2/8/2012 4:14 AM ET
(RTTNews) - Reckitt Benckiser Group Plc (RB.L: News ,RBGPF.PK: News ) reported Wednesday a higher fourth-quarter profit as it sold more in its health and household products such as Dettol and Harpic, particularly in emerging markets, while its pharmaceuticals business bore the brunt of higher Medicaid rebates and the new film version of its blockbuster Suboxone heroin treatment. Looking ahead, the consumer goods company projects growth for its base business in 2012, but cautioned that generic competition threat to Suboxone makes setting goals impossible.
When faced with patent expiration for Suboxone, the company came up with a new film for the opioid addiction drug, thereby extending its patent. At the end of 2011, the new Suboxone film had captured a 48 percent volume share of the U.S. market, the company noted.
Fourth-quarter pre-tax profit climbed 18 percent to 704 million pounds from 597 million pounds a year ago. Net income attributable to owners of the parent grew 26 percent to 521 million pounds or 70.8 pence per share.
Adjusted earnings, which excluded certain exceptional charges, increased 9 percent to 546 million pounds or 74.2 pence per share.
Net revenues for the quarter increased 6 percent to 2.42 billion pounds from 2.28 billion pounds in the year earlier period. At constant rates, revenues rose 8 percent. The results included the acquired business of SSL International plc and Paras Pharmaceuticals Limited.
Total like-for-like or LFL net revenue, excluding the impact of changes in exchange rates, acquisitions and disposals, was up 3 percent. SSL's contribution in revenues represented a LFL growth rate of 27 percent, the company noted.
Reckitt Benckiser's base business of Household and Health & Personal Care revenues grew 11 percent, reflecting higher revenues in all categories except fabric care, with strong growth coming from health & personal care.
This was partly offset by a decline of 17 percent in Pharmaceuticals division due to adjustments to higher Medicaid rebates following US Health reforms and Suboxone film conversion.
The company saw a 25 percent surge in revenues in developing markets and a 540 basis points uplift in the adjusted operating margin that reflected heavy marketing investment in the previous year.
Gross margin declined 100 basis points to 60.5 percent due to increased Medicaid rebates in pharmaceuticals segment, while base business gross margin was maintained.
For fiscal year 2011, adjusted profit grew 9 percent to 1.82 billion pounds or 247.1 pence per share on a 12 percent increase in revenues to 9.49 billion pounds.
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