Reckitt Benckiser Group (RKT) Q3 2024 TU earnings summary

Executive summary

• Q3 net revenue performance aligned with July guidance; YTD like-for-like net revenue grew 0.4%, with Health and Hygiene up 2.8% YTD, offset by an 11.6% decline in Nutrition due to US market rebasing and the Mount Vernon tornado.

• Group reported net revenue declined 3.8% YTD, impacted by FX headwinds and minor M&A effects.

• Sustained volume growth in power brands like Dettol, Lysol, Durex, and VMS/OTC segments; innovation platforms are key growth drivers.

• Strategic agenda progressing: portfolio sharpening, organizational simplification, and Essential Home exit by end of 2025.

• Market share improved sequentially in Health and Hygiene; Nutrition saw supply challenges but recovery was better than expected.

Financial highlights

• YTD group net revenue: £10,622m (+0.4% LFL, -3.8% IFRS); Q3 net revenue: £3,455m (-0.5% LFL, -4.0% IFRS).

• Hygiene: YTD LFL +3.7% (£4,585m); Health: YTD LFL +1.9% (£4,417m); Nutrition: YTD LFL -11.6% (£1,620m).

• Q3 like-for-like net revenue declined 0.5%, mainly due to a 17.4% drop in Nutrition from the Mount Vernon tornado (~£100m impact), but inventory recovery exceeded expectations.

• Price/mix improvements contributed 1.7% YTD; volume declined 1.3% overall, with Hygiene and Health combined up 0.6%.

• Developing Markets led geographic growth; North America declined due to Nutrition and tough OTC comparatives.

Outlook and guidance

• Full-year group net revenue growth target reaffirmed at 1%–3% LFL.

• Q4 expected to accelerate across all businesses due to strong brand momentum and easier comparatives.

• Health and Hygiene portfolios to deliver at lower end of mid-single-digit growth; Nutrition now expected to decline high single digits.

• Adjusted operating profit growth anticipated to outpace net revenue growth for the year; adjusted net finance expense £300m–£320m; tax rate 25–26%.

• FX headwinds expected to reduce 2024 Sterling net revenue by ~4.5% and adjusted diluted EPS by ~6.5%.