Covid-19 second wave: Reckitt Benckiser's biz delivers robust sales growth

Sales of key health and hygiene products skyrocketed during the January-March quarter

With the second wave of Covid pandemic spreading fast in India, sales of Reckitt Benckiser’s key health and hygiene products skyrocketed during the January-March quarter. The firm, which recorded double-digit growth across all major markets, saw its business emerging strongest in India.

The hygiene portfolio comprised of homecare products like Lysol, Air Wick and Finish, grew by double digits but its business was “particularly strong” in India, North America and the UK. Sales of hygiene products, which account for 47 per cent of its Rs 144,683 crore yearly revenue, grew 28.5 per cent, backed by a 22.6 per cent volume growth, in the March quarter.

“In addition to growth in the core business, Lysol continues to capture revenue from emerging white space opportunities. Air Wick and Finish each delivered double-digit revenue growth. Harpic built on its strong 2020 performance with high-single-digit growth as it continues to drive category penetration through its purpose-led marketing”, the company said in an earnings call today.

The health portfolio, primarily represented by the brand Dettol, declined 13 percent year-on-year as volumes dwindled by 14.2 percent. However, the market in India addressed the slide. “By geography, we have seen double-digit growth in India, with strong performances in China, UK and Russia”, it said.

In fact, revenue from Dettol was stable year-on-year as a result of the significant pantry loading which took place in the comparative period, and overall demand remains significantly higher than the levels seen pre-COVID. In India, revenue growth remained strong as underlying demand and expansion of key segments such as disinfectant spray and laundry sanitiser have more than offset increased competitive pressures.

Measures adopted by Reckitt and the resilience of the local market are to be attributed for better performance in the local market. Since the pandemic has begun the company has expanded its distribution reach to over 110,000 villages from 75,000. While steady economic recovery till March helped consumer sentiment. Unlike in India, despite being one of the largest markets for hygiene products, sales plunged in Brazil during the period due to “difficult economic conditions”.

According to the company management, the near-term situation remains dynamic across the world. “Countries around the world are now at very different stages of the pandemic, with cases in Brazil and India, for example, rising rapidly, while Australia and China have seen the virus largely recede. The rollout of vaccinations also varies significantly, with large proportions of the UK and US populations having now received a first dose. These factors, along with evolving scientific understanding of the virus, are resulting in changing government advice and restrictions. As a result, we continue to monitor a number of leading indicators closely to understand how demand dynamics will play out over the course of the year”, it said.