Reckitt Benckiser Group (RB.)

Sector:

Household Goods

Index:

FTSE 100

6,290.00p
   
  • Change Today:
      70.00p
  • 52 Week High: 7,155.00p
  • 52 Week Low: 5,593.00p
  • Currency: UK Pounds
  • Shares Issued: 709.32m
  • Volume: 79,990
  • Market Cap: £44,616m
  • RiskGrade: 105
  • Beta: 0.02

Reckitt Benckiser revises growth forecasts down after slow first half

By Josh White

Date: Tuesday 30 Jul 2019

LONDON (ShareCast) - (Sharecast News) - Reckitt Benckiser reported a 2% improvement in its net revenue from continuing operations on its half-year results on Tuesday, to £6.24bn, or 1% at constant currency.
The FTSE 100 consumer products giant said its reported operating profit from continuing operations was 9% higher year-on-year for the six months ended 30 June, at £1.41bn, while its adjusted operating profit was ahead 2% at £1.48bn.

Its reported net income rose 13% to £979m, and its adjusted net income came in 4% higher at £1.03bn, while its reported diluted earnings per share were up 13% at 137.9p.

The company's adjusted diluted earnings per share from continuing operations were 4% improved at 145.4p.

Looking at Reckitt Benckiser's total operations, including its discontinued businesses, reported net income was down 87% at £112m, while adjusted net income was ahead 4% at £1.03bn.

The company said like-for-like performance in the second quarter specifically was flat, with volume down 3%, while health declined by 1%.

Its 'hygiene home' operations saw continued consistent delivery, with growth of 3%.

In health, the second quarter like-for-like decline was 1%, with its infant and child nutrition segment flat thanks to a slowdown in market growth in China.

Over-the-counter health was ahead 1%, with stabilisation seen in market share for its 'Mucinex' range, while other health weak due to its 'Scholl' brand, as well as a slowing for disinfectant range 'Dettol' and sexual health brand 'Durex'.

Second quarter like-for-like growth in hygiene home totalled 3%, with the board describing another consistent quarter of broad-based growth across brands and geographies.

Looking at its so-called 'RB 2.0' strategy, Reckitt said the creation of two structurally-independent business units remained on track for mid-2020.

The company's adjusted operating margin decreased 10 basis points to 23.6%, with the board declaring an interim dividend of 73.0p per share - up 4% year-on-year.

It said it had reduced its uncertainty thanks to a settlement agreed with the US Department of Justice for $1.4bn, in respect of matters related to Indivior, and the appointment of a new CEO.

The company revised its full-year like-for-like net revenue growth target to between 2% and 3%, from a range of 3% to 4%, to reflect the slow start to the year and the improving trends for the second half.

It said there was no change to its adjusted operating margin expectations.

"Our like-for-like performance in the first half was 1%, somewhat below our expectations," said chief executive officer Rakesh Kapoor.

"Hygiene home delivered another quarter of consistent top line growth but progress in health in the second quarter was disappointing.

"We have now been operating in RB 2.0 for 18 months and have made some important achievements."

Hygiene home had been "unleashed", Kapoor said, and was delivering consistently.

"But on our journey to be a world leader in consumer health, we have work to do to deliver consistent financial performance.

"However, we believe that much of this is behind us and strong plans are in place to restore growth, including an exciting innovation pipeline such as Mucinex Night Relief and Enfa Grass Fed.

"We are further stepping up our investment in BEI and medical marketing to drive our growth."

As a result, Kapoor said the board and management team expected the second half to be back to the firm's "more normal" level of growth.

He added that the firm's work to create two structurally-independent business units was continuing to progress well, and remained on track for completion around mid-2020.

"With the slow start to the year, and the turnaround in health still work in progress, we are revising our 2019 net revenue target to 2% to 3% like-for-like growth.

"Our target of maintaining adjusted operating margins remains unchanged."

Chris Sinclair, Reckitt Benckiser's chairman, added that the company made "good progress" during the quarter in reducing uncertainty, with the appointment of Laxman Narasimhan as the new CEO, and drawing a line under Indivior-related matters.

"On behalf of the board I would like to thank Rakesh for his outstanding contribution to RB over his 32 years at the company, eight of which were as CEO.

"During his tenure he has transformed RB from a household cleaning company to a global leader in consumer health.

"He has lived, and indeed improved, RB's values whilst maintaining the culture of entrepreneurship and ownership."

Sinclaur said the company still had work to do in restoring growth and outperformance, which he explained was both the board's and Narasimhan's key priority.

"However, the future opportunities created by RB 2.0 have never been more exciting."

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Note 1: Prices and trades are provided by Digital Look Corporate Solutions and are delayed by at least 15 minutes.

Note 2: RiskGrade figures are provided by RiskMetrics.

 

Reckitt Benckiser Market Data

Currency UK Pounds
Share Price 6,290.00p
Change Today 70.00p
% Change 1.13 %
52 Week High 7,155.00p
52 Week Low 5,593.00p
Volume 79,990
Shares Issued 709.32m
Market Cap £44,616m
Beta 0.02
RiskGrade 105

Reckitt Benckiser Star Ratings

Compare performance with the sector and the market.
more star ratings
Key: vs Market vs Sector
Value
90.74% below the market average90.74% below the market average90.74% below the market average90.74% below the market average90.74% below the market average
100% below the sector average100% below the sector average100% below the sector average100% below the sector average100% below the sector average
Price Trend
11.94% below the market average11.94% below the market average11.94% below the market average11.94% below the market average11.94% below the market average
7.14% below the sector average7.14% below the sector average7.14% below the sector average7.14% below the sector average7.14% below the sector average
Income
27.34% below the market average27.34% below the market average27.34% below the market average27.34% below the market average27.34% below the market average
73.91% below the sector average73.91% below the sector average73.91% below the sector average73.91% below the sector average73.91% below the sector average
Growth
2.58% below the market average2.58% below the market average2.58% below the market average2.58% below the market average2.58% below the market average
14.29% above the sector average14.29% above the sector average14.29% above the sector average14.29% above the sector average14.29% above the sector average

What The Brokers Say

Strong Buy 8
Buy 3
Neutral 5
Sell 1
Strong Sell 4
Total 21
neutral
Broker recommendations should not be taken as investment advice, and are provided by the authorised brokers listed on this page.

Reckitt Benckiser Dividends

  Latest Previous
  Interim Final
Ex-Div 22-Aug-19 18-Apr-19
Paid 26-Sep-19 23-May-19
Amount 73.00p 100.20p

Trades for 17-Sep-2019

Time Volume / Share Price
09:44 100 @ 6,290.00p
09:44 271 @ 6,291.00p
09:44 166 @ 6,290.00p
09:44 53 @ 6,290.00p
09:44 231 @ 6,290.00p

Reckitt Benckiser Key Personnel

CFO Adrian Nevil Hennah
CEO Laxman Narasimhan

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