Newly-rebranded Reckitt makes 'good start' in first quarter

The FTSE 100 consumer products giant said the growth was driven by a focus on execution, continued investment and strong demand for its brands.

It said that at the moment, its outlook for 2021 remained unchanged, with the company on track with its medium-term goals.

In its hygiene division, Reckitt reported like-for-like growth of 28.5% to £1.64bn, led by “very strong” demand and white space expansion for Lysol, with double-digit growth in Finish, Air Wick and across most of its regions.

Health saw a like-for-like decline of 13% to £1.12bn due to lower demand for cold and flu relief products, and reflecting “significant” pantry loading in the first quarter of 2020, although there was strong growth in sexual wellbeing and Gaviscon.

Its nutrition operations turned in a decline of 7.4%, reflecting US IFCN pantry loading in the comparative period, and ongoing difficult market conditions in Greater China, particularly Hong Kong.

Reckitt reported continued successful execution against its four growth drivers, being increased penetration, market share gains, new places and new spaces.

Its e-commerce sales increased 24% to now make up 13% of group net revenue, as a result of increased investment, while its strategic review in China IFCN was progressing, with an update to be provided “when appropriate”.

The company also unveiled its new corporate brand during the period, dropping ‘Renckiser’ to now trade as Reckitt.

It also released its sustainability road map, with the targets including a 50% reduction in its carbon footprint and 50% of net revenue to come from “more sustainable products” by 2030, backed by a £1bn investment over the next 10 years.

“Demand for Lysol and Dettol continues to be strong as consumers remain vigilant to the spread of the [Covid-19] virus and see use of our products, and improved hygiene habits, as a way of protecting their health and regaining normality in their lives,” said chief executive officer Laxman Narasimhan.

“As is to be expected, the underlying drivers of near-term demand for disinfectant products are dynamic, with countries around the world at different stages of the pandemic, and we are therefore closely tracking shifts in consumer behaviour to understand supply and demand trends.

“Our health business is seeing improved trading in sexual wellbeing, very strong growth in Gaviscon and improved execution overall.”

Meanwhile, Narasimhan said it expected the difficult current market conditions for its cold and flu relief products to improve over time.

“In nutrition, trading continues to be strongly affected by the closure of the Hong Kong border, although we are beginning to annualise the impact of this.

“IFCN performance in the US and Latin America remains strong and we are seeing improved trends in parts of ASEAN.

“Our portfolio is constructed to benefit pre- and post-Covid, and the inherent balance in our portfolio leaves us favourably placed to perform well in both the short- and longer-term.”

Laxman Narasimhan said looking ahead, Reckitt expected continued strong demand for its brands, better execution, with the benefits of recent investments feeding through in the form of more focussed innovation, increased capacity, and better customer service.

“There is still much to do, and the actions we are taking make Reckitt a stronger, more competitive, business each day.

“We have the right team in place, and our portfolio is increasingly well-positioned to benefit from attractive market fundamentals.

“We continue to be confident in the outlook for both 2021 and the medium-term.”

At 0801 BST, shares in Reckitt Benckiser Group were down 0.62% at 6,545p.