Household products maker Reckitt Benckiser has reported better-than-expected quarterly results, as cautious customers stocked up on Lysol and Dettol disinfectants during the coronavirus pandemic.
Like-for-like sales for the three months ended June 30 rose 10.5%, handily beating company-provided estimates of 7.8%.
The Slough-based company also said it expects high-single-digit underlying revenue performance in 2020 compared with the mid-single-digit sales growth initially expected.
The pandemic has relieved pressure on a business that has struggled to cope with intense competition in the health and hygiene space.
People are increasingly cleaning their homes and washing their hands to protect themselves from the coronavirus, a trend which Reckitt Benckiser CEO Laxman Narasimhan expects to continue even when people spend less time indoors.
"The first six months of 2020 have been underpinned by resilience, agility and strong execution," Narasimhan said. "I’m incredibly proud of the effort of our people who have worked tirelessly, while staying safe, with focus and dedication in an environment that’s been changing daily."
Customers are also shopping more online, helping Reckitt's e-commerce sales surge more than 60% in the first half of the year, and now accounting about 12% the group's net revenue.
Adjusted earnings for the half-year ended June came in at 166.5 pence, beating estimates of 154.8 pence. Revenue came in at £6.91 billion, above forecasts of £6.81 billion.
The company also announced plans to invest an additional £100 million over the next two years to speed up growth of its disinfectant brands.
Share Price Boost
The company's strong performance has given a fillip to Reckitt's shares, pushing them up by more than a quarter this year, compared with the FTSE 100's 19% drop.
"Our strategy to rejuvenate sustainable growth at RB is unchanged and we have made good progress in the first six months of the year, albeit there is still a lot to do," Narasimhan added.
"Our strong outperformance will allow us to expand our plan to make incremental investments to capture new growth opportunities for the near- and long-term. While uncertainties remain for the second-half of the year, on both the public health and economic fronts, we have increased confidence in the successful delivery of our medium term goals.”