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Reckitt Benckiser Group PLC  -  RB.   

Half-Year Results 2013

Released 07:00 29-Jul-2013

Half-Year Results 2013

29 July 2013

                            STRONG HY 2013 RESULTS

Results at a glance       Q2*    % change   % change    HY   % change % change
                           £m     actual    constant    £m    actual  constant
(unaudited)                      exchange   exchange         exchange exchange
Net revenue              2,477      +7         +5     4,994     +7       +6
 
- growth (ex RBP)                              +6                        +6
- Like-for-like growth                         +6                        +6
(ex RBP)**
Operating profit -                                     914     -15      -17
reported
Operating profit -                                    1,163     +3       +2
adjusted***
Net income - reported                                  660     -15      -17
Net income - adjusted***                               864      +6       +5
EPS (diluted) - reported                              90.4p    -14
EPS (diluted) -                                       118.3p    +7
adjusted***

* Q2 results were not subject to the independent review.

** Like-for-like ("LFL") growth excludes the impact of changes in
exchange rates, acquisitions and disposals.

*** Adjusted results exclude exceptional items of £249m, which
includes a £225m provision for liabilities arising from historic regulatory
issues, principally competition law (refer note 9).

Highlights: Half Year (HY) unless otherwise stated

- LFL growth +5% (+6% ex RBP) driven by core areas and categories.

- Q2 LFL growth +4% (+6% ex RBP).

- Strong gross margin improvement +230bps to 58.7%: adjusted
operating margin (ex RBP)

-10bps1 to 20.4%.

- Increased investment in brand equity (BEI), ex RBP, of +80bps and
in group capabilities.

- Adjusted net income +6% (+5% constant): adjusted diluted EPS of
118.3p (+7%).

- Strong free cash flow generation of £893m.

- The Board declares a +[7]% increase in the interim dividend to
[60]p per share.

1 Prior year adjusted operating profit restated for IAS19
adjustment and a reclassification of net pension scheme interest. Refer to
note 3 for further detail

Commenting on these results, Rakesh Kapoor, Chief Executive
Officer, said:

"I am pleased that our strong focus on Health & Hygiene Powerbrands
is working and our improved company growth rates confirm that we are making
the right strategic choices. Our Health portfolio has had an excellent 1st
half, with Mucinex outperforming a very strong market with excellent
innovations such as Sinus-Max and the continued success of our Fast Max line.
Durex also delivered an excellent performance supported by creative digital
communications across the world, particularly in China which has now become
the largest Durex market in the world. In Hygiene, Dettol and Lysol are
performing strongly across the world, once again confirming the vast potential
of this franchise.

Our organizational focus on 16 Powermarkets, such as China, is
another critical element of our growth strategy and is enabling us to
sustainably outperform our markets. We have systematically increased our brand
investment in all our Areas and at the same time invested in enhancing our
capabilities to execute and win.

I am delighted with the progress we have made with our recent
strategic M&As. The excellent early results from Schiff confirm that we have
acquired very high quality brands in an exciting VMS category which we firmly
believe will deliver sustainable shareholder returns.

On Suboxone, we have always been aware of the challenges of
operating in a post generic environment. However, we continue to see strong
patient and doctor preference for film over tablets and we are very pleased
that the film has maintained its volume market share of 69%.

We continue to face challenging market conditions. Nonetheless
these strong H1 results, our sustained investment behind the equity of our
brands, together with excellent progress on the integration of our recent
acquisitions, give us confidence that we can achieve full year total revenue
growth1at the upper end of +5-6% range (ex RBP) while maintaining adjusted
operating margins.2"

1 at constant rates including acquisitions and disposals /
withdrawal from Private Label and other minor items, excluding RBP.

2 ex RBP, adjusted to exclude the impact of exceptional items

                 Basis of Presentation and Exceptional Items

LFL Definition

Where appropriate, the term "like-for-like" (LFL) describes the
performance of the business on a comparable basis, excluding the impact of
acquisitions, disposals and discontinued operations. It is measured on a
constant exchange basis.

Core definition

Where appropriate, the term "core business" represents the ENA,
RUMEA and LAPAC geographic areas, and excludes RBP and RB Food.

Adjusted results and exceptional items

Adjusted results exclude exceptional items. A breakdown of
exceptional items is detailed in note 5 and includes acquisition related
integration costs, restructuring costs in relation to the new organization,
and a provision for liabilities arising from a number of historic regulatory
issues, principally competition law.

Prior year restatements

Prior year comparatives have been restated for the adoption of
IAS19 (Revised). The impact on operating profit, interest expense and net
income is detailed on note 3.

Additionally there has been a presentation change to net pension
scheme interest. This had no impact on net income. Refer note 3.

                    Detailed Operating Review: Total Group

Half year 2013

Total HY net revenue (ex RBP) was £4,594m, a LFL increase of +6%
(+6% total at constant rates, ex RBP). Growth was driven by a strong
performance in our Emerging Market areas despite a slowing of volume market
growth in certain regions. ENA also performed well in a challenging market.
Our Health brands led growth from a category perspective with strong
performances from Mucinex in the US, and Strepsils, Durex and Nurofen
globally.

Integration and synergy delivery in respect of our recent
acquisitions are well on track.

The gross margin grew by +230bps to 58.7%. This was due to a
combination of the withdrawal from Private Label, modest price increases, our
focus on improved mix, a more benign input environment and savings from cost
optimisation programmes ("Project Fuel").

We raised investment behind our brands (as defined by our Brand
Equity Investment (BEI) metric), by 80bps to 14.4% of net revenue (ex RBP).
The increase in equity investment is focused on power brands, power markets
and new initiatives. This included an increase in investment behind our newly
acquired Schiff brands.

We also increased investment behind capabilities important to our
future growth - in particular in the areas of Health, Emerging Markets and IT.

Operating profit as reported was £914m, -15% versus HY 2012 (-17%
constant), reflecting the impact of an exceptional pre-tax charge of £249m (HY
2012: £48m). Details of the exceptional charge are set out in note 5 and
relate to a provision for historic regulatory issues, principally competition
law, restructuring costs in relation to the new organization, and acquisition
and associated integration costs. On an adjusted basis, operating profit was
ahead +3% (+2% constant) to £1,163m: The adjusted operating margin decreased
by -80bps to 23.3%. Excluding RBP, the adjusted operating margin decreased by
-10bps to 20.4%.

Net finance expense was £16m (HY 2012: £18m). The tax rate was 26%
after deducting the exceptional charge (which we do not expect to be fully tax
deductible), and 25% for adjusted net income.

Net income as reported was £660m, a decrease of -15% (-17%
constant) versus HY 2012; on an adjusted basis, net income rose +6% (+5%
constant). Diluted earnings per share of 90.4 pence was -14% lower on a
reported basis; on an adjusted basis, the growth was +7% to 118.3 pence.

On sustainability we have launched a campaign with our global partner Save the
Children to use our hygiene technologies and innovation capabilities to
prevent diarrhoea from being one of the world's biggest killers of children -
a UN millennium goal on which there has been less progress.

Second quarter 2013

Total Q2 net revenue (ex RBP) was £2,278m, a LFL increase of +6%
(+6% total at constant rates, ex RBP). Growth trends were similar to those in
Q1. Emerging markets continued to perform strongly despite some slowing in the
growth of their economies. On a category basis, Health continued its excellent
performance with Mucinex outperforming a strong market environment in the US,
and most other Health brands also performing strongly. In Hygiene powerbrands
of Dettol, Lysol, Harpic, and Mortein all performed well. Within Home, both
Vanish and Air Wick grew well in Emerging Market areas.

                           HY 2013 Business Review

Summary: % net revenue growth

                          Q2                            H1
              LFL  Net M&A*  FX   Reported  LFL  Net M&A*  FX   Reported
ENA**         +3%    +1%     +4%    +8%     +3%    +1%     +2%    +6%
LAPAC        +11%    +2%     +1%    +14%   +11%    +2%     -2%    +11%
RUMEA**       +5%     -      -1%    +4%     +6%    -1%     -1%    +4%
Food          -2%     -      +3%    +1%     0%      -      +3%    +3%
Group ex RBP  +6%    +1%     +2%    +9%     +6%    +1%     +1%    +7%
* Reflects the acquisitions of Schiff and other minor acquisitions,
withdrawal from Propack (Private Label) and disposal / discontinuance of a
number of minor businesses.

** Scholl footwear business, previously reported as part of RUMEA,
is now reported as part of ENA. Net revenue values and growth rates have been
restated / calculated based on this reclassification.

