Annual Report and Accounts 2022
BUILDING A CLEANER
HEALTHIER WORLD
01 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CONTENTS
ABOUT THIS REPORT
This report has been
producedtooptimise the
readingexperienceonline.
Culture and Inclusion
Our Strategy
Our Business Model
STRATEGIC REPORT
02 Investment Case
03 At a Glance
05 Chair’s Statement
07 Chief Executive Officer’s Statement
09 Culture and Inclusion
12 Our Strategy
13 Our Business Model
14 Market Context
16 Our Sustainability Approach
andPerformance
18 Key Performance Indicators
20 Progress Against Our Strategy: Hygiene
23 Progress Against Our Strategy: Health
26 Progress Against Our Strategy: Nutrition
29 Focus on: Innovation
33 Focus on: Executional Resilience
36 Focus on: Digital Transformation
39 Focus on: Our Productivity Journey
41 Focus on: Human Health
and Planetary Health
44 Focus on: Winning in
Attractive Categories
47 Stakeholder Engagement
59 TCFD Summary
62 S172 Statement
65 Non-Financial Information Statement
68 Group Financial Review
80 Risk Management
87 Our Viability Statement
GOVERNANCE
88 Corporate Governance Report
91 Board Leadership and Company Purpose
103 Division of Responsibilities
107 Composition, Succession and Evaluation
109 Nomination Committee Report
113 Audit Committee Report
120 CRSEC Committee Report
126 Directors’ Remuneration Report
156 Report of the Directors
160 Statement of Directors’ Responsibilities
FINANCIAL STATEMENTS
161 Independent Auditor’s Report
177 Financial Statements
241 Shareholder Information
For further information
see page 9
For further information
see page 12
For further information
see page 13
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02 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
INVESTMENT CASE
RIGHT CATEGORIES
Large addressable
market,attractive
growthand margins
MARKET-LEADING BRANDS
Trusted and loved brands
thatinnovate and grow
acrosslarge demand spaces
ATTRACTIVE
EARNINGSMODEL
High gross margin business
driving a strong earnings model
SUPERIOR EXECUTION
Relentless focus on execution
SUSTAINABILITY EMBEDDED
Sustainability embedded
inhow the companyruns
OWNERSHIP CULTURE
Strong and evolving
culture:run by owners
REASONS TO INVEST
ORGANIC REVENUE GROWTH
MID-SINGLE
DIGIT
MEDIUM-TERM TARGET
ADJUSTED OPERATING
PROFIT (AOP) MARGIN
BYTHE MID-20S
MID-20s
MEDIUM-TERM TARGET
IMPROVEMENT IN CUSTOMER
RELATIONSHIP SCORE
+100bps
SHARE OF MARKETS WHERE
RECOGNISED AS TOP TIER
BYSUPPLIER PARTNERS
2
+6 positions
REACHING RECKITT’S
HIGHEST RANK IN US KANTAR
POWERRANKING SURVEY
SINCE 2015
3
NET REVENUE FROM MORE
SUSTAINABLE PRODUCTS
24.4%
REDUCTION IN ABSOLUTE
CARBON EMISSIONS IN OUR
OPERATIONS SINCE 2015
66%
EMPLOYEE
SHAREHOLDERS
c.50%
1. Claims based on information
aggregated and reported in part
from data supplied by Nielsen
through its Retail Measurement
Services and in part from data inputs
from other suppliers, in each case, for
the relevant category, geographic
focus and latest available MAT
2. Based on Advantage Group 2022
survey of retailers. 100bps increase
inmarkets rated top tier, from 43.7%
in 2021 to 44.7% 2022. Share of
markets excludes US
3. Kantar USA PowerRanking overall
composite score 2016-2022
HYGIENE
1
#1 globally #1 globally#1 globally #3 globally #3 globally
HEALTH
1
#1 globally #1 globally#1 globally #1 Europe #2 US
NUTRITION
1
#1 globally #2 globally
03 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
AT A GLANCE
FINANCIAL HIGHLIGHTS STRATEGIC HIGHLIGHTS SUSTAINABILITY HIGHLIGHTS
CATEGORY MARKET UNITS (CMUS)
HOLDING OR GAINING MARKET SHARE
62%
2021: 62%
TOTAL RECKITT SHARE OF
TOTAL DISTRIBUTION POINTS
3
+70bps
2021: +110bps
4
SHARE OF MARKETS WHERE RECOGNISED
ASTOP TIER BY SUPPLIER PARTNERS
2
+100bps
2021: +930bps
LIKE-FOR-LIKE (LFL)
NET REVENUE GROWTH¹
7.6%
2021: 3.5%
ADJUSTED OPERATING
MARGIN EXCL. IFCN CHINA¹
23.8%
2021: 22.9%
ADJUSTED TOTAL EPS¹
DILUTED
341.7p
2021: 288.5p
FULL YEAR DIVIDEND
183.3p
2021: 174.6p
IFRS NET REVENUE GROWTH
9.2%
2021: -5.4%
IFRS OPERATING MARGIN
22.5%
2021: -6.1%
IFRS TOTAL EPS
DILUTED
324.7p
2021: -4.5p
NET REVENUE FROM MORE
SUSTAINABLE PRODUCTS
24.4%
2021: 24.9%
ABSOLUTE REDUCTION IN GREENHOUSE GAS
EMISSIONS FROM OPERATIONS SINCE 2015
66%
2021: 66%
INVESTED IN FIGHT FOR
ACCESS FUND IN 2022
£32m
2021: £38m
1. Adjusted and other non-GAAP measures, definitions and terms are defined on
page 75
2. Based on Advantage Group 2022 survey of retailers. 100bps increase in markets
rated top tier, from 43.7% in 2021 to 44.7% 2022. Share of markets excludes US
3. Increase from 24.0% (YTD Oct 2021) to 24.7% (YTD Oct 2022)
4. Increase from 22.2% (Dec 2020) to 23.3% (Nov 2021)
04
Surface & Disinfection
Auto Dishwash
Air Care
Fabric Additives
Lavatory Care
Pest Control
Other
OTC
Germ Protection
Intimate Wellness
VMS
Personal Care
Infant & Child
Specialty & Adult
North America
Europe/ANZ
Developing Markets
North America
Europe/ANZ
Developing Markets
North America
Europe/ANZ
Developing Markets
Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
AT A GLANCE CONTINUED
OUR GLOBAL BUSINESS UNITS
HYGIENE HEALTH NUTRITION
