Reckitt Benckiser Repeats Growth Targets as Sales Rise on Flu
Stock Chart for Reckitt Benckiser Group PLC (RB/)
Reckitt Benckiser Group Plc (RB/), the maker of Dettol handwash, said it remains confident of achieving its full-year goals and posted first-quarter revenue growth that was boosted by sales of cold and flu medicines.
Non-pharmaceutical sales rose 6 percent, excluding acquisitions, disposals and currency moves, the Slough, England- based company said today in a statement. The average estimate of nine analysts surveyed by Bloomberg was for a 6.3 percent gain. Total sales increased 7 percent to 2.52 billion pounds ($3.8 billion), compared with the 2.46 billion-pound average estimate.
Chief Executive Officer Rakesh Kapoor, faced with weakening economies in the U.K. and across Europe, plans to boost emerging-market revenue and push into health care through acquisitions and new product development. Kapoor said in February that developing regions such as China will account for half of revenue by 2015, a year earlier than expected. That compares with 42 percent at the beginning of last year.
“We expect continued challenging market conditions but nonetheless, we remain confident that we can achieve our full- year targets” of revenue growth of between 5 percent and 6 percent, excluding the pharma unit, Kapoor said in the statement. The company expects to maintain operating margins.
First-quarter sales were helped by a 13 percent increase from the health division, which includes cough-and-cold remedies such as Mucinex and Strepsils. There were more than 10,700 flu- related hospitalizations between Oct. 1 and March 2, compared with 593 cases in the same period last winter, according to data from the U.S. Centers for Disease Control.
Over the past six months, Reckitt Benckiser has broadened its health-care portfolio through the $1.4 billion acquisition of Schiff Nutrition International Inc., which expanded its business into vitamins and nutritional supplements, and a $482 million deal with pharmaceutical maker Bristol-Myers Squibb Co. (BMY) to license a number of Latin American over-the-counter remedies.
Revenue at the pharmaceuticals division rose 19 percent. Two generic copies of the tablet version of Reckitt Benckiser’s Suboxone heroin-dependency drug emerged in March, and eroded the product’s U.S. prescription volumes by 67 percent in their first five weeks on the market, Symphony Health data show. A newer film-strip version of Suboxone has captured 69 percent volume share in the U.S., the company said.
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