Fewer cold cases slow Reckitt sales
The company behind Durex condoms and cleaning product Dettol saw revenues in the transatlantic region drop 1% to £2.3 billion in the six months to June 30 as weak consumer sentiment hit performance.
Reckitt reported a 1% increase in group revenues to £4.7 billion and a 2% rise in underlying operating profits to £1.1 billion due to a strong performance in emerging markets, driven by sales of Durex, Dettol and cleaning brands Finish and Harpic.
Reckitt said market conditions were particularly weak in southern Europe, which is being impacted by the eurozone crisis and weak economic growth.
The group hailed the strong growth in its Latin America and Asia-Pacific (Lapac) region and Russia, the Middle East and Africa (Lumea). In Lapac, sales of Durex in China were ahead of expectations, while Dettol, Finish and Harpic also performed well.
Hygiene products make up some 46% of revenues, Reckitt said, with Dettol and Lysol leading sales across the world. Health products make up 22% of revenues.
Looking ahead, Reckitt has a number of new products launching in the second half of the financial year including Nurofen Express Period Pain capsules, sore throat relief Cepacol and condom range Durex B Closer, which is marketed at younger people.
Reckitt chief executive Rakesh Kapoor said: "While the consumer and competitive environment in Europe and North America remains challenging, we are doing the right things for the long term."
Shares in Reckitt fell 2% after the results were published. Graham Jones, analyst at broker Panmure Gordon, said the results were in line with expectations but rival Unilever was a preferred stock option due to its higher exposure to emerging markets.