Durex and Clearasil maker Reckitt Benckiser (RB.) has lifted sales targets after half-year revenues were boosted by its acquisition of Mead Johnson last year.
The consumer giant saw revenues grow 23% in the second quarter, driven by acquisition of the infant baby formula business.
Baby formula sales grew 9% for the quarter, helping the company 5% pro-forma growth.
Reckitt’s recorded 4% like-for-like growth in the period, consisting of 3% growth in its health category, and 4% growth in its home hygiene arm.
The integration of Enfamil-maker Mead Johnson – which was acquired last year for $16.6bn – is “on track” and helping to provide cost efficiencies of around $300m, it said in this morning’s trading update.
The company has raised its target for net sales growth at constant rates by a percentage point to 14-15%, as the company made an operating profit of £1.2bn for the half year ending 30 June 2018.
Reckitt’s health business was strengthened by Enfamil, which grew in channels in China, but poor performance by footcare brand Scholl impacted growth.
The home hygiene category grew in North America, offsetting “weaker growth in Europe” where pricing pressure continued. It highlighted strong performances by household brands Finish, Airwick and Harpic.
Like-for-like growth for 2018 is expected to be at the upper end of 2-3%, said CEO Rakesh Kapoor.
“Delivering growth and the successful integration of Mead Johnson Nutrition (MJN) remain our key priorities. Q2 was a quarter of progress against both of these priorities,” he commented.
“MJN integration is well on track, with Infant Formula and Child Nutrition (IFCN) performance exceeding expectations and synergies being delivered. RB 2.0 is driving greater focus and energy as we operate under our new business units – Health and Hygiene Home.
“With IFCN exceeding our expectations and our base business delivering in line, we are raising our 2018 target to +14-15% total net revenue growth at constant rates (previously +13-14%), implying like-for-like revenue growth at the upper end of +2-3%.”
Growth slowed at French food group Danone as it was weighed down by consumer boycotts in Morocco and Brazilian truck strikes.
The Activia manufacturer recorded 4% like-for-like sales growth in the half-year to June 30, with 3.3% like-for-like growth in the second quarter.
Danone saw “strong growth” for nutirition brands in China, while its water, dairy and plant-based categories all reported sales growth.
Sales growth was driven by developing markets, as Europe and North American sales fell 1% for the half-year compared to 2017. The rest of the world however saw revenues jump 10.5%, helped by growth in China.
Sales in Morocco however dived 40% as the company was heavily impacted by an ongoing consumer boycott.
It posted a 7.9% increase in operating profits, benefitted by synergies resulting from its acquisition of US organic food producer WhiteWave last year.
“In the first half of the year, Danone delivered another semester of strong results, combining sales growth momentum, strong margin improvement, and improved free cash flow,” commented chairman and CEO Emmanuel Faber.
“This performance, achieved despite ongoing volatility and unexpected headwinds in some markets, reflects the underlying strengths of our business and our continued financial discipline.
“The performance was underpinned by notable progress in rebalancing the growth profile of our portfolio and widening sources of growth, while delivering initial savings from our €1bn efficiency program Protein. Excluding the exceptional situation in Morocco, all reporting entities delivered growth in the second quarter.”
Upmarket high street chocolate retailer, Hotel Chocolat has announced plans expand in Scandinavia following strong sales performances in Denmark.
The development agreement which sees the brand expand into Sweden, Norway and Finland, also sees the brand transfer its Danish retail stores to international company Retail Brands.
“Having proven the popularity of the Hotel Chocolat brand with Danish consumers we are excited to be entering our next phase of Scandinavia-wide growth,” CEO Angus Thirlwell said.
By combining the strengths of our products and brand with the operational skills of an in-country partner, our goal is to deliver sustainable growth in Denmark and the wider Nordic region.”
Childern’s food brand Kiddylicious is looking at sales options, the Grocer has revealed. Read the full story here.
The FTSE 100 has jumped 0.4% in early trading despite ongoing trade concerns in Europe.
Reckitt Benckiser has jumped 6.9% to 6,750p on today’s results. Other early risers include Devro (DVO), up 1.8% to 198.4p, Dairy Crest (DCG), up 0.8% to 489.8p and J Sainsbury (SBRY), up 0.6% to 325p.
Early fallers include JD Wetherspoon (JDW), down 0.9% to 1,214p, Majestic Wine (WINE), down 0.8% to 453.4p and British American tobacco (BATS), down 0.7% to 4,147p.
Yesterday in the city
The FTSE 100 climbed marginally, as it rose 0.1% to 7,663pts while the markets continue to flux with global political concerns.
Yesterday, Swiss food giant Nestlé (NESN) reported it is on course to hit full year growth targets after reporting organic growth of 2.8% in the first half.
The world’s largest brewer AB InBev (ABI) reported second quarter revenue growth of 4.7% largely driven by pricing as volumes grew by just 0.8% in the quarter.
One of the big winners yesterday was British American Tobacco (BATS), as it rose 5.1% to 4,177pts on the back of encouraging first half results.
Other risers in yesterday’s trading included Total produce, up 2.6% to 195p, Greencore, up 1.8% to 181.7p, and McBride, up 1.7% to 143.6p.
Fallers yesterday included MColls (MCLS), down 5.9% to 160p, Compass Group, down 2.3% to 1,606p, and Ocado group, down 2.1% to 1,121,5p.