Reckitt Benckiser boosted by higher marketing spend

Reckitt Benckiser says that its strategy of focusing marketing spend on “power brands” such as Dettol, Vanish and Cillit Bang helped lift profit by 13% in 2010.

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The household goods maker posted operating profit of £2.13bn in 2010 driven by a strong performance in emerging markets. Revenue increased 7% to £8.5bn.

An 18% increase in revenue from developing markets offset a weaker performance in Europe, where revenue fell 1%.

The company, which completed the acquisition of Durex and Scholl owner SSL in November, has committed to growing margins through increased marketing spend and product innovation.

Total marketing investment increased in 2010, the company says, while pure media spend rose 3%. Spend on advertising and promotion was 10.7% of net revenue in 2010.

The company was the ninth biggest advertiser in the UK last year, according to Nielsen, spending £75m.

Bart Becht, chief executive officer, says that the profit and revenue gains are “evidence that our strategy of focusing on our power brands, behind new product initiatives and high levels of marketing investment, is one that continues to deliver.”

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