NET REVENUE
£5,992m
14.7% LFL net revenue growth
18.6% IFRS net revenue growth
NET REVENUE
£5,960m
-3.1% LFL net revenue growth
0.8% IFRS net revenue growth
41%
of Group net revenue
42%
of Group net revenue
17%
of Group net revenue
CATEGORY PROFILE CATEGORY PROFILE CATEGORY PROFILE
NET REVENUE
£2,501m
22.9% LFL net revenue growth
10.2% IFRS net revenue growth
ADJ USTE D
OPERATING PROFIT
£1,648m
27.5% adjusted operating
profitmargin
ADJ USTE D
OPERATING PROFIT
£1,214m
20.4% adjusted operating
profitmargin
GEOGRAPHICAL PROFILE GEOGRAPHICAL PROFILE GEOGRAPHICAL PROFILE
ADJ USTE D
OPERATING PROFIT
£577m
23.1% adjusted operating
profitmargin
05 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CHAIR’S STATEMENT
PROGRESS AND
RESILIENCE IN AN
EVENTFUL YEAR
Reckitt today is a well-invested,
resilient business with a clear
strategy and purpose, a strong
culture, dynamic and committed
leadership and an excellent
portfolio of leading and
trustedbrands.
CHRIS SINCLAIR
CHAIR
06 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CHAIR’S STATEMENT CONTINUED
1. Adjusted and other non-GAAP measures, definitions
andterms are defined on page 75
Reckitt’s Purpose to protect, heal and nurture in
the relentless pursuit of a cleaner and healthier
world remains central to our future and we
remain focused on delivering our strategy.
At the same time, governance and risk
management continue to be very important
areas of focus for the Board. Alongside our
sustainability agenda, all three elements are key
to our investments and initiatives and enhance
the safety and efficacy of our products.
Talent and culture
Also key to our investments and initiatives is
our cultural agenda. For example, we have
expanded and deepened our commitments
ondiversity, equity and inclusion. More broadly,
we are building a vibrant culture founded
on purpose and governed by our Compass.
Both affect the way we operate, how we
think of ourselves and our approach to the
wider world. Progress here is increasingly
making Reckitt a place where everyone has
a real opportunity to succeed and grow.
Executive change
Reckitt saw the departure of our former CEO,
Laxman Narasimhan, in September. We were
fortunate that Nicandro Durante was willing
and ready to step in for an interim period, to
help steer the company on our continued
transformation journey, and to give the Board
time to find the right permanent successor.
As Reckitt’s longest-serving Non-Executive
Director, Nicandro already knew our company
well. This, along with his experience as a
global FMCG CEO and strong track record
of managing change, equipped him for
the task. Nicandro is ably supported by a
strong and committed leadership team.
Reckitt saw strong all-round performance
in 2022, delivering 7.6% LFL net revenue
growth
1
. Weexecuted effectively and
delivered on our priorities, whilst advancing
on our transformation journey during what
was yet another challenging year.
Last year I wrote about the company being at
an inflection point. I suggested then that the
benefits from our transformation journey would
become increasingly apparent, and they have –
inthe progress, flexibility and resilience Reckitt
has demonstrated this year, against a backdrop of
market volatility, inflation and economic disruption.
Our problem-solving, innovative culture has been
a driving force in helping us successfully navigate
both supply bottlenecks and demand spikes.
When the war in Ukraine threatened sunflower oil
supplies, we acted fast to source alternatives and
sustain production. Faced with a sudden shortage
of infant formula in the US, we swiftly ramped up
supply to help ensure babies continued to have
access to the nutrition they needed. These are
clear examples of the organisation’s ability to
manage and excel through dynamic change.
Business performance
There is also momentum in our financial
performance, and we remain on track to meet
ourmedium-term targets.
With respect to our transformation, the business
has now pivoted from focusing on foundational
changes to enjoying the benefits of those changes
already implemented. Sharper execution, a more
flexible and resilient supply chain, expanded
capacity, better customer service and continually
improving digital capabilities have all helped
to deliver strong underlying performance
across our portfolio of purpose-led brands.
The process for naming a new CEO is well
underway with assessments of both internal
andexternal candidates. We look forward to
updating shareholders and the market as soon
aswe are able.
Finally, I’d like to express my gratitude to Laxman
for his important contribution over the past three
years. Reckitt today is a stronger company with
excellent talent and well positioned for the future.
Changes to the Board
Recent appointments have refreshed and
strengthened the Board. In February 2022,
wewere pleased to welcome Alan Stewart
asa Non-Executive Director. As former CFO
atTesco, Alan brings a wealth of experience,
and his insights are already helping to inform
ourapproach to strengthening retail partnerships.
