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Reckitt Benckiser says Dettol demand driven higher by coronavirus

By Henry Saker-Clark, PA City Reporter

Consumer healthcare giant Reckitt Benckiser (RB) said the coronavirus outbreak has helped to drive greater demand for its Dettol and Lysol hygiene products.

The company said it is also working alongside public health authorities across the world in a bid to provide people in areas affected by the virus with more information about the necessary hygiene measures.

It added that the outbreak has resulted in “increased online activity” for its consumers in China, but that the firm is “seeing some disruption to offline retailers, distribution channels and the supply chain connected to China”.

Nevertheless, RB said it is currently “too early” to assess the impact of coronavirus on the operational and financial performance of the group.

The London-listed firm provided the update as it slumped to a £1.9 billion operating loss for the year despite increasing sales.

The major loss was driven by a £5 billion impairment of goodwill which resulted from its acquisition of the Mead Johnson nutrition business.

The Nurofen and Gaviscon owner also said sales increased by 2% to £12.8 billion for the year to December despite a marginal sales decline in the final quarter.

Net revenue for the fourth quarter dipped 0.5% to £3.3 billion as improving trends in its healthcare business were offset by supply challenges.

It said sales volumes for the year were slightly lower but highlighted strong progress from e-commerce channels and improvements in both its home hygiene and health arms.

The company said it expects 2020 to be a “transitional year” but has seen trading get off to a “strong start”, though it highlighted the “uncertain environment” caused by the coronavirus outbreak.

Chief executive Laxman Narasimhan said: “We ended 2019 broadly in line with our expectations for net revenue growth and adjusted operating profit from October, as our hygiene business delivered another stable performance.

“Health remained weak from a net revenue perspective, but consumption and market share trends are encouraging.”

It added that sales in stores in China have declined as a result of the coronavirus outbreak but it has seen increasing online sales from its own websites.

The company also said it was pleased with growth in its direct-to-consumer business, which has doubled in size over the past three years.

RB said some customers can have Durex orders delivered within an hour (Stefan Rousseau/PA)

RB said it has rapidly grown its direct-to-consumer business for Durex and now has 32 different sites for the condom brand.

It said customers can order Durex online and receive them within an hour in some regions.

Mr Narasimhan said: “Direct-to-consumer has grown to be around 10% of our business and we believe we can double that in size again. It’s an important area for us.”

Shares in the business moved 1.8% lower to 5,990p on Thursday.