Reckitt Benckiser Group encountered a downturn in profits and sales for the year 2024 while maintaining a positive outlook on future growth. The UK-based consumer goods company reported net revenue of £14.17 billion for the 12 months ending December 31, 2024, marking a 3% decline year-over-year. This reduction was influenced by adverse net mergers and acquisition impacts and challenging foreign exchange conditions.
However, on a like-for-like basis, net revenue recorded a 1.4% increase during the same period, aligning with the company's guidance expectations. The net profit plummeted to £1.43 billion compared to £1.66 billion in the previous year, with operating profit suffering a 4.2% decrease to £2.43 billion.
Despite these setbacks, the group, which features well-known brands like Lysol, Strepsils, and Gaviscon, managed to secure a 90 basis-point drop in fixed costs, representing 20.9% of net revenue in 2024, down from 21.8% a year earlier. "Improved execution in key markets resulted in enhanced market share performance in Health and Hygiene.
Our achievements were further supported by innovative platforms, increased investment in our brands and research and development (R&D), and initial savings from our Fuel for Growth program," stated Chief Executive Kris Licht. "This solid advancement has allowed us to meet our objectives for the full year regarding like-for-like net revenue, adjusted operating profit, and earnings per share (EPS) growth while also delivering robust cash returns to our shareholders." The board has suggested a final dividend of £1.217 per share, elevated from the previous £1.159 per share, bringing the total annual dividend to £2.021 per share, exceeding the £1.925 per share issued in 2023. Looking forward to 2025, Reckitt is targeting a like-for-like net revenue growth of 2% to 4%, alongside aims for an increase in adjusted diluted EPS.
Starting from 2026, the company plans to consistently target a 4% to 5% like-for-like net revenue growth across its core divisions and achieve sustainable annual EPS growth. In an effort to streamline operations, Reckitt implemented a new operating model that comprises three reporting segments as of January 1: Core Reckitt, Powerbrands, Mead Johnson Nutrition, and Essential Home, with intentions to exit the latter segment by the end of 2025. Analysts at Barclays remarked, "Reckitt appears attractively priced, although it's important to note that the present transformation may have a materially dilutive effect on EPS, albeit it is strategically justifiable.
Reckitt has set a strong foundation for executing the transformation through cost savings in H2 2024; we await further evidence but currently see a balanced risk/reward scenario and maintain our [Equal Weight] position." They highlighted that the group's fixed cost savings were coming in sooner than anticipated. As of Thursday morning, Reckitt's shares had risen nearly 2% in London..