredients and materials with evaluation
and development through our R&D function. We are also working directly with copackers through our
partnership with Manufacture 2030 to help them measure and progressively reduce their emissions
which will build resilience to physical and transition risks from climate change both within our supply
chain, and for our suppliers. Further details on how we’re building supply chain resilience can be found
onpages 25-27.
Our overall carbon footprint has reduced year-on-year reflecting changes in volume and product mix,
alongside a review of the modelled footprint in our retail channels. Overall, our principle remains to abate
first, and offset last, meaning that we remain focused on reducing the footprint of our operations and
products in the first instance. We are however, considering appropriate carbon market management
approaches for the longer term. Our existing Trees for Change programme was our first step in this
programme, securing four million tonnes of carbon via afforestation projects. We will evaluate similar
opportunities during 2024.
222 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE STRATEGIC REPORT
Resilience of strategy to different climate scenarios (including 2°C or lower)
Collective climate change impacts may present risks to Reckitt’s activity, however our strategy, targets,
activity and progress help mitigate these risks, build resilience and create opportunities. Our targets
for50% of net revenue to be derived from more sustainable products, 50% product footprint reduction,
and 65% reduction in operational carbon emissions, all by 2030, collectively enable Reckitt’s brand
portfolio and supply chain to become more resilient.
We have assessed that the modelled scenarios and associated climate-related risks outlined above are
not material to ongoing business operations, and that our business has an increasingly strong resilience
across a spectrum of scenarios, including one where warming is limited to 1.5°C. This assessment is
based on a number of factors, which include:
– the strength of our market-leading portfolio of health, hygiene and nutrition products and core
capabilities in adapting and innovating our existing ranges while launching new products to meet
emerging consumer demands;
– an active programme to improve the carbon, water, plastic, chemical and packaging footprint of our
products (more sustainable products) which accounts for 29.6% of net revenue and which we continue
to grow; and
– an extensive global and geographically diverse sourcing base characterised by strong and established
strategic relationships with suppliers, which gives us a natural hedge against weather extremities.
Metrics and targets
We have considered all cross-industry climate-related metrics set out in the TCFD All Sector guidance.
The metrics set out below are those considered to be material.
GHG emissions
Reckitt has established sustainability metrics and targets to drive performance on climate change in
areas both directly controlled and across our value chain, including two science-based targets (SBT):
1. reduce our product carbon footprint by 50% by 2030 versus 2015
2. reduce absolute Scope 1 and 2 GHG emissions by 65% by 2030 versus 2015
Supporting these goals is our commitment to RE100 and increasing the use of renewable electricity
to100% by 2030, improving energy efficiency for gas use across our operations.
for more information on our net zero, emissions, energy, water, waste and packaging performance, and our GHG emissions data,
including Scopes 1, 2 and selected Scope 3 disclosures.
See pages 48-50
Climate-related physical and transition risks and opportunities
Please refer to pages 219-220.
Capital deployment and internal carbon pricing
We are currently considering an internal carbon pricing approach, which will allow us to strengthen the
assessment of climate impact in future investment decisions.
Remuneration
Since 2022, our Long Term Incentive Plan (LTIP) has included net revenue from more sustainable products
(which includes our product carbon footprint and reduction in GHG emissions from our operations,
seepage 125). The CEO and CFO’s bonus opportunities are based on the delivery of Reckitt’s strategy,
including progress against our 2030 Sustainability Ambitions as a whole, see pages 112-114. For more
information on remuneration measures see page 104.
Other metrics
– We track stakeholder sentiment through routine dialogue and engagement with our key
stakeholdersincluding investors, customers and NGOs. See more in the stakeholder section on
pages37-40. We strive to maintain and improve our performance in external benchmarks and ratings,
including MSCI, Sustainalytics and CDP Climate
– We track consumer spending patterns through sales data and broader consumer insight and research
at brand and sector level, which informs our product innovation programme and R&D pipeline
Next steps
Our priorities in 2024 will include further in-depth analysis of consumer market risk across our product
categories and markets, increasing the breadth and depth of data-driven analysis across the supply chain
to better identify and mitigate emissions-intensive activities, and continued development of internal
capabilities. Our product innovation programme has a heightened focus on product carbon emissions
reduction and we are using the Transition Plan Taskforce framework, Science Based Targets initiative
(SBTi) and Forest, Land and Agriculture (FLAG) guidance to guide our actions.
