Reckitt Benckiser Group is a manufacturer and marketer of branded products in household, health and personal care products, sold into nearly 200 countries from operations in over 60 countries. I have a holding in my income portfolio (epic code: RB.)
Reckitt Benckiser announced their third quarter IMS today and looked to be at the lower end of expectations and continue to suffer from foreign exchange headwinds.
For the nine months revenue increased by 3% at constant exchange rates to £7,037m and
excluding RBP increased by 4% to £6,532m. Adverse foreign exchange translation affected sales by -10%.
By territories LFL growth was:
ENA (Europe/North America) +2%; (+2% at the interim stage)
LAPAC (Latin America/Asia/Australia & New Zealand) +5%; (+7%)
RUMEA (Russia/Middle East/Africa/Turkey) +9%; (+5%)
Food +3% (+3%)
Pharma -8% (-8%)
The big growth drivers in RUMEA were Russia, Turkey and South Africa, with Brazil behind the slowing growth in LAPAC
By product groupings like-for-like sales growth (excluding Food and Pharma detailed above) was:
Health +9% (10%)
Hygiene +2% (3%)
Home +1% (0%)
Portfolio -2% (-6%)
Management have stated that they expect to be in a position to demerge the Pharmaceutical business prior to 31 December 2014.
Expectations are now for full year revenue growth to be at the lower end of their total revenue growth target of 4-5% (ex RBP), although they expect continued improvement in operating margins in the second half.
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