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Reckitt lifts revenue guidance as disinfectant demand boosts Q3
20th Oct 2020 07:45
(Sharecast News) - Reckitt Benckiser lifted its full-year like-for-like net revenue guidance on Tuesday and posted a jump in third-quarter sales as the Covid-19 pandemic underpinned demand for its disinfection brands.
Group sales on a like-for-like basis rose 13.3% in the third quarter to £3.5bn and were 12.4% higher in the year to date at £10.4bn.
In the hygiene business, sales were up 19.5% on a LFL basis to £1.5bn, driven by Lysol, Finish and Air Wick, with double-digit growth in most markets.
In the health segment, the company saw LFL growth of 12.6% to £1.3bn, amid ongoing strong demand for Dettol and improved trends in Durex.
In the nutrition division, LFL sales increased 4.1% to £806m. Reckitt pointed to an improved performance from infant formula during the third quarter and continued strong growth for Airborne.
The company said it now expects 2020 like-for-like net revenue to grow low double digits, up from previous guidance for high single digit growth.
Chief executive officer Laxman Narasimhan said: "The strong momentum in the first half has continued in Q3 and we are on track to deliver low double digit like-for-like net revenue growth for the full year.
"Our performance has been led by an increase in Hygiene and Health volumes, led by our market-leading disinfectant brands - Dettol, Lysol, Sagrotan and Napisan. Growth has been underpinned by better customer service levels and an improved supply chain performance, together with strong momentum in ecommerce."
At 0815 BST, the shares were up 1.3% at 7,298p.
Russ Mould, investment director at AJ Bell, said: "Here is a true lockdown winner. Reckitt Benckiser is delivering the level of growth you'd normally associate with a relatively young business that is grabbing market share and seeing strong momentum for its products and services.
"To achieve near-20% sales growth is remarkable for a gigantic company like Reckitt and that's exactly what it has done with its hygiene products.
"What's also impressive is that the stockpiling of cleaning products earlier this year when lockdown measures were first announced hasn't resulted in a deterioration of sales growth during the third quarter.
"There was the risk that people bought too much during the stockpiling frenzy in March and that demand would suffer as the year progressed, but this hasn't happened for most of the company's products. It suggests that the world is taking hygiene much more seriously and that's to the benefit of Reckitt."
Group sales on a like-for-like basis rose 13.3% in the third quarter to £3.5bn and were 12.4% higher in the year to date at £10.4bn.
In the hygiene business, sales were up 19.5% on a LFL basis to £1.5bn, driven by Lysol, Finish and Air Wick, with double-digit growth in most markets.
In the health segment, the company saw LFL growth of 12.6% to £1.3bn, amid ongoing strong demand for Dettol and improved trends in Durex.
In the nutrition division, LFL sales increased 4.1% to £806m. Reckitt pointed to an improved performance from infant formula during the third quarter and continued strong growth for Airborne.
The company said it now expects 2020 like-for-like net revenue to grow low double digits, up from previous guidance for high single digit growth.
Chief executive officer Laxman Narasimhan said: "The strong momentum in the first half has continued in Q3 and we are on track to deliver low double digit like-for-like net revenue growth for the full year.
"Our performance has been led by an increase in Hygiene and Health volumes, led by our market-leading disinfectant brands - Dettol, Lysol, Sagrotan and Napisan. Growth has been underpinned by better customer service levels and an improved supply chain performance, together with strong momentum in ecommerce."
At 0815 BST, the shares were up 1.3% at 7,298p.
Russ Mould, investment director at AJ Bell, said: "Here is a true lockdown winner. Reckitt Benckiser is delivering the level of growth you'd normally associate with a relatively young business that is grabbing market share and seeing strong momentum for its products and services.
"To achieve near-20% sales growth is remarkable for a gigantic company like Reckitt and that's exactly what it has done with its hygiene products.
"What's also impressive is that the stockpiling of cleaning products earlier this year when lockdown measures were first announced hasn't resulted in a deterioration of sales growth during the third quarter.
"There was the risk that people bought too much during the stockpiling frenzy in March and that demand would suffer as the year progressed, but this hasn't happened for most of the company's products. It suggests that the world is taking hygiene much more seriously and that's to the benefit of Reckitt."