REG - Reckitt Benckiser Gp - Q1 Results 2025
Wed 07:00
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RNS Number : 7634F Reckitt Benckiser Group PLC 23 April 2025
23 April 2025
Q1 Results 2025
SOLID START WITH CONTINUED STRATEGIC DELIVERY
"We delivered a solid first quarter driven by Core Reckitt with continued
strong growth in Emerging Markets. We continue to execute against our strategy
to make Reckitt a more efficient, world-class consumer health and hygiene
company, driven by increased investment, innovation, and our Fuel for Growth
programme. Our portfolio of high-growth, high-margin Powerbrands underpins our
resilience, and we maintain our outlook for full year 2025 whilst recognising
the more challenging macroeconomic outlook."
Kris Licht, Chief Executive Officer
LFL growth(1) Volume Price Net revenue IFRS growth
/ Mix (£m)
Emerging Markets +10.7% +6.8% +3.9% 1,044 +5.6%
Europe -1.7% -4.7% +3.0% 898 -4.7%
North America -0.9% -1.8% +0.9% 688 -0.4%
Core Reckitt +3.1% +0.3% +2.8% 2,630 +0.3%
Essential Home -7.0% -7.6% +0.6% 482 -9.7%
Mead Johnson Nutrition -0.5% -6.7% +6.2% 571 -1.7%
Group +1.1% -1.9% +3.0% 3,683 -1.4%
1. Adjusted and Non-GAAP measures are defined on page 6.
q1 highlights
· Core Reckitt LFL net revenue growth +3.1% driven by Germ Protection (+7.5%)
and Intimate Wellness (+16.6%) Powerbrands alongside improved market execution
and market share gains.
· Volume growth +0.3% for Core Reckitt, driven by strong performance in Emerging
Markets.
· Continued execution and strong innovation in Emerging Markets with LFL net
revenue growth +10.7%, led by Intimate Wellness and Germ Protection, with
double digit growth in China, and high single digit growth in India.
· Good market share gains in Europe against a backdrop of slowing market growth
in the quarter, with LFL net revenue -1.7%, as we lap phasing of shipments in
the prior year.
· North America delivering share gains through innovations amidst a volatile
macroeconomic backdrop and weakening consumer confidence, with LFL net revenue
-0.9%.
· Innovation delivering enhanced sustainable growth. Lysol Laundry and Air
Sanitizer driving category growth in North America, Durex Hyaluronic Acid
condoms in China and a positive roll-out of first-to-world Durex Nitrile
condoms in Europe.
· Fuel for Growth programme on track to deliver a 19% fixed cost base by end of
2027, with our GenAI program rolling out to R&D following the marketing
launch in 2024.
· Continuing to progress the separation of Essential Home. We continue to seek
an exit in 2025, whilst recognising that market conditions may impact this
timeframe.
· £1 billion Share Buyback Programme ongoing. As of 17 April 2025, a total of
£815m of shares bought back since the current programme commenced on 26 July
2024.
· FY 2025 outlook maintained; expect Group LFL net revenue growth of +2% to +4%
and targeting +3% to +4% LFL net revenue growth in Core Reckitt, with a
relatively balanced delivery across H1 and H2.
Core Reckitt Performance
LFL growth(1) Volume Price / Mix Net revenue (£m) Net M&A FX IFRS growth
Emerging Markets +10.7% +6.8% +3.9% 1,044 -1.4% -3.7% +5.6%
Europe / ANZ -1.7% -4.7% +3.0% 898 -0.1% -2.9% -4.7%
North America -0.9% -1.8% +0.9% 688 - +0.5% -0.4%
Core Reckitt +3.1% +0.3% +2.8% 2,630 -0.5% -2.3% +0.3%
1. Adjusted and Non-GAAP measures are defined on page 6.
Emerging Markets (40% of Core Reckitt Q1 net revenue)
· Emerging Markets net revenue grew +10.7% on a LFL basis in Q1 to £1,044m,
with +6.8% volume growth and +3.9% impact from price / mix.
· India and China delivered a strong quarter of broad-based growth across
categories, with continued success of recently launched new segments in China.
· Latin America declined mid-single digits as it lapped the phasing of sales in
Brazil in Q1 2024 ahead of SAP implementation, and weaker cold and flu season
in Mexico.
· Intimate Wellness outperformed the market supported by sustained market
leadership in Durex across the Area, and continued strong online momentum for
Intima, our feminine hygiene brand, in China. Dettol delivered double digit
growth led by innovation in new segments such as washing machine cleaners and
strong performance of our bar soap business in India. Harpic continued to
drive toilet cleaners' penetration in India, while also entering the drain
cleaner segment. VMS grew strongly, underpinned by the continued success of
Move Free in China.
