Reckitt Benckiser Shares Slide on Disappointing Q4 Sales

The
consumer
goods
and
hygiene
products
maker
which
owns
brands
such
as
painkiller
Nurofen
and
disinfectant
Dettol
said
like-for-like
sales
in
the
three
months
to
December
31
fell
1.2%,
compared
to
growth
of
5.6%
in
the
same
quarter
a
year
ago.
This
was
below
the
market
consensus,
which
had
expected
growth
of
1.8%.

Revenue
in
the
period
declined
7.0%
to
£3.56
billion
from
£3.83
billion
a
year
ago.
For
2023
as
a
whole,
revenue
edged
up
by
1.1%
to
£14.61
billion
from
£14.45
billion.
This
reflected
like-for-like
sales
growth
of
3.5%
compared
to
2022.

Pretax
profit
fell
25%
to
£2.40
billion
from
£3.01
billion
and
diluted
earnings
per
share
from
continuing
operations
slid
to
227.4p
from
325.7p
in
2022.

For
the
full
year,
growth
was
broad-based,
and
hygiene
and
health
categories
grew
at
5.1%
combined.
Nutrition
sales
declined
by
4.0%.

Reckitt
revealed
that
the
strong
performance
in
the
first
three
quarters
was
partially
offset
by
a
weaker
fourth
quarter,
where
price
increases
of
3.1%
were
offset
by
volumes
declines
of
4.3%.

Hygiene
sales
grew
5.3%
but
health
volumes
declined
by
2.2%
and
nutrition
volumes
slipped
14.3%,
due
to
the
rebasing
of
its
US
business,
and
category-led
volume
declines
in
developing
markets.
Sales
in
its
hygiene
global
business
unit
grew
5.2%,
led
by
Lysol
and
Finish.

Reckitt’s
Middle
East
Market
–
Spend
Was
Higher

Reckitt
also
disclosed
an
understatement
of
trade
spend
in
two
Middle
Eastern
markets
related
to
the
fourth
quarter
and
prior
quarters
of
2023.
As
a
result,
full
year
net
revenue
performance
was
£55
million
lower
than
previously
expected
with
an
adjusted
operating
profit
impact
of
£35
million.

The
company
is
however
confident
this
was
“an
isolated
incident”
specific
to
these
two
markets
and
does
not
impact
2024
outlook
and
medium-term
goals.

Looking
ahead,
Reckitt
Benckiser’s
CEO
Kris
Licht
says:
“While
our
performance
in
Q4
was
unsatisfactory,
we
look
to
2024
and
beyond
with
confidence.

“We
target
another
year
of
mid-single-digit
growth
in
health
and
hygiene,
driven
by
a
more
balanced
contribution
from
price,
mix
and
volume.
We
expect
nutrition
to
return
to
growth
late
in
the
year.”

Reckitt
predicted
like-for-like
net
revenue
growth
of
2%
to
4%
for
the
group,
with
mid-single-digit
growth
for
the
health
and
hygiene
portfolios.

It
expects
a
mid-to
high-single-digit
decline
for
the
nutrition
business.
It
forecast
adjusted
operating
profit
to
grow
ahead
of
net
revenue
growth.
Reckitt
said
revenue
and
profit
growth
will
be
second-half
weighted.

Licht
also
pledges
increased
cash
returns
to
shareholders,
“aiming
to
double
what
we
returned
in
2019”.

Reckitt
paid
a
final
dividend
of
115.9p
per
share,
rising
from
110.3p
last
year,
making
the
total
payout
192.5p,
5.0%
higher
than
2022’s
183.3p
payment.

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