Reckitt Benckiser

  • The consumer goods company reported its biggest quarterly sales growth ever,   thanks to robust results from its hygiene operations. The hygiene revolution   is in full swing as a result of the Covid-19 pandemic, and seems unlikely to   turnaround any time soon.

  • Global pressures, climate change and urbanization are some of the   reasons resulting in the need for improved hygiene products and services,   with a growing demand for self-care products too.

  • Reckitt Benckiser is a FTSE100 company headquartered in the UK comprised   of three operating divisions: Hygiene, Health, and Nutrition.

  • The powerful brand portfolio spans 200 countries with names such as   Dettol, Iysol, Durex, Airwick, Gaviscon, and Finish.

  • The major profit drivers in these results were disinfectant products   in the Hygiene businesses, the largest division, with like-for–like growth up   19% in the third quarter. Health had like-for–like growth of 12.6%, driven by   strong demand for Dettol and Durex. Nutrition, the smallest business unit,   showed like-for–like growth of 4.1%, with improved performance from infant   formula in the third quarter.

  • From a group perspective third quarter growth was up 13.3%, whilst   sales in new jurisdictions, and product innovation had a positive impact.   e-Commerce sales rose by 45% in the third quarter, and is estimated to be 12%   of group net revenue. Savings of £300 million were achieved which was ahead   expectations, driven by productivity gains. The group profit outlook appears   positive with Like-for-like net revenue expected to grow in low double digits   versus the previous high single digits, which is part of the strategy of   rejuvenating sustainable growth.

  • An example is that of increased market penetration in the extremely   competitive US market, where demand for hygiene products used by households   has grown from 45% to 50%.

  • The adjusted operating profit for the first half of 2020 was up   14.5% compared to that in 2019, with adjusted margins up 90 basis points and   Free Cash Flow up 104.7%. This was thanks to tailwinds from Covid-19   accelerating growth in the third quarter, spurred by higher investment,   product innovation and expanded footprint.

  • Reckitt Benckiser has an extensive and powerful range of brands, having all of the ingredients to begin a new era of renewed growth, as reflected in the strong results for the half year to June 2020, and the sustained follow through into the third quarter ended September 2020.

Reckitt Benckiser