Reckitt Benckiser Backs 2023 View, Starts GBP1 Billion Share Buyback — Update

By Michael Susin and Joe Hoppe

Reckitt Benckiser backed its revenue growth expectations for the full year despite slightly missing third-quarter market expectations, and kicked off a 1 billion pound ($1.22 billion) share-buyback program.

The consumer-goods company--which houses Dettol, Harpic and Durex among its brands--backed guidance for 2023 revenue growth on a like-for-like basis in the range of 3% to 5% and adjusted operating margin to be slightly ahead of 2022 levels of 23.8%, when excluding a one-off benefit related to U.S. nutrition.

The company reported a quarterly revenue drop of 3.6% on year on a reported basis to GBP3.60 billion. This compares with a company-provided market expectations of GBP3.63 billion.

"We are firmly on track to deliver our full year targets, despite some tough prior year comparatives that we continue to face in our US Nutrition business and across our [over-the-counter] portfolio in the fourth quarter," Chief Executive Kris Licht said.

Revenue growth on a like-for-like basis was 3.4%, below the company-provided consensus of 3.7%. The increase was driven by a price/mix improvement of 7.5%, offset by a volume decline of 4.1% and foreign-exchange headwinds. The market had expected a price/mix increase of 6.1% and volumes to drop 2.9%.

Reckitt said the share buyback program will begin immediately and run over the next 12 months.

In a strategic update, the company said it was now targeting in the medium term sustained mid single-digit like-for-like net revenue growth, and for adjusted operating profit growth to exceed net revenue growth.

Its previous guidance included mid-20s margins around the mid-point of this decade.

Write to Michael Susin at michael.susin@wsj.com and Joe Hoppe at joseph.hoppe@wsj.com

(END) Dow Jones Newswires

October 25, 2023 02:56 ET (06:56 GMT)

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