Proactiveinvestors United Kingdom Reckitt Benckiser https://www.proactiveinvestors.co.uk Proactiveinvestors United Kingdom Reckitt Benckiser RSS feed en Tue, 16 Jul 2019 03:34:24 +0100 http://blogs.law.harvard.edu/tech/rss Genera CMS action@proactiveinvestors.com (Proactiveinvestors) action@proactiveinvestors.com (Proactiveinvestors) <![CDATA[News - Reckitt Benckiser agrees to pay US$1.4bn to settle US Indivior lawsuit ]]> https://www.proactiveinvestors.co.uk/companies/news/223733/reckitt-benckiser-agrees-to-pay-us14bn-to-settle-us-indivior-lawsuit-223733.html Reckitt Benckiser Group PLC (LON:RB.) is to pay up to US$1.4bn to settle a long-running US investigation into how it sold and marketed an opioid addiction treatment.

The FTSE 100 giant had previously set aside US$400mln to cover the cost of the investigations, but it will now up this provision to an eye-watering US$1.5bn.

READ: Indivior shares hit all-time low after being hit with 28 fraud charges

The settlement relates to a Department of Justice investigation which accused Indivior, the prescription pharmaceuticals business spun out of Reckitt in 2014, of illegally boosting prescriptions of Suboxone – its blockbuster opioid addiction treatment.

An indictment back in April claimed Indivior had marketed its star drug as safer and less abusable than other treatments, deceiving healthcare providers and allowing the company to rake in billions of dollars in extra sales.

It was also accused of pushing patients towards doctors who it knew were prescribing opioids “at high rates and in a clinically unwarranted manner”.

Reckitt continues to deny the allegations but said it would settle the claims to avoid further litigation and uncertainty.

Not an admission of wrongdoing

“While RB has acted lawfully at all times and expressly denies all allegations that it engaged in any wrongful conduct, after careful consideration, the board of RB determined that the agreement is in the best interests of the company and its shareholders,” said Reckitt in a press release.

“It avoids the costs, uncertainty and distraction associated with continued investigations, litigation and the potential for an indictment at a time of significant transformation under RB 2.0 and during CEO transition.”

Analysts at City broker Liberum agreed with the company’s view: “The settlement at up to US$1.5bn, while larger than the existing US$400mln provision, is a necessary price to pay to close off this investigation and enable RB to move forward with the completion of its RB 2.0 program and transformation under new CEO Laxman Narasimhan.”

Shares react surprisingly well

In lunchtime trading, shares in Reckitt Benckiser were 2.4% higher at 6,580p.

Russ Mould, investment director at AJ Bell commented: “Being forced to foot a US$1.4bn bill would normally be cause for anger and alarm, to say the least. However, shareholders of consumer goods firm Reckitt Benckiser have reacted surprisingly well to news of today’s big settlement with US authorities.”

He added: “Given how aggressive US regulators can be, there must be some relief that a line has been drawn under the issue and incoming Reckitt chief executive, Pepsi man Laxman Narasimhan, can start with a clean slate.

“Because the fine will be met through existing borrowing facilities and cash flow, Narasimhan will inherit a company in slightly straitened circumstances, particularly as the balance sheet had already been stretched by the 2017 acquisition of Mead Johnson for an eye-watering US$17bn.

“And this could be a significant issue as several observers have identified a need for Reckitt to increase the investment behind its brands.”

Mould concluded: “The danger is that Narasimhan will be operating with one hand tied behind his back in his efforts to revive a business which has lost its way of late under current CEO Rakesh Kapoor.”

--Adds further analyst comment, updates share price --

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Thu, 11 Jul 2019 08:50:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/223733/reckitt-benckiser-agrees-to-pay-us14bn-to-settle-us-indivior-lawsuit-223733.html
<![CDATA[RNS press release - Agreement to resolve all federal investigations ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190711070003_14144200/ Thu, 11 Jul 2019 07:00:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190711070003_14144200/ <![CDATA[News - SocGen double-downgrades Reckitt Benckiser rating to ‘sell’ from ‘buy’ on margin concerns ]]> https://www.proactiveinvestors.co.uk/companies/news/223275/socgen-double-downgrades-reckitt-benckiser-rating-to-sell-from-buy-on-margin-concerns-223275.html Societe Generale has double-downgraded its rating for FTSE 100-listed consumer goods firm Reckitt Benckiser Group PLC (LON:RB.) to ‘sell’ from ‘buy’ on margin concerns.