Listing Rule 9.8.6R Compliance Statement
Reckitt plc has complied with the requirements of LR 9.8.6R by including applicable and material
climate-related financial disclosures in this section (and by reference as indicated), consistent
withtheTCFD recommendations. We consider our disclosure to be consistent with all the TCFD
Recommendations and Recommended Disclosures including section C of the 2021-TCFD Annex entitled
‘Guidance for all Sectors’ and section E of the TCFD Annex entitled ‘Supplemental Guidance for Non-
Financial Groups’.
Climate-Related Financial Disclosures continued
223 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Alternative Performance Measures
The Annual Report and Accounts include financial information prepared in accordance with International
Financial Reporting Standards (IFRS Accounting Standards) as well as information presented on an
adjusted (non-IFRS) basis.
Financial information presented on an adjusted basis excludes certain cash and non-cash items. These
items have a pattern of recognition that is largely uncorrelated with the trading performance of the
business. Management reviews the business on this basis for the purpose of making operating decisions
and showing these adjusted measures in addition to the IFRS measures provides useful additional
information on trading performance to the users of the Financial Statements. These adjusted measures
should not be considered in isolation from, as substitutes for, or superior to the financial measures
prepared in accordance with IFRS.
The following items (adjusting items) are excluded from IFRS earnings in calculating adjusted earnings.
– Impact of b usiness combinations, and similar purchases of equity, where IFRS accounting results
intherecognition of certain costs that are not comparable with those for internally generated assets,
(although the net revenues and other costs of these business combinations are not adjusted for):
• amortisation of (a) acquired brands, trademarks and similar assets and (b) certain other intangible
assets recorded as the result of a business combination;
• inventory fair value adjustments;
• professional and advisor costs recorded as the result of a business combination;
• changes in the amount of consideration paid or expected to be paid (including changes in fair value)
and associated tax impacts; and
• changes to deferred tax liabilities relating to (a) acquired brands, trademarks and similar assets and
(b) certain other intangible assets recorded as the result of a business combination as the
amortisation or profit on disposal of these brands would be treated as an adjusting item
– Profits or losses relating to the sale of brands and related intangible assets as the continued active
management of our portfolio results in the recognition of profits or losses relating to disposals of
brands and related intangible assets which are largely uncorrelated with the trading performance
ofthe business
– Re-cycled foreign exchange translation reserves upon the sale, liquidation, repayment of share
capital or abandonment of a subsidiary previously controlled by the Group, as the gain or loss relates
tomainly exchange movements in previous periods rather than the current period
– The reclassification of finance income/(expenses) on tax balances into income tax expense, to align
with the Group’s tax guidance. As a result, the income/(expenses) are presented as part of income tax
expense on an adjusted basis
– Other individually material items of expense or income. Some of these items are resolved over
aperiod of time such that the impact may affect more than one reporting period
Adjusted measures
– Adjusted Operating Profit and Adjusted Operating Profit margin: Adjusted operating profit reflects
the IFRS operating profit excluding items in line with the Group’s adjusted items policy. See page 226
for details on the adjusting items and a reconciliation between IFRS operating profit and adjusted
operating profit. The adjusted operating profit margin is the adjusted operating profit expressed
asapercentage of net revenue
– Adjusted tax rate: The adjusted tax rate is defined as the adjusted continuing income tax expense
asa percentage of adjusted profit before tax
– Adjusted diluted EPS: Adjusted diluted EPS is the IFRS diluted EPS excluding items in line with the
Group’s adjusted items policy. See page 226 for details on the adjusting items and a reconciliation
between IFRS net income and adjusted net income. The weighted average number of shares for
theperiod is the same for both IFRS diluted EPS and adjusted diluted EPS
– Adjusted EBITDA (earnings before interest, tax, depreciation and amortisation): Adjusted operating
profit less depreciation and amortisation (excluding adjusting items)
Other non-GAAP measures
– Like-for-like (LFL): Net revenue growth or decline at constant exchange rates (see below) excluding the
impact of acquisitions, disposals and discontinued operations. Completed disposals are excluded from
LFL revenue growth for the entirety of the current and prior years. Acquisitions as at the balance sheet
date are included in LFL revenue growth twelve months after the completion of the relevant acquisition.
LFL growth also excludes countries with annual inflation greater than 100% (Venezuela and Argentina).
