Yahoo Finance Reckitt ups guidance as Dettol sales normalise
Sales of disinfectant Dettol have dropped since the height of the pandemic but look set to remain high even once the Covid-19 virus is no longer rampant, its maker said.
Reckitt upped its outlook for the year on Tuesday, saying that nine of its 10 best-selling products have grown by more than 10% compared with before the pandemic started.
Cleaning products such as Dettol boomed in the early days of the pandemic, as surfaces were regularly disinfected.
But these habits have stuck around even as the immediate threat of the virus subsides.
Nine of our 10 largest brands are up double-digits on a two-year basis
Laxman Narasimhan, Reckitt
Dettol sales are decreasing from their peaks, but show signs of stabilising significantly above where they were in 2019, Reckitt said.
In one of the product’s most important markets, China Dettol sales have started to increase again.
Reckitt said it expects like-for-like revenue will grow by between 1% and 3%, an increase of one percentage point since its previous prediction.
In the third quarter, revenue grew 3.3% when discounting the sale of its Chinese baby formula business and other transactions.
When including these in the figures, revenue dipped 6.8%.
“There is more to be done, but today’s results are testament to our progress, with 3.3% LFL revenue growth building on the 15.3% growth of the third quarter of 2020,” said chief executive Laxman Narasimhan.
“Nine of our 10 largest brands are up double-digits on a two-year basis.
“Reflecting this strength, we now expect like-for-like net revenue growth for financial year 2021 in the range of 1-3%.
“Despite significant cost pressures, the benefits of our pricing actions, mix and productivity programme mean our margin guidance is unchanged, and we remain confident in our medium-term outlook.”
Revenue reached a little under £3.3 billion in the last three-month period, Reckitt said.
Analysts had expected the figure to be less than £3.1 billion.
Shares in the company had risen around 5.6% shortly after markets opened in London on Tuesday.
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