Note: due to rounding, this table will not always cast

Analyses by operating segment of net revenue and adjusted operating
profit, and of net revenue by product group are set out below. The Executive
Committee of the Group assesses the performance of the operating segments
based on net revenue and adjusted operating profit. This measurement basis
excludes the effect of exceptional items.

Review by Operating Segment

           Quarter ended                                                                  Half Year ended
 
              30 June                                                                         30 June
    2013    2012*     % change                                                      2013     2012*     % change
      £m       £m    exch. rates                                                      £m        £m    exch. rates
                    actual   const.                                                                  actual   const.
                                    Total Net revenue
   1,191    1,104       +8       +4 ENA                                            2,451     2,303       +6       +4
     654      572      +14      +13 LAPAC                                          1,280     1,152      +11      +13
     349      335       +4       +5 RUMEA                                            703       673       +4       +5
 
      84       83       +1       -2 Food                                             160       156       +3        -
 
   2,278    2,094       +9       +6 Total - ex RBP                                 4,594     4,284       +7       +6
     199      218       -9      -12 RBP                                              400       385       +4       +2
   2,477    2,312       +7       +5 Total                                          4,994     4,669       +7       +6

                                    Operating profit - adjusted**
                                    ENA                                             525       463      +13     +11
                                    LAPAC                                           233       209      +11     +12
                                    RUMEA                                           141       141        -       -
 
                                    Food                                             36        36        -       -
 
                                    Corporate***                                      -        30      n/a     n/a
 
                                    Total - ex RBP                                  935       879       +6      +5
                                    RBP                                             228       245       -7      -9
                                    Subtotal before exceptional items             1,163     1,124       +3      +2
                                    Exceptional items                             (249)      (48)
                                    Total                                           914     1,076      -15     -17

                                    Operating margin - adjusted**                    %         %
                                    ENA                                           21.4      20.1
                                    LAPAC                                         18.2      18.1
                                    RUMEA                                         20.1      21.0
 
                                    Food                                          22.5      23.1
 
                                    Corporate ***                                  n/a       n/a
 
                                    Total - ex RBP                                20.4      20.5
                                    RBP                                           57.0      63.6
                                    Total                                         23.3      24.1

* ENA and RUMEA comparatives restated to reflect the geographical
reclassification of Footwear. Prior year adjusted operating profit restated
for IAS19 adjustment and a reclassification of net pension scheme interest.
Refer note 3 for further detail

** Adjusted to exclude the impact of exceptional items.

***Items of income and expense which are not part of the results
and financial position of the reported segments, and therefore reported to the
Chief Operating Decision Maker outside of the individual segment financial
information, are shown in the Corporate segment. For the six months ended 30
June 2012, these items include profits on disposals of intangibles and the
Paras Personal Care business, and corporate provisions.

The Business Review below is given at constant exchange rates.

ENA 55% of core net revenue

HY 2013 total net revenue was £2,451m, with LFL growth of +3% with
good growth in North America and a stable result in Europe given the weak
economic backdrop.

Growth was driven by a strong performance in all Health powerbrands
- Mucinex outperforming a strong market in the US and Strepsils in Europe,
supported by the launch of Strepsils 6+. Nurofen, Durex, Scholl Footcare and
Gaviscon performed well, particularly in Europe behind significant BEI and new
product innovations. In Hygiene, Lysol performed well in the US and Finish in
Europe following the launch of the new Finish Quantum with Power Gel. In Home,
Air Wick performed well.

We have undertaken a number of specific actions to streamline our
Scholl Footwear business in Europe. There is a short term impact of this in
both ENA and portfolio brands.

The Schiff integration in the US is progressing very well with
strong LFL revenue growth, well in excess of the VMS market. Our cost
synergies programme is also well on track.

For the half year, adjusted operating profit increased +11%
(constant) to £525m; the adjusted operating margin increased +130bps to 21.4%,
due primarily to good gross margin expansion, withdrawal from Private Label,
and cost synergies from the delayering of the European management
organization. This funded increased investment in BEI.

Q2 total net revenue was £1,191m, with LFL growth of +3%
underpinned by continued strong growth in Health with all powerbrands growing
strongly.

LAPAC 29% of core net revenue

HY 2013 total net revenue was £1,280m, with LFL growth of +11%.
Growth was broad based across all regions with particularly strong growth in
Latin America and South East Asia. Growth was driven by a combination of
powerbrand rollouts, innovation, distribution and penetration expansion,
particularly in the key growth markets of India, Brazil and China. In Health,
Nurofen, Strepsils, Durex and Gaviscon performed well and Vanish, Air Wick and
Woolite drove the growth in Home. The strong performance in Hygiene was driven
by Dettol with the recently launched Dettol Kitchen Gel in India and Korea
gaining good initial market share.

For the half year, adjusted operating profit increased +12%
(constant) to £233m; the adjusted operating margin was +10bps higher at 18.2%.
Gross margin improvement funded investment in both BEI and in enhancing our
capabilities.

Q2 total net revenue was £654m, with LFL growth of +11% (total,
constant +13%). Growth was broad based across Health, Hygiene and Home in what
was a balanced performance.

RUMEA 16% of core net revenue

HY 2013 net revenue increased to £703m, with LFL growth of +6%. On
a category basis, Health was driven by a strong performance in Durex. Dettol
led the growth in Hygiene, with supporting strong performances from Harpic,
Finish, Cillit Bang and Mortein.

As signaled with our full year 2012 numbers, RUMEA growth is
somewhat impacted by the up scheduling of certain Nurofen products in Russia
and some operational and socio-political challenges in certain markets.

For the half year, adjusted operating profit was maintained at
£141m; the adjusted operating margin was -90bps lower at 20.1%. We continued
to invest behind our brands and in capabilities to drive future growth.

Q2 total net revenue was £349m, with LFL growth of +5%. Growth was
driven by Durex, Finish, Dettol and Air Wick.

Food

HY 2013 total net revenue was £160m, a level that was maintained
versus prior year and an increase of +3% at actual exchange rates. Weak market
conditions in the second quarter offset a robust start to the year. Operating
margins fell by -60bps to 22.5%.

Pharmaceuticals ("RBP")

HY 2013 net revenue was £400m, an increase of +2% (constant). The
underlying volume growth in prescriptions in the US continues to be strong
with low double digit growth, and in line with recent market trends. This
growth was offset by the negative impact of conversion from tablets to film as
we voluntarily discontinued the sale of tablets in the US from 18 March. The
remaining tablet sales from early 2013 have largely been lost to generic
Suboxone tablets, launched into the US market late in February. Since their
launch, generic Suboxone tablets have gained a 13% mg volume market share* of
the buprenorphine market in the USA. We are very pleased that Film share of
total buprenorphine prescriptions in the USA has been maintained since the
launch of generic tablets, although we continue to believe that increased
price pressure will lead to some loss of film market share over time despite
the clinical and patient benefits of the film format.

In Europe, we were impacted by government imposed price reductions
in a number of markets.

As a result of the above factors Q2 net revenue was £199m, a
decrease of -12% (constant).

HY adjusted operating profit for the total RBP business decreased
-9% (constant) to £228m as a result of market share loss, negative mix and
investment in the clinical pipeline. We expect this gradual increase in
clinical investment to continue for the remainder of 2013 and beyond as we
build a strong, sustainable growth business.

We have been informed of a paragraph IV notice of the filing of an
abbreviated new drug application (ANDA) by Par Pharmaceutical for a generic
Suboxone film in the USA (under the Waxman Hatch Act).

