Flu-Stricken Americans Help Reckitt Benckiser Top European PeersMatthew Boyle
Americans coughed, sniffled and sneezed their way through a brutally cold winter. Reckitt Benckiser Group Plc was among those not complaining, as bumper sales of its flu remedies helped it post the best first-quarter growth among Europe’s major consumer-product companies.
The British maker of Strepsils sore-throat drops reported 5 percent revenue growth on better-than-expected sales of brands such as Mucinex decongestants in the U.S., leaving the likes of Nestle SA and Unilever trailing in its wake. The health unit -- which accounts for one-third of revenue and has expanded via acquisitions in recent years -- boosted sales 13 percent, the highest rate of growth in almost two years.
“Health remained the main driver and grew more than expected, despite a challenging comparison base, notably thanks to a strong flu season,” Hermine De Bentzmann, an analyst at Raymond James, said in a note. In last year’s first quarter, health-division sales rose 11 percent.
In the U.S., the rate of influenza-associated hospitalizations between October and mid-April was 62.4 per 100,000 people, almost double the 32.8 rate of the prior year’s flu season, according to the Centers for Disease Control. North America makes up almost one-quarter of revenue for Reckitt Benckiser, with products including Airborne cold-prevention tablets.
This year’s flu followed a similar pattern to 2012 and 2013, the worst outbreak since swine flu occurred in 2009. Both years were dominated by H3N2 strains of the virus, which typically hit the elderly hard. The hospitalization rate among Americans aged 65 and over was more than quadruple the total rate, the CDC said.
Reckitt Benckiser Chief Executive Officer Rakesh Kapoor said results were “aided by a strong flu season,” although he later said in a conference call that the gains in the health unit also came from non-seasonal products such as Gaviscon heartburn relief that are less reliant on flu-related demand.
Reckitt Benckiser, which now goes by the corporate moniker RB, was little changed at 5,998 pence at 9:50 a.m. in London.