Reckitt shares surge as Dettol owner reveals better-than-expected sales
Reckitt Benckiser topped the FTSE100 risers this morning after increasing revenue forecasts on the back of better-than-expected sales.
The consumer goods giant – maker of products including Dettol, Nurofen and Durex - exceeded analyst expectations to report 3.3% like-for-like growth in the third quarter. This comes on top of 15% growth in the same period last year. Revenues reached a little under £3.3 billion.
Bosses upgraded their 2021 outlook from 0-2% like-for-like net revenue growth to 1-3% growth, despite facing input costs up by 10%. Shares surged as much as 6% on the update.
Dettol, which has seen 2021 sales decline comparatively after a pandemic-induced boom last year, has returned to growth in key marketChina.
Global Dettol sales have now stabilised at around 40% above where they were pre-pandemic, turnaround CEO Laxman Narasimhan told reporters.
Overall health sales were up 3.6%. The chief executive said newly-bought US topical pain relief brand Biofreeze is seeing double digit sales growth, which is not even yet included in results data.
Reckitt had faced challenges before the pandemic. Narasimhan, who took over the Slough-based company in 2019, said: "There is no question that we are a significantly stronger business today than we were at the start of 2020.
"This quarter's strong performance is another step for Reckitt on our journey to sustainable growth."
Companies around the world are facing soaring costs for everything from shipping and trucking to metals. The "vast majority" of Reckitt's pain is coming from higher raw materials costs, particularly surfactants and packaging, bosses said.
Like leaders at fellow giant Unilever, Narasimham said he expects the cost inflation to continue into 2022. He kept margin guidance unchanged, however. The company is raising some prices, reducing costs, offering different packaging sizes and being "disciplined" on offers to help offset.
RBC analyst James Edwardes Jones said the performance counts as “something of a triumph”.
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