Reckitt unveils 2b pound revamp

Monday, 2 March 2020 00:00 - - {{hitsCtrl.values.hits}}

REUTERS: British household goods maker Reckitt Benckiser launched a corporate revamp yesterday which will invest two billion pounds in its business over three years as it seeks to reclaim ground lost to sector peers and generate stronger revenue growth.

The results of a strategic review by new Chief Executive Officer Laxman Narasimhan also saw the company take a 5 billion pound writedown on its 2017 acquisition of infant formula maker Mead Johnson, valued at the time at almost $ 17 billion.

Reckitt’s sales growth has trailed its peers in recent years after a spate of one-off problems and Thursday’s results were widely seen as a chance for Narasimhan to launch his tenure at the company with major changes. He shied away from selling any of its businesses, however, aiming to fund the new investment through internal “productivity savings” of 1.3 billion pounds, and aligning its brands around three categories - Hygiene, Health and Nutrition.

The company said it would focus more on Greater China, integrating its businesses there and rebranding its ‘Hygiene and Home’ unit to just ‘Hygiene’.

It also said it was too early to fully assess the impact of the coronavirus outbreak on its business but was seeing disruption at retailers, and in distribution and supply chains.

The company also said it was seeing a spike in online orders for Dettol and Lysol disinfectant as a result of the outbreak.

Like-for-like sales were up 0.8% in year ending December. The company had forecast growth of between zero and 2% this year, trailing peers including Procter & Gamble who have aimed for a 3-5% expansion.

Lower sales were a result of a slowdown in demand for over-the counter medicines in the United States and infant formula in China, its biggest market, the company said.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.