Latest news with #EssentialHome
Reuters
24-07-2025
- Business
- Reuters
Reckitt lifts revenue outlook on strong Asia growth, shares surge
July 24 (Reuters) - Consumer goods company Reckitt (RKT.L), opens new tab raised its annual revenue forecast on Thursday after second-quarter net sales growth topped expectations, sending shares soaring, as strength in China and India offset weakness in North America and Europe. Shares jumped as much as 11% to their highest level since early 2024 and were among the biggest gainers on the pan-European STOXX 600 index (.STOXX), opens new tab. Reckitt, the maker of Durex condoms and Lysol cleaning products, is pivoting to focus on its 11 so-called "power brands" under CEO Kris Licht, as the sector is faced with weak demand and fierce competition. The company reported like-for-like quarterly net revenue growth of 1.9%, above the 1.7% forecast in a company-compiled consensus. It also announced a new 1 billion pounds share buyback over the next 12 months. Growth in North America and Europe lagged expectations, hit by a challenging consumer environment and the expected shelf reset of its flu medicine Mucinex due to reformulation. Licht said there was some stabilisation in those regions in the second quarter, but consumption remained "suppressed". "Even though consumption is a bit lower in our categories, we're still seeing some growth, and people are still spending. It's just much more measured," he said, referring to North America and Europe. But strong sales in China, India and good growth in Brazil, Colombia, Indonesia and Malaysia made up for weakness in developed markets. Chinese consumers were responding well to new innovation behind the Dettol brand, Licht said. Reckitt raised the like-for-like 2025 net revenue growth forecast for its core business to above 4%, from a 3% to 4% range previously. "A beat and raise is a rare occurrence in this market," said analysts at JPMorgan in a note. Reckitt now expects overall group like-for-like net revenue growth of 3% to 4% for the year, up from the previous 2% to 4%. The share price was last up 9%, heading for its biggest one-day percentage gain since November 2008. Last week, Reckitt sold a majority stake in its Essential Home business to Advent for $4.8 billion. It is also exploring options for its Mead Johnson unit, which faces several baby formula lawsuits in the U.S. The U.S. litigation may have some impact on timing of the eventual exit of Mead Johnson, Licht said. Essential Home and Mead Johnson, which are considered non-core, underperformed during the quarter. Reckitt posted operating profit of 1.71 billion pounds ($2.32 billion) for the six months ended June 30, beating analysts' average expectations of 1.66 billion pounds. Some investors worry Reckitt is more exposed than rivals to U.S. tariffs due to lower U.S. manufacturing capacity compared to Haleon (HLN.L), opens new tab and Unilever (ULVR.L), opens new tab. Once its new factory in the U.S. state of North Carolina becomes operational in 2027, the share of local U.S. sales could rise to 75% from 57%, Reckitt has previously said. Licht said he is considering further U.S. investments to "increase capacity and support innovation." ($1 = 0.7368 pounds)
Yahoo
18-07-2025
- Business
- Yahoo
Reckitt sells Essential Home stake to Advent for $4.8 billion
By Yadarisa Shabong (Reuters) -Reckitt has sold a majority stake in its Essential Home business to private equity firm Advent International in a deal valued at $4.8 billion including debt, it said on Friday. The consumer goods group said it would retain a 30% stake in the business, which makes Air Wick fresheners, Cillit Bang cleaners and insecticide Mortein. Reuters exclusively reported last month that the two parties were in talks over a sale, with Reckitt likely to retain a minority stake. Reckitt CEO Kris Licht has been trying to turn around the business and ease shareholder concerns over the strength of its brands in North America and Europe, where consumer confidence has been weak. A Reckitt spokesperson said the decision to retain a stake provided a potential long-term value opportunity and the deal structure maximised returns for shareholders. Shares in the company rose as much as 2.3% in early trade before paring gains to stand 0.8% up at 0840 GMT. "It was the perfect storm between a seller who needs to sell and a buyer with no competition," a source close to the matter said on Friday. The value of the transaction includes up to $1.3 billion in performance-based and delayed payments tied to how the business performs and other financial conditions, Reckitt said, adding that the deal is expected to close by the end of the year. "This should be a boost to management's credibility, quite a lot of which was resting on successful execution of this deal," RBC analyst James Edwardes Jones said in a note, though he did describe the proceeds as underwhelming. JPMorgan analysts also noted that the deal financials were weaker than expected, adding that Reckitt's remaining stake in the business leaves it with large exposure and risks related to Essential Home's performance. Reckitt said it plans to return excess capital to shareholders, including a special dividend of about $2.2 billion and a share consolidation, after the deal closes. Essential Home accounted for about 13% of group revenue in the first quarter but sales have struggled for several quarters. Reckitt, brands of which include Dettol handwash and Durex condoms, has also been considering options for its litigation-hit baby formula business, Mead Johnson.
