Reckitt has posted fourth-quarter sales figures below City expectations, but the consumer goods giant remained upbeat on its prospects for 2024.
In the final three months of 2023, like-for-like sales in its Health division declined by 2.0% with price/mix improvements of 0.2% and volume decline of 2.2%. The group noted that its cough, cold and flu-related OTC portfolio declined high-single digits as it lapped an early and strong season in the same quarter the previous year. Its Dettol brand fell by low double-digits, with growth in India offset by high comparatives in China and declines in the Middle East. This weakness was partially offset by double-digit growth in Reckitt’s Intimate Wellness and VMS portfolios, and mid-single-digit growth in its non-seasonal OTC portfolio.
The group’s Hygiene division saw sales grow 5.2% with price/mix improvements of 7.8% and better volume performance, down only 2.6%. Auto Dish (Finish) and Disinfectants (Lysol) were said to be the key growth drivers in the quarter, led by premiumisation in Finish and broad-based growth across all its Lysol segments. Lavatory Care (Harpic) and Pest (Mortein, SBP, Aeroguard) delivered “strong growth”.
Meanwhile, sales in its Nutrition unit slid 14.8%, driven by a double-digit decline in North America due to lapping the impact of a competitor supply issue.
For the whole of 2023, Reckitt’s like-for-like sales rose 3.5% to £14.61bn, with Hygiene up 5.1% and Health growing 5.0%. Operating profits edged down 1.9% to £3.37bn, with margin slipping 70bps to 23.1% due to increased brand equity investments and cost increases.
Looking ahead, Reckitt expects group sales growth of between 2% and 4%, with mid-single-digit growth for its Health and Hygiene portfolios. Meanwhile, it forecasts a mid-to high-single-digit decline for its Nutrition business as it continues to rebase in the first half of the year and returns to growth later in the period.
Chief Executive Kris Licht called 2023 “a year of progress” for Reckitt, highlighting “a good trading performance” in Health and Hygiene. He noted that its innovation platforms had “proved that they can deliver meaningful growth through premiumisation, household penetration and category creation.”
Licht concluded: “While our performance in Q4 was unsatisfactory, we look to 2024 and beyond with confidence.”