The French broker also cut its target price for the Dettol disinfectant to Nurofen painkillers firm to 5,600p from 7,300p, with the shares down 0.3% to 6,345p in morning trade.

READ: Reckitt poaches Pepsi's chief commercial officer to be new boss

In a note to clients, SocGen’s analysts said the company needs to "cross the chasm" into mass market positions to reignite growth, which should impact on its margins.

They forecast Reckitt’s margins contracting by 180 bp (basis points) to less than 25% by 2021.

The analysts said they do not expect the group’s 2.9% full-year 2018 growth to be improved on this year, as Reckitt’s underlying sales growth has been 2.5%-3.0% per annum for the past five years.

They added that they see Reckitt posting organic sales growth of 2.5% in full-year 2019.

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Wed, 03 Jul 2019 11:56:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/223275/socgen-double-downgrades-reckitt-benckiser-rating-to-sell-from-buy-on-margin-concerns-223275.html
<![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190701113140_14131301/ Mon, 01 Jul 2019 11:31:40 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190701113140_14131301/ <![CDATA[News - Reckitt poaches Pepsi's chief commercial officer to be new boss ]]> https://www.proactiveinvestors.co.uk/companies/news/221953/reckitt-poaches-pepsi-s-chief-commercial-officer-to-be-new-boss-221953.html Reckitt Benckiser Group PLC (LON:RB.) shares rose on Wednesday following news it has appointed PepsiCo’s chief commercial officer as its chief executive.

Laxman Narasimhan will become chief executive of Reckitt at the start of September, replacing Rakesh Kapoor.

READ: Reckitt 'remains involved' in US probes, sniffs at weak cold and flu season

The consumer goods company, whose brands include Dettol, Nurofen and Durex, announced in January that Kapoor would be stepping down after 32 years at the company, including eight years in the top job.

Kapoor leaves the company after a difficult couple of years, with the firm having been blighted by a cyber attack, criticism over his pay and factory disruption.

Reckitt handed Kapoor a pay package of £15.2mln for 2018, an 70% increase on the previous year.

Challenges facing incoming boss 

Incoming boss Narasimhan joins Reckitt as the company tries to turnaround sales at its health division, which accounts for nearly two-thirds of revenue. The health business posted a 3% rise in underlying sales growth last year, missing its target of up to 5%.

Narasimhan will also have to deal with a US Department of Justice case against a former Reckitt subsidiary accused of using a fraudulent marketing scheme to increase prescription sales of an opioid addition treatment.

Reckitt spun off the subsidiary into a separate company called Indivior in 2014 but it could still have to pay some of the fines the DoJ wants to impose.

At Pepsi, Narasimhan helped lead an “integrated long-term growth strategy” and has been implementing a digital overhaul across the business, Reckitt said.

“Laxman is an outstanding leader who brings wide experience across the consumer goods sector, both operationally at scale, and from his time at McKinsey,” said Reckitt chairman Chris Sinclair.

“He has led complex operational businesses and inspired teams across developed and emerging markets to achieve market-leading performance.”

New CEO to focus on health business turnaround 

Sinclair said the new CEO’s initial priorities will be to focus on delivering outperformance, particularly in the health business unit, and to drive the group’s so-called ‘RB2.0’ strategy.

Commenting on the appointment, Russ Mould, investment director at AJ Bell said: “Given the company’s recent patchy track record, investors may be pleased to see an outsider chosen to lead consumer goods firm Reckitt Benckiser.

“Joining from PepsiCo, Laxman Narasimhan will probably have more leeway than an internal candidate to make bold changes when he takes over from Rakesh Kapoor in September 2019. This might include boosting investment in the business and its brands which has lagged Reckitt’s peers of late.”