There are a combination of formulation and process patents
surrounding the film. The most recent of these is a formulation patent, Orange
Book listed, in RBP's name which is valid until 2030. We are confident about
the strength of our intellectual property protection for Suboxone film and
will be filing a suit to enforce our intellectual property shortly. By virtue
of filing this patent infringement lawsuit, the FDA cannot approve the generic
entrant until the earlier of 30 months or the disposition of the patent
infringement proceedings

*source: Healthcare Analytics Retail Phast Weekly Data as at 28
June 2013

                           HY 2013 Category Review

           Quarter ended                                                                  Half Year ended
 
              30 June                                                                         30 June
    2013     2012     % change                                                      2013     2012*     % change
      £m       £m    exch. rates                                                      £m        £m    exch. rates
                    actual   const.                                                                  actual   const.
                                    Net revenue by category
     600      443      +35      +32 Health                                         1,197       904      +32      +31
     968      915       +6       +4 Hygiene                                        1,993     1,879       +6       +6
     491      474       +4       +2 Home                                             979       960       +2       +1
     135      179      -25      -28 Portfolio Brands                                 265       385      -31      -33
      84       83       +1       -2 Food                                             160       156       +3        -
   2,278    2,094       +9       +6 Total - ex RBP                                 4,594     4,284       +7       +6
     199      218       -9      -12 RBP                                              400       385       +4       +2
   2,477    2,312       +7       +5 Total                                          4,994     4,669       +7       +6

                                    Operating profit - adjusted
                                    Health, Hygiene, Home & Portfolio              899       813      +11       +9
                                    Food                                            36        36        -        -
                                    Corporate                                        -        30      n/a      n/a
                                    Total - ex RBP                                 935       879       +6       +5
 
                                    RBP                                            228       245       -7       -9
                                    Total                                        1,163     1,124       +3       +2
                                    Exceptional items                            (249)      (48)
                                    Total                                          914     1,076      -15      -17

                                    Operating margin - adjusted                      %         %
                                    Health, Hygiene, Home & Portfolio             20.3      19.7
                                    Food                                          22.5      23.1
 
                                    Corporate                                      n/a       n/a
                                    Total - ex RBP                                20.4      20.5
                                    RBP                                           57.0      63.6
                                    Total                                         23.3      24.1
* Prior year adjusted operating profit restated for IAS19
adjustment and a reclassification of net pension scheme interest. Refer note 3
for further detail.

                          Q2                            H1
              LFL  Net M&A*  FX   Reported  LFL  Net M&A*  FX   Reported
Health       +16%    +16%    +3%    +35%   +14%    +17%    +1%    +32%
Hygiene       +5%    -1%     +2%    +6%     +7%    -1%     0%     +6%
Home          +3%    -1%     +2%    +4%     +2%    -1%     +1%    +2%
Portfolio     -5%    -23%    +3%    -25%   -14%    -19%    +2%    -31%
* Reflects the acquisitions of Schiff and other minor acquisitions,
withdrawal from Propack (Private Label) and disposal / discontinuance of a
number of minor businesses

The Category Review below is given at constant exchange rates.

Health 27% of core net revenue

HY 2013 total net revenue was £1,197m, with LFL growth of +14%. We
have had an excellent 1st half, with Mucinex outperforming a very strong
market with excellent innovations such as Sinus-Max and the continued success
of our Fast Max line. Durex also delivered an excellent performance supported
by creative digital communications across the world. Additionally we have seen
encouraging early successes of recently launched innovations like Strepsils
Children 6+ lozenges, Nurofen next generation heat patches and the roll out of
our Real Feel polyisoprene condoms in a number of markets.

Our recent consumer health acquisitions have also made a very
positive start. In the US MegaRed and Airborne have performed exceptionally
well as we make early progress in the integration of the business. In China
our newly acquired Myanshuning sore throat brand has made a strong start, and
we have now received regulatory clearance for our collaboration agreement with
BMS in Latam.

Q2 total net revenue was £600m, with LFL growth of +16%. Growth was
broad based, but also benefitted from a more sustained `flu season in the US,
which contributed to another quarter of strong growth.

Hygiene 45% of core net revenue

HY 2013 total net revenue was £1,993m, with LFL growth of +7%
(total, constant +6%). Growth was driven by strong performances in the Dettol
/ Lysol franchise in all our three areas. In the US, our new "Healthing"
campaign combined with new initiatives such as Lysol Power & Free drove
growth. In Emerging Market areas growth was underpinned by brand equity driven
initiatives such as our new mums hospital visit programme in over 40
countries, and successful new category extensions with Dettol Kitchen Gel.
Harpic performed well in emerging markets behind penetration programmes and
Mortein delivered good growth in India and Australia aided by our Naturguard
innovations and a good pest season. Finish performed well in a number of
European markets behind the launch of Finish Quantum with power gel, and in
certain EM countries as we continue to drive penetration.

Q2 total net revenue was £968m. LFL growth was +5%, with strong
performances in Dettol and Lysol. In the US we continue to gain shares in
Finish in the face of higher promotional intensity.

Home 22% of core net revenue

HY 2013 total net revenue was £979m, with LFL growth of +2%. Whilst
macro conditions in the Home categories remain weak, particularly in ENA, we
continue to invest behind innovation and geographical expansion. Air Wick
produced a strong performance behind electricals in the US market driven by
the recent successful launch of our new "National Parks" fragrances. We also
continue to expand our successful candles franchise and have recently
announced our newest innovation, Air Wick Pearl Infusions - a new range of
premium candles, delivering a relaxing experience...pearl after pearl. Growth
in Vanish was driven by innovation in both Developed and Emerging Markets,
with a particularly strong performance in Brazil, our largest Vanish market.

Q2 total net revenue was £491m. LFL growth was +3% against a weak
market backdrop.

Portfolio 6% of core net revenue

HY 2013 total net revenue was £265m, with LFL growth of -14%. The
significant decline in LFL growth is due in large part to planned actions in
the European Footwear business noted earlier. We also saw further weakness in
Laundry Detergents and Fabric Softeners in Southern Europe, driven primarily
by more competitive market conditions. Within total net revenue we saw the
impact of our withdrawal from our Private Label business.

Q2 total net revenue was £135m, with LFL growth of -5% with similar
trends to Q1, albeit with less of an impact from the planned actions in the
Scholl Footwear business.

                       New Product Initiatives: H2 2013

The Group has disclosed a selection of new product initiatives for
the second half of 2013:

In Health:

- Launch of Mucinex Fast-Max Night Time Cold & Flu. Powerful relief
from your worst cold & flu symptoms for a peaceful night's sleep.

- Launch of Move Free One - Total Joint Health. One softgel tablet is the
equivalent of two glucosamine and chondroitin tablets.

- Launch of Durex Embrace. Two pleasure gels combine in one product. Warming
for me, tingling for you & an amazing connection together.

In Hygiene:

- Finish Quantum with Powergel, now rolling out in 35 markets.

- Launch of Veet Facial Precision Wax and Care. Combines the
efficacy of a precision wax, with the benefits of a soothing after-care cream.

- Launch of new Lysol Power & Free with Hydrogen Peroxide - a range
of powerful cleaners without the bleach.

- Launch of "Peaceful Nights" in the pest category. Launched in
Brazil under the local brand, SBP, this is the safest electrical liquid
mosquito repellent, with smart auto off capability.

In Home:

- Launch of Air Wick Pearl Infusions. A new range of premium
candles, delivering a relaxing experience...pearl after pearl.

- Launch of the new Vanish Super Bar in Emerging Markets. The power
of Vanish now available in a soap bar. Tough on stains, gentle on fabrics.

                               Financial Review

Basis of preparation. The unaudited financial information is
prepared in accordance with IFRSs as adopted by the European Union and IFRSs
as issued by the International Accounting Standards Board, and with the
accounting policies to be applied in the financial statements for the year
ending 31 December 2013. These are not materially different from those set out
in the Group's 2012 Annual Report and Accounts, unless separately disclosed.

Constant exchange. Movements in exchange rates relative to sterling
affect actual results as reported. The constant exchange rate basis adjusts
the comparative to exclude such movements, to show the underlying results of
the Group.

Net finance expense. Net finance expense is £16m (2012: £18m, which
has been restated to include the impact of IAS19 (Revised) Employee Benefits,
and reclassification of net pension interest (refer note 3)).

Tax. The overall effective tax rate is 26% (2012: 26%).

Net working capital (inventories, trade and other receivables and
trade and other payables) of minus £855m was a £155m improvement versus the 31
December 2012 level.

Cash flow. Cash generated from operations was £1,321m (2012:
£1,106m), and free cash flow (net cash generated from operating activities
less net capital expenditure) was £893m, +13%. Net interest paid was £4m
higher at £13m and tax payments increased by £92m to £330m. Net capital
expenditure (including intangibles) was £14m higher than the prior year at
£85m. During the period the Group undertook share repurchases of £279m.

Net debt at the end of the half year was £2,760m (31 December 2012:
£2,426m), an increase of £334m. This reflected the various M&A expenditures in
China and Latin America of £413m, the payment of the final 2012 dividend of
£561m, and share repurchases of £279m, offset by strong net cash generated
from operating activities of £978m. The Group regularly reviews its banking
arrangements and has adequate facilities available to it.

Exceptional items. In HY 2013 the exceptional pre-tax charge
incurred was £249m (HY 2012: £48m). The charge consists of the following items

£225m provision for historic regulatory issues, principally
competition law

£24m restructuring costs in relation to the new organization,
acquisition and associated integration costs

Balance sheet. At 30 June 2013, the Group had shareholders' funds
of £6,037m (31 December 2012: £5,922m), an increase of +2%. Net debt was
£2,760m (31 December 2012: £2,426m) and total capital employed in the business
was £8,797m (31 December 2012: £8,348m).

