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Latin America and Asia-Pacific In Latin America and Asia-Pacific, which delivered 28% of core net revenues, total net revenues YTD increased 11% at constant exchange rates to £1,736m, with like-for-like growth of 11%. In Health, Paras brands in India and Durex, particularly in China, grew very strongly. In Hygiene, Dettol, Finish, and Harpic delivered strong growth behind initiatives such as Dettol Daily Care, Re-energize, and High Performance for Men soap and shower gels. Surface cleaners continued to experience good growth across the Area. Vanish and Air Wick performed well in the Home category.
Europe and North America In Europe and North America, which delivered 55% of core net revenues, total net revenues YTD decreased to £3,442m with flat like-for-like growth. Within this geographic area, Gaviscon and Durex delivered strong results for the health division, though this was offset by weakness YTD in seasonal brands such as Mucinex, Strepsils and certain products within Nurofen on the back of a slower start to the 'flu season earlier in the year. Its Hygiene brands of Lysol and Finish performed strongly, particularly in the US behind new initiatives, such as Lysol Power & Free, Finish Quantum and All-in-1 gel packs and tablets. In the Home category, Vanish shares showed positive momentum, although the market is still down.
Shares in household products and personal care behemoth Reckitt Benckiser jumped after it produced solid results for the third quarter, with like-for-like net revenue growth of four per cent at constant exchange rates driven by strong growth in emerging markets. It also said it will meet growth expectations. For the year-to-date (YTD), net revenues of £7,091m were also up 4% on a like-for-like basis. However, if you include the impact of exchange rates, net revenues for the year to date were flat compared with the same period in 2011. Rakesh Kapoor, Chief Executive Officer, said: "Reckitt Benckiser's strong third quarter results were underpinned by an excellent performance in emerging markets and an improved performance in Europe North America. Growth came from all core areas and categories. RBP continues to make very good progress with Suboxone sublingual film. I am very pleased that our new strategy and our renewed commitment to managing the business for the long term are showing encouraging results. "Our results give us the confidence to reiterate our FY 2012 target of like-for-like net revenue growth (excluding its RBP acquisition) of 200bps above our market growth rate. We now expect market growth to be at the top end of the 1-2% range. We continue to expect to maintain full year operating margins."
Positive Points: Sales growth was at the upper end of analyst forecasts. Management highlighted growth coming from all core areas and categories. The results give the board the confidence to reiterate its core full year 2012 sales target. Management now expects market growth to be at the top end of its 1 to 2% range. The board continues to expect to maintain full year operating margins (both targets exclude the Pharmaceutical business). Management previously confirmed that the group's new organisational structure was fully in place and that they were seeing early benefits of increased operational focus, in particular, speed, scale and consistency in execution. Cost savings from acquisitions continue to be pursued. Many of the group's products e.g. Nurofen painkillers, continue to prove defensive in difficult economic times. The group's dividend policy remains progressive. The Chief Executive is considered to have played a significant role in forging current group success.
Negative Points: Group net revenue before adjusting for currency movements declined by 1%. For its Europe and North American (ENA) region, sales on a like-for-like unadjusted basis fell by 4% and stayed unchanged on a currency adjusted basis. Competition from rivals remains intense, particularly in the group's home European market. Furthermore, other household goods companies are also looking to the Emerging Markets to provide future growth. Concerns regarding potential rival drugs impacting on the group's Pharmaceutical business remain. The company's heroin substitute drug Suboxone lost its US tablet patent in October 2009. Input and packaging costs account for approximately 30% of group sales. Net debt of £1.8 billion at the end of June was reported, up from £1.7 billion at the end of 2011, reflecting the final 2011 dividend payment and share repurchases.
Financial Highlights: Group total net revenue fell by 1% on an actual basis, although rose by 4% when adjusted for currency movements. Like-for-like sales growth of 5% on a constant currency basis was recorded.
