Durex-to-Dettol firm Reckitt Benckiser reports flat annual sales

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Household goods giant Reckitt Benckiser has reported flat annual sales as a stronger fourth quarter failed to fully counter a year that featured tough market conditions and significant disruptions following a cyber attack last summer.

The company said net revenue came in at £11.5 billion for the year to December 31, with sales flat on a like-for-like basis when excluding exchange rate effects, and the impact of recent acquisitions, disposals and discontinued operations.

Total reported revenue growth was 21%.

Like-for-like sales at its North American business saw no growth, while its operations in  Europe, Russia and surrounding states, Israel, Australia and New Zealand together dropped 3%.

Operations in regions including North Africa, the Middle East, Latin America and Asia grew 3%.

The Durex-to-Dettol firm warned on sales last year after being hit by a cyber attack last June, which significantly disrupted its manufacturing and orders systems across a raft of markets, including the UK.

It has also been undergoing an overhaul to organise the firm into two divisions – its consumer health business, including recently acquired US infant formula company Mead Johnson, and a home and hygiene arm.

But a strong final quarter seems to have lifted spirits at the consumer goods giant, which is forecasting continued growth over 2018.

Commenting on the results, chief executive Rakesh Kapoor said: “2017 was a significant year in RB’s (Reckitt Benckiser’s) journey to become a global leader in consumer health.

“We returned to growth after a solid finish to the year, our acquisition of MJN (Mead Johnson Nutrition) is firmly on track and the creation of two business units – RB Health and RB Hygiene Home – will drive long-term growth.”

He said the company is now targeting total revenue growth of 13% to 14% for 2018, and a 2% to 3% rise in like-for-like sales.

“Whilst 2018 will see some specific factors impacting margin, we reiterate our medium-term target of moderate operating margin expansion,” Mr Kapoor said.

Operating profits came in at £2.74 billion, up 21% compared with a year earlier and up 14% when stripped of currency effects.