In afternoon trading, shares in Reckitt were up 3.6% at 6,627p. The shares have underperformed the MSCI Europe Consumer Staples index this year and are trading at discount to peers including Procter & Gamble and Unilever, according to Capital IQ.

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Wed, 12 Jun 2019 08:52:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/221953/reckitt-poaches-pepsi-s-chief-commercial-officer-to-be-new-boss-221953.html
<![CDATA[RNS press release - RB CEO Announcement ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190612070005_14107277/ Wed, 12 Jun 2019 07:00:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190612070005_14107277/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190603104935_14096100/ Mon, 03 Jun 2019 10:49:35 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190603104935_14096100/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190528104001_14089076/ Tue, 28 May 2019 10:40:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190528104001_14089076/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190523164004_14085775/ Thu, 23 May 2019 16:40:04 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190523164004_14085775/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190522114505_14083704/ Wed, 22 May 2019 11:45:05 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190522114505_14083704/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190513150141_14071964/ Mon, 13 May 2019 15:01:41 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190513150141_14071964/ <![CDATA[RNS press release - Result of AGM ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190509152847_14068684/ Thu, 09 May 2019 15:28:47 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190509152847_14068684/ <![CDATA[News - Reckitt 'remains involved' in US probes, sniffs at weak cold and flu season ]]> https://www.proactiveinvestors.co.uk/companies/news/219542/reckitt--remains-involved--in-us-probes-sniffs-at-weak-cold-and-flu-season-219542.html Reckitt Benckiser Group PLC (LON:RB.) said an “unusually weak” cold and flu season hit sales of its Lemsip and Strepsils medicine brands, while revealing it continued to be involved in two major legal probes in the US.

Group sales in the first quarter of £3.16bn were up 1% compared to a year ago on a like-for-like basis, compared to analyst forecasts for 1.8%, the 4% LFL growth seen in the preceding quarter and the 2% at this time last year.

READ: Reckitt Benckiser investors tread carefully after Indivior bombshell

Noting the 9 April indictment by the US Department of Justice which saw twenty-eight felony counts levelled at Indivior PLC (LON:INDV), the former RB Pharmaceuticals division that was spun out in 2014, Reckitt said it "remains involved" in ongoing investigations by the DoJ and the US Federal Trade Commission and related litigation proceedings in the US relating to RB Pharma prior to the demerger. A provision of $400mln was made in 2017 to cover potential liabilities over the matters but it was noted that "the final cost for the group may be substantially higher".

Reckitt stressed that the DoJ's $3bn indictment, which alleges that Indivior deceiving healthcare providers by marketing its anti-opioid treatment as safer and less abusable than other treatments, “is not against Reckitt Benckiser Group plc or any other group company”.

Chief executive Rakesh Kapoor, who recently surprised the market with his plan to retire by the end of this year, understandably was more focused on Reckitt's growth prospects this year. He said he expected growth to be weighted to the second half, stressing the group remained “on track” for the full year revenue target of +3-4% LFL.

Balanced numbers

The Hygiene Home business provided the growth in the quarter, with revenues of £1.22bn up 3% on a LFL basis, and 2% overall due to currency headwinds.   

The Health division’s £1.94bn revenue, however, was flat on a LFL basis, as the weak cold season in the US and Europe led to a 9% LFL decline for over-the-counter brands, which was offset by 5% LFL growth for Infant Formula and Child Nutrition.

Kapoor said the IFCN business growth was down to “innovation led momentum continuing in the US and further progress in China”. Analysts at UBS noted that IFCN supply in the Chinese infant formula market is still "tight" following the manufacturing issues in the third quarter and performance in other markets "mixed", with US driving the growth.

Hygiene Home, he said, was benefitting from his decision to split the group in two end-to-end accountable units, with his RB2.0 plan to boost on growth and increase market share “fully on track” as he reiterate full-year growth targets, including flat adjusted operating margin. Not out of the woods

The company provided no updates on succession plans for Kapoor.

Analysts at UBS said they thought the trading update "shows that RB is not 'out of the woods' yet", with Health not outperforming, the DoJ investigation adding more uncertainty and promises for an second-half recovery "does not help after 2+ years of underperformance".

