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Reckitt Benckiser suffers 1.1% fall in first quarter revenue

09:07, 28 April 2021

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Reckitt Benckiser records a 1.1% fall in Q1 net revenue to £3.5bn as a result of a drop in health and nutrition sales.

Reckitt Benckiser reported a 1.1% drop in net revenue to £3.5bn (£2.5bn, €2.9bn) for the first quarter of 2021.

The group’s hygiene division saw net revenue increase by 21% year-on-year to £1.64bn, with robust demand for products that could help prevent the spread of coronavirus at the forefront of sales.

However, both the health and nutrition divisions recorded losses. Health revenue dropped 16.4% to £1,123m, while nutrition revenue fell 12.3% to £742m.

Sale of hygiene products reflects C-19 impact

The ongoing coronavirus pandemic is acknowledged as a key driver behind the upsurge in sales of Reckitt Benckiser’s hygiene lines. It’s global reach, combined with the uneven pattern of coronavirus infections between countries, has ensured a period of growth for hygiene products.

As a result, the group “remains confident in the greater structural opportunity for the category longer-term, including the potential for geographic expansion and our Global Business Solutions unit.”

Chief executive Laxman Narasimhan said: “'Demand for Lysol and Dettol continues to be strong as consumers remain vigilant to the spread of the virus and see use of our products, and improved hygiene habits, as a way of protecting their health and regaining normality in their lives.”

Gains in e-commerce

FT 100 listed-Reckitt Benckiser recorded a 24% rise in ecommerce sales, which accounted for 13% of the group net revenue, the gains being put down to a ramping up of investment in this segment throughout 2020.

“Difficult market conditions” expected to lift

Commenting on the group’s core businesses Laxman Narasimhan said: “Our health business is seeing improved trading in sexual wellbeing, very strong growth in Gaviscon and improved execution overall.

“Meanwhile, we expect the difficult current market conditions for our cold and flu relief products to improve over time.

“In nutrition, trading continues to be strongly affected by the closure of the Hong Kong border, although we are beginning to annualise the impact of this.”

Reckitt looks towards post-coronavirus days

Reckitt confirmed its outlook for 2021 is unchanged, and that it is “on track” to achieve its medium-term aims. It has enjoyed like-for-like net revenue growth of 4.1% so far this year, which brings two-year growth to more than 17%.

Commenting on the group’s prospects, Narasimhan said: “Our portfolio is constructed to benefit pre- and post-COVID, and the inherent balance in our portfolio leaves us favourably placed to perform well in both the short- and longer-term.

“We see continued strong demand for our brands, better execution, and the benefits of our recent investments feeding through in the form of more focused innovation, increased capacity, and better customer service. There is still much to do, and the actions we are taking make Reckitt a stronger, more competitive, business with each day.”

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