- Group like-for-like (‘LFL’) net revenue growth of +7.9%: Broad-based growth across all Business Units and geographies. Price / mix was +12.4% benefitting from strong carry over pricing from H2 2022. Volumes declined by -4.5% with improving trends.
- Hygiene LFL net revenue growth of +2.0%: Strong growth in Finish, Harpic and Vanish led by innovation and penetration building initiatives. Lysol performed in line with expectations, with sequential improvement through the quarter, as it lapped the final quarter of tough Covid-related comparatives.
- Health LFL net revenue growth of +12.5%: Excellent performance across our OTC portfolio with +30% growth in the quarter. Intimate Wellness delivered mid-single digit growth. Dettol remains on track for growth in the year, despite a slight decline in the quarter.
- Nutrition LFL net revenue growth of +11.9%: Broad-based delivery with continued mid-single digit growth in developing markets and mid-teens growth in the US, due to restocking of retailer inventories and maintaining our market leading share position.
- Outlook: We now expect Group LFL net revenue growth of +3% to +5% for the year (including the lapping of the US Nutrition impact in 2022).
- Kris Licht to become CEO. Kris will become CEO-designate effective 1 May 2023 and will take over as CEO by the end of 2023.
According to the company’s website press release on April 26, 2023, Commenting on these results, Nicandro Durante, Chief Executive Officer, said: “We have made a strong start to the year across each of our business units and geographies reflecting further delivery from the investments we have made. In particular, our innovation programme has seen good early success across multiple launches, including Air Wick Active Fresh and Air Wick Vibrant, Finish Ultimate Plus All-In-One, our Dettol long-lasting germ protection platform, and Durex Invisible. Further innovations are planned for the upcoming quarters.
I am encouraged to see improving volume and share trends across our Hygiene GBU. Lysol performed in line with expectations, and we continue to expect Lysol to return to growth from Q2 underpinned by improved distribution and innovation. Our OTC brands continue to perform well in a strong growth category, and our Enfa brands are maintaining their leading market share positions in the US. Europe delivered a strong quarter across Health and Hygiene and China is yet to show the full benefit of reopening.
Considering the strong start to the year, we are now targeting +3% to +5% Group LFL net revenue growth for the year, underpinned by our well supported and exciting innovation programme, a resilient supply chain and ongoing executional improvements.
We have announced today that Kris Licht, current President of our Health GBU, has been appointed as CEO designate and will succeed me as CEO. Having played a pivotal role in both the transformation strategy and the significant turnaround of our Health GBU over the last three years, Kris is the right leader to take Reckitt on the next stage of its exciting journey. I look forward to working with Kris to deliver a seamless and uninterrupted transition.”
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 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.
OUTLOOK
- We have made a strong start across all our GBUs. We continue to expect more challenging competitive dynamics in our US Nutrition business in future quarters. We therefore target Group LFL net revenue growth of +3% to +5% in 2023 (including the lapping of the US Nutrition impact in 2022).
- We continue to expect adjusted operating margins to be in line with or slightly above 2022 levels when excluding the one-off benefit of circa 80bps in 2022 related to US Nutrition. Within our guidance we expect to significantly increase BEI to support an exciting innovation programme in 2023.
- In the medium-term, as previously guided, we expect adjusted operating profit to grow ahead of net revenue growth, achieving mid-20s margins by the mid-2020s.
Other technical guidance
- Adjusted net finance expense is expected to be in the range of £270m to £300m (previously £270m to £310m).
- The adjusted tax rate is expected to increase to around 24% (no change).
- Capital expenditure is expected to be around 3% of net revenue (no change).