Reckitt shares, down 14% from their 52-week high last year but up 10% since stumbling on January's Kapoor retirement news, were down 1% on Thursday to 6,061p.

-- Adds share price, broker comment --

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Thu, 02 May 2019 08:00:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/219542/reckitt--remains-involved--in-us-probes-sniffs-at-weak-cold-and-flu-season-219542.html
<![CDATA[RNS press release - Q1 Tradng Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190502070003_14060195/ Thu, 02 May 2019 07:00:03 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190502070003_14060195/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190501104612_14059234/ Wed, 01 May 2019 10:46:12 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190501104612_14059234/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190501090001_14058992/ Wed, 01 May 2019 09:00:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190501090001_14058992/ <![CDATA[News - Reckitt Benckiser: Investors tread carefully after Indivior bombshell ]]> https://www.proactiveinvestors.co.uk/companies/news/218327/reckitt-benckiser-investors-tread-carefully-after-indivior-bombshell-218327.html The spectacular collapse of shares in Indivior PLC (LON:INDV) provided the ‘rubber-necking’ moment of the day in the Square Mile after it was slapped with 28 charges in the US, including healthcare fraud, wire fraud and mail fraud.

The Virginia Federal Grand Jury indictment wiped 84%, or £575mln from the value of the maker of a Suboxone film, which is used to wean addicts from opioid drugs such as heroin.

The litigation relates to a long-running Department of Justice investigation, which claimed Indivior engaged in a fraudulent marketing scheme to boost prescriptions of its blockbuster treatment.

According to the indictment, Indivior marketed its star drug as safer and less abusable than other treatments, allegedly deceiving healthcare providers and allowing the company to rake in billions of dollars in extra sales.

While all eyes were, rightly, on the unfolding carnage being wrought to the Indivior share price, a wall of worry was growing around Reckitt Benckiser (LON:RB.), the maker of slightly more innocuous healthcare products such as Strepsils, Gaviscon and Clearasil.

Its shares fell 4.9% in the wake of Indivior announcement. But as Reckitt is worth more than £40bn, that was a net loss to investors, including large pensions and savings funds, of £2.2bn.

But why has the City taken fright?

Well, until it was listed as a separate company back in 2014, Indivior, or the assets that became Indivior, were owned by Reckitt.

And, according to Wednesday’s bombshell release, the US allegations are “based on actions that occurred almost exclusively prior to Indivior becoming an independent company in its demerger from Reckitt Benckiser”.

It's worth noting the household products giant previously set aside £305mln (US$400mln) to cover potential Suboxone liabilities.

“We’ve got no idea how this will play out,” said candid Canadian outfit RBC Capital, reiterating its ‘underperform’ rating on Reckitt shares.

“Indivior ‘believes the allegations are unsupported by the facts and the law’ and states that it could take 12 months or more for the case to be heard.”

Brokers concerned 

RBC said its negative take on Reckitt shares reflected more its expectations of a “margin rebase” rather than the litigation threat, though as UBS pointed out in its note earlier Reckitt is “not off the hook”.

The company has already acknowledged the final cost could be higher than it set aside, particularly as experts are suggesting a fine of up to £2.2bn (US$3bn) could be meted out.

UBS, meanwhile, pointed to a line in Reckitt’s annual report that highlighted the risk any "potential criminal indictment of the group or employees, with reputational impact, distraction and potential debarment which could theoretically extend to IFCN [child nutrition] business".

“We stay neutral on RB and perceive increasing downside risk in light of this news,” said the Swiss bank in a note to clients.

