24th Apr 2015 09:49
LONDON (Alliance News) - Reckitt Benckiser Group PLC on Friday reported like-for-like sales growth across the business of 5% in the first quarter on a year earlier, with solid performances in its health and hygiene franchises slightly offset by like-for-like sales declines in its home and portfolio brands businesses.
The FTSE 100-listed consumer goods group, which makes brands ranging from cleaning products such as Cillit Bang to ibuprofen brand Nurofen, said like-for-like net revenue growth in its health business was 13% in the quarter, with strong growth for its Nurofen, Gaviscon, Strepsils, Durex and Airborne brands and with its consumer health franchise generally boosted by a strong cold and flu season.
Like-for-like sales rose 3% on year in its hygiene division, with good growth in its Dettol and Harpic brands. Growth was slightly held back in the division by the stocking of its Power & Pure brand in several markets have started in the comparable quarter the year earlier, along with promotional pressure this year.
But like-for-like sales declined 1% in its home arm in the quarter, with good growth of its Vanish products offset by a slow start for its Air Wick brands. Like-for-like sales also declined 3% in its portfolio brands division, which predominantly includes laundry detergents and fabric softeners, with both of those product lines putting up a weak performance. Its food products performed well, boosted by an early Easter, with like-for-like sales growth of 4%.
The company posted positive like-for-like sales in each of the markets in which it operates, with sales growth of 4% in Europe and North America and 6% growth in developing markets. However, it did note that despite a strong first quarter in Russia, its outlook remains uncertain due to "current market and currency issues", while Latin America and Asia experienced a "softer" performance due to challenging market conditions.
Last year Reckitt commenced a long-term cost containment project, "Project Supercharge", to focus on reducing cost and driving efficiencies, as well as making the business more flexible.
On Friday, it said that "whilst early days, Project Supercharge has been fully embraced by the organisation creating a more efficient and effective RB, and will deliver sustainable cost savings".
Reckitt had said in February that its cost containment initiatives will drive sustainable operating margin expansion off its 2014 base, and hopefully deliver between GBP100 million and GBP150 million in savings a year.
Reckitt said it remains on track to meet its full-year target of 4% like-for-like net revenue growth and to improve its margins.
Shares in Reckitt were trading down 0.4% at 5,978.00 pence Friday morning.
By Karolina Kaminska; [email protected] @KarolinaAllNews
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