Reckitt Benckiser's 1Q Hygiene Growth Offset Weak Health Performance -- Update
April 28 2021 - 4:17AM
Dow Jones News
By Matteo Castia
--Reckitt Benckiser first-quarter revenue fell
--Decline in the health and nutrition units offset growth in the
hygiene business
--The company said it will invest GBP1 billion to reach its
sustainability targets in the next decade
Reckitt Benckiser Group PLC said Wednesday that net revenue in
the first quarter slightly fell despite strong results from its
hygiene unit amid the coronavirus pandemic.
The consumer-goods company--which houses Dettol, Harpic and
Durex among its brands--said first-quarter net revenue fell 1.1% on
the year, but rose 4.1% on a like-for-like basis. Total revenue in
the period was 3.51 billion pounds ($4.88 billion).
Digital sales rose 24% on the year during the quarter and now
represents 13% of group net revenue, it said.
The hygiene division continued to progress and generated net
revenue growth of 21% on year, or 29% on a like-for-like basis, led
by strong demand and expansion for Lysol, with double-digit growth
in Finish, Air Wick and across most regions. Revenue in the first
quarter for the hygiene division was GBP1.64 billion.
"Demand for Lysol and Dettol continues to be strong as consumers
remain vigilant to the spread of the virus," the company said.
However, net revenue from both the health and nutrition
businesses was in decline, falling 16% and 12% on the year,
respectively, or 13% and 7.4% respectively on a like-for-like
basis.
First-quarter revenue for the health business and the nutrition
division came in at GBP1.12 billion and GBP742 million,
respectively.
"An exceptionally weak cough, cold and flu season during the
quarter, with incidences estimated to be down by around 90%, has
resulted in a significant reduction in demand for a number of our
[over the counter] brands such as Mucinex, Nurofen and Strepsils,
as well as Airborne, our immune support brand," Reckitt Benckiser
said.
The company said it expects business conditions to improve for
its health division, as the easing of pandemic restrictions, the
return to schools and the overall relaxation of social distancing
is likely to drive a stronger cough season in 2021 and 2022,
boosting demand for its immune support products.
Similarly, looser stay-at-home policies are likely to generate
an improvement in the sexual-wellbeing unit, it said.
The company said it expects like-for-like revenue growth for the
remainder of 2021 to be flat to 2%, and that it remains on track to
achieve its medium-term goals, with anticipated mid-single digit
revenue growth.
Reckitt Benckiser said it expects to invest GBP1 billion over
the next decade to boost its sustainability position. Its targets
include a 50% reduction in carbon footprint during the period.
Shares at 0725 GMT were down 125 pence, or 1.9%, at 6,461
pence.
Write to Matteo Castia at matteo.castia@dowjones.com
(END) Dow Jones Newswires
April 28, 2021 04:02 ET (08:02 GMT)
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