(Alliance News) - Reckitt Benckiser Group PLC on Wednesday said it swung to profit in 2020 as its cleaning and disinfectant brands got a sales boost from the coronavirus pandemic.
Shares in Reckitt were up 3.1% at 6,154.00 pence in London in morning trading.
The Slough, Berkshire-based consumer health and hygiene firm swung to a pretax profit of GBP1.87 billion from a loss of GBP2.11 billion in 2019.
Net revenue for 2020 increased 8.9% to GBP13.99 billion from GBP12.85 billion the year before, a hair below company-compiled consensus of GBP14.02 billion.
Like-for-like net revenue growth was 12%, with Reckitt noting the "very strong, volume-led growth in a Covid environment". The figure was exactly in line with market consensus in terms of like-for-like growth. Reckitt said it saw "sustained" strong demand for disinfectant product Dettol throughout the year.
Additionally, Reckitt had taken impairments totalling GBP5.12 billion in 2019, which reduced to just GBP985 million in 2020.
The firm's annual dividend was maintained at 174.6 pence per share, with a final 101.6p per share payout.
"Our category-leading germ protection/disinfection brands have all seen substantial market growth, with around 80% of our consumers expecting to retain many of their new improved habits post pandemic. We capitalised on these new behaviours with Dettol and Lysol entering 41 markets, with plans to enter a further 29 markets in 2021," said Chief Executive Laxman Narasimhan.
Narasimhan described 2020 as a "turning point" for the company, expecting further strategic progress in the year ahead.
For 2021, Reckitt expects like-for-like revenue in the range of flat to 2% growth year-on-year, with adjusted operating margin expectations broadly unchanged. The company said it will keep investing in growth in 2021, so expects that margin to be between 40 and 90 basis points lower than the 23.6% recorded in 2020, which in turn was down from 26.2% in 2019.
Separately, Reckitt said it has agreed to sell its Scholl brand and will be buying the Biofreeze brand.
Reckitt said it will sell footcare brand Scholl to Yellow Wood Partners, with the deal marking a "step forward in RB's plan to bring greater focus to its portfolio". The sale is subject to consultation with Reckitt's works council in France, which the company will now initiate, and the deal is expected to complete in the third quarter of this year.
Separately, Reckitt has agreed to buy the Biofreeze brand from Performance Health, a company owned by Madison Dearborn Partners. Reckitt said that Biofreeze is the number-one clinically recommended topical pain relief brand in the US, and has delivered "robust double-digit sales growth".
The Biofreeze buy is expected to complete in the second quarter of 2021. No financial details were disclosed for either deal.
By Anna Farley; annafarley@alliancenews.com
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