A slow start to 2019 has forced global health giant RB to cut its growth expectations for the year.
Like-for-like performance in the first half of the year rose by just one per cent, held back by poor results in RB’s Health department.
Earlier this month, RB also agreed to pay $1.4bn to full resolve an ongoing investigation into the sales of a drug called Suboxone by its former business Indivior.
RB -formerly Reckitt Benckiser - said while it had not acted unlawfully, it had decided the settlement was “in the best interests of the company and its shareholders.”
Commenting on the first half of 2019, outgoing RB CEO Rakesh Kapoor said: ““Our like-for-like performance in H1 was up one per cent, somewhat below our expectations.
“Hygiene Home delivered another quarter of consistent top line growth but progress in Health in Q2 was disappointing.
“However, we believe that much of this is behind us and strong plans are in place to restore growth…
“We are further stepping up our investment in BEI and medical marketing to drive our growth. We therefore expect H2 to be back to our more normal level of growth.”
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In the first half of 2019, operating profits at RB hit £1.4bn – up from £1.3bn in the same period last year.
RB said while well-known brands including Nurofen, Strepsils and Gaviscon had shown strong share gains, its Dettol and Durex products slowed in the second quarter of 2019.
The slower than expected start to 2019 forced RB to cut its revenue growth target for the year from three to four per cent, to two to three per cent.
RB’s latest figures come as former CEO Rakesh Kapoor hands over the reins to new boss, Laxman Narasimhan.
Mr Narasimhan, formerly a boss at PepsiCo, became RB’s CEO-designate on July 16, and will take the position of group CEO from September.
Chris Sinclair, chairman at RB, said: “We have made good progress during the quarter in reducing uncertainty, with the appointment of Laxman Narasimhan, our new CEO, and drawing a line under Indivior related matters.
“On behalf of the Board I would like to thank Rakesh for his outstanding contribution to RB over his 32 years at the company, eight of which were as CEO.
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“During his tenure he has transformed RB from a household cleaning company to a global leader in Consumer Health. He has lived, and, indeed improved, RB’s values whilst maintaining the culture of entrepreneurship and ownership.
“We still have work to do in restoring growth and outperformance. This is the Board’s and Laxman’s key priority. However, the future opportunities created by RB 2.0 have never been more exciting.”
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