Reckitt Benckiser results defy credit crunch

By Simon Pitman

- Last updated on GMT

Related tags Revenue

An increased advertising spend and new product launches have helped UK cosmetics player Reckitt Benckiser to weather tough economic conditions.

The company announced its third quarter results, showing that sales had increased by 24 per cent at actual exchange rates, to £1.66bn, representing an increase of 13 per cent at constant rates.

For the first nine months of the financial year sales turnover was £4.73bn, an increase of 22 per cent at actual exchange rates and an increase of 12 per cent at constant rates.

Strong sales and profit growth

But the strong sales figures were also backed up by strong growth for the company’s net profits, a particularly impressive feat given that manufacturers are coming under increasing pressures as production costs continue to rise on the back of high energy costs.

The company has household, pharmaceutical as well as health and personal care business divisions – the latter representing the biggest sales turnover.

Net revenue for the health and personal care increased by 22 per cent during the quarter, to £1.19bn, reflecting strong growth in brands such as Dettol antiseptic, boosted by the introduction of a Dettol personal wash range for the developing markets.

Net income growth

Reported net income grew by 12 per cent at actual exchange rates, to reach £285m, while this figure represented 4 per cent at constant exchange rates.

The company said that the adjusted net income, which takes into account exceptional items, was up 31 percent at actual exchange rates, reflecting costs incurred in the corresponding quarter last year.

The results meant that net debt at the end of September stood at £1.08bn, which had increased from £952m for the year end 2007, reflecting the fact that the company had taken on additional debt following the £1.1bn acquisition of Adams Respiratory Therapeutics during the period.

Growth in all geographic regions

The company reported that during the third quarter growth came from all of its geographical regions – Europe, North America and Australia, developing markets – while its powerbrands enhanced these gains.

The company pointed out that new innovations, including Finish Quantum and Vanish Intelligence had also helped to drive sales.

The strong results meant that that the company has subsequently increased its full year targets, increasing projected sales revenue growth at constant exchange rates of 11 – 12 per cent up to 13 per cent, and underlining its expectation that net income will increases by 11 per cent at constant exchange rates.

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