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Demand for Dettol as the world battles Covid-19 sees Reckitt Benckiser sales soar

REUTERS
REUTERS

Strong demand for hand sanitiser and cleaning products as the world battles the Covid-19 pandemic has seen Reckitt Benckiser report a large climb in sales.

The consumer goods giant – maker of products including Dettol, Lysol and Durex - exceeded analyst expectations to report a 13.3% like-for-like growth in the third quarter on Tuesday, with hygiene sales up 19.5% on the same period last year, and 12.6% in its health arm, which includes Durex condoms.

RB is now selling both Dettol and Lysol in 19 more countries than this time last year, and has expanded the reach of its hand sanitiser into 20 new markets.

Due to the increased hygiene demand in hospitality and transport sectors, the goods giant has also launched new partnerships with companies including Airbnb and Amtrak.

Consumers have improved their hygeine practices (RB)
Consumers have improved their hygeine practices (RB)

RB chief executive, Laxman Narasimhan, who took over the Slough-based company last year, said the company has improved its forecast as a result of the quarter’s strong performance, and he is now expecting to report “low double digit” growth in like-for-like net revenue this year.

Narasimhan said the company is now in “much better shape than we were a year ago”, and had become a “stronger and more agile business” despite facing challenges in 2020.

The company had already seen a strong profit performance in the first half of the year, and Narasimhan’s turnaround plan for the business aiming “to rejuvenate sustainable revenue growth” is now expected to be delivered a year ahead of schedule “and with greater certainty”.

He said: “I feel very good about our performance so far.

“The growth has been led by our hygiene business.

"We are seeing behaviour changes in our categories... We are seeing 80% of consumers adopting better hygiene practices.

“We are uniquely placed to help tackle the challenges the world is facing."

The company said it is continuing to expand its global supply chain, and invest in e-commerce.

Analysts had on average predicted a 9.5% rise, according to a consensus supplied by the company. On Tuesday analysts reacted to the latest report by increasing sales guidance, with Jefferies lifting full-year expectations to double digit growth, up from its previous consensus of 10.2%.

The analyst noted that “the tone is confident”, but warned that the company’s performance areas remain “highly polarised”, with sales of products such as baby formula falling flat as birth rates continue to remain low in key markets.

It was reported last month that RB, which had faced challenges before the pandemic, is preparing to sell off its non-core personal care brands, including Veet hair removal cream and Clearasil acne cream, for around £1bn.

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