LFL policy will be updated in 2024 to exclude low margin manufacturing revenues agreed at the time of
sale of a brand or business. In 2023, net revenue included £10 million of such low margin revenues
– Constant exchange rate (CER): Net revenue and profit growth or decline adjusting the actual consolidated
results such that the foreign currency conversion uses the same exchange rates as were applied in the
prior year, and excludes the effect of applying hyperinflation accounting in the relevant subsidiaries
– Brand Equity Investment (BEI): BEI is the marketing support designed to capture the voice, mind and
heart of our consumers
– Net working capital (NWC): NWC is the total of inventory, trade and other receivables and trade and
other payables less interest accrued on tax balances, indemnity provisions for disposed businesses
and forward purchase liabilities. NWC is calculated as a % of last twelve months net revenue to
compare changes in NWC to the growth of the business
– Net Debt: The Group’s principal measure of net borrowings being the total of cash and cash equivalents,
short-term and long-term borrowings, lease liabilities and derivative financial instruments on debt
– Free Cash Flow and Free Cash Flow Conversion: The Group’s principal measure of cash flow defined as
net cash generated from continuing operating activities less net capital expenditure. A reconciliation of
cash generated from operations to Free Cash Flow is shown on page 225. The Group tracks Free Cash
Flow as a % of adjusted net income to understand the conversion of adjusted profit into cash
224 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Alternative Performance Measures continued
Other definitions and terms
– Category Market Unit (CMU): Reckitt analyses its market share by CMUs, which represent country
andeither brand or category, e.g., US Lysol. This allows us to analyse the components of market share
growth taking into account both geography and brand/category. Management has identified those
Core CMUs that are the most strategically important. The list of Core CMUs is kept under continual
review and will change over time based on strategic decisions. Currently, Core CMUs cover c.65%
ofGroup net revenue and between c.55% to c.80% of each Global Business Unit’s (GBU) net revenue.
As a measure of competitiveness, management tracks the percentage of Core CMUs holding or
gaining market share, weighted by net revenue
– E-commerce: E-commerce channel net revenue is direct sales from Reckitt to online platforms or
directly to consumers. Estimates of total E-commerce sales as a percentage of Group net revenues are
calculated by adding E-commerce channel net revenue to an estimate of E-commerce sales achieved
by our brands through omnichannel distributors and retailer websites
– Discontinued operations: Includes credits or charges related to the previously demerged RB
Pharmaceuticals business that became Indivior plc. Net profit/(loss) from discontinued operations
ispresented as a single line item in the Group Income Statement
– Return on Capital Employed (ROCE): Defined as adjusted operating profit after tax divided by
monthly average capital employed. Capital employed comprises total assets less current liabilities
other than borrowings-related liabilities. Total assets exclude cash, retirement benefit surplus, current
tax and a technical gross-up to goodwill that arises because of deferred tax liabilities recorded against
identified assets acquired in business combinations. Total assets have been adjusted to add back
impairments of Goodwill except where the impaired asset has been disposed or partially disposed.
Current liabilities exclude the share repurchase liability, legal provisions recorded as a result of
adjusting items and current tax
– Net revenue attributable to ‘more sustainable’ products: A product is defined as ‘more sustainable’
when it scores a total of 10 or more points across five parameters (carbon, water, plastics, packaging
and ingredients) at time of launch using our Sustainable Innovation Calculator (a streamlined Lifecycle
Assessment tool that models the environmental impacts of products). The net revenue from ‘more
sustainable’ products is expressed as a percentage of total net revenue. The calculation is done on
thebasis of a 12 month period ending September (to allow for the assembling of the related data)
Reconciliation of IFRS to Like-for-Like Net Revenue (by GBU)
For the year ended 31 December
Net revenue
Hygiene
£m
Health
£m
Nutrition
£m
Group
£m
2022 IFRS 5,960 5,992 2,501 14,453
M&A – (40) (12) (52)
Exchange and hyperinflation (37) (7) 1 (43)
2022 Like-for-like 5,923 5,945 2,490 14,358
2023 IFRS 6,135 6,062 2,410 14,607
M&A – (8) (7) (15)
Exchange and hyperinflation 93 190 (13) 270
2023 Like-for-like 6,228 6,244 2,390 14,862
Like-for-like growth 5.1% 5.0% (4.0%) 3.5%
Like-for-Like Net Revenue Growth
% Hygiene Health Nutrition Group
2020 19.5% 13.9% 0.1% 13.9%
2021 7.5% (0.8%) 2.7% 3.5%
2022 (3.1%) 14.7% 22.9% 7.6%
2023 5.1% 5.0% (4.0%) 3.5%
4 year Compound Annual Growth Rate (CAGR) 6.9% 8.0% 4.9% 7.0%
This shows net revenue growth since Reckitt set out our strategy for rejuvenating sustainable growth
inFebruary 2020 to rebuild like for like revenue growth to the mid-single digit range.
