Consumer goods maker Reckitt Benckiser has raised annual revenue and profit margin targets after a forecast-beating first-half performance led by consumer health and hygiene in most of its markets around the world.
The manufacturer of Durex condoms, Dettol disinfectant and Nurofen painkillers also said it would hit the upper end of targeted cost savings, around £150 million, ahead of schedule.
The firm is trying to boost its presence in consumer health. The sector has been growing fast amid increased demand for over-the-counter remedies and health products due to a greater awareness of health, aging populations in developed markets and rising incomes and urbanisation in emerging markets.
Chief executive Rakesh Kapoor said second-half growth would be driven by innovation, with a host of new product launches, including from its Mucinex cold medicine, Scholl footcare, and Airwick air freshener brands.
Over the six months to June 30 sales rose five per cent on a like-for-like basis, which excludes the impact of currency, acquisitions, disposals and discontinued operations, mirroring first-quarter growth but ahead of analysts' average forecast of 4.6 per cent.
Adjusted operating margin rose 160 basis points to 21.9 per cent, driving an 11 per cent increase in adjusted operating profit to £953 million at constant exchange rates. Free cash flow generation was £756m.
Mr Kapoor said while European and North American markets were more stable than a few years ago developing markets remained mixed.
"While we are seeing improved consumer sentiment in a number of countries, such as India, other geographies, such as Brazil and Indonesia, remain challenging," he said.
RB is now targeting full-year like-for-like net revenue growth of between four and five per cent and second-half moderate to "nice" adjusted operating margin expansion. It previously forecast like-for-like sales growth of four per cent.
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