This finances non-current assets of £12,813m (31 December 2012:
£12,023m), of which £753m (31 December 2012: £737m) is property, plant and
equipment, the remainder being goodwill, other intangible assets, deferred
tax, available for sale financial assets and other receivables. The Group has
net working capital of minus £855m (31 December 2012: minus £700m), current
provisions of £239m (31 December 2012: £128m) and long-term liabilities other
than borrowings of £2,830m (31 December 2012: £2,668m).

Dividends. The Board of Directors declares an interim dividend of
60p (2012: 56.0p), an increase of +7%. The ex-dividend date will be 7 August
2013 and the dividend will be paid on 26 September 2013 to shareholders on the
register at the record date of 9 August 2013. The last date for election for
the share alternative to the dividend is 5 September 2013.

Legal Provisions. As previously reported, the Group is involved in
a number of historic regulatory investigations by various government
authorities in Europe and North America. These investigations involve mainly
competition law inquiries, most of which include several other companies. The
Directors have made a provision of £225m in respect of these matters.

As a matter of policy and practice, the Group cooperates with all
government investigations, including regulatory investigations involving
competition law. The Group maintains and continues to improve a robust
compliance training programme and ensures that all executive managers sign an
annual disclosure and reporting document certifying compliance with the
Group's Code of Conduct.

Contingent liabilities. The Group is involved in a number of
investigations by government authorities and has made provisions for such
investigations, where appropriate. Where it is too early to determine the
likely outcome of these matters, or to make a reliable estimate, the Directors
have made no provision for such potential liabilities.

The Group from time to time 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.

                                 2013 Targets

The strong HY results, our continued and sustained investment behind the long
term equity of our brands, and good progress on the integration of our recent
acquisitions, give us confidence that we can achieve the upper end our full
year targets of +5-6% total net revenue growth1 (ex RBP) while maintaining
adjusted operating margins.2

1 at constant rates including acquisitions and disposals /
withdrawal from Private Label and other minor items, excluding RBP.

2 ex RBP, adjusted to exclude the impact of exceptional items

               Principal Risks and Uncertainties
The Directors consider that the principal risks and uncertainties
which could have a material impact on the Group's performance in the remaining
six months of 2013 are the same as described on pages 13 to 15 of the Annual
Report and Financial Statements for the year ended 31 December 2012. These
include:

Market risks:

- Competition, economic conditions and customer consolidation
translates into increasing pressure on pricing and promotion levels and market
growth rates, especially in Europe.

- The expiry of the Group's exclusive licences for Suboxone could
expose the business to competition from generic variants.

Operational risks:

- Business continuity plans prove insufficient to protect the
business in the face of a significant and unforeseen supply disruption.

- Key senior management leave the Group or management turnover
increases significantly.

- The combination of the Group's recently initiated strategic
business reorganization and ERP programmes could result in sub-optimal
implementations and reduced focus due to conflicting demands for management
attention.

- Information technology systems may be disrupted or may fail,
interfering with the Group's ability to conduct its business.

- Product quality failures or ingredient concerns could potentially
result in the undermining of consumer confidence in the Group's products and
brands.

- Regulatory decisions and changes in the legal and regulatory
environment could limit business activities.

- Non-compliance with the 2011 UK Bribery Act

- If intensity or scale of acquisitions and disposals activity
distracts management focus or undermines the control environment.

Financial risks:

- Tax authorities continue to aggressively challenge tax filings
positions and pursue compensation for retroactive changes to tax laws.

- Government authorities have become more aggressive in leveling
punitive fines for historic breaches of law.

Environmental, social and governance risks:

- Industry sector and regulatory risks.

- Product quality and safety risks to consumers.

- Potential reputational risks around the supply chain.

The Group's Annual Report and Financial Statements for the year
ended 31 December 2012 are available on the Group's website at www.rb.com.

The Group at a Glance (Unaudited)

Quarter ended 30 June                               Half year ended 30 June
   2013       2012                                      2013       2012**
    £m         £m                                        £m          £m
 
  2,477       2,312    Net revenue - total             4,994        4,669
   +4%         +4%     Net revenue growth -             +5%          +4%
                       like-for-like
   +5%         +3%     Net revenue growth -             +6%          +4%
                       constant
   +7%         -1%     Net revenue growth - total       +7%          +1%
                       Gross margin                    58.7%        56.4%
                       EBITDA - adjusted*              1,240        1,191
                       EBITDA margin - adjusted*       24.8%        25.5%
                       EBIT                             914         1,076
                       EBIT margin                     18.3%        23.0%
                       EBIT - adjusted*                1,163        1,124
                       EBIT margin - adjusted*         23.3%        24.1%
                       Profit before tax                898         1,058
                       Net income                       660          775
                       Net income - adjusted*           864          814
                       EPS, basic, as reported         91.9p       106.5p
                       EPS, adjusted and diluted*      118.3p      110.5p
* Adjusted to exclude the impact of exceptional items.

** Prior year comparatives restated for IAS19 adjustment and a
reclassification of net pension scheme interest. Refer note 3 for further
detail

For further information, please contact:

Reckitt Benckiser                                +44 (0)1753 217800
 
Richard Joyce
 
Director, Investor Relations
 
Andraea Dawson-Shepherd
 
SVP, Global Corporate Communication and Affairs
Brunswick (Financial PR)                        +44 (0)20 7404 5959
 
David Litterick / Max McGahan

Notice to shareholders

Cautionary note concerning forward-looking statements

This document contains statements with respect to the financial
condition, results of operations and business of Reckitt Benckiser and certain
of the plans and objectives of the Group with respect to these items. These
forward-looking statements are made pursuant to the "Safe Harbor" provisions
of the United States Private Securities Litigation Reform Act of 1995. In
particular, all statements that express forecasts, expectations and
projections with respect to future matters, including trends in results of
operations, margins, growth rates, overall market trends, the impact of
interest or exchange rates, the availability of financing to the Company,
anticipated cost savings or synergies and the completion of strategic
transactions are forward-looking statements. 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 discussed in this report, that could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements, including many factors outside Reckitt Benckiser's
control. Past performance cannot be relied upon as a guide to future
performance.

Half Year Condensed Financial Statements

Group Income Statement

For the six months ended 30 June 2013

                                              Six months ended       Year ended
                                            30 June       30 June   31 December
                                               2013          2012          2012
                                                    (restated)(a) (restated)(a)
                                      Notes      £m            £m            £m
Net revenue                               4   4,994         4,669         9,567
Cost of sales                               (2,065)       (2,038)       (4,029)
Gross profit                                  2,929         2,631         5,538
Net operating expenses                      (2,015)       (1,555)       (3,096)
Operating profit                          4     914         1,076         2,442
Operating profit before exceptional           1,163         1,124         2,577
items
Exceptional items                         5   (249)          (48)         (135)
Operating profit                                914         1,076         2,442
Finance income                                   12            12            26
Finance expense                                (28)          (30)          (60)
Net finance expense                            (16)          (18)          (34)
Profit on ordinary activities before            898         1,058         2,408
taxation
Tax on profit on ordinary activities      6   (237)         (279)         (583)
Net income for the period                       661           779         1,825
 
Attributable to non-controlling                   1             4             4
interests
Attributable to owners of the parent            660           775         1,821
Net income for the period                       661           779         1,825
 
Earnings per ordinary share:
Basic earnings per share                  7   91.9p        106.5p        251.4p
Diluted earnings per share                7   90.4p        105.2p        248.4p
(a) refer to note 3 for further details.

Group Statement of Comprehensive Income

For the six months ended 30 June 2013

                                                          Six months ended            Year ended
                                                         30 June         30 June     31 December
                                                            2013            2012            2012
                                                                   (restated)(a)   (restated)(a)
                                                              £m              £m              £m
Net income for the period                                    661             779           1,825
Other comprehensive income
Items that may be reclassified to profit or loss in
subsequent periods
Net exchange adjustments on foreign currency                 167           (204)           (255)
translation, net of tax
Gains on cash flow hedges, net of tax                         10               -               3
Reclassification of foreign currency                           -               9               9
translation reserves on disposal of
subsidiary, net of tax
                                                             177           (195)           (243)
Items that will not be reclassified to profit or loss in
subsequent periods
Remeasurements of defined benefit pension                      1            (24)            (41)
plans, net of tax
                                                               1            (24)            (41)
Other comprehensive income for the period, net
of tax                                                       178           (219)           (284)
Total comprehensive income for the period                    839             560           1,541
Attributable to non-controlling interests                      1               2             (1)
Attributable to owners of the parent                         838             558           1,542
                                                             839             560           1,541
 
(a) refer to note 3 for further details.

