Despite a profit decrease, Reckitt remains a top competitor

If you were to begin talking about the company Reckitt Benckiser PLC, not many people would know what you were talking about. However, if you mention brands such as Air Wick, Veet, Lysol and Clearisil, people have usually heard of these. Reckitt Benckiser PLC is a household goods and personal products company based in Slough, United Kingdom. The company was founded in 1814, currently operates out of more than 60 countries and sells products in over 180. Despite having many different products out on the market that appeal to many different people, last week the company reported having an 8% decline in profit. According to company representatives this is likely due to the status of the economy. It is also likely that because of a slow global economy and growing cost pressures, the company will see little growth in its earnings this year. Chief Executive Bart Becht said “It is a two-world picture. Europe and North America are not doing well, while developing markets are doing well.” However, despite these current profit declines and the stagnant economy, the company still expects to see sales rising in the future. For many years now Reckitt has been at the top of the industry in terms of market capitalization, so they face a lot of competition from other companies. Recently, there have been increases in commodity prices such as oil, palm oil and plastics, which are all big components of many of Reckitt’s products. These rising costs are a challenge for all the companies in this industry because without raw materials, you have no product.  Still, it doesn’t seem like the company will suffer too much as it remains listed as one of the top companies in the industry in many reports. Furthermore, to help with these decreasing profits, Reckitt remains on the look out for possible acquisitions in emerging markets but hasn’t made anything public about any possible ones at the moment. Having so many different products, created by so many trusted names will definitely keep this company afloat and in competition for that so desired spot as the number one country in the industry. 

Sources:

http://online.wsj.com/article/SB10001424052748704858404576134230786079352.html?mod=WSJ_Consumerproducts_leftHeadlines

http://biz.yahoo.com/ic/323.html