Reckitt Benckiser Swings to 2020 Profit on Strong Hygiene Sales, Shuffles Brand Stable -- Update

By Matteo Castia

--Reckitt Benckiser swung to profit in 2020 on higher revenue, boosted by strong hygiene sales amid the coronavirus pandemic

--The company bought the Biofreeze pain-relief brand from Performance Health for an undisclosed amount

--Reckitt Benckiser sold its Scholl footcare brand to Yellow Wood Partners, also for an undisclosed amount

Reckitt Benckiser Group PLC reported Wednesday a swing to net profit for 2020 as its hygiene division benefited from increasing demand amid the coronavirus pandemic and boosted revenue in the period.

The consumer-goods company--which houses Dettol, Harpic and Durex among its brands--made net profit of 1.19 billion pounds ($1.68 billion) for the year, compared with a net loss of GBP3.68 billion in 2019.

Pretax profit was GBP1.87 billion, compared with a loss of GBP2.11 billion a year earlier, it said.

Revenue rose to GBP13.99 billion from GBP12.85 billion.

In the fourth quarter, revenue rose to GBP3.57 billion from GBP3.32 billion in the year-earlier period, it said. The group's hygiene division increased its revenue by 22% during the fourth quarter to GBP1.59 billion, and by 16% to GBP5.82 billion for the full year.

On a like-for-like basis, revenue from the hygiene division jumped 26% on the year during the fourth quarter and 20% in the full year.

The board declared a final dividend of 101.6 pence, taking the full-year payout to 174.6 pence, flat on the year.

The company said it expects like-for-like revenue for 2021 in a range from flat to 2% growth, including a strong first quarter.

Reckitt Benckiser said that during the year it has invested a record high GBP745 million in building capabilities to strengthen execution and customer service, digital and brand building and sustainability. It added that its productivity program exceeded expectations.

The productivity program delivered savings of over GBP400 million and drove an increase in the company's projected productivity savings to GBP1.60 billion from GBP1.30 billion, it added.

Also on Wednesday, the company said in a separate release that it has entered into a definitive agreement with Performance Health--a company owned by Madison Dearborn Partners--to acquire the Biofreeze pain-relief brand for an undisclosed amount.

"The brand taps into the growing global trend for wellness and self-care and aligns with our strategy to build our U.S. health footprint into new spaces and places," Chief Executive Laxman Narasimhan said. Completion is expected to occur in the second quarter of the year, Reckitt Benckiser said.

In another separate release Wednesday, the company said it is selling the Scholl footcare brand to Boston-based private-equity firm Yellow Wood Partners. While no financial details of the transaction were disclosed, Reckitt Benckiser said it anticipates the deal to complete in the third quarter of this year.

Reckitt Benckiser had acquired Scholl as part of its acquisition of SSL International in 2010. The proposed sale also includes the Amope, Krack and Eulactol footcare brands, the company said.

Write to Matteo Castia at [e-mail]

(END) Dow Jones Newswires

February 24, 2021 03:13 ET (08:13 GMT)

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