(Alliance News) - Reckitt Benckiser Group PLC on Wednesday reported strong quarterly revenue growth as prices and mix improved, despite a decline in volumes.
In the third quarter, the Slough, Berkshire-based consumer goods firm said total revenue grew 14% year-on-year to GBP3.74 billion, or 7.4% on a like-for-like basis.
Price and mix improvements of 12% helped to offset a volume decline of 4.6%. Reckitt noted "continued broad-based growth and momentum" during the period.
Shares in Reckitt were 3.3% lower at 5,769.55 pence each in London on Wednesday morning.
Like-for-like growth benefitted from foreign exchange tailwinds of 8.5%, partially offset by net mergers & acquisitions impact of 1.9%.
On a reported basis, Hygiene revenue rose 5.4%, Health by 19% and Nutrition by 26%. On a like-for-like basis, Hygiene fell 1.2%. Health rose 11% and Nutrition was up 25%.
Hygiene revenue rose 3.3% on a like-for-like basis, when Lysol disinfectant is excluded. Total volume across the group declined by around 1% when Lysol is excluded. Lysol saw volume declines of 13% against a tough comparative in 2021.
However, Lysol like-for-like net revenue is still 50% above pre-pandemic levels, the firm noted, as core consumption expands, and 'consumers continue to exhibit elevated hygiene behaviours'.
"Net revenue growth benefitted from the temporary uplift in demand for Reckitt Nutrition products due to the temporary supply shortages of infant nutrition products in the US. We estimate this benefit to have added approximately 3.0% in [the third quarter] and 2.7% on a [year-to-date] basis," the firm said.
Looking ahead, Reckitt expects Nutrition sales volumes and operating margins to normalise.
In Health, the business saw volume growth of 0.6% and price/mix improvements of 10%. Over The Counter net revenue grew 20%, with its cold and flu relief brands benefitting from high incidences of cold and flu.
Dettol, a cleaning disinfectant and antiseptic, net revenue declined in low single digits, but continues to stabilise "well above" pre-Covid levels.
With a strong performance in the year so far, Reckitt reiterated its annual targets. However, for like-for-like revenue growth, it tweaked the range upwards to between 6% and 8%, compared to 5% and 8% previously.
"Reckitt delivered another quarter of broad-based growth amidst challenging market conditions, as we continue to innovate and improve on our in-market execution," said Chief Executive Officer Nicandro Durante.
"My priority is firmly focussed on continuing to execute on our strategic path, to deliver sustainable mid-single digit growth, and mid-20s adjusted operating margins by the mid-2020s."
By Elizabeth Winter; elizabethwinter@alliancenews.com
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