Reckitt Benckiser Group plc

Core Reckitt and Mead Johnson like-for-like net revenue grew 2.6% in the half, with Core Reckitt up 2.7% and Mead Johnson up 2.0%; Q2 was stronger at 4.2% for Core Reckitt and 7.2% for Mead Johnson. Group like-for-like net revenue growth was 2.6% in H1 and 4.7% in Q2. Core Reckitt and Mead Johnson gross margin was 60.5%, down 50 bps year on year; Core Reckitt gross margin was 60.9%, down 110 bps year on year. Adjusted operating margin was 23.6%, down 100 bps, and adjusted EPS was 152.1p, down 9.7%. Free cash flow was GBP 419 million and net debt-to-EBITDA was 2.5x. For 2026, management reiterated Core Reckitt like-for-like net revenue growth of 4% to 5% and adjusted operating profit margin of 24.9% to 25.6% for Core Reckitt and Mead Johnson.

Kris Licht emphasized that the business is becoming simpler, sharper, and better executed, with Q2 showing broader-based improvement across all areas and categories. He repeatedly pointed to innovation as a key driver, citing Dettol Activ Botany, Vanish Turbo, Durex Intensity, Lysol Air Sanitizer extensions, and Mucinex 12 Hour Cold & Fever as examples that are landing well and supporting premiumization. His tone was constructive and confident, while still acknowledging external volatility in the Middle East, commodity costs, and continued work ahead on execution and supply chain mitigation.

Shannon Eisenhardt highlighted that H1 adjusted operating margin of 23.6% was ahead of expectations because Middle East gross margin headwinds were less severe than feared and Fuel for Growth savings arrived earlier than expected. She said Core Reckitt and Mead Johnson gross margin was 60.5%, down 50 bps, while Core Reckitt gross margin was 60.9%, down 110 bps; she also noted adjusted EPS of 152.1p, down 9.7%, and free cash flow of GBP 419 million with 42% cash conversion. On capital allocation, she said the company returned over GBP 3 billion in the period, repurchased GBP 600 million of shares, paid an GBP 800 million full-year dividend, received GBP 1.6 billion from the Essential Home transaction, and launched a new GBP 500 million 12-month buyback. She also reiterated the Fuel for Growth target of fixed costs below 19% of net revenue by end-2027 and said the program should cost around GBP 1 billion in total, including around GBP 350 million in 2026.

Analysts focused on the second-half sales ramp, North America destocking, Europe recovery, OTC incidence assumptions, buyback size, and margin drivers. Management said the full-year 4% to 5% sales guide does not assume the Russia transaction closes, that Q1 was the anomaly, and that Q2’s balanced growth and strong innovation pipeline support a stronger back half with some back-end weighting into Q4. On North America, Kris Licht said destocking was real but not likely to become a sustained trend, while Shannon pointed to a weaker Q3 comp from prior-year shelf resets and a stronger Q4. On Europe and pricing, management said recovery should come from improved execution, innovation, selective pricing, and softer comps, but only modest growth is expected.