Consumer goods giant Reckitt saw its like-for-like sales climb 6.0% during the first half of 2023, with each of its three business units delivering growth.
The results were lifted by price / mix improvements of 10.4% to counter higher operating and raw material costs. Volume declined 4.4% as some shoppers switched to cheaper alternatives, although the group noted that it had continued to see improving trends from previous quarters, with a recovery expected in the second half of the year.
In the second quarter period, the group’s revenue growth was a better-than-expected 4.1%, with price / mix improvements of 8.4% offset by a volume decline of 4.3%.
Over the half-year, Reckitt’s Hygiene unit saw sales increase 3.6%, with growth driven by its Finish, Harpic, Vanish and Air Wick brands, and new product innovation.
In the Health division, revenues climbed 8.8%, led by its OTC portfolio and Intimate Wellness brands with an improving performance in China.
Meanwhile, the Nutrition business saw sales increase 5.3%, with strong market share gains in North America and mid-single digit growth in Latin America, against the lapping of tough prior year comparatives related to the infant formula supply disruption in the US during 2022.
Reckitt retained its 2023 target range of 3% to 5% like-for-like revenue growth. The company also said it expected adjusted operating margins to be slightly above 2022 levels.
Rival Unilever yesterday raised its forecast for revenue growth for the year to over 5% after its results were boosted by higher prices. However, its CFO noted that inflation had now peaked, with the business shifting its focus towards volume growth.
Reckitt’s interim chief executive Nicandro Durante said today that the company was cautious about passing on further price rises to inflation-hit consumers in Europe.
“With new pricing for this year, we are being extremely cautious [in Europe] because we understand consumers are under stress,” he said.
Reckitt’s results marked the first official appearance of its incoming Chief Executive, Kris Licht, who is set to take over later this year.
“We look to the future with confidence under Kris Licht’s leadership,” said Durante. “Amidst a backdrop of challenging market conditions and uncertainty, the business has strong momentum, yet with an opportunity to further strengthen our execution, optimise our cost base, and deliver improved returns to shareholders.”
