Reckitt Benckiser (RB) has revealed that its overall like-for-like sales rose only 1% in the first quarter of the year as a mild winter in some key markets softened demand for its cold and flu medicines.
Like-for-like sales in its main Health unit were flat, with reported revenues up 1% to £1.94bn. Its OTC category saw a like-for-like decline of 9% due to seasonal factors, associated retailer destocking and some share loss of its Mucinex cold and flu medicine to private label competition. However, the group highlighted that other brands which are less impacted by seasonality, such as Nurofen and Gaviscon, had performed well on the back of product innovation and growth in developing markets.
Meanwhile, RB’s Infant Nutrition business, which also operates within the Health division, delivered lealthy like-for-like growth of 5%. This was driven by strong demand for its products in North America and online, and further progress in China.
Total revenue in the group’s Hygiene Home division grew 2% to £1.22bn with like-for-like sales up a solid 3% (comprising -1% volume and +4% price/mix). RB blamed the softer volume on strong comparators with the previous year, particularly in its Lysol cleaning brand in the US. Price/mix was said to be strong due to its focus on premium innovation and by pricing to offset inflationary and exchange rate headwinds.
The group also highlighted that its Finish, Vanish, Harpic and Veja brands had performed well, driven by product innovation.
Chief Executive Rakesh Kapoor, who is due to step down by the year end, stated that RB’s growth was expected to improve in the remainder of the year, particularly in the second half.
“Restoring outperformance in our Health BU remains our top priority as we target innovation-led growth, invest and outperform in e-channels, invest behind the equities of our brands, and build a more resilient business,” he said.
Kapoor confirmed its annual goals for comparable sales growth of +3-4%, and operating margins “to be maintained”.