225 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Alternative Performance Measures continued
Reconciliation of Operating Cash Flow to Free Cash Flow
31 Dec 2023
£m
31 Dec 2022
£m
Cash generated from continuing operations 3,829 3,430
Less: net interest paid (263) (209)
Less: tax paid (922) (831)
Less: purchase of property, plant & equipment (348) (362)
Less: purchase of intangible assets (101) (81)
Plus: proceeds from the sale of property, plant & equipment 63 84
Free cash flow 2,258 2,031
Free cash flow conversion 97% 83%
12 months Adjusted EBITDA to Net Debt
Adjusted EBITDA
31 Dec 2023
£m
31 Dec 2022
£m
Operating profit 2,531 3,249
Excluding: adjusting items 842 190
Adjusted operating profit 3,373 3,439
Excluding: adjusted depreciation and amortisation 444 402
Adjusted EBITDA 3,817 3,841
Net debt
31 Dec 2023
£m
31 Dec 2022
£m
Cash and cash equivalents (inc. overdrafts) 1,380 1,156
Financing liabilities (8,670) (9,140)
Net debt (7,290) (7,984)
Net debt/Adjusted EBITDA (times) 1.9 2.1
Dividend Cover
31 Dec 2023
£m
31 Dec 2022
£m
Interim dividend paid in year 549 523
Final dividend proposed 828 789
Total dividends 1,377 1,312
Adjusted net income 2,323 2,452
Dividend cover (times) 1.7 1.9
Net Working Capital
31 Dec 2023
£m
31 Dec 2022
£m
Inventories 1,637 1,825
Trade and other receivables 2,062 2,082
Trade and other payables (5,506) (5,547)
Less: Forward purchase liability 158 –
Less: Interest accrued on tax balances 122 105
Less: Indemnity provisions for disposed businesses 48 –
Net working capital (1,479) (1,535)
Net working capital as percentage of 12-month net revenue (10%) (11%)
ROCE Calculation
31 Dec 2023
£m
31 Dec 2022
£m
Adjusted operating profit 3,373 3,439
Less: taxation on adjusted operating profit (850) (753)
Adjusted net operating profit after tax 2,523 2,686
IFRS total assets 27,136 28,742
IFRS total current liabilities (8,338) (8,341)
IFRS total assets less current liabilities 18,798 20,401
Excluding IFRS items not included in capital employed:
Short-term borrowings 1,679 1,721
Current tax liabilities 620 791
Legal provisions 30 90
Interest accrued on tax balances 122 105
Share repurchase liability 296 –
Cash and cash equivalents (1,387) (1,157)
Current tax recoverable (80) (155)
Retirement benefit surplus (270) (294)
IFRS balances included in capital employed 19,808 21,502
Add back: impact of unrealised impairments 4,078 3,490
Less: goodwill due to deferred tax on intangibles (4,265) (4,385)
Impact of average in year vs closing balance 531 (289)
Average capital employed 20,152 20,318
Return on capital employed 12.5% 13.2%
226 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Alternative Performance Measures continued
1 EPS is calculated using 716.7 million shares (basic) and 718.3 million shares (diluted)
The table below reconciles the Group’s IFRS measures to its adjusted measures for the year ended 31 December 2023.
Adjusting items
IFRS
£m
Impact of
business
combinations
£m
Gain on
disposal of
brands
£m
Reclassified
foreign
exchange
translation on
liquidation of
subsidiaries
£m
Finance
income
reclass
£m
Other
individually
material items
of income and
expense
£m
Adjusted
£m
Net revenue 14,607 – – – – – 14,607
Cost of sales (5,847) – – – – – (5,847)
Gross profit 8,760 – – – – – 8,760
Net operating expenses (6,229) 28 1 – – 813 (5,387)
Operating profit 2,531 28 1 – – 813 3,373
Net finance expense (130) (9) – (130) 22 – (247)
Profit before income tax 2,401 19 1 (130) 22 813 3,126
Income tax charge (753) (4) (9) – (22) (1) (789)
Net income from continuing operations 1,648 15 (8) (130) – 812 2,337
Less: Attributable to non-controlling interests (14) – – – – – (14)
Net income from continuing operations
attributable to owners of the parent company 1,634 15 (8) (130) – 812 2,323
Net profit from discontinued operations 9 – – – – (9) –
Total net income attributable to owners of the
parent company 1,643 15 (8) (130) – 803 2,323
Earnings per share (EPS)
Continuing operations
1
Basic 227.9 2.1 (1.1) (18.1) – 113.3 324.1
Diluted 227.4 2.1 (1.1) (18.1) – 113.1 323.4
Discontinued operations
1
Basic 1.3 – – – – (1.3) –
Diluted 1.3 – – – – (1.3) –
Total operations
1
Basic 229.2 2.1 (1.1) (18.1) – 112.0 324.1
Diluted 228.7 2.1 (1.1) (18.1) – 111.8 323.4
Impact of business combinations comprises:
– £27 million relates principally to amortisation of certain
intangible assets recognised as a result of historical
business combinations and a related £4 million tax
credit;and
– £9 million finance credit relating to reduction in the liability
under the agreement to purchase the non-controlling
interest in RB Manon (note 30), and£1million of related
professional fees.
