Consumer goods colossus Reckitt Benckiser (RB.) said its full-year 2020 sales, margin and earnings performance is set to beat expectations set out in April.
This follows a better-than-expected first half performance from the Dettol-to-Lysol maker, which booked a 12% rise in profit amid a surge in demand for cleaning products during the COVID-19 crisis.
Panicked consumers have been stocking up on the Slough-headquartered company’s Lysol and Dettol disinfectants and Mucinex cough syrup during the pandemic.
However the shares, which have powered higher during the coronavirus crisis, softened 1% to £76.44 on profit-taking as Reckitt Benckiser cautioned the outlook for the balance of the year remained uncertain.
VERY HEALTHY HALF
Reckitt Benckiser reported forecast-busting 10.5% like-for-like sales growth for the second quarter to June and also guided towards healthy high single-digit underlying revenue growth for the full year.
Pre-tax profit for the six months to June increased to £1.44 billion, up from £1.26 billion year-on-year, as revenue rose 11% to £6.91 billion. During the half, revenue in the hygiene division jumped 14%. In the health division, sales rose 8.8%.
Reckitt Benckiser, whose brands include Lysol cleaners, Nurofen painkillers and Durex condoms, also maintained the interim dividend at 73p, in line with guidance given in February.
CHANGED BEYOND RECOGNITION
‘The world has changed beyond recognition in 2020,’ commented chief executive Laxman Narasimhan, who added that Reckitt Benckiser boasts the largest portfolio of surface disinfectant brands including Dettol, Lysol and Sagrotan.
The former Pepsi man also highlighted strong first half e-commerce sales growth north of 60%.
‘COVID-19 is likely to be with us for the foreseeable future and, as a society, we are embedding new hygiene practices to protect our way of life. Our hygiene and base health businesses have both performed well, with strong volume growth in challenging circumstances.
‘At the same time, our infant and child nutrition business has delivered important operational and executional improvements, although the focus remains on delivering revenue growth through innovation and navigating headwinds such as Hong Kong.’