Reckitt Benckiser: Dettol demand has spiked due to coronavirus worries
Consumer goods giant Reckitt Benckiser said today it had seen a spike in demand for its Dettol and Lysol disinfectant brands in the wake of the coronavirus outbreak.
Pictures of the Dettol label went viral recently because of claims it can kill the coronavirus.
Reckitt Benckiser cautioned that as Covid-19 was a novel virus it had not been tested with Dettol, but said: “We would expect our Dettol products…to be effective against the new strain.”
The company, which announced its results for the full year today, said it was too early to fully assess the impact of the coronavirus outbreak on its business but was seeing disruption at retailers, and in distribution and supply chains.
New chief executive Laxman Narasimhan said today that the company would take a £5bn writedown on its 2017 acquisition of baby formula milk-maker Mead Johnson which was valued at the time at $17bn (£13bn).
The writedown dragged the company to a £3.6bn loss for the period.
Narasimhan also announced the results of a strategic review that will involve the investment of £2bn into the business over three years in an attempt to increase revenue growth.
The review also split the business into three main divisions: hygiene, health and nutrition.
Net revenue for the year was £12.8bn with growth of 0.8 per cent on a life-for-like basis.
Narasimhan said: “We ended 2019 broadly in line with our expectations for net revenue growth and adjusted operating profit from October, as our hygiene business delivered another stable performance. Health remained weak from a net revenue perspective, but consumption and market share trends are encouraging.”
Joe Healey, investment research analyst at the Share Centre, said: “From a future strategic standpoint, the restructuring makes sense as it’s clear the business needs a face-lift especially in markets such as China where the group sees longer-term potential.
“All in all, these results on an adjusted basis were generally in line. The business still faces short-term uncertainties including the Covid-19 disruption in their Asian markets alongside tougher market environments globally presenting the group with a number of hurdles to overcome.”
Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said: “In theory Reckitt has a lot of the right ideas, but it’s now about execution. Twenty-twenty has been pegged as a transitional year, and is where the hard work begins. We can’t rule out further ups and downs – it takes a lot of effort to turn a giant of Reckitt’s size around.”
Shares rose 2.3 per cent to 6,243p.