Alan was also appointed as Chair of the
Remuneration Committee, replacing Mary Harris
in that role. Mary continues to be a valued
member of the Remuneration Committee.
Following Nicandro becoming CEO, Jeremy
Darroch joined us as Senior Independent
Non-Executive Director in November and was
appointed to the Remuneration Committee
and the Nomination Committee. Formerly
Executive Chairman and Group Chief Executive
of Sky, Jeremy is an outstanding leader with
considerable expertise in the consumer retail
environment, built up over a successful career
at some of the UK’s highest-profile companies.
We are also delighted to welcome Tamara
Ingram OBE as a Non-Executive Director and
member of the Audit Committee from February
2023. With many years of experience at major
advertising firms, including as Global Chair of
Wunderman Thompson and CEO of McCann
Worldgroup in London, Tamara’s informed
perspective, on marketing and communication
issues especially, will add tremendously
to the quality of our deliberations.
In February 2020, the Board committed
to maintain the dividend at 2019 levels as
investments were made to benefit long-term
sustainable growth. The Board has updated
its dividend policy and now aims to deliver
sustainable dividend growth in future years,
subject to any significant internal or external
factors. Accordingly, the 2022 dividend has been
increased by 5% in line with this objective.
The Board of Directors recommends a final
2022 dividend of 110.3 pence, which when
added to the interim dividend of 73.0 pence,
gives afull-year dividend of 183.3 pence
(2021:174.6pence). Subject to shareholder
approval at the Annual General Meeting, this will
be paid on 24 May 2023 to shareholders on the
register at the record date of 11 April 2023.
Conclusion
In summary, Reckitt today is a well-invested,
resilient business with a clear strategy
and purpose, a strong culture, dynamic
and invested leadership and an excellent
portfolio of leading and trusted brands.
With good momentum and a strategy fit for
the times, we are well placed to both manage
upcoming challenges and respond to opportunities.
We approach the future with confidence.
Wewill continue to drive sustainable growth
and deliver on our priorities and purpose. We
know these are the right priorities and we will
continue forging our path to long-term success
for Reckitt, its shareholders and its stakeholders.
07 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S STATEMENT
A YEAR OF
DELIVERY AND
MOMENTUM
Our growth strategy is delivering.
The Group is now 28% larger
than in 2019 on a like-for-like
netrevenue basis, driven by the
strength of our iconic brands,
which are often number one or
twoglobally orin their markets.
NICANDRO DURANTE
CHIEF EXECUTIVE OFFICER
08 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CHIEF EXECUTIVE OFFICER’S STATEMENT CONTINUED
Overview
Reckitt has a unique portfolio of brands that
consumers love, trust and rely on to protect, heal
and nurture millions of people each and every day.
Our brands are steeped in history and are
iconic leaders in their categories, often ranked
number one or two globally or in their markets.
Each brand also has a specific fight, aligned
with the Sustainable Development Goals,
which helps to identify unmet opportunities.
Our strong brands therefore have the equity
to expand into adjacent categories, travel
to new geographies, earn trust from new
consumers and stand for something bigger.
That equity has helped drive growth in our
market share and penetration and has allowed
us to move into new spaces and places,
deepening and broadening the reach of our
trusted brands in high-growth categories.
Behind everything we do is our culture, which
guides each of us to Own, Create, Deliver and
Care. Our focus on sustainability steers our work
towards a cleaner, healthier world through our
purpose-led brands. Overall, we contribute
to a healthier planet and a fairer society.
2022, a year of strong delivery in
challengingconditions
When I took over as CEO in October 2022,
itwasimmediately clear that our growth
strategy is delivering. In 2022, amid an extremely
challenging environment of high inflation,
consumers facing cost-of-living pressures and
global supply challenges, we delivered 7.6%
like-for-like net revenue growth
1
, aresilient
gross margin performance and strong
adjusted operating margin expansion of 90bps
(excluding IFCN China) to 23.8%. The Group
is now 28% larger than in 2019 on a LFL net
revenue basis with price/mix improvements
of around 18%, and volume growth of around
10%, with broad-based growth across our
three Global Business Units (GBUs).
Our resilient performance was underpinned by
sequential improvement in our Hygiene GBU
throughout the year as the Lysol base continued
to normalise, and ongoing momentum in the
Health GBU, led by OTC brands and our Intimate
Wellness portfolio. The Nutrition GBU also made
good progress, with solid net revenue growth
aside from the short-term outperformance
resulting from a competitor’s supply issue.
Our in-market competitiveness remains
strong, with 62% of our core Category Market
Units (CMUs) holding or gaining share. This
performance is due to a more resilient supply
chain, improved in-store execution and successful
innovation that is increasingly supported by deep
consumer insights and investment in science.
I am particularly proud of the outstanding
delivery by our Nutrition team in the US, where
the supply of infant formula was a serious issue
during much of the year. The team’s focus on
doing everything possible to put more formula
on shelves, addressing concerns of parents
across the US, whilst safeguarding quality and
safety, was exceptional and a testament to
the Reckitt ‘can-do’ attitude. Asaresult, we
delivered more than 1.8 billion 8oz servings
of infant formula in North America.
A firm focus on execution in 2023
Market conditions in 2023 are likely to remain
challenging, with further inflation and consumers
facing continued financial pressures. We are mindful
of these issues; however, we have good momentum,
a strong innovation pipeline and an organisation
fully focused on delivering superior products.
