Heavier marketing spend boosts Reckitt Benckiser

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SLOUGH, U.K. -- A heftier marketing spend of $442 million last year helped drive net revenues up 7% to $4.4 billion at household cleaning products marketer Reckitt Benckiser. Increasing marketing expenditure to 10% of net revenues was part of a "new growth strategy" that has "turned the business around" in 2000, CEO Bart Becht told analysts in London Feb. 28 at the announcement of the company's preliminary results for 2000. Reckitt Benckiser was formed in December 1999 from the U.K.-based Reckitt & Colman's takeover of the Netherland's Benckiser.

"2000 was a fantastic year," Mr. Becht says. "The merger phase is now over, allowing us to pursue even more intensely our new growth strategy. Based on this, our targets for 2001 are to grow net revenues by 4% on continuing operations at constant exchange and to grow net income by 18% on continuing operations."

New initiatives for 2001 include the launch of Calgonit 3-in-1 automatic dishwashing detergent plus rinse agent plus salt in Europe, and Electrasol 2-in-1 automatic dishwashing detergent plus rinse agent in North America, the company says. In addition, Vanish in-wash liquid fabric treatment is rolling out into Thailand, Veet depilatory is launching in Brazil, Mexico and Turkey, and Calgonit dishwashing products are debuting in South Africa. Air care, led by Crystal Air, has been launched in the Netherlands, Norway, Sweden and Finland, and disinfecting cleaners have been rolled out into Switzerland and Austria.

In 1999, Reckitt set a goal of selling half its non-core, non-strategic businesses. It says it has now nearly completed that task. Its five core categories are now: fabric care -- specifically fabric treatments and water softeners; surface care -- disinfectant cleaners and specialty cleaners; health & personal care -- depilatories, antiseptics and OTC medicines; dishwashing -- automatic dishwashing products; and home care -- air care and pesticides. Figures for 2000 were at the top end of analysts' expectations, driving the share price up by 4% on Feb. 28. But, says Jeremy Batstone of NatWest Stockbrokers, there's concern the company will find it difficult to weather any economic downturn.

Copyright February 2001, Crain Communications Inc.

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