Reckitt Benckiser's raised its annual revenue growth target on Friday after quarterly sales rose 4% on a like-for-like basis, helped by better-than-expected growth in its infant and child nutrition business.
The British maker of Dettol expects revenue to rise 14 to 15%, higher than its previous target of 13 to 14%.
Infant and child nutrition was experiencing strong growth above medium-term expectations, led by China, the world's largest market for the products, Reckitt said.
MJN Integration
“Delivering growth and the successful integration of Mead Johnson Nutrition (MJN) remain our key priorities,” said Rakesh Kapoor, the company’s chief executive. “Q2 was a quarter of progress against both of these priorities.”
Kapoor added that the MJN integration is well on track, “with IFCN performance exceeding expectations and synergies being delivered. RB 2.0 is driving greater focus and energy as we operate under our new business units – Health and Hygiene Home. I am confident that as we fully realise the benefits of RB 2.0, we will deliver outperformance in both business units.”
Competitive Marketplace
The higher forecast comes as Reckitt and other consumer goods companies struggle to raise prices in an ultra-competitive retail marketplace. However, the recent rise in costs have forced some of companies to pass along these to customers.
The maker of Durex condoms, Lysol disinfectant and Mucinex cold medicine said revenue rose 5%, on a pro-forma basis, to £3.02 billion for the three months ended June 30.
The pro-forma growth was helped by 3% volume growth and 2% from pricing mix in the second quarter, the company said.
Since January, Reckitt began operating two units. Its health-related products, which make up most of the business, saw like-for-like sales up 3%, while its home and hygiene business that offers products like Harpic and Lysol rose 4%.
News by Reuters, edited by ESM. Additional reporting by Stephen Wynne-Jones. Click subscribe to sign up to ESM: European Supermarket Magazine.