We target another year of mid-single-digit growth
in 2023, excluding the impact of the 2022 one-off
gain from competitor supply issues in our US
Nutrition business. This impact is approximately
+2.5% on our LFL net revenue growth in 2022.
Looking ahead, with our strong innovation
pipeline, improved executional muscle, and
significant penetration opportunities, we
are well positioned to deliver sustainable
mid-single-digit growth in the medium term.
Creating long-term value
The Group Executive Committee and I are
committed to maximising long-term value for our
shareholders. Our interests are fundamentally
aligned through our market-leading shareholding
requirements for all of our top management.
Reckitt is well positioned to create long-term value
for all of its stakeholders. This starts withastrong
growth algorithm from its trusted, market-leading
brands operating in growth categories, and is
bolstered by all the improvements we’ve made
in the business and the opportunities ahead.
The quality of our categories and the strength
of our brands enable us to achieve leading
gross margins in our peer group. It is these
high gross margins that fund investment in
innovation, support for our brands and our fixed
cost infrastructure, whilst delivering strong
adjusted operating profits and margins.
In summary, we have a unique portfolio of
trusted, market-leading brands in structurally
attractive categories with significant headroom
for growth. This, combined with our progress to
date, gives me great confidence in our future.
CORE CMUS GAINING
OR HOLDING SHARE
62%
GROUP LFL NET REVENUE
GROWTH VS 2019
28%
1. Adjusted and other non-GAAP measures, definitions
andterms are defined on page 75
09
Do the
right thing.
Always.
Put consumers
and people first
Build shared
success
Seek out new
opportunities
Strive for
excellence
Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CULTURE AND INCLUSION
DYNAMIC, INCLUSIVE
AND COLLABORATIVE
We are nurturing our dynamic,
inclusive and collaborative culture
to take onthe fight for a cleaner,
healthier world. We celebrate
andencourage behaviours rooted
inourshared sense of purpose.
OUR PURPOSE
OUR COMPASS
OUR FIGHT
OUR LEADERSHIP BEHAVIOURS
Our Compass guides our business. At its heart is the
goalof doing the right thing. Always. We put consumers
and people first, seek out new opportunities, strive
forexcellence and join forces to win bigger and build
aculture of shared success.
We have a fight on our hands. A fight to make access
tothe highest-quality hygiene, wellness and nourishment
a right, not a privilege.
Our culture aims to empower our people to always bring
their authentic self to work so they can operate attheir
best. This is articulated in our Leadership Behaviours,
which set out our expectations about how webehave.
Everyone at Reckitt, not just our leaders, is expected to
Own, Create, Deliver and Care. These behaviours define
how we operate and how we make decisions.
Own
– Live our Purpose, Fight
andCompass
– Know our business cold
– Make decisions
Create
– Spot opportunities
– Innovate, iterate andscale
– Relentlessly build better
Deliver
– Focus on what matters
– Move boldly and at pace
– Join forces to win bigger
Care
– Actively listen, learn
andinclude
– Speak direct with respect
– Act to unleash potential
10 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CULTURE AND INCLUSION CONTINUED
United by Purpose
Our Purpose, Fight, Compass and Leadership
Behaviours have been widely welcomed and
adopted within the company. Our culture
has evolved to support this strategy and
cement our status as a purpose-driven,
consumer-centric business.
Reckitt has long been recognised as a place
where people take responsibility for making things
happen. Now, that drive for delivery and innovation
is even more strongly combined with a sense of
purpose. We take care of each other and recognise
we all have a part to play in making access to the
highest-quality hygiene, wellness and nutrition
a right, not a privilege. A dynamic, inclusive and
collaborative culture is at the heart of that.
We build sustained business performance by
encouraging the four Leadership Behaviours that
promote and embed our purpose-led culture.
We want our people to Own their decisions,
whilst living our Purpose and Compass every
day. We seek to Create new opportunities
to relentlessly pursue our Purpose, whilst
putting people and consumers first. Deliver
encapsulates our commitment to superior
execution. Last but not least, we Care about
others within the company and in wider society.
Leveraging diversity
Our cultural diversity is a key strategic capability.
With around 40,000 people of 125 different
nationalities operating in 68 countries spanning
six continents, we closely reflect and represent
the consumers and communities we serve. This
leaves us better placed to develop solutions our
consumers really need, whilst having a positive
impact and helping build a more inclusive world.
We are gathering global diversity information,
with employee consent, to enrich our
understanding of the make-up of our
workforce and colleagues’ experiences.
Taking care of each other
We continually assess how best to care for
colleagues and deliver exceptional business
performance, whilst adapting to changing
socialand economic conditions.
We live in volatile and challenging times. After
a pandemic that changed the world of work
overnight and triggered demand disruption and
supply chain bottlenecks, we have faced cost
inflation and product availability challenges.
In 2022, the war in Ukraine, the ongoing
cost-of-living crisis and increased energy
prices have all taken their toll. Our people
have demonstrated tremendous talent and
resilience by responding effectively to these
external pressures, whilst still progressing
Reckitt’s own transformational journey.
This year, we decided to mark this outstanding
effort and recognise the added financial
burden we all face, with a one-off appreciation
bonus or salary increase for the majority of
our employees globally. A fixed amount,
agreed country-by-country, was awarded
to the majority of employees below senior
management. This ensured that colleagues
most affected by the rising cost of living
received the largest percentage benefit.
When reviewing compensation, we take
account of inflation, salary market norms
andaffordability in determining pay levels.
Colleagues’ safety and security are paramount.
