![img-0.jpeg](img-0.jpeg) ![img-1.jpeg](img-1.jpeg) reckitt # POWERBRANDS WITH IMPACT Annual Report and Accounts 2024 ![img-2.jpeg](img-2.jpeg) ![img-3.jpeg](img-3.jpeg) --- # CONTENTS ![img-4.jpeg](img-4.jpeg) ![img-5.jpeg](img-5.jpeg) ![img-6.jpeg](img-6.jpeg) ## About this report This report has been produced to optimise the reading experience online. Use these interactive symbols throughout the online report: - Links to another page in the report - Links to further reading online - Return to contents page - Move to previous or next page ![img-7.jpeg](img-7.jpeg) ## Reporting Hub For further detail, visit our reporting hub: www.reckitt.com/reportinghub ## STRATEGIC REPORT 1. At a Glance 2. Our Powerbrands 4. Chair's Statement 6. Chief Executive Officer's Statement 8. People and Culture 10. Value Creation Model 16. Strategic Priorities 17. Simpler Organisation 18. Our Core Business 19. Market Execution 22. Self Care 24. Germ Protection 26. Household Care 28. Intimate Wellness 30. Essential Home 32. Mead Johnson Nutrition 34. Fuel for Growth 35. Capital Allocation 36. Total Shareholder Returns 37. Key Performance Indicators 38. Sustainability Performance Dashboard 39. Financial Performance 45. Sustainability Performance Review, including Non-Financial and Sustainability Information Statement 52. Risk Management 57. Our Viability Statement ## GOVERNANCE 58. Corporate Governance Report 60. Board Leadership 63. Senior Leadership 65. Reckitt's Approach to Governance 67. How We Are Governed 68. Board Roles and Responsibilities 69. Governance Framework 71. Purpose and Culture 72. Board Activities 74. Maintaining the Trust of Stakeholders 78. Section 172 Statement 79. Board Performance Review and Effectiveness 81. Nomination Committee Report 86. Audit Committee Report 94. Compliance Committee Report 96. Directors' Remuneration Report 134. Report of the Directors 138. Statement of Directors' Responsibilities ## FINANCIAL STATEMENTS 139. Independent Auditor's Report 155. Group Financial Statements 198. Parent Company Financial Statements 205. Subsidiary Undertakings ## OTHER INFORMATION 218. Climate-Related Financial Disclosures 223. Alternative Performance Measures 228. Shareholder Information --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 1 # At a Glance # A WORLD-CLASS HEALTH AND HYGIENE COMPANY Reckitt is home to some of the world's best-loved consumer brands in their categories, which people trust to care for the ones they love. Our products are chosen by consumers millions of times each day to support their health and wellbeing. Everything we do, every decision we make, has that moment of choice at its heart. As a company, our purpose is to protect, heal and nurture in the pursuit of a cleaner, healthier world. That's because we believe good health starts at home, in our communities and workplaces. We believe hygiene is the foundation of health and we deliver for consumers, whether they are preventing the spread of germs, treating a cold or protecting against sexually transmitted infections. We combine deep consumer insights with world-class science to create superior products that address the everyday issues we all face when it comes to our families' health and hygiene. Whatever need we are meeting, we help to make lives easier, cleaner and healthier, both now and in the future. ![img-8.jpeg](img-8.jpeg) | Like-for-like net revenue growth^{1} +1.4% | IFRS net revenue growth -3.0% | Net revenue from more sustainable products^{1} 34.9% | | --- | --- | --- | | 2023: +3.5% | 2023: +1.1% | 2023: 29.6% | | Adjusted operating margin^{1} 24.5% | IFRS operating margin^{4} 17.1% | Reduction in absolute Greenhouse Gas (GHG) emissions from operations^{2} 69% | | 2023: 23.1% | 2023: 17.3% | 2023: 67% | | Adjusted total EPS diluted^{1} 349.1p | IFRS total EPS diluted^{4} 203.2p | Social impact investments £34mn | | 2023: 323.4p | 2023: 228.7p | 2023: £31mn | | Full-year dividend 202.1p | Cash returned to shareholders £2.7bn | People positively impacted through our social impact programmes^{3} 29mn | | 2023: 192.5p | 2023: £1.5bn | 2023: 19mn | 1 Adjusted and other non-GAAP measures, definitions and terms are defined on page 223 2 Since 2015 3 Cumulative since 2020 4 IFRS operating margin and EPS are impacted mainly by an intangible asset impairment charge and restructuring costs, see page 226 for more details --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 2 3 # Our Powerbrands # POWERBRANDS WITH IMPACT Reckitt is focused on a portfolio of market-leading Powerbrands that support health and wellbeing. These brands have a high level of consumer trust, premium positioning and competitive advantage. That enduring competitive advantage is built through the powerful combination of Reckitt's unique consumer insight, science and entrepreneurial spirit. It helps drive attractive earnings models for our 11 Powerbrands, with high gross margins that in turn fuel ongoing reinvestment and innovation, such as the 2024 introduction of Mucinex Mighty Chews, the first over-the-counter medicated children's soft chewable tablet for cough relief (see page 11 for more information on how we build our Powerbrands). With a pipeline of superior products that address people's everyday needs, we create, build and broaden our iconic brands, taking advantage of significant, long-term runways for growth, driven by population dynamics, economic opportunities and consumer trends. This also drives expansion in our four core categories: Self Care, Germ Protection, Household Care and Intimate Wellness. In addition to our Powerbrands, which make up more than 80% of our core business, we have likely future Powerbrands including Move Free and Biofreeze, as well as local heroes including Lemsip, Jik and Veja. Together, this portfolio serves both the universal and unique health and hygiene needs of people around the world, while delivering sustainable growth and long-term value creation. # OUR PORTFOLIO OF POWERBRANDS ![img-9.jpeg](img-9.jpeg) # SELF CARE Strepsils, Mucinex, Gaviscon and Nurofen are our over-the-counter (OTC) Powerbrands, trusted by consumers and healthcare professionals to treat a range of symptoms. Read more on page 22 ![img-10.jpeg](img-10.jpeg) # GERM PROTECTION These Powerbrands, Lysol, Dettol and Harpic, protect against the spread of germs, enabling good hygiene, which we see as the foundation of health. Read more on page 24 ![img-11.jpeg](img-11.jpeg) # HOUSEHOLD CARE Two Powerbrands, Finish and Vanish, are global leaders in their respective categories. Their growth is fuelled by opportunities for premiumisation and penetration. Read more on page 26 ![img-12.jpeg](img-12.jpeg) # INTIMATE WELLNESS Durex and Veet are global leaders in their respective categories, condoms and depilatories, driven by innovation and premiumisation as we serve growing consumer interest and engagement. Read more on page 28 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 < # Our Powerbrands continued ![img-13.jpeg](img-13.jpeg) ![img-14.jpeg](img-14.jpeg) ![img-15.jpeg](img-15.jpeg) ![img-16.jpeg](img-16.jpeg) ![img-17.jpeg](img-17.jpeg) ![img-18.jpeg](img-18.jpeg) ![img-19.jpeg](img-19.jpeg) ![img-20.jpeg](img-20.jpeg) ![img-21.jpeg](img-21.jpeg) ![img-22.jpeg](img-22.jpeg) ![img-23.jpeg](img-23.jpeg) ![img-24.jpeg](img-24.jpeg) ![img-25.jpeg](img-25.jpeg) ![img-26.jpeg](img-26.jpeg) ![img-27.jpeg](img-27.jpeg) ![img-28.jpeg](img-28.jpeg) ![img-29.jpeg](img-29.jpeg) ![img-30.jpeg](img-30.jpeg) ![img-31.jpeg](img-31.jpeg) ![img-32.jpeg](img-32.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 4 三 # Chair's Statement ![img-33.jpeg](img-33.jpeg) # SECURING OUR FUTURE SUCCESS We are confident of Reckitt's strengths and potential to deliver growth and value creation. 2024 was an important year, in which we laid out a new direction for our business. We have revamped our strategy to streamline our portfolio, simplify our organisation and refresh our leadership team and Board. We believe this will improve our performance and ensure Reckitt is a leader, fit for the future. We have much work to do but we are clear on the plan we have in place, confident of Reckitt's strengths and potential to deliver strong growth and value creation. ## A world-class company in resilient categories Reckitt is a company with an important near-200-year history, a global footprint and an enviable portfolio of well-loved and trusted brands that improve people's lives. Our Powerbrands are market leaders and play in resilient categories with long-term runways for growth due to favourable demographic and consumer trends. All of this makes for a strong and attractive foundation. Alongside this, the Company has an entrepreneurial and inclusive culture, a talented and motivated workforce and a clear set of priorities that will serve Reckitt well as it evolves as a world-class consumer health and hygiene company. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 5 > # Chair's Statement continued ![img-34.jpeg](img-34.jpeg) Our objective, therefore, is to create one of the strongest growth and margin profiles of our peer group, overseen by new leadership with a structure that will bring greater focus, faster decision-making and improved execution. Becoming a simpler, more agile organisation will better enable us to navigate a more complex world, to both seize the opportunities and deal with the challenges arising from the likes of climate change, technology and macroeconomics. ## Shareholder focus Underpinning this is a drive to better deliver for our shareholders. We recognise that in 2024 our share price has underperformed, but I want you to know that we are doing all we can to demonstrate the enduring value of our business to the market and to turn this performance around. In July 2024, our Chief Executive Officer Kris Licht presented the details of our new strategy and organisational change. Our teams spent the second half of 2024 laying the important foundations for the future, with the new structure taking effect from 1 January 2025. We are working to exit a group of strong homecare brands, now called Essential Home, which we are on track to do by the end of 2025. Mead Johnson Nutrition is now considered non-core and we will consider all options to maximise its value for shareholders, taking the time required to achieve the right solution. Shareholder returns are a foremost priority, and the Board is confident that our new strategy and structure will generate value for shareholders going forward. This confidence is reflected in the second £1 billion share buyback programme that we initiated in July 2024, following completion of a previous £1 billion programme launched in 2023. The first two tranches of the current programme, worth £500 million, are complete, with the third tranche, worth another £500 million, expected to complete by 30 June 2025. We expect the programme to continue in the coming years, consistent with our capital allocation principles. ## 2024 performance showing progress The financial performance we have delivered shows progress and sets a strong base for future growth. Like-for-like net revenue rose 1.4%, in line with our guidance and adjusted operating profit rose at 3%. Delivery of these results came at a time of uncertainty for many of our teams at Reckitt, but right across our business our colleagues have been working extremely hard and doing an excellent job of staying focused on performance. ## Engaging with external stakeholders One of the key responsibilities of the Board is to both constructively challenge and support the CEO and Executive Committee, overseeing execution of the Company strategy. We do this by providing critical internal and external perspectives, honed by our engagement with individuals and groups from across our stakeholder universe, from investors and consumers to non-governmental organisations and other members of civil society. In 2024, Board members met with senior government representatives from the United Kingdom and attended valuable gatherings as part of the Global Leadership Foundation as well as New York Climate Week, where we engaged with policy makers and leaders from the worlds of academia, politics, technology and business about advancing solutions for health and hygiene across markets. 1 IFRS operating profit declined 4% and was impacted mainly by an intangible asset impairment charge and restructuring costs, see page 226 for more details ## Our objective is to create one of the strongest growth and margin profiles of our peer group. As a Board, we value external perspectives, and in 2024 we created an action plan to build on the results of a large survey we conducted across a broad spectrum of respondents in our top markets, from business stakeholders to general consumers. The results showed that while there is more to be done to increase familiarity with Reckitt, people who were familiar with us had a high degree of trust in the Company. I know that our employees, executives and the Board are proud of that trust, and keep it front of mind in our decision-making. ## Board changes During 2024 we made good progress in strengthening the Board. I'm happy to note several recent Board changes. In 2024, we were joined by Marybeth Hays and Fiona Dawson, and of course I took over as Chair from Chris Sinclair. I want to thank Chris for his nine years of service to this great Board. We benefited greatly from his judgement and experience. Following on from that, the Board was bolstered further with the appointments of Mahesh Madhavan and Stefan Oschmann, who both have many years of experience as CEOs of global businesses. I know their insight and experience, as well as that from other Board members, will serve our Group well, as we oversee this exciting chapter in Reckitt's history. As we look to the future, I want to thank all our colleagues. I am always struck by the quality, enthusiasm, talents and commitment of the people in this business. They work tirelessly, often unseen, each and every day, in service of our consumers, our customers and all of us as stakeholders. I also want to thank you, our shareholders, for your long-term perspective. Seeing this commitment from all of our stakeholders, even during such change, gives me much confidence in what we can achieve together in the future. ## Sir Jeremy Darroch Chair --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 6 三 # Chief Executive Officer's Statement ![img-35.jpeg](img-35.jpeg) # A YEAR OF STRATEGIC CLARITY AND DELIVERY It was a year of delivery against our strategic plan, of top and bottom-line growth and substantial cash returns to shareholders. 2024 was a foundational year for Reckitt. It was a year of strategic clarity as we announced a sharpened focus on Powerbrands and a simpler, more effective operating model. It was also a year in which we delivered against our strategic plan despite a volatile environment and challenges to our business. Against that backdrop, we have driven top and bottom-line growth and substantially increased cash returns to shareholders. # Powerbrands with impact Reckitt owns great brands, which rank amongst the world's best loved in their categories. They offer superior, efficacious solutions that serve the health and hygiene needs of consumers globally. We have invested diligently over the past four years to ensure these brands receive the world class support from our R&D and Supply organisations they deserve. LFL net revenue growth¹ +1.4% Adjusted earnings per share growth¹ +7.9% Cash returns to shareholders¹ +75% ¹ Adjusted and other non-GAAP measures, definitions and terms are defined on page 223 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 7 三 # Chief Executive Officer's Statement continued ![img-36.jpeg](img-36.jpeg) We bring our brands to life through premium products that extend and deepen their equities through science-based innovation. This supported the welcome return of volume growth across our brand portfolio as the year progressed and a growth algorithm better balanced between volume, price and mix. Strong contributions from our innovation platforms in Hygiene enabled Lysol to drive volume-led growth through our Air and Laundry Sanitiser products, and Finish through our premium thermoformed dishwasher tablets, despite the return to a more competitive environment in developed markets. In Health, the success of our new hyaluronic acid condoms helped secure another strong year for Durex in China. Alongside strong performances from Gaviscon and our Vitamins, Minerals and Supplements business, this helped offset softer demand for our seasonal OTC products following a cold and flu season that both ended weak in 2023 and started late in 2024. ## Commitment to deliver shareholder returns Despite this seasonality and the supply impact of the tornado that hit our Nutrition storage facility in July, we were successful in delivering LFL net revenue growth and adjusted operating profit growth in 2024, as well as a 75% increase in cash returns to shareholders. Changes in the regulatory environment for infant formula and a more challenging marketplace for topical pain relief resulted in a £838 million goodwill impairment to these assets (see page 173). Nonetheless, at the Group level we achieved our ambition of growing adjusted operating profit ahead of net revenue. This enabled us to increase investment in our brands and grow earnings by 7.9%, resuming an important cadence in adjusted EPS growth that has been lacking in recent years. It also supported a record £2.7 billion in cash returned to shareholders through our dividend and continued share buyback programme. ## Investing for growth Returning cash has not been at the expense of investing for our long-term growth. In December, I was delighted to raise the Reckitt flag at our newest manufacturing facility in Wilson, North Carolina, which as the cornerstone manufacturing site for our US OTC business will enhance our agility in meeting seasonal demand in our largest market. In January 2025, I was proud to be at the commissioning of our new R&D centre in Shanghai. This will provide us with a dedicated innovation platform for China to complement our state-of-the-art manufacturing facility in Taicang, which has already helped to deliver the double-digit growth we enjoyed in China in 2024. These investments in our growth exemplify our commitment to enhancing the resilience of our supply footprint while deepening our R&D capabilities. They will help ensure we continue to innovate the very best products and strengthen execution in market with local capabilities that promote their future growth. ## Harnessing our people and culture In July, I was pleased to bring strategic clarity to our future by introducing a new Reckitt focused on TI core Powerbrands. The change I set out draws on our value creation principles, which ensure that every brand we possess works hard for its place in our portfolio. These Powerbrands are at the heart of our growth model. Supporting them now is a new organisational structure that will enable us to execute in our markets at a level of excellence we expect from the world class consumer health and hygiene company we are becoming. We have moved at pace to reshape Reckitt and bring about this change. We entered 2025 as an area-led business positioned to maximise the value of our new Self Care, Germ ## Uniting us now is a clear direction: a shared compass through which to navigate opportunity and harness the entrepreneurial energy of our people. Protection, Household Care and Intimate Wellness categories across three global Areas. Of these, Emerging Markets is now our largest and fastest growing, delivering 5.5% growth in 2024 led by China's double-digit performance. This change has enabled us to eliminate duplication and accelerate decision making through the organisational delayering we have achieved. It also supports an ambitious target to reduce our fixed costs over the next three years under our Fuel for Growth programme while releasing these to increase brand investment and drive earnings growth in the meantime. In announcing these changes, I was pleased to appoint some of our longest-serving and most accomplished global leaders to our new businesses, who now join our leadership team on our Group Executive Committee. With these appointments, I am confident we are bringing the skills and experiences of our very best to each. ## A year of opportunity Across emerging markets and developed economies, 2025 offers an abundance of opportunity for Reckitt. We possess a cohesive, world-class portfolio of Powerbrands and a proven playbook for how to grow and expand them. We enjoy scale across our value chain and our balanced global footprint. And we are undertaking a step-change in organisational effectiveness that will materially improve our ability to execute with excellence in market. Uniting us now is a clear direction: a shared compass through which to navigate opportunity and harness the entrepreneurial energy of our people to deliver a brighter future and a cleaner, healthier world. ## Kris Licht Chief Executive Officer --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 8 三 # People and Culture # UNLEASHING THE POTENTIAL OF OUR PEOPLE, PERFORMANCE AND PURPOSE In 2024, Reckitt announced the strategic reshaping of our business to sharpen our portfolio and simplify our organisation for accelerated growth. To achieve this, we are reorganising into three businesses: core Reckitt, Essential Home and Mead Johnson Nutrition, reducing organisational layers to foster greater accountability and speed of decision making. Within core Reckitt we have also adopted a geography-category organisation and leveraged our global functions to further enable our commercial organisation. This work has led to new appointments to Reckitt's Group Executive Committee (see page 64) as well as changes to our Category, Area and Centre of Excellence teams. The vast majority of these appointments have been internal promotions of leaders who have rich commercial, cross-market experience at Reckitt. This is a testimony of past leadership development initiatives. As we position our portfolio for the future, it is our people who unite us. Our spirit, drive and determination are evident in every one of our markets, categories and functions. Our ambition is to be a world-class consumer health and hygiene company and our Leadership Behaviours: Own, Create, Deliver and Care are critical enablers to our success. We Do the Right Thing. Always. ![img-37.jpeg](img-37.jpeg) Building on the foundation created to date, we have put in place plans to continue strengthening our culture. Our culture places people and purpose at the heart of our business. It recognises that how we work is as important as what we do. It is inclusive and values everyone's unique perspective, where everyone has potential to grow and we all hold accountability for making Reckitt a great place to work. ## Nurturing talent We believe everyone has the potential to grow and develop, including those within specialised roles, those making lateral moves, and those with potential for bigger impact. > “We have a special culture, delivered through our people and brands. We do the right thing, always, and are passionate about delivering performance that is purpose driven, entrepreneurial, fast paced and action oriented.” > > Ranjay Radhakrishnan > Chief Human Resources Officer In November 2023, we brought together all of our learning programmes for professional growth onto a single platform that offers personalised learning and development options. The uptake of MyDevelopment Learning has shown strong momentum over the past year, with over 17,000 individual learners. Supported by changes to the way we define and nurture talent, we will continue to provide tailored development and learning journeys for every colleague to grow, feeding our talent pipeline and building Reckitt's next generation of leaders. ## Recognising and rewarding performance Reckitt strives for sustained high performance in a globally competitive world. We have updated several elements of how we set and measure performance, supported by our established cycle of objective setting, performance reviews and assessment, and development conversations. These changes ensure that we not only further strengthen our performance culture, but also ensure that our colleagues remain purpose led and values driven. Our performance, talent and reward philosophy is aligned to 'who we are' and recognises both 'what' we do and 'how' we do it. Central to our remuneration philosophy are the principles of pay for performance alongside shareholder and strategic alignment. Combined with our Compass and business model, these principles inform how decisions are made, how leaders lead and how we reward them. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 9 三 # People and Culture continued ## INCLUSIVE LEADERSHIP We continue to strive to embed inclusion into our DNA and believe that building an inclusive culture is everyone's responsibility. Enhancing our global Conscious Inclusion programme, in 2024 we launched our Inclusive Leadership programme, encouraging our most senior leaders to review their role and contribution to inclusion within their teams, and supporting them to complete a self assessment and action plan. We plan to enhance this programme in 2025 as we continue our ongoing partnership with our Wellbeing partner, Hintsa, and introduce new methods to promote, review and action colleague feedback. ![img-38.jpeg](img-38.jpeg) ![img-39.jpeg](img-39.jpeg) For the majority of colleagues, their performance will feed into our Annual Performance Plan (APP) alongside our collective performance against key performance metrics, tailored to individual markets. Reckitt's most senior managers participate in our Long-Term Incentive Plan (LTIP). Participation has been expanded for 2025, extending a longer-term element of reward to balance in-year performance, enhancing our culture of ownership and supporting us in recruiting, retaining and developing the best global talent. Read more in our Directors' Remuneration Report on page 96 ## Reflecting the countries and communities we serve As a global organisation that reaches a diverse group of customers, consumers, suppliers and partners, conscious inclusion is at the heart of everything we do. We recognise that our people are a source of competitive advantage. The fact that every one of us is unique, with our own identity, background and experience gives us diversity of thought and enables creative solutions. Our ambition is for everyone to be welcomed, respected and heard. We want everyone to be able to fully contribute to our business and to thrive as we represent and reflect the countries and communities that we serve. We are proud to be recognised as a Global Living Wage employer (see page 49). Our Global Inclusion Board, chaired by Reckitt's CEO, provides strategic leadership and governance for our inclusion agenda and how it is deployed for our people, within our brand identities and across our supply chain. The Board works with market-based Local Inclusion Boards and Global Employee Resource Groups (ERGs), to ensure our global direction is meaningful across all of our markets. Our four Global ERGs lead the activation of our inclusion strategy, representing four groups of colleagues and allies: Women, Race & Ethnicity, LGBTQ+ and Disability. Each contributes to moments of celebration throughout the year, amplifying the voices of their members and building allyship throughout our employee population. ## Creating employee dialogue We paused our annual employee survey for 2024 in order to reassess our employee feedback strategy. Committing to greater transparency on the points that matter most to our people, in 2025 we are introducing new methods of listening to our colleagues throughout the year. Anchored by an annual global survey, supported by shorter 'Pulse' surveys throughout the year and targeted requests for feedback at key moments, our new methodology will bring together feedback and sentiment from across multiple colleague check points to inform decisions and drive action planning. ## Commitment during change Change is a continuous reality within our business as we adapt and grow. Throughout these changes we remain committed to our people, sharing our ambitions for the future and ensuring our culture reflects their enthusiasm, drive and professionalism. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 10 > # Value Creation Model # MANAGING OUR PORTFOLIO FOR VALUE CREATION Our business model is rooted in three fundamental principles that drive the value we create through our brands and the categories in which we play. These principles define our brand portfolio by setting the expectations against which each must deliver, and guide our strategic choices as we manage our portfolio for value creation. ## HOW WE CREATE VALUE Reckitt's business model harnesses our value creation principles to a proven playbook on how we grow and expand Powerbrands. Our sharpened portfolio and simpler organisation enable us to create value guided by strategic priorities that support sustainable, long-term growth. ### Portfolio Value Creation - Read more page 10 ### Reckitt Playbook - Read more page 11 ### Strategic Priorities - Read more page 16 ### Simpler Organisation - Read more page 17 ### Stakeholder Value Creation - Read more page 21 ## Our three portfolio principles Our first principle requires each brand to demonstrate a clear, long-term runway for growth. This can be driven in several ways. First, through premiumisation by leveraging our innovation platforms to develop superior products that anticipate consumer needs as they evolve. Second, through category creation by innovating to establish entirely new categories or expanding existing brands into adjacent ones. Third, through household penetration by increasing our reach and driving adoption of our products in new households and across markets with low penetration rates. The second principle requires each brand to possess an attractive earnings model. The primary metric we look at is the strength of its gross margin, which must be high and towards the upper end of its category. This approach supports continued reinvestment and innovation, which in turn fuel additional growth through premiumisation and category creation. It also ensures each brand can deliver profit contributions consistent with the Group's gross margin, which is amongst the highest in the industry. ![img-40.jpeg](img-40.jpeg) ## Our three principles for portfolio value creation ensure every brand earns its place in our portfolio Third, each brand must demonstrate an enduring competitive advantage. This is rooted in strong brand equity, built through decades of consumer loyalty and trust and extended through a superior, innovative product range that sets the brand apart in the marketplace. These three principles provide the strategic lens through which we evaluate every brand in our portfolio. They inform our capital allocation choices and ensure we play in categories that offer the best long-term opportunities for growth and sustainable value creation. ## July 2024 strategic update These principles drove the strategic choices we announced in July 2024 to sharpen our portfolio focus on 11 Powerbrands in four consumer health and hygiene categories (see page 18 for details). Drawn from those with the strongest equity, these brands capture the essence of Reckitt's growth potential. Together, they comprise a portfolio with the potential to deliver one of the most attractive growth and profitability profiles in the industry. Alongside this core portfolio are two businesses, Essential Home and Mead Johnson Nutrition, which although strong and growing, do not fully align with these three principles. We have therefore embarked on a process to find market opportunities for each. From 1 January 2025, these two non-core businesses operate and are managed independently alongside core Reckitt, replacing our Global Business Units as our operating segments in the Group's financial reporting. We plan to exit Essential Home by the end of 2025 while exploring all options for Mead Johnson Nutrition, where we will take the time necessary to determine the path that maximises shareholder value for this market-leading business. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 11 # Value Creation Model continued # WE CREATE AND GROW POWERBRANDS Reckitt's Playbook captures the way we create, build and expand our iconic brands. Our Playbook brings together the capabilities that enable us to deliver sustainable, long-term growth across our brand portfolio. It has been honed over many decades of learning and enables us to create, build and expand our brands through the 'Science Inside' our innovation platforms. This drives the creation of superior products that anticipate consumer needs through premiumisation and the development of new categories. It extends to engaging with consumers in local markets and executing with excellence, which we continuously strive to enhance. # The Reckitt Playbook ## CONSUMER OBSESSED - Deep consumer insights - Evolving category needs - Understanding demand spaces ## ICONIC BRANDS - Creating and growing categories - Global Powerbrands - Local heroes ## SUPERIOR INNOVATION - The 'Science Inside' Reckitt - Breakthrough propositions that delight consumers - Innovation-led growth ## EXECUTION EXCELLENCE - Optimised supply organisation - Global success model - Excellence on shelf and on screen ## Premiumisation ## Category creation ## Household penetration ## CONSUMER OBSESSED People are at the heart of everything we do. To truly understand their needs, we begin by developing deep insight into their lives. We immerse ourselves in their worlds, bringing everyday problems to life in our sensory and consumer science labs around the world to fully understand and test the local challenges they face. This ensures we solve people's problems by applying science in a way that adds value to their lives. Using proprietary advanced analytics and machine learning, we uncover valuable insights that reveal hidden patterns in consumer behaviour and sentiment, which are often overlooked in traditional research methods. This enables us to assess why people choose specific products and to map their behaviour in demand spaces where they engage. By combining deep behavioural understanding with our data-driven analysis, we can identify unmet needs, high-potential categories and methods to unlock demand in those spaces. This is how we keep consumers at the heart of our strategy and drive demand-centric growth through superior solutions across our portfolio of market-leading brands. --- Strategy report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 12 三 # Value Creation Model continued ![img-41.jpeg](img-41.jpeg) # VANISH: SUSTAINABLE PRODUCT INNOVATION When developing the new Vanish Oxi Action, our goal was to help consumers reduce their energy bills and carbon footprint while maintaining exceptional performance. Our research revealed that while consumers appreciated the convenience of shorter washes and the potential for energy savings, they were hesitant to switch to colder washes, which are the key element in reducing $\mathrm{CO}_{2}$ emissions in the wash cycle. This reluctance stemmed from concerns about poor stain removal and lingering odours at lower temperatures. To address this, we unlocked an exclusive new cold wash catalyst through our innovation capabilities. This catalyst allows the bleaching system to react faster, enabling effective stain removal even in colder washes, tackling tough stains and odours. We enriched our existing formula with this catalyst and used machine learning to rebalance the ingredients, optimising the formula to speed up stain removal in just 30 minutes. To test the new formula's effectiveness, we pioneered a first-of-its-kind, two-phase Life Cycle Assessment. In the first phase, we evaluated the efficacy and environmental impact of our laundry booster in the wash cycle. In the second phase, we extended our evaluation to the impact on garment lifespan. Our results were striking: using our laundry booster on a $20^{\circ}\mathrm{C}$ shorter wash cycle can reduce $\mathrm{CO}_{2}$ emissions by up to $30\%$ compared to using detergent alone on a $40^{\circ}\mathrm{C}$ longer wash cycle, while still providing excellent stain removal. Additionally, our testing showed that washing with our laundry booster on a colder, milder cycle can double the lifetime of a garment, with better colour maintenance, thanks to lower mechanical and thermal stress. This has significant positive implications for reducing the environmental footprint considered in our Life Cycle Assessment. Our new formula was successfully launched in the UK, our largest market for Vanish, in 2023 and has reached at least 350,000 new households since launch. # Link to strategy Portfolio value creation Product superiority # ICONIC BRANDS Reckitt has been growing brands for almost two centuries. Today, the superior, efficacious products they represent provide health and hygiene solutions to people in almost every country. Most of our Powerbrands are global leaders in their category. We leverage our global footprint to drive brand expansion through the breadth of our go-to-market networks and the scale of our manufacturing capabilities. Our brands are the foundation of our value proposition and the medium through which we engage with consumers. Whether it's Dettol, launched in 1933 and synonymous with antiseptic liquid for consumers across the world, or Finish, a pioneer in auto dishwash since 1953, the brand equity we build represents a unique and powerful source of our competitive advantage. Each of the Powerbrands in our core portfolio has earned its place by meeting our three principles of value creation. Collectively, they match the high expectations we set around long-term growth, earnings power and competitive advantage. Alongside our Powerbrands are a number of local hero brands which enjoy strong levels of consumer loyalty in their local markets. They include Tempra, Lemsip, Jik and Veja, which meet our value creation criteria but do not possess the multi-geography reach of our Powerbrands. Certain brands have the potential to grow into Powerbrands over time. These include Move Free, our joint health supplement, which has enjoyed strong levels of adoption in China and contributed to the double-digit growth we enjoyed there in 2024. Together, our Powerbrands, future Powerbrands and local heroes comprise a cohesive and proven brand portfolio, to which we can apply our Playbook to build on the strong structural economics of the regional businesses that deliver them. Our ongoing investment in brand equity is a vital component of our success and is enabled though the high gross margins our products enjoy. Investment broadens the shoulders of our brands and boosts their ability to create value. Our ability to premiumise products and extend them to new categories lies at the heart of this process as we deliver superior solutions that draw on the deep science of our innovation platforms. ![img-42.jpeg](img-42.jpeg) Finish Ultimate Plus All in 1 uses breakthrough CycleSync™ technology to release the right ingredient at the right time to deliver intensive clean and shine. $75\%$ of Finish tablet net revenue comes from thermoformed tablets, which have contributed almost £500 million additional net revenue in 2024 versus 2019. --- Strategic Report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 13 三 # Value Creation Model continued ## SUPERIOR INNOVATION Innovation is a vital driver of our growth. Through our world class, science-backed innovation capabilities, we create value for our Powerbrands and delight consumers by premiumising solutions and introducing new categories. ## The 'Science Inside' Reckitt At the heart of our innovation capabilities is deep scientific expertise. Our innovation platforms fuel our growth and build brand market leadership by providing a pipeline of strong, trusted solutions for our brands. We leverage the strength of nine interconnected science and technology platforms to our products, each dedicated to discoveries that drive impactful solutions for high-potential categories we identify through our consumer insights. These capabilities channel the 'Science Inside' our products. Our microbiome platform, which looks at six targeted areas including the built environment biome to understand the microbes in our surroundings, is a great example of how we apply our scientific rigour. This understanding helps us to innovate in categories such as laundry and demonstrates the clear connection between hygiene and good health. Our approach focuses on developing fewer, bigger and better propositions from each of our science and technology platforms. We harness breakthrough science and enable it to travel across categories. This helps to maximise the value of new discoveries by applying it across multiple Powerbrands to address a multitude of unmet consumer needs. We keep sustainability, regulatory compliance and consumer safety core to this end-to-end process, ensuring that 'safety-by-design' is at the heart of all product development stages while also aiming to reduce our environmental impact. Our worldwide team of Regulatory and Safety Scientists work end to end across our product portfolio to ensure compliance with all product-related competent authority regulations as well as early detection, assessment and mitigation of emerging regulatory trends and concerns about ingredients, contaminants, degradants and impurities. Through proactive Product Stewardship processes, we strive not just to be compliant anytime and anywhere but to be ahead of regulations and societal concerns so that we can deliver maximum product resilience and competitive advantage. Read more in Reckitt's 2024 Sustainability Report on product safety ## Innovating for the consumer The success of Lysol Air Sanitizer demonstrates how our platform discoveries lead to breakthrough propositions. Its launch in July 2023 sparked the creation of a whole new Germ Protection category with the first and only air sanitising spray approved by the EPA, which kills 99.9% of airborne viruses and bacteria. This groundbreaking innovation was recognised by the prestigious R&D100 Awards in 2024, winning an award in the Process/Prototyping category. This innovative solution has not only created a new category in air disinfection but has continued to drive strong penetration and growth for Lysol overall. The 'Science Inside' Reckitt enables us to offer premium solutions in existing categories. These include the reformulation of Vanish Oxi Action using a new patented technology with sustainability in mind to offer uncompromised stain removal in a quick, 30-minute cold wash at just 20°C (see case study on page 12). Packaging innovation is another area where we apply our platform science to reduce environmental impact. Our polymer science platform uses novel materials and technology to make packaging lighter and incorporate post-consumer recycled (PCR) polymers. ![img-43.jpeg](img-43.jpeg) ![img-44.jpeg](img-44.jpeg) Durex Fetherlite Our Hyaluronic Acid (HA) condoms are one of the brand's fastest growing recent innovations. Bringing a new lubrication experience, HA is particularly popular with females. With rapid growth in 2024, Durex now leads the HA segment in China. Recycled content in packaging has been introduced across multiple products including Vanish, Lysol, Harpic and Finish to reduce their environmental impact. The impact of these projects has contributed to an increase in net revenue from more sustainable products, which now accounts for over a third of total revenue (see more on page 45). We actively conduct research studies through our science platforms to help us gain further insights into our categories and showcase our category leadership. We recently published a first-of-its-kind study on the vaginal microbiome in the open access journal Microorganisms, in partnership with two leading gynaecology experts. As an emerging area of health research, the study examined how personal lubricants affect the vaginal microbiome. Our findings demonstrated that various Durex and KY lubricants do not negatively impact the healthy vaginal microbiome, addressing concerns based on previous laboratory test data. By increasing our insights into vaginal health, we are better equipped to deliver the best products and solutions for consumers to care for their intimate wellness. Our innovation platforms fuel our growth and build brand market leadership by providing a pipeline of strong, trusted solutions for our brands. Our commitment to innovation and the depth of our platforms ensure that we remain at the forefront of solving problems for consumers by delivering products that also further our sustainability goals and ambitions. --- Strategic Report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 14 三 # Value Creation Model continued ## EXECUTION EXCELLENCE Execution in market is fundamental to our success. Through our new operating model, we are continuously improving the way we serve consumers through strong customer relationships and adapting our products and their delivery to meet specific local needs. Our global success model is based on the scale we enjoy in Emerging Markets, Europe and North America. The extensive reach of our go-to-market networks, combined with the scale of our manufacturing capabilities, drive the growth of our Powerbrands and support strong gross margins through economies of scale and operational efficiencies. We define success at local market level, tailoring our approach to the unique needs of every market, whether through our e-commerce strategy in China or by amending packaging sizes to better serve households in emerging markets. We work continuously to enhance our in-market execution capabilities. This remains a key priority. When it comes to customer service excellence and better meeting consumer needs, there's no finish line; there's always room for improvement. ## Optimised Supply organisation Our supply chain is fundamental to serving our customers in market. It is the backbone of Reckitt, spanning manufacturing, procurement, logistics and customer service and comprises about half of our organisation. During 2024, we took strategic measures to improve our service levels to customers and to ensure that our supply footprint possesses the agility to respond to changes in consumer demand. We are continuing to make strategic investments to strengthen our local supply capabilities. In December 2024, we announced the acquisition of a manufacturing site in Wilson, North Carolina. Commissioned primarily to produce Mucinex tablets and liquids, Wilson will become Reckitt's largest OTC manufacturing facility in the US and is crucial in boosting our ability to meet seasonal demand in our largest single market (see case study on page 20). We also made strides in enhancing our forecasting and planning through the deployment of our end-to-end integrated business planning system. Possessing embedded scenario planning, this system has already contributed to improving our forecasting accuracy, to reducing inventory levels and to increasing our service levels to customers. We have expanded our digital logistics programme with the connection of our ocean freight operations to a Real Time Transport Visibility Platform. This has proven valuable for managing geopolitical disruptions that have impacted ocean transport. During 2024, we began the large-scale roll-out of our Manufacturing Operating System, which supports the further enhancement of our manufacturing excellence programme. This significantly enhances our visibility of potential improvements across all areas of our operations and acts as a means of implementation in some circumstances. We will continue the roll-out of this programme throughout 2025. As part of our ongoing commitment to improvement, in January 2025 we launched a newly-designed Supply organisation to set us up for success and allow us to execute with greater excellence. Alongside this we are investing in a long-term sustainable supply chain that will be a key enabler of stronger value creation for our business. This new platform will support our laser focus on developing capabilities to standardise our ways of working and ensure we are delivering best-in-class service and superior product quality. ![img-45.jpeg](img-45.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 15 # Value Creation Model continued Our new Supply organisation establishes an effective partnership between our global capabilities and local execution by providing clear ownership and accountability. This combination of capability and executional excellence will ensure we can win for our customers and our consumers. ## Harnessing digital capabilities Throughout 2024, our IT & Digital organisation made significant progress in driving and embedding innovation to enable our global teams to better serve their markets. We continued to develop our AI capabilities with a specific focus on developing tools to enhance execution in supply, sales, marketing and R&D. Building on our strong data and AI foundations, in 2024 we launched our ambitious GenAI transformation programme, which began in marketing and will expand further in 2025. In addition to harnessing the best technology available, we are developing our own tools and validating new ways to continue to drive brand-building at Reckitt. Our programme spans creativity, insights and the key tasks our marketers perform daily. As we deploy our initial suite of tools in more key markets in 2025, we are working to enhance both productivity and growth, achieving up to 60% faster concept development and 30% faster advertisement adaptation and localisation. We are scaling our approach in the UK and US, improving efficiency, effectiveness and our ability to better serve local markets as we integrate GenAI across our marketing tasks. Our AI capabilities have been developed out of our Global Hubs, which focus on developing shared services across our business in order to improve execution across markets. Separately, we have continued our commitment to expanding our shared services capabilities with the opening of a new Global Hub in Warsaw in August 2024 (see adjacent case study). ![img-46.jpeg](img-46.jpeg) ![img-47.jpeg](img-47.jpeg) ## INVESTING IN OUR SHARED SERVICES Our Global Hubs focus on developing solutions for our business across technology, data, AI and multi-functional shared services. They enhance efficiency and innovation on a global scale and ensure operating capabilities that surpass industry benchmarks to increase the quality of service and reduce costs. In August 2024, we opened a new Global Hub in Warsaw. Located in the VIBE building in Warsaw's Wola District, the office promotes creativity and adheres to high ESG standards to reduce energy consumption. This facility reflects our future vision and commitment to expanding our shared services capabilities at Reckitt. ![img-48.jpeg](img-48.