The FTSE 100 lists medical and home cleaning products giant Reckitt Benckiser (LON:RB), which saw sales growth in all divisions in the third quarter, added in a strong year of trading.
The group recorded a total growth of 13.3%, up to £3.5 billion in the third quarter. In other words, annual growth rate rose 12.4% to £10.4 billion.
This advancement was guided by growth across the operational segment, improving infant performance and increasing the nutrition business by 4.1%. Similarly, strong demand for Dettol and Durex rose 12.6% in its health segment, which is expected to not at the same time.
However, the show’s star is the hygiene business, with strong demand for Resore, Finish and Airwick, seeing double-digit growth in most markets, increasing its hygiene arm by 19.5%.
Other successful drivers for the company since the beginning of the year include: Dettol and Lysol are on sale in 19 new markets. Airwick mist has risen by 50% in the US. The first polyurethane durex to be released in China. And that e-commerce sales rose 45% in the third quarter alone.
These factors mean that while most guidance remains the same, we expect to report revenue growth like “double digits” for the full year of 2020.
Reckitt Benckiser cleans up
Speaking about the company’s booming performance, CEO Laxman Narasimhan commented.
“Our performance is led by an increase in hygiene and health volume led by market-leading disinfectant brands: Detre, Risore, Sagrotan and Napisan. Along with strong e-commerce momentum, growth is supported by improved customer service levels and improved supply chain performance. Nutrition revenue performance has improved quarterly, but it is fully focused on dealing with headwinds in Hong Kong and taking the necessary actions to bring about sustainable improvements.”
“By protecting, healing and nurturing the unrelenting pursuit of a clean, healthy world, we are uniquely positioned to help tackle the challenges the world is facing. Our plan to invest more than £2 billion over three years is on track, and this year is supported by an expanded productivity program that has provided £300 million savings so far. We are also reinvesting outperformance to capitalize on the strong demand for our products, particularly through Dettle and Lisole, e-commerce and professional channels.”
Investor’s Notes
Following the update, Reckitt Benckiser sharing rose at 1.58% or 114.00p, reaching 12:40 BST at 7,318.00p, respectively. This is comfortable with analysts’ consensus target price of 7,616.94pa share, falling behind that year’s high of 7,960p.
Analysts currently have a consensus “buy” rating for stocks, a 54.56% “outperform” rating from the MarketBeat community, and an AP/E ratio of 20.64.
