Reckitt Benckiser Shines on Emerging-Market Growth

LONDON -- Reckitt Benckiser (LSE: RB.L  ) reported a 4% increase in like-for-like sales in the first six months, thanks to strong growth in emerging markets. Revenue in the first half rose 4% to 4.6 billion pounds, and operating profits climbed 4% to 1.1 billion pounds.

The company said: "Six months into our purpose-driven strategy, Reckitt Benckiser has delivered revenue growth well ahead of our market. On a like-for-like basis, net revenue growth of 4% was driven by continued excellent performance from emerging-market areas and hygiene brands."

However, the maker of Cillit Bang, Dettol, and Finish warned that the consumer and competitive environment in Europe and North America remains challenging. Nevertheless, it said it was doing the right things for the long term by increasing its brand equity investment.

Reckitt Benckiser saw a slight dip in gross margin to 56.3%, but operating margin rose to 24%. The company said it was able to partially offset higher input cost and increased investments by cost-savings programs.

It added: "The new organisation structure is fully in place and we are seeing early benefits of increased operational focus: speed, scale and consistency of our execution. RBP (Pharmaceuticals) continues to make very good progress with the Suboxone sublingual film now at 56% market volume share."

Reckitt Benckiser said its interim results, together with exciting innovations for the second half and backed by further increased brand equity investment, underpins its confidence in achieving full-year targets.

The interim dividend was increased by 2% to 56 pence per share, which puts the company on course to double its payout to shareholders in four years.

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David does not owns shares in Reckitt Benckiser. The Motley Fool has a disclosure policy. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.


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