Reckitt Benckiser Group Plc reported first-quarter revenue growth that met analysts’ estimates, boosted by Durex condoms and Strepsils throat lozenges, and maintained its full-year outlook on better-than-expected sales of consumer-health products.
Like-for-like net sales rose 5 per cent, the Slough, England-based company said in a statement Monday. The health unit, which includes Nurofen painkillers and Scholl foot products, boosted sales 10 per cent, exceeding estimates.
"We had a good start to the year despite continued challenging market conditions," Chief Executive Officer Rakesh Kapoor said in the statement. The company continues to forecast growth of 4 per cent to 5 per cent in like-for-like sales for 2016 and "moderate" margin expansion over the mid-term.
Reckitt Benckiser is seeking to expand in healthcare – its fastest-growing business – as sales of products such as Mucinex and Gaviscon medicines outpace demand for food and homecare brands. Kapoor has said he’s keen to make acquisitions in that industry, which he views as fragmented and likely to consolidate.
The stock rose 0.9 per cent to 6,792 pence as of 8:11 am in London.
"Health at 10 per cent remains relatively strong and somewhat ahead of expectations," Jeff Stent, an analyst at Exane BNP Paribas, said in a note to investors.
Reckitt Benckiser’s sales in developing markets rose 10 percent on the back of growth in India and China, beating the consensus for 9.1 per cent growth. The company joined rival Unilever Plc in citing a tougher business environment in Brazil, amid a wider decline in some emerging-market currencies. Reckitt Benckiser’s sales were boosted by demand for pest-control products in Brazil due to the outbreak of the Zika virus.
Analysts had been expecting 4.7 per cent growth in first-quarter like-for-like sales, according to the average estimate of 14 analysts surveyed by Bloomberg. Reckitt Benckiser rounds its quarterly figures to the nearest whole number.
Like-for-like sales exclude acquisitions, disposals and currency shifts.
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