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Resilient Reckitt warns 2016 will be tougher

Consumer giant Reckitt Benckiser has beat market expectations with its latest set of annual results
February 15, 2016

Consumer goods giant Reckitt Benckiser (RB.) has reported a market-beating set of full-year numbers, but that doesn’t mean chief executive Rakesh Kapoor can breathe easy. Mr Kapoor reckons the wider business environment will be "tough" in 2016, and is working towards a modest target of like-for-like net revenue growth of 4 to 5 per cent. Strategic cost savings will have to remain high on the agenda, too, if the group wants to continue growing margins.

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Market conditions were mixed for the business in 2015, but the group still reported a robust 6 per cent improvement in like-for-like sales, with foreign exchange headwinds accounting for the flat turnover reported. This growth managed to find its way to the bottom line, as strict cost savings pushed adjusted operating margins up 210 basis points, leaving adjusted operating profits up 9 per cent at £2.4bn. Europe and North America – which account for the bulk of revenues – grew 5 per cent on an underlying basis, bringing in a total of £5.8bn in net revenue. Emerging markets actually held up pretty well, too, with a collective 9 per cent improvement in underlying revenues thanks to strong performances in India and China. However, Brazil and parts of Southeast Asia remain challenging.

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