Reckitt Benckiser: Schiff results ‘confirm that we have acquired very high quality brands in an exciting VMS category’

By Stephen DANIELLS

- Last updated on GMT

Reckitt Benckiser: Schiff results ‘confirm that we have acquired very high quality brands in an exciting VMS category’
Schiff Nutrition is performing strongly for Reckitt Benckiser, as the company posts 4% like-for-like growth for the second quarter of FY13.

Health was the stand-out business division, posting 16% growth, followed by hygiene (+5%) and home (3%). The company’s food and pharma divisions posted negative growth of -2% and -12%, respectively.

“I am delighted with the progress we have made with our recent strategic M&As,”​ said Rakesh Kapoor, RB’s CEO.

“The excellent early results from Schiff confirm that we have acquired very high quality brands in an exciting VMS category which we firmly believe will deliver sustainable shareholder returns.”

UK-based consumer goods firm Reckitt Benckiser acquired Schiff Nutrition International for about $1.3bn in 2012​, outbidding German pharma giant Bayer for the US’s second biggest dietary supplements firm.

Better than Unilever and Danone

Commenting on the results, Andrew Wood, senior research analyst, European Food & HPC for Sanford C. Bernstein, said the results were very mixed versus expectations.

“The biggest headline was the beat to expectations on ex-Pharma like-for-like growth (+6% rounded) led by strong growth (again) at Consumer health (+16%),”​ he said. This represented the fourth straight quarter of ex-Pharma growth of +5% or above on a rounded basis for RB.

“Total company EPS (+7%) was also below our expectations, but in-line with consensus…and much better than Unilever (+4%) and Danone (-2%) who have reported so far,”​ he added.

All of the regions remained strong for the company, with North America and Europe both reporting 3% growth. The highest growth was reported for Latin America and Asia Pacific with 11% reported for both regions.

“Our organizational focus on 16 Powermarkets, such as China, is another critical element of our growth strategy and is enabling us to sustainably outperform our markets,”​ added Kapoor. “We have systematically increased our brand investment in all our areas and at the same time invested in enhancing our capabilities to execute and win.”

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