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 16 # Strategic Priorities # PROGRESS TOWARDS OUR STRATEGIC PRIORITIES Our strategic priorities guide our choices as we create value through a sharper portfolio and a simpler, more effective organisation. | Strategic priority | Progress in 2024 | Future focus | Risks (see Risk Management on pages 53-55 for detail) | | --- | --- | --- | --- | | Portfolio value creation | | | | | by applying three clear principles to drive choices that maximise value | • We are moving at pace to reshape Reckitt as a world-class consumer health and hygiene organisation • We are significantly sharpening our brand portfolio and moving to a simpler, more effective organisation to maximise long-term value for shareholders | • We will focus on a portfolio of market-leading Powerbrands, enabling us to allocate capital against brands that offer the best long-term opportunities for growth | • Business transformation • Product innovation • ESG transition • Macroeconomic uncertainty | | Page 10 | | | | | Product superiority | | | | | through delivering products that delight consumers and extend our growth opportunities | • Every Powerbrand has earned its place in our core portfolio by meeting our three principles of value creation. Each possesses a long-term runway for growth, an attractive earnings model and enduring competitive advantage | • Our focus remains on innovation to deepen the equity of our brands and drive growth through premiumisation, new category creation and greater household penetration of our products • We will continue to launch new products and invest in our innovation platforms to extend the growth runways of our Powerbrands | • Business transformation • Product innovation • Supply chain continuity and resilience • Product integrity • ESG transition • Macroeconomic uncertainty | | Page 13 | | | | | Win in market | | | | | by executing with excellence consistently | • We have equipped our organisation with better tools and capabilities to enable our teams to execute with excellence in market • We are boosting the agility of our US OTC supply capabilities through commissioning a new manufacturing facility in Wilson, North Carolina | • Our new supply organisation and investments in our supply chain will reinforce our business resilience and present opportunities to enhance our customer relationships • We will continue our focus on localising our production capabilities in market to better match local demand with supply | • Business transformation • Geopolitical instability • Product innovation • Technology resilience and information security • Supply chain continuity and resilience • Product integrity • Legal and compliance • ESG transition | | Page 14 | | | | | Fixed cost optimisation | | | | | by releasing costs through simplifying our organisation and securing productivity and efficiency benefits | • We expanded our cost efficiency initiatives in our new Fuel For Growth programme, which targets a reduction in our fixed costs to 19% of net revenue as we exit 2027, versus 21.8% in 2023 | • We will continue to focus on securing the efficiency benefits of our simpler organisation • Advancing shared services adoption will help us reduce costs while we harness digital and AI capabilities to boost productivity | • Business transformation • Geopolitical instability • Technology resilience and information security • Supply chain continuity and resilience • ESG transition • Macroeconomic uncertainty | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 17 # Simpler Organisation # A SIMPLER, MORE EFFECTIVE ORGANISATION Our new unified category structure enables a step change in our organisational effectiveness, supporting stronger in-market execution through a leaner, more agile operating model. ## A new unified category structure In July 2024, we announced our plans to reshape Reckitt as a world-class consumer health and hygiene company through a significant sharpening of our brand portfolio and a move to a simpler, more effective organisation. We adopted this new model on 1 January 2025, replacing our Global Business Units (GBUs) with a unified category structure operated through three geographic areas: Emerging Markets, Europe and North America. The new structure has fewer management layers and reduced duplication in order to accelerate the speed of our decision-making and improve efficiency. Our new global category organisation delivers consumer insight, category expertise and innovation across our brand portfolios in Self Care, Germ Protection, Household Care and Intimate Wellness. Our three geographic areas focus on execution excellence for consumers and customers in market. Working together, we are equipped to deliver stronger in-market execution through harnessing core expertise in brand innovation to leaner global capabilities that are embedded in local markets. ## De-layering the organisation A key element of our new structure is the simplification of our organisational layers. Reckitt previously operated with five: global, GBUs, area, region and market. By reducing these to three (global, area and market), we remove unnecessary complexity and duplicative functions that were an inadvertent consequence of our GBU model. Fewer layers enable changes in our leadership model, moving from a high-cost, multi-layered leadership to fewer, larger leadership roles. Alongside a progressive adoption of cross-functional end-to-end shared services, our new structure expands the scope of our fixed cost reduction opportunities, which are captured in our Fuel for Growth programme (see page 34). ## A more agile Reckitt Our simpler organisation has been designed to bring about a step-change in our organisation's effectiveness by accelerating decision-making and channelling our entrepreneurial energy to the market opportunities we serve. In doing so, we can unlock the full potential of our Powerbrands by improving our ability to meet the needs of consumers and customers across our markets. ![img-49.jpeg](img-49.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 18 # Our Core Business # CORE RECKITT Reckitt is a truly special business, with a portfolio of market-leading, iconic Powerbrands that can deliver accelerated growth and enhanced value creation. Our Powerbrands are loved by consumers and occupy market-leading positions in their categories. Each possesses enduring competitive advantage through the strength and depth of their equities and considerable global scale in their market reach. Sharpening our portfolio has allowed us to simplify Reckitt by moving to a unified category organisation dedicated to the delivery of market-leading strategy, innovation and activation for our Powerbrands across the four categories (see adjacent table). Our categories are unified by growth opportunities and financial attributes that lead in our industry. Each enjoys high gross margins, which underpin ongoing reinvestment in marketing and R&D, supporting deep innovation platforms that will enable us to grow our market presence through premiumisation and new category creation. In core Reckitt, we have a scaled presence in the regions and markets where we believe it matters most. Our categories and brands share a highly consistent operating model, with optimised supply and go-to-market strategies that enable scale across a global health and hygiene marketplace we know best. Reckitt's long history of winning with consumers in these categories provides us with deep-rooted expertise in the markets in which we play. In consolidating our organisation with a unified category structure, we are better able to move at speed and deliver the excellence in execution that will secure our future success. ![img-50.jpeg](img-50.jpeg) # SELF CARE 33% of core Reckitt¹ Self Care is led by our Powerbrands Mucinex, Strepsils, Gaviscon and Nurofen. Our over-the-counter (OTC) products are trusted by consumers and healthcare professionals to treat a range of symptoms. Their growth is fuelled by increased disposable income and heightened consumer interest in health, especially as populations age, as well as category penetration opportunities in emerging markets. ![img-51.jpeg](img-51.jpeg) # GERM PROTECTION 30% of core Reckitt¹ Germ Protection brings together Lysol, Dettol and Harpic. We view hygiene as the foundation of health which these brands enable by protecting against the spread of germs. Our Germ Protection brands enjoy penetration and category creation opportunities around the world as consumers seek protection against viruses and bacteria on surfaces, in their laundry and in the air. ![img-52.jpeg](img-52.jpeg) # HOUSEHOLD CARE 23% of core Reckitt¹ Household Care leads with Finish and Vanish. The growth of these two global leaders of their respective household categories, auto dishwash and laundry additives, is being driven by large penetration and premiumisation opportunities, with significant potential in large developing markets. ![img-53.jpeg](img-53.jpeg) # INTIMATE WELLNESS 14% of core Reckitt¹ Intimate Wellness is home to Durex and Veet. Each is a global leader in its respective category, condoms and depilatories. Their growth is fuelled by increasing consumer interest, normalisation and engagement, which we are meeting with innovation and product premiumisation. We are confident about the growth opportunities in emerging markets such as India, Africa and Latin America, where changing social attitudes are helping to drive higher adoption rates. ¹ Percentage net revenue contributions to core Reckitt based on FY 2024 financial results --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 19 # Market Execution # EXECUTING ACROSS OUR AREAS 1 Percentage net revenue contributions to core Reckitt based on FY 2024 financial results ![img-54.jpeg](img-54.jpeg) ![img-55.jpeg](img-55.jpeg) ![img-56.jpeg](img-56.jpeg) Since 1840, Reckitt has grown brands into household names around the world, supported by an expanding global footprint. Today, we deliver these at scale across three geographic areas, each of which possess the infrastructure and capabilities to win in market. Our new operating model provides us with global scale to execute across our three areas: Emerging Markets, Europe and North America. The operating model benefits from the significant presence we have established in Reckitt's key growth markets. The geographic footprint of our Powerbrand portfolio tilts us further towards the faster-growing emerging markets such as India, China and Africa, where Reckitt already benefits from extensive scale in local supply capabilities. In Europe, operational scale is growing with the unification of our go-to-market structures, which operated separately under the previous Global Business Unit structure. In the US, we are investing in our local manufacturing capabilities to respond faster to future demand for seasonal OTC product while enhancing the technology that supports our distribution and supply capabilities. The breadth of our go-to-market networks and our expanding local manufacturing capabilities underpin the growth of our Powerbrands, supporting strong gross margins through economies of scale and operational efficiencies. # Emerging Markets Collectively, Emerging Markets represents the largest single area in Reckitt's Powerbrand portfolio and is led by the high-growth markets of China and India. Reckitt is well placed to serve consumers in the world's most populated country, India, which accounts for 8% of core Reckitt net revenue. We sell through over one million outlets in India and have grown strongly over the past five years. Our manufacturing capability enables us to supply 95% of products locally at excellent service levels, helped by the recent doubling of our direct customer coverage. There is significant growth potential for health and hygiene categories in India, where Dettol is a leading Powerbrand and enjoys status as one of the most trusted and iconic brands in the country. Dettol is also one of our most expandable brands, enabling us to navigate the consumer from entry-level bar soaps to Dettol's growing range of premium personal hygiene products. China represents 10% of core Reckitt net revenue and became our largest emerging market in 2024 following a strong year of double-digit growth. Here, we lead with two Powerbrands: Durex, for which China is our largest market, and Dettol. We also have a growing VMS business, led by MoveFree, which enjoyed double-digit growth during the year. In Household Care, Finish has significant penetration potential in the auto dishwash category, given less than 3% of China's households currently have dishwashers. We have developed strong go-to-market capabilities though e-commerce in China, including selling through livestream channels. These contributed to China's double-digit growth in 2024 and we are well positioned to meet local demand with a robust supply capability that produces around 80% of the products we sell locally. We are expanding our presence in China to support our long-term growth ambitions. In 2022, we opened our largest manufacturing plant in Taicang, near Shanghai. This state-of-the-art, digitally native site produces local supply for Dettol with an annual production capacity of 100,000 tonnes. Building on the success of this facility, we are expanding production capacity to include Durex PU condoms starting in 2025. As well as meeting growing product demand, the expansion enables us to build greater resilience in our business continuity planning. The Taicang facility will also benefit from our new Global R&D Centre for Innovation, which will be completed in 2026. Located in Shanghai's Caohejing Technical Park, the centre --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 20 # Market Execution continued ## E ## FLEXIBLE ROUTES TO MARKET We implement tailored go-to-market strategies for our Powerbrands to penetrate categories and establish market leadership in fast-growing emerging markets. The global lavatory care market, for example, is projected to grow by 6% annually for the next five years, with the majority of growth in the developing world. To engage directly with consumers in countries including Nigeria and Kenya, Harpic employs in-market demonstrations and door-to-door sales teams to showcase product efficacy. Since launching in 2020, the door-to-door programme in Kenya has more than doubled in size, with sales teams conducting live doorstep demonstrations to over 300,000 households annually, achieving high conversion rates and fostering repeat customers through automated data collection. ![img-57.jpeg](img-57.jpeg) Harpic has also increased access to hygiene products in emerging markets by reducing pack sizes and offering sachets, lowering the cost of entry for consumers. Making our products accessible in this way means that more people can access the high-quality products they need to help them care for themselves, their homes and their families. In Nigeria, a new sachet production line was inaugurated in May 2024 in Agbara, further supporting household penetration in the region. Our Powerbrands also leverage digital go-to-market strategies to engage consumers. In China, Veet uses TikTok to lead conversations around hair removal habits among digitally native younger consumers, driving a significant portion of revenue in this market. By employing a diverse range of go-to-market strategies, our Powerbrands continuously strive to meet consumers in each market in ways that best suit their needs. ## Link to strategy Win in market will leverage the city's position as a hub for technology and innovation, helping us to build strategic partnerships and drive product innovation. As the commercial centre of our China business, Shanghai's proximity to Taicang will strengthen collaboration between our Commercial, Supply and R&D teams. By innovating in China as part of our 'China-for-China' strategy, we will be better equipped to deliver innovations that resonate locally while also scaling these solutions globally. ## Europe Europe is a complex and vibrant region with an abundance of opportunity and is the original home of many of our Powerbrands. Durex, Nurofen and Gaviscon enjoy category-leading positions in many markets across the region. Italy is a great example of how we go to market in Europe, having delivered strong, consistent growth over the last three years, with a net revenue CAGR of over 6%. This is supported by a robust local supply footprint, with around 94% of products produced within the EU. Several of our Powerbrands are market leaders in Italy, including Finish, Gaviscon, Durex and Strepsils. Reinforcing its market position, Durex has ![img-58.jpeg](img-58.jpeg) ## INVESTING IN LOCAL MANUFACTURING We are making strategic investments to significantly expand production capacity and fully support the growing demand for our Powerbrands within local markets. In December 2024, we announced a £155 million acquisition of a pharmaceutical site in Wilson, North Carolina, which will become a state-of-the-art manufacturing facility, primarily for Mucinex production. This will enhance our agility in meeting seasonal demand for OTC products in our largest market once it becomes fully operational in 2027. The 310,000 square-foot site will not only support Mucinex but also has the capacity to manufacture other products in the future such as Move Free and Biofreeze, supporting our long-term growth ambitions in these categories. Elsewhere, following the rapid growth of our OTC Powerbrand Gaviscon we have made continuous investments in sourcing and raw material production sites across key markets throughout 2024. This expansion has resulted in a doubling of Gaviscon's production capacity across all key product formats and ranges and ensures that we can meet the increasing demand for Gaviscon products. These investments in Mucinex and Gaviscon highlight our commitment to strengthening local manufacturing capabilities, improving customer service and enhancing the resilience of our supply chain. ## Link to strategy Win in market --- Strategic Report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 21 # Market Execution continued become the first-ever official partner of the Italian government in sex education for high school students. Over the last four years, we've seen a significant shift upwards in our market position in the OTC segment in Italy, moving up to a number five position from number nine, with participation in three of the top five OTC categories. ## North America North America includes our largest market, the US, which comprises 24% of core Reckitt net revenue. Market-leading Powerbrands in this market include Lysol, Finish and Mucinex. Around 60% of our products sold in the US by value are produced locally through our local supply network of manufacturing plants. We are investing to increase this percentage significantly with the commissioning of a new manufacturing site in Wilson, North Carolina, which will boost our agility to respond to future growth in the US seasonal OTC market (see case study on page 20). We have continued to invest elsewhere in our US Supply organisation to match growth in demand. During 2024, we saw this increase for Lysol products, including through the club retail channel, which is a market penetration opportunity attracting consumers who opt for larger product packs. In July 2024, we launched a high-speed canister wipes packaging line in St. Peter's, Missouri, to support the strong demand for our wipes multi-packs in this channel. This line has the capability to produce up to three variants in multi-pack bundles, reducing complexity and increasing automation. We have also strengthened our go-to-market network capabilities through a focus on improving our customer service. This has increased Reckitt's relative share of distribution in recent years. In the Kantar 2024 Advantage survey, we demonstrated strong online execution and presence when ranked against our peers. ## VALUE CHAIN We continue to use our scale and reach to influence positive change and impact across our value chain, which in turn underpins the value we are able to create for stakeholders. ![img-59.jpeg](img-59.jpeg) ## 01 PRODUCT DESIGN We develop superior, science-based solutions and we use our Sustainable Innovation Calculator to design products that contribute to our sustainability targets. 📅 Read more on page 45 ## 02 SOURCING We source product packaging and raw materials from around 3,800 suppliers across 59 countries. Around 31,000 suppliers provide services that support our business. ## 03 MANUFACTURING We have 48 production facilities, supported by 282 third-party manufacturing sites (co-packers). ## 04 SUPPLY AND LOGISTICS Our global distribution network consists of 144 distribution/ embellishment centres across 54 countries. ## 05 SALES AND MARKETING Globally, our major trading channels span millions of retailers, from online retailers to brick and mortar stores, and leverage a network of distributors to reach consumers, especially in Emerging Markets. ## 06 CONSUMER USE Our products are used in households millions of times each day. On this scale, even small changes in consumer behaviour can have a big impact. ## 07 END OF LIFE DISPOSAL We aim to design for a circular economy to help reduce plastic and packaging waste. 📍 Read more in Reckitt's 2024 Sustainability report 📅 Read more about our stakeholders on page 74 ## STAKEHOLDER VALUE CREATION Our Consumers **2.3bn** People engaged through our purpose-led partnerships since 2020 2023: 1.9bn since 2020 Our People **c.17,800** Learning Library unique users 2023: c.9,500 Our Investors **£2.7bn** cash returned to shareholders 2023: £1.5bn Governments **£700mn** tax paid 2023: £922mn Our Customers **46%** of our markets ranked in the Top Tier of the Advantage Survey for e-commerce 2023: 41% Our Suppliers **£269k** average spend with our suppliers 2023: £240k Communities **£34mn** in social impact investments 2023: £31mn --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 22 > Self Care # SUPPORTING HEALTH THROUGH SELF CARE Our Self Care brands are category leaders in over-the-counter (OTC) healthcare. They offer effective, medicated solutions for common health concerns including pain, congestion, indigestion and sore throat, providing easy access to relief without the need for a prescription. Within our Self Care portfolio, two Powerbrands directly support consumers in managing the symptoms of cold and flu: Mucinex, the number two formulation in upper respiratory, and Strepsils, the global market leader in medicated sore throat. Our two non-seasonal OTC Powerbrands are Gaviscon, the number one in heartburn and indigestion worldwide, and Nurofen, the market-leading analgesic brand in Europe, Australia and New Zealand. # #2 Mucinex: global upper respiratory # #1 Gaviscon: global upper gastrointestinal Strepsils: global medicated sore throat # #1 Nurofen: Global analgesics ![img-60.jpeg](img-60.jpeg) Claims based on information aggregated 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 based on FY24 (based on branded players only) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 23 # Self Care continued The long-term runway for growth in this category is underpinned by an increasing number of consumers actively seeking OTC solutions. This includes the health needs of an ageing global population and health-conscious individuals seeking to treat minor ailments without medical consultation, reducing the burden on healthcare providers. At the same time, greater access to information and online resources is empowering consumers to choose the most effective self care solutions. We communicate with consumers through educational campaigns, partnerships with health organisations, digital engagement and point of sale displays. Nurofen, for example, continues to drive awareness and growth in the pain category, including with its ongoing 'See My Pain' campaign (see adjacent case study). We aim to drive above-category growth by combining our strong brand equity with innovative science. Mucinex entered a new space in 2024 with the launch of its Sinus Saline 2-in-1 Nasal Spray, the first ever drug-free saline product with a nozzle that switches between spray settings for everyday allergens and tough nasal congestion. Our innovation capabilities are driving the development of new product formats, with the successful launch in September 2024 of Mucinex Mighty Chews, the first over-the-counter medicated children's soft chewable tablet for cough relief. Our digestive health portfolio, led by Gaviscon, has expanded into the lower gastrointestinal (GI) category with three specialised ranges: constipation, diarrhoea, and wind and bloating, leveraging a unique science platform designed to address the causes of these symptoms and prevent their recurrence. This extension into the lower GI category builds significant scale across the combined upper and lower GI category. The market penetration opportunity in Self Care adds significant headroom for long-term growth in the category. We see particular potential in emerging markets, where Self Care is still nascent, for scaling brands such as Gaviscon and tilting our portfolio further towards non-seasonality. Nurofen continued to drive market penetration in 2024 with the international roll-out of several new formulations, particularly Nurofen Liquid Capsules in Italy, and in Mexico under the Temprafen brand. We saw a promising early response to the launch of Nurofen sustained release with 12-hour pain relief in Romania. Meanwhile, launching smaller packs of Nuromol has proven a successful strategy to gain penetration in households in South America. The Self Care category offers attractive returns given the innovative and efficacious solutions we provide. This enables continued high levels of investment in brand building and innovation. Our enduring source of competitive advantage stems from brand equity built on the deep trust our consumers have in our effective solutions, supported by over 70 years of research and innovation. With continued innovation, category expansion and the market penetration opportunity in emerging markets, we believe Reckitt's Self Care brands are well positioned to deliver attractive growth in the years ahead. # LEVERAGING OUR SCIENCE ACROSS COLD & FLU RELIEF Strepsils and Mucinex are leaders in cold and flu care, each with a distinctive focus. Strepsils is the global leader in medicated sore throat remedies, while Mucinex is the leading doctor-recommended cold and flu medication in the US. In recent years, both Powerbrands have broadened their shoulders by entering adjacent categories. This expansion is powered by their shared science platforms, developing innovative ranges that cater to changing consumer needs and offering multiple functional benefits. Mucinex entered the $1 billion US sore throat category in 2021 with the launch of Instasoothe, which combines its trusted brand with science from the Strepsils sore throat platform. Clinically proven to numb pain quickly with a three-in-one formula, Instasoothe is the only lozenge in the US to contain hexylresociol, an oral pain reliever. Market penetration in the US continued in 2024 as the range continues to deliver double-digit year-on-year growth. Strepsils has followed the reverse path to Mucinex, expanding the brand's global footprint from sore throat into the cough category. In 2022, Strepsils launched Dry Cough Lozenges in Australia, offering triple relief for cough, sore throat and blocked nose, which quickly became a market leader. Building on this success, Strepsils launched Herbal Chesty Cough+ Lozenges in Australia in 2024. With a successful launch ahead of forecasts, Strepsils cough expansion programme will now roll out across additional markets during 2025 through lozenges and syrups. # Link to strategy Portfolio value creation ![img-61.jpeg](img-61.jpeg) # PAIN AWARENESS Nurofen continues to raise awareness around pain, partnering with universities and key opinion leaders. Our ongoing 'See My Pain' campaign seeks to address how women's pain is often dismissed compared to men's. In October 2024, we released our third Gender Pain Gap Index Report, revealing that women's pain is dismissed from as young as 10 years old. This is an ongoing collaboration with Oxford University researchers and was referenced in a UK Parliamentary Committee report on women's reproductive health. We published a new study in BMJ Open in 2024, in collaboration with Imperial College London, examining the perceptions of UK medical students regarding gender pain bias based on their clinical observations. The study discusses ways to prevent such bias in medical training. We also ran a Pain in Children advisory board focused on ensuring better recognition and treatment of children's pain. Additionally, we launched a UK campaign for Nuromol, a combined paracetamol and ibuprofen pain reliever, successfully positioning it as a solution for strong pain sufferers, which has unlocked growth in this market. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 24 # Germ Protection # TRUSTED BRANDS FOR # GERM # POWER ![img-62.jpeg](img-62.jpeg) For over a century, families have relied on our Germ Protection brands, which people trust to protect the ones they love. Our three Powerbrands in Germ Protection are category leaders, trusted by consumers: Lysol, the number one global disinfectant with its strong consumer base in the US; Dettol, the number one in global antiseptic personal care; and Harpic, the leading global lavatory care brand. Lysol, Dettol and Harpic share a common recognition of hygiene as the foundation of health, providing solutions that enable consumers to achieve the highest hygiene standards at home. Our innovation platforms drive the creation of new categories within Germ Protection, providing opportunities for long-term growth. Lysol is a proven pioneer in category creation and has pushed boundaries to expand beyond surface disinfection to tackle harmful germs in laundry and in the air (see case study). Lysol Laundry Sanitizer has reached 11% of US households since its successful launch in 2016, transforming the way families tackle germs in their laundry, and Lysol Air Sanitizer has been adopted by three million US households since its launch in 2023. ## #1 Lysol: global disinfection ## #1 Harpic: global lavatory care ## #1 Dettol: global antiseptic personal care Claims based on information aggregated 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 based on FY24 (based on branded players only) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 25 # Germ Protection continued There is significant potential for market penetration in these new categories. The US club channel, consisting of large-scale retail chains offering a wide range of products at attractive prices and in bulk quantities, has been a significant growth driver for Lysol during 2024. Products such as the large pack of Lysol Laundry Sanitizer and Lysol Disinfecting Wipes multi-packs are selling well in this channel and Lysol Air Sanitizer was rolled out across the club retailers in January 2025. Demographic changes are driving increasing hygiene awareness globally and are significant tailwinds for market penetration in the Germ Protection category. They include the risk of pandemics, climate change, urbanisation and the growing middle class in emerging markets. Dettol and Harpic's geographic exposures are beneficially weighted towards emerging markets, which are seeing increasing disposable income spent on hygiene and personal care categories. Dettol has leveraged its trusted brand status by extending in recent years beyond the liquid antiseptic category into new categories including personal care, laundry and surface disinfection. Following successful launches in these categories, the opportunity for market penetration remains significant. Dettol is unlocking new hygiene occasions for consumers both in emerging markets, where Dettol Disinfectant Spray is showing strong growth in China, and in established markets such as the UK, where our new advertising campaign, launched in Summer 2024, is encouraging consumers to re-think their approach to germ protection by boosting perceptions of its everyday relevance to their lives. This has driven growth, particularly in wipes, with a notable increase in the percentage of UK consumers who believe that Dettol should be part of their everyday cleaning routines. Each Powerbrand shares a common source of enduring competitive advantage in deep brand equity, earning consumer trust and loyalty through decades of innovation and demonstrated efficacy. This is a strong foundation for attractive returns in the Germ Protection category, together with an ability to price premium products through offering superior solutions and creating new categories. ![img-63.jpeg](img-63.jpeg) ![img-64.jpeg](img-64.jpeg) ![img-65.jpeg](img-65.jpeg) # CREATING NEW CATEGORIES IN GERM PROTECTION Lysol and Dettol have created significant value over the past five years by leveraging our scientific capabilities to develop and penetrate new categories. Lysol founded a new category beyond its surface disinfection and Laundry Sanitizer ranges with the launch of its breakthrough Lysol Air Sanitizer in July 2023. This is the first and only air sanitising spray approved by the EPA to effectively kill both viruses and bacteria in the air, reducing the spread of airborne, illness-causing pathogens such as cold, flu and coronavirus. The science behind this formula is based on active molecules which attach themselves to and breakdown airborne microorganisms, killing germs and odours. The product is steadily increasing its market penetration, reaching a record-high of 8.4% market share in air instant action sales in September 2024. Dettol has successfully broadened the shoulders of its strong brand using innovation to enter new categories in new markets in laundry and personal care. In 2022, we launched Dettol Washing Machine Cleaner and Dettol Laundry Pods in China, accelerating Dettol's penetration in laundry alongside the Dettol Laundry Sanitiser. The five-in-one washing machine cleaner, developed through our microbiome science platform, kills 99.9% of bacteria, while removing limescale from deep in the machine. The four-in-one Tru-Protect Laundry Solution laundry pods, powered by our polymer science platform, provide both cleaning and germ-kill in one formula. These launches proved successful, with the Washing Machine Cleaner currently holding a number one market position and 34% market share in China and the Laundry Pods a number one market position in Hong Kong. Dettol's strong innovation pipeline continues in 2025 with the launch of a range of personal care and disinfectant products offering 12-hour protection against harmful germs, enabled by innovation derived from medical science. The creation of new product categories, supported by a strong pipeline of innovation, opens up significant market penetration opportunities for Lysol and Dettol in key growth markets including the US, China and India. # Link to strategy Portfolio value creation --- Strategic report Governance Financial statements Other Information Reckitt Annual Report and Accounts 2024 26 # Household Care # PREMIUM SOLUTIONS FOR HOUSEHOLD CARE ![img-66.jpeg](img-66.jpeg) # Finish and Vanish offer premium solutions that are trusted by millions of households to tackle everyday cleaning challenges. As the world's number one automatic dishwashing brand, Finish provides a complete range of products, from dishwasher tablets to rinse and shine aids and dishwasher cleaners. Vanish, the number one global fabric treatment brand, offers powerful stain removers, laundry boosters and carpet cleaners, helping clothes and carpets last longer. In recent years, both Powerbrands have focused on enhancing their core ranges with premium features to address evolving consumer needs. The auto dishwash portfolio has transitioned to superior performance thermoformed tablets using innovation capabilities from our polymer science platform (see adjacent case study). Today, thermoformed products account for 75% of tablet net revenue. # #1 Finish: global automatic dishwash # #1 Vanish: global fabric treatment Claims based on information aggregated 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 based on FY24 (based on branded players only) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 27 # Household Care continued In 2023, we took premiumisation further with the successful launch of Finish Ultimate Plus, featuring our best-performing dish detergent technology, which enables consumers to save water on each load through eliminating the need for pre-rinsing. Vanish launched a new formulation for Oxi Action Stain Remover in 2023 to meet consumer demand for high performance in a shorter, more economical wash. The new formula promises stain removal and colour protection, even at 20 degrees on a 30-minute wash. This was successfully launched in the UK (see case study on page 12). With strong initial consumer adoption of these premium products, there is a compelling opportunity for growth with a runway for deeper market penetration. Finish's footprint is currently concentrated in markets such as Europe and the US and there is a significant opportunity in large, developing markets where dishwasher ownership is growing from a low base. The growing percentage of households that currently own a dishwasher globally is about 13%, and is less than 3% in China and India. Vanish also has a large penetration opportunity, with less than one in five people using a stain removal product. The Household Care category offers attractive returns given the premium nature of our products, which are embedded with patented technology, providing significant headroom for continued investment. The trust earned from consumers, stemming from 50 years of category development and innovation at Finish and 30 years at Vanish, is a significant contributor to the brand equity of these category-leading products and provides a solid foundation for their future growth. ![img-67.jpeg](img-67.jpeg) ![img-68.jpeg](img-68.jpeg) # THE SCIENCE INSIDE FINISH Finish made the strategic decision to pivot from traditional hard-pressed dishwashing tablets to thermoformed tablets in 2019. This change was enabled by our investment in polymer science, which has equipped us to innovate new polyurethane-based tablet formats preferred by consumers and to premiumise Finish's market presence through new product launches. Thermoformed tablets have enjoyed a positive consumer response. In 2024, there were around 580 million more Finish thermoform washes worldwide versus 2023 and thermoform tablets now account for three-quarters of our tablet net revenue. Within the thermoform category, we offer several tiers of tablets, with the top end represented by our newest launch, Finish Ultimate Plus. With three times the cleaning strength, it is our best-performing auto dishwash detergent yet. Powered by patented CycleSync technology, it releases ingredients separately during the wash for maximum effectiveness. It also enables the consumer to skip the pre-rinse cycle and save up to 40 litres per load. Since the launch of Finish Ultimate Plus in 2023, sales now represent more than a quarter of thermoformed tablets sold in our launch markets, including Germany, the UK and Australia. We will continue to invest in the premiumisation of our thermoform products to meet the number one consumer need in auto dishwash: a deep clean, whatever the conditions. # Link to strategy Product superiority --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 28 Intimate Wellness # EMPOWERING CHOICES IN # INTIMATE # WELLNESS ![img-69.jpeg](img-69.jpeg) Durex and Veet are empowering consumers by offering innovative, premium personal care solutions that promote choice and wellbeing. As the number one brand in global sexual wellbeing, Durex leads the industry, innovating with products designed to enhance the sexual experience and improve intimate wellness. Veet, the leading depilatory brand worldwide, provides superior hair-removal solutions tailored to suit different skin types, styles and moods and is trusted in over 80 countries. Intimate Wellness is an attractive, high-growth category fuelled by growing consumer interest, involvement and normalisation. Our Powerbrands are at the forefront, shaping online conversations and engaging with people directly. In China, Veet has successfully engaged with younger, tech-savvy consumers through TikTok discussions around hair removal. This platform now drives significant revenues in China, demonstrating the importance of digital engagement. # #1 Durex: global sexual wellbeing # #1 Veet: global depilatory Claims based on information aggregated 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 based on FY24 (based on branded players only) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 29 # Intimate Wellness continued These Powerbrands drive significant growth by premiumising products to give consumers more choices to meet their needs and preferences. Our consumer insights are leveraged with science developed through our innovation platforms. A standout example of this is the launch of Durex Fetherlite HA condoms in China in 2022. Recognising lubrication as a key consumer need in this category and the well-known moisturising benefits of hyaluronic acid (HA) in skincare, Durex developed a condom with a water-based lubricant containing hyaluronic acid. This successful launch has proven popular with women, who make up over a third of buyers, higher than the rate for other condoms. This product has strengthened Durex's category leadership in China. Veet is also evolving to match consumer needs, with Veet Men posting double-digit growth and capturing over 80% of the global market for men's depilatories. Meanwhile, our Veet Women's Bikini products, the first dedicated range in this new segment, also continue their success since launch. The Intimate Wellness category offers additional growth through significant market penetration opportunities. While Durex is the number one condom brand worldwide, based on our estimates we believe Durex products currently reach less than 1% of global sex occasions. The brand has experienced notable success in China and there are additional opportunities for rapid growth in large, emerging markets such as India, Africa and Latin America. It also enjoys further expansion opportunities in our adjacent categories such as personal lubricants. Intimate Wellness solutions enjoy an attractive earnings model with strong gross margins that enable ongoing investment in superior materials and new production techniques. Our premium solutions also enhance the brand equity and consumer loyalty that both Veet and Durex have built over 90 years of innovation and leadership in the category. With continued premiumisation of products and deeper market penetration in emerging economies, our Intimate Wellness portfolio is well positioned to deliver attractive growth and returns in the years ahead. ![img-70.jpeg](img-70.jpeg) ![img-71.jpeg](img-71.jpeg) # STRETCHING MATERIAL SCIENCE IN DUREX Since becoming Europe's first manufacturer of latex condoms in 1932, Durex has evolved to meet consumer needs through key moments of innovation. As the global condom market leader, with particular strength in Asia and Europe, Durex continues to reinforce its position with breakthrough innovations and a commitment to delivering premium products. In 2020, Durex launched 001 in China, a next-generation polyurethane condom which is the thinnest in the Durex family, designed to provide a more natural feeling. This was followed by the 003, offering even greater softness and comfort. This innovation stemmed from deep research within our Polymer Science platform. In 2022, Durex made another high-impact launch with Durex Fetherlite HA, a thin latex condom featuring a water-based lubricant infused with hyaluronic acid for a unique sensation. Developed in under a year, this product gained a leading share of the HA condom segment within its first 12 months. Building on this success, we are launching a hyaluronic acid range with three products across Basic, Fetherlite and Air, to secure our leadership in this segment. By consistently innovating premium, differentiated products for key markets like China, we continue to strengthen the category leadership Durex enjoys. ## Link to strategy - Product superiority - Win in market ![img-72.jpeg](img-72.jpeg) ![img-73.jpeg](img-73.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 30 三 # Essential Home # ESSENTIAL HOME ![img-74.jpeg](img-74.jpeg) Essential Home is a global, scaled business of trusted brands on a mission to transform people's living spaces into places they can call Home: somewhere to connect with family, friends and themselves, a place where they feel protected and are proud of. This portfolio of market-leading brands plays in growing and resilient categories such as Air Care, Laundry, Surface Care and Pest, with substantial potential for continued future growth. At the core of the portfolio is Air Wick, the number one air care brand in Europe, Australia and New Zealand combined, and global number one in plug-in scented oils and mist diffusers, which has been uplifting homes with fragrances for more than 80 years. # #1 Air Wick: Europe and ANZ Air Care # #1 Woolite: US fine fabric detergent # #1 Calgon: European water softener # #4 Cillit Bang: European power cleaner SBP: Brazilian pest brand Claims based on information aggregated 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 based on FY24 (based on branded players only) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 31 # Essential Home continued Alongside Air Wick is a group of strong brands with market-leading positions and deep brand equities. These include Calgon, the number one water softener in Europe providing over 90 years of protection against limescale and dirt in washing machines; SBP, the number one insect protection brand in Brazil with over 50 years of heritage; Woolite, the number one fine fabric wash laundry detergent in the US that has been protecting clothes for more than 70 years; Cillit Bang, the number four power cleaner in Europe known for its powerful range of cleaning products; and Resolve, the leading carpet spot and stain removal brand in the US. Essential Home enjoys a scaled market presence across North America, Europe, Australia and New Zealand, and Latin America. This is supported by long-term partnerships with major retailers and an end-to-end multi-region supply chain infrastructure. As with core Reckitt, sustainability is a key aspect of Essential Home's product and supply strategy, with the business deeply committed to optimising resource usage and reducing environmental impact. Essential Home's brand portfolio enjoys gross margins that rank amongst the industry's highest. Air Wick has been a key driver of growth, benefiting from a strong innovation pipeline, including the 2023 launches of 24/7 Active Fresh, our first aerosol-free auto spray, Air Wick's Vibrant fragrance range and advanced plug-in device and the latest generation of Essential Mist diffusers (see adjacent case study). Essential Home benefits from a dedicated R&D team with a track record of delivering transformative, superior solutions and applying innovation synergies across the portfolio. In the laundry and surface care categories, future growth potential lies in leveraging strong brands such as Woolite and Calgon to increase market penetration, and expanding leading cleaning brands such as Cillit Bang and Easy-Off into new categories through premiumised products. Essential Home's pest brands are set to grow further, benefiting from external trends such as climate change, and building on their strong position in key markets. Essential Home is a stable business with a resilient portfolio of strong brands with a great future. Following a strategic assessment of our brand portfolio, we announced in July 2024 that we see stronger growth synergies across the Powerbrands we identified in core Reckitt. As a consequence, we are now assessing market opportunities for Essential Home and expect we will achieve an exit for this business by the end of 2025. ![img-75.jpeg](img-75.jpeg) ![img-76.jpeg](img-76.jpeg) # AIR WICK: CONTINUING TO BRING THE OUTSIDE INSIDE Air Wick has continued to convert its strong innovation pipeline into transformative, superior solutions that fulfil consumers' desires to elevate their living spaces and turn their homes into sanctuaries. The Air Wick Vibrant range of scented oil fragrances, launched in January 2023, was the biggest liquid electricals launch in the US of the past five years. With twice the essential oil content of regular scented oils, our fragrances offer a premium experience, bringing speciality store quality to mass retail and attracting new shoppers to the brand. Since launch, the range continues to generate double-digit growth. To complete the multi-sensorial experience, we launched the latest generation of our Air Wick Essential Mist Diffuser in a segment we pioneered back in 2018, which still has significant opportunity for penetration growth. This new diffuser, coupled with Vibrant fragrances offer consumers an unparalleled fragrance experience. Our cordless diffuser features two new settings: a gentle light that glows while a fragrant mist is released, instantly enhancing the ambience in homes, and an additional maximum intensity setting for more noticeable fragrance. It is the first Reckitt device to incorporate PCR content within its plastic housing. Air Wick is reinventing the auto-spray segment with 24/7 Active Fresh, the first-ever aerosol-free auto-spray, launched in Europe in 2023. Free from phthalates, propellants and dyes and packaged in a 50% PCR bottle, this product appeals to consumers who prefer non-aerosol. With up to 70 days of freshness, it provides a more natural way of continuously neutralising odours. The success of the launch continues and it has been awarded the 'Product of the Year' in multiple European markets, as voted by consumers. Air Wick's ongoing ability to translate innovation into superior solutions that delight consumers solidifies its global leadership in plug-in scented oils and mist diffusers, while attracting new users and increasing market penetration. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 32 三 # Mead Johnson Nutrition # MEAD JOHNSON NUTRITION ![img-77.jpeg](img-77.jpeg) Mead Johnson Nutrition provides the highest-quality, clinically based infant and toddler nutrition through a market-leading portfolio of brands around the world. Mead Johnson's portfolio includes Enfamil, the leading global infant formula brand and the most recommended by paediatricians in our core markets, as well as Nutramigen, the number one brand for managing cow's milk allergy worldwide, supported by over 75 years of evidence. Parents place their trust in our brands, underpinned by the confidence that medical professionals have in our products. This confidence is rooted in our unwavering commitment to a clinical, science-based approach to innovation. The infant formula category is evolving to meet the increasingly specialised needs of infants. Our response to this is the development of our allergy and digestion segments, which present growth opportunities even as global birth rates decline. Mead Johnson maintains a leading market share in these segments by offering differentiated products. # #1 Enfamil: infant formula brand recommended by US paediatricians # #1 Nutramigen: global for managing cow's milk allergy Claims based on information aggregated 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 based on FY24 (based on branded players only) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 33 # Mead Johnson Nutrition continued In the higher-growth digestion segment, we successfully launched Enfamil NeuroPro Gentlease Powder in 2024 to soothe stomach problems with patented prebiotics. It is the only formula with proven 24-hour relief, easing all five signs of digestive discomfort, while providing long-lasting brain-building benefits. We continue to expand our market access and penetration with new format releases and international roll-outs. In 2024, this included a successful launch of Enfamil NeuroPro (see adjacent case study) in Canada. Given the crucial role healthcare professionals (HCPs) play in educating parents on child nutrition and recommending solutions, building and deepening relationships with them is vital. In 2024, we focused on further nurturing these relationships through the relaunch of the Mead Johnson Nutrition Institute, a platform dedicated to HCP education. The platform serves as a one-stop destination for the latest in nutrition science, education and events, providing credible, easy-to-read resources. By the end of 2024, we engaged healthcare professionals in more than 25 countries through nutrition science and education initiatives. Following our team's remarkable efforts in addressing the infant formula supply shortages in the US in 2022, they once again demonstrated exceptional dedication in the aftermath of a tornado in Mount Vernon, Indiana in July 2024. Thankfully, all our employees were safe despite significant damage to our third-party warehouse, which stored a mix of raw materials and finished products. Thanks to a global, coordinated effort, we were able to continue production and limit the extent of retail stock shortages during this period. We are deeply grateful for the hard work of our team during this challenging time. To further build resilience in our supply chain, Mead Johnson is starting a programme of capital investments that will strengthen our operations and allow the business to stay ahead in a dynamic environment. Mead Johnson is a great business, but it is now considered non-core. As we focus on our Health and Hygiene Powerbrands, we will consider all strategic options to maximise its value for shareholders. ![img-78.jpeg](img-78.jpeg) ![img-79.jpeg](img-79.jpeg) # ENFAMIL: A SPECIALISED, SCIENCE-LED PORTFOLIO Enfamil focuses innovation around ingredients with clinically proven outcomes. Enfamil NeuroPro and MindPro are the only infant formulas in the market that contain two essential elements found in human breast milk: milk fat globule membrane (MFGM), which plays a vital role in brain development, and human milk oligosaccharides that support the immune system. Supplementing with MFGM in infancy is linked to enhanced cognitive, motor and language development at 12-18 months, as well as a 5.2-point IQ advantage at five-and-a-half years of age. Since launching in key markets across Asia, North America and South America, Enfamil has captured a 32% market share of the premium global infant and toddler formula category. Enfamil is also targeting the higher-growth digestion segment of the infant formula category by enhancing the NeuroPro formula with a patented prebiotic fibre blend. Enfamil NeuroPro Gentlease Powder helps soothe tummy troubles within 24 hours and is clinically shown to support softer and more frequent stools. The Stage 1 Powder was successfully launched in the US during 2024. Specialised products are another higher growth segment that Enfamil has entered with the launch of an innovative, premiumised product designed specifically for babies born via C-section, Enfamil A+ Nurapro C-Biome. C-section babies are at greater risk of neuro, immune and gut health issues and this formula is the first to feature a unique C-Biome blend to boost microbiome diversity and immune response. The formula was launched in ASEAN during 2023-2024, receiving a positive reception in Thailand and the Philippines, with Malaysia, Vietnam and Singapore launching over 2025. Through these innovations, Enfamil continues to demonstrate its market leadership in premium products backed by scientific research, and continues to build the trust of medical professionals and parents. