Headline beats but the mix of delivery in focus

研报英文原文证据摘录

Headline beats but the mix of delivery in focus

Barclays | Reckitt Benckiser Group PLC

implementation and restrictions around advertising and content on certain digital platforms.

While India, LATAM and several other markets continue to perform well, they have not yet been

sufficient to offset the weakness in China. Encouragingly Reckitt appears to be adapting to the

new operating environment in China, with improved execution across social commerce

channels especially Douyin, increased marketing support and a pipeline of condom innovation

in H2-26. However, how much that can boost growth for H2 is unclear at this stage. We

think delivering an inflection in Intimate Wellness will be important for sentiment on the stock.

3. Share buyback announcement slightly below expectations?

While the announcement of a new £500m share buyback sounds positive, we suspect the

quantum may have been modestly below what some investors had hoped for following the

completion of the previous £1bn programme. We think expectations for the SBB were either for

£500m or £750m. That said, the announcement still provides incremental EPS support and

remains consistent with management's disciplined approach to capital allocation, balancing

shareholder returns with flexibility ahead of the eventual resolution of NEC litigation and the

future of Mead Johnson.

4. A softer cash performance in H1

While operational performance was encouraging, cash conversion was less impressive. Free

cash flow conversion was impacted by the Essential Home and restructuring costs resulting in a

weaker-than-normal H1 cash performance. Although part of this reflects timing effects and

should unwind over the course of the year, the H1 cash generation still could remain a question

mark for some investors.

Estimate Changes