Global health giant RB’s performance between July and the end of September was “disappointing,” its CEO has admitted.
Like-for-like sales in RB’s health division in the third quarter of 2019 were down 0.3 per cent, as it blamed weaker performance in the US and China.
Across the whole business, which employs more than 1,000 people at its base in Hull, sales rose by just 1.6 per cent – half the expected rate.
Company CEO Laxman Narasimhan, who took the reins at RB in September, delivered a brutally honest evaluation of the last three months, and cut expected 2019 revenue growth by up to two per cent.
He said: “RB’s performance in Q3 was disappointing.
“We delivered another quarter of consistent growth in Hygiene Home. Our Health business, despite good market growth and stable consumer offtake, delivered a weak net revenue performance.
“This was primarily due to issues in the US and China. In the US, we saw more cautious retailer seasonal purchasing patterns. In China, IFCN continues to face challenging market conditions.
“This performance is a reflection of an extended period of significant change and disruption in the company. I am prioritising execution and operational performance as a matter of urgency.”
Total sales at RB between July and the end of September hit £3.3bn.
The company said performance in the US had been “weak” in Q3, but that European trade had seen “an encouraging return to growth.”
RB’s roots lie firmly in Hull.
Reckitt & Sons started in 1840 when Isaac Reckitt rented a starch mill on Dansom Lane.
Today, RB's brands include Dettol, Strepsils, Durex, Gavison and Vanish.
The FTSE-listed business is currently putting the finishing touches on its £100m Centre for Scientific Excellence in the city.
The single biggest investment in RB’s history, it will be one of the company’s largest healthcare development centres.
Despite the weak performance in Q3, RB’s boss said he thought the challenges facing the firm were “clear and addressable.”
Mr Narasimhan said: “I am confident we can restore RB to the levels of performance that it is capable of achieving, and build a purpose-driven, responsible company.
“Our focus will be on restoring performance credibility, bringing simplification and focus, driving commercial execution, unleashing our people and delivering a strong financial model.
“I firmly believe that we have significant potential, with an outstanding set of brands in structural growth categories.
“I look forward to providing a more detailed update on the business, and our plans to restore long-term sustainable performance, in February with our FY19 results.”