Europe (34% of Core Reckitt Q1 net revenue)
· Europe net revenue declined -1.7% on a LFL basis in Q1 to £898m, with +3.0%
price / mix improvement offset by a -4.7% volume decline as we lap phasing of
shipments in the prior year.
· Good market share recovery, with positive momentum on share gains in the
quarter, against a backdrop of slowing market growth through the quarter.
· Self Care declined mid-single digits against a strong prior year comparison
which benefited from significant inventory restocking across our Health
portfolio. However, year to date we have seen broad-based market share gains,
particularly Nurofen and Strepsils.
· Finish was broadly flat in the quarter as we lap a high base due to innovation
launches in Q1 last year, albeit with good market share momentum.
· Across our other categories, Germ Protection delivered mid-single digit
growth, driven by strong execution across markets including Italy and Germany.
Intimate Wellness grew low single digits, with strong share gains in Durex
across markets and a strong start to the rollout of our new Durex Intensity
condoms, made from nitrile.
North America (26% of Core Reckitt Q1 net revenue)
· North America net revenue declined -0.9% on a LFL basis in Q1 to £688m, with
+0.9% price / mix improvement and -1.8% volume decline, primarily due to
retailer destocking, particularly within VMS in the drug channel.
· Our innovation platforms are enabling market share gains, despite a volatile
macro-economic backdrop and slowing consumer confidence impacting the retail
environment. Lysol Air and Laundry Sanitiser, as well as Mucinex Sinus Nasal
Spray and MightyChews all drove category growth and share gains in Q1.
· By brand in the quarter, Lysol performed well, growing low-single-digit,
despite a slower-than-expected ramp-up of new capacity to meet strong consumer
demand, and VMS grew mid-single-digit, driven by strong performance from our
Airborne immunity brand, as the cold and flu season peaked in the quarter.
Mucinex declined low-single-digit, impacted by the phasing of shipments as
retailers began the quarter with higher inventory levels. Finish also declined
low-single-digits, as we continue to see heightened competition in the US auto
dish category.
· Our focus on in-market execution is showing results. We delivered growth
across mass retail and club channels, underpinned by improved on-shelf
execution, with some offset from a softer performance in the drug channel.
LFL growth(1) Volume Price / Mix Net revenue (£m) Net M&A FX IFRS growth
Self-Care -3.6% -7.2% +3.6% 846 -1.3% -1.9% -6.8%
Germ Protection +7.5% +6.8% +0.7% 813 - -2.1% +5.4%
Household Care -0.2% -3.4% +3.2% 580 - -3.0% -3.2%
Intimate Wellness +16.6% +12.1% +4.5% 391 -0.3% -2.6% +13.7%
Core Reckitt +3.1% +0.3% +2.8% 2,630 -0.5% -2.3% +0.3%
1. Adjusted and Non-GAAP measures are defined on page 6.
Core Reckitt (71% of Group Q1 net revenue)
Self-Care
· Net revenue declined -3.6% on a LFL basis to £846m in the quarter, with
volume of -7.2% and price / mix of +3.6%.
· Seasonal OTC brands declined mid-single digits, primarily due to phasing of
shipments as retailers entered the quarter with higher-than-normal levels of
inventory.
· This was partially offset by strong double-digit growth in VMS, led by
continued success of Move Free in China and robust performance of Airborne
immunity brand in the US, as the cold and flu season peaked in the first
quarter.
· Gaviscon also delivered low-single-digit growth, led by continuous consumer
demand and supported by improved supply availability to meet strong consumer
demand.
Germ Protection
· Net revenue grew +7.5% on a LFL basis to £813m in the quarter, with volume of
+6.8% and price / mix of +0.7%.
· Growth was led by Dettol, which delivered double-digit growth, supported by
strong momentum in China, driven by the successful launch of several new
innovations. India also performed well, with high-single-digit growth
reflecting the benefit of pricing actions taken in the prior year. Harpic grew
high single digits in the quarter, led by double digit growth in India driven
by increased penetration and entry into the drain cleaner segment.
· Lysol grew low-single-digit, with broad-based growth across all Areas.
Performance was particularly strong in Emerging Markets, delivering
high-single-digit growth and maintaining momentum despite new entrants in the
category.
Household Care
· Net revenue declined -0.2% on a LFL basis to £580m in the quarter, with
volume of -3.4% and price / mix of +3.2%.
· Finish grew low-single-digit, with strong double-digit growth in Emerging
Markets, offset by low-single-digit decline in North America due to heightened
competitive pressure in the auto dish category.
· Vanish declined low single digits, reflecting a softer performance in Emerging
Markets as we lap a higher base in Brazil where additional sell in occurred
ahead of last year's SAP implementation at the end of the quarter.