In February 2022, following the outbreak of
the war in Ukraine, we temporarily suspended
our operations there. Despite this, we have
committed to continuing to pay the salaries
to our colleagues in Ukraine at least until
mid-2023. We are also engaged in a process
aimed at transferring ownership of our Russian
business. We continue to employ and support
our Russian colleagues whilst this is underway.
Mental health and wellbeing
Promoting wellbeing is not just an employee
consideration at Reckitt, it goes to the core of who
we are: we exist to protect, heal and nurture in the
relentless pursuit of a cleaner, healthier world.
In March 2022, we launched our Global Wellbeing
Policy. This sets out our ambition to create an
environment where people can live a betterlife.
It recognises mental health as critical to
that and reflects our belief that focusing on
125
nationalities operating in 68 countries,
spanning six continents reflects
ourdiverse culture
Our culture of ownership
drives us to live our
Purpose in our Fight,
model our Leadership
Behaviours and
deliversustained
highperformance.
RANJAY RADHAKRISHNAN
CHIEF HUMAN RESOURCES OFFICER
11 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
CULTURE AND INCLUSION CONTINUED
colleagues’ personal and professional wellbeing is
foundational for sustained business performance.
We have a wide range of tools and resources to
support employees’ mental health and wellbeing.
People share stories through our global Stronger
Together conversations, including each year
on World Mental Health Day. Performance
coaches support Reckitt’s leaders in managing
constant change, beating fatigue, and resetting
and refocusing. Employees are encouraged to
take time out for monthly Wellbeing Boosters
where performance coaches provide tips
and tools to support them on their wellbeing
journey. We’ve also teamed up with Heart On
My Sleeve, a global organisation focused on
emotional wellness, which helps people forge
meaningful connections through understanding,
peer support and community engagement.
Employee Resource Groups (ERGs)
ERGs are employee networks that aim to raise
the visibility of underrepresented communities.
They provide a space for colleagues to connect
and support each other. ERGs welcome anyone
who wants to advance group interests, either
as a community member or as an ally.
ERGs are represented on our Global Inclusion
Board and provide input on consumer
perspectives, which inform our innovation process.
This Board is led by our CEO and includes senior
business leaders as well as ERG representatives.
Their work is complemented by Local Inclusion
Boards working with local ERGs. Chaired by
regional general managers, these provide
representation and support in specific markets.
With the launch of our new Disability ERG in
April2022 we now have four global ERGs.
Women@Reckitt works to unlock the potential
of women at Reckitt and transform the way we
think about gender. LGBTQ+ @Reckitt celebrates
diversity in all its forms. It aims to eradicate
discrimination and empower LGBTQ+ people
to bring their whole selves to work. The Race
and Ethnicity ERG encourages conversations
and promotes corporate actions to create an
environment where employees of all races and
ethnicities can thrive. Our Disability ERG enables
and empowers employees with disabilities
and those caring for people with disabilities.
Embedding inclusivity
All colleagues should feel able to participate
fully, bring their authentic self to work, and
realise their full potential. Together, we can
make a real, meaningful difference.
We have been intensifying our efforts to
embed this sense of inclusion. Internally, we are
strengthening our inclusive culture by focusing
on leadership, people and policy. Externally, our
inclusive approach to procurement, brands and
partnerships aligns who we are with what we do.
Our dedicated Global Inclusion team works
in close partnership with the Global Inclusion
Board to set and drive our inclusion agenda.
We have also been rolling out a conscious
inclusion learning programme globally. This is
spreading the message that we all need to play
our part in creating a culture where everyone is
included and valued. We have issued specific
guidance on inclusive recruitment practices
for managers with hiring responsibilities.
Our four global ERGs
provide visibility, support
and understanding, all
the things that help us
bring our fullselves to
work. I am proud to
sponsor the work we
are doing within the
LGBTQ+ community.
JÉRÔME LEMAIRE
EXEC SPONSOR OF LGBTQ+ ERG
AND EVP CDO HYGIENE
TOP EMPLOYER
Seven of our markets were named in the Top
Employers Institute Awards, which globally
recognises excellence in people practices
12 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
OUR STRATEGY
OUR GROWTH STRATEGY
STRATEGIC IMPERATIVES
GROW BRANDS
ANDINNOVATE
PRODUCT
PENETRATION
Increasing product
usage by capturing
newconsumers
andhouseholds.
EXPANSION INTO
NEW PLACES
Taking our brands
and products into
new geographies
and new channels.
MARKET
SHARE GAINS
Winning by serving
existing consumers
faster, better and
moreefficiently with
superior and more
relevant products.
EXPANSION INTO
NEW SPACES
Capturing new market
opportunities using
ourbrands and
consumer relationships.
INVEST IN
CAPABILITIES
EMBED
SUSTAINABILITY
DRIVE SUPERIOR
EXECUTION
INCREASE
PRODUCTIVITY
ACTIVELY MANAGE
THE PORTFOLIO
Our strategic imperatives are those areas of focus which
supportourmedium-term objectives of delivering sustainable
mid-single-digit growth andmid-20s adjusted operating margins.
Our category-led growth strategy is anchored in consumer demand.
We use our deep consumer insights, combined with our strength
inscience and technology to drive growth via our strategic levers.
Our 2030 ambitions embed sustainability at the core of our business
and build on the progress we have already made. They focus on
three areas:
PURPOSE-LED BRANDS
We sell more than 30 million products every single day.
Wewant to have a positive impact by selling products
peoplewant andthat make a positive difference in the world.
