Reckitt Benckiser pins hopes on Powerbrands after sales fall in 2024

(Alliance News) - Reckitt Benckiser Group PLC on Thursday predicted modest growth in 2025 as it ...

Alliance News 6 March, 2025 | 9:28AM
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(Alliance News) - Reckitt Benckiser Group PLC on Thursday predicted modest growth in 2025 as it continues to focus on its high-margin 'Powerbrands' and offload other units.

The London-based consumer products group owns products such as antiseptic Dettol, painkiller Nurofen and throat sweets Strepsils.

It said operating profit declined by 4.0% to GBP2.43 billion in 2024 from GBP2.53 billion in 2023, while pretax profit fell 13% to GBP2.10 billion from GBP2.40 billion.

Diluted earnings per share from continuing operations fell 10% to 203.8 pence from 227.4p.

Revenue slipped by 3.0% to GBP14.17 billion in 2024 from GBP14.61 billion a year prior, but increased 1.4% on a like-for-like basis.

Like-for-like Hygiene sales increased 4.2% in 2024, and Health sales rose 2.1%, but Nutrition sales dropped 7.3%.

In the fourth quarter alone, revenue eased 0.4% to GBP3.55 billion but rose 4.6% like-for-like. Like-for-like sales rose 5.5% in Hygiene in the quarter, by 2.4% in Health and by 8.4% in Nutrition.

Reckitt said it continues to focus on 'core Reckitt', accounting for 71% of revenue and including the 11 so-called 'Powerbrands'.

These are Muciniex, Strepsils, Gaviscon, Nurofen, Lysol, Dettol, Harpic, Finish, Vanish, Durex and Veet.

"We are reshaping Reckitt into a more efficient, world-class consumer health and hygiene company, focused on a portfolio of high-growth, high-margin Powerbrands," said Kris Licht, chief executive officer.

Reckitt said core Reckitt gross margin and operating margin outperformed the overall group.

In response, shares in Reckitt Benckiser were 1.7% higher at 5,274.00 pence each, shaking off a weak start to trading. The firm is valued at GBP36.5 billion.

Reckitt said it is on track to exit Essential Home, 14% of net revenue, by end-2025, and continues to evaluate opportunities for Mead Johnson Nutrition, 15% of revenue.

For 2025, Reckitt expects LFL net revenue growth of 2% to 4%, with Essential Home and Mead Johnson Nutrition making this a little more second half weighted.

It is targeting 3% to 4% LFL net revenue growth in core Reckitt, and expects mid-to-high single digit growth in Emerging Markets, with Europe flat.

In North America, for the first quarter, Reckitt expects low-single digit growth, partially driven by retailer destocking and slower than anticipated ramp up in new capacity to meet stronger Lysol demand.

It expects low-single digit LFL net revenue growth in Essential Home and Mead Johnson Nutrition in 2025, with both being second half weighted. Both businesses will show LFL net revenue declines in the first half.

From 2026, the firm hopes core Reckitt will consistently deliver 4% to 5% LFL net revenue growth.

Reckitt increased its full-year cash dividend by 5.0% to 202.1 pence from 192.5p. It also noted it returned GBP1.3 billion to shareholder by means of its ongoing share buyback programme.

By Jeremy Cutler, Alliance News reporter

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Securities Mentioned in Article

Security Name Price Change (%) Morningstar
Rating
Reckitt Benckiser Group PLC 5,332.00 GBX 2.82

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