Reckitt Benckiser sees strong growth in emerging markets - UPDATE

Shares in household products and personal care behemoth Reckitt Benckiser jumped after it produced solid results for the third quarter, with like-for-like net revenue growth of four per cent at constant exchange rates driven by strong growth in emerging markets. It also said it will meet growth expectations.

For the year-to-date (YTD), net revenues of £7,091m were also up 4% on a like-for-like basis. However, if you include the impact of exchange rates, net revenues for the year to date were flat compared with the same period in 2011.

Rakesh Kapoor, Chief Executive Officer, said: "Reckitt Benckiser's strong third quarter results were underpinned by an excellent performance in emerging markets and an improved performance in Europe North America. Growth came from all core areas and categories. RBP continues to make very good progress with Suboxone sublingual film. I am very pleased that our new strategy and our renewed commitment to managing the business for the long term are showing encouraging results.

"Our results give us the confidence to reiterate our FY 2012 target of like-for-like net revenue growth (excluding its RBP acquisition) of 200bps above our market growth rate. We now expect market growth to be at the top end of the 1-2% range. We continue to expect to maintain full year operating margins."

Europe and North AmericaIn Europe and North America, which delivered 55% of core net revenues, total net revenues YTD decreased to £3,442m with flat like-for-like growth.

Within this geographic area, Gaviscon and Durex delivered strong results for the health division, though this was offset by weakness YTD in seasonal brands such as Mucinex, Strepsils and certain products within Nurofen on the back of a slower start to the 'flu season earlier in the year.

Its Hygiene brands of Lysol and Finish performed strongly, particularly in the US behind new initiatives, such as Lysol Power & Free, Finish Quantum and All-in-1 gel packs and tablets. In the Home category, Vanish shares showed positive momentum, although the market is still down.

Latin America and Asia-PacificIn Latin America and Asia-Pacific, which delivered 28% of core net revenues, total net revenues YTD increased 11% at constant exchange rates to £1,736m, with like-for-like growth of 11%.

In Health, Paras brands in India and Durex, particularly in China, grew very strongly. In Hygiene, Dettol, Finish, and Harpic delivered strong growth behind initiatives such as Dettol Daily Care, Re-energize, and High Performance for Men soap and shower gels. Surface cleaners continued to experience good growth across the Area. Vanish and Air Wick performed well in the Home category.

Russia, the Middle East and AfricaIn Russia, the Middle East and Africa, which delivered 17% of core net revenue, total net revenues YTD increased 8% at constant exchange rates to £1,077m with like-for-like growth of 8%.

On a category basis Health growth was driven by Durex, Gaviscon and Strepsils. Hygiene performed particularly well behind Dettol, Finish, Harpic and Veet driven by initiatives such as Dettol Daily Care and Re-energize. Air Wick performed well in the Home category.

CM