Group Balance Sheet

As at 30 June 2013

                                             30 June  30 June 31 December
                                                2013     2012        2012
                                       Note       £m       £m          £m
ASSETS
Non-current assets:
Goodwill and other intangible assets          11,711   10,005      11,175
Property, plant and equipment                    753      716         737
Deferred tax assets                               62      115          49
Available for sale financial assets                2       10           2
Retirement benefit surplus                        20       27          27
Other receivables                                265       38          33
                                              12,813   10,911      12,023
Current assets:
Inventories                                      785      739         735
Trade and other receivables                    1,466    1,355       1,407
Derivative financial instruments                  40       36           4
Current tax receivables                           41        1          20
Available for sale financial assets               21        7           4
Cash and cash equivalents                        790    1,063         887
                                               3,143    3,201       3,057
Total assets                                  15,956   14,112      15,080
 
LIABILITIES
Current liabilities:
Borrowings                                   (3,597)  (2,948)     (3,271)
Provisions for liabilities and charges         (239)     (53)       (128)
Trade and other payables                     (3,106)  (2,846)     (2,842)
Derivative financial instruments                (11)      (4)        (43)
Current tax liabilities                        (133)    (265)       (203)
                                             (7,086)  (6,116)     (6,487)
Non-current liabilities:
Borrowings                                       (3)      (3)         (3)
Deferred tax liabilities                     (1,854)  (1,659)     (1,814)
Retirement benefit obligations                 (395)    (494)       (426)
Provisions for liabilities and charges         (186)    (125)       (100)
Non-current tax liabilities                    (342)    (211)       (311)
Other non-current liabilities                   (53)     (35)        (17)
                                             (2,833)  (2,527)     (2,671)
Total liabilities                            (9,919)  (8,643)     (9,158)
Net assets                                     6,037    5,469       5,922
 
EQUITY
Capital and reserves:
Share capital                            10       74       73          73
Share premium                                    243      155         184
Merger reserve                              (14,229) (14,229)    (14,229)
Hedging reserve                                   12      (1)           2
Foreign currency translation reserve              36     (83)       (131)
Retained earnings                             19,899   19,548      20,022
                                               6,035    5,463       5,921
Non-controlling interests                          2        6           1
Total equity                                   6,037    5,469       5,922


Group Statement of Changes in Equity

For the six months ended 30 June 2013


                                                      Foreign Retained        Total 
                                                     currency earnings attributable       
                   Share   Share   Merger Hedging translation Retained to owners of Non-controlling  Total                      
                 capital Premium  reserve reserve     reserve earnings   the parent       interests equity               
 Restated (a)         £m      £m       £m      £m          £m       £m           £m              £m     £m
                                                                                                          
Balance at 1          73      86 (14,229)     (1)         110   19,672        5,711              70  5,781
January 2012                                                                                              
                                                                                                          
Net income                                                         775          775               4    779
                                                                                                          
Other                                                   (193)     (24)        (217)             (2)  (219)
comprehensive                                                                                             
income                                                                                                    
                                                                                                          
Total                  -       -        -       -       (193)      751          558               2    560
comprehensive                                                                                             
income                                                                                                    
                                                                                                          
Transactions                                                                                              
with owners                                                                                               
                                                                                                          
Proceeds from                 69                                                 69                     69
share issue                                                                                               
                                                                                                          
Share-based                                                         28           28                     28
payments                                                                                                  
                                                                                                          
Current tax on                                                      11           11                     11
share awards                                                                                              
                                                                                                          
Shares                                                           (352)        (352)                  (352)
repurchased and                                                                                           
held in Treasury                                                                                          
                                                                                                          
Dividends                                                        (511)        (511)             (4)  (515)
                                                                                                          
Acquisition of                                                    (51)         (51)            (53)  (104)
non-controlling                                                                                           
interest                                                                                                  
                                                                                                          
Reclassification                                                                                (9)    (9)
of                                                                                                        
non-controlling                                                                                           
interest                                                                                                  
following loss                                                                                            
of control and                                                                                            
subsequent                                                                                                
disposal                                                                                                  
                                                                                                          
Total                  -      69        -       -           -    (875)        (806)            (66)  (872)
transactions                                                                                              
with owners                                                                                               
                                                                                                          
Balance at 30         73     155 (14,229)     (1)        (83)   19,548        5,463               6  5,469
June 2012                                                                                                 
                                                                                                          
Net income                                                       1,046        1,046               -  1,046
                                                                                                          
Other                                           3        (48)     (17)         (62)             (3)   (65)
comprehensive                                                                                             
income                                                                                                    
                                                                                                          
Total                  -       -        -       3        (48)    1,029          984             (3)    981
comprehensive                                                                                             
income                                                                                                    
                                                                                                          
Transactions                                                                                              
with owners                                                                                               
                                                                                                          
Proceeds from                 29                                                 29                     29
share issue                                                                                               
                                                                                                          
Share-based                                                         21           21                     21
payments                                                                                                  
                                                                                                          
Current tax on                                                      12           12                     12
share awards                                                                                              
                                                                                                          
Shares                                                           (183)        (183)                  (183)
repurchased and                                                                                           
held in Treasury                                                                                          
                                                                                                          
Dividends                                                        (405)        (405)                  (405)
                                                                                                          
Acquisition of                                                                                  (2)    (2)
non-controlling                                                                                           
interest                                                                                                  
                                                                                                          
Total                  -      29        -       -           -    (555)        (526)             (2)  (528)
transactions                                                                                              
with owners                                                                                               
                                                                                                          
Balance at 31         73     184 (14,229)       2       (131)   20,022        5,921               1  5,922
December 2012                                                                                             
                                                                                                          
Net income                                                         660          660               1    661
                                                                                                          
Other                                          10         167        1          178                    178
comprehensive                                                                                             
income                                                                                                    
                                                                                                          
Total                  -       -        -      10         167      661          838               1    839
comprehensive                                                                                             
income                                                                                                    
                                                                                                          
Transactions                                                                                              
with owners                                                                                               
                                                                                                          
Proceeds from          1      59                                                 60                     60
share issue                                                                                               
                                                                                                          
Share-based                                                         29           29                     29
payments                                                                                                  
                                                                                                          
Deferred tax on                                                      7            7                      7
share awards                                                                                              
                                                                                                          
Current tax on                                                      20           20                     20
share awards                                                                                              
                                                                                                          
Shares                                                           (279)        (279)                  (279)
repurchased and                                                                                           
held in Treasury                                                                                          
                                                                                                          
Dividends                                                        (561)        (561)                  (561)
                                                                                                          
Total                  1      59        -       -           -    (784)        (724)               -  (724)
transactions                                                                                              
with owners                                                                                               
                                                                                                          
Balance at 30         74     243 (14,229)      12          36   19,899        6,035               2  6,037
June 2013                                                                                                 

(a) refer to note 3 for further details.



Group Cash Flow Statement

For the six months ended 30 June 2013

                                                           Six months ended       Year ended
                                                         30 June       30 June   31 December
                                                            2013          2012          2012
                                                                 (restated)(a) (restated)(a)
                                                 Notes        £m            £m            £m
CASH FLOWS FROM OPERATING ACTIVITIES
Cash generated from operations Operating                                               2,442
profit
                                                             914         1,076
Depreciation, amortisation and impairment                     80            72           148
Fair value losses / (gains)                                    1           (1)           (7)
Gain on sale of property, plant & equipment and                -          (13)          (13)
intangible assets
Gain on sale of businesses                                     -          (32)          (32)
(Increase) / decrease in inventories                        (39)           (8)            19
(Increase) / decrease in trade and other                    (34)            23          (16)
receivables
Increase / (decrease) in payables and                        370          (39)         (167)
provisions
Share based payments                                          29            28            49
Cash generated from operations:                            1,321         1,106         2,423
Interest paid                                               (26)          (21)          (34)
Interest received                                             13            12            27
Tax paid                                                   (330)         (238)         (528)
Net cash generated from operating activities                 978           859         1,888
 
