Reckitt Benckiser faces a dip in revenue but maintains a positive outlook by restructuring set for 2025.
- The company reported a 0.5% like-for-like revenue growth despite a 3.8% annual decline.
- Hygiene and health sectors expanded, while nutrition sales fell due to supply issues.
- A new structure will organize the business into three divisions, focusing on high-margin brands.
- Reckitt’s leadership team reshuffle and share buyback program are progressing well.
Reckitt Benckiser has disclosed facing a decline in like-for-like revenue as the firm continues to encounter post-pandemic challenges. Despite reporting a -0.5% growth in like-for-like net revenue for the third quarter, there was a slight increase of 0.4% in revenue for the year ending September 30. Overall, the company experienced a 4% decline in net revenue for both the quarter and a 3.8% drop for the year up to the end of September.
Notwithstanding these challenges, Reckitt remains firm in its claim that it is on track to meet its full-year targets. The company anticipates all divisions to deliver robust like-for-like net revenue growth in the fourth quarter. Although Reckitt’s hygiene and health sectors experienced expansion of 2.1% and 3.2% respectively, the nutrition sector suffered a substantial -17.3% fall in sales on a like-for-like basis. This nutritional decline was attributed to supply-related issues valued at £100 million, which emerged following the Mount Vernon tornado in July.
Nevertheless, the corporation assured that its transformational journey is progressing as planned. Reckitt is set to unveil a new operating structure in January 2025, restructuring into three divisions: Reckitt, Essential Home, and Mead Johnson Nutrition. In upcoming quarters, the focus will be on high-margin Powerbrands, while strategically evaluating options for its non-core Essential Home and Mead Johnson Nutrition portfolios.
The firm has undergone a reshuffle in its global leadership team, marking a new phase with significant senior roles filled by newly appointed leaders. Additionally, Reckitt has highlighted advancements in its share buyback program, having completed £321 million of the planned £1 billion buyback announced earlier in the year.
Chief Executive Officer Kris Licht remarked, “Our third quarter delivery aligns with our guidance at the half-year mark. Health delivered sequential improvement in the quarter and hygiene maintained solid growth despite facing a more competitive environment in developed markets,” offering insights into the company’s resilience and strategic vision.
Reflecting on the nutritional segment, Licht noted the adverse impact of the Mount Vernon tornado on sales, while expressing confidence in the resilience and strength of the company’s categories and brands, describing them as resilient with a balanced algorithm for growth. Looking towards the future, Licht shared, “We are moving rapidly in executing the reshaping of Reckitt by sharpening our portfolio, simplifying the organization, and enhancing shareholder returns. Further details on the new operating model and future targets will be provided alongside our full-year results update.”
Reckitt navigates current revenue challenges with optimism, poised for growth through strategic restructuring and leadership initiatives.
