Reckitt confirmed the reorganisation of its divisions today as part of a strategy to accelerate growth after a year of mixed results.
The owner of brands such as Durex, Dettol and Nurofen saw its like-for-like revenue increase 1.4% to £14.17bn over the 12 months to 31 December, with operating profit on an adjusted basis up 3.0% to £3.48bn.
Its Hygiene and Health divisions saw sales growth of 4.2% and 2.1%, although its Nutrition unit was down 7.3% after its supply chain was impacted by a tornado earlier in the year.
The group’s performance improved in the fourth quarter, with sales up 4.6%. However, this was down on expectations of 5.3% growth after a late flu and cold season dented demand for its OTC medicines. The Hygiene unit grew 5.5%, Health was up 2.4% (+8.0% excluding seasonal OTC), and the Nutrition unit saw growth of 8.4% after restocking post the tornado in the third quarter.
As part of its strategic plan, Reckitt confirmed that it was now reorganising its business into three reporting units: Core Reckitt (71% of group net revenue), Essential Home (14%), and Mead Johnson Nutrition (15%). The company said it was on track to exit Essential Home by the end of 2025, with it also “evaluating opportunities” for the Nutrition business.
For 2025, Reckitt is forecasting overall like-for-like revenue growth of 2% – 4%, marginally less than expected, with progress weighted towards the second half of the year. The group noted its ‘Fuel for Growth’ programme was expected to help drive adjusted operating profit ahead of revenue growth.
“We are reshaping Reckitt into a more efficient, world-class consumer health and hygiene company, focused on a portfolio of high-growth, high-margin Powerbrands,” said Chief Executive Kris Licht.
The company stated that it was targeting 3% – 4% like-for-like growth in its Core Reckitt unit, with a balanced delivery across H1 and H2. However, it noted that first-quarter sales would be flat in Europe, while emerging markets would see mid-to-high single-digit growth.
In North America, Reckitt expects low-single-digit growth in the current quarter, partially driven by retailer destocking and slower than anticipated ramp-up in new capacity to meet stronger demand for its Lysol brand.
It added: “We expect low-single-digit LFL net revenue growth in Essential Home and Mead Johnson Nutrition in 2025, with both being second-half weighted. Both businesses will show LFL net revenue declines in H1.”
Shares in Reckitt were up over 3% in early trading today.