Daily Mail
18-07-2025
- Business
- Daily Mail
Reckitt sells Cillit Bang and Airwick to private equity in $4.8bn deal
Consumer giant Reckitt Benckiser has sold its Essential Home business to a private equity firm in a deal worth up to $4.8billion. The FTSE 100 firm is selling the unit, which includes brands like Air Wick and Cillit Bang, as part of Reckitt's efficiency drive launched earlier this year that will see it focus efforts on its core business. Reckitt is also exploring options for Mead Johnson Nutrition, which remains the subject of US litigation regarding its infant formula. The group, which also owns healthcare brands like Durex and Clearasil, told shareholders on Friday Essential Home would be sold to Advent International for an enterprise value of 'up to $4.8billion', with Reckitt retaining a 30 per cent stake in the business. Reckitt Essential Home operates in more than 70 markets in the air care, surface, pest and laundry segments, and generated £2billion of net revenue in 2024. Reckitt's interest in six global manufacturing plants will transfer with Essential Home, including the UK site in Derby. The deal, the value of which is equivalent to 7.7x Essential Home's unaudited adjusted operating profit for last year, includes up to $1.3billion of contingent and deferred consideration. And investors are set to be rewarded, with Reckitt lining up a $2.2billion special dividend on top of the group's ongoing share buyback programme. Expected to complete by the end of the year, the deal will see Reckitt face costs of roughly $800million with the majority payable in 2026. Reckitt boss Kris Licht said: 'We are executing our strategic plan at pace. The divestment of Essential Home represents a significant step forward in unlocking the substantial value in our business. 'This moves Reckitt towards becoming a simpler, more effective world-class consumer health and hygiene company and it will enable us to focus on a core portfolio of high-growth, high-margin Powerbrands. 'Essential Home will benefit from Advent's new majority ownership with our retained minority stake in Essential Home providing a potential long-term value enhancement opportunity for Reckitt.' Advent managing partner Ranjan Sen said the deal 'represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories with structural growth tailwinds'.
The Herald Scotland
18-07-2025
- Business
- The Herald Scotland
Reckitt strikes deal worth up to £3.6bn to sell Cillit Bang business
Reckitt will keep a 30% stake in the essential home business after the sale, with up to 1.3 billion dollars (£968 million) deferred under the deal. It will offload six factories, including a site in Derby, to Advent under the deal. The firm will also book around 800 million dollars (£596 million) in costs for splitting out the essential home division from the rest of the business. It expects to complete the deal by the end of the year. Kris Licht, Reckitt chief executive, said: 'We are executing our strategic plan at pace. 'The divestment of Essential Home represents a significant step forward in unlocking the substantial value in our business. 'This moves Reckitt towards becoming a simpler, more effective world-class consumer health and hygiene company and it will enable us to focus on a core portfolio of high-growth, high-margin power brands.' It put the essential home division, which accounts for about 14% of group net revenues, up for sale last summer as part of a major overhaul. Mr Licht has been leading a plan to restructure Reckitt, unveiling aims last year to spin off its baby formula business, Mead Johnson, and sell the essential home division to focus on 'power brands', such as Durex condoms, Gaviscon antacid and Strepsils lozenges. The essential home business delivered around £2 billion of net revenues in 2024 and it made underlying earnings of £486 million in the year to March. Reckitt said the sale would help further boost shareholder returns, with it set to pay out a 2.2 billion dollar (£1.6 billion) special dividend to investors. The group added it plans to offset the costs of spinning off the division under wider aims to cut costs across the firm. Ranjan Sen, managing partner of Advent said: 'The carve-out represents a unique opportunity to create a focused, scaled platform of globally recognised home care brands that operate in attractive categories. 'We are confident we can build on the portfolio's strong foundations to drive operational excellence and unlock the brands' full potential.'
Reuters
18-07-2025
- Business
- Reuters
Reckitt sells Essential Home stake to Advent for $4.8 billion
July 18 (Reuters) - Reckitt (RKT.L), opens new tab has sold a majority stake in its Essential Home business to private equity firm Advent International in a deal valued at $4.8 billion including debt, it said on Friday. The consumer goods group said it would retain a 30% stake in the business, which makes Air Wick fresheners, Cillit Bang cleaners and insecticide Mortein. Reuters exclusively reported last month that the two parties were in talks over a sale, with Reckitt likely to retain a minority stake. Reckitt CEO Kris Licht has been trying to turn around the business and ease shareholder concerns over the strength of its brands in North America and Europe, where consumer confidence has been weak. Reckitt said it plans to return excess capital to shareholders, including a special dividend of about $2.2 billion and a share consolidation, after the deal closes. Reckitt shares were up about 1.2% in early trade. Essential Home accounted for about 13% of group revenue in the first quarter but has struggled for several quarters, with sales down 7% year on year in the first three months of the year. The value of the transaction includes up to $1.3 billion in performance-based and delayed payments tied to how the business performs and other financial conditions, it said, adding that the deal is expected to close by the end of the year. Reckitt, brands of which include Dettol handwash and Durex condoms, has also been considering options for its litigation-hit baby formula business, Mead Johnson.
