Growth was primarily fueled by mid-single-digit increases in Europe and Developing Markets, although this was partially tempered by anticipated decreases in North America. The declines in North America were largely due to adjustments in US Nutrition and the anticipated normalization following the previous year’s buildup of retailer inventory in seasonal over-the-counter products.
In the realm of business segments, Hygiene’s net revenue surged by 7.1% on a like-for-like basis, reaching £1,608 million. This growth was propelled by a 2.9% increase in volume and a 4.2% enhancement in price/mix, attributed to sustained pricing strategies and minor pricing adjustments within the year. Notably, Lysol experienced robust low-double-digit growth in net revenue, primarily fueled by substantial volume expansion. Growth was further driven by innovative products such as Lysol Laundry Sanitizer and Lysol Air Sanitizer, each contributing to growth within their respective segments. Additionally, Lysol wipes benefited from increased distribution compared to the previous year.
Health’s net revenue increased by 1.0% on a like-for-like basis, reaching £1,538 million, supported by steady volumes and a 1.1% improvement in price/mix. Growth in volumes was observed in Durex, non-seasonal over-the-counter (OTC) brands, Dettol, and VMS (Vitamins, Minerals, and Supplements), although this was offset by the anticipated decline in sales resulting from the previous year’s retailer inventory buildup in seasonal cold and flu OTC brands (such as Mucinex, Strepsils, and similar local brands). Moreover, the slowdown towards the end of the flu season led to a reduction in sales as retailers adjusted their inventory levels, impacting the first quarter results.
Nutrition experienced a decline of 9.9% in net revenue on a like-for-like basis, amounting to £591 million. This decline was influenced by a decrease of 0.5% in price/mix, driven by a return to a normalized trade spending environment compared to the previous year in the US, as well as the cessation of temporary benefits in states where the company’s competitor held the WIC contract. Additionally, volume decreased by 9.4%, primarily due to the end of peak market shares attained during the US competitor supply shortage in 2022 and the replenishment of retailer inventory shelves in the first quarter of the previous year.
Kris Licht, Chief Executive Officer, said: “We have delivered a good first quarter. Following a period of price-led growth, we are now returning to a morebalanced contribution from price, mix, and volume. We grew volumes in many of our powerbrands in the quarter, including Lysol, Dettol, Durex, and Finish, as well as our non-seasonal OTC portfolio. In addition, we continue to benefit from carryover pricing and consumers trading up to our premium innovations.”
