By Richa Naidu
LONDON (Reuters) -Britain’s Reckitt Benckiser, maker of Dettol and Lysol cleaning products, on Wednesday marginally beat full-year like-for-like net revenue expectations, helped by higher prices and its nutrition and health businesses.
The company said it would target like-for-like net revenue growth of mid-single digits for 2023, excluding the substantial lift its 2022 sales received from the recall of a rival’s infant formula.
Abbott Laboratories early last year recalled dozens of infant nutrition products in the United States after customers complained of infants contracting bacterial infections.
Reckitt, its biggest rival at the time, ramped up production to fill the supply gap left by Abbott, helping to drive full-year like-for-like net sales growth of about 23% in its nutrition business.
The impact from the shortage added about 17.5% to the unit’s growth, Reckitt said.
Overall, the price/mix for Reckitt’s products, which include Nurofen tablets, cold remedy Lemsip and Durex condoms, rose 9.8%, helping the company make up for a 2.2% decline in sales volumes due to its business in North America.
Consumer goods companies, from Procter & Gamble to Unilever and Clorox, have for several quarters hiked prices to make up for rising raw material, supply chain and energy costs.
Higher prices have prompted some consumers to shift away from big brands and embrace cheaper private label products made by retailers, including Walmart, Tesco and Carrefour.
But Reckitt executives said on a call with journalists that commodity costs “have peaked” and that price hikes would be “much” lower this year.
“We think instead of 17%, (input costs) will be somewhere in the single-digit level for 2023,” Reckitt’s interim Chief Executive Nicandro Durante added.
The company said full-year like-for-like net revenue increased by 7.6% to $13.66 billion pounds ($16.47 billion), edging ahead of analysts’ expectations of a 7.5% rise, according to a company-provided consensus.
Reckitt’s own 2022 like-for-like net revenue growth target was 6% to 8%.
Full-year adjusted earnings rose 16.8% to 3.44 billion pounds.
Nivea maker Beiersdorf said on Wednesday that it expects organic sales growth to slow this year to a mid-single-digit range after reporting double-digit growth for the first time in two decades in 2022 thanks to strong demand for its skin care products.
($1 = 0.8294 pounds)
(Reporting by Richa Naidu; editing by Matt Scuffham, Jason Neely and Sharon Singleton)