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24 Feb 2021 | 07:02

Full-year sales hit record high at Reckitt Benckiser

(Sharecast News) - Reckitt Benckiser reported a surge in full-year revenues on Wednesday, after demand for cleaning and hygiene products spiked during the Covid-19 pandemic.

Group revenues in the 12 months to 31 December came in at £13.99bn, ahead 8.9% or by 11.8% on a like-for-like basis. Within that, the hygiene division - which includes brands such as Dettol, Finish and Lysol - saw the biggest growth, with underlying sales up 19.5% at £5.82bn.

Laxman Narasimhan, chief executive, said: "Our category germ protection/disinfection brands have all seen substantial market growth, with around 80% of consumers expecting to retain many of their new improved habits post pandemic.

"We capitalised on these new behaviours, with Dettol and Lysol entering 41 markets, with plans to enter a further 29 markets in 2021."

The health division saw revenues rise 12.1% on an underlying basis, to £4.89bn, while nutrition was flat at £3.29bn.

Group operating profits were £2.16bn compared to losses of £1.95bn in 2019, while pre-tax profits were £1.87bn, against pre-tax losses of £2.11bn a year previously.

The consumer goods giant - whose brands also include Gaviscon, Vanish, Nurofen and Durex - was pushed into the red in 2019 following a series of significant impairment charges, largely relating to the 2017 acquisition of baby formula maker Mead Johnson.

At the time, Reckitt Benckiser said it would invest £2bn as it sought to strengthen its portfolio and restructure into the three core divisions of hygiene, health and nutrition.

Narasimhan, who took over as chief executive in 2019, said: "2020 was a turning point for Reckitt Benckiser. Our performance is strong, we are building capability, actively managing our portfolio and transforming our culture. We expect 2021 to be a year of further strategic progress and we remain confident that we will meet our medium-term targets."

As part of its ongoing moves to reposition the portfolio towards higher growth brands, the blue chip also announced on Wednesday that it was selling its foot brand Scholl to US private equity firm Yellow Wood Partners and buying topical pain relief brand Biofreeze from Performance Health, which is owned by Madison Dearborn Partners. Financial details have not been disclosed.

In addition, it has launched a strategic review of its infant formula business in China, where the birth rate is falling.

Looking to the current year, Reckitt Benckiser is forecasting like-for-like revenue performance to be in the range of flat to +2%.
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