Consumer goods giant Reckitt delivered a “strong” second quarter with broad\u2011based acceleration, prompting the group to reiterate its full\u2011year outlook as momentum improved across regions, categories and its Mead Johnson Nutrition arm.<\/p>\n
Reckitt’s core like\u2011for\u2011like net revenue growth picked up to 4.2% in Q2, taking first\u2011half growth to 2.7%, with volumes improving and price\/mix remaining supportive.<\/p>\n
All three geographic areas strengthened in the quarter, with emerging markets rising 9.4%, Europe narrowing its decline to \u20111.5%, and North America returned to growth at 2.8%.<\/p>\n
Categories also saw better trends, led by Germ Protection, while China delivered a twelfth straight quarter of double\u2011digit gains. Innovation continued to underpin performance, with Dettol Activ Botany, Mucinex 12HR Cold & Fever and Durex Intensity all progressing well. Mead Johnson Nutrition returned to growth, with H1 LFL revenue up 2.0% and Q2 accelerating to 7.2% as trading conditions stabilised.<\/p>\n
For the six months ended 30 June, adjusted operating margins for core Reckitt and MJN came in at 23.6%, ahead of expectations, supported by the firm’s Fuel for Growth programme, which mitigated stranded costs following its Essential Home divestment. First-half adjusted operating profits were down 15% year-on-year to \u00a31.45bn, even as LFL net revenues were up 2.6%.<\/p>\n
Reckitt declared an interim dividend of 88.6p, up 5% year-on-year and in line with its aim to deliver sustainable dividend growth, and also announced a new share buyback programme would commence imminently, with up to \u00a3500m of shares to be repurchased over the next twelve months.<\/p>\n
Reckitt said it remains on track for full-year like-for-like net revenue growth of 4% to 5% for core Reckitt, with emerging markets expected to maintain broad\u2011based strength, Europe returning to growth in H2, and North America driven by Mucinex and Lysol.<\/p>\n
The FTSE 100-listed group continues to expect a 24.9% to 25.6% adjusted operating margin for core Reckitt and MJN, with H2 set to be materially stronger. Reckitt also reaffirmed its ambition for long\u2011term sustainable earnings per share growth.<\/p>\n
As of 0810 BST, Reckitt shares were up 6.72% at 5,524p.<\/p>\n
Reporting by Iain Gilbert at Sharecast.com<\/p>\n