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Wed, 10 Apr 2019 13:18:00 +0100 https://www.proactiveinvestors.co.uk/companies/news/218327/reckitt-benckiser-investors-tread-carefully-after-indivior-bombshell-218327.html
<![CDATA[RNS press release - US Justice Department indictment of Indivior Plc ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190410103756_14036012/ Wed, 10 Apr 2019 10:37:56 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190410103756_14036012/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190404124501_14029412/ Thu, 04 Apr 2019 12:45:01 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190404124501_14029412/ <![CDATA[RNS press release - Annual Financial Report ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190402165618_14026154/ Tue, 02 Apr 2019 16:56:18 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190402165618_14026154/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190401093002_14023174/ Mon, 01 Apr 2019 09:30:02 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190401093002_14023174/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190327145815_14018232/ Wed, 27 Mar 2019 14:58:15 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190327145815_14018232/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190305163015_13991186/ Tue, 05 Mar 2019 16:30:15 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190305163015_13991186/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190304114333_13989174/ Mon, 04 Mar 2019 11:43:33 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190304114333_13989174/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190301073004_13986808/ Fri, 01 Mar 2019 07:30:04 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190301073004_13986808/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190228111607_13985421/ Thu, 28 Feb 2019 11:16:07 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190228111607_13985421/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190220151955_13976146/ Wed, 20 Feb 2019 15:19:55 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190220151955_13976146/ <![CDATA[News - Reckitt Benckiser still spending hundreds of millions in pay-outs to South Korean Oxy RB victims ]]> https://www.proactiveinvestors.co.uk/companies/news/214818/reckitt-benckiser-still-spending-hundreds-of-millions-in-pay-outs-to-south-korean-oxy-rb-victims-214818.html Reckitt Benckiser PLC (LON:RB.) has set aside more than £1bn in legal costs over the past three years, a large chunk of which is related to Oxy RB – its humidifier sanitiser (HS) which was linked to dozens of deaths and hundreds of injuries in South Korea.

The consumer goods giant, which is behind brands such as Nurofen, Durex and Cillit Bang, told investors in today’s full-year results that it set aside another £431mln in exceptional legal provisions last year. That is on top of the combined £742mln it set aside in 2016 and 2017.

READ: Reckitt shares rise as profits, revenues jump

Reckitt refused to break down the figures but has repeatedly said the amounts “predominantly” relate to HS compensation and legal costs associated with a Department of Justice investigation in the United States.

Humidifiers soared in popularity during the 1990s as Koreans looked for ways to keep their homes and offices humid during the dry winter months.

Back in 2001, Reckitt Benckiser started selling a humidifier sanitiser (HS) called Oxy RB which was used to eliminate germs and bacteria within humidifiers.

Reckitt has insisted there were no “red flags” when it first launched Oxy RB, but it withdrew the product in 2011 after a report from the Korean Centre for Disease Control (KCDC) suggested a link between HS products and reported lung injuries.

93 deaths linked to Oxy RB

An estimated 93 people are thought to have died as a direct result of exposure to Oxy RB, while the latest figures, also released in RB’s 2018 results, show that another 405 are likely to have suffered from asthma or other conditions brought on by chemicals in the liquid.

Despite removing the steriliser from supermarket shelves, it took the FTSE 100 company five years before it formally accepted responsibility for the catastrophe.

Reckitt, as well as other firms, came under intense media criticism, with reports of children killed or severely injured by HS products fuelling the public anger.

RB’s sales in the region took a beating, too, as retailers stopped stocking its goods in protest.

Reckitt shares rose 4.9% to 6,309p on Monday, driven by better-than-expected full-year results.

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Mon, 18 Feb 2019 15:20:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214818/reckitt-benckiser-still-spending-hundreds-of-millions-in-pay-outs-to-south-korean-oxy-rb-victims-214818.html
<![CDATA[News - Reckitt Benckiser reports jump in annual profits as it beds in US$17bn Mead Johnson acquisition ]]> https://www.proactiveinvestors.co.uk/companies/news/214788/reckitt-benckiser-reports-jump-in-annual-profits-as-it-beds-in-us17bn-mead-johnson-acquisition-214788.html Reckitt Benckiser PLC (LON:RB.) has reported a surge in annual revenue and profits after enjoying “broad-based growth” across its portfolio of consumer goods brands.

Revenue for the year ended 31 December was up 10% to £12.60bn – the upper end of its forecast range – while net income, excluding a one-off tax credit in 2017, rose 7% to £2.41bn.

READ: US investment bank slams RB's 'weak' workplace culture

A first full-year contribution from Mead Johnson, the baby milk formula giant bought by Reckitt for US$17bn (£13bn) back in 2017, accounted for a large portion of that growth.