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property, plant & equipment                     (77)          (76)         (166)
Purchase of intangible assets                               (14)           (5)          (11)
Disposal of property, plant & equipment                        6             1            13
Disposal of intangible assets                                  -             9             9
Acquisition of businesses, net of cash            13       (413)             -         (877)
acquired
Disposal of businesses, net of cash disposed                   -            81            81
(Purchase) / maturity of short-term                         (18)             3             7
investments
Maturity of long-term investments                              -             7            14
Net cash outflow on deconsolidation of a                       -           (6)           (6)
subsidiary
Net cash generated (used in) / from investing              (516)            14         (936)
activities
 
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from issue of ordinary shares                        60            69            98
Shares purchased and held in Treasury                 10   (279)         (352)         (535)
Proceeds from borrowings                                     256           475           887
Repayments of borrowings                                     (7)             -         (112)
Dividends paid to owners of the parent                11   (561)         (511)         (916)
Dividends paid to non-controlling interest                     -           (4)           (4)
Acquisition of non-controlling interest               15    (28)         (104)         (106)
Net cash used in financing activities                      (559)         (427)         (688)
 
Net (decrease) / increase in cash and cash                  (97)           446           264
equivalents
Cash and cash equivalents at beginning of                    882           634           634
period
Exchange losses                                              (4)          (18)          (16)
Cash and cash equivalents at end of the period               781         1,062           882
 
Cash and cash equivalents comprise
Cash and cash equivalents                                    790         1,063           887
Overdrafts                                                   (9)           (1)           (5)
                                                             781         1,062           882
(a) refer to note 3 for further details.

Notes to the Half Year Condensed Financial Statements

For the six months ended 30 June 2013

1. General Information

Reckitt Benckiser Group plc is a public limited company listed on
the London Stock Exchange and incorporated and domiciled in the UK. The
address of its registered office is 103-105 Bath Road, Slough, Berkshire SL1
3UH.

The Half Year Condensed Financial Statements were approved by the
Board of Directors on 26 July 2013. The Half Year Condensed Financial
Statements have been reviewed, not audited.

2. Basis of Preparation

The Half Year Condensed Financial Statements for the six months
ended 30 June 2013 have been prepared in accordance with the Disclosure and
Transparency Rules of the Financial Conduct Authority and IAS 34 Interim
financial reporting as endorsed by the European Union. The Half Year Condensed
Financial Statements should be read in conjunction with the Annual Report and
Financial Statements for the year ended 31 December 2012, which have been
prepared in accordance with European Union endorsed International Financial
Reporting Standards (IFRS) and those parts of the Companies Act 2006
applicable to companies reporting under IFRS. The financial statements for the
year ended 31 December 2012 are also in compliance with IFRS as issued by the
International Accounting Standards Board.

These Half Year Condensed Financial Statements do not comprise
statutory accounts within the meaning of section 434 of the Companies Act
2006. Statutory accounts for the year ended 31 December 2012 were approved by
the Board of Directors on 8 March 2013 and delivered to the Registrar of
Companies. The report of the auditors on those accounts was unqualified, did
not contain an emphasis of matter paragraph and did not contain any statement
under section 498 of the Companies Act 2006.

The Group has considerable financial resources together with a
diverse customer and supplier base across different geographical areas and
categories. As a consequence, the Directors believe that the Group is well
placed to manage its business risks successfully despite the current uncertain
economic outlook. The Directors have a reasonable expectation that the Group
has adequate resources to continue in operational existence for the
foreseeable future. The Group therefore continues to adopt the going concern
basis of accounting in preparing its Half Year Condensed Financial Statements.

3. Accounting Policies and Estimates

Except as described below, the accounting policies adopted in the
preparation of the half year condensed financial statements are consistent
with those described on pages 43-46 of the Annual Report and Financial
Statements for the year ended 31 December 2012.

The Group applies, for the first time, amendments to IAS 1
Presentation of Items of Other Comprehensive Income, IFRS 10 Consolidated
Financial Statements, IFRS 11 Joint Arrangements, IFRS 12 Disclosure of
Interests in Other Entities, IFRS 13 Fair Value Measurement and IAS 19
(Revised) Employee Benefits

Amendments to IAS 1 require items of other comprehensive income
that may be reclassified to profit or loss to be presented separately from
items that will never be reclassified. The statement of comprehensive income
has been revised accordingly.

IFRS 10 replaces previous guidance on control and consolidation,
IFRS 11 requires joint arrangements to be accounted for as a joint operation
or as a joint venture depending on the rights and obligations of each party to
the arrangement, and IFRS 12 requires enhanced disclosures of the nature,
risks and financial effects associated with the Group's interests in
subsidiaries, associates, joint arrangements and unconsolidated structured
entities. The impact on the Group of applying these standards is not material.

IFRS 13 explains how to measure fair value and enhances fair value
disclosures. The standard does not

significantly change the measurement of fair value but codifies it
in one place. The impact on the Group is not material.

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

3. Accounting Policies and Estimates (continued)

IAS 19 (Revised) replaces the interest cost on pension scheme
liabilities and expected return on pension scheme assets with a net interest
amount that is calculated by applying the discount rate used to measure the
defined benefit obligation at the beginning of the period to the net defined
benefit liability / asset.

In addition, the Group now treats the net pension scheme interest
amount as finance income / expense. Previously the interest cost on pension
scheme liabilities and expected return on pension scheme assets were
classified in either cost of sales or net operating expenses. The Directors
believe that this change provides more relevant information about the
performance of the Group and aligns the Group's accounting policies with
common industry practice.

These restatements had no impact on the balance sheet and the
following impact on the income statement and statement of comprehensive
income.

                                                  Six months ended       Year ended
                                                      30 June 2012 31 December 2012
                                                                £m               £m
Group Income Statement
 
Decrease in cost of sales                                        1                1
Decrease in net operating expenses                               3                6
Increase in operating profit for the period                      4                7
Increase in finance expense                                   (10)             (19)
Decrease in tax on profit on ordinary activities                 2                4
Decrease in net income for the period                          (4)              (8)
 
Group Statement of Comprehensive Income
Decrease in actuarial losses, net of tax                         4                8
Increase in other comprehensive income                           4                8
Net impact on total comprehensive income                         -                -
Basic, diluted, adjusted basic and adjusted diluted earnings per
share all decreased 0.6 pence for the six months ended 30 June 2012 and 1.1
pence for the year ended 31 December 2012 as a result of the adoption of IAS
19 (Revised).

The Cash Flow statement was restated as a result of the change in
operating profit, with an offsetting decrease in payables and provisions.

Several other new standards and amendments apply for the first time
in 2013. However, they do not impact the accounting policies applied in
preparing the annual consolidated financial statements of the Group, or the
half year condensed financial statements. Furthermore, there are no standards,
amendments or interpretations that are not yet effective that would be
expected to have a material impact on the Group.

In preparing these Half Year Condensed Financial Statements the
significant estimates and judgments made by management in applying the Group's
accounting policies and the key sources of estimation uncertainty were the
same as those that applied to the consolidated financial statements for the
year ended 31 December 2012.

Income tax expense in the interim period is accrued using the tax
rate that would be applicable to the expected total annual profit. Refer to
note 6 for further details.

4. Operating Segments

The Executive Committee is the Group's Chief Operating Decision
Maker (CODM). Management has determined the operating segments based on the
reports reviewed by the Executive Committee for the purposes of making
strategic decisions. The Executive Committee considers the business
principally from a geographical perspective, but with the Pharmaceuticals
(RBP) and Food businesses being managed separately given the significantly
different nature of these businesses and the risks and rewards associated with
them.

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

4. Operating Segments (continued)

The geographical segments, comprising Europe and North America
(ENA); Latin America, North Asia, South East Asia and Australia & New Zealand
(LAPAC); and Russia & CIS, Middle East, North Africa, Turkey and Sub-Saharan
Africa (RUMEA), derive their revenue primarily from the manufacture and sale
of branded products in the Health, Home & Hygiene categories. RBP derives its
revenue exclusively from the sales of buprenorphine-based prescription drugs
used to treat opiate dependence and Food derives its revenue from food
products sold in ENA.

As previously announced the Scholl Footwear business, previously
reported as part of RUMEA, is now reported as part of ENA. Comparatives have
been restated on a consistent basis.

The Executive Committee assesses the performance of the operating segments
based on net revenue and operating profit before exceptional items. Finance
income and expense are not allocated to segments, as they are managed on a
central Group basis.

Items of income and expense which are not part of the results and financial
position of the operating segments, and therefore reported to the Executive
Committee outside of the individual segment financial information, are shown
in the Corporate segment. For the six months ended 30 June 2013 this is £nil.
For the six months ended 30 June 2012 this included profit on disposals of
intangible assets and the Paras Personal Care business and other corporate
provisions with a net effect of £30m.

