Reckitt Benckiser to sell £1.9bn portfolio of homecare brands
The consumer goods giant will focus solely on healthcare as it seeks to offload products including Air Wick and Cillit Bang by the end of 2025.
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Your support makes all the difference.Reckitt Benckiser is to sell off a slew of household-name brands, including air freshener Air Wick and cleaning product Cillit Bang, as part of an effort to refocus the company on health and hygiene products.
The London-listed firm said it will sell its portfolio of homecare brands that are “no longer core” to the business, and which brought in £1.9 billion in combined revenue last year, by the end of next year.
Instead, it will focus on its most profitable health products, including Strepsils cough sweets, Nurofen painkillers and Durex condoms.
Other products to be sold off include dishwasher tablets Calgon and insecticide brand Mortein.
Reckitt will also offload its Mead Johnson baby food business, which it bought in 2017 in a 17.9 billion US dollar (£13.9 billion) deal when including Mead Johnson’s debt at the time.
The move comes after an October 2023 update, one of the first moves under chief executive Kris Licht, in which Reckitt said it would “sharpen and improve” its huge suite of products.
From the start of next year, Reckitt will also separate the home products business to be “run by a separate, dedicated team” of directors until its eventual sale.
Mr Licht said: “Today I am pleased to announce a set of actions to significantly sharpen our portfolio and simplify our organisation for accelerated growth and value creation.”
It comes as operating profit fell 4.3% year on year to £1.68 billion for the first half of 2024, while revenue fell 3.7% to £7.17 billion.
The fall was partly driven by disruption to its Mead Johnson nutrition arm in recent weeks, after a tornado in Indiana, US, did “significant damage” to a third-party warehouse.
Reckitt said the site is important for the business and contains “a mix of raw materials and finished products”, and that the damage caused it to cut its net revenue growth outlook for the year to 1%-3%, down from 2%-4%.
“Notwithstanding this, our business remains resilient,” added Mr Licht. “We expect revenue growth to accelerate in H2 and continue to target operating profit growth ahead of net revenue growth.”