Third quarter results: Reckitt enjoys growth from all core areas and categories. The update saw management highlighting growth coming from all core areas and categories. An excellent performance was enjoyed in the Emerging Markets, whilst an improving performance for its now combined European and North America division was reported. A stabilising promotional environment in laundry care and Vanish played its part, whilst higher brand investment also contributed. The share price was up more than 5% following the midday news release. The group's pharmaceutical business also made progress. Currency adjusted sales grew by 6%, with growth coming from strong volume growth in the US. Conversion from tablets to film continued to increase with market volume share of 60% reported, up from 48% at the end of 2011. Management noted that "our new strategy and our renewed commitment to managing the business for the long term are showing encouraging results." The results give the board the confidence to reiterate its core full year 2012 sales target. In all, concerns for slowing group growth under the relatively new Chief Executive
Company overview The Anglo-Dutch group is the world's biggest manufacturer and distributor of household cleaning wares, along with providing a range of healthcare products. Brands include Finish dishwasher tablets, Dettol antiseptic, Lemsip flu powder, Vanish, Jet Dry, Air Wick, Veet, Napisan, Electrasol, Rodasol, Gaviscon, Brasso, Woolite, and Nugget. Products are sold in 180 countries and operations are conducted from 60 countries. The group employs around 23,000 people and is a constituent in the UK’s leading FTSE-100 index.
Consumer products giant Reckitt Benckiser is due to report its third-quarter results on Wednesday. The company, whose 'powerbrands' include Vanish, Harpic, Cillit Bang and Finish, is expected to report a 3.8% organic sales growth rate on the guided metric (excluding RB Pharmaceuticals and including Foods), according to consensus estimates. Investec, however, predicts a 3.1% increase - "a low-end view", it admits. "We note the one percentage point tougher comp than Q2, continuing challenges in Southern Europe and hints of a slowdown in Asia," said analyst Martin Deboo in a research report on Monday. "We continue to see the impending change of CFO as a positive catalyst and are warming to the Reckitt story. But there are some difficult H2 waters to navigate," Deboo said.
This news comes just about month after he and the CFO fell out and then he fired the CFO with a very vitriolic press release . .. Wonder when exactly this lack of corporate governance and failure to obey the financial rules came to light internally? ? does'nt give me a good feeling about what else is there in the woodwork.
The chief executive of Reckitt Benckiser pledged millions of pounds of shares in the company to secure a personal loan more than two years ago without investors being told, it has emerged. Rakesh Kapoor, who earned £736,000 last year, used shares currently worth £7.4m as collateral for a personal loan with Bank of America Merrill Lynch. More shares were added after the loan was taken out in June 2010, taking the total value of the shares to £8.7m at today's prices. The position was only revealed to shareholders after the company consulted with the Financial Services Authority. Regulations make it clear the market must be informed if shares are used as collateral for loans. The company also disclosed that Freddy Caspers, a member of the company's executive committee, sold 200,000 shares in December 2008. The shares are worth £7.3m at today's prices, The Telegraph reports.
Questor, in the Telegraph, is sticking to its guns on consumer goods giant Reckitt Benckiser. The column identified the group as weaker than rival Unilever but is now forced to admit the Chief Executive’s plans are going well. The shares trade on 14.4 times earnings and yield 3.6 per cent. The only problem is, the group is exposed to the 'old world' of Europe and the US. The recommendation is 'sell'.
Positive Points: Management's strategy is for a renewed emphasis on its fastest growing health and hygiene brands like Dettol, Strepsils and Durex and moving quicker into the key BRIC emerging markets of Brazil, Russia, India and China. Cost savings from acquisitions continue to be pursued. Many of the group's products e.g. Nurofen painkillers, continue to prove defensive in difficult economic times. The group's dividend policy remains progressive. Management confirmed the group's new organisation structure was fully in place and they were seeing early benefits of increased operational focus, in particular, speed, scale and consistency in execution. The Chief Executive is considered to have played a significant role in forging current group success.
Negative Points: The company's more established markets in the US and Europe proved difficult in the period, with tough conditions expected to continue. Competition from rivals is intense, particularly in the group's home European market. Furthermore, other household goods companies are also looking to the Emerging Markets to provide future growth. Profits within the group's pharma business could see pressure if a number of generic drug enter the market. Input and packaging costs account for approximately 30% of group sales. Net debt of £1.8 billion at the end of June was reported, up from £1.7 billion at the end of 2011, reflecting the final 2011 dividend payment and share repurchases.
Financial Highlights: Net profit in the six months to 30 June rose 2.6% to £779 million, from £759 million a year earlier. Revenue in the period increased to £4.67 billion, from £4.62 billion in the same period a year ago. The Board declared a 2% increase in the interim dividend to 56p per share.