Six months ended 30 June 2013     ENA LAPAC RUMEA Food Corporate Total ex RBP Total
                                                                      RBP
                                   £m    £m    £m   £m        £m       £m  £m    £m
Net revenue                     2,451 1,280   703  160         -    4,594 400 4,994
Operating profit before           525   233   141   36         -      935 228 1,163
exceptional items
Exceptional items (note 5)                                                    (249)
Operating profit                                                                914
Net finance expense                                                            (16)
Profit on ordinary activities before                                            898
taxation
Six months ended 30 June 2012   ENA LAPAC RUMEA Food Corporate Total ex RBP Total
restated(c)                                                         RBP
                                 £m    £m    £m   £m        £m       £m  £m    £m
Net revenue                   2,303 1,152   673  156         -    4,284 385 4,669
Operating profit before         463   209   141   36        30      879 245 1,124
exceptional items
Exceptional items (note 5)                                                   (48)
Operating profit                                                            1,076
Net finance expense                                                          (18)
Profit on ordinary activities                                               1,058
before taxation
Year ended 31 December 2012     ENA LAPAC RUMEA Food Corporate Total ex RBP Total
restated(c)                                                         RBP
                                 £m    £m    £m   £m        £m       £m  £m    £m
Net revenue                   4,744 2,327 1,338  321         -    8,730 837 9,567
Operating profit before       1,156   465   296   92        32    2,041 536 2,577
exceptional items
Exceptional items (note 5)                                                  (135)
Operating profit                                                            2,442
Net finance expense                                                          (34)
Profit on ordinary activities                                               2,408
before taxation
(c) restated for Scholl Footwear segment change and the impact of the
accounting policy change discussed in note 3.

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

4. Operating Segments (continued)

Analysis of Categories

The Group also analyses its revenue by the following categories.

                                  30 June 30 June 31 December
                                     2013    2012        2012
                                       £m      £m          £m
Health                              1,197     904       2,068
Hygiene                             1,993   1,879       3,682
Home                                  979     960       1,966
Portfolio Brands                      265     385         693
Food                                  160     156         321
                                    4,594   4,284       8,730
RB Pharmaceuticals                    400     385         837
                                    4,994   4,669       9,567
5. Exceptional Items

Exceptional items totalling £249m have been recognised in the six
months to 30 June 2013.

This includes £225m relating to legal provisions discussed in note
9.

The remaining £24m relates to the acquisition and integration of
Schiff, the collaboration with Bristol-Myers Squibb (BMS) and the
reconfiguration of the Group announced last year (six months ended 30 June
2012: £48m; year ended 31 December 2012: £135m relating to the implementation
of the Group's new area and category organisation, integration of SSL,
withdrawal of private label and further reconfiguration of the Group). This
consists primarily of legal and other professional fees, redundancy and
business integration costs which have been included within net operating
expenses.

6. Income Taxes

Income tax expense is recognised based on management's best
estimate of the weighted average annual income tax rate expected for the full
financial year. The estimated average annual tax rate used for the year to 31
December 2013 is 26% (the estimated tax rate for the six months ended 30 June
2012 was 26%).

The March 2013 Budget Statement contained the announcement of a
reduction to the UK corporation tax rate from 23% to 21% from 1 April 2014,
with a further reduction to 20% from 1 April 2015. The Finance Act 2013
includes the legislation to enact the future reduction in the UK tax rate to
20% but this legislation was not substantively enacted at the balance sheet
date and the effects of which are not included in these financial statements.

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

7. Earnings per Share

                                            Six months ended
                                          30 June 2013  30 June 2012
                                                       (restated)(a)
                                                 pence         pence
Basic earnings per share                          91.9         106.5
                                                  90.4         105.2
Diluted earnings per share
 
Adjusted basic earnings per share                120.3         111.9
Adjusted diluted earnings per share              118.3         110.5

(a) refer to note 3 for further details.

Basic

Basic earnings per share is calculated by dividing the net income
attributable to owners of the parent (six months to 30 June 2013: £670m; six
months to 30 June 2012 (restated): £775m) by the weighted average number of
ordinary shares in issue during the period (six months to 30 June 2013:
718,069,986; six months to 30 June 2012: 727,389,222).

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 two categories of dilutive potential
ordinary shares: Executive Options and Employee Sharesave schemes. 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 30 June 2013 there were nil (30 June 2012:
nil) Executive Share Options excluded from the dilution.

The Directors believe that diluted earnings per ordinary share,
adjusted for the impact of exceptional items after the appropriate tax amount,
provides additional useful information on underlying trends to shareholders in
respect of earnings per ordinary share.

Details of the adjusted net income attributable to owners of the
parent are as follows:

                                                              Six months ended
                                                          30 June 2013  30 June 2012
                                                                       (restated)(a)
                                                                    £m            £m
Net income attributable to owners of the parent                    660           775
Exceptional items                                                  249            48
Tax effect of exceptional items                                   (45)           (9)
Adjusted net income attributable to owners of the parent           864           814
(a) refer to note 3 for further details.

                                                                                  30 June 2013   30 June 2012
                                                                                Average number Average number
                                                                                     of shares      of shares
On a basic basis                                                                   718,069,986    727,389,222
Dilution of Executive Options outstanding and Executive Restricted Share Plan       11,142,889      8,292,794
Dilution for Employee Sharesave Scheme Options outstanding                             858,718        677,949
On a diluted basis                                                                 730,071,593    736,359,965

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

8. Net Debt

                                  30 June 30 June 31 December
                                     2013    2012        2012
Analysis of net debt                   £m      £m          £m
Cash and cash equivalents             790   1,063         887
Overdrafts                            (9)     (1)         (5)
Borrowings (excluding overdrafts) (3,591) (2,950)     (3,269)
Other                                  50      42        (39)
                                  (2,760) (1,846)     (2,426)

                                                       30 June 30 June 31 December
                                                          2013    2012        2012
Reconciliation of net debt                                  £m      £m          £m
Net debt at beginning of period                        (2,426) (1,795)     (1,795)
Net (decrease) / increase in cash and cash equivalents    (97)     446         264
Repayment of borrowings                                      7       -         112
Proceeds from borrowings                                 (256)   (475)       (887)
Borrowings acquired in business combination                  -       -        (99)
Exchange and other adjustments                              12    (22)        (21)
Net debt at the end of the period                      (2,760) (1,846)     (2,426)

9. Provisions for Liabilities and Charges

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.

Provisions for liabilities and charges include restructuring and
other provisions.

The restructuring provision of £33m (30 June 2012, £32m; 31
December 2012, £66m) relates principally to redundancies, the majority of
which is expected to be utilised within one year.

Within other provisions the Directors have recognised some
exceptional legal provisions. The Group is involved in a number of historic
regulatory investigations by various government authorities in Europe and
North America. These investigations involve mainly competition law inquiries,
most of which include several other companies. The Directors have made a
provision of £225m in respect to these matters. Other provisions include
onerous lease provisions and environmental and other obligations throughout
the Group, the majority of which are expected to be used within five years.
Total other provisions as at 30 June 2013 are £392m (30 June 2012, £146m; 31
December 2012, £162m).

10. Share Capital

                                 Equity     Nominal  Subscriber     Nominal
                               ordinary    value £m    ordinary    value £m
                                 shares                  shares
Issued and fully paid
At 1 January 2013           734,210,757          73           2           -
Allotments                    2,324,430           1           -           -
At 30 June 2013             736,535,187          74           2           -

In the six months to 30 June 2013 the Group acquired 6,000,000 of
its own equity ordinary shares through purchases on the London Stock Exchange.
The total amount paid to acquire the shares was £279m (including stamp duty)
which has been deducted from shareholders' equity. The shares are now held as
`Treasury shares' and the Company has the right to re-issue these shares at a
later date. All shares were fully paid.

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

11. Dividends

A final dividend of 78.0 pence per share for the year ended 31
December 2012 was paid on 30 May 2013 to shareholders who were on the register
on 22 February 2013. This amounted to £561m.

The Directors are proposing an interim dividend in respect of the
year ending 31 December 2013 of [60.0] pence per share which will absorb an
estimated £431m of shareholders' funds. It will be paid on 26 September 2013
to shareholders who are on the register on 9 August 2013.

12. Contingent Liabilities

The Group is involved in a number of investigations by government
authorities and has made provisions for such investigations, where
appropriate. Where it is too early to determine the likely outcome of these
matters, or to make a reliable estimate, the Directors have made no provision
for such potential liabilities.

