ii view: Reckitt Benckiser pursues emerging market growth

Full year results to 31 December

• Core adjusted revenues up 5.2% to £10.2 billion
• Core adjusted operating profit up 8.9% to £2.73 billion
• A final dividend of 127.8p per share
• Total 2025 dividend up 5% to 212.2p per share
• Share buybacks of £900 million made 
• Net debt down 17% to £6.6 billion

Guidance:

• Expects full-year core revenue to grow by 4-5% and in line with medium-term target
• Expects a first-quarter impact from a weaker cold and flu season

Chief executive Kris Licht said:

“2025 has been a strong year with performance ahead of our expectations. We have more work to do but our geographic footprint, portfolio of Powerbrands and focused organisational structure have strengthened our ability to deliver sustainable long-term growth. We look forward with confidence.”

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ii round-up:

Reckitt Benckiser Group (LSE:RKT) makes branded hygiene and health products.

Sales are made across four subcategories: Hygiene covers Germ protection brands such as Dettol, Lysol and Harpic as well as Household Care items Finish and Vanish.

Health products include Self Care brands Nurofen, Gaviscon, Strepsils and Mucinex, as well as Intimate Wellness brands Durex and Veet.

Reckitt’s Mead Johnson Nutrition business is now considered non-core, with all strategic options being considered. A sale of its Essential Home business including brands such as Airwick and Cillit Bang was recently completed, with Reckitt retaining a 30% stake. 

For a round-up of these latest results announced on 5 March, please click here. 

ii view:

Reckitt Benckiser was formed in 1999 via the merger of Reckitt Coleman and Dutch company Benckiser. Geographically, emerging markets like China, India and Brazil generated 42% of core sales in 2025. That was followed by European sales at 33% and North America the balance of 25%. 

For investors, higher energy costs globally could potentially see consumers seek cheaper alternatives such as supermarket own brands. Exposure to cold and flu remedies leaves sales open to fluctuations with demand, with early 2026 seen as relatively light. A forecast price/earnings ratio above the three-year average may suggest the shares are not obviously cheap, while the group’s diversity could soon be further reduced given a possible sale of its Mead Nutritional business. 

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To the upside, exposure to emerging markets is high, with consumer incomes in key markets expected to grow over the medium to longer term. A rejuvenated strategy now leaves a more focused and simplified company. An eventual sale of the Mead business could see more cash returned to shareholders, while a forecast dividend yield of around 4% is not to be ignored. 

In all, and while room for caution persists, exposure to emerging markets and a consensus analyst fair value estimate above £65 per share, look to offer grounds for longer-term optimism. 

Positives: 

• Diversity of product type and geographical location
• Focus on shareholder returns

Negatives:

• Uncertain economic outlook
• Subject to currency fluctuations

The average rating of stock market analysts:

Buy