Reckitt Benckiser Group plc is a British multinational consumer goods company headquartered in Slough, England. It is a producer of health, hygiene and home products.
RB’s brands include Dettol, Strepsils, Veet, Air Wick, Calgon, Clearasil, Cillit Bang, Durex and Vanish.
This is an important absentee from the current app
This is now available in the app!
As Carl mentioned, RB is already available
One of the few winners of the Covid-19 situation.
Q1 revenue came in at £3.5bn, up by 13.3% over Q1 2019.
The all-important e-commerce revenues grew by more than 50%.
The company sells quite a few products from disinfectants to cough syrups, so I was expecting sales to be up, and it’s nice to see they were.
It will be interesting to see if the increased sales were due to defensive buying or higher levels of underlying consumption. We will see later this year I reckon.
The share price is near the 52-week high again.
(source)
I coded a spreadsheet tool to check for fundamentals - you just have to input the ticker.
For Reckitt Benckiser, things don’t look that great, on reflection:
As a benchmark, I use the S&P 500 tracker VOO. It’s nice it overperfomed the benchmark for the last 12 months, but it’s not great it’s behind the benchmark when looking at 5 years. But it depends on what you expect
My tool also showed negative EPS for 2019, and the LSE page confirms the data-
I’ll need to understand what happened in 2019 before going ahead with this potential investment.
Does anyone know?
They faced several exceptional costs last year;
*USD1.4bn settlement with US DoJ related to the Indivior fraud
*GBP890m costs of winding down various operations
*USD5bn impairment charge related to its acquisition of Mead Johnson Nutrition (formula business ?)
The question will be how well the business can adapt and leverage the hallowed new normal, whatever this looks like in the coming 6 to 18 months. It’s got a lot of relevant strengths to play to in terms of product and the relationship it holds with consumers - could possibly see it pivot towards ‘consumer friendly’ PPE - which, depending on WHO and government policies on the wearing of face gear could serve the business very well.
Thanks for your reply. Agree with your excellent thought about consumer friendly PPE.
Adjusting items seem reasonable although the MJ write down was always likely to cause indigestion:
They also have a different CEO at the helm as of September 2019, who seems more focused on getting the operations more efficient.
Nice tool, but benchmarking it to the S&P 500 doesn’t make a lot of sense unless you are deciding on buying RB vs an S&P 500 ETF.
RB is not a S&P 500 constituent as a U.K. company, it’s a FTSE 100 constituent. And I think it’s outperformed the FTSE 100 by around 30% over a 5 year time frame (double check that though)
I see what you mean! I’m (counter-intuitively) benchmarking it against the S&P 500 because that is the top “mainstream” index had the highest growth. I’m looking for companies, both in the UK and US that can beat that index. I thought maybe RB had potential in this changed world, but I’m not sure.
The trouble with the FTSE 100 is (and benchmarking growth against it), it’s not really a “growth” index.
Anyone thoughts on growth companies that can beat the S&P 500?
The FTSE 100 has historically been heavily weighted towards oil, miners and financials. It still is to a large extent which isn’t a great place to find growth but has been a useful source of dividends. Assuming a recovery in oil and commodity prices, this is likely to continue, financials should return to form once we get through the recession so the weightings are unlikely to change dramatically. Screen shots below of the top end of the Vanguard FTSE 100 ETF
The S&P has been more weighted towards tech recently, hence the growth. Screen shot from the top end of the Vanguard S&P 500 ETF
There are a range of sector ETFs that you might find more useful as a comparison, Vanguard consumer staples index for example:
https://investor.vanguard.com/etf/profile/VDC
I imagine the other big ETF providers have similar offerings.
Reckitt grows after rising to meet US baby formula crisis
“Discretionary spending is expected to decline during a recession. Yet, demand for Reckitt products isn’t likely to wane due to the inelastic nature of its products. This has allowed the group to raise the prices of its products while growing its profit margins to 22.5%. Additionally, Reckitt earns the bulk of its revenue from outside the UK and Europe, allowing it to hedge against slower growth in the area. This is why Deutsche thinks Reckitt is a stock to buy.”
Interesting to note its EBITDA coverage on net debt as well, but curious to hear opinions on whether this puts the company in a precarious position if for whatever reason, the EBITDA multiple drops.
Ouch… I am grateful that I sold the shares in 2022.
