Coronavirus: Dettol and Lysol owner Reckitt Benckiser sees 'exceptional growth'

Edmund HeaphyFinance and news reporter
Yahoo Finance UK
Dettol hand sanitiser gel, sales of which have climbed during the coronavirus pandemic. (PA)
Dettol hand sanitiser gel, sales of which have climbed during the coronavirus pandemic. (PA)

Reckitt Benckiser (RB.L), the maker of Dettol and Lysol disinfectants, said on Thursday that “exceptional demand” for its health and hygiene products during the coronavirus pandemic had pushed sales in its first quarter to an all-time record high.

The Berkshire-based firm said that it now expected its full-year financial performance to be better than it had originally guided, even as several of its markets face challenges due to the crisis.

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Overall, the group saw like-for-like growth of more than 13% in the first quarter, and “strong” growth and demand across its key hygiene and health divisions.

Net revenue climbed 12.3% to £3.54bn ($4.4bn) in the three months to the end of March, marking the best quarterly performance for the company since it was formed in 1999 through the merger of Reckitt & Colman and Dutch company Benckiser.

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Growth in sales for Dettol, over-the-counter products such as Nurofen, and other products in North America, Europe, and Australia partially offset lower growth in developing markets and a decline in demand for its child nutrition products in China.

Online sales climbed by 50% in the quarter, reflecting strong growth in both its health and hygiene divisions.

Consumers have scrambled to stock up on hand sanitiser and disinfectant products as the coronavirus pandemic has swept the world.

Last week, Reckitt Benckiser was forced to warn customers that “under no circumstance” should its products be injected or ingested after US president Donald Trump suggested such products could be used to treat coronavirus.

The company said that it had managed to sustain supply of Dettol, Lysol, Nurofen, as well as chest congestion product Mucinex despite “challenging conditions” in many of its markets.

“This is a uniquely challenging time,” said chief executive Laxman Narasimhan, noting that its teams had “worked around the clock” to ensure continuity of supply.

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Narasimhan said the extent to which the pandemic had driven an increase in underlying consumption was unclear, noting that defensive buying — which sees customers stocking up — may be driving sales growth.

“Improved penetration and usage, particularly for products like Dettol and Lysol, may well sustain, although we will likely see some unwinding of 'pantry load' as we work our way through the crisis,” he said.

“The near-term operational challenges to meet additional demand and handle lockdown conditions, with the associated costs, are also likely to continue for some time.”

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