Durex maker Reckitt eyes continued growth in 'must-win' emerging markets

By Alexander Marrow

LONDON, March 5 (Reuters) - Reckitt RKT.L CEO Kris Licht identified countries such as China and India as a "must-win set of markets" for the consumer goods company, which on Thursday delivered a quarterly sales beat, led by a 10th consecutive quarter of double-digit expansion in emerging markets.

Along with consumer goods rivals such as Nestle NESN.S and Unilever ULVR.L, Reckitt has been fine-tuning its portfolio to focus on high-growth, high-margin brands. On December 31, it finalised the $4.8 billion divestment of its Essential Home division to private equity firm Advent International, while retaining a 30% equity stake.

The maker of Durex condoms and Lysol cleaning products reported total group like-for-like net revenue growth of 5.4% for the quarter ended December 31, compared with 4.7% expected in a company-compiled consensus, and said it expected its core businesses to grow at 4% to 5% in 2026.

RECKITT MUST WIN IN EMERGING MARKETS, CEO SAYS

"The runway for growth is so significant," Licht told Reuters, highlighting emerging markets' opportunities for organic growth, with the number of middle class households in these markets now greater than Europe and the U.S. combined.

"From a standpoint of where we have to win, this is absolutely a must-win set of markets for us."

Revenue in emerging markets, which account for about 42% of Reckitt's core net revenue, surged 17.2%, led by China and India, while Europe recorded a quarterly drop of 4.5%.

Barclays analysts said the emerging markets segment was "doing the heavy lifting for the group and provides a reliable growth engine at a time when developed markets category growth is sluggish."

Reckitt's shares, which hit a near three-year high last week, opened around 1.2% lower.

The British company, which also produces Nurofen tablets and cold remedy Lemsip, said it expected the challenging trading environment in Europe to continue.

It warned that it expected its seasonal over-the-counter business to suffer in the first quarter of 2026 from a milder cold and flu season, something consumer healthcare group Haleon HLN.L also flagged when reporting underwhelming results last week.