Summary of Reckitt's Focus on Emerging Markets Presentation Company Overview - **Company**: Reckitt - **Focus**: Emerging Markets - **Key Personnel**: Chris Licht (CEO), Nitish Kapoor (President of Emerging Markets), Ryan Daley (Chief Category Growth Officer), Shannon Eisenhardt (CFO) Industry Insights - **Emerging Markets**: Largest geographic area for Reckitt, with significant growth opportunities - **Market Dynamics**: Some emerging markets have already reached advanced market status, while others are still developing Core Points and Arguments 1. **Growth Potential**: Reckitt has seen steady growth in emerging markets, transitioning from mid-single digit growth to high single digit growth over the last decade, with a recent surge to almost 14% growth in the last nine months [11][22][25] 2. **Brand Strength**: Reckitt has established strong, trusted brands in emerging markets, such as Dettol, Harpic, and Durex, which are leaders in their respective categories [14][15][21] 3. **Market Penetration**: The company has increased its market penetration significantly, with Dettol being used over a billion times a year and Harpic growing from GBP 500,000 in revenue in India 27 years ago to an expected GBP 250 million this year [14][17] 4. **Consumer Trends**: Rising incomes and new consumption habits in emerging markets are driving demand for Reckitt's products, with emerging markets expected to contribute 50% of world GDP by 2030 [27][29] 5. **Category Development**: Reckitt is focusing on both mature and nascent categories, with plans to expand into self-care and intimate wellness products, which are gaining traction in these markets [30][54] Additional Important Insights 1. **Local Expertise**: Reckitt's leadership in emerging markets has an average tenure of 21 years, providing deep local knowledge and continuity [9][10] 2. **Distribution Reach**: Products were available in over 10 million stores last year, with 125 million online orders shipped, indicating strong distribution capabilities [18] 3. **Innovation Pipeline**: Reckitt has a robust innovation pipeline ready to be deployed in emerging markets, allowing for quick adaptation to consumer needs [25][32] 4. **Social Impact**: The company is actively involved in societal change, such as improving hygiene practices in India, which has led to a significant increase in household penetration for Harpic [44][47] 5. **Healthcare Partnerships**: Reckitt is engaging with healthcare professionals and policymakers to drive awareness and education about its products, particularly in addressing antibiotic overuse [57][61] Conclusion Reckitt is well-positioned to capitalize on the growth opportunities in emerging markets through its strong brand portfolio, local expertise, and innovative strategies. The company aims to sustain high single-digit growth by leveraging rising incomes and evolving consumer habits while also contributing positively to societal health and well-being.

Trade Policy Impact - The United States has implemented new tariffs, with a 10% baseline tariff on most imports and up to 145% on Chinese goods, significantly affecting global trade dynamics [1] - The elimination of the "de minimis" exemption for shipments under $800 impacts low-cost Chinese e-commerce platforms like Temu and Shein [1] - China has responded by suspending exports of critical minerals, escalating the trade conflict and increasing uncertainty in global markets [1] Economic Consequences - Previous tariffs from 2018 to 2020 resulted in over $80 billion in additional costs for American businesses and consumers, raising concerns about price increases and margin compression across industries [2] - The reintroduction of tariffs in 2025 has raised alarms in the corporate sector, particularly regarding the implementation timeline and potential retaliatory measures from trade partners like China [2] Pharmaceutical Sector - The U.S. government is preparing to impose tariffs on select pharmaceutical imports from countries like China and India, raising concerns about increased costs and supply chain disruptions [3] - Pharmaceutical companies, reliant on international manufacturing, are particularly vulnerable to trade disruptions, leading to a cautious sentiment in the industry [3] Medical Device Sector - The medical device sector is identified as a strong investment opportunity, driven by technological advancements, demographic trends, and increasing demand for healthcare solutions [4] - The global medical devices market was valued at $518.46 billion in 2023 and is projected to grow to over $886.80 billion by 2032, with a CAGR of 6.3% [5] Investment Opportunities - Amid tariff uncertainties, investors are focusing on undervalued stocks with strong balance sheets and resilient performance, particularly in the medical device sector [6] - Promising undervalued stocks for 2025 include Cencora, Inc. (COR), Hims & Hers Health (HIMS), and Prestige Consumer (PBH) [6] Cencora, Inc. - Cencora is a major pharmaceutical services company with a diverse portfolio, including biologics and complex injectables [7] - The company has launched Accelerate Pharmacy Solutions to optimize operations for healthcare customers and has acquired Retina Consultants of America to enhance its specialty leadership [8] - Cencora's stock trades at a P/S ratio of 0.17, lower than the Medical Services market's 0.40, with an expected 11.6% growth in 2025 earnings [9] Hims & Hers Health - Hims & Hers Health offers subscription-based telehealth services and aims to simplify healthcare through a digital-first platform [10] - The company has a P/S ratio of 2.47, discounted compared to the industry's 4.03, with a projected 58% growth in 2025 earnings [11] Prestige Consumer - Prestige Consumer provides over-the-counter healthcare products and has a strong presence across various retail channels [12] - The gastrointestinal product category is a significant growth driver, representing nearly one-fifth of North American sales [13] - The stock trades at a P/S ratio of 3.43, lower than the industry's 5.32, with a recent earnings surprise of 5.17% [16]

Core Insights - Prestige Consumer Healthcare (PBH) is focused on brand building and portfolio expansion through strategic acquisitions, which is expected to drive growth in upcoming quarters [1][5] - The company has experienced a share price increase of 19.3% over the past year, outperforming the industry and S&P 500 [1] Company Overview - PBH has a market capitalization of $4.17 billion and reported an earnings surprise of 5.17% in the last quarter [2] - The earnings yield for PBH stands at 5.4%, significantly higher than the industry's 0.3% [2] Growth Drivers - The strength of PBH's diversified portfolio, which includes well-recognized consumer brands, has contributed to sales growth and long-term profitability, with core brands generating nearly 58.6% of total revenues in fiscal 2024 [3] - The gastrointestinal (GI) product category is a significant contributor, accounting for nearly 20% of North American sales, with brands like Dramamine, Fleet, and Gaviscon leading the category [4] - The company is also seeing growth in the e-commerce channel, reflecting a long-term trend towards online purchases [4] Strategic Acquisitions - PBH has expanded its brand portfolio through both organic growth and acquisitions, including the purchase of TheraTears and other over-the-counter brands from Akorn Operating Company LLC, as well as Hydralyte from Hydration Pharmaceuticals Trust [5] Financial Concerns - As of the end of the fiscal third quarter, PBH had a long-term debt of $996 million and cash and cash equivalents of $51 million, with a debt-to-capital ratio of 35.8% [7] - The company generated approximately 14.8% of its fiscal 2024 revenues from international business, making it susceptible to currency fluctuations [9] Earnings Estimates - The Zacks Consensus Estimate for PBH's fiscal 2025 earnings per share has increased by 0.4% to $4.52, with revenue estimates at $1.13 billion, reflecting a 0.5% increase from the previous year [10]