Interactive Investor

ii view: relief that Reckitt Benckiser on track to hit targets

It has been a tough year for this FTSE 100 consumer staples company, with its nutrition business under the spotlight. We assess prospects after latest results.

24th April 2024 11:46

by Keith Bowman from interactive investor

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Reckitt cillit bank 600

First quarter trading and full-year results to 31 December 2023

  • Adjusted Like-for-Like (LFL) revenue up 1.5%


  • Continues to expect full-year LFL sales to grow between 2% and 4%

Chief executive Kris Licht said:

"We have delivered a good first quarter. Following a period of price-led growth, we are now returning to a more balanced contribution from price, mix and volume.

“We are on track to deliver our full-year revenue and profit targets, led by mid-single-digit growth across our Health and Hygiene portfolios."

ii round-up:

Reckitt Benckiser Group (LSE:RKT) today detailed first-quarter sales that beat City expectations, with the maker of hygiene, health and nutrition products also reiterating it is on track to hit full-year revenue and profit targets.

Demand for products such as Lysol, Dettol, Durex and Finish pushed adjusted like-for-like sales up 1.5% during the three months to late March, exceeding analyst estimates for a fall of 0.9%. Kris Licht, chief executive since October, continues to expect annual LFL sales to grow between 2% and 4%.

Shares in the FTSE 100 company have had a terrible 2024. First, in February, fourth-quarter sales and profit missed forecasts, then the following month it lost a court case concerning its Enfamil infant formula. A trial is scheduled to start on 30 September. Reckitt shares rose 4% in UK trading Wednesday having come into this latest news down 21% year-to-date. Fellow consumer goods firm Unilever (LSE:ULVR) is up 2% in 2024 and the FTSE 100 index has risen by almost 5%.

Reckitt operates across the three divisions of hygiene, health, and nutrition, with hygiene and health each generating about 42% of revenues during 2023 and nutrition the balance of 16%.

Sales growth of 7.1% for hygiene led the way during the quarter, driven by a 2.9% increase in volumes and a 4.2% increase in prices. LFL health sales rose 1% while nutritional sales fell 9.9%.

Geographically, LFL sales growth of just over 5% for each of its European and ANZ combined region and Developing Markets business helped offset a 5.5% fall across North America.  

Reckitt's AGM is scheduled for 2 May, with interim results scheduled to follow on 24 July.  

ii view:

Reckitt Benckiser was formed in 1999 via the merger of Reckitt Coleman and Dutch concern Benckiser. Today, and headquartered in Slough, it employs around 40,000 people globally. In 2023, the USA was its biggest generator of revenues at 31%, with the UK coming in at 6% and other countries the balance of 63%.  

For investors, legal challenges at its nutrition business and the potential cost of litigation settlements cast a shadow over the business. Consumer spending remains pressured by elevated borrowing costs, with some consumers likely to have traded down to cheaper supermarket brands. Operational challenges previously included inappropriate employee actions, while costs generally for businesses and including wages are now elevated.  

On the upside, diversity of both business type and geographical region exist. Its relatively new CEO is attempting to reinvigorate performance with various initiatives, including further investments into product superiority, as well as improving the consistency of its market execution, while a forecast dividend yield in the region of 4.7% is not to be overlooked.

For now, a discounted valuation compared to the wider European staples sector offers attractions and latest sales numbers are encouraging. However, there's work needed to get back to consistent growth, while the uncertainty of legal action is likely to mean some investors will prefer to watch events unfold. 


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


  • Uncertain economic outlook
  • Many supermarket own brands now compete

The average rating of stock market analysts:

Strong hold

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