FTSE 100 listed medical and home cleaning product giant, Reckitt Benckiser (LON:RB), added to a robust year of trading, with sales growth across all its divisions during the third quarter.
The group recorded total like-for-like growth of 13.3% during Q3, up to £3.5 billion, which meant that year-to-date growth was up by 12.4%, to £10.4 billion.
This progress was led by growth across its operational segments, with improved infant formula performance seeing its Nutrition business grow by 4.1%. Similarly, strong demand for Dettol and Durex – hopefully not at the same time – saw its Health segment rise by 12.6%.
The star of the show, though, was its Hygiene business, with strong demand for Lysol, Finish and Air Wick seeing double digit growth in most markets, and pushing its Hygiene arm up by 19.5%.
Other drivers of the company’s successful year-to-date include; Dettol and Lysol being sold in 19 new markets; Air Wick Mist rising by 50% in the US; the first polyurethane Durex being launched in China; and its ecommerce sales growing by 45% during Q3 alone.
These factors have meant that while most guidance remains unchanged, it now expects to report ‘double-digit’ like-for-like revenue growth for the full-year 2020.
Reckitt Benckiser cleans up
Speaking on the company’s booming performance, CEO, Laxman Narasimhan, commented:
“Our performance has been led by an increase in Hygiene and Health volumes, led by our market-leading disinfectant brands – Dettol, Lysol, Sagrotan and Napisan. Growth has been underpinned by better customer service levels and an improved supply chain performance, together with strong momentum in eCommerce. While the revenue performance in Nutrition improved in the quarter, we remain fully focused on addressing the headwinds, such as Hong Kong, and taking the actions necessary to deliver a sustained improvement.”
“With a world-class portfolio of hygiene, health and nutrition brands and a clear purpose – to protect, heal and nurture in the relentless pursuit of a cleaner and healthier world – we are uniquely placed to help tackle the challenges the world is facing. Our plan to invest over £2bn over three years is on track, supported by our expanded productivity programme which has delivered savings of £300m so far this year. We are also reinvesting our outperformance to capitalise on the strong demand for our products, particularly with Dettol and Lysol and through eCommerce and professional channels.”
Investor notes
Following the update, Reckitt Benckiser shares rallied by 1.58% or 114.00p, to 7,318.00p apiece 12:40 BST. This is comfortably behind analysts’ consensus target price of 7,616.94p a share, and behind its year-to-date high of 7,960p.
Analysts currently have a consensus ‘Buy’ rating on the stock, a 54.56% ‘Outperform’ rating from the Marketbeat community, and a p/e ratio of 20.64.