Reckitt Benckiser (RB) upgraded its full-year sales forecast today after posting a bigger-than-expected rise in quarterly sales thanks to consumers doing more cleaning during the pandemic.
Following a robust first-half, the British group revealed that its total third-quarter like-for-sales had risen 13.3% to £3.51bn, with both its main divisions performing well.
The Hygiene unit saw like-for-like growth of 19.5%, driven by its Lysol, Finish, Harpic, and Air Wick brands, with double-digit growth in most markets. However, demand for its Vanish brand remained weak due to ‘stay at home’ behaviour impacting demand for stain removal products.
RB’s Health division delivered growth of 12.6% with sales of its Dettol disinfectant brand surging up 50% in the quarter. The group also stated that demand had picked for its Durex brand as social distancing regulations were relaxed. However, its OTC portfolio saw revenue decline 10% due to less consumer demand during stay-at-home conditions and lower retailer demand as a result of good inventories ahead of the new cough and cold season.
Meanwhile, sales in its Nutrition unit rose 4.1% after an improved performance from its infant and child nutrition products following a slow start to the year.
RB revealed that its £1.3bn productivity programme was on track with year-to-date savings of £300m, ahead of plan. It also stated that its plan to rejuvenate sales following years of lacklustre growth may now be achieved a year earlier than expected.
“While there is still more work to do, I’m pleased to say that RB today is in much better shape than it was a year ago,” said Chief Executive Laxman Narasimhan.
“Our improved execution and the investments in capability and growth, will enable us to achieve our revenue growth target a year earlier than expected, and with greater certainty.”
He highlighted that some virus-related behaviour changes seemed to be lasting: “We’ve seen in countries where the pandemic is more advanced that some of this behaviour sustains … [that’s] giving us more confidence in the underlying growth of our categories.”
The company raised its full-year revenue outlook, saying it now expects a low double-digit increase, up from a previous forecast of high single-digit growth.
Last month, it was reported that RB was preparing to sell some of its non-core personal care brands, with the likes of Beiersdorf, Henkel and Unilever named as possible buyers.
Reckitt shares were up around 2% in early trading today having gained over 17% this year.
