23rd Apr 2025 08:50
(Alliance News) - Reckitt Benckiser Group PLC on Wednesday backed annual guidance, despite a sluggish first quarter, and said the trade tariffs imposed by the US will have a limited impact on its business.
The Slough, England-based consumer products company said like-for-like sales rose 1.1% in the first quarter, below company-compiled consensus for growth of 1.4%.
In response, shares in Reckitt Benckiser were 5.0% lower at 4,701.000 pence in London on Wednesday morning. The wider FTSE 100 index was up 1.4%.
Net revenue fell 1.6% to GBP3.68 billion in the first quarter from GBP3.74 billion a year before.
Emerging Markets saw LFL growth of 11%, led by Intimate Wellness and Germ Protection, with double-digit percentage growth in China, and high single-digit growth in India.
But in Europe, like-for-like sales fell 1.7%, with 3.0% price/mix improvement offset by a 4.7% volume decline.
In the US, LFL sales fell 0.9%, with Reckitt highlighting a "volatile" macro-economic backdrop and "slowing consumer confidence".
Reckitt said Lysol Laundry and Air Sanitizer drove category growth in North America, as did Durex condoms in China, while a positive roll-out of first-to-world Durex nitrile condoms supported Europe.
The company said 'Core Reckitt' LFL revenue rose 3.1%, driven by Germ Protection with 7.5% growth, and Intimate Wellness with 17% growth. Volume growth of 0.3% for 'Core Reckitt' was driven by a strong performance in Emerging Markets.
In 2024, Reckitt announced plans to focus on a portfolio of "high-growth, high-margin Powerbrands".
It said it would exit Essential Home and consider options for the Mead Johnson nutrition business, deemed as non-core.
Chief Executive Officer Kris Licht said it was a "solid" first quarter, driven by 'Core Reckitt' with continued strong growth in Emerging Markets. "We maintain our outlook for full year 2025 whilst recognising the more challenging macroeconomic outlook."
Reckitt expects full-year group LFL net revenue growth of 2% to 4% and is targeting 3% to 4% LFL net revenue growth in 'Core Reckitt', with a relatively balanced delivery across the year.
In the second quarter, the firm expects 'Core Reckitt' growth to be led by Emerging Markets with mid-to-high single-digit percentage growth, but with low single-digit growth in Europe and a low single-digit decline in North America.
In the second half, growth is expected to be more balanced across all three areas with North America returning to growth, the company said.
Reckitt said it is "closely monitoring" the evolving situation around global tariffs and the potential impacts on our supply chain and cost base.
Latest modelling identifies an "immaterial annualised impact" on its cost of goods sold, which "we are confident in mitigating" over the short to medium-term, Reckitt said.
Reckitt said it is continuing to progress the separation of Essential Home.
"We continue to seek an exit in 2025, whilst recognising that market conditions may impact this time-frame," the company said.
In the first quarter, Essential Home LFL sales declined 7.0%.
Reckitt said as of last Thursday, it had completed GBP815 million of its GBP1 billion share buyback.
By Jeremy Cutler, Alliance News reporter
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