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 34 # Fuel for Growth ## RIGHT-SIZING OUR OPERATING COSTS Our transition to a sharper, simpler organisation brings with it valuable opportunities to right-size our operating costs. These have been brought together in a cost optimisation programme we call 'Fuel for Growth'. Set out in our July 2024 Strategy Update, Fuel for Growth targets a reduction in our corporate fixed costs to circa 19% of net revenue as we exit 2027, a reduction of at least 300bps, from circa 22% in 2023. We aim to achieve this through our simpler operating model, the right-sizing of historical investments, leveraging automation and greater adoption of shared services, and harnessing the productivity benefits of our digital capabilities and generative AI. Fuel for Growth is already delivering cost benefits. By streamlining corporate functions and simplifying our operating model, we were able to eliminate corporate overhead in 2024, which helped us to reduce our fixed costs to 20.9% of net revenue (see page 39 for further details). We see further opportunities for similar cost reductions in the year ahead, as well as savings from right-sizing existing investment programmes that have already delivered benefits in areas such as marketing. Beyond this, we expect to realise the cost benefits of automation and shared services and the productivity gains from digital and generative AI as we move towards our end-2027 cost ambition. The transformation of our organisation will incur one-off cash costs of around £1 billion over the same period. In 2024, these amounted to £161 million and we expect about £500 million in 2025, with the majority of the balance in 2026. We have excluded these one-off transformation and restructuring costs from our adjusted results because in aggregate they are material and affect multiple reporting periods. See pages 223 and 226 for more details. ![img-80.jpeg](img-80.jpeg) ![img-81.jpeg](img-81.jpeg) ## Fuel for Growth delivering early benefits ### Simplification **2024-2025** Simplify our organisation for scale opportunities - Streamlined functional structure - Removal of semi-autonomous GBUs - Reduction in management layers - More unified go-to-market approach ### Right-size investment **2024-2025** Right-sizing and embedded global capability teams in markets - E-commerce capabilities embedded in market - Created omnichannel marketing and sales force - Professional line integrated into markets ### Automation & shared services **2025-2027** Reduce cost and improve efficiency - Implement end-to-end holistic Global Business Services strategy - Expand finance and supply shared services footprint ### Digital & generative AI **2025-2027** New opportunities for effectiveness and efficiency - Marketing function deployed use cases - R&D next frontier - SAP implementation --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 35 # Capital Allocation # OUR CAPITAL ALLOCATION PRIORITIES Our growth model generates attractive cash returns, which we use to reinvest in our brands and enhance returns for our shareholders. Our capital allocation priorities govern these decisions and ensure our brands are well invested, our balance sheet remains strong and our shareholder returns are competitive. Investing in organic growth is our top priority. Allocating capital against brands that offer the best long-term opportunity for growth and value creation is vital for our future success. Our business model is highly cash generative and we maintain a strong balance sheet, with a leverage ratio of around 2.0x EBITDA consistent with our single A credit rating. We are committed to returning excess capital to shareholders. We achieve this through our progressive dividend policy and our share buyback programme, which we reintroduced in October 2023 with a commitment to buy back £1 billion of our shares over a 12-month period. We completed the £1 billion buyback in ten months and announced a follow-on programme of the same size in July 2024. This remains ongoing and as at 27 February 2025 we had purchased shares to a value of £154 million under this second programme. The total value of shares repurchased during 2024 was £1.3 billion. Our full-year dividend for 2024 was set at 202.1 pence, which represents a 5% increase versus 2023. Through our dividend and share buyback, we returned £2.7 billion in cash to shareholders in 2024, a 75% increase versus 2023. It remains our ambition to continue our share buyback programme as a key feature of the returns we offer to shareholders, subject to fulfilling the other governing principles that guide our capital choices. ## Invest in organic growth - Our priority remains to invest in organic growth, funded through our earnings model - Our three principles for long-term value creation govern our organic and inorganic capital allocation choices - This discipline enables us to dedicate capital against the brands that offer the best long-term opportunity for growth and value creation ## Return cash to shareholders - We are committed to returning surplus cash to our shareholders through our dividend and share buyback programme - We expect this programme to continue, consistent with our capital allocation principles ## £2.7bn returned to shareholders in 2024, a 75% increase versus 2023 ## Strong free cash conversion - We continue to prioritise free cash flow conversion and are confident this will remain strong ## Sustainable dividend growth - We continue to pay a progressive dividend - Our dividend policy aims to deliver sustainable dividend growth in future years - Our 2024 dividend was increased by 5% in line with this objective +5% increase in dividend ## Creating value for shareholders ## Target single A credit rating - We continue to target a single A credit rating with balance sheet leverage of around 2x EBITDA ## Manage the portfolio for value creation - We manage our brand portfolio actively to ensure each brand earns its place based on its growth potential and earnings model --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 36 # Total Shareholder Returns # ENHANCING RETURNS TO SHAREHOLDERS Our business is owned by our shareholders, whose expectations we work hard to match and exceed. It is rooted in an earnings model that aims to deliver best-in-class growth and shareholder returns. The total return we offer our shareholders is fundamental to the way we manage our business and share its financial benefits. Since October 2023, this includes our share buyback programme. We have an excellent portfolio of market-leading brands operating in categories with long-term runways for growth. Our target is to deliver sustainable mid-single-digit net revenue growth, ahead of the medium-term growth of our categories. Our business delivers high gross margins, which reflect the quality of both the categories in which we operate and the premiumisation we bring to each. Investing in innovation, consumer education and omnichannel marketing is key to ensuring our brands resonate with customers and consumers. Operating leverage from top-line growth at structurally high gross margins and optimising costs through our Fuel for Growth programme underpin our ability to deliver operating profit ahead of net revenue growth. We will continue to prioritise strong free cash conversion and are committed to returning cash to shareholders through our progressive dividend policy and share buyback programme. # We have an enduring framework for sustained value creation ![img-82.jpeg](img-82.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 37 # Key Performance Indicators ## MEASURING PERFORMANCE Reckitt's key performance indicators (KPIs) include measures for assessing financial and non-financial performance. Variable pay across the Group is aligned to these KPIs. Central to our remuneration philosophy are the principles of pay for performance, as well as strategic alignment. Combined with our Compass and Leadership Behaviours, these principles define how decisions are made, how people act and how they are assessed and rewarded. The KPIs shown here directly impact the remuneration awarded to Executive Directors. - See page 118 for more information in our Remuneration Report - See pages 223-224 for details of our definitions and terms in our APMs ## Like-for-like net revenue growth | 2024 | 1.4% | | --- | --- | | 2023 | 3.5% | | 2022 | 7.6% | | 2021 | 3.5% | | 2020 | 11.8% | Why we measure it: To ensure that our strategy is delivering organic revenue growth. The mix and strength of products and brands enables us to target mid-single-digit growth over time. Performance narrative: Group net revenue of £14,169 million grew by 1.4% on a LFL basis in the year, reflecting price/mix improvements of 2.0% and a volume decline of 0.6%. Our Hygiene brands grew 4.2%, our Health brands grew 2.1% and Nutrition declined 7.3%. ## Return on capital employed (ROCE)¹ | 2024 | 13.5% | | --- | --- | | 2023 | 12.5% | | 2022 | 13.2% | | 2021 | 10.1% | | 2020 | 10.1% | Why we measure it: To ensure it is not being delivered to the public by the public in the year 2024. ## Adjusted operating profit growth at constant exchange rates¹,² | 2024 | +8.6% | | --- | --- | | 2023 | +0.9% | | 2022 | +9.2% | | 2021 | -2.6% | | 2020 | +0.7% | Why we measure it: To ensure that we are converting revenue growth into profit. We anticipate growing operating profit faster than revenue growth. Performance narrative: Adjusted operating profit grew more than net revenue in 2024, driven mainly by gross margin expansion along with a decline in fixed costs. ## Adjusted diluted earnings per share¹ | 2024 | 349.0p | | --- | --- | | 2023 | 323.4p | | 2022 | 341.7p | | 2021 | 288.5p | | 2020 | 327.0p | Why we measure it: To monitor profitability and to provide a comparable net profit per share attributable to owners. Performance narrative: Total adjusted diluted EPS was 349.0p in 2024 (2023: 323.4p), a rise of +7.9%, supported by a lower share count from our ongoing share buyback, and a lower effective tax rate of 22.2% (2023: 25.2%), offset by higher net interest cost and adverse foreign exchange. ## Free cash flow conversion¹ | 2024 | 91% | | --- | --- | | 2023 | 97% | | 2022 | 83% | | 2021 | 61% | | 2020 | 131% | Why we measure it: To maintain the delivery of strong free cash flow conversion over time. Performance narrative: Free cash flow of £2,232 million decreased by £26 million or 1%. Free cash flow conversion reduced by six percentage points to 91% as the benefit of reduction in tax paid was more than offset by cash outflow relating to group strategic announcements, higher interest paid and cash outflow from increased working capital commitments. ## Return on capital employed (ROCE)¹ | 2024 | 14.9%¹ | | --- | --- | | 2023 | 29.6% | | 2022 | 24.4% | | 2021 | 24.9% | | 2020 | 30.4% | Why we measure it: To drive product innovation that supports delivery of our Sustainability Ambitions and the development of more sustainable products with a lower environmental footprint, as measured by our Sustainable Innovation Calculator. Performance narrative: Net revenue from more sustainable products now accounts for over a third of total revenues (34.9% in 2024 vs 29.6% in 2023) which reflects our ongoing efforts and improvements in product packaging, ingredients and carbon footprint. ## Reduction in Greenhouse Gas (GHG) emissions in our operations⁴ | 2024 | -69%⁴ | | --- | --- | | 2023 | -67% | | 2022 | -66% | | 2021 | -66% | | 2020 | -39% | Why we measure it: To support our net zero ambition and reduce absolute Scope 1 and 2 GHG emissions from our own operations. Performance narrative: Through our ongoing focus on optimising high energy manufacturing processes and our use of renewable energy, we continued to surpass our science-based target reduction of 65% by 2030, achieving a 69% reduction in 2024. 1. See details on our alternative performance measures on pages 223-227 2. Years after and including 2021 exclude IFCN China (disposed September 2021) 3. Figures prior to 2021 exclude our Nutrition business unit 4. Since 2015 + Data was subject to independent limited assurance by ERM CVS in accordance with ISAE 3000 (Revised) and ISAE 3410. Please see ERM CVS' full assurance report at www.reckitt.com/reporting-hub for more details --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 38 # Sustainability Performance Dashboard # PROGRESS AGAINST OUR SUSTAINABILITY AMBITIONS This dashboard summarises our performance across key metrics. A full performance breakdown can be found in our Sustainability Report and ESG Data Book, available online at www.reckitt.com/reporting-hub. ## OUR STRATEGY ### Our Purpose To protect, heal and nurture in the pursuit of a cleaner, healthier world ### Our Compass Do the right thing. Always ## MORE SUSTAINABLE BRANDS | 50% | Progress | Target | | --- | --- | --- | | net revenue from more sustainable products by 2030 | 35%* | | | 50% | Progress | Target | | reduction in product carbon footprint by 2030¹ | 13%* | | | 50% | Progress | Target | | reduction in virgin plastic packaging by 2030² | 10% | | | 25% | Progress | Target | | recycled content in our plastic packaging by 2025 | 8% | | Implementing programmes of positive impact through our brands and in communities Read more on page 45 ## HEALTHIER PLANET ### Net zero across our value chain by 2040³ | 65% | Target | | --- | --- | | reduction in GHG emissions in operations by 2030¹ | 62%* | ### 100% renewable electricity by 2030 | Progress | Target | | --- | --- | | 50%* | | ### Water-positive in water-stressed sites by 2030 Implementing programmes of positive impact on nature in key places Read more on page 46 ## FAIRER SOCIETY ### Inclusive An inclusive culture where everybody is treated fairly and equally ### Diverse Our teams represent the diverse places where we work and the people we serve ### 50/50 Gender balanced management at all levels by 2030⁴ | 49% Male | 51% Female | | --- | --- | ### 30 million people positively impacted by our social impact investments by 2030 (cumulative since 2020) | Progress | Target | | --- | --- | | 2030⁵ | | ### 2 billion people engaged through our purpose-led partnerships, programmes and campaigns (cumulative since 2020) | Progress | Target | | --- | --- | | < 3bn | | * ERM CVS provides independent limited assurance over selected sustainability disclosures. The assurance report, along with the principles and methodologies we use in our reporting, can be found online at www.reckitt.com/reporting-hub 1 Reduction targets for GHG emissions are from a 2015 baseline 2 Reduction target for plastic is from a 2020 baseline. All packaging data relates to 2023, which is driven by the Ellen MacArthur Foundation reporting timelines. 2024 data will be available in mid-2025 3 Reckitt's net zero target means we aim to negate the amount of Greenhouse Gas emissions across our value chain, including Scopes 1, 2, 3.1, 3.4, 3.11 (direct only) and 3.12 by 2040. It includes our near-term science-based emissions reduction targets for 2030 (see page 46). Further detail is provided in our 2024 Sustainability Report 4 Data as of 31 December 2024 for active Reckitt employees (excluding contractors). 'All management' includes: Executive Committee member, Group leadership team, senior management team, middle manager, manager --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 39 三 # Financial Performance # GROWING EARNINGS AND DELIVERING STRONG CASH RETURNS TO SHAREHOLDERS ![img-83.jpeg](img-83.jpeg) # Group financial performance In 2024, Group net revenue grew by +1.4% on a like-for-like (LFL) basis to £14,169m, reflecting price/mix improvements of +2.0% and a volume decline of -0.6%. Our Hygiene business delivered broad-based growth of +4.2% despite a competitive market environment, with improving volume trends supported by the strong performance of our innovation platforms, including Lysol Air Sanitizer and Finish Ultimate Plus All in 1. Health net revenue grew by +2.1%, with broad-based growth in our Dettol, Durex, Nurofen, Gaviscon and VMS portfolios partially offset by weakness in our seasonal OTC brands (together around 10% of Group net revenue) due to weak cold and flu trends at the start and end of 2024. Nutrition declined by -7.3% as the US lapped the prior year competitor supply issue and experienced short-term disruptions to supply following the Mount Vernon tornado in July. Total Group net revenue on an IFRS basis was down by -3.0%, reflecting foreign exchange headwinds of -4.1% and net M&A impact of -0.3%. The year saw improving market share trends, with 48% of our Top Category Market Units (CMUs) holding or gaining share on a net revenue-weighted basis, with 55% in Health (2023: 46%), 55% in Hygiene (2023: 47%) and 15% (2023: 37%) in Nutrition. The Group's gross margin was 60.7%, an increase of +70bps versus 2023, driven by pricing and productivity efficiencies against a more benign environment for cost input inflation. Brand equity investment (BEI) increased by +3.1% (+£59m) on a constant FX basis as we strengthened investment behind innovation launches to Support the long-term growth of our brands. As a percentage of net revenue, BEI was 13.4%, up +30bps year-on-year. Group adjusted operating profit for the year was £3,475m (2023: £3,373m) at an adjusted operating margin of 24.5% (2023: 23.1%), 140bps higher than the prior year reflecting early delivery of cost efficiencies from our Fuel for Growth programme, as well as +30bps of one-off items driven by the benefit of insurance proceeds relating to the Mount Vernon tornado in July. Fixed costs declined by -90bps to 20.9% of net revenue, versus 21.8% in 2023. On an IFRS basis, operating profit was £2,425m (2023: £2,531m) at an operating profit margin of 17.1% (2023: 17.3%). This was impacted by an intangible assets impairment charge of £838 million (2023: £810m) relating to our Infant Formula (IFCN) business and to Biofreeze. This reflects a significant capital investment programme that has commenced to meet regulatory requirements and to build greater resilience in the wider supply network for IFCN, and a more challenging marketplace for Biofreeze in topical pain relief. Following the announcement we made in our July 2024 Strategy Update, the Group incurred £167m of one-off costs (of which £161m are one-off cash costs) in relation to transformation and restructuring, which are excluded from adjusted earnings. Total adjusted diluted earnings per share was 349.0p in 2024 (2023: 323.4p), a rise of +7.9%, supported by a lower share count from our ongoing share buyback and a lower effective tax rate of 22.2% (2023: 25.2%), offset by higher net interest cost and adverse foreign exchange. Total IFRS diluted EPS was 203.2p (2022: 228.7p). Our full year dividend increased by 5% to 202.1p (2023: 192.5p) per share, in line with our policy to deliver sustainable growth through a progressive dividend. The final proposed dividend was 121.7p (2023: 115.9p) per share. Free cash flow was £2,232m in 2024 (2023: £2,258m) a -1.2% decrease year on year. We continue to maintain a strong balance sheet with net debt at 2.0x adjusted EBITDA (2023: 1.9x adjusted EBITDA). # Shannon Eisenhardt Chief Financial Officer Net revenue¹ £14.2bn 2023: £14.6bn Adjusted operating profit¹ £3.5bn 2023: £3.4bn Free cash flow¹ £2.2bn 2023: £2.3bn ¹ Adjusted and other non-GAAP measures, definitions and terms are defined on page 223 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 40 三 # Financial Performance continued ![img-84.jpeg](img-84.jpeg) | FY 2024 Net Revenue | Adjusted Operating Profit | Adjusted Operating Profit Margin | | --- | --- | --- | | £6,140m | £1,375m | 22.4% | | Volume | +1.8% | Constant FX (CER) +16.5% | | Price/Mix | +2.4% | Actual +11.2% | | LFL | +4.2% | | | Net M&A | — | | | FX | -4.1% | | | Actual | +0.1% | | Actual +230bps # HYGIENE 43% of Group revenue Hygiene net revenue grew +4.2% in 2024 on a like-for-like (LFL) basis to £6,140m. Growth was balanced with +2.4% price/mix improvements and +1.8% volume growth. Net revenue growth was broad-based across all Powerbrands and regions. 55% of our Hygiene Top CMUs (weighted by net revenue) gained or held share during the year. Successful innovation launches and strengthened marketing were positive growth drivers, offset by a more competitive environment in the US, particularly in Auto Dish and Air Care. Finish LFL net revenue grew mid-single-digits, with strong growth across our thermoformed formats driving further premiumisation in the auto dish category as consumers continue to trade up to more superior solutions. Finish thermoformed tablets now account for 75% of our tablet net revenue. Lysol delivered high single-digit LFL net revenue growth in the year, led by strong high single-digit growth in all surface and bathroom hygiene cleaners in our established segments of disinfection. Our innovation platforms, Lysol Laundry Sanitizer and Lysol Air Sanitizer, continue to drive category growth with penetration gains and market share growth. Lysol Air Sanitizer demonstrates how our platform discoveries lead to breakthrough propositions. Since its launch in July 2023, it has created an entirely new category with the first and only air sanitising spray approved by the EPA, which kills 99.9% of airborne viruses and bacteria. Harpic delivered mid-single-digit LFL net revenue growth in the year, led by India where our 10X Advanced Harpic formulation is delivering category share gains. Vanish net revenue grew low single-digits in the year, led by mid-single-digit growth and market share gains in key markets across Europe, building on our premiumisation strategy enabled through superior performance, especially in short and quick wash cycles. We saw broad-based growth across our other Hygiene brands, including Air Wick and Mortein. Adjusted operating profit for Hygiene was £1,375m, up +16.5% on a constant FX basis and +11.2% on an actual basis. Hygiene's adjusted operating profit margin was 22.4%, up +230bps driven by strong gross margin expansion, effective targeted brand building and marketing investment, supported by further improvements in our fixed cost base enabled by a strong productivity programme. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 41 # Financial Performance continued ![img-85.jpeg](img-85.jpeg) | FY 2024 Net Revenue | Adjusted Operating Profit | Adjusted Operating Profit Margin | | --- | --- | --- | | £5,882m | £1,699m | 28.9% | | Volume | -0.3% | Constant FX (CER) +6.5% | | Price/Mix | +2.4% | Actual +0.5% | | LFL | +2.1% | | | Net M&A | -0.7% | | | FX | -4.4% | | | Actual | -3.0% | | # HEALTH 42% of Group revenue Health net revenue grew +2.1% on a LFL basis to £5,882m, reflecting price/mix improvements of +2.4% and a volume decline of -0.3%. Excluding our seasonal OTC brands, Health net revenue grew 5.3% in the full year, with volumes positive at +2.5%. 55% of our Health Top CMUs (weighted by net revenue) gained or held share during the year, driven by market share gains across our Intimate Wellness and non-seasonal OTC portfolios. Our Intimate Wellness portfolio, led by Durex, delivered high single-digit growth in the year, with double-digit growth across Developing Markets, and high single-digit growth across Europe. We are seeing strong market share gains across these geographies with higher rates of adoption being driven by improved in-store execution, distribution gains and recent innovation launches. Intimate Wellness net revenue growth in China, our largest market for Durex, grew mid-teens, helped by the continued success of innovation platforms such as polyurethane condoms and hyaluronic acid condoms, which have seen a strong response from consumers, as well as our Intima feminine hygiene brand, which has seen strong growth, especially across our online channels. Our non-seasonal OTC brands net revenue grew mid-single digits in the year. Investment in expanding supply capacity enabled us to meet strong consumer demand, with Gaviscon achieving double-digit growth and improved pack fill rates, and strong growth in Nurofen across multiple European markets supported by the roll-out of Nurofen Liquid Capsules in Italy, as well as a promising early response to the launch of Nurofen sustained release with 12-hour pain relief in Romania. Net revenue of our seasonal OTC brands, Mucinex and Strepsils, declined high single digits, impacted by tough prior year comparatives in Q1, a weak end to the cold and flu season in the first half of the year and a delayed onset of the US season in the second half. Notwithstanding this backdrop, the equity of these brands remains strong and is supported by ongoing innovation, including the successful September 2024 launch of Mucinex Mighty Chews, the first over-the-counter medicated children's soft chew for cough relief. Dettol net revenue grew low single digits in the year, with strong volume growth partially offset by the competitive pricing actions taken in certain ASEAN markets. China delivered strong double-digit growth led by innovation across a number of platforms. Adjusted operating profit for Health of £1,699m was up +6.5% on a constant FX basis and +0.5% on an actual basis. Health's adjusted operating margin was 28.9%, an increase of +100bps, with gross margin expansion and fixed cost optimisation more than offsetting increased investment behind our brands. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 42 # Financial Performance continued ![img-86.jpeg](img-86.jpeg) | FY 2024 Net Revenue | Adjusted Operating Profit | Adjusted Operating Profit Margin | | --- | --- | --- | | £2,147m | £401m | 18.7% | | Volume | -7.1% | Constant FX (CER) | | Price/Mix | -0.2% | -5.4% | | LFL | -7.3% | Actual | | Net M&A | — | +20bps | | FX | -3.6% | | | Actual | -10.9% | | # NUTRITION 15% of Group revenue Nutrition net revenue declined by -7.3% on a LFL basis in 2024 to £2,147m, with a price/mix contribution of -0.2% and a volume decline of -7.1%. This was driven by a combination of the Mount Vernon tornado, which impacted short-term supply to customers in the second half of the year, and our market shares rebasing from historical highs reached in the prior year during the competitor supply issue. Developing Markets remained broadly flat for the full year, reflecting category-led volume growth declines that were partially offset by growth in premium products in ASEAN. 15% of Nutrition's Top CMUs (weighted by net revenue) gained or held share during the year. This result was impacted by our market shares rebasing in the US following the competitor supply issue, and the impact of the Mount Vernon tornado, which resulted in us being out of stock in certain SKUs in some of our more specialised formulations. Adjusted operating profit for Nutrition at £401m in 2024 was down -5.4% on a constant FX basis and -10.3% on an actual basis. Nutrition's adjusted operating margin was 18.7%, up +20bps, as reduced gross margin was offset by the effect of the insurance proceeds following the Mount Vernon tornado. We continue to expand our market access and penetration with new format releases and international rollouts. In the higher-growth digestion segment, we successfully launched Enfamil NeuroPro Gentlease Powder in Q2 2024, which soothes stomach problems with patented prebiotics. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 43 # Financial Performance continued The following section should be read in conjunction with the full-year financial review from page 39 and the alternative performance measures section from page 223. ## Group operating profit Adjusted operating profit was £3,475 million (2023: £3,373 million) at an adjusted operating margin of 24.5%, 140bps higher than the prior year (2023: 23.1%). This increase was driven by gross margins 70bps higher than 2023, and fixed costs 90bps lower than 2023. This was partially offset by BEI and other marketing spend increases of 20bps. IFRS operating profit was £2,425 million (2023: £2,531 million) at an IFRS operating margin of 17.1% (2023: 17.3%). IFRS operating profit in 2024 was impacted by an intangible assets impairment charge of £838 million relating to IFCN and Biofreeze (2023: £810 million). The IFCN impairment of £696 million (2023: £810 million) reflects changes in the regulatory environment resulting in increased capital requirements as well as to build greater resilience in the wider supply network (see note 9). During 2024, Biofreeze performed below expectations following competitive pressure from both private label and branded competitors, new entrants to the market and a reduction in the level of displays present in the category which has resulted in an impairment of £142 million (2023: £0 million), (see note 9). IFRS operating profit was also affected by restructuring and other project costs of £167 million linked to the group strategic announcements in 2024. This principally includes professional advisor fees and severance costs relating to business transformation and portfolio changes. ## Net finance expense Adjusted net finance expense was £323 million (2023: £247 million). The increase in adjusted net finance expense in 2024 was primarily driven by increased interest payable on borrowings due to the cost of debt issued in the period. IFRS net finance expense was £321 million (2023: £130 million). The net finance expense under IFRS is higher in 2024 due to a £130 million credit in 2023 relating to translational foreign exchange gains arising upon liquidation of a number of subsidiaries. ## Tax The adjusted effective tax rate (ETR) was 22.2% (2023: 25.2%). The 2024 ETR benefited from a change in estimate of uncertain tax positions. The IFRS tax rate was 31.9% (2023: 31.4%). The IFRS ETR in 2024 is higher than the adjusted ETR due to the non-deductible impairment of intangible assets, and the non-deductible costs linked to the group strategic announcements in 2024. The IFRS ETR in 2023 is higher than the adjusted ETR due to the non-deductible impairment of IFCN goodwill offset by the benefit from largely non-taxable gains on liquidation of subsidiaries. ## Earnings per share (EPS) Adjusted diluted EPS was 349.0 pence (2023: 323.4 pence), an increase of 7.9%. The increase was due to higher adjusted operating profit at constant exchange rates and the beneficial effect of the ongoing share buyback programme, partly offset by the impact of foreign exchange. IFRS diluted EPS was 203.2 pence (2023: 228.7 pence), a decrease of 11.1%. The decrease was driven by a lower operating profit and higher net finance expense, which more than offset the benefit of a lower diluted number of shares. ## Balance sheet At 31 December 2024, the Group had total equity of £6,720 million (31 December 2023: £8,469 million). Current assets of £4,598 million (31 December 2023: £5,302 million) decreased by £704 million. Cash and cash equivalents reduced by £507m, which includes an increase in share repurchases in the year. Inventories and corporation tax receivables also reduced in the year. Current liabilities of £7,943 million (31 December 2023: £8,338 million) decreased by £395 million. The decrease principally relates to lower borrowings and lower trade and other payables, together with lower current tax liabilities. These decreases were offset by the share repurchase liability in relation to committed purchases under the share buyback programme. Non-current assets of £20,700 million (31 December 2023: £21,834 million) primarily comprise goodwill and other intangible assets of £17,565 million (31 December 2023: £18,588 million) and property, plant and equipment. The decrease in goodwill and other intangible assets of £1,023 million is predominantly due to impairment of IFCN and Biofreeze intangible assets. Non-current liabilities of £10,635 million (31 December 2023: £10,329 million) increased by £306 million principally due to financing activity, offset by a reduction in non-current tax liabilities. ## Net working capital During the year, net working capital decreased by £77 million to negative £1,402 million (2023: negative £1,479 million). Net working capital as a percentage of 12-month net revenue is -10% (31 December 2023: -10%). | Cash flow | | | | --- | --- | --- | | | 31 Dec 2024 | 31 Dec 2023 | | | £m | £m | | Adjusted operating profit | 3,475 | 3,373 | | Depreciation, share-based payments and gain on disposal of fixed assets (net of proceeds) | 546 | 585 | | Capital expenditure | (465) | (449) | | Movement in working capital and provisions | (271) | (21) | | Cash flow in relation to adjusting items^{1} | (61) | (45) | | Net interest paid | (292) | (263) | | Tax paid | (700) | (922) | | Free cash flow | 2,232 | 2,258 | | Free cash flow conversion | 91% | 97% | 1 Further details on adjusting items can be found on page 226 Free cash flow (FCF) is the amount of cash generated from continuing operating activities after net capital expenditure on property, plant and equipment and intangible software assets. Free cash flow reflects cash flows that could be used for payment of dividends, repayment of debt or to fund acquisitions or other strategic objectives. Free cash flow of £2,232 million decreased by £26 million or 1%. Free cash flow conversion reduced by six percentage points to 91% as the benefit of reduction in tax paid was more than offset by cash outflow relating to group strategic announcements, higher interest paid and cash outflow from increased working capital commitments. Net cash generated from operating activities has increased by £46 million to £2,682 million (2023: £2,636 million). --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 44 # Financial Performance continued Net debt | | 31 Dec 2024 £m | 31 Dec 2023 £m | | --- | --- | --- | | Opening net debt | (7,290) | (7,984) | | Free cash flow | 2,232 | 2,258 | | Share buyback | (1,328) | (207) | | Purchase of ordinary shares by employee share ownership trust | (3) | (2) | | Shares reissued | 3 | 48 | | Acquisitions, disposals and purchase of investments | 17 | (80) | | Dividends paid to owners of the Parent Company | (1,381) | (1,339) | | Dividends paid to non-controlling interests | (2) | (8) | | New lease liabilities in the period | (70) | (44) | | Exchange and other movements | (91) | 76 | | Cash flow attributable to discontinued operations | (1) | (8) | | Closing net debt | (7,914) | (7,290) | At 31 December 2024, net debt was £7,914 million, an increase of £624 million from 31 December 2023, as higher capital returns through dividends (£1,381 million) and the ongoing share buy-back program (£1,328 million) more than offset continued strong free cash flow (£2,232 million). Net debt was 2.0x adjusted EBITDA at 31 December 2024 (31 December 2023: 1.9x) The Group regularly reviews its banking arrangements and currently has adequate facilities available to it. The Group has committed borrowing facilities totalling £4,450 million (31 December 2023: £4,500 million), of which £124 million (2023: £nil) was drawn at year end and of which £3,500 million (31 December 2023: £4,450 million) expire after more than two years. The Group remains compliant with its banking covenants. The committed borrowing facilities, together with cash and cash equivalents, are considered sufficient to meet the Group's projected cash requirements. ## Dividends The Board of Directors recommends a final 2024 dividend of 121.7 pence (2023: 115.9 pence). The ex-dividend date will be 10 April 2025 and the dividend will be paid on 29 May 2025 to shareholders on the register at the record date of 11 April 2025. The final 2024 dividend will be accrued once approved by shareholders. ## Return on Capital Employed (ROCE) ROCE in 2024 was 13.5% (2023: 12.5%), an increase of 100 bps from 2023, due to a higher Net Operating Profit after Tax (NOPAT). ## Capital returns policy Reckitt has consistently communicated its intention to use its strong cash flow for the benefit of shareholders. Our priority remains to reinvest our financial resources back into the business, including through value-adding acquisitions, in order to deliver sustainable growth in net revenue and improving earnings per share over time. In managing the balance sheet, we intend to maintain key financial ratios in line with those expected of an A-grade credit-rated business. This will broadly define acceptable levels of leverage over time. In 2024, our strong free cash flow generation and healthy balance sheet enabled us to return £1.3 billion of cash to shareholders through share repurchases. Growing the dividend is a long-term goal of the business. The Board's dividend policy aims to deliver sustainable dividend growth in future years, subject to any significant internal or external factors. Accordingly, the 2024 dividend was increased by 5% in line with this objective. --- Strategic Report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 45 # Sustainability Performance Review # OUR PURPOSE IS TO PROTECT, HEAL AND NURTURE IN THE PURSUIT OF A CLEANER, HEALTHIER WORLD Everything we do is channelled towards captivating and delighting our consumers with more enduring, relevant products that meet their everyday needs. We aim to create positive impact for people and society while supporting resilience and growth for our business. This approach is reflected in our Sustainability Ambitions for 2030 and beyond. They are an integral part of our strategy and our Purpose to protect, heal and nurture in the pursuit of a cleaner, healthier world. We focus on three pillars of activity: more sustainable brands, healthier planet and fairer society, informed by the issues that matter most to our business and stakeholders. ## Our commitment to advancing the global sustainable development agenda We are signatories to the UN Global Compact and our annual communication on progress demonstrates our commitment to the UN Guiding Principles and the Sustainable Development Goals (SDGs). 1. More detail on our approach, including the outcomes of our materiality assessment, is available in our 2024 Sustainability Report ## MORE SUSTAINABLE BRANDS Our products are used in millions of households every day. Our ambition is that every product innovation we generate is more sustainable than its predecessor. Everything counts, from major new product launches to small incremental changes. We could be improving an existing product range by reducing plastic packaging; switching to a more sustainable, lower-carbon ingredient; exploring new solutions with our suppliers; or we could be developing a completely new product with a lower environmental footprint. A key tool is our Sustainable Innovation Calculator. This helps us compare the sustainability of product innovations with existing benchmarks. We evaluate a product's raw materials, packaging and environmental impact to understand if innovations are more sustainable. Beyond product design, we leverage the scale and reach of our iconic brands to influence consumer behaviour. For example, Finish promotes water conservation through its ongoing 'Skip the Rinse' campaign, Vanish promotes sustainable fashion through its 'Clothes live longer' ethos, Nurofen continues to raise awareness of the gender pain gap through its 'See My Pain' campaign, and our Dettol Hygiene Quest school education programme aims to improve hygiene behaviours. ## Progress In 2023, we put additional resources in place to accelerate progress against our product carbon footprint reduction target and meet our post-consumer recycled (PCR) packaging target. During 2024, we focused on the raw materials used in our products and continued our programmes to reduce the use of certain chemicals. The impact of these projects has contributed to an increase in net revenue from more sustainable products, which now accounts for over a third of total revenues (34.9% in 2024 vs 29.6% in 2023). We've been progressively removing specific chemicals from our portfolio, targeting those on our Restricted Substance List, including fluorosurfactants and certain fragrances. These have helped achieve a 24% reduction in our overall chemical footprint versus our 2020 baseline (target: 65% reduction by 2030). We are reviewing this target in line with emerging regulatory developments (more detail in our Sustainability Report). ## 34.9% net revenue from more sustainable products (Target: 50% by 2030) ## S ## INNOVATION IN ACTION Our near-term focus has been on reducing plastic and carbon across our portfolio. Examples include: - Enhanced formulas like our premium Vanish Oxi Action Gold Stain Remover powders which contain an innovative cold wash catalyst that helps to remove the toughest stains even in 30 minutes and at 20 degrees. It helps consumers save energy in use and reduces the product's carbon and water footprint (see page 12) - Concentrated formulas like our Vanish PLUS super concentrated powder which deliver more for less as consumers only need to use half the amount to achieve the same great results - Using recycled content (PCR) to replace virgin plastic in packaging which helps us meet our plastic targets as well as reducing our carbon footprint. We significantly increased PCR content in our Harpic, Lysol, Veja and Vanish product ranges - Reducing plastic packaging in products, like our Harpic Hygienic & Fresh self-adhesive toilet block which doesn't need a plastic cage - Refills for our Dettol surface cleaner and Cillit Bang grime and limescale cleaner, which provide consumers with more sustainable alternatives that deliver the same high-quality product performance and reduce packaging by allowing consumers to refill their original bottle 1. More detail on sustainable product innovations is available in our 2024 Sustainability Report ![img-87.jpeg](img-87.jpeg) ![img-88.jpeg](img-88.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 46 # Sustainability Performance Review continued ## HEALTHIER PLANET ### Climate change Our ambition is to achieve net zero by 2040. We have a holistic set of science-based targets to help tackle climate change and achieve our net zero ambition, including: - 65% reduction in emissions from our operations (Scope 1 and 2) by 2030 vs 2015 - 50% reduction in emissions across our value chain (Scope 3) by 2030 vs 2015 - Achieve 100% renewable electricity by 2030 We've already surpassed our initial target to reduce emissions in our operations by optimising high energy manufacturing processes (especially those using natural gas), increasing our use of renewable energy and investing in longer-term renewable electricity generation. We're now focused on reducing emissions across our value chain with our extensive network of suppliers. In 2024, we began a partnership with CO₂ Al and Quantis to enhance our Scope 3 modelling capabilities. Specifically, we've moved from representative to precise emissions data for our products. This has significantly improved the accuracy of our modelling and delivered execution efficiencies by automating manual, time-consuming processes. The partnership is helping us to identify priority actions across raw materials and packaging, which account for over half of our Scope 3 emissions. We can now target specific materials and suppliers that account for around 80% of our raw material and packaging footprint. This analysis enhances our ability to link agendas and maximise value creation. For example, increasing the use of recycled plastic content in our packaging helps meet the future direction of plastic policy and also reduces the carbon footprint of packaging. ### Our operations (Scope 1 and 2) In 2024, we achieved a 69% reduction against our baseline. During the year we completed the expansion of solar installations at our Taicang and Chonburi sites. Almost all of our electricity is from renewable sources and we now have 16 sites generating some of their own renewable energy. Our ongoing site decarbonisation and energy efficiency programmes are continuing to deliver emissions reductions. We are still aiming to improve energy efficiency with its associated reduction in energy costs. However, many projects have a longer pay-back period and those targeting electrical efficiency will not help reduce our absolute carbon emissions, which is the focus of our attention. We remain focused on reducing our reliance on and use of natural gas and are evaluating alternatives for thermal energy to reduce carbon emissions. 96% of the electricity used across our sites is renewable through a combination of on-site generation, power purchase agreements, green tariffs and renewable energy certificates (RECs). We are progressively moving towards more power purchase agreements and reducing our use of RECs, which helps build resilience in long-term renewable energy sourcing. During the year, we secured power purchase agreements in Poland, Singapore and Bahrain (the latter two are due to come online in 2025). - See our Basis of Reporting for details on the methodologies used to calculate this information at www.reckitt.com/reporting-hub - See pages 218-222 for our Climate-related Financial Disclosures and TCFD statement - See our Sustainability Report for information on our Climate Transition Plan - See our ESG data book for more detailed emissions and energy data ## Emissions Information¹ | Metric | Unit | 2024 | 2023 (restated)* | 2023 | | --- | --- | --- | --- | --- | | Scope 1 emissions | tCO₂e | 107,029* | 114,656 | 115,705 | | Scope 2 emissions (market-based) | tCO₂e | 6,714* | 8,842 | 8,902 | | Scope 2 emissions (location-based) | tCO₂e | 232,882* | 229,262 | 241,600 | | Total Scope 1 and 2 emissions (market-based) | tCO₂e | 113,743 | 123,498 | 124,606 | | Total Scope 1 and 2 emissions (location-based) | tCO₂e | 339,911 | 343,918 | 357,304 | | 3.1 Purchased goods and services | tCO₂e | 4,126,467 | 4,239,379 | 5,047,000 | | 3.4 Upstream transportation and distribution | tCO₂e | 1,107,400 | 1,075,607 | 1,618,000 | | 3.5 Waste generated in operations | tCO₂e | 26,116 | 28,125 | 28,000 | | 3.6 Business travel | tCO₂e | 43,610 | 50,423 | 159,000 | | 3.9 Downstream transportation and distribution | tCO₂e | 1,560,183 | 1,571,522 | 1,572,000 | | 3.11 Use of sold products (direct only) | tCO₂e | 379,457 | 383,274 | 366,000 | | 3.11 Use of sold products (including indirect) | tCO₂e | 29,417,952 | 29,370,005 | 28,775,000 | | 3.12 End of life treatment of sold products | tCO₂e | 302,091 | 291,013 | 366,000 | | 3.13 Downstream leased assets | tCO₂e | 28,304 | 30,481 | 30,000 | | Total Scope 3 emissions (direct consumer use only)³ | tCO₂e | 7,573,628 | 7,669,825 | 9,186,000 | | Total product carbon footprint (direct consumer use only)⁴ | tCO₂e | 7,585,641* | 7,685,717 | 9,127,034 | | Scope 1 and 2 GHG emissions intensity (market-based) | | | | | | - tCO₂e per tonne of production | | 0.04 | 0.04 | 0.04 | | - tCO₂e/Em revenue | | 0.008 | 0.008 | 0.008 | | Energy consumption resulting in Scope 1 and 2 emissions | MWh | 1,244,716* | 1,270,672 | 1,220,968 | | Proportion of energy consumption from UK operations | % | 10 | 11 | 10 | | Proportion of Scope 1 and 2 emissions from UK operations | % | 9 | 12 | 12 | * Assured by ERM CVS as part of limited assurance engagement in accordance with International Standard on Assurance Engagement (ISAE) 3000 (revised) and ISAE 3410 for Greenhouse Gas data issued by the International Auditing and Assurance Standards Board. The assurance report, along with the principles and methodologies we use in our reporting, can be found online at www.reckitt.com/reporting-hub 1 We report on emission sources required under the Companies Act 2006 (Strategic Report and Directors' Reports) Regulations 2013 and the Streamlined Energy and Carbon Reporting (SECR) requirements covering the 2024 reporting year (1 January-31 December). Emissions have been calculated in line with the World Resources Institute (WRI)/World Business Council for Sustainable Development (WBCSD) Greenhouse Gas (GHG) Protocol - Corporate Accounting and Reporting (revised edition). Our GHG emissions and energy data includes emissions and energy consumption from operations covered by the Group Financial Statements for which we have operational control 2 The scope of our GHG emissions per tonne of production covers manufacturing and warehousing. Including R&D and offices the GHG emissions intensity per unit of production in 2024 sites only was 0.04 tCO₂e 3 Total Scope 3 emissions includes our total product carbon footprint (where we are targeting a 50% reduction by 2030). 