Reckitt Benckiser cites macroeconomic conditions amid flat first quarter sales

Reckitt Benckiser share price Group updates market on Q1 performance

Reckitt Benckiser share price Group updates market on Q1 performance

The acquisition of Mead Johnson is on track and should be completed by the end of the third quarter, the company said.

The announcement came as the company, whose brands include Dettol, Durex, and French's ketchup and mustard, reported flat first quarter sales. I expect our growth trajectory to improve as we progress through the year and we remain on track to achieve our full year net revenue target of three per cent like-for-like growth.

Reckitt recently launched a review of its £2 billion foods business, which could see the division behind Frank's RedHot sauces being sold off to help fund the deal.

Earlier this month Reckitt announced a "strategic review" of its food business.

A disposal is being considered to help fund its US$16.6bn takeover of USA baby food maker Mead Johnson, announced at the start of February.

Baby milk formula is big business.

Geographically, total revenue in Europe, North America and Australasia rose by 12%, while growing by 21% in the Middle East, Turkey, Africa, Asia and Latin America. This included a 15% rise for its Health unit, 18% for the Hygiene unit, and 11% for the Home unit.

Consumer products group Reckitt Benckiser PLC (LON:RB.) saw its shares drop in early trading after it said its like-for-like sales were flat in the first quarter reflecting challenging market conditions as it progresses a strategic review of its food business and an expansion in to the USA baby food industry.

The foods arm, which had sales a year ago of £411mln, could fetch more than £2.4bn if sold, according to media reports.

Analysts had expected the first quarter to be weak across the consumer goods sector, due to economic uncertainties and the timing of Easter.

Reckitt also noted that the Indian government is planning to implement a goods & services tax from the beginning of July, which it expects to result in a GBP40 million hit to net revenue in its full-year accounts.

"We don't think for one minute that Reckitt's brands are losing their fundamental appeal, or that the company has lost its ability to innovate".

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