Reckitt Benckiser Group Plc (RB)
This leader in household products and also well positioned in personal care has around twenty famous brands. The consumer hygiene sector is subject to intense competition, with margin levels under pressure. However, Reckitt published completely correct figures with sales growth of 5.6% on a like-for-like basis and continued dynamic market share in all of its activities. These health and nutrition divisions experienced growth of 20%. The company raises its revenue growth forecast for 2022 to +1/+4% and believes that it can maintain its margins in line with those of 2021. Which is not the case for its competitor Henkel, we will see below. Despite a predictable environment, this publication reassures investors. The stock is up 1% this morning after the release.
Henkel AG & Co. KGAA (HEN)
Henkel is one of the world’s leading chemical groups with its activities in adhesive products, maintenance and care products. With the war in Ukraine, the Düsseldorf-based German company is under pressure on its supply chain on the industrial side of its business. Rising input costs are weighing on Q1 2022 profitability. Group sales increased organically by 7.1% to around 5.3 billion, driven in particular by adhesive technologies at +10.7%. The company expects continued increases in material and logistics costs due to the exit of their Russia and Belarus operations. Indeed, even if sales are expected to increase by 3.5% to 5.5% in 2022, EPS (Net Earnings per Share) is expected to fall this year by 15% to 35% compared to 2021. The title is down 8% this morning after the release.
Arbitration can be made between Reckitt Benckiser (long position) and Henkel (sell position).