A HEALTHIER PLANET
A healthier planet and healthier people are inextricably
linked.We play an active role in helping to combat climate
change, addressing biodiversity concerns and improving
planetary health through our own actions, our partnerships
and ourbrands.
A FAIRER SOCIETY
We are fighting for a world where access to the highest-quality
hygiene, wellness and nourishment is everyone’s right, and
notaprivilege. We are building an inclusive culture, where
everybody is treated fairly and equally. Our teams represent the
diverse geographies we operate in and the people we serve.
STRATEGIC GROWTH DRIVERS 2030 SUSTAINABILITY AMBITIONS
For further information
see page 29
For further information
see page 36
For further information
see page 41
For further information
see page 33
For further information
see page 39
For further information
see page 44
For further information
see pages 20 to 28
For further information
see page 17
1
3
2
4
13
1
HIGH GROSS
MARGIN BUSINESS
UNDERPINNED BY
STRONG CULTURE
SUSTAINABLE NET
REVENUE GROWTH
BRAND INVESTMENTS
AND INNOVATION
HIGH
OPERATING
PROFIT
PRODUCTIVITY
Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
OUR BUSINESS MODEL
HOW WE
CREATE VALUE
OUR PEOPLE AND CULTURE
We employ outstanding people who are focused
onexecution. They work in a unique culture,
withastrong sense of shared ownership,
thatharnesses their passion andallows them
tomake areal difference.
OUR BRANDS
We have a global portfolio of leading brands,
offering attractive growth prospects and margins,
and sustainable competitive advantages.
OUR KNOWLEDGE AND SKILLS
We have deep consumer understanding, proven R&D
capabilities and an agile organisation, which gets the
right products into the hands of consumersquickly.
OUR PARTNERSHIPS
We develop strong, trusted relationships with our
customers, consumers, suppliers, communities and
other partners to allow usto extend our impact.
OUR INFRASTRUCTURE
Our business is underpinned by strong manufacturing
sites, R&Dlaboratories, centres of excellence and
logistics centres aswell as digital infrastructure.
OUR FINANCIAL STRENGTH
Shareholders’ equity, debt and retained profit give
usthe financial resources to implement our strategy.
HIGH GROSS MARGIN BUSINESS
Gross margin reflects the quality of both
the categories in which we operate, and
strength and premiumisation of our brands.
This funds reinvestment in our brands, our
growth drivers and the delivery of leading
operating profit margins in our peer group.
PRODUCTIVITY
Embedding programmes to enhance
effectiveness and efficiency in the
company and to fund investment.
CUSTOMERS
Ranking in top 100
consumer packaged
goods companies
#28
For further information
see page 47
CONSUMERS
Net revenue from
more sustainable
products
24.4%
For further information
see page 49
OUR PEOPLE
Gender balance
across all
management
50/50
For further information
see page 112
OUR ENVIRONMENT
absolute reduction in
carbon emissions from
operations since 2015
66%
For further information
see page 56
BRAND INVESTMENTS AND INNOVATIONS
Investing behind our brands through innovation,
consumer education and advertising, amongst
other activities, ensures that our brands
remain relevant to our consumers, whilst
making their lives incrementally better.
SUSTAINABLE NET REVENUE GROWTH
We operate in high-growth categories,
underpinned by innovation and investment
in brand-building initiatives. This creates
a strong platform to support sustainable
mid-single-digit net revenue growth.
OUR ASSETS
EARNINGS GROWTH MODEL WHO WE CREATE VALUE FOR
SUPPLIERS
For further information
see page 51
INNOVATORS
For further information
see page 52
INVESTORS
For further information
see page 54
INDUSTRY BODIES
For further information
see page 53
SCIENTISTS
For further information
see page 52
COMMUNITIES
For further information
see page 54
14 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
MARKET CONTEXT
TACKLING FOUR BIG
GLOBAL PROBLEMS
1
3
2
4
THE PROBLEM
POOR WATER, SANITATION
AND HYGIENECAN HAVE
DEVASTATING CONSEQUENCES
THE PROBLEM
LIMITED UNDERSTANDING AND STIGMAS
AROUND INTIMATE WELLNESS DAMAGE
PUBLIC HEALTH AND WELLBEING
THE PROBLEM
FORMAL HEALTHCARE SYSTEMS
HAVE LIMITED RESOURCES AND
AREUNDER INCREASING PRESSURE
THE PROBLEM
BOTH INFANTS AND THE INCREASING
NUMBER OF SENIORS IN OUR SOCIETY
HAVE SPECIALISED NUTRITIONAL NEEDS
Reckitt fights to help tackle
fourbig problems for humanity.
Ourbrands help people meet
these challenges. Growing our
markets increases our impact.
SUSTAINABILITY AND
DIGITAL PRACTICE EMBEDDED
As we seek solutions to these problems, we are embedding
sustainability into our work and strengthening our digital
capabilities to meet consumers’ evolving tastes, values
andbehaviours.
Sustainability is not just about doing the right thing, it is a commercial
imperative. Consumers want to buy products that are not only
safeand effective, but have also been developed in a responsible
manner, recognising the positive and negative impact that their
production and use can have on the environment and wider society.
Digital technologies are transforming consumer behaviour
andpurchasing decisions,affecting what and how people
buy.Technology also hasimplications for the way we develop
andmarketour products, thevalue we can offer consumers,
andhowwemanage our supplychain.