The FTSE 100 giant has already achieved £158mln of synergies from that acquisition and remains on track to deliver its increased synergy target of £230mln.

Reckitt also enjoyed solid organic growth in its two core divisions.

Both businesses perform well

Sales in its hygiene home business rose 4% on a like-for-like basis in 2018, driven by strong performances from a host of its major brands, including Harpic, Air Wick and Finish dishwasher detergents.

Growth was less impressive in the health business, although like-for-likes still edged 2% higher year-on-year as demand for its vitamins and supplements continued to rise in North America and China, while Durex and Dettol also put in solid performances.

Footcare brand Scholl was a “significant drag” though, particularly in the first half of the year, while Mucinex also struggled due to a relatively weak cold and flu season.

More growth in 2019

“2018 was a year of good financial progress, achieved in an environment of both significant change within the company, and challenging market conditions,” said chief executive Rakesh Kapoor, who is due to leave later this year.

“We delivered the upper end of our 2018 revenue growth target, and accelerated the delivery of MJN cost synergies versus our ingoing expectations.”

He added: “For 2019 we expect momentum to continue, and target +3-4% LFL net revenue growth. We expect to maintain the adjusted operating margin as we generate our usual RB cost and efficiency savings and deploy them into building two even stronger businesses.”

No headaches for investors

“Investors will not be rushing for the Nurofen this morning as there was a solid performance across the business from Reckitt Benckiser in its full year results this morning,” said Graham Spooner, investment research analyst at The Share Centre.

“Overall revenue came in towards the top end of analyst expectations [and] … the shares were up in early trading helped by improving sales growth over Q4.

“Emerging market growth has been important for Reckitt and there was a strong performance in India and Brazil, although China was mixed.”

He added: “After a difficult couple of years these results may help restore a measure of investor confidence in the group.”

Reckitt shares were up 5% to 6,320p on Monday morning.

-- Adds share price and analyst comment --

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Mon, 18 Feb 2019 07:51:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/214788/reckitt-benckiser-reports-jump-in-annual-profits-as-it-beds-in-us17bn-mead-johnson-acquisition-214788.html
<![CDATA[RNS press release - Full Year Results 2018 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190218070006_13971935/ Mon, 18 Feb 2019 07:00:06 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190218070006_13971935/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190201084401_13955137/ Fri, 01 Feb 2019 08:44:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190201084401_13955137/ <![CDATA[News - Reckitt Benckiser plunges as US investment bank slams ‘weak’ work culture ]]> https://www.proactiveinvestors.co.uk/companies/news/213251/reckitt-benckiser-plunges-as-us-investment-bank-slams-weak-work-culture-213251.html Reckitt Benckiser Group PLC (LON:RB.) was among the top blue-chip losers on Thursday after US investment bank Jefferies downgraded its rating of the consumer goods giant.

Analysts are concerned that the weak cold and flu season in the season could hit sales of some of Reckitt’s big brands such as Strepsils, Lemsip and Nurofen.

Those worries knocked 4% off the share price on Wednesday, and Jefferies thinks there is “still further to go”.

READ: Reckitt boss to step down this year

But the analysts’ biggest issue is with the workplace culture, especially after the “surprise retirement” of chief executive Rakesh Kapoor who is due to leave by the end of the year.

“The surprise retirement of CEO Rakesh Kapoor crystallises long-brewing anxieties around RB's predicament,” read a note to clients.

“There are strong runners and riders for the role aplenty. But this is a challenge

beyond mere fresh legs. The unique RB pay for performance model, so powerful for so long, is now under pressure, laying bare the fact that RB has the weakest culture and workstyle ratings in the peer group.”

The analysts argue that the merger of GlaxoSmithKline PLC’s (LON:GSK) and Pfizer’s consumer health businesses – Reckitt was interested in Pfizer’s assets – might have been “the straw that broke Kapoor’s back”.

“Not only does it stalemate RB strategically, it also cuts off a vital source of fresh innovation. That leaves RB's Health Relief portfolio reliant on under-pressure Mucinex and a yeoman infantry of Nurofen, Strepsils and Gaviscon fast running out of marching space.”

