24th Apr 2024 09:09
(Alliance News) - Reckitt Benckiser Group PLC on Wednesday reported a strong start to 2024 for its Hygiene business, offsetting a significant decline in Nutrition and allowing the company to maintain its guidance for annual revenue and profit growth.
The Slough, England-based consumer goods maker also got some growth from its Health division. Shares were up 4.9% to 4,457.33 pence early Wednesday in London.
Reckitt reported 1.5% net revenue growth on a like-for-like basis in the first quarter of 2024 from a year before. This was composed of a 0.5% decline in volume that was more than offset by a 2.0% increase from pricing and sales mix.
Within this, the Hygiene business recorded the stand-out revenue performance, with 7.1% like-for-like growth, thanks to a 2.9% rise in volume and a 4.2% benefit from price and mix.
By contrast, the Nutrition division suffered a 9.9% decline in like-for-like net revenue, almost entirely the result of lower volume, which was down 9.4%. Reckitt said the lower Nutrition revenue was the result of temporary market share gains due to competitor supply issues falling away.
The Health division was more stable, with 1.0% like-for-like growth in the first quarter, thanks to a 1.1% benefit from price and mix.
"We have delivered a good first quarter," said Chief Executive Officer Kris Licht. "Following a period of price-led growth, we are now returning to a more balanced contribution from price, mix and volume. We grew volumes in many of our 'powerbrands' in the quarter, including Lysol, Dettol, Durex and Finish, as well as our non-seasonal [over-the-counter] portfolio."
Total net revenue was GBP3.74 billion, down 4.6% annually on an IFRS basis. Hygiene was the largest contributor and best performer, with net revenue of GBP1.61 billion, up 1.1%. Health contributed GBP1.54 billion, down 6.4%, and Nutrition GBP591 million, down 14%.
Reckitt said it is on track for its 2024 revenue and profit targets. These are for like-for-like net revenue growth of 2% to 4%, with adjusted operating profit growing ahead of net revenue growth. Net revenue growth will be led by mid-single-digit percentage growth for the Health and Hygiene businesses, the company said, offset by a mid- to high-single-digit decline for Nutrition. Growth will be second-half weighted, it said.
For 2023, Reckitt reported adjusted operating profit of GBP3.37 billion on net revenue of GBP15.61 billion.
By Tom Waite, Alliance News editor
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