See
following
page
15 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
MARKET CONTEXT CONTINUED
POOR WATER, SANITATION
AND HYGIENE CAN HAVE
DEVASTATING CONSEQUENCES
FORMAL HEALTHCARE SYSTEMS HAVE
LIMITED RESOURCES AND ARE UNDER
INCREASING PRESSURE
LIMITED UNDERSTANDING AND STIGMAS
AROUND INTIMATE WELLNESS DAMAGE
PUBLIC HEALTH AND WELLBEING
BOTH INFANTS AND THE INCREASING
NUMBER OF SENIORS IN OUR SOCIETY
HAVE SPECIALISED NUTRITIONAL NEEDS
As cities become more crowded and populations
more mobile, good hygiene practice is essential
in reducing the spread of infection. In developing
economies, water stress can compromise
hygiene. This has a direct impact on health,
bothin cities and in rural communities.
Across the world, ageing populations and
stretched public finances are putting pressure
onhealthcare systems. Meanwhile, individuals
are becoming better informed and are more
actively involved in looking after themselves.
Self-care solutions, supported by consumer-
centred technology on apps and elsewhere,
givepeople more control. By saving trips to
thedoctor, they can also helpreduce demand
onstrained public healthcare systems.
In many parts of the world, there is limited
awareness and understanding of intimate
wellness. In some traditionally conservative
societies, cultural taboos rather than health
considerations guide policy priorities.
Reproductive health and sexual wellbeing
havenot been priorities in recent years.
Thecontact-averse public health measures
during the pandemic restricted young people’s
access to sexual education and development.
Infants deserve the best possible start in life and
the nutrition they receive is a key part of that.
That is especially true for those suffering from
allergies or other conditions which require
specialised nutrition. Equally, with people living
longer, there is a growing demand for nutritional
products that help promote and sustain mental
and physical faculties. All adults, especially
seniors, can benefit from high-quality speciality
food supplements that support immunity,
digestion, cognition and mental health.
OUR RESPONSE
We supply products that meet the highest
hygiene standards. We promote hygiene
asthefoundation forhealth
More and more consumers use our premium,
category-leading products to protect their homes
and families. They provide a frontline defence against
the spread of transmissible diseases and viruses.
Lysol and Dettol, our disinfectant brands, help
break the chain of infection on surfaces in
kitchens and bathrooms, from hands, and other
‘at-risk’ spaces. Harpic, Vanish and Finish support
cleanliness and hygiene in the home. Our pest
brands, like Mortein and SBP, protect against
unwanted pests and insects. The Reckitt Global
Hygiene Institute and our Fight for Access
Fund are building scientific understanding
andextending awareness of hygiene issues.
OUR RESPONSE
We are reducing demand for institutional
healthcare by empowering consumers with
effective and practical self-care solutions
With our over-the-counter healthcare brands,
via vitamins, minerals and supplements, and
through health literacy campaigns, we give
people the tools and the knowledge to take
better care of themselves, prevent illness and
treat everyday symptoms at home. We share
insights gleaned from our science platforms
(see page31) and address specific consumer
needs across our product range. We partner
with clinical professionals and share science-
backed information with consumers to
prevent and treat infection. These dynamics,
combined with digital trends, continue to
provide opportunities in areas like personalised
nutrition, wellness and digital health.
OUR RESPONSE
We are supporting intimate wellness and
safeguarding young people by promoting
sexualwellbeing and combating sexually
transmitted diseases
As the world’s leading producer of condoms
and with 90 years of brand heritage, Durex plays
a crucial role in reducing the risk of sexually
transmitted infection and encouraging safe
sexual practices. With brands like Queen V and
KY, we are supporting vaginal health and getting
people to talk openly about intimate wellness.
OUR RESPONSE
Our specialised nutrition is helping infants
toflourish and allowing older adults to live
fullerlives
Through the strength of our brands, consumer
insight and science understanding, we are well
placed in the nutrition market. Brands such as
the Enfa range and Nutramigen nurture infants
byserving important nutritional needs. Foradults,
brands like Provital, Move Free, Airborne and
Neuriva deliver essential vitamins, minerals and
supplements. Our product innovation teams
leverage the capabilities within our allergy and
immunity and digestive health science platforms
to deliver innovative solutions that address the
specific nutritional needs of infants and adults.
1 2 3 4
16 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
OUR SUSTAINABILITY APPROACH AND PERFORMANCE
A CLEANER
HEALTHIER
WORLD
Our 2030 Sustainability Ambitions sit at the
centre of our business and support our Purpose
to protect, heal and nurture in the relentless
pursuit of a cleaner, healthier world.
Embedding sustainability across our business
and throughout our value chain is a strategic
imperative. We work with independent external
experts to assess the priority issues for our
stakeholders through focused research and
dialogue. Using the ‘double materiality’ approach
recommended by the Global Reporting Initiative,
we consider both our impact on these issues
and their impact on us. Our latest assessment
in 2021 identified the following top six issues:
– Climate change
– Product quality and safety
– Packaging and waste
– Advancing global health and hygiene
– Ethical business conduct
– Sustainable product innovation
For more detail see
Focusing on what matters
Our desire to see a cleaner, healthier world
aligns with our fight to tackle four of the world’s
biggest problems. As a member of the UN Global
Compact, we are committed to contributing to
the UN Sustainable Development Goals (SDGs).
