Reckitt Benckiser shares down even as sales return to growth
Reckitt Benckiser posted stronger numbers following a flat 2017 and said it is on track for solid revenue growth this year.
Strong growth for brands including Durex, Harpic and Finish helped to offset the sluggishness of Scholl and the aftermath of a public health scandal in Korea.
Shares int he company were down over five per cent in early trading.
The figures
For the first quarter, the UK-based company said that like for like growth was two per cent, driven by four per cent growth in the hygiene and home division.
The group said it was on track to achieve total revenue growth of between 13 and 14 per cent for the year, with two to three per cent like-for-like sales growth.
Like-for-like sales were down one per cent in Europe, Australia and New Zealand.
Why it’s interesting
There was no mention of the company’s recent exit from talks to buy Pfizer’s consumer health unit, but analysts said this could help to renew focus.
“With the overhang of a Pfizer consumer health deal now removed, focus returns to RB’s organic growth story and Mead synergies,” said analyst Robert Waldschmidt,
This was the first update since the group reorganised its divisions into just two segments rather than three.
In health, Durex was one of the strongest performances, growing in most markets especially in China. But Scholl continued to drag, an issue which the chief executive said the company was addressing.
This all marked an improvement from last year when the company’s growth was flat and it dealt with the aftermath of a scandal in South Korea relating to one of its products which was linked to the deaths of 100 people.
What Reckitt Benckiser said
CEO Rakesh Kapoor said: “Our priority remains organic growth under our new focussed organisation structure. The integration of MJN is going well.
“We have work to do in parts of our Health portfolio, particularly Scholl. I am very pleased to see such energy, focus and a strong start by the Hygiene Home team.”
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