Intimate Wellness
· Net revenue grew +16.6% on a LFL basis to £391m in the quarter, with volume
of +12.1% and price / mix of +4.5%.
· We saw broad-based double-digit growth across both Powerbrands, supported by
strong market share gains in key markets. This was driven by higher rates of
adoption, improved in store execution, distribution gains, and the successful
rollout of Durex Performance and Hyaluronic Acid condoms in China, as well as
Durex Intensity condoms, made from Nitrile, in Europe.
Non-Core Segments
Essential Home (13% of Group Q1 net revenue)
· Essential Home net revenue declined -7.0% on a LFL basis in Q1 to £482m, with
volume of -7.6% and price / mix of +0.6%.
· Market shares were in decline in North America and Europe, reflecting
continued competitiveness, particularly in the US Air Care category, with some
improving trends in Latin America.
· LFL net revenue performance was impacted by the comparative of a strong pest
season in Q1 2024, as well as a higher base in Brazil due to additional
sell-in ahead of last year's SAP implementation at the end of the quarter.
· New management team are focused on improving performance, particularly in US
Air Care, and we expect negative LFL net revenue in the first half of the year
ahead of a recovery in the second half.
Mead Johnson Nutrition (16% of Group Q1 net revenue)
· Mead Johnson Nutrition net revenue declined -0.5% on a LFL basis in Q1 to
£571m, with volume of -6.7% and price / mix of +6.2%.
· Our North America business continues to recover following the supply
disruption caused by the Mount Vernon tornado in the second half of 2024,
which impacted on-shelf availability. We are rebuilding our US non-WIC value
market shares, as we regain new family product adoption following the absence
of samples and supplies.
· Performance also reflects the lapping of private label supply shortages and
Nutramigen restocking in Q1 2024.
Q2 / H1 and FY 2025 outlook
We maintain our FY 2025 outlook
· We are targeting +3% to +4% LFL net revenue growth in Core Reckitt, with a
balanced delivery across H1 and H2.
o In Q2, we expect Core Reckitt growth to be led by Emerging Markets
(mid-to-high single digit growth), with low-single digit growth in Europe and
low-single digit decline in North America.
o In H2, growth is expected to be more balanced across all three Areas with
North America returning to growth.
· We expect low-single digit LFL net revenue growth in Essential Home and Mead
Johnson Nutrition in 2025, with both being second half weighted. Both
businesses will show LFL net revenue declines in H1.
· Overall, for 2025, we expect Group LFL net revenue growth of +2% to +4%, with
Essential Home and Mead Johnson Nutrition more second half weighted.
· Our Fuel for Growth programme is expected to help drive adjusted operating
profit ahead of net revenue growth.
· We expect to deliver another year of adjusted diluted EPS growth.
· Other technical guidance:
o Adjusted net finance expense is expected to be in the range of £350m to
£370m (2024: £323m)
o The adjusted effective tax rate is expected to be 25% to 26% (2024: 22.2%)
o Capital expenditure as a percentage of net revenue is expected to be 3% to
4% (2024: 3.3%)
· We are closely monitoring the evolving situation around global tariffs and the
potential impacts on our supply chain and cost base. From what we know today,
our latest modelling identifies an immaterial annualised impact on our COGS
base which we are confident in mitigating over the short to medium-term
through a number of levers. These include our inflight manufacturing
investments, such as the recent investment in our Wilson, North Carolina,
manufacturing facility, our excellent brand equities with pricing power, and
limited imports from China into the US.
COnference call / enquiries
We will be hosting a live audiocast followed by a Q&A session for analysts
and investors at 08:30 (BST) on Wednesday 23 April 2025 at
https://www.reckitt.com/investors/results-and-presentations/
(https://www.reckitt.com/investors/results-and-presentations/)
Alternatively, dial in details are as follows:
United Kingdom: 0800 358 1035
All other locations: +44 20 3936 2999
Participant access code 598804
Enquiries:
Investors: Nick Ashworth +44 (0)7408 812350
Jon Bone +44 (0)7408 811493
Media: Patty O'Hayer, External Relations and Government Affairs +44 (0)7825 755688
Charlie Armitstead, FTI Consulting +44 (0)7703 330269
Cautionary note concerning forward-looking statements
This announcement contains statements with respect to the financial condition,
results of operations and business of Reckitt Benckiser Group plc and the
Reckitt group of companies (the "Group") and certain of the plans and
objectives of the Group that are forward-looking statements. Words such as
''intends', 'targets', or the negative of these terms and other similar
expressions of future performance or results, and their negatives, are
intended to identify such forward-looking statements. In particular, all
statements that express forecasts, expectations and projections with respect
to future matters, including targets for net revenue, operating margin and
cost efficiency, are forward-looking statements. Such statements are not
historical facts, nor are they guarantees of future performance.