4 Total product carbon footprint is a measure of direct and indirect GHG emissions associated with Reckitt products across the value chain. It includes the following Scope 3 categories 3.1, 3.4, 3.9, 3.11 (Direct), 3.12 and Reckitt's own operations. The methodology is detailed in our Basis of Reporting at www.reckitt.com/reporting-hub * Restatements: prior year Scope 1 and 2 data has been restated to exclude divested sites and updates to the International Energy Agency GHG emission factors. Prior year Scope 3 data has been restated as a result of methodology improvements. See our Basis of Reporting for details at www.reckitt.com/reporting-hub --- Strategic Report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 47 # Sustainability Performance Review continued ## 69% reduction in absolute Scope 1 and 2 emissions vs 2015 (Target: 65% by 2030) ### Our value chain (Scope 3) Our approach to reducing Scope 3 emissions is to focus on the largest emitting categories and the areas in which we have greatest influence. Most significantly, we introduced product-level modelling to account for the majority of our ingredients and packaging impacts (purchased goods and services), which make up over half of our Scope 3 emissions. As a result, we can more easily identify alternative, lower-carbon ingredients for our raw materials. One example is the bio-based citric acid used in our Harpic power plus deep clean tablets. Outbound logistics account for almost 10% of our Scope 3 emissions. Through our green logistics programme we have been engaging with our customers, suppliers and distribution centres to evaluate low-carbon road and sea freight options. This includes fuel switches, trialling and scaling the use of electric vehicles and targeting fuel and transport efficiencies by optimising loads. We continued to support third-party manufacturers through our Supplier Environmental Performance Programme. In partnership with Manufacture 2030, Ricardo and Haleon, we created a toolkit to help suppliers improve resource efficiency and reduce environmental impact in their operations by building awareness of environmental standards, sharing good practice and guidance. ### Packaging and waste, circular economy In 2023, we put additional resources in place to meet our 2025 PCR target and are on track to achieve this. We introduced and increased the use of PCR content in packaging across multiple products including Vanish, Lysol, Harpic, Cillit Bang and Veja. We continue to make progress in reducing virgin plastic by increasing recycled content and reducing the amount of plastic used. This has been a key focus over the last 18-24 months. Examples include concentrated refills for Dettol and Cillit Bang. We've also continued our efforts to improve the recyclability of our packaging. Progress is slower than we'd like, however, this reflects industry-wide challenges, combined with a lack of recycling infrastructure and technological solutions. Recyclability is particularly challenging for regulated medicinal and infant nutrition products where packaging materials are intrinsic to the long-term stability and safety of the product. The Ellen MacArthur Foundation (EMF) forecasts that most signatories of its Global Commitment are expected to miss the 100% reusable, recyclable or compostable plastic packaging target. Regardless, we are continuing our efforts to achieve 100% recyclability across our portfolio. We've achieved zero waste to landfill at all of our manufacturing sites and we continue to reduce waste from our operations. ![img-89.jpeg](img-89.jpeg) ## 8% recycled content (PCR) in plastic packaging (Target: 25% by 2025) ## 15% reduction in virgin plastic packaging vs 2020 (Target: 50% by 2030) ### Water stewardship, nature-based solutions, deforestation, biodiversity We're committed to protecting water resources, avoiding deforestation and strengthening biodiversity in key locations. Our focus is on the areas where we can have the most impact. Our focus on reducing water use has centred around our operations and the catchment areas we are part of, especially in water-stressed locations. We're continuing initiatives to reduce water use in our operations by reusing and recycling water where appropriate, optimising our processes and advancing on-site water stewardship programmes. Water-saving projects in water-stressed locations remain a key part of our strategy for resilience in the long term. We've now achieved water positivity at two of our sites in India, Hosur and Mysore. For 2024, Mysore was independently verified as water positive by ERM CVS. Projects included digging sunken ponds, restoring tanks, and building small check dams to improve groundwater filtration, rainwater retention and prevent soil erosion. We are advancing similar projects at key sites in Mexico, Pakistan, India and South Africa, partnering with local NGOs and governments to support communities and our sites there. We continue to consider the overall water footprint of our products. Our near-term focus has been on reducing plastic and carbon in our product portfolio. This focus was essential but meant that actions to reduce our overall water footprint were not given the same priority. As a result, our water footprint increased by 15% versus our 2015 baseline, predominantly driven by consumer use. Our water footprint includes water used by consumers with our products, like bars of soap. This makes reducing our overall footprint more challenging. While we encourage people to use less water, we are also considering other ways to target reductions in our water footprint, both in formulation and in use, enabled by our Sustainable Innovation Calculator. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 48 # Sustainability Performance Review continued We have a long-standing commitment to No Deforestation, No Peat, No Exploitation (NDPE) in our palm oil supply chains. In preparation for EU Deforestation Regulation (EUDR), we identified the impact on our natural raw materials supply chains. While our products are out of scope for EUDR reporting, some ingredients such as palm oil surfactants are impacted. We have engaged our suppliers to ensure we have EUDR compliant material. We've been a contributing member to the Taskforce on Nature-based Financial Disclosures (TNFD) since 2021 and are an early adopter of the TNFD recommendations. We have developed a science-based approach to measuring the biodiversity impacts of our sourcing activities on local ecosystems in collaboration with Nature-based Insights. Our priority natural raw materials include palm oil, latex and cocoa. We are assessing the biodiversity impacts in the landscapes where these materials originate. We then work with a number of partners, like the Earthworm Foundation, to help protect and regenerate those ecosystems, while helping to deliver social benefits to local communities. > water positive sites in water-stressed locations where we operate > More detail on our natural raw materials, landscape programmes and our approach to TNFD can be found in our 2024 Sustainability Report # PARTNERING WITH WWF SINCE 2021 TO PROTECT AND RESTORE NATURE FOR A CLEANER, HEALTHIER WORLD Reckitt and the World Wide Fund for Nature's (WWF) global partnership has focused on water and nature for the past three years, helping to strengthen key water ecosystems and supplies for future generations. The partnership has helped protect key species through government and community-led initiatives. It has empowered local communities with conservation actions that support livelihoods and economic opportunities. Reckitt has supported two transformative WWF projects in the Ramganga tributary in India and the Tapajós tributary in Brazil: - In India, the partnership has replenished over 1 billion litres of water in the Ganga river, influenced water-resource management, and supported sustainable farming practices - In Brazil, the partnership has reached 3,000 people affected by mercury contamination along the Tapajós tributary of the Amazon river with improved access to safe water By leveraging the reach and power of Reckitt's brands Finish and Air Wick, the partnership has inspired millions of people to reconnect with nature and take action for our planet: - Finish and WWF worked in nine countries to protect and restore freshwater habitats. It replenished 500 million litres of water in Norfolk, UK and 335 acre-feet of water in the Upper Rio Grande Basin in the US - Air Wick and WWF restored and protected 1.3 billion square feet of wildflower habitats across 11 countries and reached over 600 million people # 200,000 people positively impacted through the Reckitt and WWF partnership since 2021 (excluding Finish and Air Wick activity) ![img-90.jpeg](img-90.jpeg) Photo credit: WWF # The next phase of our partnership aims to: - Deliver conservation programmes in India, Brazil, Indonesia and Pakistan to help regenerate nature and replenish freshwater - Help improve sustainability across palm oil supply chains in Indonesia to contribute towards sustainable livelihoods and a lasting, positive impact in communities - Provide practical solutions to support Reckitt's ambition for water positivity in water-stressed sites by 2030 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 49 # Sustainability Performance Review continued ## FAIRER SOCIETY We are committed to enabling a fair, diverse and inclusive society as an employer, across our supply chain and through our brands. Our inclusion strategy focuses on who we are as a business and the role we play in society. ## Diversity, equity and inclusion in our workforce Becoming a more diverse and inclusive organisation helps to drive our performance and is key to attracting and retaining talent. Our commitment to championing different nationalities, ages, backgrounds, identities, beliefs, and cognitive and gender diversity is fundamental to a fair and equitable working environment and our ability to deliver products that reflect the diversity of the consumers we serve around the world. Nearly half of our employees are women, our manager population is gender-balanced and women make up a third of our senior management team. Gender balance at the highest levels is improving, while we have already achieved 50% women at all management levels by 2030. **51%** women at all management levels ## Living Wage Reckitt achieved Global Living Wage Certification from the Fair Wage Network in December 2024, having already achieved UK accreditation in 2020. This confirms that we pay all our employees in all our markets at least the living wage for that location. We are also committed to paying a living wage for our interns, trainees and apprentices. Paying a living wage enables workers to meet the basic needs of themselves and their families, including food, housing, education and healthcare. It goes beyond minimum wage and helps people to achieve a sustainable livelihood. Respecting human rights and empowering everyone in our value chain are at the heart of our efforts. Through our Sustainable Livelihood Framework, we aim to go beyond wages to ensure safe working environments, equality, employment rights, financial security and career development opportunities. By partnering with NGOs, peers, and communities, we focus on addressing critical issues where we can make a lasting impact, building resilience and fairness across the value chain. > More detail in the Directors' Remuneration Report on page 116 ![img-91.jpeg](img-91.jpeg) ## Gender diversity Key - Male - Female | Board Directors | 4 (26%) | 7 (44%) | | --- | --- | --- | | GEC and direct reports | 8 (64%) | 47 (34%) | | Senior manager roles | 14 (56%) | 90 (44%) | | All manager roles | 1575 (47%) | 8,041 (51%) | | All employees | 19,100 (54%) | 10,033 (40%) | Diversity data is taken as of 31 December 2024 for active Reckitt employees (excluding contractors) 'All management' includes: Executive Committee member, Group leadership team, senior management team, middle manager, manager Further information on methodology for calculating diversity performance is available in our Basis of Reporting Criteria at www.reckitt.com/reporting-hub --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 50 # Sustainability Performance Review continued ## Advancing global health and hygiene The global health system is under pressure, with one in two people lacking access to basic healthcare and one in four people living without access to clean water. We're committed to making sure underrepresented communities have access to the highest-quality health and hygiene, by leveraging innovative finance and scaling local solutions from social entrepreneurs. Through our iconic Powerbrands, like Durex, Dettol, and Finish, we are driving behaviour change at scale, embedding lasting habits and breaking the chain of infection. Programmes are funded via our Global Access Fund¹ supported by our commitment to invest 1% of our adjusted operating profit across a three-year average into social impact. Through the fund, we put a specific focus on advancing gender-transformative initiatives, prioritising the needs of women and girls. We've almost reached our goal of positively impacting 30 million people by 2030, reaching 29 million people to date. More broadly, we have exceeded our target to engage two billion people with purpose-led partnerships, programmes and campaigns to promote awareness for a cleaner, healthier world. More detail on our social impact programmes can be found in our Social Impact Report ## 2.9mn people positively impacted by our social impact investments (cumulative since 2020) (Target: 30 million people by 2030) ## 2.3bn people engaged through our purpose-led partnerships, programmes and campaigns (cumulative since 2020) ## IMPROVING ACCESS TO CLEAN WATER, SANITATION AND HYGIENE Since 2019, Reckitt and Water.org have brought water and sanitation to over 2.4 million people in India, Indonesia and Kenya, and soon in Nigeria. Our longstanding partnership with water.org is driving scalable impact to enable access to household water and sanitation solutions for millions of people. Now, we are extending the microcredit model to Nigeria. Together, we are working to reach five million people with lasting access to safe water or sanitation by 2030. In September, we announced our latest $5 million investment into WaterEquity's impact funds, supporting climate-resilient infrastructure. We continue to drive catalytic impact, re-investing the yields of the funds to further scale our impact work with water.org. Photo credit: water.org ![img-92.jpeg](img-92.jpeg) ![img-93.jpeg](img-93.jpeg) ## ACCESS HUB We harness innovation and entrepreneurship to drive transformative impact. Since 2022, we've built a network of over 50 social innovators, improving global health and hygiene. Through Reckitt's Access Hub, we are adopting a strategic, portfolio-driven approach to scale our efforts in capability building, mentorship and financial support for innovative social entrepreneurs around the world. Together with our partners like Yunus Social Business and Health Innovation Exchange, we are creating a powerful ecosystem of collaboration and sustainable change that addresses some of the world's most pressing challenges. By partnering with social innovators, we are fostering a community of cutting-edge solutions in health and hygiene. A specific focus is on investing in women-led ideas and integrating the solutions into our value chain. For example, our factories in South Africa and Indonesia have partnered with Eco-Soap Bank to recycle soap waste that is then distributed to vulnerable communities and used in our Dettol Hygiene Quest programme. In Pakistan, Reckitt has provided funding and mentorship to the social enterprise Tayaba which has launched an atmospheric water generator that creates safe drinking water from the humidity in the air. They continue to scale their impact in the region. Dr. Shamim Nabuuma, founder and CEO of Chil Al Lab, has provided healthcare services to rural communities in Uganda for several years. She is now our partner to deliver the country's first Hygiene Quest programme. Our social entrepreneurship hub is a key pillar of our impact work. As we look forward, we will continue to scale innovative solutions to local problems and leverage our network to drive systemic change. 1 Formerly the Fight for Access Fund --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 51 # Sustainability Performance Review continued # NON-FINANCIAL AND SUSTAINABILITY INFORMATION STATEMENT We are committed to the 10 principles of the UN Global Compact in the areas of human rights, labour, the environment and anti-corruption. | | Relevant policies and risk management processes | Additional information | | --- | --- | --- | | Environmental matters | Our Environmental Manufacturing Policy sets out our objectives for reducing our environmental impacts. It requires compliance with relevant legislation, consideration of environmental issues in key decisions, and engagement with multiple stakeholders for better environmental performance which is monitored through our Group Environmental Management System. Our Supply Chain Leadership team routinely monitors environmental performance, including progress on our climate ambitions through our operational programmes. These are also reviewed at Group and Board level on a quarterly basis. Our Sourcing for Sustainable Growth Policy sets out Reckitt's human rights, health and safety, environment and sourcing requirements for all business partners. The policy details six responsible sourcing principles that drive us to conduct business with honesty and integrity, respect human rights, provide a safe and healthy working environment, use safe and sustainable ingredients, source raw materials responsibly, protect the environment and reduce environmental impact. The policy applies to Reckitt employees and third parties. | Environmental Performance Review, pages 46-48 | | Employees | Reckitt's Code of Conduct governs standards of conduct in relation to our employees, as well as our stakeholders. All employees must complete Code of Conduct training and are encouraged to refer to the code frequently to ensure the right decisions are made. In addition, Reckitt has policies committing to equal opportunities at work and to providing a safe and healthy working environment. Health and safety performance is monitored through our Group Occupational Health and Safety Management System, enabling us to investigate any incidents and take any necessary action. We have a Speak Up Policy and process, allowing any employee or third party to confidentially report a violation of the Code of Conduct, local law or regulation, or unethical behaviour. | Social Performance Review, pages 49-50 People and Culture, pages 8-9 | | Human rights | Respecting human rights is an absolute and universal requirement and through our Code of Conduct we set out our commitment to respecting the fundamental human rights defined in the UN Universal Declaration of Human Rights. Our Labour and Human Rights Standard sets out the requirements and practices expected of our supply chain. Our Sourcing for Sustainable Growth Policy (see above) also encompasses principles of the International Bill of Human Rights and the International Labour Organization's (ILO) Declaration on Fundamental Principles and Rights at Work. We also follow the UN Guiding Principles on Business and Human Rights and Organisation for Economic Co-operation and Development (OECD) Guidelines for Multinational Enterprises. Our Supply Chain Leadership team monitors our human rights and labour standards assessment programme on a monthly basis, while these are also reviewed at Group and Board level on a quarterly basis. | See our Modern Slavery Statement | | Social and community matters, including consumers | Reckitt's Product Safety Policy describes our approach to safety assurance for products, covering product development; monitoring in-use safety and feedback from users; and reacting promptly and effectively to mitigate potential harm. In addition, our Responsible Marketing Policy covers the full marketing lifecycle of our products and applies to all marketing communications and channels. It applies to everyone at Reckitt and external parties. We perform ongoing audits and adherence checks on policy implementation. We also monitor consumer, customer and employee feedback on an ongoing basis, through our consumer care lines or our Speak Up Line. | Social Performance Review, pages 49-50 See our 2024 Sustainability Report | | Anti-bribery and corruption | Our policy is that all Reckitt companies, employees and contractors must comply with the anti-bribery, anti-corruption and competition laws of all countries in which they operate. Directors and managers must ensure that the employees and contractors they supervise are aware of and comply with this policy. All employees and contractors must certify annually that they have complied with our Code of Conduct, and the Audit Committee reviews internal audit findings in relation to this. | | | Emissions information | | Page 46 | | Climate-related financial disclosures | | Our climate-related financial disclosures can be found on pages 218-222 and are incorporated into the Strategic Report by reference | | Diversity information | | Page 49 | | Policy embedding, due diligence and outcomes | | Risk Management, page 52 | | Principal risks and impact of business activity | | Pages 53-55 | | Description of business model | | Pages 10-15 | | Non-financial key performance indicators | | Page 37 | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 52 # Risk Management # RISK MANAGEMENT AT RECKITT Taking and managing risk are essential to the way we operate and to growing our business safely, effectively and sustainably. They are fundamental to both good management practice and to the successful delivery of our strategic priorities. ## Our risk management framework Our risk management framework provides a consistent approach to risk management across the organisation and facilitates the timely communication of risks to ensure the right people at the right level are managing the right risks. ## Risk appetite The Board interprets risk appetite as the level of risk that the Company is willing to take to meet its business objectives. The Board's appetite for risk is communicated to the organisation through our strategic and business planning process and control frameworks. The Board recognises that not only does risk mitigation need to be proportionate to the benefit gained, but also carefully balanced with a degree of flexibility to support Reckitt's dynamic and entrepreneurial culture. In assessing risk appetite, the Board reviews the three-year business plan and associated strategic risks. The risk appetite for specific financial risks such as funding and liquidity, credit, counterparty, foreign exchange, interest and commodity risk is set out in the Board-approved treasury policies. Compliance with our safety standards and our legal and regulatory requirements is mandatory. ## Risk governance Reckitt's risk governance model supports our risk management framework and enables effective management and reporting of material risks. Reckitt operates a three lines of defence model which assigns clear roles and responsibility for the management of risk. The Board has overall responsibility for the management of risk and the Audit Committee monitors the effectiveness of our risk management and internal controls framework. Board oversight is achieved through several mechanisms which include strategic reviews, Committee meetings and focused reviews into selected risk areas. Ownership and day-to-day management of principal risks reside with the GEC. There is an accountable GEC owner for each principal risk. Throughout the year, Group and management level risk and compliance committees across the business have supported the GEC in its oversight role. These are embedded within the governance structure of the organisation, with escalation between committees as needed. They meet quarterly to review, challenge and monitor risk management activities. ## Risk management process Our risk management process delivers simple and effective risk management which supports business operations and allows management and the Board to fulfil their duties under the UK Corporate Governance Code. This ensures that we are appropriately prioritising our efforts and resources to manage our risks. Our Group Risk team, part of the wider Internal Audit and Risk function, facilitates the risk management process. The Group's risk profile is reviewed biannually, with risks assessed across a timeline of up to three years, and prioritised based on impact, likelihood and ## Key Minor impact Moderate impact Major impact Severe impact ## Principal risk 1. Technology resilience and information security 2. Product integrity 3. Legal and compliance 4. Supply chain continuity and resilience 5. Business transformation 6. Geopolitical instability 7. ESG transition 8. Product innovation 9. Macroeconomic uncertainty ![img-94.jpeg](img-94.jpeg) speed of impact, which reflects the time we would have to react should a risk materialise. The risk profile is used as an input to the Viability Statement assessment. ## Our principal risks Our principal risks continue to evolve in response to our changing environment. During 2024 business transformation was elevated to a principal risk due to the organisational change underway to simplify the organisation for accelerated growth. While the likelihood and impact of the remaining principal risks are broadly consistent with 2023, some related risks have been combined to provide a clearer understanding of the risk profile and to support more efficient risk mitigation strategies. These include: - Cyber security risk has been expanded to technology resilience and information security to include related threats to critical systems and data and to ensure mitigation efforts are focused on a broad spectrum of vulnerabilities - Product safety and compliance with product regulations have been combined into an overall product integrity risk to provide a comprehensive framework which ensures all aspects of product-related risks are addressed cohesively - Supplier disruption and reliance on key manufacturing sites have been merged into supply chain continuity and resilience to address the interdependencies between supply chain stability and manufacturing capabilities and allow development of contingency plans for critical manufacturing processes --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 < # Risk Management continued # Link to strategy Portfolio value creation Product superiority Win in market Fixed cost optimisation # OUR PRINCIPAL RISKS | Risk | What is the risk and impact? | Examples of how we are managing the risk | Mitigation progress this year | | --- | --- | --- | --- | | Business transformation Link to strategic priorities: Risk classification: Strategic Risk trajectory: New Risk rating: Major Speed of onset: Weeks Oversight Committee: Board | The uncertainty inherent in the large-scale organisational change underway risks the loss of management or key personnel, disruption of short-term operations and change fatigue, adversely affecting performance. Additionally, failure to prioritise resources effectively to achieve targets could jeopardise the delivery of our medium and long-term growth ambitions. | • A steering committee is in place to oversee the programme and reviews resourcing and capacity to ensure minimal disruption to operations • Dedicated Project Management Office (PMO) supported by external experts, which actively monitors key performance indicators (KPIs) and resource capacity, including metrics on talent retention • The portfolio of existing programmes has been reprioritised to create organisational capacity for the reorganisation • Talent retention plans in place for critical roles • Regular employee communications-monthly senior leadership calls and briefing packs, and central transformation hub with relevant information and updates in place • External advisors for key elements of the programme-McKinsey, EY and BCG-on both the transformation and separation • Operating model clarity, decision-making rights and governance deployed to all functional leaders across core Reckitt, Essential Home and Mead Johnson Nutrition for January 2025 • Separation principles and perimeter defined to ensure clear work plan and resourcing in 2025 | • New principal risk in year | | Geopolitical instability Link to strategic priorities: Risk classification: Strategic Risk trajectory: Increasing Risk rating: Moderate Speed of onset: Months Oversight Committee: Board | Reckitt operates in a challenging and unpredictable trading environment influenced by various external factors that can impact our operations and financial performance. Geopolitical events such as conflicts, trade wars, economic sanctions, and political polarisation create disruptions, adding to the complexity of our operating environment. | • Our three-year plan takes into account current and potential future challenges • We maintain an extensive network of local regulatory and external affairs teams, which together with external advisors closely monitor the political and geopolitical environment • Our Issues and Crisis Management team supports the business with market-specific risk assessments and resources to support with regional issue and crisis management • Geopolitical risk is considered within our business continuity planning for the resilience of our supply chain • Our Corporate Security function identifies potential threats through the Corporate Security programme and supports the business with horizon scanning activities | • The GEC provides oversight over the management of the Group's geopolitical risk profile • To enhance manufacturing resilience, we are regionalising our supply chain, including building redundancies within the network to mitigate disruptions and risks from geopolitical instability • Ad hoc horizon scanning and scenario planning activities are undertaken by the GEC and in-country management teams | | Product innovation Link to strategic priorities: Risk classification: Strategic Risk trajectory: No change Risk rating: Moderate Speed of onset: Years Oversight Committee: Board | Our continued growth and success depend on our ability to innovate, produce relevant products, and maintain our value proposition. Failure to anticipate and respond to evolving consumer trends, invest in research and development, and launch and market new products could lead to diminished brand presence and loss of market share and profitability. | • Consumer trends, behaviour and needs are analysed through our demand-centred growth process based on targeted consumer segments • Innovation projects follow a standardised operating model, which includes defined stage gates and cross-functional approvals, with oversight from our category and R&D teams • Product development reporting provides visibility over our innovation pipeline • Continued investment in our science platforms to create superior, longer-term and differentiated products, strengthen our claims and lead with consumer-relevant solutions • We work closely with external partners to drive innovation in key areas like sustainability and new technologies | • Move to a simplified organisational structure with a unified category growth organisation accountable for delivering consumer insights, category expertise and innovation from 2025 • To support the longer-term growth ambitions in China, we are establishing a Global R&D Centre of Excellence in Shanghai, to drive enhancements in innovation through collaboration, science capabilities and talent development • We are exploring the possibilities of generative AI with the aims of enhancing product superiority and increasing speed to market | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 54 # Risk Management continued # Link to strategy Portfolio value creation Product superiority Win in market Fixed cost optimisation | Risk | What is the risk and impact? | Examples of how we are managing the risk | Mitigation progress this year | | --- | --- | --- | --- | | Technology resilience and information security Link to strategic priorities: Risk classification: Operational Risk trajectory: No change Risk rating: Major Speed of onset: Days Oversight: Board | Reckitt's increasing reliance on digital technologies for operations, supply chain management, and consumer engagement exposes the organisation to cyber attacks, IT system failures, and potential data breaches which could lead to disruption of critical operations, unauthorised access to sensitive data and non-compliance with regulatory requirements. | • We operate a Group-wide cyber security control framework, aligned with industry standards, including ISO and National Institute of Standards and Technology (NIST) • We undertake regular horizon scanning and threat detection activities, perform penetration testing and work closely with our third parties and partners to manage cyber risk • Robust Information Technology and Digital (IT&D) Controls Framework in place including policies, standard operating procedures and training covering governance, third-party vendor management, service continuity and recovery management and responsible AI • Access restrictions are in place for any publicly available AI and machine learning solution • Mandatory cyber awareness training is rolled out across the Group as part of our compliance training programme | • We continue to invest in our digital manufacturing infrastructure to improve cyber security on the factory operating technology network. The programme is in place to address all factory sites to improve protection and recoverability of the factory estate • Responsible AI Policy, principles and SOPs to assess and mitigate the risks relating to the creation and adoption of AI tools were rolled out. A baseline AI training module was developed for all relevant employees • Our Cyber team has updated the endpoint protection solution to improve detection and protection from malware. We also continue to enhance our identity and access management capabilities (which also support compliance with UK SOX legislation) | | Supply chain continuity and resilience Link to strategic priorities: Risk classification: Operational Risk trajectory: No change Risk rating: Major Speed of onset: Weeks Oversight Committee: Board | Our ability to source materials and manufacture and distribute our products through our global network relies on complex manufacturing and supply chain processes. Operational failures, supply chain disruptions, and process inefficiencies, or more broadly, large external events like extreme weather or infrastructure failures could disrupt or halt operations. | • We carefully monitor all our third-party suppliers through our supplier management programme and our Procurement team regularly risk assesses our suppliers and entire direct material portfolio across multiple dimensions using our supplier vulnerability tool. We also map our suppliers further up the value chain to identify any potential geographic concentration risks • Action plans, centrally tracked and monitored through our quarterly Supplier Risk Committee, are in place for critical suppliers to ensure continuity of supply in the event of a disruption. Where possible, these include business continuity planning and the qualification of alternative suppliers • Each of our manufacturing sites is classified through a three-tier system based on revenue dependency or criticality to market. This drives our site inspection programme with Tier 1 sites being subject to more regular inspections | • We have continued to de-risk our sourcing of critical materials through the qualification of alternative suppliers and have reduced the number of highly critical materials by 14% since 2023 • Key initiatives have been launched to strengthen our manufacturing resilience including regionalising the supply chain, reducing obsolescence, further developing and standardising business continuity plans across factories and reviewing our network master plan to enhance overall resilience • In December we acquired a new manufacturing site in North Carolina, US, for over-the-counter (OTC) products. Given Reckitt's ambitions to grow the business further, the acquisition of this new facility, which we anticipate will begin production in 2027, is a key part of our Future Factory Network Plan | | Product integrity Link to strategic priorities: Risk classification: Compliance and responsibility Risk trajectory: No change Risk rating: Major Speed of onset: Weeks Oversight Committee: Compliance Committee | Our broad portfolio includes products that are ingested, inhaled or have direct skin contact. Some may contain hazardous chemicals. Failure to meet quality, safety, and regulatory standards could lead to potential harm to consumers, product recalls, and legal liabilities, and impact consumer confidence in our brands. | • Our Regulatory Intelligence framework performs horizon scanning to help identify new and emerging regulatory changes and trends in enforcement practice • Our Ingredient Steering Group monitors regulatory developments, reviews classification changes and completes impact assessments utilising our Restricted Substances List • A robust quality management system (QMS) is in place underpinned by policies, operating procedures and systems. This is subject to regular independent audits, and our internal Quality Audit team also audits internal functions to ensure compliance • Our Quality, Regulatory and Safety Council collectively addresses product integrity-related risks • Our Consumer Safety team conducts holistic product safety assessments during the product development lifecycle • We have an adverse and critical events process, and our dedicated Consumer Care and Vigilance teams monitor and respond to product quality or safety issues • We use data generated from our Consumer Safety, Evidence Generation and Clinical Research functions to support our claims | • We launched a new Regulatory Intelligence system during the year to capture data related to emerging regulatory changes • We developed, launched and optimised a new Consumer Safety CARA System, enabling the generation of automated safety assessments and our technology risk vigilance platform is now operational • Established an EU Green Deal programme to bring our product portfolio into compliance with new EU regulations, such as the General Product Safety Regulation • Our quality organisation has consolidated under R&D to ensure quality oversight throughout the end-to-end product lifecycle • We have digitised our quality management system and continue to develop and launch modules, including new audit management functionality | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 55 # Risk Management continued # Link to strategy Portfolio value creation Product superiority Win in market Fixed cost optimisation | Risk | What is the risk and impact? | Examples of how we are managing the risk | Mitigation progress this year | | --- | --- | --- | --- | | Legal and compliance Link to strategic priorities: Risk classification: Compliance and responsibility Risk trajectory: No change Risk rating: Major Speed of onset: Years Oversight Committee: Compliance Committee | Reckitt operates in various countries with diverse regulatory environments. Failure to meet legal, regulatory, and corporate responsibility commitments could impact our reputation with our consumers, investors, and stakeholders. Additionally, operating in litigious environments increases litigation risk, potentially leading to significant legal costs, settlements, and reputational damage. | • A global Ethics and Compliance programme is in place which covers key areas such as anti-bribery, sanctions, competition and data privacy. The programme incorporates annual training, 'Speak Up' hotline, compliance policies and procedures, targeted risk and control assessments and third-party due diligence • Embedded Legal and Compliance teams, supported by external experts as needed, to help us identify, understand and comply with current and emerging regulatory obligations • Group Privacy Office (GPO) and in-market privacy programmes to support the business and provide oversight of data protection policy compliance • Disputes and litigation are supervised by senior members of the Legal team, with General Counsel oversight of significant Group matters | • To further enhance our programme, we undertook a comprehensive mapping of the key risks within the scope of ethics and compliance. This mapping will inform continued improvement of risk assessment activities, the definition of more effective mitigating actions, the improvement of monitoring processes, and the better allocation of resources • We undertook a review of our third-party due diligence programme which has led to the creation of a transformation plan to address those aspects of the programme requiring improvement • Development of a procedure to risk assess the use of AI | | ESG transition Link to strategic priorities: Risk classification: Compliance and responsibility Risk trajectory: No change Risk rating: Moderate Speed of onset: Months Oversight Committee: Board | Changes in the regulatory environment and shifting stakeholder expectations emerging from the transition to a more sustainable, net zero economy creates significant uncertainty for Reckitt. There is a risk that we fail to deliver our ESG programme or deliver against our Sustainability Ambitions. | • We have a clear set of Sustainability Ambitions with measurable, time-bound targets. Performance is centrally coordinated, monitored and reported. See page 45 Programmes to meet our targets are implemented by our Brands, Supply Chain, R&D, and Safety, Quality and Regulatory Compliance teams • A Group Sustainability function leads sustainability-related strategy development, compliance and reporting to support performance management and disclosure. A cross-functional steering committee provides governance and oversight across key ESG transition risks and sustainable product activities • Tools have been developed to support the delivery of our Sustainability Ambitions, including our Sustainable Innovation Calculator. This has been implemented across our innovation pipeline to quantify sustainability improvements across carbon, water, plastics and packaging, ingredients and overall extended producer responsibility (EPR) risk • Carbon footprint modelling enables targeted activity for decarbonisation | • We continue to deliver on our operational carbon, plastics, water catchment, and waste reduction targets. We have surpassed our initial targets for direct emissions and are now focusing on reducing Scope 3 emissions • CSRD, EU Green Deal and EU Taxonomy programmes are underway, with associated IT&D development, to prepare for requirements ahead of 2026. This includes an updated double materiality approach in line with CSRD • Carbon footprint modelling has been strengthened to prioritise reduction levers for Scope 3 emissions and support the development of more detailed transition plans targeting areas of highest carbon for greatest impact • Ongoing programmes of supplier auditing and development to ensure compliance with human rights and labour standards, and sustainable sourcing (i.e. avoiding risks of modern slavery and deforestation) | | Macroeconomic uncertainty Link to strategic priorities: Risk classification: Financial Risk trajectory: Increasing Risk rating: Moderate Speed of onset: Weeks Oversight Committee: Board; Audit Committee | Adverse economic conditions, coupled with high levels of volatility and unpredictability in the macroeconomic environment, could impact our ability to deliver consistent and predictable growth. Fluctuations in interest rates, currency exchange rates, and inflation can adversely affect our financial performance and strategic objectives. This risk is further exacerbated by potential changes in tax laws, financial compliance requirements, and regulatory frameworks, which may lead to increased operational costs and compliance requirements. | • Ongoing monitoring of local and global key macroeconomic indicators and their consequent impact on our business performance • Interest rate and foreign exchange risks are centralised into Group Treasury to provide expertise, control and economies of scale in managing and reporting on these financial risks in line with Group-wide policies and procedures • Key commodities' prices are managed on an ongoing basis by our supply teams and communicated across the Group • Our partnerships with external tax advisors help us understand and remediate the tax implications of changes in organisational structure and the impact of any regulatory or other legislative changes, helping inform the need for central provisioning for anticipated exposure | • Our Planning and Forecasting Programme is now live across Europe, Asia, Africa and the Middle East, with North America and Latin America to go live during 2025. We anticipate that its adoption across these markets, along with its integration with demand and sales planning, will provide greater visibility into forecast horizons and enable the Group to enhance its scenario planning and risk management capabilities across the business | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 56 # Risk Management continued # Link to strategy - Portfolio value creation - Product superiority - Win in market - Fixed cost optimisation # EMERGING RISKS Our risk profile will continue to evolve as a result of future trends and uncertainties. Emerging risk and horizon scanning is integrated into our standard risk management process and provides a forward-looking view of major trends that have the potential to impact our business across a longer time horizon (>three years). Emerging risks are monitored to understand the potential impact on our business and to allow timely decision-making. | Risk | Description | How are we preparing? | | --- | --- | --- | | Science and technology disruption Link to strategic priorities: | The rapid pace of advancements in science and technology has the potential to significantly disrupt the categories in which we operate. Innovations in areas such as biotechnology and digital health could redefine consumer expectations and competitive dynamics. | • External partnerships allow us to participate in leading research around hygiene interventions and the development of emerging treatments • Our R&D and Science teams actively engage with the scientific community through participation in conferences, thought leadership and research projects. Working with this consortium of external experts helps us to stay abreast of leading developments in science and regulatory affairs and the impact of emerging technology • Horizon-scanning activities undertaken internally across a number of teams, including the Corporate Development team and individual brand teams, helping to identify threats and opportunities in each category | | Artificial intelligence Link to strategic priorities: | Failure to adopt and integrate advanced AI technologies could result in significant competitive disadvantage. This includes the risk of lagging behind industry peers which leverage AI for enhanced decision-making, operational efficiency, innovation and customer engagement. The inability to keep pace with predictive and generative AI may lead to loss of market share. | • Reckitt AI and Machine Learning (ML) Community of Practice established an AI and ML Idea Factory to target areas where AI and ML can be used to drive innovation and enhance the business • Pilots launched to help illustrate how GenAI can enhance both productivity and growth • We have been working to develop our own tools and validate how we can reinvent the way marketers work at Reckitt end to end | | Sector consolidation Link to strategic priorities: | Consolidation in the number of players together with higher levels of competition for potential acquisition targets may impact our ability to drive inorganic growth. | • Corporate Development team responsible for identifying, evaluating and executing Reckitt's global M&A opportunities • Competitive scanning activities to identify potential mergers, acquisitions, divestments, joint ventures or long-term partnerships • Corporate Development partners closely with the in-market teams which actively manage the portfolio to help establish clear and prioritised inorganic business development objectives, so the business is focused on the right targets that will help create long-term value | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 57 # Our Viability Statement # THE ASSESSMENT PROCESS AND KEY ASSUMPTIONS The Board's Viability Review is based on the Group's strategy, its long-term financial plan and its principal risks. A financial forecast covering a five-year period was prepared (the base case). This period was selected as it is the period covered in the Group's long-term forecasting process, based on the budget and projections for the following years and covers the introduction to market of the current new product pipeline. The period also covers the majority of Reckitt's debt repayment profile. The financial forecast is based on a number of key assumptions aligned to the Group's growth strategy, planned capital spending and capital allocation policy. The assessment of viability takes into account the Group's cash flow, its currently available banking facilities and interest cover ratios in relevant financial covenants, and does not assume the raising of additional new debt or equity finance. If Reckitt performs in line with the base case forecasts, it will have sufficient funds to trade, settle its liabilities as they fall due, remain compliant with financial covenants and remain viable. Moreover, the Group has access to external debt markets on account of its credit rating together with a well-diversified supplier network, customer base and product range, and geographical activities with a strong innovation pipeline and dividend cover. ## Assessment of principal risks and viability To further test the robustness of the base case forecast, further analyses were prepared to consider the viability of the business in the event of adverse unexpected circumstances. Such adverse circumstances were modelled primarily upon the crystallisation of the Group's principal risks (see pages 53-55, including how we are managing the risk). Principal risks have the potential to create adverse circumstances for the Group and can occur individually or in combination with each other. The assessment of viability considered the implications of crystallisation of each principal risk and estimating the impact on interest cover ratios and headroom over available borrowing facilities. These principal risks were aggregated to create two scenarios, which model plausible downside scenarios of increasing severity based on: (i) crystallisation of principal risks including litigation deemed to have the most significant potential impact on viability; and (ii) crystallisation of all principal risks and the impact of adverse movements in foreign exchange and interest rates. The principal risks that were evaluated also include the failure to address existing and emerging environmental, social and governance (ESG) and sustainability risks and the changing societal and stakeholder expectations of businesses in addressing these. The Board has also considered the potential impact of changes to environmental factors which may affect the business model and performance in the future, as set out in the Taskforce on Climate-related Financial Disclosures (TCFD) statement on pages 218-222. The analysis indicated that even with unexpected events occurring immediately and in combination, Reckitt would still have sufficient funds to trade, settle its liabilities as they fall due and remain compliant with financial covenants. The Board has further considered the occurrence of a Black Swan event: an event of greater adversity than those modelled above, with sufficient potential impact to risk the future of Reckitt as a strong and independent business operating in its chosen markets. The occurrence of a major issue could result in significant reputational impact, a substantial share price fall, significant loss of consumer confidence and the inability to retain and recruit quality people. Such an event could have an impact on the viability of the business. On the basis of a comprehensive set of mitigating controls in place across the business, considering the unknown nature of a Black Swan event and that its occurrence is considered highly unlikely, it has not been included in the Viability Review. The Strategic Report, as set out on pages 1-57, has been approved by the Board. ## Viability Statement The Board believes that the Group is well-positioned to manage its principal risks successfully. The Board's belief is based on consideration of the historic resilience of Reckitt and has taken account of its current position and prospects, the actions taken to manage the Group's debt profile, risk appetite and the principal risks facing the business in unexpected and adverse circumstances. Mitigating actions, should they be required, are all within management's control and could include reduced capital expenditure or temporary suspension of dividend payments. ## Conclusion As a result of the Viability Review, the Board has a reasonable expectation that the Group will be able to continue in operation and meet its liabilities as they fall due over the five-year period covered in the Viability Review. ## Catheryn O'Rourke Company Secretary Reckitt Benckiser Group plc 5 March 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 58 三 # Corporate Governance Report # CHAIR'S INTRODUCTION TO GOVERNANCE ![img-95.jpeg](img-95.jpeg) | Further details | Pages | | --- | --- | | Board of Directors and Group Executive Committee | 60-64 | | The governance framework and how the Board monitors culture | 65-71 | | Details of the Board's activities this year | 72-73 | | How the Board engages with our stakeholders | 74-78 | | The Board effectiveness review report | 79-80 | # Reckitt is a business taking the right long-term decisions. ## Dear shareholder, On behalf of the Board, I am pleased to present Reckitt's Corporate Governance Report for the financial year ended 31 December 2024. The Board is responsible for the effective leadership of the Group and for promoting its long-term sustainable success. The Board provides leadership by setting the Company's Purpose, strategy and values, overseeing implementation of the strategy by management and monitoring culture to ensure its alignment with our Purpose and values. The Board ensures there are appropriate processes in place to manage risk and monitors the Company's financial and operational performance against objectives. ## Board changes There have been a number of changes to the composition of the Board this year which are summarised below. I would firstly like to take this opportunity to sincerely thank Chris Sinclair for his years of service to the Reckitt Board, having joined the Board in 2015 as a Non-Executive Director and becoming Chair in May 2018 until he retired at the AGM in May 2024. Throughout his tenure, Chris led with confidence, insight, integrity and a clear vision. - At the AGM in May 2024 Pam Kirby stepped down, having served nine years on the Board - Alan Stewart also stepped down from the Board at the AGM in May - Jeff Carr retired as CFO in March 2024 - We were sad to learn that Olivier Bohuon passed away in early May I would like to thank each of them for their valuable contributions to the Reckitt Board during their tenure. - As notified last year, Mary Harris replaced Alan Stewart as Chair of the Remuneration Committee and will step down at this year's AGM having exceeded nine years' tenure. Mary is considered to continue to retain an independence of mind and to be an effective and valued contributor to the Board. We are grateful for Mary's contributions and commitment to the Board and Committees during her tenure - Shannon Eisenhardt became CFO in March 2024 following Jeff's retirement - I became Chair and Andrew Bonfield became Senior Independent Director following the 2024 AGM - Marybeth Hays joined the Board as a Non-Executive Director on 1 February 2024 - Fiona Dawson joined the Board as a Non-Executive Director on 1 June 2024. Fiona will replace Mary Harris as Chair of the Remuneration Committee following the AGM in May 2025 - Elane Stock took on the role of Designated Non-Executive Director for Engagement with the Company's Workforce at the conclusion of the 2024 AGM We were pleased to announce in November 2024 the appointment of Mahesh Madhavan and Stefan Oschmann as Non-Executive Directors, who joined the Board on 1 January 2025. I would like to thank the Board, management and all the Reckitt employees I have met so far for their warm welcome and for their continued commitment to our Purpose, Compass and stewardship of the Group. ## Sir Jeremy Darroch Chair Reckitt Benckiser Group plc 5 March 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 59 三 # Corporate Governance Report continued ## CHAIR SITE VISITS Since becoming Chair, Sir Jeremy has visited various Reckitt sites and a summary is set out below: Sir Jeremy visited a number of Reckitt sites during the year including sites in Delhi (India), Hull (UK), and Parsippany (US). A summary of the visits to India and Hull are set out below. ### Visit to India Sir Jeremy, Ranjay Radhakrishnan, our Chief HR Officer and Cathy O'Rourke, Group General Counsel & Company Secretary, visited the Reckitt team in India during October. Members of the India team presented a review of the Company's business in India including an overview of key financial metrics, marketing initiatives, competitive insights, supply chain capabilities, market-specific innovations, and ESG and climate initiatives. Sir Jeremy spent time with the sales team to understand the diverse sales landscape and visited various retailers. Sir Jeremy also engaged with employees in both small group settings and during a townhall session. ### Visit to Hull Sir Jeremy visited our Hull site in the UK with Angela Naef, our Chief R&D Officer, to gain a better understanding of our research and manufacturing capabilities. Sir Jeremy toured the site and members of the Hull leadership team provided an overview of the important work performed on site. Sir Jeremy also gained valuable insights about our talent pipeline through meeting with our degree apprentices and women in science representatives and learning about the Future Leadership Scheme available to science, technology, engineering and mathematics (STEM) university graduates. ![img-96.jpeg](img-96.jpeg) ![img-97.jpeg](img-97.jpeg) ## USA Sir Jeremy answers questions on his first year as Chair. ### Q. How will the strategic transformation announced in July 2024 make Reckitt a stronger business? A. Following the announcement in July, we have revamped our strategy to streamline our portfolio and simplify our organisation. We believe this will improve our performance and ensure that Reckitt is fit for the future and will support maximising shareholder value. I am confident about the plan that has been put in place and its potential to deliver strong growth and value creation. ### Q. What have been your key highlights and challenges from your first year as Chair? A. Being Chair of Reckitt is a great privilege. Helping the Executive team as they develop a new strategy that will take the Company forward in the coming years has been a particular highlight. I'm looking forward to its implementation and seeing the benefits that will flow from it come through. A clear challenge has been the underperformance of the share price in 2024, which I know has disappointed everyone. However, we believe we have the right plan in place now, with a re-structured and refreshed organisation and the whole business is focused and working tirelessly to deliver the results that, we believe, will see our share price recover strongly. ### Q. What are your priorities for the Board in 2025? A. Supporting the delivery of the new strategy will be the key priority for 2025, with an initial focus on exiting the Essential Home portfolio this year and reviewing the potential options for the Mead Johnson Nutrition business. I also look forward to continuing to visit the markets in which Reckitt operates with my fellow Board members to help them enhance their understanding of the business requirements for 2025 and beyond. This will be particularly helpful for the induction of our newest Board members. