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Highlights
- Revenue and Profit Growth: FY like-for-like (LFL) net revenue up 1.4%, adjusted operating profit up 8.6% (at constant FX), and AOP margin increased by 140bps.
- Robust Cash Returns: £2.7bn returned to shareholders through dividends and buybacks, with free cash flow at £2.2bn.
- Positive 2025 Outlook: Targeting 2%–4% LFL revenue growth, with accelerated profit growth supported by the Fuel for Growth programme.
Reckitt Benckiser Group PLC (LSE:RKT) has reported solid financial results for the fiscal year ending 2024, with revenue and profit growth, enhanced market share, and substantial returns to shareholders, despite currency headwinds and seasonal challenges.
Top and Bottom-Line Growth Despite Market Pressures
Reckitt achieved 1.4% LFL net revenue growth, aligning with guidance, driven by gains in its Hygiene (+3.1%) and Health (+3.1%) segments. Excluding seasonal over-the-counter (OTC) brands, Health grew 4.6%, showing resilient consumer demand. However, IFRS net revenue fell 3.0%, impacted by foreign exchange fluctuations.
Regional performance varied:
- Emerging Markets: Up 5.5%
- Europe/ANZ: Up 3.9%
- North America: Down 5.0%, due to weaker seasonal OTC sales and the Nutrition business reset.
Q4 showed promising momentum, with 4.6% LFL growth, led by Hygiene (+5.5%) and Nutrition (+8.4%), reflecting restocking post Q3 disruptions.
Profitability and Cost Efficiencies
Adjusted operating profit rose 8.6%, with margins expanding to 24.5%. This was supported by:
- Pricing strategies and productivity gains, allowing increased brand investment (+3.1% BEI).
- Fixed cost reduction to 20.9% of net revenue, helped by early wins from the Fuel for Growth programme.
Despite higher impairment charges on IFCN (£696m) and Biofreeze (£142m), plus restructuring costs, Reckitt managed adjusted EPS growth of 7.9%, aided by share buybacks and a lower tax rate of 22.2%.
Record Shareholder Returns and Cash Flow
Reckitt generated £2.2bn in free cash flow, facilitating £2.7bn in shareholder returns — a 75% increase year-on-year. This included:
- £1.3bn share buyback programme.
- 202.1p full-year dividend (+5%), reflecting the company’s focus on sustainable dividend growth.
Net debt remains manageable at 2.0x adjusted EBITDA, maintaining balance sheet flexibility for future growth investments.
2025 Outlook: Growth Across Core Segments
Looking ahead, Reckitt is targeting 2%–4% LFL net revenue growth in 2025, with Core Reckitt expected to grow 3%–4%. The company anticipates:
- Emerging Markets: Mid-to-high single-digit growth.
- Europe: Flat Q1, with gradual improvement.
- North America: Low single-digit growth, with Q1 impacted by retailer destocking and a slower Lysol capacity ramp-up.
Essential Home and Mead Johnson Nutrition are expected to grow in the low single digits for the year, though both will show revenue declines in H1, making overall growth more second-half weighted.
The Fuel for Growth programme will continue driving cost efficiencies, with operating profit set to outpace revenue growth, and another year of adjusted EPS growth is anticipated.
Medium-Term Growth Ambitions
From 2026 onward, Reckitt aims to consistently deliver 4%–5% LFL revenue growth, underpinned by its diversified portfolio, global reach, and operational discipline. The company remains committed to creating sustained value for shareholders through profitable growth and disciplined capital allocation.