Net gain on disposal of brands includes charge of £2 million
relating to remeasurement on held for sale of certain small
developing market brands (note 31), a related £9 million tax
credit and £1 million of residual income relating to previous
brand sales.
Reclassified foreign exchange translation on liquidation
ofsubsidiaries of £130 million relates to a gain following
theliquidation of legal entities as part of simplification
oftheGroup’s legal entity structure.
Reclassification of finance income of £22 million relates
tothe reclassification of net interest expense on income
taxbalances from net finance expense to income tax.
Other individually material items of income and
expensecomprise:
– £810 million impairment of goodwill in IFCN (note 9);
– £3 million expense relating to costs incurred in relation
tothe Korean HS issue; and
– £9 million income from discontinued operations which
relates to the DoJ settlement in 2019.
227 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Alternative Performance Measures continued
The table below reconciles the Group’s IFRS measures to its adjusted measures for the year ended 31 December 2022.
Adjusting items
IFRS
£m
Impact of
business
combinations
£m
Gain on
disposal of
brands
£m
Reclassified
foreign
exchange
translation on
liquidation of
subsidiaries
£m
Finance
income
reclass
£m
Other
individually
material items
of income and
expense
£m
Adjusted
£m
Net revenue 14,453 – – – – – 14,453
Cost of sales (6,092) – – – – – (6,092)
Gross profit 8,361 – – – – – 8,361
Net operating expenses (5,112) 33 (14) – – 171 (4,922)
Operating profit 3,249 33 (14) – – 171 3,439
Net finance expense (161) – – (69) (26) – (256)
Share of loss and impairment of
equity-accounted investments (21) – – – – – (21)
Profit before income tax 3,067 33 (14) (69) (26) 171 3,162
Income tax charge (711) (11) (7) – 26 12 (691)
Net income from continuing operations 2,356 22 (21) (69) – 183 2,471
Less: Attributable to non-controlling interests (19) – – – – – (19)
Net income from continuing operations
attributable to owners of the parent company 2,337 22 (21) (69) – 183 2,452
Net loss from discontinued operations (7) – – – – 7 –
Total net income attributable to owners of the
parent company 2,330 22 (21) (69) – 190 2,452
Earnings per share (EPS)
Continuing operations
1
Basic 326.7 3.1 (2.9) (9.6) – 25.5 342.8
Diluted 325.7 3.1 (2.9) (9.6) – 25.4 341.7
Discontinued operations
1
Basic (1.0) – – – – 1.0 –
Diluted (1.0) – – – – 1.0 –
Total operations
1
Basic 325.7 3.1 (2.9) (9.6) – 26.5 342.8
Diluted 324.7 3.1 (2.9) (9.6) – 26.4 341.7
Impact of business combinations of £33 million relates
principally to amortisation of acquired intangible assets
recognised through historical business combinations.
Incometax relates to an £11 million tax credit in relation
tothis amortisation.
Gain on disposal of brands and related intangible assets
of£14 million relates to the disposal of Dermicool (£49 million
loss) and E45 and related brands (£63 million gain). Included
within income tax expense is a deferred tax credit of
£28million arising on the derecognition of deferred tax
liabilities, offset by a £21 million tax charge incurred in
relation to the disposals.
Reclassified foreign exchange translation on liquidation
ofsubsidiaries of £69 million is the gain following the
liquidation of legal entities as part of simplification of
theGroup’s legal entity structure.
Reclassification of finance income of £26 million relates
tothe reclassification of net interest income on income
taxbalances from net finance expense to income tax.
Other individually material items of income and expense
of £171 million is composed of:
– £152 million expense relating to the impairment
ofBiofreeze goodwill;
– £14 million expense relating to the reorganisation
oftheNutrition business subsequent to the disposal
ofIFCNChina in 2021; and
– £5 million expense relating to costs incurred in relation
tothe Korean HS issue.