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 60 # Board Leadership # OUR BOARD Experienced, diverse and balanced ## Inclusive Leadership ### Tenure* ![img-98.jpeg](img-98.jpeg) - Under 3 years: 6 - 3-6 years: 1 - 6-9 years: 3 - 9+ years: 1 ### Committee key - Chair - N - Nomination - C - Compliance - R - Remuneration - A - Audit ### Gender* ![img-99.jpeg](img-99.jpeg) - Male: 36% - Female: 64% ### Nationality* ![img-100.jpeg](img-100.jpeg) - British: 3 - American: 3 - Irish: 1 - British/Dutch: 1 - American/British: 1 - Danish: 1 - Italian/British: 1 ![img-101.jpeg](img-101.jpeg) ## Sir Jeremy Darroch (62) ### Chair ### Nationality British ### Appointment Appointed as Senior Independent Non-Executive Director in November 2022 and became Chair of the Board and the Nomination Committee in May 2024. ## Skills and experience Sir 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 most high-profile companies. He has a proven track record of driving business performance and unique insight into what motivates consumers, bringing great value to the Board. ## Current external appointments - Non-Executive Director of The Walt Disney Company - Chair of the National Oceanography Centre - WWF Ambassador - Senior Advisor for The MultiChoice Group - Executive Advisor for KKR ![img-102.jpeg](img-102.jpeg) ## Kris Licht (48) ### Chief Executive Officer ### Nationality Danish ### Appointment Kris joined Reckitt in 2019 and was appointed as Chief Executive Officer (CEO) Designate on 1 May 2023, became an Executive Director on 1 June 2023 and took over as CEO on 1 October 2023. ## Skills and experience Kris brings over 20 years of strong leadership and transformation experience across consumer health and consumer goods more broadly, with a proven track record in delivering growth and driving sustained operating performance. He has in-depth understanding of our categories and global markets and played a pivotal role in both setting the strategic direction of Reckitt and returning the Health business to the strong growth trajectory that it has delivered over the last four years. Prior to Reckitt Kris held a number of senior operational and strategic leadership roles at PepsiCo. ## Current external appointments - None ![img-103.jpeg](img-103.jpeg) ## Shannon Eisenhardt (50) ### Chief Financial Officer ### Nationality American ### Appointment Shannon joined the Board as Chief Financial Officer (CFO) Designate on 17 October 2023 and took over as CFO on 31 March 2024. ## Skills and experience Shannon brings extensive experience across consumer and retail, having worked with some of the most globally recognised brands, and an impressive and highly relevant international background. Shannon is a proven strategic and operational leader with a track record of building highly successful teams and delivering strong and consistent performance. ## Current external appointments - None * These graphs are based on data as at 31 December 2024 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 61 # Board Leadership continued ![img-104.jpeg](img-104.jpeg) ## Andrew Bonfield (62) Senior Independent Non-Executive Director ## Nationality British ## Appointment Appointed as a Non-Executive Director in July 2018 and became Senior Independent Director in May 2024. Andrew is Chair of the Audit Committee and a member of the Nomination Committee. ## Skills and experience Andrew brings more than three decades of financial expertise to the Board. He is a strong leader with experience gained in large, complex organisations, and has a history of driving strong financial performance in the UK and globally. These skills are valuable to the Board and to his role as Chair of the Audit Committee. He is CFO of Caterpillar Inc. and was Group CFO of National Grid plc, CFO of Cadbury plc and Executive Vice President and CFO at Bristol Myers Squibb. ## Current external appointments - CFO of Caterpillar Inc. ![img-105.jpeg](img-105.jpeg) ## Margherita Della Valle (59) Non-Executive Director ## Nationality Italian/British ## Appointment Appointed as a Non-Executive Director in July 2020. ## Skills and experience Margherita has extensive experience of financial markets and digital technologies. She is deeply experienced in business in both developed and developing markets, bringing great insight to the Board. These skills, together with her strong leadership background, are valuable to the Board and her membership of the Audit Committee and Nomination Committee. ## Current external appointments - Chief Executive Officer of Vodafone Group Plc - Non-Executive Director of Bocconi University ![img-106.jpeg](img-106.jpeg) ## Mary Harris (58) Non-Executive Director ## Nationality Dutch/British ## Appointment Appointed as a Non-Executive Director in February 2015. Mary is also Chair of the Remuneration Committee. ## Skills and experience Mary has substantial experience in consumer and retail businesses across China, Southeast Asia and Europe. She brings to the Board a top-level strategic outlook with an international and consumer focus. Her previous experience in other non-executive director roles is invaluable to the Board and to chairing the Remuneration Committee. ## Current external appointments - Non-Executive Director and member of the Remuneration and Nomination Committees of Coca-Cola Europacific Partners plc - Supervisory Director of HAL Holding N.V. - Member of the INSEAD Corporate Governance Council ![img-107.jpeg](img-107.jpeg) ## Tamara Ingram, OBE (64) Non-Executive Director ## Nationality British ## Appointment Appointed as a Non-Executive Director in February 2023. ## Skills and experience Tamara is an outstanding leader with considerable expertise in global marketing services, and has led renowned marketing campaigns for household brands around the world. ## Current external appointments - Non-Executive Director of Marks and Spencer Group plc - Non-Executive Director of Intertek Group plc - Non-Executive Director of Marsh & McLennan Companies, Inc. - Chair of Asthma and Lung UK - Chair of 10 Group - Deputy Chair of Ofcom ![img-108.jpeg](img-108.jpeg) ## Mehmood Khan (66) Non-Executive Director ## Nationality American/British ## Appointment Appointed as a Non-Executive Director in July 2018. Mehmood is Chair of the Compliance Committee. ## Skills and experience Mehmood is a highly skilled medical practitioner and researcher. Mehmood has been Chief Executive Officer of Hevolution Foundation since October 2020. He was previously CEO of Life Biosciences Inc., and prior to that served as Vice Chairman and Chief Scientific Officer, Global Research and Development at PepsiCo, Inc. ## Current external appointments - Chief Executive Officer of Hevolution Foundation - Executive Chairman of Life Biosciences Inc. - Chairman of VCAT, US National Institute of Standards and Technology - Non-Executive Director of the Saudi Research, Development and Innovation Authority - Non-Executive Director of International Flavors & Fragrances --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 62 # Board Leadership continued ![img-109.jpeg](img-109.jpeg) ## Elane Stock (60) Non-Executive Director Nationality American ## Appointment Appointed as a Non-Executive Director in September 2018. Elane was appointed as Designated NED for Engagement with the Company's Workforce in May 2024. ## Skills and experience Elane brings great sector-relevant experience and insight of consumer goods products to the Board, particularly in personal care and wellness. She also brings key knowledge of emerging markets and the changing channels of trade and consumer preferences. ## Current external appointments - Director of Fomento Economico Mexicano SAB de CV ![img-110.jpeg](img-110.jpeg) ## Marybeth Hays (56) Non-Executive Director Nationality American ## Appointment Appointed as a Non-Executive Director in February 2024. ## Skills and experience Marybeth has considerable expertise in merchandising, marketing and omnichannel, gained from 25 years of general management experience across global retail, healthcare and consumer goods businesses, including at Walmart. ## Current external appointments - Non-Executive Director of Decowraps - Non-Executive Director of Leapfrog Brands - Non-Executive Director of AMS Retail Solutions ![img-111.jpeg](img-111.jpeg) ## Fiona Dawson, CBE (58) Non-Executive Director Nationality Irish ## Appointment Appointed as Non-Executive Director in June 2024 and Chair Designate for the Remuneration Committee. ## Skills and experience Fiona was previously Global President Food, Drinks and Multisales at Mars, Inc. In May 2021, Fiona was awarded a CBE for services to women and the economy. She is President of the Chartered Management Institute, a Trustee with the Social Mobility Foundation, and was previously Chair of the Women's Business Council. ## Current external appointments - Non-Executive Director of LEGO A/S - Non-Executive Director of Marks and Spencer Group plc - Non-Executive Director of Kerry Group PLC ![img-112.jpeg](img-112.jpeg) ## Mahesh Madhavan (62) Non-Executive Director Nationality Indian ## Appointment Appointed as Non-Executive Director in January 2025 and is a member of the Remuneration Committee. ## Skills and experience Mahesh is CEO of Bacardi and joined in 1997, where he held several regional leadership roles before being promoted to CEO in 2017. He has successfully led the company's growth and transformation, providing stability, a clear strategy, and a dynamic culture for organisational success. Previously, Mahesh held various roles at International Distillers & Vintners, FCD Draft Advertising and Wipro Consumer Products. ## Current external appointments - Chief Executive Officer of Bacardi Limited - Non-Executive Director of Capri Holdings ![img-113.jpeg](img-113.jpeg) ## Stefan Oschmann (67) Non-Executive Director Nationality German ## Appointment Appointed as Non-Executive Director in January 2025 and is a member of the Compliance Committee. ## Skills and experience Stefan Oschmann is the former CEO and Chair of Merck KGaA which he joined in 2011 and became CEO and Chair of Merck between 2016 and 2021. Prior to that Stefan spent 30 years at Merck & Co in various leadership roles. Stefan brings strong transformational experience in science, healthcare and technology. ## Current external appointments - Non-Executive Director of Stamm - Non-Executive Director of European Healthcare Acquisition & Growth - Non-Executive Director of Springer Nature - Chair of AiCuris Anti-Infective Cures ## Director changes during the year | Chris Sinclair | Non-Executive Director from February 2015 and Chair of the Board from May 2018 until he retired from the Board in May 2024. | | --- | --- | | Pam Kirby | Non-Executive Director from February 2015 until she retired from the Board in May 2024. | | Alan Stewart | Non-Executive Director from February 2022 and Chair of the Remuneration Committee from May 2022 until he retired from the Board in May 2024. | | Olivier Bohuon | Non-Executive Director from January 2021 until his death in May 2024. | | Jeff Carr | Chief Financial Officer and Executive Director from April 2020 until his retirement in March 2024. | The two members in the grey boxes above joined the Board on 1 January 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 63 # Senior Leadership # GROUP EXECUTIVE COMMITTEE Experienced, diverse and balanced Kris Licht (48) Chief Executive Officer 📧 For biography see page 60 Shannon Eisenhardt (50) Chief Financial Officer 📧 For biography see page 60 Group Executive Committee changes during the year | | Reason for change | | --- | --- | | Jeff Carr | Chief Financial Officer who joined Reckitt in April 2020 and retired in March 2024. | | Volker Kuhn | President Hygiene who joined Reckitt in August 2020 and left in December 2024. | | Pat Sly | President Health who joined Reckitt in July 2017 and left in December 2024. | | Sami Haffakh | Chief Supply Officer who joined Reckitt in July 2020 and left in July 2024. | | Filippo Catalano | Chief Information and Digitisation Officer who joined Reckitt in April 2021 and left in October 2024. | | Fabrice Beaulieu | Chief Marketing, Sustainability and Corporate Affairs Officer who joined Reckitt in 1999 and left in December 2024. | ![img-114.jpeg](img-114.jpeg) Susan Sholtis (58) President Nutrition Nationality American Key skills and experience Susan joined Reckitt as President Nutrition in July 2023. Susan has a deep knowledge of the Nutrition business, having previously worked for over 11 years at Mead Johnson Nutrition and Reckitt in a number of senior leadership roles in the US and Europe, including general management, marketing and sales. ![img-115.jpeg](img-115.jpeg) Angela Naef, PhD (49) Chief R&D Officer Nationality American Key skills and experience Angela joined Reckitt as Chief R&D Officer in September 2020 and is responsible for elevating Reckitt's science capability and platforms as well as for driving external partnerships. She is focused on enabling the R&D organisation to deliver meaningful solutions addressing the mega trends and sustainability to deliver growth. ![img-116.jpeg](img-116.jpeg) Ranjay Radhakrishnan (54) Chief Human Resources Officer Nationality British Key skills and experience Ranjay joined Reckitt as Chief Human Resources Officer in March 2020. Ranjay has over 30 years' experience in the human resources function across different geographies and industries. Prior to joining Reckitt, Ranjay was the Chief Human Resources Officer at InterContinental Hotels Group plc and spent over two decades at Unilever in senior leadership roles. ![img-117.jpeg](img-117.jpeg) Catheryn O'Rourke (52) General Counsel & Company Secretary Nationality American Key skills and experience Catheryn joined Reckitt in February 2022 and is responsible for legal and compliance matters across the Group. She brings to Reckitt more than 20 years of professional expertise in running global legal and compliance teams, managing litigation and corporate transactions, advising on financial reporting and disclosure and supporting board governance. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 64 # Senior Leadership continued ![img-118.jpeg](img-118.jpeg) ## Harald Emberger (59) Chief Supply Officer Nationality German ## Key skills and experience Harald joined Reckitt as Chief Supply Officer in July 2024 and is responsible for Reckitt's end-to-end supply chain operations, procurement, and the Health & Safety and Corporate Security functions. Harald is a seasoned supply executive who has led multiple large scale supply chain transformation efforts. He brings many years of supply chain leadership across all regions of the globe and has held senior leadership roles at Beiersdorf AG, Unilever and Mars. ![img-119.jpeg](img-119.jpeg) ## Ryan Dullea (47) Chief Category Growth Officer Nationality American ## Key skills and experience Ryan joined Reckitt in 2019. With his Reckitt and previous experiences, Ryan brings a comprehensive understanding of our consumers and categories across multiple geographies having lived and worked in Asia, Europe and North America. His career spans over 25 years, during which he has gained a blend of experiences in consulting, marketing, and sales with companies like P&G and Accenture. Ryan has worked across all aspects of the value creation process from upstream innovation all the way through to general management and sales. ![img-120.jpeg](img-120.jpeg) ## Jérôme Lemaire (51) President North America Nationality French ## Key skills and experience Jérôme joined Reckitt in 1998. He has broad experience in senior leadership roles in general management and marketing across North America, the United Kingdom, Australia and the Netherlands. ![img-121.jpeg](img-121.jpeg) ## Eric Gilliot (58) President Europe Nationality French ## Key skills and experience Eric has been at Reckitt for 26 years. Since joining Reckitt in 1998, Eric has held various leadership positions across several global markets. In 2020, he was appointed Chief Customer Officer International and SVP Global Sales and in October 2022, he was appointed EVP North America, Hygiene. ![img-122.jpeg](img-122.jpeg) ## Nitish Kapoor (56) President Emerging Markets Nationality Indian ## Key skills and experience Nitish joined Reckitt in India as a Management Trainee in 1993. Over three decades he has worked in India, the US, Europe and Africa in sales, marketing, global category and general management roles. Nitish was appointed EVP Global Health categories in 2020 and EVP of the Fuel for Growth transformation programme in 2023. The four members in the grey boxes above joined the Group Executive Committee on 1 January 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 65 # Reckitt's Approach to Governance # COMPLIANCE WITH THE CODE ## Compliance with the UK Corporate Governance Code For the year ended 31 December 2024, the Company complied with all the principles and provisions of the UK Corporate Governance Code 2018 (the Code) and the Disclosure Guidance and Transparency Rules requirements to provide a corporate governance statement. Pages 58-138 of this report form our Corporate Governance Statement. Details of how the principles of the Code have been applied can be found throughout this report, the Strategic report, and the Committee reports as set out below. The Board has received an update in relation to the changes to the Code following the publication of the UK Corporate Governance Code 2024 and intends to be compliant with all the new relevant provisions within the timeframes indicated. The Board has carried out an evaluation of the changes required in the reporting requirements. ## How we comply with the Code | | Pages | | --- | --- | | 1. Board leadership and Company Purpose | | | Promoting the long-term, sustainable success of the Company | 1-57 | | Purpose, values and culture | 8-9, 71 | | Strategic priorities and objectives | 10-16 | | Stakeholder engagement | 74-77 | | Workforce engagement | 9, 74 | | 2. Division of responsibilities | | | Role of Chair, Non-Executive Directors and Group Company Secretary | 67-68 | | Board composition | 60-62 | | 3. Composition, succession and evaluation | | | Appointments to the Board and succession planning | 81-84 | | Balanced Board | 60-62, 85 | | Board performance | 79-80 | | 4. Audit, risk and internal control | | | Audit Committee Report | 86-93 | | Principal risks and uncertainties | 52-56 | | 5. Remuneration | | | Directors' Remuneration Committee Report | 96-133 | ![img-123.jpeg](img-123.jpeg) ## Board skills as at 31 December 2024 ![img-124.jpeg](img-124.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 66 # Reckitt's Approach to Governance continued ## Board roles and responsibilities The Board is responsible for the effective leadership of the Group and for promoting its long-term sustainable success, generating value for shareholders and contributing to wider society, whilst focusing on governance with the highest regard to the principles of the Code. The Board provides leadership by setting our Purpose, strategy and values, monitoring our culture and ensuring alignment with our Purpose and Compass, and overseeing implementation by management. All Directors must act with integrity, lead by example and promote the Company's culture and values. The Board also ensures there are appropriate processes in place to manage risk, including the Company's risk appetite, and monitors financial and operational performance against objectives. The Board consists of a balance of Executive and Non-Executive Directors who together have collective accountability to Reckitt's shareholders as well as responsibility for the overriding strategic, financial and operational objectives and direction of Reckitt. The Board manages the overall leadership of the Group with reference to its formal Schedule of Matters Reserved for the Board. This schedule is reviewed annually, with the last review undertaken in November 2024, and broadly covers: - Matters which are legally required to be considered or decided by the Board, such as approval of Reckitt's Annual Report and Financial Statements, declaration of dividends and appointment of new Directors - Matters recommended by the Code to be considered by the Board, such as terms of reference for the Board and its Committees, review of internal controls and risk management - Compliance with regulations governing UK publicly listed companies, such as the UK Listing Rules, the Disclosure Guidance and Transparency Rules and the Prospectus Regulation Rules - Matters relating to developments in, or changes to, the Group's strategic direction, or material corporate or financial transactions The full Schedule of Matters Reserved for the Board is available on the Reckitt website at www.reckitt.com/investors/corporate-governance. ## Risk management and internal controls The Board has overall responsibility for internal controls and risk management along with compliance with the Code and the Financial Reporting Council's (FRC) Guidance on Risk Management, Internal Control and Related Financial and Business Reporting. The sectors and environment within which Reckitt operates are dynamic and fast-moving, and in some areas, highly regulated, and so controls are kept under review. On an ongoing basis, the Board reviews the effectiveness of the Group's risk management and internal control system, including through monitoring reports from management on its assessment of risks and internal control systems, assurance received from management regarding compliance with relevant policies, and assurance received on the effectiveness of the Company's internal control environment. In addition, the Board reviews reports from the Audit Committee, the Internal Audit function and the External Auditor, and the Company's response to incidents and threats, including those relating to cyber security and safety. The Audit Committee, on behalf of the Board, oversees the Group's overall Risk Management Framework, and the effectiveness of internal controls and monitors Reckitt's compliance with the requirements of the Code in respect of risk management and internal controls. The Audit Committee monitored the key elements of the Group's internal controls framework throughout the year and conducted an annual review of the effectiveness of Reckitt's system of risk management and internal control in respect of 2024, which covered all material controls, including financial, operational and compliance controls. The Audit Committee's annual review was supported by a report prepared by the Internal Audit function on the Group's risk management and internal controls. The Audit Committee Report can be found on pages 86–93. ## Principal risks and risk appetite As part of our risk management process, we regularly evaluate risks related to achieving our objectives and the likelihood of such risks materialising and impacting the ability of the Group to cope with the circumstances should they occur. In doing so, we are inherently considering our risk appetite through the actions taken, controls implemented and processes followed to reduce the likelihood of risk events taking place, mitigating the potential impact and ensuring that the cost of doing so is proportionate to the benefit gained. Each principal and emerging risk is overseen by the Board, or a designated Committee of the Board, and is subject to formal deep dive reviews as appropriate at Board and GEC meetings. During the year, the Directors undertook a robust assessment of the principal and emerging risks facing the Group, including those that could threaten our business model, future performance, solvency and liquidity. The Group's principal and emerging risks and mitigating actions are detailed on pages 52–56. ## Climate-related risk and environmental social and governance (ESG) matters The Board oversees, considers and reviews the Group's ESG strategy and has oversight of the climate-related risks and opportunities. As part of the Board's twice yearly review of the principal and emerging risks, sustainability was considered. The Board's focus included both ESG performance and reporting. More information on our Sustainability Ambitions can be found on page 38. The Viability Statement on page 57 provides further disclosure on climate and ESG related risk matters. Our Climate-Related Financial Disclosures can be found on pages 218–222. --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 67 # How We Are Governed ## Board roles and responsibilities To ensure the Board performs effectively, there is a clear division of responsibilities, set out in writing and agreed by the Board, between the leadership of the Board and the Executive leadership of the business. The key roles are defined in greater detail on the following pages. A full description of the roles and responsibilities of the Chair, CEO and Senior Independent Director can be found on our website: www.reckitt.com/investors/corporate-governance ## Managing time commitment and 'overboarding' On appointment, Non-Executive Directors are made aware of the need to, and are required to confirm that they will, allocate sufficient time to their role to discharge their responsibilities effectively. They are also required to seek agreement from the Chair before taking on additional commitments and to declare any actual or potential conflicts of interest. Non-Executive Directors are engaged under the terms of a letter of appointment. Initial terms of appointment are for three years with three months' notice, with all Directors standing for election or re-election at every AGM. The Board has reviewed the length of service of each Director and considers that each Non-Executive Director standing for re-election or election at this year's AGM is independent. As noted in last year's report, following the retirement of Alan Stewart from the Board at the 2024 AGM, to provide continuity in relation to the Remuneration Committee, Mary Harris the former Chair of the Remuneration Committee was reappointed to the role for a fixed term of one year between the 2024 and 2025 AGM, to enable a smooth transition when the role moves to Fiona Dawson. Mary will retire at this year's AGM and will not put herself forward for re-election. The Board is confident that each Director individually has the expertise and relevant experience required to perform the role of a Director of a listed company and to contribute effectively to the Board and Committees to which they are appointed. The Company recognises the developmental advantages of an external non-executive role on a non-competitor board and Executive Directors are permitted to seek such a role, provided that they do not take on more than one non-executive directorship in, nor become the Chair of, a FTSE 100 company. Neither Kris Licht or Shannon Eisenhardt hold any external directorships at the date of this report. ## The Chair - Leading the Board and taking responsibility for the Board's overall effectiveness in directing the Company - Upholding the highest standards of integrity and ethical leadership, leading by example and promoting a culture of openness and debate, based on mutual respect, both in and outside the boardroom and in line with our Purpose, values, strategy and culture - Chairing Board, Nomination Committee and shareholder meetings and setting Board agendas - Encouraging constructive challenge and facilitating effective communication between the Board, management, shareholders and wider stakeholders - Ensuring an appropriate balance is maintained between the interests of shareholders and other stakeholders - Leading the annual effectiveness review process for the Board and its Committees and addressing any subsequent actions - Promoting the highest standards of corporate governance - Building a well-balanced, diverse and highly effective Board - Ensuring Directors receive accurate, timely and clear information - Ensuring there are appropriate induction and development programmes for all Board members - Ensuring the long-term sustainability of the Company ## The Chief Executive Officer - Principally responsible for the day-to-day management of Reckitt, in line with the strategic, financial and operational objectives set by the Board - Chair of the GEC, consisting of the CEO, the CFO and senior management executives, who together are responsible for execution of the Company's strategy and achieving its commercial aims - Effective development and implementation of strategy and commercial objectives as agreed by the Board - Maintaining relationships with investors and advising the Board accordingly - Managing Reckitt's risk profile and establishing effective internal controls - Ensuring there are effective communication flows to the Board and the Chair, and that they are regularly updated on key matters, including progress on delivering strategic objectives - Regularly reviewing the organisational structure, developing a Group Executive team and planning for succession - Providing clear leadership to promote the desired culture, values and behaviours to inspire and support the Company's workforce - Ensuring the long-term sustainability of the business ## The Senior Independent Director - Acting as a sounding board for the Chair on Board-related matters - Acting as an intermediary for other Directors as necessary - Evaluating the Chair's performance on an annual basis - Chairing Board and Nomination Committee meetings in the absence of the Chair - Being available to shareholders and stakeholders to address any concerns that they have been unable to resolve through normal channels - Leading the search and appointment process for a new Chair, when necessary --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 68 回 # Board Roles and Responsibilities ![img-125.jpeg](img-125.jpeg) ## Board support The General Counsel & Company Secretary is responsible for organising Board meetings, as well as collating any papers for the Board to review and consider. Board and Committee papers are accessible to all Directors through a secure and confidential electronic document storage facility. This facility is maintained by Reckitt's Secretariat function and additionally holds other information which the Chair, the CEO or the General Counsel & Company Secretary may deem useful to the Directors, such as press releases and pertinent Company information. All Directors have individual access to advice from the General Counsel & Company Secretary and a procedure exists for Directors to take independent professional advice at the Company's expense in furtherance of their duties. ## The Chief Financial Officer - Supporting the CEO in developing and implementing the Company's strategy - Leading the global finance function and developing key talent and planning for succession - Responsible for establishing and maintaining adequate internal controls over financial reporting and for the preparation and integrity of financial reporting - Ensuring the Board receives accurate, timely and clear information in respect of the Group's financial performance and position - Developing and recommending the long-term strategic and financial plan ## Non-Executive Directors - Providing independent input into Board decisions through constructive challenge and debate, strategic guidance and specialist experience - Setting and approving the Company's long-term strategic, financial and operational goals - Examining the day-to-day management of the business against the performance targets and objectives set, ensuring that management is held to account - Reviewing financial information and ensuring it is complete, accurate and transparent - Ensuring there are effective systems of internal control and risk management and that these are continually monitored and reviewed - Setting appropriate levels of remuneration for Executive Directors and ensuring performance targets are closely aligned with shareholder interests - Development of succession planning and the appointment and removal of senior management - Taking into account and responding to shareholders' views ## Designated Non-Executive Director for Engagement with the Company's Workforce - Overseeing the Board's engagement with the Company's workforce, together with management, to understand more about engagement and the culture of the Company - Developing and implementing employee engagement initiatives - Providing an employee voice in the boardroom and reporting on matters relating to Company culture, purpose and improvements ## The Company Secretary - Providing advice and support to the Chair and all Directors - Advising and keeping the Board up to date on all relevant legal and governance requirements and ensuring the Company is compliant - Ensuring the Board receives high quality, timely information in advance of Board meetings to ensure effective discussion - Facilitating an induction programme for all Board members Ensuring there are policies and processes in place to help the Board function efficiently and effectively - Keeping abreast of shareholders' views --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 69 # Governance Framework The Company has a clear and effective governance structure, which allows the Board, its Committees and the Executive team to make decisions effectively. The Board has established four Committees to assist in the execution of its responsibilities. Each Committee operates under terms of reference approved by the Board. The terms of reference are reviewed regularly, with the last review taking place in November 2024. There are also three supporting Management Committees: the Disclosure Committee, the Group Executive Committee (GEC), and the Group Compliance Committee (GCC). ## Shareholders Our shareholders are the ultimate owners of the Company and play an important role in the governance structure. Further information on our engagement with shareholders can be found on pages 36 and 76. ## Our Board The Board is collectively responsible for the overall leadership of the Group and for promoting its long-term sustainable success whilst focusing on its strategic direction. Purpose, values and governance with the highest regard to the principles of the Code. There is a clear division of responsibilities between the Board, its Committees and Management Committees. | **Nomination Committee** Chaired by Sir Jeremy Darroch | **Audit Committee** Chaired by Andrew Bonfield | **Remuneration Committee** Chaired by Mary Harris | **Compliance Committee** Chaired by Mahmood Khan | | --- | --- | --- | --- | | Responsible for making recommendations to the Board on suitable candidates for appointment to the Board, its Committees and senior management and to regularly review and refresh their composition to ensure that they comprise a diverse group of individuals with the necessary skills, knowledge and experience to effectively discharge their responsibilities. ☐ Read more on page 81 | Responsible for monitoring the integrity of Reckitt's Financial Statements and ensuring effective functioning of internal audit, internal controls and risk management. It is also responsible for managing the Company's relationship with its External Auditor. ☐ Read more on page 86 | Responsible for assisting the Board in fulfilling its oversight responsibility by ensuring that the Remuneration Policy and practices reward fairly and responsibly, are linked to corporate and individual performance and take account of the generally accepted principles of good governance. The Committee is responsible for determining the remuneration for the Chair, Executive Directors and senior management. ☐ Read more on page 96 | Responsible for supporting the Board in reviewing, monitoring and assessing the Company's approach to ethical and compliant corporate conduct and to assist the Board in upholding its Compass. ☐ Read more on page 94 | | **Disclosure Committee** Chaired by CFO | **Group Executive Committee** Chaired by CEO | **Group Compliance Committee** Chaired by CEO | | --- | --- | --- | | Responsible for ensuring accuracy and timeliness of disclosure of financial and other public announcements. | Responsible for overseeing Reckitt's management and ensuring collaboration between functions and in-market operations. It recommends and implements the strategy and related budget as approved by the Board. The GEC drives business and cultural transformation, reviews business performance and approves business development plans and major investments. It plays a critical role in talent management and development and oversees the integration of sustainability within business operations. | Provides oversight of risk across the organisation and makes recommendations to the Compliance Committee for actions to be taken in respect of the Group's legal compliance and ethics, product quality, consumer safety and regulatory matters, including compliance strategies, policies, programmes and key activities. | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 70 三 # Governance Framework continued ## How we manage conflicts of interest Directors have a duty to avoid interests, direct or indirect, which might conflict with the interests of the Group. Under the terms of our Articles, such conflicts can be authorised by the Board. Procedures are in place to manage and, where appropriate, approve such conflicts. Any authorisations granted by the Board are recorded by the General Counsel & Company Secretary in a Register of Conflicts, together with the date on which the conflict was authorised. Any conflicts authorised during the year are reviewed annually by the Nomination Committee and the Board. In addition, each Director certifies on an annual basis that the information contained in the Register of Conflicts is correct. The Company indemnifies the Directors and Officers of the Company and any Group subsidiary to the extent permitted by law in respect of the legal defence costs for claims against them and third-party liabilities. The indemnity would not provide cover for a Director or Officer if that individual was found to have acted fraudulently or dishonestly. Directors' and Officers' liability insurance cover was maintained throughout the year at the Company's expense. ## How Board meetings are structured Board meetings are conducted in an open atmosphere conducive to challenge and debate. Agendas are tailored to the requirements of the business and agreed in advance by the Chair and CEO with the support of the General Counsel & Company Secretary. The Board receives operating and financial reports from the CEO and CFO on strategic and business developments, as well as financial performance and forecasts at each meeting. Specific presentations are also made by non-Board members on material matters to the Group. In addition, the Chairs of the Audit, Remuneration, Compliance and Nomination Committees update the Board on the proceedings of those meetings, including key topics and areas of concern. At the conclusion of every scheduled Board meeting, the Chair holds a session with the other Non-Executive Directors, without the Executive Directors present, providing further opportunity for the Non-Executive Directors to assess the performance of management and individual Executive Directors and help drive future agenda items. The Board uses its meetings as a way of discharging its responsibilities, including as set out in section 172 of Companies Act 2006, to promote the success of the Company for the benefit of its members as a whole. Further information can be found on page 78. ## Board and Committee meeting attendance In 2024, there were five scheduled Board meetings. The table opposite sets out the attendance by Directors at scheduled Board and Committee meetings that each Director was eligible to attend. Directors who were not members of individual Board Committees were also invited to attend one or more meetings of those Committees during the year. | | Board | Audit Committee | Compliance Committee | Nomination Committee | Remuneration Committee | | --- | --- | --- | --- | --- | --- | | | 5 | 4 | 4 | 2 | 5 | | | Meetings | Meetings | Meetings | Meetings | Meetings | | Sir Jeremy Darroch | 55 | | | 77 | 55 | | Kris Licht | 55 | | 64 | | | | Shannon Eisenhardt | 55 | | | | | | Andrew Bonfield | 55 | 64 | | 77 | | | Margherita Della Valle | 55 | 55 | | 71 | | | Marybeth Hays | 55 | 72 | 52 | | | | Mary Harris | 55 | | | | 55 | | Tamara Ingram | 55 | 64 | | | | | Mehmood Khan | 55 | | 54 | | | | Elane Stock | 55 | 64 | | | | | Fiona Dawson | 72 | | | | 55 | | Olivier Bohuon^{1} | 72 | | 82 | | 71 | | Pam Kirby^{2} | 72 | 72 | 72 | 71 | | | Chris Sinclair^{3} | 72 | | 72 | 71 | 71 | | Alan Stewart^{4} | 72 | | | 71 | 71 | | Jeff Carr^{5} | 71 | | | | | Where a Director is unavoidably absent from a Board or Committee meeting, they still receive and review the papers for the meeting and may provide verbal or written input ahead of the meeting, usually through the Chair of the Board or the Chair of the relevant Committee, so that their views are considered at the meeting. 