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Consumer group Reckitt has launched a strategic review of its infant formula business Mead Johnson and announced plans to sell a large portfolio of its home care brands, including Air Wick and Cillit Bang, in an effort to streamline the business.
The company will in the future report as three divisions: Reckitt, which includes the best-performing brands such as Nurofen and Gaviscon; Essential Home, with the lower-growth homecare brands; and Mead Johnson, the troubled infant formula company that is facing litigation in the US.
The sale of the homecare portfolio, which brings in revenues of £1.9bn, and a potential sale of Mead Johnson would leave Reckitt with net revenues of £10bn, compared with £14.6bn for the whole group in 2023.
In an echo of Unilever’s strategy launched last year, Reckitt said it would focus on its high-growth, high-margin “power brands” and described the Mead Johnson business as “non-core”. The company added that it was considering “all strategic options to maximise shareholder value”.
Reckitt said it would also launch a reorganisation and cost-saving programme that would incur a one-off cost of £1bn. It also cut its sales growth expectations for this year, forecasting revenue to grow by 1 per cent to 3 per cent in 2024, down from previous expectations of 2 per cent to 4 per cent.
This is a developing story