Given its various fears, Jefferies has downgraded the FTSE 100 group to ‘underperform’ from hold, while it has also slashed its price target to 5,000p from 6,800p previously.

Reckitt shares fell 3% on Thursday morning to 5,611p, making it the biggest faller on London’s blue-chip index.

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Thu, 24 Jan 2019 10:36:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/213251/reckitt-benckiser-plunges-as-us-investment-bank-slams-weak-work-culture-213251.html
<![CDATA[News - Reckitt Benckiser boss to step down at the end of 2019 after 8 years in the top job ]]> https://www.proactiveinvestors.co.uk/companies/news/212667/reckitt-benckiser-boss-to-step-down-at-the-end-of-2019-after-8-years-in-the-top-job-212667.html Reckitt Benckiser Group PLC (LON:RB.) saw its shares retreat on Wednesday following news its chief executive Rakesh Kapoor plans to retire at the end of the year after more than eight years in charge of the consumer goods group.

The company, which owns the Durex condoms, Vanish stain remover, Harpic cleaner and Scholl footcare brands, said it has started a search for Kapoor’s replacement and will consider both internal and external candidates.

READ: Reckitt Benckiser third quarter sales hit by manufacturing disruption in Europe

Kapoor has spent 32 years at Reckitt and was appointed chief executive in September 2011. As boss, he helped the company grow from a household cleaning business to a consumer goods giant.

Kapoor said the last two years have been particularly “transformational” with the 2017 acquisition of US baby formula business Mead Johnson, which was the catalyst for the creation of two business units – health and hygiene, and home.

“2020 will herald a new decade and I believe now is a good time for new leadership to take this great company through the next phase of outperformance,” he said. “I will remain fully focussed on driving the business until a successor is in place."

Business split nearer?

In a note to clients, analysts at Liberum Capital pointed out that “Kapoor was the key driver behind the group's strategic push to become a world leader in consumer health products and is the architect behind the group's RB 2.0 program which is ultimately designed to split the business into two fully separate, stand-alone businesses - Health and Hygiene Home.”

They added: “In light of today's announcement and the material progress on RB 2.0 to date, we expect Mr Kapoor's departure could signal the start of plans to formally split the businesses into two separate entities.

“This could make either or both of the two businesses more attractive to prospective third parties. We expect today's announcement will bring new interest to Reckitt shares in 2019.”

Liberum maintained a ‘buy’ rating and 7,300p target price on Reckitt shares. In late morning trading, the stock was down 2.6% at 6,088p.

 -- Adds share price, analyst comment --

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Wed, 16 Jan 2019 07:57:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/212667/reckitt-benckiser-boss-to-step-down-at-the-end-of-2019-after-8-years-in-the-top-job-212667.html
<![CDATA[RNS press release - Rakesh Kapoor to retire as CEO by end of 2019 ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190116070515_13935958/ Wed, 16 Jan 2019 07:05:15 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190116070515_13935958/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190104110001_13924275/ Fri, 04 Jan 2019 11:00:01 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190104110001_13924275/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190102142307_13921310/ Wed, 02 Jan 2019 14:23:07 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20190102142307_13921310/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181231131216_13919766/ Mon, 31 Dec 2018 13:12:16 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181231131216_13919766/ <![CDATA[RNS press release - Second Price Monitoring Extn ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181227164112_13917055/ Thu, 27 Dec 2018 16:41:12 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181227164112_13917055/ <![CDATA[RNS press release - Price Monitoring Extension ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181227163559_13917046/ Thu, 27 Dec 2018 16:35:59 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181227163559_13917046/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181213094328_13902514/ Thu, 13 Dec 2018 09:43:28 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181213094328_13902514/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181203100954_13888748/ Mon, 03 Dec 2018 10:09:54 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181203100954_13888748/ <![CDATA[RNS press release - Director Declaration ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181119101111_13871831/ Mon, 19 Nov 2018 10:11:11 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181119101111_13871831/ <![CDATA[RNS press release - Directorate Change ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181109115652_13861936/ Fri, 09 Nov 2018 11:56:52 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181109115652_13861936/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181101095951_13851163/ Thu, 01 Nov 2018 09:59:51 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181101095951_13851163/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181031121819_13849675/ Wed, 31 Oct 2018 12:18:19 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181031121819_13849675/ <![CDATA[News - Reckitt Benckiser third quarter sales hit by manufacturing disruption in Europe ]]> https://www.proactiveinvestors.co.uk/companies/news/208084/reckitt-benckiser-third-quarter-sales-hit-by-manufacturing-disruption-in-europe-208084.html Household products giant Reckitt Benckiser (LON:RB.) reported softer than expected underlying revenue growth in its third quarter after being hit by manufacturing disruption at one of its European baby formula factories, which dented sales and sent its shares tumbling.