1. Olivier Bohuon: Non-Executive Director from January 2021 until his death in May 2024 2. Pam Kirby: Non-Executive Director from February 2015 until she retired from the Board in May 2024 3. Chris Sinclair: Non-Executive Director from February 2015 and Chair of the Board from May 2018 until he retired from the Board in May 2024 4. Alan Stewart: Non-Executive Director from February 2022 and Chair of the Remuneration Committee from May 2022 until he retired from the Board in May 2024 5. Jeff Carr: Chief Financial Officer and Executive Director from April 2020 until his retirement in March 2024 --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 71 # Purpose and Culture ![img-126.jpeg](img-126.jpeg) ## Our people and culture Reckitt is rooted in a culture that is purpose driven, innovative and entrepreneurial. Our Leadership Behaviours unite us through a shared ambition to Own, to Create, to Deliver and, above all, to Care about the outcomes we deliver. Doing the right thing, always, is at the centre of our Compass, which guides our business and the Leadership Behaviours that drive our success. Our people are what makes Reckitt unique. They believe in and are inspired by our Purpose. Over the last five years, we have established deep cultural foundations that empower our people as the key value drivers of our business. We defined our Leadership Behaviours to place a greater emphasis on care as we serve the needs of all our stakeholders. We elevated the importance of teamwork in delivering outcomes and protecting against the pursuit of results at any cost. More information on our culture can be found on pages 8-9 of the Strategic Report. ## How the Board monitors culture A key focus of the Board is to monitor and support culture and ensure alignment across our Purpose, values, and behaviours. Our culture and values at Reckitt are defined by the Board and the GEC. We are evolving a vibrant, inclusive and collaborative culture to deliver on our Purpose. By embedding inclusivity, all colleagues should feel free to participate fully, bring their authentic selves to work and realise their full potential. Regular interactions with employees help the Board monitor culture and are detailed in the table opposite. | How we monitor culture | Board interactions and engagement to monitor culture throughout the year | | --- | --- | | Connecting directly with employees | Board members meet with employees regularly. In her role as Designated NED for Engagement with the Company's Workforce, Elane Stock attended meetings with various employee groups throughout the year, where employees were able to speak directly with her. The Board received feedback from Elane on these discussions. Further information on Elane's role as Designated NED for Engagement with the Company's Workforce can be found on page 74. | | Creating a forum for employees to be heard | ERGs are employee networks that aim to raise the visibility of underrepresented communities. They provide a space for colleagues to connect and support each other and are also represented on the Global Inclusion Board. In addition, throughout the year, Elane Stock has maintained regular engagement with various employee groups, including the ERGs. | | Ensuring employees are informed | Quarterly all-employee global live-streaming results are broadcast held by the CEO, CFO and Group Executive Committee members to present our financial results and employees are invited to ask questions and interact directly with presenters. | | Staying informed of legal and compliance matters | At each Board meeting, the Compliance Committee Chair reports to the Board on legal compliance and ethics matters, including the Group's Speak Up programme, which provides safe communication channels for employees wishing to raise concerns on potential violations of regulations, internal policies or any misconduct observed at Reckitt. A deep dive was also provided to the Audit Committee during the year in relation to the results and action plan following the investigation in the Middle East between the end of 2023 and first half of 2024. More details can be found within the Audit Committee report on page 90. | | Maintaining open communications | Following the strategy update announced in July 2024 the CEO broadcast a live all-employee update on the new strategy and the plans for the future. This broadcast gave employees the opportunity to ask questions and further updates have been provided to employees on the company intranet 'Rubi'. | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 72 # Board Activities # 2024 BOARD ACTIVITIES | Information flow | Outcomes, benefits and considerations | | --- | --- | | Strategy | Links to stakeholders | | Group plans and budgets | • Reviewed the Group's financial plan for 2025 • Reviewed and approved the 3 year plan • Reviewed forecasts and business performance | | Strategy | • Discussed and approved the new strategy and received regular updates on progress • During the November 2024 meeting, Board members discussed the progress on the new strategy and the innovation pipeline for 2025 • Received updates on competitive environment and broader market developments • Received an update from the Chief Supply Officer | | Mergers and acquisitions | • Oversight of potential merger and acquisitions (M&A) activities and portfolio strategy | | Business updates | • Reviewed the business performance in the markets • Deep dives on functions such as Finance, HR, Supply, IT & Digital and Cyber Security | | Governance and oversight | Links to stakeholders | | --- | --- | | Board and Committee performance review | • Conducted the annual internal 2024 Board effectiveness review and had oversight of Committee performance reviews • Identified areas for improvement and recommended actions for 2025 • Considered and proactively addressed actions from the 2023 Board effectiveness review • Reviewed and approved the external evaluator for the 2025 external Board effectiveness review | | Information flow | Outcomes, benefits and considerations | | --- | --- | | Governance and oversight | continued | | Talent, succession and Board composition | • Oversight of Group talent planning and succession, including senior management succession and retention • Update on the new structure following the strategy update and change in roles for the senior management team across the Group • Considered and approved Board changes, including succession planning and the appointment of new Non-Executive Directors as detailed on pages 62, 81-85 | | Shareholders and stakeholders | • Reviewed and approved the 2024 Notice of AGM • Held the 2024 AGM in person. Shareholders had the opportunity to pre-submit questions as well as ask the Board questions during the meeting alongside voting on the proposed resolutions • Held Board and employee engagement meetings, to understand employee views • The Designated Non-Executive Director provided regular updates to the Board on engagement activities. More details can be found on page 71 | | Legal and Compliance | • Reviewed and approved governance matters, such as the Schedule of Matters Reserved for the Board, roles of Chair, CEO and SID, Committee terms of reference, Directors' conflicts of interest and compliance with the Code and best practice • Reviewed and approved the updated share dealing policy and code • Kept abreast of upcoming changes in the UK corporate governance and regulatory framework • Approved Reckitt's 2023 Modern Slavery and Human Trafficking Statement • Received updates and discussed litigation matters including product liability actions related to Necrotizing Enterocolitis | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 73 # Board Activities continued Information flow Outcomes, benefits and considerations | ESG | Links to stakeholders | | --- | --- | | ESG | • Reviewed the Group's sustainability strategy and approach, including progress against the delivery of our Sustainability Ambitions • Received updates on sustainability activities and initiatives • Undertook a deep dive on ESG and climate change | Risk management and internal controls Links to stakeholders | Principal and Emerging Risks | • Conducted an annual review of Reckitt's principal and emerging risks and consideration of risk management approach • Reviewed the appropriateness and effectiveness of the system of internal control and risk management • Received an update on Artificial Intelligence which included an overview of the Company's governance framework relating to the acceptable use of AI • Undertook a deep dive on Cyber Security | | --- | --- | Financial Links to stakeholders | Reporting | • Reviewed and approved Reckitt's Annual Report and Financial Statements including compliance with reporting requirements • Reviewed and approved Reckitt's full-year, half-year and quarterly results • Provided results presentations to investors and employees during the year • Reviewed and approved the announcement in relation to the strategy update | | --- | --- | | Going concern | • Reviewed long-term going concern and liquidity considerations • Considered and approved the 2023 Annual Report Viability Statement upon recommendation of the Audit Committee | | Financial resources | • Reviewed the Company's financial position, Group debt and funding arrangements and capital allocation • Approved a bond issuance • Approved continuation of the share buyback programme • Approved the final 2023 and interim 2024 dividend payments | | Treasury policies | • Reviewed and approved the Group's Treasury policies | ![img-127.jpeg](img-127.jpeg) ![img-128.jpeg](img-128.jpeg) --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 74 # Maintaining the Trust of Stakeholders ## Understanding the needs and expectations of our stakeholders is fundamental to our Purpose. Our business can only grow and prosper by acting in the long-term interests of our consumers and customers, our people, our suppliers, our investors and shareholders, and the communities in which we operate. Our commitment to 'Do the right thing. Always' guides us in acting responsibly and with integrity, putting people first, seeking out new opportunities, striving for excellence and building shared success with our stakeholders. For us, high standards of corporate governance and incorporating stakeholder voices into our decision making are central to maintaining that integrity and trust, and strengthen our long-term relationships. ## Our people Our colleagues collectively help fulfil our Purpose to protect, heal and nurture in the pursuit of a cleaner, healthier world. We believe in nurturing a workplace that supports and encourages all colleagues to thrive. The talent, skills, experience and values our colleagues bring and continuously develop strengthen our organisation. We engage to build strong relationships with our people, ensuring an understanding of Reckitt's strategic direction and the role that every one of us plays in contributing to our collective success. In turn, we strive to provide an inclusive, fulfilling and high-performing workplace where everyone has the Freedom to Succeed. ## How we engage ### Group - Internal communications tools are used to inform, build connection and enable collaboration across the business. Our goal is to support two-way communication and dialogue with our people and there are a number of key mechanisms that enable this - Regular global townhalls and broadcasts for all employees, hosted by the CEO and Group Executive Committee (GEC), including live-streamed Q&As plus supporting market and function-specific townhalls - Targeted communications by function focused on building strategic alignment, excellence in execution, collaboration and building functional capabilities - Employee Resource Groups (ERGs) which provide a space for colleagues to connect and support each other and share views with the business through regular touchpoints - Informal forums, focus groups and listening sessions with leaders - A regular news feed provided through our intranet, Rubi, supported by informal channels for colleagues to share updates, insights and news - Throughout 2024, we have informed, consulted and engaged with our people and local works councils and trades unions on the proposed changes to our organisation, where relevant and in line with local guidance and legislation ### Board - Elane Stock, our Designated Non-Executive Director for Employee with the Company's Workforce, maintains regular engagement with various employee groups, including the Group's ERGs - Various Board members visited Reckitt sites throughout the year to engage directly with employees, including Parsippany and Montvale in the US, Hull and Slough in the UK, and Delhi in India - The Board's Compliance Committee receives updates on employee concerns raised through Speak Up and ensures proper follow-up and action, as appropriate - The Board reviewed and provided input on proposed changes to the performance evaluation and talent development processes to ensure they are aligned with Reckitt's strategy, build critical organisational capabilities, and provide equitable growth opportunities to all employees ## 2024 outcomes of engagement - During the year, we hosted two global townhalls focused on strategy, performance and results. Our half-year update, which focused on the strategic direction of the business, had the highest number of live attendees plus subsequent views of the live event recording, and received over 400 questions - Following the half-year strategic update, a colleague 'Strategy Hub' was introduced specifically to provide regular updates on developments, with organisational changes reflected in a new look platform from January 2025. The bespoke hub received over 34,000 total views - In 2025 a new continuous listening strategy will be introduced, providing further opportunity for colleagues to give timely feedback ![img-129.jpeg](img-129.jpeg) The Designated Non-Executive Director for Engagement with the Company's Workforce is Elane Stock who was appointed to the role following the AGM in May 2024. This role follows an agreed plan of work which builds on existing channels of communication and fosters new engagement opportunities. It facilitates and complements full-Board engagement activities by strengthening the depth of employee sentiment and representing relevant concerns within discussions and decision making. Since taking over the role in May, I've had the opportunity to meet with many of Reckitt's employees across the world. These discussions have provided me with a wide range of views and I have enjoyed the variety of conversations I've had with the teams I've met. I have shared the views and insights with the Board to ensure they are meaningful inputs into our decisions. I am looking forward to continued engagement in 2025. --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 75 # Maintaining the Trust of Stakeholders continued ## Our consumers ### Putting consumers and people first is a guiding principle for our business. Our consumers want products that are safe, effective and provide value for money. Increasingly, they also want reassurance that the products they trust are responsibly sourced, with consideration and care for the people who make them and for natural resources. Consumer insight drives our innovation programme, helping us to provide trusted, quality products that help meet consumers' health, hygiene and nutritional needs. By reaching more people in more places, we grow our business and increase our impact. We do that by gaining and retaining people's trust. ## Our customers ### Our partnerships with our retail customers and distributors are the way in which consumers access our products. Aside from the merchandising opportunities they provide, retailers also offer us vital feedback on evolving consumer priorities and patterns of demand. This informs our product and service innovation programmes and helps us to better meet consumers' needs. We aim to build strong and successful customer relationships and partnerships founded on common purpose that ultimately help us to grow our business. In turn, we aim to exceed our customers' expectations through successful innovation, efficient execution and high-quality products and service that help our customers to grow their own businesses. ## How we engage ### Group and Board - Our products are chosen by millions of consumers each day and we collect consumer insights through our sales teams, supply chain partners, customer and consumer teams. Most of our products are sold through our retail customers who provide us with feedback on consumer priorities (see more in Customers on the right of this page) - Our sensory and consumer science labs combine this insight and feedback with behavioural analytics to develop superior solutions grounded in science - Through our brands, we work to forge emotional connections with our consumers by delivering products and solutions that meet their needs and reflect their values - The Board benefits from consumer insights in making category growth decisions ### 2024 outcomes of engagement - Based on consumer insights, during the year we developed and launched our new Vanish Oxi Action formula, Durex Basic HA, Lysol Air Sanitizer, Mucinex Mighty Chews and Nurofen sustained release - We continued our multi-year Nurofen 'See My Pain' campaign highlighting the Gender Pain Gap and our Finish 'Skip My Rinse' campaign in the US - Our brand certifications such as Cradle to Cradle and Fair Rubber, qualify our products within Amazon's Climate Pledge Friendly programme, and continue to support consumers in making more sustainable choices ## How we engage ### Group - In 2024 we welcomed a new Chief Customer Officer for the Group, based in North America, focused on customer engagement, delivering profitable results and accelerating sales growth through execution excellence - Customer relationships are coordinated globally, regionally or nationally through our customer service and sales teams. Joint meetings and workshops are used to define and build shared objectives, both commercial and non-financial, agree strategy and action plans, performance and growth metrics - We develop joint sustainability business plans with many of our customers to help deliver on collective goals such as plastics and packaging reduction and emissions avoidance. Operationally, we provide ongoing support through our category, shopper, sustainability, channel and format, and regional specialists - In support of proposed changes to Reckitt, our CEO contacted our global customers and our sales team colleagues were provided with bespoke materials to engage customers on the changes and what it will mean for them ### Board - The Board recognises the importance of understanding our customers and we continue to strengthen our Board capability in this area with the recent appointments of Fiona Dawson and Mahesh Madhavan ### 2024 outcomes of engagement - Reckitt achieved Giga Guru status within Walmart's supply chain initiative, Project Gigaton, which aims to avoid one gigatonne of GHG emissions by 2030. This recognition demonstrates environmental leadership among Walmart suppliers, a commitment to innovation, and successful emissions reduction - Together with Tesco in the UK, we continued to work to enhance the availability of self care and wellness ranges in store, accompanied by an increase in in-store literacy to support consumer choice in key categories - Reckitt won the Australian Packaging Covenant Organisation (APCO) education award for our work in developing and leveraging sustainability packaging data across our organisation and the broader industry and a reduced cost to serve --- Strategic report Governmental Financial statements Other information Reckitt Annual Report and Accounts 2024 76 # Maintaining the Trust of Stakeholders continued ## Our suppliers and partners Maintaining long-term relationships with suppliers and partners helps us to protect business continuity, drive innovation and deliver our Sustainability Ambitions. Ensuring our supplier relationships are founded on high standards helps us to drive progress across the value chain. From ensuring the fair treatment of workers, to reducing carbon emissions and water use, and protecting local ecosystems and nature, our engagement is helping to build resilience and maximise opportunities for all. Insights from across the value chain help us to understand long-term trends, build action programmes, guide innovation and develop expertise and capabilities to meet future challenges in partnership with our suppliers. ## Our investors Investors provide financial capital in the form of equity and debt, which underpins our business and enables us to execute our strategy. In return, investors expect attractive returns through capital appreciation, dividends, share buybacks or interest. Our investment community includes current shareholders and prospective investors, mainly institutional and retail, as well as sell-side research analysts, investment and financing banks and ratings agencies. Many of our employees form part of this shareholder community too. Our Investor Relations activities promote an open, consistent and transparent dialogue with these stakeholders, aiming to inform investors and market participants of key attributes of our financial performance and strategy. ## How we engage ### Group - We host regional supplier capability-building events in partnership with industry peers, where local suppliers are invited to attend and share best practice on salient topics - We have centralised more supplier relationships and procurement activity to monitor supplier performance and enable best practice sharing - We conduct regular supplier audits based on past performance and risk. Where needed, we work with suppliers through our capability building programme to help improve processes and raise standards - We engage with healthcare practitioners internationally to exchange information, share best clinical practice and sponsor research. We also contribute our expertise to professional journals, international symposiums and congresses - In support of proposed changes to Reckitt, our CEO contacted our global suppliers and partners and our procurement team was provided with bespoke materials to support their engagement with individual partners ### Board - The Board receives briefings from the Supply function on our key supplier relationships, including in the context of progress against our wider supply strategy ### 2024 outcomes of engagement - During the year, we developed new Supplier Sustainability Standards which include nine targets covering emissions, renewable energy, water reduction and waste. To support this engagement and our procurement activity, we developed a range of tools and resources including a buyer guide and playbook - In addition, Reckitt is a member of the Sustainable Markets Initiative Health Systems Taskforce, which brings together leading voices from across the health sector, with the aim of accelerating the delivery of net zero, patient-centric health systems. The Taskforce aligned on joint, minimum climate and sustainability targets for health sector suppliers, to address emissions across the value chain ## How we engage ### Group and Board - We communicate our financial results through management presentations to analysts and institutional investors - We communicate our financial results at our Annual General Meeting to retail investors - Post results, our CEO and CFO roadshows meet with top shareholders and prospective investors to discuss our latest financial performance and address their questions - Management and our Investor Relations team attend investor conferences throughout the year to communicate our most recent financial results and reiterate our company strategy - We hold ad hoc meetings with investors and sell-side analysts to address any strategy, operational, Environmental, Social and Governance (ESG) and modelling queries - We host a number of additional investor engagement events, including investor days, brokerage sales desk presentations and credit investor updates - Our Group Head of Sustainability participated in a number of ESG investment panels in 2024, as well as engaging with investors on sustainability-related topics through individual meetings ### 2024 outcomes of engagement - Our CEO Kris Licht, set out actions to reshape Reckitt as a world-class consumer health and hygiene organisation at our Strategy Update in July alongside our H1 2024 results - The Strategy Update reinforced Reckitt's value creation principles and their role in defining our focus on a sharper portfolio of market-leading Powerbrands, as well as communicating the simpler, more effective organisational structure that will deliver them to our customers and consumers --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 77 # Maintaining the Trust of Stakeholders continued ## Communities From the markets we support with our products to those at the heart of where we operate and source our ingredients, the communities across our value chain are critical to our goal to make a positive impact. Our community focus is linked to our Purpose and areas where we can make the biggest impact: access to clean water, hygiene and sanitation for all; championing sexual and reproductive healthcare and rights; strengthening maternal and child healthcare; and improving access to healthcare and self-care. With engaged and empowered communities, we benefit from long-term market growth and resilient supply chains, while advancing access to the highest-quality hygiene, wellness and nourishment. ## Governments, NGOs, industry and academia We engage with public policy makers to protect and strengthen our reputation and influence policy and regulatory development. We work with universities and industry groups to support new innovation and process development. In turn, these forums provide valuable research, insights and feedback to further strengthen our approach and help shape wider industry action. ## How we engage ### Group and Board - Together with our partners, we use our expertise and global reach to drive measurable and sustainable impact in communities aligned with our commitment to a cleaner, healthier world and our focus on achieving a fairer society, while advancing the UN Sustainable Development Goals - We accelerate social entrepreneurship with expert partners, including Yunus Social Business and Health Innovation Exchange, by mentoring, funding and scaling these businesses - We leverage innovative finance and impact investments like Water Equity's Fund IV and Watercredit micro-finance loans to help provide lasting access to clean water and sanitation - We drive behaviour change at scale through our leading brands; for example, through Dettol's Hygiene Quest, a gamified school programme that educates millions of students each year - We work with suppliers and communities in our supply network through partners such as Earthworm Foundation, to manage our supply networks, promote sustainable livelihoods, and protect local ecosystems and habitats - The Board receives updates on and monitors our Fight for Access Fund and other social impact initiatives ### 2024 outcomes of engagement - In September, we announced our latest $5 million investment into WaterEquity's impact funds, supporting climate-resilient infrastructure - In collaboration with local partners, through commercial incentives and investment in training and capacity building, rubber farmers in our latex supply chain have reduced their costs, built resilience and improved their incomes, leading to wider community benefits ## How we engage ### Group and Board - We engage regularly with national and international policy makers, governments and regulatory agencies, through formal policy consultation processes and ongoing bilateral engagement - With NGOs: through global partnership programmes with Water.org and our WWF partnership, and through local supply chain partnerships such as with Earthworm Foundation - With industry peers: through trade associations including the International Association for Soaps, Detergents and Maintenance products (AISE), via the World Business Council for Sustainable Development (WBCSD) and the Consumer Goods Forum (CGF) - Reckitt is part of the Sustainable Markets Initiative Health Systems Taskforce, a public-private partnership accelerating the delivery of net zero healthcare - We work with the Nature-based Insetting team, a spin-off from the University of Oxford, to help us understand and measure our impact on biodiversity in key supply chains, and the University of York on PhDs to support green chemistry and product resilience - We collaborate with governments on specific programs to improve access to health and hygiene. For example, with the Nigerian government we work with Reckitt Clean Naija flagship initiative with the Federal Ministry of Water as a multi-level campaign to create effective public health campaigns, awareness, educate, and drive behavioural change for national health promotion and disease prevention ### 2024 outcomes of engagement - The UK Parliament's Women and Equalities Committee's report on Women's reproductive health conditions endorsed Nurofen's 'See My Pain' campaign and called on the National Health Service to urgently implement a training programme to improve the experience of treatment and diagnosis in primary care for women - 'Oh Yes! Net Zero' was showcased at the international Smart City Expo in Barcelona, alongside other globally significant climate action initiatives. It was highlighted as a business-led example of a city driving action to combat climate change --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 78 # Section 172 Statement # EFFECTIVE ENGAGEMENT WITH OUR STAKEHOLDERS This statement shows how our Directors have acted in a way that they consider, in good faith, would be most likely to promote the success of the Company for the benefit of its members as a whole during 2024, having regard to stakeholders, including matters under Section 172(1) (a)-(f) of the Companies Act 2006. Effective engagement with our shareholders, employees, and wider stakeholders is key to Reckitt's sustainable success. In our decision-making, we consider what will most likely promote the long-term success of the Company for its shareholders, while also taking into account the interests of other stakeholders. Understanding their needs and expectations is fundamental to our Purpose: to protect, heal, and nurture in the relentless pursuit of a cleaner and healthier world. We recognise that our business can only grow and prosper by acting in the long-term interests of our key stakeholders, namely our people, our consumers and customers, our shareholders, investors and partners, the communities in which we operate, governments, NGOs, industry and academia we engage with, and the environment. Examples of how the Directors have oversight of stakeholder matters and had regard for these matters when making decisions are included throughout this Annual Report. The Board considers our key stakeholders and the matters set out under Section 172 of the Companies Act 2006 in its discussions and decision-making. The following table sets out examples of how the Board has considered matters under section 172 during the year in performing its duties. Section 172 (a)-(f) additional disclosures | A: Likely consequence of any decisions in the long term | Chair's Statement and Chief Executive Officer's Statement | 4-7 | | --- | --- | --- | | | Value creation and strategic priorities | 10-16 | | | Key performance indicators and our value creation model | 10-15, 37 | | | Section 172 Statement, Board activities and governance | 58-138 | | | Risk management | 52-56 | | B: Interests of our employees | Key performance indicators | 37 | | | Stakeholder engagement | 74-77 | | | Nomination Committee Report | 81-85 | | | Directors' Remuneration Report | 96-133 | | | Directors' Report | 134-137 | | | People and culture | 8-9 | | C: The need to foster relationships with suppliers, customers and others | Chair's Statement and Chief Executive Officer's Statement | 4-7 | | | Value creation and strategic priorities | 10-16 | | | Key performance indicators and our value creation model | 10-15, 37 | | | Risk management | 52-56 | | | Stakeholder engagement | 74-77 | | D: The impact of our operations on the community and environment | Value creation and strategic priorities | 10-16 | | | Sustainability performance dashboard and sustainability performance review | 38, 45-51 | | | Stakeholder engagement | 74-77 | | | Section 172 Statement and Board activity | 78, 72-73 | | | Sustainability performance review | 38, 45-51 | | | Climate-related financial disclosures | 218-222 | | | Non-financial and sustainability information statement | 51 | | E: The desirability of the Company to maintain a reputation for high standards of business conduct | Purpose, compass and Leadership Behaviours, and our value creation model | 8-15, 71 | | | Reckitt's approach to governance | 65 | | | Purpose, values and compass; how the Board monitors culture | 8-15, 71 | | | Section 172 Statement and Board activities | 78, 72-73 | | F: The need to act fairly between members of the Company | Strategic priorities and key performance indicators | 16, 37 | | | Section 172 Statement and Board activities | 78, 72-73 | | | Stakeholder engagement | 74-77 | --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 79 # BOARD PERFORMANCE REVIEW AND EFFECTIVENESS The Board undertakes an annual review of its own and its Committees' performance and effectiveness, with a formal externally facilitated review of the Board conducted at least every three years. Since 2020, Lintstock has facilitated both our internal and external reviews, which included a three-year Board Development Programme. This year, Lintstock was asked to oversee the internal review process while our new Chair completed his induction and observed a full annual cycle. We plan to conduct an external review in 2025 and during the year a tender process was undertaken to appoint an external evaluator for the 2025 review. A summary of the process is set out on the following pages. Lintstock is independent of and has no other links with the Company or its Directors in connection with the effectiveness review. For this year's internal review, the Company followed the CGI 'Principles of Good Practice for listed companies using external Board reviewers' principles. Lintstock have confirmed they followed the CGI Code of Practice for reviewers'. Lintstock were given the opportunity to review this section of the Annual Report and provide input and comment on the disclosures. ## Findings and progress from the 2023 external performance review | 2023 recommendations | Action taken during 2024 | | --- | --- | | **Board succession planning** There were a number of changes to the Board including the Chair, CEO, CFO and Non-Executive Directors and a focus on effective transition of these roles was required. | During 2024 there was a clear plan in place for the transition of the Chair, CEO and CFO roles and through the Nomination Committee, the Board maintained a strong focus on continued renewal with the appointments of Marybeth Hays in February 2024, Fiona Dawson in June 2024 and Stefan Oschmann and Mahesh Madhavan being appointed to the Board in January 2025. All bring broad and relevant experience to the Reckitt Board. | | **Review of the CRSEC Committee** The breadth of the CRSEC Committee was raised as an area of focus for 2024. | As announced in June 2024, a review of the CRSECC took place following the AGM. Mehmood Khan took over the role of Chair and it was agreed by the Board to align the Committee to our Principal Risks related to product regulation, product quality and safety, and legal and compliance which has allowed the Committee to focus on these critical areas, along with the compliance culture at the Company. ESG and sustainability matters have returned to the remit of the Board. Given the change in scope, the Committee has been renamed the Compliance Committee. | | **Review of senior leaders and talent** The strength of the senior team, ability to attract and retain talent, and the incentive structure were raised as areas for review in 2024. | The Board carry out an annual review of key talent which took place at the November meeting and this included a review of the changes in members of the Executive Committee and their direct reports to support the new strategy. As detailed within the People & Culture section on pages 8-9, we are continuing to strengthen our culture through changes to performance management, talent and reward. This includes expanded participation in our Long Term Incentive Plan to introduce a longer-term element of reward to balance in-year performance. | ## 2024 Board performance review process ### 1. Design of questionnaire A session took place with Lintstock and the Chair to discuss the proposed process for the 2024 internal review. It was agreed to adopt a concise questionnaire, focusing on the strategy changes announced and the Board changes made since the last review. ### 2. Evaluation methodology The questionnaire was sent to each Board and Board Committee member and structured around the topics of: - Board composition and dynamics, stakeholder oversight, Board support. - Management and focus of meetings, Board Committees, Strategic oversight, Risk management, People oversight, Priorities for change. - Separate questionnaires were sent to each Director relating to the performance of the Chair and to review their individual performance. ### 3. Results and actions Lintstock collated the responses and produced a Board evaluation report which was shared with the Chair for review ahead of including in the November Board meeting pack. The finalised report of findings was provided to the Board which was discussed. Actions for the year ahead were agreed - see the next page for a summary. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 80 # Board Performance Review and Effectiveness continued ## 2024 review findings and actions | Findings | Actions | | --- | --- | | Continued focus on Board succession planning. | Diversity of experience will continue to be a focus in 2025 for the Nomination Committee as we continue with the orderly planning of Board succession. As announced in November 2024, we have appointed Stefan Oschmann and Mahesh Madhavan to the Board as we continue to enhance the Board. Both bring broad and diverse experience to Reckitt. | | Developing Board skills further in 2025. | It was agreed at the November 2024 Board meeting to build in additional listening sessions throughout 2025 and this will also include a number of site visits. This will enable the Board to continue to broaden its understanding of the business and enhance its knowledge and skills around sustainability, technology and AI. | ### Board Committees Each Board Committee was highly rated and confirmed as delivering effective support to the Board. Individual Committee actions were reviewed and agreed by each Committee Chair at the November Committee meetings and further details are set out in the Committee reports. ### Individual Director performance Individual Director performance and contribution were assessed through one-to-one meetings with the Chair. These sessions allowed reflection on personal development and discussion of matters relevant to boardroom culture and process. The findings, in combination with the individual skills, time commitment and independence assessments, confirmed each Director continues to contribute positively. ### Chair performance The performance of the Chair was evaluated by the Senior Independent Director based on individual feedback and a discussion was held without the Chair present at the end of the November Board meeting. The discussion concluded that the Chair had made a good start and had devoted considerable time to getting a better understanding of the business so he could chair the Board effectively. ## 2025 external Board evaluator tender process ### July 2024 The Company Secretary proposed a list of potential providers to the Chair and agreed to request proposals from those providers. ### October 2024 Individual meetings were held with the Company Secretary and external providers to determine their cultural fit, style of review and independence. ### November 2024 A summary of the process and a recommendation to the Board for the preferred evaluator was discussed at the November Board meeting. The Board approved the recommendation to appoint Clare Chalmers as the preferred evaluator for the 2025 external effectiveness review. ### January 2025 A meeting was held with Clare Chalmers to commence the preparation work for the external effectiveness review which will take place in 2025 and the results will be shared in the 2025 Annual Report. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 81 # NOMINATION COMMITTEE REPORT ![img-130.jpeg](img-130.jpeg) The Committee's focus has continued to be on Board and senior management succession, ensuring that we have the right people in place to support Reckitt's strategic aims. Sir Jeremy Darroch Chair of the Nomination Committee | Member | Scheduled meetings attended | | --- | --- | | Sir Jeremy Darroch (Chair) Member for the whole year and Chair from May 2024 | 2/2 | | Andrew Bonfield Member for the whole year | 2/2 | | Margherita Della Valle Member from June 2024 | 1/1 | | Chris Sinclair Chair and member until May 2024 | 1/1 | | Alan Stewart Member until May 2024 | 1/1 | | Pam Kirby Member until May 2024 | 1/1 | # Committee priorities in 2024 - Support for Chair transition from Chris Sinclair to Sir Jeremy Darroch - Transition of Remuneration Committee Chair and Compliance Committee Chair following the AGM in May 2024 - The induction of Marybeth Hays and Fiona Dawson as new Non-Executive Directors - Continued succession planning for the Board and senior management roles and updated Committee memberships in June 2024 # Committee membership Members of the Committee are appointed by the Board. Membership of the Committee is reviewed at least annually and was reviewed following the 2024 AGM with changes announced on 19 June 2024. The members include the Chair and certain independent Non-Executive Directors. An additional review took place as part of the annual performance review of the Committee in November. In accordance with the principles of the Code, the Committee is made up of a majority of independent Non-Executive Directors. The General Counsel & Company Secretary acted as Secretary to the Committee during the year. All Directors are required to seek election or re-election each year at the AGM. Biographical details of the Directors, including their skills and experience, can be found on pages 60-62. # Role and responsibilities The role of the Committee, as set out in the Committee's terms of reference, is to ensure that there is a formal, rigorous and transparent procedure for the appointment of new Directors to the Board and to lead the process for Board appointments. The Nomination Committee has principal responsibility for making recommendations to the Board on new appointments and on the composition of the Board and its Committees. The Committee also assists the Board in succession planning for senior management. Further details on the Committee's role and responsibilities can be found below and in its terms of reference, available at www.reckitt.com/investors/corporate-governance. # Board composition The Committee regularly reviews the composition of the Board and its Committees, considering the balance of skills, experience, and how effectively Directors work together to achieve Reckitt's objectives. Non-Executive Directors are initially appointed for a three-year term and generally continue to serve one or more further terms. All Directors are nominated for appointment by the Committee, which is subsequently approved by the Board. As previously announced, Marybeth Hays was appointed as a Non-Executive Director, with effect from 1 February 2024, and Fiona Dawson was appointed as a Non-Executive Director with effect from 1 June 2024. A Q&A with Marybeth and Fiona on their views and observations since joining Reckitt is set out on page 83. In November 2024 we announced the appointment of Stefan Oschmann and Mahesh Madhavan as Non-Executive Directors with effect from 1 January 2025. Biographical details can be found on page 62. --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 82 # Nomination Committee Report continued ## Key objectives for the year ahead - Continue succession planning for the Board and senior management roles and keep Committee memberships under review - Induction of Mahesh Madhavan and Stefan Oschmann who joined as independent Non-Executive Directors in January 2025 - Support the transition of the Remuneration Committee Chair from Mary Harris to Fiona Dawson following the 2025 AGM The Committee used Korn Ferry for the appointments of Marybeth Hays and Fiona Dawson and MWM Consulting for the appointments of Mahesh Madhavan and Stefan Oschmann. Neither Korn Ferry nor MWM Consulting have any other connection with individual Directors. As previously announced, in March 2024, Jeff Carr retired from the Board and Shannon Eisenhardt became CFO. Following the AGM in May 2024, Chris Sinclair, Pam Kirby and Alan Stewart all retired from the Board, Sir Jeremy Darroch became Chair of the Board and the Nomination Committee, Mary Harris became Chair of the Remuneration Committee and Mehmood Khan became Chair of the CRSEC Committee. We reported the sad death of Olivier Bohuon in early May 2024, who had been a member of the Board since January 2021. His insight and open demeanour will be missed by the Board. Director tenure and independence was reviewed as part of the annual Board review and it was concluded that each Non-Executive Director remained independent. In accordance with the Code, all existing Directors will stand for election or re-election at the AGM, with the exception of Mary Harris who has already notified her intention not to stand for re-election at the AGM, having exceeded her nine-year term. The Board considers Mary to be independent for the purposes of the Code as, in the Board's view, she continues to be independent in character and judgement notwithstanding her length of service. The Committee recommends that all existing Board members have their appointments renewed. Resolutions to this effect will be proposed to shareholders for approval at the forthcoming AGM. Details of the specific contributions each Director makes to Reckitt's long-term success are set out in the Notice of AGM, available at www.reckitt.com/investors/annual-general-meetings. ## Succession planning The Committee regularly reviews and monitors the Board's structure, size and composition, including the balance of skills, experience, independence, knowledge and diversity required, and makes recommendations to the Board of any changes deemed necessary. Consideration is given to the length of service of the Board as a whole and Directors individually. In addition, the Committee keeps the leadership needs of the Company under review, including senior management positions, ensuring plans are in place for orderly succession, so that the Company can continue to compete effectively in the markets in which it operates. ## Key activities during 2024 Meetings of the Committee are held as needed but are required to take place at least once a year. In 2024, the Committee held two scheduled meetings and two additional meetings. Meetings take place ahead of Board meetings and the Chair of the Committee reports formally to the Board on its proceedings. Details of the activities undertaken across the four meetings held are set out in the adjacent section. ### January #### Succession planning - Non-Executive Director succession: the Committee met to review and then approve its recommendation to the Board to appoint Marybeth Hays ### February #### Succession planning - Committee and Designated NED for engagement with the Company's Workforce changes discussed and agreed ahead of the AGM - Chair succession and NED succession discussed and agreed ahead of the AGM - The appointment of Fiona Dawson as a Non-Executive Director was discussed and then approved for recommendation to the Board ### September #### Succession planning - Non-Executive Director succession in relation to potential appointments was discussed ### November #### Succession planning - The appointment of Mahesh Madhavan and Stefan Oschmann as Non-Executive Directors was discussed and then approved for recommendation to the Board - Update on succession planning generally - Discussed the Board effectiveness review feedback in relation to the Committee - Annual review and recommendation for approval to the Board of the terms of reference of the Committee - External evaluator tender review and approval of proposed 2025 evaluator - Annual review of potential conflicts of interest --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 83 # Nomination Committee Report continued ## Q&A ![img-131.jpeg](img-131.jpeg) Marybeth Hays Non-Executive Director ![img-132.jpeg](img-132.jpeg) Fiona Dawson, CBE Non-Executive Director Marybeth Hays and Fiona Dawson joined the Board during 2024 and provided some thoughts and reflections following their appointment. ## Q. What drew you to Reckitt and how has your experience been to date? A. HH. I was absolutely delighted to receive a call about the Reckitt opportunity. As an EVP Merchandising at Walmart US, I knew of Reckitt's excellent reputation among my merchant team in consumables, health and wellness. As a former brand executive, I am drawn to the power of the brand portfolio. Some of my earliest memories include Lysol - my mother would not travel without it! As a former expat (China), I find the complexity of a global business invigorating! FD. Having worked for 34 years with some of the world's best-loved brands, I have always admired Reckitt's strong portfolio of leading products, which are trusted household names all over the world. Coupled with that I was drawn to the breadth of the business and enjoy working with the challenges and opportunities of a global consumer packaged goods organisation. From a Board perspective, it has been an extremely interesting time to join, with the portfolio evolution to focus on high-growth, high-margin 'Powerbrands'. I have really admired the team's strategic clarity and focus in executing on this. ## Q. What are your views on Reckitt's culture? A. HH. Reckitt has a can-do, highly entrepreneurial yet humble culture that is well suited for the enormous changes in the world today. Reckitt does not take time to rest on its laurels and believes in continual improvement. FD. I had always believed Reckitt's culture was hard working, results focused and ambitious, and whilst that was certainly the case when I met the Executive team, I also experienced a culture that was very people centric, transparent, and enabling. A culture where people are encouraged to reach their full potential and to do the right thing. As the 'newbie' I felt very welcomed to the Board from day one, and there is real respect around the table for the vast experience different Board members bring, leading to diversity of thought and breakthrough thinking. I have certainly learnt a lot from the Reckitt team and my fellow Board members and look forward to continue doing so over the coming years. ## Q. What have been your key highlights and challenges in your first year? A. HH. Supporting Kris and his team on our portfolio restructuring. This will set us up for unprecedented growth in the future. As a former merchant and brand marketer, I approach strategy through a product and customer lens. I would like to learn more about the new product pipeline, our customers (retailers and distributors) and consumers. I am very keen on manufacturing and supply chain - to ensure product availability but more importantly, product quality and safety. I plan to visit some factories this year. FD. From a business perspective, we have a big year ahead as the newly shaped Company lands. My priority will be to provide the necessary support and relevant challenge to the team to help ensure the successful execution of our strategy. During this period, I look forward to getting even closer to the business, meeting more people and visiting sites to further experience the Company first hand. I am also looking forward to taking over as Chair of the Remuneration Committee from Mary Harris who has been utterly brilliant in her onboarding of me to the Committee and very generous with her time. I look forward to following her lead in ensuring we have a balance of pay for performance, shareholder returns and strategic alignment. --- # Nomination Committee Report continued The Committee considers Board renewal on an ongoing basis and makes recommendations to the Board regarding proposed appointments. The Committee is also responsible for making recommendations for the role of Senior Independent Director and proposes the membership and the role of Chair for each of the Board Committees. ## Induction programmes New Directors receive a tailored induction programme on appointment to the Board to suit their individual experience and background. The induction programme generally includes meetings with the other Board Directors, the General Counsel & Company Secretary and GEC members on a one‐to‐one basis, along with meeting some of our key external advisors. The meetings are held in person or virtually. New Directors may also carry out market visits and attend key Reckitt sites to enhance their induction to the Company. ## Board Directors' ongoing training and development The Chair has overall responsibility for ensuring that all the Directors receive suitable training to enable them to carry out their duties. As part of their role, Directors are also expected to personally identify any additional training requirements they feel would benefit them in performing their duties. We arrange ongoing training including on legal and financial regulatory developments relevant to the Company and the Directors. Training is also provided by way of briefing papers or presentations at scheduled Board meetings, as well as meetings with senior executives or external sources. The Directors may, at the Company's expense, take independent professional advice and are encouraged to continually update their professional skills and knowledge of the business and wider industry. During the year, training materials have been made available for Board members to view. We also aim to provide Directors an opportunity to engage directly with employees and key personnel and be immersed in the business. ## GEC changes The GEC changes during the year reflect the alignment of our leaders with Reckitt's new strategic priorities and growth opportunities. As we announced in July as part of our strategic update, we welcomed the following members to the GEC (with effect from 1 January 2025), all of whom have been with the business for a number of years and bring a wealth of experience to their new roles: - Ryan Dullea, Chief Category Growth Officer - Jérôme Lemaire, President, North America - Eric Gilliot, President, Europe - Nitish Kapoor, President, Emerging Markets Volker Kuhn, President of Hygiene, and Pat Sly, President of Health, both left the business on 31 December 2024. Sami Naffakh, Chief Supply Officer, resigned from his role and left the business in July 2024 and we welcomed Harald Emberger as Chief Supply Officer in July 2024. Filippo Catalono, Chief Information and Digitisation Officer, resigned from his role and left the business at the end of October 2024. Shannon Eisenhardt is now responsible for IT & Digital. Fabrice Beaulieu, Chief Marketing, Sustainability and Corporate Affairs Officer, resigned and stepped down from his role at the end of December 2024. Ryan Dullea is responsible for marketing as part of his role and Harald Emberger is responsible for Sustainability within his role. Sheila Redzepi was welcomed as Chief Communications and Corporate Affairs Officer in February 2025. Biographical details of GEC members can be found on pages 63--64. ## Committee effectiveness review An internal effectiveness review of the Committee was conducted as part of the broader Board review (see pages 79--80). All areas received positive ratings overall. As part of the Board's annual effectiveness review, the Committee reviews the Board's composition and diversity and how effectively members work together to achieve objectives. Directors are evaluated both collectively and individually to demonstrate whether each Director continues to contribute effectively. Following conclusion of the review, the Committee reports to the Board on the outcomes of the review that have or will influence its composition and whether each Director is committing sufficient time to fulfil their duties. The Board, having had sight of the results of the Committee's effectiveness review, considers the Committee to continue to operate effectively. ## Diversity and inclusion The Board and Committee recognise the importance of diversity, including gender and ethnicity, at Board and senior management levels in compliance with the Code. Inclusion is core to Reckitt's purpose to ‘protect, heal and nurture in the relentless pursuit of a cleaner and healthier world'. We recognise that it is critical for us to have a diverse employee population and a Board and senior management team that are reflective of the markets we operate in and the consumers we serve. We are committed to equality of opportunity in all areas of employment and business, regardless of personal characteristics. We always recruit the best and most suitable candidates for any role, and we strive for a well‐balanced representation of backgrounds, nationalities, cultures, skills and experiences at all levels across the Group. Ultimate responsibility for and sponsorship of this policy rests with the GEC. Senior management is accountable and all Reckitt employees are responsible for ensuring that our diversity policies and programmes are implemented and followed. During the year we introduced a new Board Policy, which is in line with the Financial Conduct Authority (FCA) Policy on Diversity and Inclusion on Company Boards and Executive Management, the Parker Review and the FTSE Women Leaders Review. The Policy can be found on our website at www.reckitt.com/investors/corporate-governance. The Committee and the Board are committed to recruiting members of the Board on the strict criteria of merit, skill, experience and to seek diversity of gender, social and ethnic backgrounds, as well as cognitive and personal strengths. This commitment is demonstrated through our Board composition which comprises nine nationalities, seven women and six men as at the date of this report. Our Board consists of two members from an ethnic minority, exceeding the Parker Review recommendation and the FCA Policy on Diversity and Inclusion on Company Boards and Executive Management. Our GEC, comprising the most senior management level in the business, represents six different nationalities from across the globe, embodying our truly multinational focus. The Company's wider global leadership community (GEC, GEC‐1 and SMT) comprises over 46 nationalities between them, representing a broad background of collective skills, cultures and experience. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 85 # Nomination Committee Report continued As submitted to the UK Parker Review, 14.3% of UK-based senior leaders (GEC and GEC-1) reported as being from an ethnic minority. Our intention is to continue to increase this representation in the future. This widens our understanding of our consumers, who come from the broadest possible backgrounds allowing us to be best placed in serving their needs. | At 31 December 2024 | Number of Board members | Percentage of the Board | Percentage of senior positions on the Board (CEO, CFO, SID and Chair) | Number in executive management | Percentage of executive management | | --- | --- | --- | --- | --- | --- | | White British or other White (including minority White groups) | 10 | 91% | 100% | 5 | 50% | | Mixed/multiple ethnic groups | – | – | – | 1 | 10% | | Asian/Asian British | 1 | 9% | – | 1 | 10% | | Black/African/Caribbean/Black British | – | – | – | – | – | | Other ethnic group, including Arab | – | – | – | – | – | | Not specified/prefer not to say | – | – | – | 3 | 30% | # Representation of women at Board and senior management levels As at 31 December 2024, 64% of our Board members are women and we have surpassed 40% as outlined in the FTSE Women Leaders Review. In addition, we will comply with the FCA's Policy on Diversity and Inclusion on Company Boards and Executive Management, which requires that at least one of the senior Board roles should be held by a woman, with Shannon Eisenhardt appointed as CFO in March 2024. As at 31 December 2024, representation of women within the GEC was 40%. Women constitute 26% of GEC direct reports. We will continue to review the representation of women in leadership roles within the GEC as detailed in the FTSE Women Leaders Review (and in provision 23 of the Code). For further details relating to gender diversity within our workforce, please see page 49. | | Number of Board members | Percentage of the Board | Number of senior positions on the Board (CEO, CFO, SID and Chair) | Number in executive management | Percentage of executive management | | --- | --- | --- | --- | --- | --- | | Men | 4 | 36% | 3 | 6 | 60% | | Women | 7 | 64% | 1 | 4 | 40% | | Not specified/prefer not to say | – | – | – | – | – | Further details can be found on pages 8-9 and in our Fairer Society section on pages 49-50. # Sir Jeremy Darroch Chair of Nomination Committee Reckitt Benckiser Group plc 5 March 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 86 # AUDIT COMMITTEE REPORT ![img-133.jpeg](img-133.jpeg) The focus this year remained on oversight of Reckitt's internal controls and risk management framework in the context of the updated Corporate Governance Code. Andrew Bonfield Chair of the Audit Committee | Member | Scheduled meetings attended | | --- | --- | | Andrew Bonfield (Chair) Chair and member for the whole year | 4/4 | | Margherita Della Valle Member for the whole year | 3/4 | | Elane Stock Member for the whole year | 4/4 | | Tamara Ingram Member for the whole year | 4/4 | | Marybeth Hays Member from July 2024 | 2/2 | | Pam Kirby Member until May 2024 | 2/2 | On behalf of the Board, I am pleased to present the Audit Committee Report for the financial year ended 31 December 2024. This report details how the Committee has discharged its role, duties and performance during the year including in relation to internal control, financial and other reporting, risk management, the Internal Audit function and our relationship and interaction with the External Auditor. ## Committee priorities in 2025 - Maintaining oversight on Reckitt's risk management and internal control procedures, including monitoring key areas in the context of risk and control - Sustaining a strong culture of risk management and embedding and strengthening internal controls across the Group - Monitoring potential legislative and regulatory changes which may affect the work of the Committee including the updated Corporate Governance Code - Overseeing the External Auditor tendering process, in line with the Audit Committees and the External Audit: Minimum Standard - Reviewing cyber security risks and controls ## Committee membership and experience | Name | Recent and relevant financial experience | Sectoral experience relevant to Reckitt's operations | | --- | --- | --- | | Andrew Bonfield (Chair) | · Financial expert | · Consumer goods | | | · Chartered Accountant | · Pharmaceuticals/healthcare | | | · Currently CFO of a global US Fortune 100 company | | | | · Multiple CFO roles at other large companies, including in the consumer goods sector | | | Margherita Della Valle | · Financial expert | · Consumer goods | | | · Holds a Master's degree in Economics | · Technology | | | · Previously held Group CFO and senior finance roles | | | | · Group CEO of FTSE 50 company | | | Elane Stock | · Holds Master's degrees in Finance | · Consumer goods | | | · Previously member of the audit committee of two US-listed entities | · Emerging markets | | Tamara Ingram | · Member of the audit committee of a US-listed company | · Consumer goods | | | | · Digital strategy | | Marybeth Hays | · Member of the audit committee of a US-listed company | · Consumer goods | | | | · Healthcare | --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 87 # Audit Committee Report continued All Committee members are independent Non-Executive Directors who have financial, economics and/or business management expertise in large companies. Committee members are expected in particular to have an understanding of: - The Group's operations, policies and internal control environment - The principles of, and recent developments in, financial reporting - Relevant legislation, regulatory requirements and ethical codes of practice - The role of internal and external audit and risk management The Board is satisfied that, in compliance with the Code, Committee members as a whole have competence relevant to the Company's sector (consumer goods). Committee appointments are generally made for a three-year period. Members of the Committee are appointed by the Board on the recommendation of the Nomination Committee. On joining the Committee and during their tenure, members receive additional training tailored to their individual requirements. Committee members also meet with management covering internal audit, risk management, legal, tax, treasury and financial matters, as well as meetings with the External Auditor. During the year, members of the Committee received regular briefings from management on matters covering governance and legislative developments, accounting policies and practices, and tax and treasury. During the year, the Deputy Company Secretary for the February meeting and the Head of Secretariat for the remainder of the year acted as Secretary to the Committee. ![img-134.jpeg](img-134.jpeg) # Meetings During 2024, the Committee held four scheduled meetings at times aligned to the Company's reporting cycle. In addition, two non-scheduled joint meetings with the Board were held in February and March in relation to the approval of the 2023 Annual Report and Financial Statements. Committee meetings usually take place ahead of Board meetings and the Committee Chair provides an update to the Board on the key issues discussed at each meeting. Committee papers are provided to all Directors in advance of each meeting, including a copy of the Committee minutes. Meetings are attended by senior representatives of the External Auditor and by the Group Head of Internal Audit, CFO, and Corporate Controller. Other Board Directors are invited to attend all meetings and the CEO attends and observes most meetings. Other members of management attend when deemed appropriate by the Committee. Time is allocated at the end of each meeting for private discussion with the CFO, internal audit and the External Auditor, without other invitees being present, as well as a private session of the Committee members. Committee members' meeting attendance during the year is set out on the first page of this Audit Committee Report. # Committee effectiveness review A review of the Committee was conducted as part of the Board's annual effectiveness review. All areas received positive ratings, with the thoroughness of the Committee highlighted, along with praise for how the meetings were chaired. Areas of focus for the year ahead include the controls transformation and consideration into how the Internal Audit function is managed. The Board, having had sight of the results of the Committee's review, considers the Committee to be operating effectively. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 88 # Audit Committee Report continued ## Fair, balanced and understandable The Committee reviewed the 2024 Annual Report and Financial Statements to confirm that it is fair, balanced and understandable and provides sufficient information to shareholders to assess the Group's position, performance, business model and strategy. The Committee relies upon the following assurance framework in making its assessment of fair, balanced and understandable: - All sections of the 2024 Annual Report and Financial Statements were prepared in accordance with the standard operating procedures (SOPs) as approved by the Disclosure Committee - A detailed review of the 2024 Annual Report and Financial Statements was undertaken by senior management and the Disclosure Committee to ensure consistency in messaging and appropriate balance - A comprehensive review by the Directors and the senior management team of the form, content and consistency of narrative, the disclosures contained in the Financial Statements and the underlying processes and controls supporting the preparation of the 2024 Annual Report and Financial Statements - A comprehensive verification process, supporting any facts, figures and assertions included in the 2024 Annual Report and Financial Statements The Committee and the Board received confirmation from management that the 2024 Annual Report and Financial Statements had been prepared in accordance with the assurance framework and that appropriate verification had been undertaken. In addition, the Committee also reviewed KPMG's audit findings report, draft audit opinion and draft management representation letter. Following the Committee's review, the Committee was satisfied that the 2024 Annual Report and Financial Statements, taken as a whole, met its objectives and accordingly recommended to the Board that the 2024 Annual Report and Financial Statements be approved and that the Board make its statement on page 138. ## Role and responsibilities The Committee is part of the Group's governance framework and supports the Board in fulfilling its oversight responsibilities in ensuring the integrity of the Group's financial reporting, internal controls and overall risk management process, and relationship with the Company's External Auditor. ## Financial reporting - Monitor the integrity of the Financial Statements of the Company including interim and annual Financial Statements - Review the appropriateness of significant accounting policies and practices - Review significant financial judgements and estimates, taking into account the External Auditor's view on the financial judgements and estimates - Advise the Board on whether, taken as a whole, the Annual Report is fair, balanced and understandable and provides the information necessary for shareholders to assess the Company's performance, business model and strategy ## Risk management systems and internal controls - Review and monitor the effectiveness of the management of risk and overall system of internal control - Review the framework and analysis to support both the going concern and the long-term Viability Statement ## Whistle-blowing, fraud and compliance In conjunction with the Compliance Committee, review the Company's arrangements for its workforce to raise concerns about possible wrongdoings in financial reporting and other matters; review the Company's procedures for detecting fraud; and its systems and controls for ethical behaviours and the prevention of bribery. ## External audit - Make recommendations to the Board on the appointment, removal, remuneration and terms of engagement of the External Auditor, in line with the FRC Audit Committees and the External Audit: Minimum Standard - Review and assess the External Auditor's independence and objectivity taking into account relevant UK law and professional and regulatory requirements - Develop, recommend and implement the Group's policy in relation to the provision of non-audit services - Review and approve the annual audit plan and assess the effectiveness of the audit process ## Internal audit - Review and approve the annual internal audit plan and monitor and review its effectiveness - Review and monitor the effectiveness of the Internal Audit function, ensuring the necessary resources are in place for it to perform effectively There were no significant changes to the Committee's role and responsibilities during the year. The Committee's role and responsibilities are set out in its terms of reference, which are available at www.reckitt.com/investors/corporate-governance. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 89 # Audit Committee Report continued ## Key activities during the year | February | March | May | July | November | | --- | --- | --- | --- | --- | | • Received an update on the current draft of the 2023 Annual Report and Financial Statements, the going concern basis of preparation and Viability Statement • Received an update on the Corporate Controller's Report covering key accounting and reporting matters • Received an update on KPMG's report on progress of the 2023 audit • Annual review of risk management and internal controls including review of risks across Group functions and of the integrated risk management framework • Received an update from the Internal Auditor on progress against the 2023 audit plan and a summary of the audits planned for 2024 and review of the Internal Audit Charter • Reviewed the 2023 preliminary results announcement, including the Financial Statements • Reviewed the final dividend proposal • Reviewed the KPMG management representation letter | • Reviewed the 2023 Annual Report and Financial Statements, the going concern basis of preparation and Viability Statement, including whether the Committee could recommend that the Board approve the 2023 Annual Report and Financial Statements • Received an update on KPMG's 2023 audit findings report, observations on Reckitt's internal controls for the 2023 financial year, management representation letter and report on the 2023 Annual Report and Financial Statements | • Received an update on the Corporate Controller's Report covering key accounting and reporting matters • Reviewed and considered the updated Corporate Governance Code in relation to controls effectiveness • Reviewed the Group's funding position and a proposal related to a bond issuance and new revolving credit facility • Reviewed the audit quality delivery and assessment of External Auditor effectiveness • Received an update on KPMG's internal controls review and strategy for the 2024 audit • Approved KPMG's 2024 audit fees and terms of engagement • Confirmation following assessment of External Auditor independence and ethics • Received an update on the key internal audit findings and any significant matters, and status of the internal audit plan • Received an update on legal matters and compliance controls • Reviewed the whistle-blowing procedures | • Received an update on the Corporate Controller's Report covering key accounting and reporting matters, including the External Auditor tender proposal • Reviewed the 2024 half-year results announcement, including the going concern basis of preparation and recommended for approval by the Board • Received KPMG's half-year review report findings to 30 June 2024 and management representation letter • Received KPMG's assessment of its objectivity and independence • Reviewed and discussed the implications following the tornado damage to warehouse in the US • Received the annual legal and compliance review • Received an update on the key internal audit findings, any significant matters, the status of the internal audit plan and the responsiveness of management • Undertook a deep dive into the findings from the Middle East investigations which took place in late 2023 and early 2024 | • Reviewed and approved the Committee's 2025 standing agenda and terms of reference • Discussed the performance review findings of the Committee • Considered and discussed the annual review of IT and controls • Reviewed the controls transformation update and progress • Received an update on KPMG's IT update and control findings relating to the 2024 audit cycle • Received the 2025 internal audit plan • Reviewed and approved the updates to the Group Treasury policies • Received an update on the risk management process including results of the effectiveness review • Received an update on Speak Up reports • Received an update on the key internal audit findings and any significant matters, and status of the internal audit plan • Received an update on the annual tax review | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 90 # Audit Committee Report continued ## Significant and key financial reporting matters The Committee is responsible for reviewing and approving the appropriateness of the interim and annual Financial Statements and related announcements, including: - Recommending that, in the Committee's view, the Financial Statements are fair, balanced and understandable. In addition to the detailed preparation and verification procedures in place for the 2024 Annual Report and Financial Statements, management continued its focus on narrative reporting with clear written and visual messaging to communicate the Group's strategy - Reviewing the appropriateness of the accounting policies, judgements and estimates used as set out from pages 159–196 and concluding that the judgements and assumptions used are reasonable - Reviewing the Group's policy relating to, and disclosure of, alternative performance measures (APMs) ## Areas of significant financial judgement The areas of significant financial judgement in relation to the 2024 Group Financial Statements considered by the Committee, together with a summary of the actions taken, were as follows. ## Recoverability of goodwill and other intangible assets Under International Financial Reporting Standards (IFRS), goodwill and indefinite-life assets must be tested for impairment on at least an annual basis. Impairment testing is inherently judgemental and requires management to make multiple estimates on future performance, for example around future price and volume growth, future margins, terminal growth rates and discount rates. The Group's impairment testing utilised cash flow projections included within one-year budgets and five-year strategic plans. Cash flows beyond the five-year period were projected using terminal growth rates. As a result of impairment testing performed in 2024, management determined that an impairment charge of £696 million relating to its IFCN cash-generating unit (CGU) and £142 million relating to its Biofreeze CGU, was required at 31 December 2024 (2023: impairment charge of £810 million relating to the IFCN CGU). In November 2024 and February 2025, the Committee reviewed the detailed results of the impairment testing for the Group's CGUs, with a particular focus on the IFCN and Biofreeze CGU. The Committee challenged the key assumptions which underpinned the Biofreeze recoverable amounts, including anticipated category growth, market share improvement, the commercial success of new product launches and international market expansion. The Committee confirmed the key judgements and estimates made by management including market expansion and discount rate, and reviewed the sensitivity of the impairment model to changes in key assumptions. In February 2025, the Committee reviewed the detailed results of the impairment testing in relation to the IFCN CGU and challenged the key assumptions which underpinned the IFCN recoverable amount at 31 December 2024. This included the effect of changes to the regulatory environment, net revenue growth rates, the commercial success of new product launches, the expansion of speciality nutrition and the anticipated capital expenditure programme to upgrade facilities. The evolving regulatory environment has increased the judgemental nature of estimating the future cash flows in relation to capital expenditure, thereby resulting in increased scrutiny and focus by the Committee and challenge to management. The Committee confirmed the key judgements and estimates made by management and reviewed the sensitivities of the impairment model to reasonable changes in key assumptions. The Committee reviewed management's disclosures in relation to goodwill, other intangible assets and related impairment reviews included within Note 9 and considered them appropriate. ## Tax provisioning From time to time, the Group may be involved in disputes in relation to ongoing tax matters in a number of jurisdictions around the world where the approach of the local authorities is particularly difficult to predict. The amount of uncertain tax position liabilities recorded in relation to these investigations is an area where management and tax judgement are important. The Committee reviewed the key judgements and conclusions made with management and considered the level of recognised uncertain tax position liabilities to be appropriate. As required under IFRS, management has included disclosure in the Financial Statements outlining the amount of uncertain tax position liabilities, the methodology by which they have been recognised and the sources of estimation uncertainty in relation to these uncertain tax position liabilities or the rationale for why sensitivity disclosure is not meaningful and has not been provided in the Financial Statements. The Committee has reviewed these disclosures, included within Notes 1 and 22, and considers them appropriate. ## Trade spend accruals Trade spend is a significant cost for the Group, with the principal accounting judgements relating to trade accruals, specifically the timing of recognition and the determination of management's best estimate of the amount of trade spend which will ultimately be incurred. The Audit Committee focused on the level of trade spend accruals at the year end to ensure they are sufficient and appropriate. In addition, the Committee evaluated the accuracy of management's estimation of trade spend accruals through reviewing the subsequent utilisation of trade spend accruals which were originally recorded in the 2023 Financial Statements. ## Legal liability provisioning At 31 December 2024 a provision of £112 million (2023: £137 million) was held on the Group's Balance Sheet in relation to regulatory, civil and criminal investigations as well as litigation proceedings. The Committee has reviewed the status of potential legal and constructive liabilities during the year, and at the year end, including the South Korea Humidifier Sanitiser (HS) issue, Necrotizing Enterocolitis (NEC), Phenylephrine (PE) and other significant matters. The Committee challenged management on the judgements made in determining the level of provisions recognised and was satisfied with the level of provisioning and associated disclosure for the HS issue, NEC, PE and other significant matters (see Note 20) and on its exercise of judgements described in the disclosure. ## Other key financial reporting matters Other key matters reviewed and evaluated in relation to the 2024 Group Financial Statements considered by the Committee, together with a summary of the actions taken, are set out below. Following the update provided in last year's report in relation to the Middle East, the investigation continued during the first half of the financial year and a deep dive was presented to the Committee in July on the findings and actions following the investigation. Several senior members of the finance and management team in the Middle East were exited from the Business in February 2024. The Committee discussed the factors that had contributed to the issue in the Middle East and how these could be prevented for a similar situation in the future. A new management team from outside the region was appointed and management continues to work on driving the culture and expectations required for the business, and the financial and control systems have been strengthened. --- A clear action plan is now in place, driven by the CEO and CFO, setting the tone from the top on expectations. There is zero tolerance for any behaviours that are not aligned with ‘Do the Right Thing. Always', which is being driven consistently throughout the organisation. ### Going concern and Viability Statement A Viability Review was undertaken by management, encompassing its going concern review. The Committee reviewed and challenged the key assumptions used by management in its Viability Review and going concern assessment, as well as the scenarios applied and risks considered. Based on its review, the Committee considers that the application of the going concern basis for the preparation of the Financial Statements was appropriate and confirmed the suitability of the Viability Statement covering a five‐year period, as set out on page 57. The five‐year period for the Viability Review is the period of the Group's long‐term forecasting process and covers the various business cycles. ### Internal audit ### Role of internal auditor The Committee is responsible for reviewing and monitoring the effectiveness of the Internal Audit function. The Group Head of Audit is accountable to the Chair of the Committee, although for administrative matters reports to the CFO. The function operates independently of the Business, with no responsibility for operational management. The independence of the Group Head of Audit and the Internal Audit function is considered as part of the annual internal audit effectiveness review. The Group Head of Audit role is vacant as at the date of this report. The Internal Audit Director attended Committee meetings and provided updates on behalf of the Internal Audit function. The function is responsible for providing independent and objective assurance on the adequacy and effectiveness of Reckitt's risk management and internal control systems. Its mandate is set out in a written charter, approved by the Committee, and it uses a formal internal audit methodology consistent with the Institute of Internal Auditors, internationally recognised standards. Prior to the start of each financial year the Committee reviews and approves the annual audit plan and assesses the adequacy of the function's budget and resources. The function brings in specialist skills from external service providers, as necessary. The strengthening of the finance second line will allow the function in future periods to transition away from an agreed rotation and scope policy to a more risk‐based approach. The risk‐based audit plan focuses on areas deemed critical to achieving our business objectives and covers Reckitt's commercial businesses, manufacturing facilities, information systems, programmes and higher‐risk areas and processes. Following each audit, control weaknesses are reported to senior management, together with recommendations and updates. Resulting management actions are tracked until they are satisfactorily closed. Audits that identified significant weaknesses in the control environment and where rated unacceptable may receive a follow‐up audit within 12 to 18 months, as appropriate. At each Committee meeting the Internal Audit function presents an update which includes an assessment of the control environment together with any material issues, the performance of the Internal Audit function, and any other topics as required. A private session with the Committee is also held at every meeting. ### Risk management The Committee supports the Board in fulfilling its oversight responsibilities in ensuring the integrity of the Group's financial reporting (including the Annual Report and Financial Statements), system of risk management and internal control, and the relationship with the External Auditor. The Committee makes recommendations to the Board in relation to approval of the Annual Report and Financial Statements. The Committee regularly monitors our system of risk management and internal control (including internal financial controls). The finance function, headed by the CFO, has implemented policies, processes, and controls to enable the Company to review and comply with changes in accounting standards and relevant financial regulations. These policies, processes and controls are kept under review on an ongoing basis to ensure both internal and external developments are reviewed and acted upon. In monitoring the integrity of financial reporting and any other risks falling within its remit, the Committee receives regular reports from the Corporate Controller, Chief Ethics and Compliance Officer, Group Head of Tax and Group Head of Treasury on material developments in the legislative, regulatory, and fiscal landscape in which the Group operates. It also receives reports on IT and cyber security risks and controls, and on the Group's whistle‐blowing arrangements. The Committee reported to the Board in February 2025 that it considers the internal control framework to be functioning appropriately, to enable the Board to meet its obligations under section 4 of the Code, to maintain sound risk management and internal control systems, and to report to shareholders on these in the Annual Report (see page 138). As highlighted in last year's report, Reckitt is continuing with its controls transformation programme in preparation for internal controls changes arising from the revisions to the Code. The basis for the preparation of the Group Financial Statements is set out on page 159 under Accounting Policies. The External Auditor's Report, setting out its work and reporting responsibilities, can be found on pages 139, 140, 141, 142, 143, 144. The terms, areas of responsibility and scope of the External Auditor's work are agreed by the Committee and set out in the External Auditor's engagement letter. More information on the Group's principal and emerging risks and strategy for growth and achieving targeted goals is detailed in the Strategic Report, which can be found on pages 52, 53, 54, 55, 56. The Viability Statement can be found on page 57. The Statement of Directors' Responsibilities on page 138 details the Directors' responsibilities for the Financial Statements, for disclosing relevant audit information to the External Auditor and for ensuring that the Annual Report is fair, balanced and understandable. ### Internal controls framework Internal control processes are implemented through clearly defined roles and responsibilities, supported by clear policies and procedures, and delegated to the GEC and senior management. Reckitt operates a ‘three lines of defence' model in monitoring internal control systems and managing risk. 1. Management in the first line ensures that controls, policies and procedures are followed in dealing with risks in day‐to‐day activities. Such risks are mitigated at source with controls embedded into relevant systems and processes. Supervisory controls, either at management level or through delegation, ensure appropriate checks and verifications take place, with any failures dealt with promptly. Throughout Reckitt, a key responsibility for any line manager is to ensure the achievement of business objectives with appropriate risk management and internal control systems. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 92 # Audit Committee Report continued 2. Each function and business has its own management which acts as a second line of oversight. This second line sets the local level policies and procedures, specific to its own business environment, subject to Group policy and authorisation. The second line further acts in an oversight capacity over the implementation of controls in the first line. The financial performance of each business is monitored against pre-approved budgets and forecasts ultimately overseen by the executive management and the Board. As part of the second line, the corporate control team identifies financial risks and mitigates these with appropriate internal controls, set out through minimum expected financial control requirements. The effectiveness of the global financial control framework is reviewed annually. Further, the Group's compliance controls include the operation of an independent and anonymous 'Speak Up' whistle-blowing hotline, annual management reviews and the provision of training specific to individual needs within the business. 3. The third line of defence is provided by the Internal Audit function which provides independent and objective assurance to management and the Committee on the adequacy and effectiveness of risk management systems and internal controls operated by the first and second lines of defence. Internal audit also facilitates the risk management process. Reckitt's internal control framework provides assurance that business objectives are achieved, that business is conducted in an orderly manner and in compliance with local laws, that records are accurate, reliable and free from material misstatement, and that risks are understood and managed. The corporate control team is accountable for managing global financial control policies and frameworks and for monitoring the effectiveness of the Group's internal financial control environment. Corporate control is responsible for reporting and monitoring controls at local, area and global levels, working with markets to improve risk and controls capability and to support the development of remediation plans and corrective actions for financial control weaknesses. To meet upcoming changes to the Code, the Company has established a multi-year controls transformation programme. Alongside meeting requirements of the Code, the programme aims to embed a control focused culture which will help strengthen internal controls across the Group. In 2023, the controls transformation programme launched an updated, standardised and risk-focused controls framework for financial and IT general controls, including new evidence standards to enable consistent documentation of the operating effectiveness of financial and IT general controls. Following launch, the second line of defence team, supported by external advisors, conducted a comprehensive fit-gap assessment to determine the required uplift to comply with the new framework and evidence standards. As anticipated, gaps versus the framework and standard were identified in relation to the retention of evidence and the formality and consistency of control operation. In 2024 remediation work continued alongside a programme of control testing covering financial and IT general controls. At each meeting, the Committee reviews a report outlining the status of the controls transformation programme, the results of testing remediation progress, and other notable controls activity since the previous meeting. In 2025, assurance over the operating effectiveness of controls in the revised framework will be provided by testing conducted by the second line of defence team. # Internal auditor effectiveness review The Committee monitors the effectiveness of the Internal Audit function throughout the year through the internal audit attendance at Committee meetings, review of work presented throughout the course of the year and the annual internal audit effectiveness review. The annual review involves the solicitation of feedback through a survey circulated to internal stakeholders including Non-Executive Directors (including Committee members), GEC, functional and operational leadership teams. The review assessed the skills and experience, audit quality, audit scope, audit cost, audit communication, independence, and change catalyst of the Internal Audit function. The survey reported strong, positive feedback with management viewing the function as comprising high-quality and skilled individuals who demonstrate a high level of integrity, independence, and objectivity. The Committee has considered the conclusions of the effectiveness review and the work performed by the function during the year and remains satisfied that the resourcing, quality, experience and expertise of the function is appropriate for the Company and that the function was objective and performed its role effectively. # External Auditor The Committee is responsible for maintaining the relationship with the External Auditor on behalf of the Board. The Company's External Auditor is KPMG LLP (KPMG). Following a competitive tender undertaken in 2017, KPMG was formally appointed as the Group's External Auditor by shareholders in 2018. The Company will be required to conduct its next external audit tender no later than 2027. For the year ended 31 December 2024, the Company has complied with the Competition and Markets Authority Order: The Statutory Services for Large Companies Market Investigation (Mandatory use of Competitive Tender Processes and Audit Committee Responsibilities) Order 2014. The Committee considers and makes a recommendation to the Board in relation to the appointment, reappointment and removal of the External Auditor, taking into account independence, effectiveness, lead audit partner rotation and any other relevant factors, and oversees the tendering of the external audit contract. The Committee approves the External Auditor's terms of engagement and remuneration and reviews the strategy and scope of the audit and the work plan. The Committee also monitors the rotation of the lead audit partner every five years in accordance with the FRC's Ethical Standard. The current lead audit partner, Andrew Bradshaw, has completed his third year as lead audit partner. # Tender process At the recommendation of the Audit Committee, an audit services tender process commenced during 2024 to provide sufficient time for an adequate transition in the event that a new audit firm is selected to perform the statutory audit for the year ending 31 December 2026. In determining the process for the audit services tender, management will take into consideration and follow the FRC's guidance on audit tendering, with the Audit Committee making robust decisions to ensure that the requirements of the FRC's minimum standard for audit committees are met. Included in the process is a review of each firm's most recent FRC Audit Quality Review reports, consideration of potential conflicts of interest and independence checks, and identification of key individuals with appropriate skills and experience to act as potential lead partners. Clear and objective criteria for assessing success will be determined and agreed. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 93 # Audit Committee Report continued A timeline summary of the key steps taken so far, and the next steps to take place, are set out below. | July 2024 | Review of the audit market to determine their minimum capability and capacity requirements. | | --- | --- | | January 2025 | Issued a formal invitation to tender to the shortlisted audit firms. | | February to April 2025 | Determination of the list of assessment criteria, creation and opening of a data room to share information, and carrying out a series of management meetings with each shortlisted firm. | | May to June 2025 | Submission of a written proposal followed by a presentation to the Audit Committee from the shortlisted firms. | | June 2025 | Review of proposals from firms, consideration by Audit Committee and recommendation to the Board. | # External Auditor effectiveness review The annual evaluation of the External Auditor was carried out in early 2024 and the results were reported to the Committee in May. The assessment of the External Auditor was conducted using a survey circulated to the Board, GEC, finance and other functional leadership and local finance management. The survey covered the four competency areas in the FRC's Guidance on Audit Quality: practice aid for Audit Committees (published in December 2019): Judgement; Quality Control; Skills and Knowledge; and Mindset and Culture. Besides the annual evaluation of the External Auditor, the Committee continually reviews the External Auditor's effectiveness through means such as the monitoring of its progress against the agreed audit plan and scope. KPMG reports to the Committee annually with an audit quality scorecard, providing a holistic view of, and its investment in, audit quality and how it measures its audit quality progress. # External Auditor fees and non-audit services The Committee reviews the nature and level of non-audit services undertaken by the External Auditor during the year to satisfy itself that there is no impact on its independence. The Committee is required to approve all non-audit services. The Board recognises that in certain circumstances the nature of the service required may make it timelier and more cost-effective to appoint a party that already has a good understanding of Reckitt. The total fees paid to KPMG for the year ended 31 December 2024 were £24.2 million, of which £4.5 million related to non-audit and audit-related work (to which KPMG was appointed principally for the above reasons). The Group's internal policy on non-audit fees (effective 1 January 2017) states that, on an annual basis, non-audit fees should not exceed 50% of the Group's external audit and audit-related fees for the year. The Board confirms that, for the year ended 31 December 2024, non-audit and audit-related fees were 22.8% of the audit fees. Details of services provided by the External Auditor are set out in Note 4 on page 168. # Independence and reappointment Reckitt has a formal policy in place to safeguard the External Auditor's independence. In addition, as part of its audit strategy presentation to the Committee in May, KPMG identified its own safeguards in place to protect its independence and confirmed its independence to the Committee in March. KPMG demonstrate appropriate professional scepticism in the papers that are presented to the Committee in relation to all significant areas that were identified. The Group has a policy that restricts the recruitment or secondment of individuals employed by the External Auditor into positions that provide financial reporting oversight where they could exercise influence over the financial or regulatory statements of the Group or the level of audit and non-audit fees. Other than the provision of advisory services to a Director in their personal capacity, KPMG had no connection with the Directors during the financial year. The External Auditor is a key stakeholder in helping the Committee fulfil its oversight role for the Board. The Committee remains satisfied with the External Auditor's independence and effectiveness and believes KPMG is best placed to conduct the Company's audit for the 2025 financial year. KPMG has expressed a willingness to continue as External Auditor of the Company. Following a recommendation by the Committee, the Board concluded that it was in the best interests of shareholders to appoint KPMG as the Company's External Auditor for the financial year ending 31 December 2025. The Committee and Board's recommendation was free from third-party influence and there was no contractual term of the kind mentioned under Regulation (EU) No 537/2014 imposed on the Company. In accordance with section 489 of CA 2006, resolutions to propose the reappointment of KPMG as the Company's External Auditor and to authorise the Committee to fix its remuneration will be put to shareholders at the AGM on 8 May 2025. # Andrew Bonfield Chair of the Audit Committee Reckitt Benckiser Group plc 5 March 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 94 # COMPLIANCE COMMITTEE REPORT ![img-135.jpeg](img-135.jpeg) ## The Committee receives regular briefings from key functional teams to enable it to discharge its oversight responsibilities and works with the Audit Committee on areas of crossover, as needed. ## Mehmood Khan Chair of the Compliance Committee | Member | Meetings attended | | --- | --- | | Mehmood Khan (Chair) Member for the whole year, Chair from May 2024 | 3/4 | | Kris Licht Member for the whole year | 4/4 | | Marybeth Hays Member since February 2024 | 3/3 | | Chris Sinclair Member until May 2024 | 2/2 | | Olivier Bohuon Member until May 2024 | 1/2 | | Pam Kirby (Chair) Chair and member until May 2024 | 2/2 | On behalf of the Board, I am pleased to present the Compliance Committee Report for the financial year ended 31 December 2024. This report details how the Committee has discharged its role and responsibilities during the year in accordance with our Purpose and Compass. ## Committee membership Members of the Committee are appointed by the Board on the recommendation of the Nomination Committee, which reviews membership in terms of skills, knowledge and experience. There were a number of changes to the members of the Committee during the year, with Pam Kirby stepping down as Chair and Chris Sinclair stepping down as a member following the AGM in May when they both retired from the Board, and the sad news of the death of Olivier Bohuon in early May. I would like to thank them all for their valuable contributions to the Committee. I took over as Chair of the Committee following the AGM on 2 May 2024. Kris Licht continued as a member and Marybeth Hays joined the Committee in February 2024 when she joined the Board. On joining the Committee and during their tenure, members receive an induction tailored to their individual requirements. This includes meetings with internal management responsible for Compliance Committee matters. All members of the Committee receive regular briefings from senior executives on matters covering governance, regulatory and legislative developments, product safety and ethics-related matters, along with updates on Reckitt's practices and policies in these areas. During the year, the Deputy Company Secretary for the February Committee meeting, and the Head of Secretariat for the remainder of the year, acted as Secretary to the Committee. ## Meetings In 2024, the Committee held four meetings. Meetings usually take place ahead of Board meetings and the Chair of the Committee reports formally to the Board on the Committee's activities. The CEO, CFO, Chief R&D Officer, General Counsel & Company Secretary, Chief Supply Officer, Chief Ethics and Compliance Officer, SVP Regulatory Affairs & Global Safety Assurance, and the SVP Head of Global Quality regularly attend meetings. Other Board Directors are invited to attend all meetings, and other senior management attend when deemed appropriate by the Committee. Time is allocated at each meeting for private discussions with the Chief R&D Officer and Group General Counsel & Company Secretary without other invitees being present, as required, as well as a private meeting of the Committee members. All Board members are provided with copies of Committee papers and minutes. | Areas of focus | Further detail | Pages | | --- | --- | --- | | Legal compliance and ethics | Risk Management | 52-56 | | | Section 172 Statement | 78 | | | Audit Committee Report | 86-93 | | Product safety and quality | Value creation model | 10-15 | | | Stakeholder Engagement | 74-77 | | R&D and regulatory compliance | Risk Management | 52-56 | --- Strategic report Government Financial statements Other information Reckitt Annual Report and Accounts 2024 95 # Compliance Committee Report continued In addition to reviewing matters at Committee meetings, the Committee Chair held regular meetings with our CEO, Chief R&D Officer, Chief Supply Officer and Chief Ethics and Compliance Officer, to review progress against the strategy and to represent the Board in supporting the compliance efforts in these critical areas. ## Committee effectiveness review This year, an internal effectiveness review of the Committee was conducted as part of the Board's overall effectiveness review (see pages 79-80). Following last year's external review, where the role and scope of the Committee was highlighted, the Committee's remit was changed in June which is detailed below. The Committee was rated very highly this year, with the change in scope positively received. The Board, having had sight of the results of the Committee's performance review, considers the Committee to be operating effectively. ## Change in scope and remit of the Committee As announced on 19 June 2024, the role and scope of the Corporate Responsibility, Sustainability, Ethics and Compliance Committee (CRSECC) was reviewed earlier in the year and it was agreed by the Board to align the Committee to our principal risks related to product regulation, product quality and safety, and legal and compliance. This will allow the Committee to focus on these critical areas and the compliance culture at the Company. ESG and sustainability matters have returned to the remit of the full Board. Given the change in scope, the Committee has been renamed the Compliance Committee. ## Role of the Committee The Committee is part of the Group's governance framework and supports the Board in fulfilling its oversight responsibilities in ensuring the integrity of the Group's product regulation, product quality and safety, legal and compliance risks, policies, programmes and activities. Its role and responsibilities are set out in its terms of reference, which can be found at www.reckitt.com/investors/corporate-governance, and are reviewed by the Committee annually. The Committee's terms of reference were updated following the change in remit of the Committee following feedback from the Board evaluation carried out in 2023. The updated terms of reference were approved by the Board in June 2024. The Audit Committee has a monitoring function in respect of risk management and internal control systems, which also includes the assurance framework established by management to identify and monitor risks identified by the Compliance Committee. The Committee liaises with the Audit Committee and Marybeth Hays is a member of both Committees. ## Responsibilities of the Committee The Committee reviews the following areas throughout the year as part of its remit and responsibilities, with its terms of reference and in the context of the Group's principal risks: - Oversee, assess, monitor and recommend policies, processes and procedures relating to health and safety and product quality, compliance matters (including anti-bribery, competition law, data privacy, trade sanctions, anti-money laundering, regulatory and quality risk assurance and restrictive trade practices and ethical conduct), ensuring they align with the Company's culture, purpose