Consumer-goods giant Reckitt Benckiser has affirmed its revenue growth projections for the full year, despite falling slightly short of market expectations in the third quarter. The company, known for brands such as Dettol, Harpic, and Durex, has also initiated a share-buyback program worth £1 billion ($1.22 billion).
Revenue Growth Forecast
Reckitt Benckiser has reconfirmed its guidance for revenue growth in 2023, projecting a range of 3% to 5% on a like-for-like basis. The company also expects the adjusted operating margin to exceed the 2022 levels of 23.8%, excluding a one-off benefit related to U.S. nutrition.
In the third quarter, the company reported a year-on-year decline in revenue of 3.6%, amounting to £3.60 billion. This figure missed the market expectations of £3.63 billion, as provided by the company.
Reckitt Benckiser CEO Kris Licht expressed confidence in achieving their full-year targets, despite challenges in the U.S. Nutrition business and the over-the-counter portfolio in the fourth quarter. Licht emphasized that the company remains firmly on track to meet their goals.
Revenue Growth Breakdown
On a like-for-like basis, the company’s revenue growth was 3.4%, slightly lower than the consensus of 3.7%. This increase was bolstered by a 7.5% improvement in price/mix, which was offset by a volume decline of 4.1% and foreign-exchange headwinds. The market had anticipated a 6.1% price/mix increase and a volume decrease of 2.9%.
Reckitt Benckiser has initiated a share-buyback program, commencing immediately and running for the next 12 months.
In its strategic update, the company revealed its medium-term goal of achieving sustained mid single-digit net revenue growth on a like-for-like basis. Reckitt Benckiser aims to surpass the net revenue growth in its adjusted operating profit. Previously, the company had aimed for mid-20s margins by the middle of this decade.