Included within income tax expense is a £12 million net tax
charge in relation to the IFCN China strategic review.
1 EPS is calculated using 715.3 million shares (basic) and 717.5 million shares (diluted)
228 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Shareholder Information
Annual General Meeting
Our Annual General Meeting (AGM) will be held on Thursday 2 May 2024 at 14:00 at the London Heathrow
Marriott Hotel, Bath Road, Hayes, Middlesex UB3 5AN.
The Notice convening the AGM meeting, together with the business to be considered at the meeting,
iscontained in a separate document for shareholders and is available on our website at
www.reckitt.com/investors/annual-general-meetings.
2024 financial calendar and key dates
Announcement of Quarter 1 trading statement 24 April 2024
Annual General Meeting 2 May 2024
Record date for 2023 final dividend 12 April 2024
Payment of 2023 final ordinary dividend 24 May 2024
Announcement of 2024 interim results 24 July 2024
Record date for 2024 interim dividend 2 August 2024
Payment of 2024 interim ordinary dividend 13 September 2024
Announcement of Quarter 3 trading statement 23 October 2024
Dividend
The Directors recommend a final dividend of 115.9 pence per share for the year ended 31 December
2023. Subject to shareholder approval at the 2024 AGM, payment of the final dividend will be made on
24 May 2024 to all shareholders on the register as at 12 April 2024. The latest date for receipt of new
applications to participate in the Dividend Reinvestment Plan (DRIP) in respect of the 2023 final dividend
is 2 May 2024. Details on how to join the DRIP can be found below.
Dividend Reinvestment Plan (DRIP)
Shareholders participating in the DRIP receive additional shares purchased in the market instead of
receiving a cash dividend. You can elect to join the DRIP by registering on the Computershare Investor
Centre at www.investorcentre.co.uk. Alternatively, you can request a DRIP mandate form and terms and
conditions by contacting Computershare on +44 370 703 0118.
Mandatory direct credit
We no longer pay dividends by cheque. Instead, cash dividends are now paid directly to shareholders’
bank accounts. This is known as ‘mandatory direct credit’. Receiving dividends this way means that
shareholders receive dividend funds quicker. It also means the Company reduces its environmental
impact, incurs lower administration costs and reduces the risk of cheque fraud.
To have your dividends paid directly into your bank account, please provide your bank details to our Registrar,
Computershare, either by accessing Computershare’s Investor Centre at www.investorcentre.co.uk or by
telephone on +44 370 703 0118. We will hold your dividends for you until you provide valid bank details and
charges may be applied to reissue any outstanding dividend payments.
If you are based overseas, Computershare can offer an international payment option to have your
dividends paid into your local account in a preferred currency. Please register online by visiting
www.investorcentre.co.uk, where you can review the full details and associated fees.
Share dealing facility
The Company’s shares can be traded through most banks, building societies, stockbrokers or ‘share
shops’. In addition, UK-based shareholders can buy or sell the Company’s shares using a share dealing
facility made available by Computershare, which includes internet and postal share dealing.
Internet share dealing
Internet share dealing is available to shareholders residing in the UK. This service offers shareholders a
straightforward way to buy or sell the Company’s shares on the London Stock Exchange. The commission
is 1.4%, subject to a minimum charge of £40. In addition, stamp duty, currently 0.5%, is payable on
purchases. Real-time dealing is available during UK market hours (08:00 to 16:30). In addition, you can
place a sale instruction outside of market hours.
To access the service, log on to www.computershare.com/dealing/uk. Shareholders must have their
Shareholder Reference Number (SRN) available. The SRN appears on share certificates. Internet share
dealing is only available to residents in either the UK, Channel Islands or Isle of Man.
Postal share dealing service
The postal share dealing service offers a way to sell or purchase shares (subject to availability). To use
theservice you must be a resident of the UK or one of the permitted jurisdictions. A full list of permitted
jurisdictions can be found at www.computershare.com/dealing/uk. If you wish to use the service, you can
download a postal share dealing form and the terms and conditions at www.computershare.com/dealing/uk.
The fee for this service is 1.4% of the value of each sale or purchase and is subject to a minimum charge of
£40. Stamp duty of 0.5% may be payable on purchases.
Detailed terms and conditions for both internet and postal dealing are available upon request by calling
+44 370 702 0000.
