(Bloomberg) The promise of surging baby-formula sales in China fueled Reckitt Benckiser Group Plc’s $18 billion acquisition of Enfamil maker Mead Johnson. Only four years later, the U.K. company is considering whether to get out of that market. Reckitt put its infant-nutrition business in Greater China under strategic review Wednesday as part of Laxman Narasimhan’s biggest portfolio revamp since becoming chief executive officer in late 2019. While Reckitt’s overall sales grew a record 12% in 2020, fueled by surging demand for Lysol and hygiene products, the China baby-formula business has been a drag. What had been a boom market has turned to bust due to falling birthrates in the world’s most populous country. Local competition has also increased, putting pressure on Reckitt and its rivals Nestle SA and Danone, which plowed into the market since China eased its stringent one-child policy in 2013 and allowed each family to have two children in 2016. Registered births slumped 1
Reckitt Benckiser has launched a strategic review of its struggling China infant formula business four years after acquiring it as part of its biggest acquisition yet.The review of the Greater China
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A strong end to the year has helped Reckitt Benckiser register double-digit growth in 2020 as consumers turned to Dettol, Lysol and other hygiene brands to keep coronavirus at bay.
Revenues for the year finished 11.8% higher on a like-for-like basis to £14bn, with the hygiene division up 19.5% and health rising 12.1%. It is the best growth recorded in the company’s history.
The shift to online also benefitted the multinational as its ecommerce channel registered a record performance, with online sales soaring 56% to account for about 12% of total group business.
Reckitt flagged very strong growth for its heritage brands, particularly Lysol, Finish and Dettol, with a good performance from Gaviscon and improved momentum for Durex once the first lockdown was lifted.
Provided by Dow Jones By Matteo Castia Reckitt Benckiser swung to profit in 2020 on higher revenue, boosted by strong hygiene sales amid the coronavirus pandemic The company bought the Biofreeze pain-relief brand from Performance Health for an undisclosed amount Reckitt Benckiser sold its Scholl footcare brand to Yellow Wood Partners, also for an undisclosed amount Reckitt Benckiser Group PLC reported Wednesday a swing to net profit for 2020 as its hygiene division benefited from increasing demand amid the coronavirus pandemic and boosted revenue in the period. The consumer-goods company which houses Dettol, Harpic and Durex among its brands made net profit of 1.19 billion pounds ($1.68 billion) for the year, compared with a net loss of GBP3.68 billion in 2019.