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Reckitt Benckiser's 1Q Hygiene Growth Offset Weak Health Performance — Update

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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