Nurofen maker Reckitt Benckiser sales take a hit from cyber attack
NUROFEN maker Reckitt Benckiser felt the pain today as it warned that annual sales would take a hit from a major cyber attack last month.
Nurofen maker Reckitt Benckiser warned that annual sales would take a hit
The FTSE 100 consumer products group, whose other brands include Dettol, Durex and Cillit Bang, became one of the first companies to put a cost on disruption from the virus, which hit Ukraine before spreading around the world affecting corporate heavyweights such as advertiser WPP, Cadbury owner Mondelez and shipping group A.P. Moller-Maersk.
Reckitt, led by chief executive, Rakesh Kapoor, pictured, estimated that like-for-like revenue in the second quarter would be 2 per cent lower than last year, with annual revenue growth reduced from 3 per cent to 2 per cent.
The group posted annual revenue of nearly £10billion last year, so the reduction could amount to about £100milion.
Reckitt said it was working with its IT partners to resolve outstanding issues and the virus issue had now been “materially contained”.
The systems at Mead Johnson, the American baby milk group it is buying in a £13billion deal, have not been impacted.
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But it added: “The attack did disrupt our ability to manufacture and distribute products to customers in multiple markets. Consequently, we were unable to ship and invoice some orders to customers before the close of the quarter.
“Some of our factories are currently still not operating normally but plans are in place to return to full operation.”
The group was dealt another blow after the implementation of a new goods and services tax in India, which resulted in reduced orders from some customers during June.
The consumer product manufacturer was hit by a major cyber attack last month
Without the two setbacks, second-quarter like-for-like sales would have been flat.
Reckitt said: “We are still assessing the full financial impact of these events. We expect some of the revenue lost from the second quarter will be recovered in the third. However, continued production difficulties in some factories mean we also expect to lose some further revenue permanently.”
Reckitt Benckiser other brands include Dettol, Durex and Cillit Bang
Shares fell 117p to 7583p, wiping about £80million from Reckitt’s market value.
Reckitt had already failed to meet its first-quarter growth forecast as sales remained flat after a boycott of its products in South Korea following a safety scandal, as well as the failure of a Scholl footcare product.