Half Year Results: Reckitt Benckiser Plc warned on a tough outlook for consumer spending in mature markets as it posted a modest rise in profits, helped by demand for household and medical products in its emerging markets. Total net revenue, at constant rates, increased 4% to 4.67 billion pounds. Health and Hygiene underpinned the group's performance from a category perspective with particularly strong performances seen from RB’s major non seasonal Health power brands such as Durex and Gaviscon, and from Hygiene - Dettol, Lysol, Finish and Harpic. Reckitt Benckiser reiterated its February forecast for growth of 3% to 4% in non-pharmaceutical revenue this year at constant exchange rates, and unchanged operating profit margins. On balance,
The Anglo-Dutch group is the world's biggest manufacturer and distributor of household cleaning wares, along with providing a range of healthcare products. Brands include Finish dishwasher tablets, Dettol antiseptic, Lemsip flu powder, Vanish, Jet Dry, Air Wick, Veet, Napisan, Electrasol, Rodasol, Gaviscon, Brasso, Woolite, and Nugget. Products are sold in 180 countries and operations are conducted from 60 countries. The group employs around 23,000 people and is a constituent in the UK’s leading FTSE-100 index.
Reckitt Benckiser Group (RB.) reported year-on-year revenue growth for 1% for the six months ended 30th June, to 4.7 billion pounds, while pre-tax profits grew by 2.5% to 1.06 billion pounds. The consumer goods firm noted that it outperformed the market under difficult trading conditions, with US peer Procter and Gamble previously issuing a profit warning. The company achieved strong growth in the emerging markets of Latin America, Asia and Russia, compensating for adverse exchange rate movements and declines in revenue from the mature markets of North America and Europe. The shares slipped by 6p to 3,536p.
2012 Targets The HY 2012 results position the Group well to achieve its FY 2012 financial targets. For the Group excluding RBP, the target is for like-for-like net revenue growth of +200 basis points ahead of our market growth. We continue to expect the market to grow at 1-2%. We also expect to maintain margins on an adjusted basis* (ex RBP) as we invest behind brand equity building initiatives.
Commenting on these results, Rakesh Kapoor, Chief Executive Officer, said: " Six months into our Purpose driven strategy, Reckitt Benckiser has delivered revenue growth well ahead of our market. On a LFL basis (ex RBP), Net revenue growth of 4% was driven by continued excellent performance from Emerging Market Areas and Hygiene Brands such as Dettol, Lysol and Finish. While the consumer and competitive environment in Europe and North America remains challenging, we are doing the right things for the long term by increasing our Brand Equity Investment. Our H1 margins are in line with expectations with higher input costs and increased investment being partially offset by cost savings programmes. The new organisation structure is fully in place and we are seeing early benefits of increased operational focus: speed, scale and consistency of our execution. RBP continues to make very good progress with the Suboxone sublingual film now at 56% market volume share. These results and our exciting innovations for H2, backed by further increased Brand Equity Investment underpins our confidence in our FY 2012 target of 200bps above our market growth rate of 1-2%."
Highlights: Half Year (HY) - LFL growth +4% (+4% ex-RBP) driven by strong Emerging Market (EM) growth. - Q2 LFL growth +4% (+4% ex RBP). Similar trends to Q1. - Gross margin -60bps to 56.3%: adjusted operating margin +10bps to 24.0%. - Increased brand equity investment (BEI), ex RBP, of £40m* (+60bps) and within this media +40bps. - Adjusted net income +2% (+4% constant): adjusted diluted EPS of 111.1p (+2%). - Net working capital of minus £752m, reflecting a £51m improvement versus year end 2011. - Net debt of £1,846m (31 December 2011: £1,795m), with strong free cash flow generation offset by final 2011 dividend payment and share repurchases. - The Board declares a +2% increase in the interim dividend to 56p per share. * at constant rates
http://www.investegate.co.uk/Article.aspx?id=20120730070000PDE24
Consumer products group Reckitt Benckiser was under the weather on Thursday morning after Credit Suisse downgraded its rating on the stock from 'outperform' to 'neutral' and cut its target price to 3,500p from 3,800p. "Reckitt’s historical outperformance in the marketplace was driven by its almost unique ability to garner growth from the developed markets, and in particular Europe," the broker said in a research note. "This hasn’t been the case for two to three years now, and we don’t see that changing any time soon. In part it is the market, but market share is also a contributory factor, and competition isn’t about to ease off."
eckitt Benckiser Group Buy 15-May-12 £51,581.25 Richard John Cousins 1,500 @ 3,438.75p
Canaccord Genuity kept its "sell" recommendation on Reckitt Benckiser (RB.) with a 3,075p target price. The broker noted that JAB Holdings is planning to cut its stake in the consumer goods company from around 15.5% to 10.6%, at a potential discount of between 5% and 9% to Wednesday's closing price of 3,566p. Canaccord believes that this could lead to reduced demand for the shares, and added that JAB may later chose to reduce its holding even further.