The Group from time to time 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.

13. Business Combinations

Collaboration with Bristol-Myers Squibb (BMS)

On 8 May 2013 the Group received regulatory approval for a
three-year collaboration agreement with BMS for a number of market-leading
over-the-counter consumer health care brands in Brazil, Mexico and certain
other parts of Latin America. This arrangement, which also includes personnel,
supply contracts and an option to acquire legal title to the related
intellectual property at the end of the collaboration period for a multiple of
earnings, was secured for an upfront cash payment of $482m (£311m). This
transaction is accounted for as a business combination under IFRS 3 (Revised)
Business Combinations.

The collaboration agreement provides the Group with an immediate
healthcare platform, distribution network and infrastructure in Latin America
and trusted brands with a strong fit with the Group's existing health
portfolio.

All assets and liabilities were recognised at the following
provisional fair values. The amount of consideration transferred over the net
assets acquired is recognised as goodwill in the Group financial statements.

                                                                Provisional
                                                                 fair value
                                                                         £m

Intangible asset                                                         57
Deferred tax assets                                                       4
Provisions                                                             (16)

Net assets acquired                                                      45
Goodwill                                                                 36

Consideration transferred for net assets and goodwill                    81
Payment for prepaid option                                              250

Total consideration transferred                                         331

Cash consideration                                                      311
Deferred consideration                                                   20

Total consideration transferred                                         331

Related to the transaction payments totalling £250m were made to
BMS in relation to the future option to acquire legal title to the related
intellectual property. The option is exercisable by the Group at the end of
the collaboration period, subject to certain payments, in addition to the
£331m, to be made at that time. The prepayment of this option is not an asset
purchased as part of the business combination under IFRS 3 (Revised), and is
therefore disclosed separately.

Notes to the Half Year Condensed Financial Statements continued

For the six months ended 30 June 2013

13. Business Combinations (continued)

The intangible asset acquired relates to the 3-year collaboration
agreement.

Goodwill represents the strategic premium to establish an immediate
platform, infrastructure and distribution network in the Latin American
over-the-counter consumer health care market, the value of expected synergy
savings, and assembled workforce.

Acquisition related costs of £3m are included in net operating
expenses and exceptional items in the income statement.

The fair value of identifiable net assets are stated at provisional
amounts which will be finalised within the 12-month hindsight period following
acquisition. Provisional fair value adjustments cover the recognition of
acquired intangibles and their associated deferred tax and accounting policy
alignment.

All assets and liabilities are included within the LAPAC reportable
segment and the health category.

Acquisition of Oriental Medicine Company Limited

On 8 January 2013 the Group obtained control of Oriental Medicine
Company Limited, a manufacturer of traditional Chinese sore throat products,
by acquiring 100% of the share capital.

14. Financial Instruments

Carrying amounts versus fair values

The carrying amounts of all financial assets and financial
liabilities in the Group balance sheet, listed below, as at 30 June 2013 and
30 June 2012 are a reasonable approximation of their fair value.

- Auction rate securities
- Short-term deposits
- Trade and other receivables
- Derivative financial instruments - FX forward contracts
- Cash and cash equivalents
- Borrowings (including finance lease obligations)
- Trade and other payables
- Other non-current liabilities
 
The Group's financial instruments carried at fair value are not
considered material, and as such, the valuation methods and fair value
hierarchy levels are not disclosed as at 30 June 2013. For further information
on valuation methods refer to the Group's Annual Report and Financial
Statements for the year ended 31 December 2012.

The Group's financial risk management objectives and policies are
consistent with those disclosed in the Annual Report and Financial Statements
for the year ended 31 December 2012.

15. Related Parties

On 19 March 2013 the Group purchased a further 24.95% interest in
Shanghai Manon Trading Limited from the non-controlling interests.
The Group has a forward contract to purchase the remaining non-controlling
interest in 2016 and the present value of the expected cash outflow is
included in other non-current liabilities. There were no other related party
transactions.

16. Seasonality

Demand for the majority of the Group's products is not subject to
significant seasonal fluctuations. Some health and pest control products do
exhibit seasonal fluctuations. Peak demand in the northern hemisphere markets
offsets lower demand in the southern hemisphere markets and vice-versa. The
intensity of, in particular, the influenza season can vary from year to year
with a corresponding influence on the Group's performance.

Statement of Directors' Responsibilities

The Directors confirm that, to the best of their knowledge, these
Half Year Condensed Financial Statements have been prepared in accordance with
International Accounting Standard 34 `Interim Financial Reporting' as adopted
by the European Union and as issued by the International Accounting Standards
Board, and that the interim management report includes a fair review of the
information required by DTR 4.2.7 and DTR 4.2.8, namely:

- an indication of important events that have occurred during the
first six months and their impact on the Half Year Condensed Financial
Statements, and a description of the principal risks and uncertainties for the
remaining six months of the financial year; and

- material related party transactions in the first six months of
the financial year and any material changes in the related party transactions
described in the last annual report.

The Directors of Reckitt Benckiser Group plc are listed in the
Reckitt Benckiser Group plc Annual Report and Financial Statements for 31
December 2012. A list of current Directors is maintained on the Reckitt
Benckiser Group plc website: www.rb.com.

By order of the Board


Rakesh Kapoor
Chief Executive Officer


Adrian Bellamy
Director

26 July 2013



Independent Review Report to Reckitt Benckiser Group plc

Introduction

We have been engaged by the company to review the Half Year
Condensed Financial Statements in the half-yearly financial report for the six
months ended 30 June 2013, which comprise the Group income statement, the
Group statement of comprehensive income, the Group balance sheet, the Group
statement of changes in equity, the Group cash flow statement and related
notes. We have read the other information contained in the half-yearly
financial report and considered whether it contains any apparent misstatements
or material inconsistencies with the information in the Half Year Condensed
financial statements.

Directors' responsibilities

The half-yearly financial report is the responsibility of, and has
been approved by, the directors. The directors are responsible for preparing
the half-yearly financial report in accordance with the Disclosure and
Transparency Rules of the United Kingdom's Financial Conduct Authority.

As disclosed in note 1, the annual financial statements of the
group are prepared in accordance with IFRSs as adopted by the European Union
and IFRSs as issued by the International Accounting Standards Board. The Half
Year Condensed Financial Statements included in this half-yearly financial
report have been prepared in accordance with International Accounting Standard
34, "Interim Financial Reporting", as adopted by the European Union and as
issued by the International Accounting Standards Board.

Our responsibility

Our responsibility is to express to the company a conclusion on the
Half Year Condensed Financial Statements in the half-yearly financial report
based on our review. This report, including the conclusion, has been prepared
for and only for the company for the purpose of the Disclosure and
Transparency Rules of the Financial Conduct Authority and for no other
purpose. We do not, in producing this report, accept or assume responsibility
for any other purpose or to any other person to whom this report is shown or
into whose hands it may come save where expressly agreed by our prior consent
in writing.

Scope of review

We conducted our review in accordance with International Standard
on Review Engagements (UK and Ireland) 2410, `Review of Interim Financial
Information Performed by the Independent Auditor of the Entity' issued by the
Auditing Practices Board for use in the United Kingdom. A review of interim
financial information consists of making enquiries, primarily of persons
responsible for financial and accounting matters, and applying analytical and
other review procedures. A review is substantially less in scope than an audit
conducted in accordance with International Standards on Auditing (UK and
Ireland) and consequently does not enable us to obtain assurance that we would
become aware of all significant matters that might be identified in an audit.
Accordingly, we do not express an audit opinion.

Conclusion

Based on our review, nothing has come to our attention that causes
us to believe that the Half Year Condensed Financial Statements in the
half-yearly financial report for the six months ended 30 June 2013 are not
prepared, in all material respects, in accordance with International
Accounting Standard 34 as adopted by the European Union and as issued by the
International Accounting Standards Board, and the Disclosure and Transparency
Rules of the United Kingdom's Financial Conduct Authority.

PricewaterhouseCoopers LLP
Chartered Accountants
London

26 July 2013

Notes:

 (a) The maintenance and integrity of the Reckitt Benckiser Group
plc website is the responsibility of the directors; the work carried out by
the auditors does not involve consideration of these matters and, accordingly,
the auditors accept no responsibility for any changes that may have occurred
to the financial statements since they were initially presented on the
website.

 (b) Legislation in the United Kingdom governing the preparation
and dissemination of financial statements may differ from legislation in other
jurisdictions.

Close


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Half-Year Results 2013 - RNS