Sales volumes for Reckitt Benckiser’s products sank 5.8 per cent in the final quarter as demand for Lysol disinfectant fell and tough price negotiations with retailers removed some products temporarily from the shelves.
The maker of Dettol disinfectant, Durex condoms and Nurofen painkillers pushed up its prices 12 per cent during the quarter to December 31, but interim chief executive Nicandro Durante said demand was hit by consumers buying less disinfectant than at the peak of the pandemic.
“2022 was a very tough year for Lysol simply because of the high Covid [comparisons] . . . however Lysol is much stronger now than before the pandemic,” he said.
He added: “If you look at hygiene, we had some share losses and some decline in quarter four because of some trade negotiations in which, in order to implement the price increase, we had . . . some of our products that were out of the trade for a couple of months.”
The sales decline, greater than that reported by most competitors, was also caused by lockdowns in China affecting sales of Reckitt’s intimate wellness products, which include KY Jelly.
Sales volumes were down 2.2 per cent for the full year on a rise in price/mix — a figure that takes in price rises and consumers’ choice of products — of almost 10 per cent.
Like-for-like net revenue growth, a key measure for the sector, was 7.6 per cent for the full year, driven by price rises and boosted by strong sales of infant formula in the US as rival Abbott was forced to recall batches of its Similac formula. Operating profit reached £3.2bn.
Durante said he expected inflation to moderate in 2023, with Reckitt’s input cost inflation — which reached 17 per cent in 2022 — coming down to single digits. “I expect for 2023, considering we will take less pricing, the volume probably will show a better picture,” he said.
The company’s former chief executive Laxman Narasimhan left abruptly last year to take the helm at Starbucks after three years. Reckitt has not yet announced a permanent successor, though Durante said the company was expected to unveil its choice in the first half of this year.
Shares in the group rose 0.45 per cent to £57.88 in early trading on Wednesday.
Reckitt also recorded an impairment charge of £152mn on its 2021 acquisition of Biofreeze, a pain relief gel, which it said reflected “a short-term category slowdown and increased discount rates due to current macroeconomic conditions”.