* Like-for-like sales grew by a record 11.8% last year
* Forecasts 2021 like-for-like sales up 0-2%
* Announces sale of Scholl footcare business
* Shares up 1.7%
(Adds detail, analyst, shares)
By Siddharth Cavale
Feb 24 (Reuters) - British consumer goods group Reckitt
Benckiser expects to maintain strong sales this year, it
said on Wednesday as it posted record pandemic-driven sales in
2020 and announced the sale of its Scholl footcare business.
Reckitt boss Laxman Narasimhan described 2020 as a turning
point for the maker of cleaning products such as Lysol and
Dettol, creating a much larger market even though sales are
likely to dip from levels reached at the height of the COVID-19
pandemic.
The company said it expects 2021 sales to come in between
flat and 2%, beating the 0.4% decline forecast in a
company-supplied poll of analysts.
Reckitt shares, down about 7% over the past year, were up
1.7% at 60.70 pounds in morning trade.
The Slough-based company reported an 11.8% rise in
like-for-like sales growth last year, the largest increase since
Reckitt's formation in 1999, but marginally lower than the 11.9%
analysts had expected.
The boost has mainly come from its hygiene business, a unit
once expected to be spun off from Reckitt, with like-for-like
annual sales rising by more than a quarter last year.
Chief Executive Narasimhan said that, while he expects some
of this hygiene demand to moderate over the long term, it would
still be a "substantially larger underlying market" than before
the pandemic.
EXPANSION INVESTMENT
The company spent about 745 million pounds ($1.1
billion)last year to spur what has been stubbornly slow growth
in recent years, including expansion of its disinfectant product
distribution to more countries.
By the end of 2021, Reckitt expects Dettol and Lysol
products to be in 70 more countries than in 2019.
Separately, Reckitt announced that it would sell its Scholl
footcare products business to private equity firm Yellow Wood
Partners and acquire Biofreeze pain relief gel from
rehabilitation and sports drug manufacturer Performance Health.
Terms of both transactions were not disclosed, but the
company said deals would initially be earnings-neutral.
Brokerage Jefferies said it estimates Scholl had sales of
about 250 million pounds in 2020, representing about 2% of group
sales.
"(Reckitt's) latest update triggered a positive market
reaction, but there is still the lingering question of whether
it can deliver sustainable growth over the longer term,
particularly as competition is tough in many of its product
areas," said AJ Bell investment director Russ Mould.
Reckitt also said on Wednesday that it had started a
strategic review of its infant formula business in Greater
China, which represents 6% of group sales, saying multiple
options were being explored.
Like rivals such as Danone, Reckitt has been facing
intense competition from Chinese baby formula brands that have
regained the trust of consumers since a baby milk scandal in
2008.
($1 = 0.7056 pounds)
(Reporting by Siddharth Cavale in Bengaluru
Additional reporting by Indranil Sarkar
Editing by Sherry Jacob-Phillips and David Goodman)
