Reckitt Benckiser waxes lyrical about emerging markets performance
To most of the male population and those who embrace the hirsute look, the Veet EasyWax Electrical Roll-On will never have featured in their shopping baskets.
But the hair-removal system, along with other luxury home beauty products, has helped boost the profits of FTS Slough-based consumer goods group Reckitt Benckiser with booming sales in the emerging markets of the world.
The company has revealed that as a result it has had a 4% increase in like-for-like sales of £2.36bn for the first three months of the year – despite flatlining returns in the established markets of Europe and North America.
The numbers at the company’s Eastern Europe, Middle East and Africa divisions rose 9% to £369m, while its Latin American and Asia Pacific region gained 13% to £580m.
Rakesh Kapoor, the group’s chief executive officer, said that first quarter results were on track and in line with ingoing expectations.
"High quality, volume led growth of 4% was driven by continued excellent performance in emerging market areas and the success of innovations like Veet Easy Wax Roll-On and the Lysol No-Touch Kitchen System.
"These results give us the confidence to reiterate our 2012 target of like-for-like net revenue growth of 200bp above our market growth rate of 1-2%. We also expect to maintain full year operating margins."
The plug-in Veet Easy Wax Roll-On has a roll-on applicator and strips for what it describes as ‘salon wax results at home’, and the product has proves especially popular in India and Indonesia, where waxing salons are in shorter supply than in the UK. It retails for just under £30 in the UK.
And while waxing is proving profitable, so is the market for established brands such as Durex – especially in populous China – and hygiene products such as Dettol and Harpic, in India.
However health products took a turn for the worse with the company blaming a "poor 'flu season" for stagnant sales of brands such as Mucinex, Strepsils and Nurofen.
Growing middle classes in countries such as China are fuelling demand for more hygiene and health products.
Rakesh Kapoor has reorganised the company to focus on emerging markets and its health and hygiene divisions. Kapoor wants half of Reckitt's sales in its main divisions to come from emerging markets by 2016 and has launched a £100m marketing drive.