23rd Oct 2024 08:20
(Alliance News) - Reckitt Benckiser Group PLC on Wednesday said its third-quarter business was in line with guidance, with revenue in its Health and Hygiene arms improving, though there was a decline in the Nutrition division amid "supply-related challenges".
Shares in the company were 2.5% higher at 4,888.00 pence early Wednesday in London. They were among the best FTSE 100 performers, the wider index up just 0.1%.
The consumer goods firm, with brands such as Air Wick and Dettol in its stable, said net revenue in the third-quarter fell 4.0% on-year to GBP3.46 billion. On a like-for-like basis, it weakened 0.5%.
Hygiene revenue fell 1.4% on a reported basis but increased 2.1% like-for-like. Health revenue was down 0.4%, but up 3.2% like-for-like.
Reckitt's hygiene brands include Vanish and Harpic. Among its Health products are Nurofen and Strepsils.
In Nutrition, which includes the Enfamil baby formula products, revenue dropped 21%, and 17% like-for-like.
Nutrition's performance was "primarily impacted by around GBP100 million of supply-related challenges from the Mount Vernon tornado in July, which reflects a better-than-expected recovery of inventories."
In July, the firm said the tornado in Indiana struck a third party warehouse "which sustained significant damage". The site in Mount Vernon is "important" for the Mead Johnson Nutrition business, Reckitt explained in July, as it houses a "mix of raw materials and finished products".
Reckitt on Wednesday said the tornado hurt Nutrition sales less than initially expected.
Reckitt is on track to meet full-year targets, it said. All units are "well placed to deliver strong LFL net revenue growth in Q4".
Reckitt earlier this year plans for a wide-ranging shake-up. Reckitt plans to focus on a portfolio of 'powerbrands', which it defined as high-growth, high-margin businesses that it thinks have the potential for long-term growth.
These include Mucinex, Strepsils, Gaviscon, Nurofen, Lysol, Dettol, Harpic, Finish, Vanish, Durex and Veet.
The company plans to sell non-core home care brands including Air Wick, Mortein, Calgon and Cillit Bang.
The Times last week Thursday had reported Apollo Global Management, KKR and Clayton, Dubilier & Rice are among the buyout firms mulling a bid for the home care brands porfolio. Reckitt adviser Morgan Stanley had sent possible suitors a "teaser" document, The Times reported.
Reckitt Chief Executive Officer Kris Licht said Wednesday: "Our Q3 delivery is in line with our guidance at the half year. Health delivered sequential improvement in the quarter and Hygiene delivered a solid quarter of growth despite a more competitive market backdrop in developed markets. Nutrition was impacted by the Mount Vernon tornado in July, which impacted sales to customers in the quarter, but to a lesser extent than we initially expected.
"We are moving at pace on the execution of reshaping Reckitt through sharpening our portfolio, simplifying the organisation and improving shareholder returns. I look forward to providing further details on our new operating model and future targets with our FY24 results update."
Licht earlier this month completed his first year at the helm of the FTSE 100 listing. He assumed the role of CEO at the start of October 2023, replacing Nicandro Durante. He was named as the next CEO in April of last year, however.
By Eric Cunha, Alliance News news editor
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