SAFER AND MORE
SUSTAINABLE PRODUCTS
50%
of net revenue from more sustainable
products by 2030
65%
reduction in chemical footprint
by2030
ENABLING A CIRCULAR ECONOMY
100%
of plastic packaging to be recyclable
or reusable by2025
25%
recycled content in our plastic
packaging by 2025
50%
reduction of virgin plastic in
packaging by 2030
COMBATING CLIMATE CHANGE
50%
reduction in our product carbon
footprint by 2030
65%
reduction in Greenhouse Gas (GHG)
emissions in operations by 2030
100%
renewable electricity by2030
25%
less energy use by2025
WATER POSITIVE
Water positive in water-stressed sites
by2030
50%
reduction in our product water
footprint by 2040
30%
reduction in water in operations
by2025
CREATING FREEDOM TOSUCCEED
An inclusive culture where everybody
istreated fairly andequally
Our teams represent the diverse geographies
we operate in and the people weserve
50/50
Gender balanced management
at all levels by 2030
FAIRNESS ACROSS OUR VALUE CHAIN
Sustainable livelihoods and working conditions
Our teams and communities throughout
ourvalue chain have livelihoods that enable
their health and wellness
Embed human rights through impact
assessments and action plans in our
keyvaluechains by2030
Reach half the world with
brandsthat help people live
cleaner, healthier lives
Engage two billion people in our
partnerships, programmes
andcampaigns
Make a lasting difference in
communities through our
FightFor Access Fund
andourprogrammes
Work with our partners to help
deliver the UN Sustainable
Development Goals
See our latest performance on
page 18
PURPOSE-LED BRANDS HEALTHIER PLANET FAIRER SOCIETY
A CLEANER HEALTHIER WORLD THROUGH THEPOWER OF OUR PURPOSE-LED BRANDS
And within our
Sustainability Insights
17 Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
OUR SUSTAINABILITY APPROACH AND PERFORMANCE CONTINUED
Every day, through
ourglobal brands, we
encourage millions of
consumers to take small
actions that add up to
meaningful change.
OUR 2030
AMBITIONS
INACTION
PURPOSE-LED BRANDS HEALTHIER PLANET FAIRER SOCIETY
DRIVING ACCESS TO CLEAN
WATER AND SANITATION
Today, 771 million people lack access to
safe water and one in four lack access to
safe sanitation. Without action, 4.8 billion
people will face water stress by 2050.
SDG 6 calls for access to clean water and
sanitation for all by 2030. This demands
four times faster progress and a three and
a half times increase in global investment
in water, sanitation and hygiene (WASH).
Water is critical to our Purpose and our
Sustainability Ambitions because it’s the
biggest ingredient in the manufacturing
of our products, and our consumers
often need water to use them.
We’re aiming to reduce our water footprint
everywhere by recycling water in our factories.
Our Hosur factory in India is now water neutral
through actions we have taken to reduce
our water use, develop water harvesting
and strengthen water security in the local
catchment. We partner with global experts
to provide and improve sanitation. With
Water.org, we’ve helped 1.4 million people
gain improved access to water and sanitation.
REDUCING PLASTIC
Progressing the SDGs is core to our Purpose.
As we pursue our Purpose through our brands,
strategies for making more sustainable
products, including using less plastic,
areintegrated into brand development.
In 2022, we launched paper-based
packaging for Finish, a first for automatic
dishwashing products. The new stand-up
pouch uses 75% less plastic. It’s the latest
milestone on the way to our 2030 goal
of halving virgin plastic in packaging.
Too much plastic is produced worldwide and
far too much of that goes to landfill. Alongside
reducing plastic use, we’re also improving
recyclability by using materials that are
more readily recyclable and simplifying our
packaging to make it easier to recycle. We’re
increasingly using more non-virgin packaging
materials and we’re working to develop
circular economies for plastics through
cross-industry alliances like RecyClass and the
Business Coalition for a Global Plastics Treaty.
RESTORING NATURE
Biodiversity is fundamental for a healthy
planet. We are developing methodologies
to monitor our impact on nature and the
tools to manage it. We’ll use these to
set new targets in supply chains for key
ingredients. And we’ve set ourselves a
stretching target to help improve ecosystems
internationally. We aim to restore 1.2 billion
square feet of wildflower habitats globally.
Botanica by Air Wick is actively involved. Its
international partnership with WWF has already
restored more than 77 million square feet of
forest and wildflower habitats. Numerous
plant species have been conserved.
The partnership is progressing its biodiversity
plans in 10 countries. In the US, it’s reseeding
nearly 40 million square feet of Great Plains
grasslands. In Mexico, it’s protecting the
Monarch butterfly by preserving wild flowering
plants on migration routes. In the UK, the
Let’s Bring Nature Back campaign pledges to
restore and protect 20 million square feet of
wildflower habitats. In Australia, 22 endangered
wildflower species are being preserved.
18
2
021
2
2
019
2
020
2
2018
2
022
3.5%
0.8%
11.8%
3.0%
7.6%
2
021
3
2
019
2
020
2018
4
2
022
21.7%
26.2%
23.6%
26.7%
23.8%
2
021
2
019
2
020
2018
4
2
022
288.5p
349.0p
327.0p
339.9p
341.7p
2
021
2
019
2
020
2018
4
2
022
61%
87%
131%
84%
83%
2
021
2
019
2
020
2018
2
022
10.1%
10.3%
10.1%
10.7%
13.2%
2
021
2
015
2022
66%
0%
66%
2
021
5
2
015
2022
5%
0%
5%
2
021
2
019
2
020
2018
2022
96%
96%
96%
93%
94%
Reckitt Annual Report and Accounts 2022 FINANCIAL STATEMENTSGOVERNANCESTRATEGIC REPORT
KEY PERFORMANCE INDICATORS
1. See details on our alternative performance measures on page 75
2. IFCN China disposed in 2021, and therefore not included in 2021 LF