and values - In conjunction with the Audit Committee, reviewing the Company's whistle-blowing arrangements, including the adequacy and security for the workforce to raise concerns about the possible wrongdoings in financial reporting or other matters - Receiving and reviewing reports regarding investigations of allegations raised through the Speak Up system - Monitoring and reviewing processes for risk assessment for product quality and compliance matters and ethical conduct - Reviewing mitigating actions for product quality and compliance risks and receiving reports on progress of risk mitigation - Receiving reports from management in respect of ethics and compliance and investigating and taking action in relation to issues raised or reported ## Committee priorities for 2025 - Review the remit and activities of the Committee within the broader Reckitt governance framework - Monitor and prepare for future developments in product regulation, product quality and safety and legal and compliance requirements, and review internal processes, policies and procedures to ensure compliance - Continually review and update the Board on Reckitt's quality, safety, compliance and regulatory responsibilities - Monitor and review the processes for risk assessment of key principal risks including in relation to product regulation, product quality and safety and legal and compliance - Keep abreast of market conditions and maintenance of products in the current global political and economic landscapes ## Mehmood Khan Chair of the Compliance Committee Reckitt Benckiser Group plc 5 March 2025 ## Key activities during 2024 ### CRSECC #### February - Legal Compliance and Ethics report - ESG update - Changes to Product Regulations report - Product Safety and Supply report - Employee Health and Safety and Quality report - External Affairs report - Deep dive on changes to regulation under 'EU Green Deal' #### May - Legal Compliance and Ethics report - ESG update - Changes to Product Regulations report - Product Safety and Supply report - Employee Health and Safety and Quality report - External Affairs report - Compliance report - Deep dive on employee health and safety ### Compliance Committee #### July - Legal Compliance and Ethics report - Changes to Product Regulations report - Product Safety and Supply report #### November - Legal Compliance and Ethics report - Changes to Product Regulations report - Product Safety and Supply report - Review of implications for product regulations, product quality and compliance activities in relation to the strategy announcement made in July 2024 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 96 # DIRECTORS' REMUNERATION REPORT ![img-136.jpeg](img-136.jpeg) ## Our proposed Remuneration Policy is aligned to our strategy, and to our remuneration philosophy and principles including our pay-for-performance and share ownership culture. ## Mary Harris Chair of the Remuneration Committee | Member | Meetings attended^{1} | | --- | --- | | Mary Harris (Chair) Member for the whole year and Chair since May 2024 | 5/5 | | Sir Jeremy Darroch Member for the whole year | 5/5 | | Fiona Dawson Member and Chair Designate since June 2024 | 3/3 | | Alan Stewart Chair and member until May 2024 | 1/1 | | Olivier Bohuon Member until May 2024 | 1/1 | | Chris Sinclair Member until May 2024 | 1/1 | 1 During 2024, the Committee held five scheduled meetings aligned to the Company's Board meeting cycle. In addition, one non-scheduled meeting was held in December 2024 attended by all three active Committee members. ## Contents of Directors' Remuneration Report | 96 | Letter from the Chair | | --- | --- | | 99 | Reckitt's remuneration at a glance | | 103 | Directors' Remuneration Policy | | 110 | Annual Report on Remuneration | | 127 | Additional remuneration disclosures | ## Letter from the Chair On behalf of the Board, I am pleased to present the Directors' Remuneration Report for the financial year ended 31 December 2024. I would like to thank shareholders for their support of our 2023 Annual Report on Remuneration at our AGM on 2 May 2024, which received a strong vote in favour of 94%. In line with the normal three-year lifecycle, we will be submitting our Directors' Remuneration Policy (Policy) for approval at the AGM on 8 May 2025. On the following pages I have shared the context for the key decisions the Remuneration Committee has taken this year, in particular the decisions we took in connection with the updated Policy, how we rewarded performance achieved during the year in line with the current shareholder-approved Policy, decisions relating to remuneration arrangements in 2025, and the context of wider workforce remuneration. The outcome of the Committee's review is that the Policy remains fit for purpose, aligned to our strategy, and aligned to our remuneration philosophy and principles including our pay-for-performance and share ownership culture. Therefore, the Remuneration Committee is not proposing to make any material changes – it is largely a rollover of the Policy approved at the 2022 AGM. As part of the Policy renewal, the Remuneration Committee has engaged with shareholders and shareholder advisory bodies over the past year. I am pleased to say that we have had the benefit of feedback or engagement with approximately 40% of Reckitt's ownership as well as the key proxy advisors and that the vast majority of shareholders that we engaged with were supportive of the proposals and noted that there is no significant change. We have provided additional context in response to some of the key themes raised by shareholders throughout this letter and report. We highly value the inputs and views of all shareholders and their advisors, and on behalf of the Committee, I would personally like to take this opportunity to thank all those who took the time to engage with us and provide feedback on the proposals. The Policy review considered the remuneration framework in the context of our updated strategy, focusing on growth and long-term value creation, our remuneration principles including our long-established pay-for-performance and share ownership culture, and the increasingly competitive global talent market in which we operate. The Committee also had in mind that shareholders have been supportive of the current Policy and its implementation since it was approved by shareholders at the 2022 AGM, with strong AGM votes in all years since (all 90%+). The Committee is proposing to make modest increases to the LTIP which are within the limits of our current Policy. These changes have taken into account the following: - Reckitt's refreshed strategy, which was announced in July 2024. It is critical that our remuneration arrangements incentivise our senior leaders to deliver this strategy as we continue to reshape Reckitt into a more efficient, world class consumer health and hygiene company focused on a portfolio of high-growth, high-margin Powerbrands - Our focus to retain and incentivise our talent – Reckitt competes for the best global talent with the world's largest companies and many of our senior executives are highly sought after in this talent market --- # Directors' Remuneration Report continued - Our unchanged pay positioning philosophy, which is to deliver packages to the Executive Directors broadly in line with the median of the FTSE 30 (excluding Financial Services Companies (FS)) for more modest performance levels, and packages in the upper quartile practice for true outperformance including significant share price growth. The primary group used for assessing the competitiveness of pay is the FTSE 30 (excluding FS) of which we are a constituent, with a secondary reference point being our global FMCG peer group with whom we compete for talent - Further details are discussed on page 110 ### Performance for the year under review and strategic context 2024 was a foundational year for Reckitt. We substantially increased our cash returns to shareholders and invested in our future growth while weathering unforeseen difficulties. It was a year of strategic clarity and delivery as we announced a sharpened portfolio of brands, a simpler, more effective operating model and drove top and bottom‐line growth. We achieved like‐for‐like net revenue growth (LFL NR) of +1.4%, within our guidance. Our adjusted operating profit grew by +8.6% (at constant FX), and we generated free cash flow of £2,232m, supporting a record 75% increase in cash returns to shareholders through our dividend and continued share buyback programme. Our competitive position in Health and Hygiene has improved, 55% of top Category Market Units held or gained share, with 15% for Nutrition and 48% for the Group. Our progress was driven by strong innovation platforms and increased investment in our brands and R&D. In July 2024, we announced a strategic reshaping to create a world‐class consumer health and hygiene company, focused on a portfolio of high‐growth, high‐margin Powerbrands for a simpler, more effective Reckitt. Overall, the financial performance delivered in 2024 demonstrates our progress and sets a strong foundation for future growth. We are confident in our refreshed strategy, strengths, and potential to deliver strong growth and value creation. ### Performance outcomes for 2024 The Committee carried out a thorough evaluation of the performance of both the Group and the Executive Directors in the round, having regard to broader circumstances, and have determined that the formulaic incentive outcomes set out below are appropriate and justified in this wider context. The framework and the assessment against performance which the Committee used are set out in detail on page 110. The Committee has adjusted the 2024 bonus and 2022‐24 LTIP outturns for the impact of the exceptional Mount Vernon tornado for all participants, including Executive Directors. No one could have foreseen the tornado that hit our storage facility and the logistical impact, and therefore this adjustment was made to ensure that underlying performance was measured in a fair and consistent manner. The Committee determined that the level of annual bonus payout and the total vesting level of the LTIP set out below are appropriate and justified in this wider context. ### Annual bonus Reckitt operates an annual bonus plan that is strongly aligned to performance, measured against targets of net revenue and adjusted profit before income tax, with a downward modifier based on net working capital (NWC). Net revenue performance for the year was in line with our guidance range. Against our stretching target range this was between threshold and maximum and resulted in a multiplier for LFL net revenue of 1.22x. We achieved our goal of growing adjusted operating profit ahead of net revenue -- driven by year‐on‐year margin expansion which resulted in EPS growth of 7.9%. Profit before tax performance exceeded the target range and resulted in a maximum multiplier for this measure. Net working capital performance exceeded the maximum target resulting in a multiplier of 1.0x. The overall result under the annual bonus is therefore 65% of maximum. This is in line with all other employees on the same Group‐wide measures. One‐third of bonus payments to Executive Directors are deferred into Reckitt shares for three years in line with the Policy. - More details are set out on page 111 of the Annual Report ### 2022--2024 LTIP The Reckitt LTIP is designed to align participants with shareholders through making awards with stretching performance conditions denominated in both performance share options and performance share awards. Vesting of awards under the 2022 LTIP was dependent on LFL NR growth, ROCE, relative TSR, and Sustainability targets. As a result of very strong performance over the three‐year period, NR growth was at 4.3% p.a. This was towards the upper end of the target range and resulted in vesting of 81% of this element. ROCE performance was above the maximum target. Whilst the TSR element lapsed in full, the Committee noted that the share price as at 31 January 2025 was c.10% higher than the Q4 2024 average price (on which the TSR outcome is based). We have exceeded the targets set for carbon reduction, by optimising high energy manufacturing processes (especially those using natural gas), increasing our use of renewable energy, and investing in longer term renewable electricity generation, which allowed us to achieve a 69% reduction in GHG emissions in 2024. This exceeds our 2030 ambition by several years and therefore our performance was above the maximum range, with full vesting under this element. We also delivered 35% of our net revenue from more sustainable products by focusing on the raw materials used in our products and continuing our programmes to reduce the use of certain chemicals. This element of our LTIP also exceeded the maximum target range and resulted in full vesting under this measure. As set out on page 116, the overall outcome is that 68% of the award vests. In line with our Policy, there is a further two‐year holding period attached to vested LTIP awards. ### Implementation in 2025 The Committee is proposing some modest changes to the implementation of the Policy, further detail of which is set out below. ### Base salary In relation to base salary, the CEO was awarded a 4% increase for 2025, in line with the wider UK workforce. It should also be noted that in 2024 the CEO received no salary increase. Whilst we remain committed to ensuring the package is weighted to performance‐based elements, the Committee is mindful that the CEO's salary has now fallen below the lower quartile of the FTSE 30 (excluding FS) and will keep this under review in future years. As part of the refreshed strategy, the scope of the CFO role has been expanded significantly to include responsibility for IT and Digital. This is no longer a separate GEC role and instead the function reports to the CFO. As part of this, the CFO will now play a critical role in delivering the Group's strategy by building a data‐driven, digitally enabled Business, and has responsibility for a significantly larger number of people. This global function is critical to the success of the Company, as we continue to build on our strong data and AI foundations, setting our global teams up for success and better serving our customers and consumers. To reflect the increase in scope and complexity of the CFO role, an additional salary increase of 5% on top of the wider workforce increase of 4% has been awarded, resulting in a total of 9%. --- # Directors' Remuneration Report continued ### Annual bonus There are no proposed changes to the annual bonus opportunities or performance measures. For the 2025 Annual Performance Plan (APP) the Committee's assessment of performance in the round will also include consideration of performance in relation to the execution and delivery of the refreshed strategy. Further detail is set out later in this report. ### LTIP Within the limits of the existing Policy a modest increase is proposed to LTIP award levels. 2025 award levels for the CEO will be set at 87,500 performance shares and 175,000 performance share options (previously 75,000 and 150,000 respectively), with the CFO's award set at 42,500 shares and 85,000 options (previously 40,000 and 80,000 respectively). This takes into the account the context set out earlier in this letter including alignment to our refreshed strategy, the global talent markets in which we operate, and our remuneration principles including our historic pay positioning philosophy. During the shareholder consultation some shareholders asked for further detail on how the Committee determined the number of performance shares and performance share options. These increases are intended to move the package closer to our desired positioning against the FTSE 30 (excluding F5) outlined earlier in the report. In reviewing the packages, the Committee based this on assuming a share price at award of $60, broadly in line with historic levels and higher than the current share price. At the current share price, the package continues to be below our desired positioning. The package also continues to be materially below typical market practice in our global peer group. Over recent years multiple senior leaders from across the Group have been targeted by global competitors. Whilst we are not intending to match US pay levels (our remuneration packages are positioned significantly less competitively, in all performance scenarios, versus our global sector peers), it is critical that our arrangements are credible in the markets in which we operate. The Committee has also reviewed the performance measures in operation and is of the view that the current overall balance of measures remains appropriate and aligned to our strategy and culture. There is a minor change to the Sustainability measure as we have already achieved the 2030 ambition for carbon reduction. Further detail has been provided later on in this report. Following feedback from shareholders, we have also reviewed the TSR peer group which consists of companies that are closely aligned to Reckitt in terms of business areas and product portfolios, and are subject to similar market dynamics. For the 2025 LTIP, JDE Peet's, Lindt, and Mondelēz will be removed from the peer group on the basis that their product portfolios are less closely aligned to Reckitt's and following the addition of Haleon and Kenvue resulting in the peer group being a sufficiently robust size. Further detail is provided later on page 126. ### Share ownership Our share ownership guidelines, which are amongst the highest in the UK‐listed market and our international peers, will be retained to support our culture of share ownership. ### MED fees During the year, the Chair and Non‐Executive Director (NED) fees have been reviewed taking into account increases awarded to the wider workforce and market practice. The fee for the Chair will increase by 4%, in line with the increase applied to the wider workforce. The basic NED fee will increase to £115,000, with effect from 1 January 2025, which is broadly in line with the wider workforce. There are also modest increases to the additional fees for being Senior Independent Director, Committee Chair, a Committee member, and the Designated Employee NED to reflect the time commitments and responsibilities of the roles. Further details are set out on page 129. 25% of the Chair fee and basic NED fee continues to be paid in shares. We will continue to review NED fees to ensure they are appropriate and competitive against the market. ### Context for remuneration of the wider workforce Reckitt is committed to fair and consistent reward policies for its employees, aligned with our Compass, remuneration philosophy and our culture. Amidst significant organisational transformation, a review of the pay structure across the whole organisation has been undertaken alongside the review of the Executive Director Policy. Partnering with our wider Reward and HR team, the Remuneration Committee has considered and reviewed multiple elements of reward including salary structures, bonus designs, LTIP and benefits throughout 2024. In 2025 we have updated several elements of how we set and measure performance, supported by our established cycle of objective setting, performance reviews and assessment, and development conversations. These changes ensure that we not only further strengthen our performance culture, but also ensure that our colleagues remain purpose led and values driven. Our Performance, Talent and Reward philosophy is aligned to ‘who we are' and recognises both ‘what' we do and ‘how' we do it in measure. Central to our remuneration philosophy are the principles of pay for performance, shareholder and strategic alignment. For the majority of colleagues, their performance will feed into our annual bonus (APP) alongside our collective performance against key performance metrics, tailored to individual markets. Reckitt's most senior managers participate in our Long‐Term Incentive Plan (LTIP). Participation has been expanded for 2025, introducing a more long‐term element of reward to balance in‐year performance, enhancing our culture of ownership and supporting us in recruiting, retaining and developing the best global talent. This builds on several other initiatives we already have in place for employees, further detail of which is provided in the Directors' Remuneration Report. In particular, participation in all‐employee share plans is offered to over 95% of our employees where local legislation permits and as of 2024 year end over 13,000 Reckitt employees were participating in one of our share plans fostering our culture of ownership and shareholder alignment. Amongst other market‐related benefits, all employees have life insurance of at least 2x base salary and have access to an appropriate Employee Assistance Programme. In addition, as part of our Sustainable Livelihoods framework, we are proud that in 2024 Reckitt has achieved the Fair Wage Network Global Living Wage Certification, confirming that we pay all our employees above the living wage in all locations. This formal accreditation solidifies our commitment to fair compensation and equitable treatment. For more information, please refer to pages 121‐123. ### Conclusion On behalf of the Committee, I would like to thank shareholders for their continued support and engagement during the year. I hope that you find this report a clear explanation of the proposed Remuneration Policy. We welcome any comments you may have on this report and I look forward to your support at the upcoming AGM on 8 May 2025. As announced earlier last year, Fiona Dawson will be taking over as Chair of the Remuneration Committee following the AGM and I thank her for her input and guidance since joining the Committee in June 2024. As announced in November, Mahesh Madhavan joined the Remuneration Committee in February 2025. I would also like to thank my fellow Committee members for their insight and commitment; and shareholders, for their invaluable feedback and support which has helped inform and update our proposed Remuneration Policy, and for their support during my tenure as Chair of Reckitt's Remuneration Committee. ## Mary Harris Chair of the Remuneration Committee Reckitt Benckiser Group plc 5 March 2025 --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 99 # Directors' Remuneration Report continued ## Reckitt's Remuneration at a Glance Reckitt aims for leading global performance. Our refreshed strategy focuses on growth and long-term value creation and our remuneration principles remain aligned to this change and continue fostering our strong pay-for-performance culture. Our management team is multinational, and we compete for talent globally. Central to our remuneration philosophy are the principles of pay-for-performance, shareholder alignment, strategic alignment, and rewarding the right behaviour. Combined with our Compass and business model, these principles support our long-established pay-for-performance and share ownership culture, driving accelerated growth and supporting long-term value creation. To reinforce our philosophy, the majority of the Executive Directors' remuneration packages consist of variable at-risk pay, linked to challenging targets that align with our strategy and are largely delivered in Reckitt shares. Additionally, we have shareholding requirements for Executives amongst the highest in the UK market. This approach is cascaded throughout our senior leadership. ![img-137.jpeg](img-137.jpeg) Reckitt's Compass ![img-138.jpeg](img-138.jpeg) Remuneration philosophy ## Reckitt's strategy - Purpose and culture fit for the future - Excellent brand portfolio for value creation - Scaled global footprint - Enhanced returns to shareholders See page 16 for more details of our Company strategy The tables below illustrate the remuneration principles at Reckitt, which are driven by our Compass, strategy and the remuneration philosophy. ## 1 Recruit, Retain & Develop the best global talent - Engage highly performance-driven individuals - Deliver globally competitive pay practice across our industry peer group ## 2 Ensure high performance culture - Drive sustainable outperformance and shareholder value - A high proportion of variable pay with stretching performance targets ![img-139.jpeg](img-139.jpeg) Maximum CEO pay under the Remuneration Policy Note: Value of the CEO's maximum 2025 package. This illustrates fixed remuneration plus full payout of the annual bonus (APP) and full vesting of the LTIP awards including 50% share price growth ## 3 Culture of ownership - Market leading share ownership - Align the interests of management and shareholders In-employment shareholding requirement | | Number of shares | Value of shares (E)1 | % of 2024 annual salary | | --- | --- | --- | --- | | CEO | 200,000 | 9,562,000 | 869% | | CFO | 100,000 | 4,781,000 | 629% | Post-employment shareholding requirement2 | | Number of shares | Value of shares (E)1 | % of 2024 annual salary | | --- | --- | --- | --- | | CEO | 100,000 | 4,781,000 | 435% | | CFO | 50,000 | 2,390,500 | 315% | 1 Based on the average closing share price in Q4 2024 of £47.81 2 Reflecting 50% of the in-employment shareholding requirement ## 4 Ensure alignment with strategy across the Business - Alignment of performance metrics with strategic priorities - Alignment across the business of metrics and ownership ## Summary of our Remuneration Policy The table below summarises the proposed Directors' Remuneration Policy which can be found on pages 103-109. No structural changes to the Policy are proposed. | | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Up to Year 10 | | --- | --- | --- | --- | --- | --- | --- | | Fixed pay | Salary benefits and benefits | | | | | | | Annual bonus (APP) | One-year performance period | Two-thirty paid in cash, one-third in Reckitt shares deferred for three years. No further performance conditions | | | | | | LTIP | Performance shares and performance share options Three-year performance period | | | Two-year holding period No further performance conditions | | | | | | | | Ten-year life for options from grant | | | | Shareholding requirements | Period of eight years from appointment to achieve requirements Two-year shareholding requirement post-departure | | | | | | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 100 # Directors' Remuneration Report continued Link to strategy ☐ Purpose and culture fit for the future ☐ Excellent brand portfolio for value creation ☐ Scaled global footprint ☐ Enhanced returns to shareholders Summary of our proposed Remuneration Policy | Element | Key features of operation of proposed Policy | How we will implement for 2025 | Link to strategy | Link to strategy | | --- | --- | --- | --- | --- | | Salary, benefits and pension | • Salary increases and pension contribution set in context of wider workforce • Salaries and benefits set competitively against peers | • 4% salary increase, in line with wider UK workforce for the CEO. For the CFO, to reflect the increase in scope and complexity of the CFO role, an additional salary increase of 5% on top of the wider workforce increase of 4% has been awarded • Pension contribution, or equivalent cash allowance, currently 10% of salary in line with the wider workforce in the UK | • To enable the total package to support recruitment and retention | ☐ | | Annual bonus (APP) | • Target bonus of 120% of salary for CEO and 100% for CFO • One-third deferred into awards over Reckitt shares for three years • Malus and clawback provisions apply | • Targets set for net revenue and adjusted profit before income tax • NWC target to act as a downward modifier • Threshold performance results in zero payout, with maximum of 3.57x target for truly exceptional performance on all three metrics • Remuneration Committee assessment of performance in the round | • To drive strong performance, with significant reward for overachievement of annual targets linked to Reckitt's strategic priorities • Use of deferral for longer-term shareholder alignment | ☐ | | LTIP Performance shares and performance share options | • Three-year performance period and two-year holding period • Malus and clawback provisions apply • Options have approximately seven years to exercise post vesting | • Targets set for LFL net revenue growth (40% weighting); ROCE (25% weighting); relative TSR (25% weighting); Sustainability (10% weighting) • Performance conditions are applied to both performance share options and performance shares • Remuneration Committee assessment of performance in the round | • To incentivise and reward long-term performance and align the interests of Executive Directors with those of shareholders • Two-year holding period for longer-term shareholder alignment | ☐ | | Shareholding requirements | • Period of eight years from appointment to achieve • Two-year shareholding requirement post departure | In-employment shareholding requirement: • CEO: 200,000 shares • CFO: 100,000 shares Post-employment shareholding requirement equal to the lower of 50% of the in-employment requirement or their actual shareholding on departure | • Promotes long-term alignment with shareholders • Promotes focus on management of corporate risks | ☐ | --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 101 # Directors' Remuneration Report continued ## Summary of performance and payout ### Annual performance plan The performance outcome for the annual bonus was 65% of maximum. A third of the bonus is deferred, by way of an award over Reckitt shares. | Performance measure | Threshold (zero bonus) | Actual/Achieved | Maximum (3.57x target) | Multiplier | | --- | --- | --- | --- | --- | | Net Revenue (NR) growth | <£14.26bn | Actual £14.81bn | £15.13bn | 1.22x | | Adjusted profit before income tax | <£2.90bn | Actual £3.32bn | £3.29bn | 1.89x | | Average Net Working Capital (NWC) | -5.5% | Actual -7.9% | -7.5% | 1.00x | | Total | | | | 2.31x | ● Achieved | | 2024 base salary (£) | Target bonus opportunity (% of salary) | Multiplier achieved | Bonus payout (% of max) | Value delivered in cash (£) | Value deferred into shares (£) | | --- | --- | --- | --- | --- | --- | --- | | Kris Licht | 1,100,000 | 120% | 2.31x | 65% | 2,032,800 | 1,016,400 | | Shannon Eisenhardt | 760,000 | 100% | 2.31x | 65% | 1,170,400 | 585,200 | | Jeff Carr^{1} | 190,000 | 100% | 2.31x | 65% | 292,600 | 146,300 | 1 The 2024 base salary for Jeff Carr is pro-rated for the period served as Executive Director ## LTIP The 2022 LTIP vested at 68% of maximum, against the performance conditions over the three-year period. | Performance measure | Threshold (20% vesting) | Achieved | Maximum (100% vesting) | Vesting (% of total award) | | --- | --- | --- | --- | --- | | LFL net revenue growth (3-year CAGR) (40% weighting) | 2.0% p.a. | Actual 4.3% p.a. | 5.0% p.a. | 81% | | ROCE (final year) (25% weighting) | 13.2% | Actual 15.3% 15.2% | | 100% | | Relative TSR (25% weighting) | 7.9% | | £7.5% | 1.00x | | | -5.5% | | | | | Total | | | | 2.31x | ☑ Achieved These results reflect a year of continued momentum, with top and bottom-line growth and strong shareholder returns. Total diluted EPS was 349p in 2024, with free cash flow generation of £2,232 million, supporting £2,709 million cash returns to shareholders. Reckitt is well positioned today to continue to deliver mid-single-digit growth in the medium term. With our proposed 5% increase in our annual dividend, we continue to enhance returns to shareholders in line with our framework for sustained value creation. The overall formulaic bonus multiplier was 2.31x of target (65% of maximum). # Overall Group performance taken into consideration As it does every year, the Committee thoroughly evaluated the performance of both the Group and the Executive Directors in the round to assess whether the level of annual bonus payout is both appropriate and justified. The framework that the Committee applies is set out on page 110 and more details including progress on delivery of the strategy, wider people, culture and sustainability is provided below: ## Strategic delivery ### Portfolio value creation - Moving at pace to reshape Reckitt as a world-class consumer health and hygiene organisation - Significantly sharpened our brand portfolio and moving to a simpler, more effective organisation to maximise long-term value for shareholders ### Financial performance - Delivered LFL net revenue growth within revised full-year guidance range and grew adjusted operating profit ahead of net revenue, enabling EPS growth of 8% ### Product superiority - Ensured every brand has earned its place in our portfolio by meeting our three principles of value creation - Invested in our brands and deepened their equities through innovation, driving net revenue growth from premiumisation of our products ### Win in market - Equipped our organisation with better tools and capabilities to enable our teams to execute with excellence in market - Boosted the agility of our US OTC supply capabilities through commissioning a new manufacturing facility in Wilson, North Carolina ## Fixed cost optimisation - Expanded our cost efficiency initiatives in our new Fuel for Growth programme, which targets at least 300bps reduction in our corporate fixed costs as we exit 2027, from a 2023 baseline - Delivered 90bps of fixed cost savings in FY 2024 through streamlining our corporate functions ## Enhancing returns to shareholders - Committed to returning surplus cash to our shareholders through our dividend and share buyback programme - Increased our dividend by 5% - Returned £2.7 billion in cash to shareholders, a 75% increase versus 2023 ## Market share - Our competitive position in Health and Hygiene has improved, 55% of top Category Market Units held or gained share, with 15% for Nutrition and 48% for the Group --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 113 # Directors' Remuneration Report continued ## Sustainability ### Purpose-led brands - 34.9% net revenue from more sustainable products, improved from 29.6% in 2023 - 13% reduction in product carbon footprint vs 2015 - 8% recycled content in our plastic and 15% reduction in virgin plastic packaging - 24% reduction against target 65% product chemical footprint reduction by 2030. Reduction has been created by ongoing R&D activity ### Healthier planet - 69% reduction in GHG emissions in operations. We continue to surpass this target for 65% reduction by 2030 - 100% renewable electricity purchased for manufacturing, 96% of our electricity comes from renewable sources - Water efficiency: 6% against our target of 30% by 2025. We have focused more on GHG emissions reduction - Water stressed locations: Revisions in the water stress mapping confirmed 16 sites in 2024, of which 2 (Hosur and Mysore) now achieve neutrality. Programmes are in place in Mexico and Pakistan, with others planned in South Africa and China. - Waste: 23% reduction against our target of 25% by 2025; 100% zero waste to landfill from manufacturing ## Fairer society - An inclusive culture where everybody is treated fairly and equally - Our teams represent the diverse places where we work and the people we serve - Gender balance at all management levels: 51% - Achieved the Fair Wage Network Global Living Wage Certification, confirming that we pay all our employees above the living wage globally ## Wider stakeholder experience ### Suppliers and external partners - Partnered with the Fair Rubber Association and Earthworm Foundation to improve the livelihoods of smallholder latex farmers in Thailand and protect the ecosystem - In 2024, met target to pay the premium on 100% of the latex we buy - Continued to invest in 1,000+ latex farmers to deliver 15% increase in yield, 10% improvement in quality and resistance to plant diseases and significant increase in incomes - Worked with human rights organisation Our Journey in Malaysia to complete a mapping of human rights risks - Continued partnership with the Sustainable Agriculture Initiative's Sustainable Dairy Partnership, to collaborate with suppliers and peers to work on 14 focus areas that will make the dairy industry more sustainable - Continued to increase RSPO mass balance certified volumes for fat blends and soap noodles (palm oil commitment), aiming for 100% - Integrated the WWF partnership within our palm sourcing programme in Indonesia and continued to fund the Earthworm programmes in Indonesia and Malaysia - Continued engaging our third-party manufacturers through Manufacture 2030 to help them reduce their environmental footprint through a series of innovative projects and behavioural changes - Established Supplier Sustainability Standards in 2024 for selected raw materials and packaging suppliers to comply with, covering areas such as Greenhouse Gas emissions, water, and waste - Continued focusing on our program for Human Rights and Responsible Workplace in our own operations and as well at external manufacturers and materials suppliers - Running external Innovation partnership program Partners to Innovate with keys strategic suppliers ## Customers and communities Delivered improved execution with our largest Global customers, driving product availability enhancing communication and customer satisfaction within key customers. ## North America - Improved instock and sales with our largest customer. Specific wins include reaching 97% instock at Walmart with Mucinex. Delsym and Cepacol getting on-shelf ahead of the season, putting our consumers first - Implemented Truckload Optimization in Canada, saving 33 MT of CO₂ and $104k CAD in freight costs, achieved best-in-class strategic support with Walmart and Loblaws - Execution of eleven (11) promotional events with Costco in a single month, achieving a record goal and delivering a 7% increase in sales in the quarter as we sought out new opportunities --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 114 # Directors' Remuneration Report continued ## Europe - Established a permanent direct delivery model in the UK, achieving significant CO₂ and cost savings, and implemented a collaborative forecasting program, successfully launching all range reviews with Tesco, building shared success - Selected as a key partner in France by Carrefour within the sustainability program ## Emerging Markets - Improved service level with Panda in KSA from 67% to 87%, conducted a Value Chain Mapping workshop with Amazon KSA, improving service levels from 71% (2023) to 86% (2024), and received prestigious awards from top customers, including Nahdi's Partner Award ## Sales and Customer Partnerships - Received multiple awards and customer recognitions as a "partner of choice" where 2024 was the point where "Reckitt turned around last year and they are happy with the improvements that you've made" Walmart Merchant - Additional positive feedback received Albertsons, Kroger, Target, Walgreens, and Amazon for strong partnerships and innovative approaches, and selected as the Rising Star Partner of the Year with Office Depot for excellence in sales, marketing, and collaboration ## People and culture ### Pay, recognition and benefits Alongside the Remuneration Policy Review, we refreshed our philosophy and principles, now putting 'rewarding the right behaviour' at the core of our remuneration strategy. We made changes to our annual bonus plan through the introduction of an individual performance element, recognising both 'what' we do and 'how' we do it is key. In addition, we expanded our LTIP offering to a wider global population. From 2025 these colleagues will be granted Reckitt shares balanced by changes to their annual bonus. Our rebalancing of remuneration reflects our strategy and focus on long-term performance and value creation. We are proud to announce that in 2024, Reckitt has achieved the Fair Wage Network Global Living Wage Certification, confirming that we pay all our employees above the living wage in all locations, as defined by the Fair Wage Network. This formal accreditation solidifies our commitment to fair compensation and equitable treatment. The living wage accreditation is contained within our "Sustainable Livelihoods" framework which, in addition to compensation, promotes health, equality, employment rights, financial security, and career development, aligned with our 2030 Sustainability Ambitions. We also continue to be an accredited Living Wage Employer and paying at least the Living Wage to all our UK employees and contractors. Following a successful pilot in Poland and the United States in 2023, we have now extended our pay equity analyses across our top 10 markets and European countries with very positive results in 2024. Building on this achievement, we are now preparing to expand this initiative to all our global markets in 2025. Our Gender Pay and Inclusion Report already goes beyond the legal requirement, covering Reckitt's top 10 markets including the UK and included a robust update on Inclusion progress. The median gender pay gap in the UK is -91%. In 2024, we have extended our private healthcare insurance benefit, administered by Bupa, to include all colleagues at our UK manufacturing sites. Previously, this benefit was only available to office-based employees. With this change, all UK employees are now eligible to receive private healthcare insurance. ### Diversity and Inclusion Our Inclusion strategy focuses on People, Brands, and Procurement, overseen by our Global Inclusion Board. We implemented the Global Equality Standard (GES) framework globally and in five key markets (Mexico, India, UK, US, and Brazil) starting their three-year road maps in 2024. The Reckitt 'Leading inclusively' programme was launched at our Leadership Conference, focusing on building diverse teams, active listening, inclusive decision-making and recognising individual contributions. We are finalising plans to embed this philosophy and way of working within our wider Learning and Development curriculum in 2025. Reckitt's Conscious Inclusion programme places an emphasis on our collective role in creating an inclusive workplace. To date, over 12,300 people have engaged in online learning and team-based conversations. We submitted gender balance data to the 'FTSE Women Leaders' Review. And participated in the 'Parker Review' – the UK government's annual ethnicity-in-leadership census. At a global level, and in markets where it is possible to seek this information, more than 4,600 colleagues have consented to share their diversity data with us. Our Global ERGs play an integral role in our Inclusion strategy. We launched the 'Positive Portrayal Panel' in Europe in partnership with our Marketing Excellence team, with the focus on campaign design to ensure diversity and inclusion is at the heart of our consumer focus. On Disability Inclusion, we refreshed our global disability & adjustments policy and hosted a Stronger Together conversation where leaders and colleagues shared their experiences with disability. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 115 # Directors' Remuneration Report continued On LGBTQ+ Inclusion, Reckitt India was awarded a bronze rating by the India Workplace Equality Index. Reckitt UKI was ranked as a 'top employer' and received a gold rating for the Stonewall UK Index. We continue to maintain gender balance at all management levels. Our Women@Reckitt (20+ local champions) exists to champion the case for change. For International Women's Day 2024, champions led local activations including Stronger Together conversations and Speed Mentoring events. Our Race & Ethnicity ERG operates across 5 regions. In 2024, the Group hosted a Global Day Against Racism event to highlight the power of allyship and the CEO joined the discussion. 351 small and diverse suppliers were supported by Reckitt US in 2024. Over 5% of spending on small and/or diverse businesses was reached by Reckitt US in 2024. ## Wellbeing In 2024, almost 15,000 attendees to Better Life events. We pivoted our wellbeing program to focus on change and transition during our business transformation, acknowledging that employees needed support with navigating change, looking after their mental wellbeing and being mindful of their team dynamics during this period. We gained a cumulative Net Promoter Score (NPS)* score of 55 from the 2024 webinar deliveries. * NPS is a metric used to gauge customer experience. Bain & Company, creators of NPS, suggest that a score above 50 is excellent Launched in January 2024, the Better Life Journey-For-All, available in 14 languages, provides all Reckitt employees with a holistic wellbeing assessment with the offer of one-to-one support from a coach-on-demand. Over 860 employees created wellbeing assessment profiles, and results were used to curate upcoming content for employees. All employees were able to access 1:1 sessions with a trained Hintsa coach. Participation was broadly similar to 2023 and we chose to pivot our provision in Q4 to address employee needs during transformation, by offering more targeted wellbeing consultations. 100% of respondents who provided feedback said they experienced lifestyle changes as a result of their coaching programme and 90% reported a 5/5 score on personal benefit. We launched a three-part Mental Health Curriculum - Better Mind, Better Life, curated specifically for Reckitt, in collaboration with doctors, executive performance coaches, clinical psychologists and our coaching partner - Hintsa Performance. The curriculum focuses on prevention and managing day-to-day and workplace stresses. The curriculum is available in four languages. We aim to improve our FTSE Corporate Mental Health Index score from 58% (Tier 3) to Tier 1 in the next 18-24 months. In addition, we tripled our trained Mental Health First Aider Cohort. Our Caregivers programme, refreshed in August 2024, shifted focus from 'surviving' to 'thriving' and utilising caregivers' unique skills for career and personal development. Over 4,000 colleagues attended these sessions, a 60% increase YOY. Reckitt is a 2024 Grocery Aid Silver award winner. Grocery Aid is a UK charity where FMCG companies and retailers unite to raise money, increase awareness, and support colleagues in need. Each year, awards are given to companies based on three criteria: Awareness, Fundraising, and Volunteering. In 2024, Reckitt UK achieved the following: - Awareness: Our HR team actively raised awareness across our sites, helping Grocery Aid support Reckitt employees in need - Fundraising: We supported events for major grocery retailers and specific Grocery Aid events, donating over £80k as a UK business - Volunteering: Reckitt representatives participated in the Grocery Aid D&I board, and Tarsila Calvo, our Head of UK Customer Supply, gave an inspiring talk at the Grocery Aid Live event ## Leadership Development and Learning In 2024, we conducted a study with EY to identify key challenges and strengths of 215 participating senior leaders. This was complemented by an aggregate analysis of internal 360 and psychometric results, engagement survey data, and a review of external research. The outcome was a report with six critical skills and recommendations, leading to an overhaul of our leadership programs in 2025/2026. We invested in leadership skills through Embark and Elevate, training 352 HR facilitators with a 98.6% net promoter score. Our Good to Great programme saw 24 leaders undergo a 12-month development. The Accelerate programmes for high potential women enhanced self-awareness and networks, with senior women receiving internal advocates. Our new learning platform, MyDevelopment, launched in November 2023, saw over 17,000 employees access it in 2024. We launched the Project & Change Learning Hub and the AI Hub, and we now have 10 Academies that are dedicated to deliver the Functional knowledge and skills required for roles across Reckitt. Furthermore, LinkedIn Library continues to be embedded across our Academies & wider Reckitt with 31,000 hours of LinkedIn Learning resources consumed in 2024. ## Talent, Performance, Engagement, and Recognition We updated our Talent and Performance approach to support Reckitt's evolution, reflecting industry best practices and internal feedback. We will introduce multi-rater feedback for greater collaboration and an enterprise mindset. Our updated talent ratings will recognise diverse career paths and development opportunities. These changes started in January 2025. All details are subject to works council consultation and/or employee notification in country. --- Strategic report Governance Financial statements Other information Reckitt Annual Report and Accounts 2024 116 # Directors' Remuneration Report continued ## Decision on 2024 bonus outcomes Reckitt's performance showed solid progress in 2024 despite weathering unforeseen challenges like the tornado. Our Group LFL NR growth is in line with guidance overall. We achieved our ambition of growing adjusted operating profit ahead of net revenue, enabling us to increase investment in our brands and grow earnings by 8%, supporting a record 2.7 billion in cash returned to shareholders through our dividend and continued share buyback programme. Given this performance and wider assessment as described above and in the Remuneration Chair's letter, including the adjustment made to the 2024 bonus to reflect the impact the tornado in July had on operations, the Committee concluded that the formulaic APP payout based on performance against targets is justified in this wider context. Under the Remuneration Policy, one-third of the annual bonus will be delivered by way of an award over Reckitt shares and deferred for a three-year period. | | Base salary (£) | X | Target bonus | X | Performance multiplier = | Total bonus (£) | = | Cash (£) | Deferred into shares (£) | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Kris Licht | 1,100,000 | | 120% | | 2.31x | 3,049,200 | | 2,032,800 | 1,016,400 | | Shannon Eisenhardt | 760,000 | | 100% | | 2.31x | 1,755,600 | | 1,170,400 | 585,200 | | Jeff Carr^{1} | 190,000 | | 100% | | 2.31x | 438,900 | | 292,600 | 146,300 | 1 The 2024 base salary for Jeff Carr is pro-rated for the period served as Executive Director ## Vesting of the 2022 LTIP The Reckitt LTIP is designed to align participants with shareholders through making awards with stretching performance conditions denominated in both performance share options and performance share awards. Kris Licht's award was made under his previous role and Jeff Carr's awards were granted under the previous Remuneration Policy on 20 May 2022. Shannon Eisenhardt did not participate in the 2022 LTIP as she was not an employee of the Company at the time of grant, however, as disclosed last year, she was granted a replacement award for performance shares lapsing due to leaving her previous employer, of which a portion was made subject to the 2022 Reckitt LTIP performance conditions to align her with Reckitt's performance. ## 2022 performance targets Vesting of awards under the 2022 LTIP was dependent on the performance conditions set out in the table to the right. ## Assessment of performance versus targets The chart below illustrates performance compared to the targets. As set out below, performance against performance measures over the three-year performance period results in an overall 68% vesting of the 2022 LTIP award. As stated earlier, the Committee has adjusted the 2022 LTIP for the impact of the Mount Vernon tornado in July to ensure that underlying performance was measured in a fair and consistent manner. In order to reflect underlying performance, ROCE is calculated on an adjusted basis for incentive plan purposes. Adjustments include: i) calculation on a constant currency basis; ii) exclusion of impairment impact so that management do not benefit from impairments; iii) adjustment for unbudgeted investment over the period to reflect strategic priorities; and iv) adjustment for actual M&A investment over the period. These adjustments are made to reflect underlying performance and to align with plan assumptions to ensure performance is measured on a like-for-like basis. These adjustments have been made for all LTIP participants. | Performance measure | Threshold (20% vesting) | Achieved | Maximum (100% vesting) | Vesting (% of total award) | | --- | --- | --- | --- | --- | | LFL net revenue growth (3-year CAGR) (40% weighting) | 2.0% p.a. | Actual 4.3% p.a. | 5.0% p.a. | 81% | | ROCE (final year) (25% weighting) | 13.2% | Actual 15.3% | 15.2% | 100% | | Relative TSR (25% weighting) |