Reckitt Benckiser Cuts Forecast As Cyberattack Slows Sales
Reckitt Benckiser Group Plc cut its full-year sales forecast after a cyberattack disrupted manufacturing and distribution at the maker of Scholl foot-care and Air Wick fresheners.
The company, one of the first to quantify the financial effects of the incident, expects sales to rise about 2 percent on a like-for-like basis, Reckitt said in a statement Thursday. Previously it forecast 3 percent growth.
“This is more than we were expecting,” RBC Capital Markets analyst James Edwardes Jones said in a note. The shares fell as much as 3.2 percent in early London trading.
The cyberattack caused widespread disruptions to shipping terminals, corporate-information technology networks and other vital infrastructure around the world. Reckitt joined companies including FedEx Corp. and Danish shipping company A.P. Moller-Maersk A/S in falling victims late last month. Employees at snack giant Mondelez International Inc. worked with mobile phones and personal email after their computer system was infected.
Nivea skin-care maker Beiersdorf AG suffered “many millions” of euros worth of damage as a result, Stern magazine reported this week, citing an unidentified manager whose comments have not been confirmed by the company. At Reckitt, the estimated loss of 1 percent of annual sales would equate to about 90 million pounds ($117 million).
The virus began spreading in Ukraine and demanded ransom money to unlock computer systems. Reckitt said it believes it has contained the problem and it’s working to resolve outstanding IT issues, though some factories are still not operating normally.
The company also said that a new tax in India reduced orders from some customers in June. Second-quarter revenue fell 2 percent, the company estimated. Reckitt said it expects to recover some of the lost sales in the third quarter.
“These impacts are exceptional and not a reflection on the underlying strength of the business,” Berenberg analyst Rosie Edwards said in a note.