229 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Shareholder Information continued
Electronic shareholder communications
We encourage all shareholders to receive an email notification when shareholder documents become
available online, to reduce our impact on the environment. An election to receive electronic shareholder
communications will:
– result in cost savings to the Company since less paper documentation will need to be produced
andposted;
– allow for quicker and more effective communications with shareholders; and
– support Reckitt’s corporate responsibility profile.
Shareholders can register for electronic communications by registering at www.investorcentre.co.uk.
Shareholders who have elected for electronic communications will receive an email whenever
shareholder documents are available on the Company’s website. Shareholders who have elected by
deemed consent, in accordance with the CA 2006, will receive a hard copy notice of availability of a
document on the Company’s website and are entitled to request a hard copy of any such document,
atany time, free of charge from Computershare. Shareholders can revoke their consent to receive
electronic communications at any time by contacting Computershare.
The Company’s 2023 Annual Report and Notice of the 2024 AGM are available to view at www.reckitt.com.
The Investor section of the website also contains up-to-date information for shareholders to view
throughout the year, including:
– detailed share price information;
– financial results;
– regulatory announcements;
– dividend history, payment dates and amounts;
– access to shareholder documents including the Annual Report and Notice of AGM; and
– share capital information.
Analysis of shareholders as at 31 December 2023
Distribution of shares by type of shareholder No. of holdings Shares
Nominees and institutional investors 2,948 728,445,231
Individuals 9,948 8,089,948
Total 12,896 736,535,179
Size of shareholding No. of holdings Shares
1–500 7,324 1,391,393
501–1,000 2,032 1,473,968
1,001–5,000 2,006 4,167,361
5,001–10,000 310 2,226,412
10,001–50,000 541 13,290,266
50,001–100,000 202 14,190,441
100,001–1,000,000 371 123,087,357
1,000,001 and above 108 576,707,981
Total 12,896 736,535,179
American Depositary Receipts (ADRs)
ADRs are dollar-denominated securities that represent the ownership of ordinary shares in a non-US
company, quoted and traded in US dollars in the US securities market. ADRs facilitate the purchase,
holding and sale of non-US shares by US investors. Dividends are paid to investors in US dollars.
Reckitt Benckiser Group plc ADRs are traded on the over-the-counter (OTC) market under the symbol
RBGLY. Five ADRs represent one ordinary Reckitt share. J.P. Morgan Chase Bank N.A. is the Depositary.
The table below provides details of the identification of Reckitt securities on the US market place and
the London Stock Exchange.
Symbol Security Listing/Trading CUSIP/ISIN
RBGLY US security (ADR) OTC Pink 756255204
RKT.L. Ordinary share London Stock Exchange GB00B24CGK77
230 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Shareholder Information continued
ADR Depositary Bank
J.P. Morgan Chase Bank N.A. sponsors and administers the Reckitt ADR facility.
J.P. Morgan ADR shareholder services can be contacted as follows:
J.P. Morgan Chase Bank N.A.
383 Madison Avenue, Floor 11, New York, NY 10179
Telephone number for general queries: +1 800 990 1135
Telephone number from outside the US: +1 651 453 2128
Website: www.shareowneronline.com
Company Secretary
Catheryn O’Rourke
Registered office
103-105 Bath Road, Slough, Berkshire SL1 3UH, United Kingdom
Telephone: +44 1753 217800
Registered in England and Wales, No. 6270876
Company status
Public Limited Company
Auditor
KPMG LLP
Solicitors
Slaughter and May
Registrar
The company’s Registrar, Computershare, is responsible for maintaining and updating the shareholder
register and making dividend payments to shareholders. If you have any queries relating to your
shareholding, please contact Computershare.
Computershare Investor Services PLC
The Pavilions, Bridgwater Road, Bristol BS99 6ZZ
Shareholder helpline
Telephone: +44 370 703 0118
Website: www.computershare.com/uk
Charity donation
ShareGift is a UK registered charity (No.1052686) which specialises in realising the value locked up in
smallshareholdings for charitable purposes. The resulting proceeds are donated to a wide range of
charities, reflecting suggestions received from donors. If you have only a small number of Reckitt
shareswhich areuneconomic to continue holding, you may wish to consider donating them to ShareGift.
Please visit www.sharegift.org/donate-shares or telephone +44 207 930 3737 for more information.
Unsolicited mail
We are legally obliged to make our register of shareholders available to the public, subject to a proper
purpose test. As a result, some shareholders might receive unsolicited mail. Shareholders wishing to limit
the amount of such mail should write to the Mailing Preference Service, MPS FREEPOST 29 LON20771,
London W1E 0ZT or register online at www.mpsonline.org.uk.