By their nature, forward-looking statements involve risk and uncertainty
because they relate to events and depend on circumstances that will occur in
the future. There are a number of factors that could cause actual results and
developments to differ materially from those expressed or implied by these
forward-looking statements, including many factors outside the Group's
control. Among other risks and uncertainties, the material or principal
factors which could cause actual results to differ materially are: the general
economic, business, political, geopolitical and social conditions in the key
markets in which the Group operates; the Group's ability to innovate and
remain competitive; the Group's investment choices in its portfolio
management; the ability of the Group to address existing and emerging
environmental and social risks and opportunities; the ability of the Group to
manage regulatory, tax and legal matters, including changes thereto; the
reliability of the Group's technological infrastructure or that of third
parties on which the Group relies including the risk of cyber-attack;
interruptions in the Group's supply chain and disruptions to its production
facilities; economic volatility including increases in tariffs and the cost of
labour, raw materials and commodities; the execution of acquisitions,
divestitures and business transformation projects; product safety and quality,
and the reputation of the Group's global brands; and the recruitment and
retention of key management.
These forward-looking statements speak only as of the date of this
announcement. Except as required by any applicable law or regulation, the
Group expressly disclaims any obligation or undertaking to release publicly
any updates or revisions to any forward-looking statements contained herein to
reflect any change in the Group's expectations with regard thereto or any
change in events, conditions or circumstances on which any such statement is
based.
LEI: 5493003JFSMOJG48V108
APPENDIX - ALTERNATIVE PERFORMANCE MEASURES
Like-for-like (LFL): Net revenue growth or decline at constant exchange rates
(see below) excluding the impact of acquisitions, disposals and discontinued
operations. Disposals include low margin manufacturing revenues which are
agreed at the time of sale of a brand or business. Completed disposals are
excluded from LFL revenue growth for the entirety of the current and prior
years. Acquisitions are included in LFL revenue growth twelve months after the
completion of the relevant acquisition. LFL growth also excludes countries
with annual inflation greater than 100% (Venezuela and Argentina).
Constant exchange rate (CER): Net revenue and profit growth or decline
adjusting the actual consolidated results such that the foreign currency
conversion uses the same exchange rates as were applied in the prior year and
excludes the effect of applying hyperinflation accounting in the relevant
subsidiaries.
Reconciliation of IFRS to Like-for-Like Net Revenue
For the quarter ended 31 March
Net revenue Emerging Markets Europe North America Core Reckitt Essential Home Mead Johnson Group
£m £m £m £m £m £m £m
2024 IFRS (Restated)(1) 989 942 691 2,622 534 581 3,737
M&A (12) (1) - (13) - (2) (15)
Exchange and hyperinflation (27) (13) (5) (45) (23) (11) (79)
2024 Like-for-like 950 928 686 2,564 511 568 3,643
2025 IFRS 1,044 898 688 2,630 482 571 3,683
M&A - - - - - (8) (8)
Exchange and hyperinflation 8 14 (8) 14 (7) 2 9
2025 Like-for-like 1,052 912 680 2,644 475 565 3,684
Like-for-like growth 10.7% -1.7% -0.9% 3.1% -7.0% -0.5% 1.1%
(1 In 2025, Reckitt has transferred some globally managed export businesses to
be locally managed (within Reckitt Core and Essential Home). 2024 comparatives
have been restated based on the location of the customer, rather than the UK
domicile of the legal entity.)
For the quarter ended 31 March
Net revenue Self Care Germ Protection Household Care Intimate Wellness Core
Reckitt
£m £m £m £m £m
2024 IFRS (Restated)(2) 908 771 599 344 2,622
M&A (12) - - (1) (13)
Exchange and hyperinflation (16) (12) (11) (6) (45)
2024 Like-for-like 880 759 588 337 2,564
2025 IFRS 846 813 580 391 2,630
M&A - - - - -
Exchange and hyperinflation 2 3 7 2 14
2025 Like-for-like 848 816 587 393 2,644
Like-for-like growth -3.6% 7.5% -0.2% 16.6% 3.1%
(2 Updated from results issued on 6 March 2025, for certain products that are
being managed as part of germ protection rather than household portfolio.)
Reconciliation of IFRS like-for-like net revenue excluding seasonal OTC brands
For the quarter ended 31 March
Net revenue Self Care Core Reckitt
£m £m
2024 Like-for-like 880 2,564
2024 seasonal OTC 361 361
2024 LFL ex. seasonal OTC 519 2,203
2025 Like-for-like 848 2,644
2025 seasonal OTC 338 338
2025 LFL ex. seasonal OTC 510 2,306
2025 Like-for-like growth -3.6% 3.1%
2025 LFL growth ex. seasonal OTC -1.7% 4.7%
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