Reckitt Benckiser Swung to 2021 Loss Despite Like-for-Like Revenue Rise -- Update

By Michael Susin

Reckitt Benckiser Group PLC on Thursday reported a swing to pretax loss for 2021 despite revenue on a like-for-like basis beating expectations, driven by hygiene products and a recovery in the health division.

The consumer-goods company--which houses Dettol, Harpic and Durex among its brands--posted a pretax loss of 260 million pounds ($353.2 million) for the year compared with a profit of GBP1.87 billion for 2020.

Adjusted operating profit--one of the company's preferred metrics, which strips out exceptional and other one-off items--fell to GBP2.88 billion from GBP3.30 billion the year earlier.

The company reported an operating loss of GBP804 million compared with a profit of GBP2.1 million the previous year.

Excluding the infant formula and child nutrition business in China--which the company agreed to sell to Primavera Capital in June for $2.2 billion and completed on Sept. 9--adjusted operating profit was GBP2.94 billion, matching a consensus taken from the company's website.

Revenue came in at GBP13.23 billion, down from GBP13.99 billion the prior year. Revenue was driven by strong growth in hygiene and a recovery in health, particularly in North America, as price increases were offset by a return to more normalized promotion levels, it said.

Reckitt Benckiser's health business net revenue was GBP4.65 billion and broadly flat on a like-for-like basis.

A consensus estimate taken from the company's website had forecast Reckitt's revenue at GBP13.18 billion, including IFCN China.

The company's net revenue on a like-for-like basis rose 3.5%, beating its guidance of between 1% and 3%. Excluding IFCN China, revenue was GBP12.85 billion compared with a forecast of GBP12.80 billion.

For the year ahead, the company has targeted like-for-like net revenue growth of between 1% to 4%.

"We are therefore targeting both growth in like-for-like net revenue and an increase in adjusted operating margin in 2022, despite an unprecedented inflationary environment and ongoing uncertainties created by Covid-19", Chief Executive Officer Laxman Narasimhan said.

The board declared an interim dividend of 174.6 pence, flat on the previous year, reflecting the recommendation of a final dividend of 101.6 pence.

Write to Michael Susin at [e-mail]

(END) Dow Jones Newswires

February 17, 2022 03:19 ET (08:19 GMT)

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