Share fraud and ‘boiler room’ scams
Share fraud is a deceptive practice that induces investors to make sales and purchases based on
inaccurate information and in violation of security laws. In boiler room scams, fraudsters will entice
investors into scams through increased persuasion and high-pressure tactics through cold calling or
random contact.
Reckitt is aware of these deceptions and urges shareholders who are offered unsolicited investment
advice, discounted shares, a premium price for shares, or free company or research reports to investigate
thoroughly before making any decision.
If you receive any form of unsolicited investment advice, please take the following steps:
– Confirm the name of the person and/or organisation
– Check the Financial Conduct Authority’s (FCA) Financial Services Register at www.register.fca.org.uk/
toensure they are authorised
– Use the details on the Financial Services Register to contact the firm
– Call the FCA Consumer Helpline on +44 800 111 6768 (freephone) or 0300 500 8082 (from the UK),
ifthere are no contact details on the Register or if they are out of date
– Search the FCA’s list of unauthorised firms and individuals at
www.fca.org.uk/consumers/unauthorised-firms-individuals to avoid doing business with
reportedoffenders
– If you are approached by fraudsters please contact the FCA using its helpline, or share fraud
reportingform
– Consider getting independent financial advice
Using an unauthorised firm to buy or sell shares or other investments will prohibit access to the
FinancialOmbudsman Service or Financial Services Compensation Scheme (FSCS) should the
investmentbe unsuccessful. Remember: if it sounds too good to be true, it probably is. If you
thinkyouhave been a victim of these scams, the matter should be reported to the Police
andtoActionFraud. For more information, please visit the Serious Fraud Office website at
www.sfo.gov.uk/contact-us/reporting-serious-fraud-bribery-corruption.
231 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Shareholder Information continued
Cautionary note concerning forward-looking statements
This Annual Report and Financial Statements contains statements with respect to the financial condition,
results of operations and business of Reckitt Benckiser Group plc and the Reckitt group of companies
(the Group) and certain of the plans and objectives of the Group that are forward-looking statements.
Words such as ‘intends’, ‘targets’, or the negative of these terms and other similar expressions of future
performance or results, and their negatives, are intended to identify such forward-looking statements.
Inparticular, all statements that express forecasts, expectations and projections with respect to future
matters, including targets for net revenue, operating margin and cost efficiency, are forward-looking
statements. Such statements are not historical facts, nor are they guarantees of future performance.
By their nature, forward-looking statements involve risk and uncertainty because they relate to events
and depend on circumstances that will occur in the future. There are a number of factors that could
cause actual results and developments to differ materially from those expressed or implied by these
forward-looking statements, including many factors outside the Group’s control. Among other risks and
uncertainties, the material or principal factors which could cause actual results to differ materially are:
the general economic, business, political, geopolitical and social conditions in the key markets in which
the Group operates; the Group’s ability to innovate and remain competitive; the Group’s investment
choices in its portfolio management; the ability of the Group to address existing and emerging
environmental and social risks and opportunities; the ability of the Group to manage regulatory, tax and
legal matters, including changes thereto; the reliability of the Group’s technological infrastructure or that
of third parties on which the Group relies including the risk of cyber-attack; interruptions in the Group’s
supply chain and disruptions to its production facilities; economic volatility including increases in the
costof labour, raw materials and commodities; the execution of acquisitions, divestitures and business
transformation projects; product safety and quality, and the reputation of the Group’s global brands;
andthe recruitment and retention of key management.
These forward-looking statements speak only as of the date of this Annual Report and Financial
Statements. Except as required by any applicable law or regulation, Reckitt expressly disclaims any
obligation or undertaking to release publicly any updates or revisions to any forward-looking statements
contained herein to reflect any change in the Group’s expectations with regard thereto or any change
inevents, conditions or circumstances on which any such statement is based.
Any information contained in the 2023 Annual Report and Financial Statements on the price at which
shares or other securities in Reckitt Benckiser Group plc have been bought or sold in the past, or on the
yield on such shares or other securities, should not be relied upon as a guide to future performance.
232 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Notes
233 Reckitt Annual Report and Accounts 2023 FINANCIAL STATEMENTS OTHER INFORMATION STRATEGIC REPORT GOVERNANCE
Notes
reckitt.com
Reckitt Benckiser Group
Registered office
103-105 Bath Road
Slough, Berkshire
SL1 3UH, UK
Registered in England and Wales
No 6270876
Reckitt Annual Report and Accounts 2023