The maker of Durex condoms, Vanish detergent and Airwick air fresheners, on Tuesday said its like-for-like sales had grown 2% in the quarter thanks to solid performances at its health and hygiene home divisions, which helped it partly absorb the hit caused by the production issue.

READ: Reckitt Benckiser upgrades revenue as baby food acquisition pays off

Analysts at UBS had expected Reckitt to report +3.7% organic sales growth in the quarter.

Reckitt said the temporary manufacturing disruption at its European Infant Formula and Child Nutrition (IFCN) plant affected sales to a number of markets. Total growth was negatively impacted by 2% - or £70mln.

The firm added that the problem occurred during a period of unusually high market growth and before its new facilities in Australia were operational and able to diversify its supply chain.

“The disruption was resolved and supply restored before the end of the quarter, although we do expect some residual impact in Q4 and into 2019,” CEO Rakesh Kapoor said in a statement.

“We have sufficient momentum and progress in our business to absorb this temporary manufacturing disruption.  We, therefore, reiterate our 2018 target of +14-15% total net revenue growth at constant rates,” he continued, adding that this implies like-for-like revenue growth at the upper end of 2%-3%.

Reckitt said its health and hygiene home businesses each delivered like-for-like growth of 4% in the quarter, against a backdrop of mixed market conditions, which it said demonstrated the strength of its brands, innovation success and benefits of its RB 2.0 programme. 

“Although encouraging, we remain focused on further improving our growth trajectory,” said Kapoor.

Reckitt got into the infant nutrition market last year through its US$17 billion acquisition of Mead Johnson (MJN).

Reckitt said its IFCN business delivered a strong performance in North America, with the launch of Enfamil NeuroPro, and progress in new channels.  It added that it remains firmly on track to deliver the medium-term targets it set at the time of its MJN acquisition.

"Reckitt's difficulties in the third quarter look self-inflicted," analysts at Hargreaves Lansdown said in a note to clients.

"Customer demand is solid enough, with strong growth for MJN in most of its end markets. But the group started with low levels of inventory so when things went wrong in the manufacturing plant, there was limited ability to keep supplying customers. Reckitt has new manufacturing facilities coming on stream in Australia, which should make them more resilient in future," they continued, adding that previously loyal customers may well have switched brands due to the shortfall during the period.

Shares in Reckitt were 5.3% down at 6,260p in early trade.

- updates intro, adds analyst comment and share price - 

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Tue, 30 Oct 2018 07:25:00 +0000 https://www.proactiveinvestors.co.uk/companies/news/208084/reckitt-benckiser-third-quarter-sales-hit-by-manufacturing-disruption-in-europe-208084.html
<![CDATA[RNS press release - Q3 2018: Trading Update ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181030070007_13846726/ Tue, 30 Oct 2018 07:00:07 +0000 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181030070007_13846726/ <![CDATA[RNS press release - Director/PDMR Shareholding ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181001171728_13812006/ Mon, 01 Oct 2018 17:17:28 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181001171728_13812006/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181001123410_13811378/ Mon, 01 Oct 2018 12:34:10 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20181001123410_13811378/ <![CDATA[RNS press release - Total Voting Rights ]]> https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20180831164610_13775334/ Fri, 31 Aug 2018 16:46:10 +0100 https://www.proactiveinvestors.co.uk/companies/rns/3260/LSE20180831164610_13775334/