Reckitt Benckiser Group is a manufacturer and marketer of branded products in household, health and personal care products, sold into nearly 200 countries from operations in over 60 countries. I have a holding in my income portfolio (epic code: RB.)
Reckitt Benckiser announced their third quarter update this morning. There were some pleasing numbers given the recent trading update on Unilever commented on here, that warned the market of a slow down in their growth for emerging markets.
Reported year to date revenue was £7,542m up 6% on last year, with LFL net revenue growth of 4% and 5% if we exclude the Pharmaceutical business (RBP).
By territories plus Food LFL growth (excluding RBP) was:
Europe/North America +3%,
Latin America/Asia/Australia & New Zealand +11%,
Russia/Middle East/Africa/Turkey +6%.
Food 0%
Identical rates to those at the 6 month stage.
Management now believe that their full year net revenue growth for these territories, including the net impact of M&A will be at least 6% and they expect to maintain full year margins.
For RBP LFL revenue fell by -5% to £591m and the Q3 decline was -16%. As they have previously mentioned, that sometime after the launch of generic tablets would be the right time to consider options for the RBP business, so they are therefore commencing a strategic review of the business. Although this business is under pressure form generic tablets, their film product still has a share of above 60% volume of the US buprenorphine prescription market. Sales and operating profits last year were £837m and £536m respectively, but I would expect this to be around £780m and say £470m this year. A likely sale might therefore attract a price of £3-3.5bn approximately 10% of the current market cap.
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