Reckitt Benckiser chief Rakesh Kapoor failed to convince the City his turnaround is working on Monday, as the shares were on track for their sharpest fall since 2011.
Reckitt tumbled 416p to 6149p as earnings missed City forecasts at the consumer goods giant.
Kapoor said the maker of Durex, Nurofen and Gaviscon brands’ comparable sales will rise by 2%-3% this year after a tough 2017. Reckitt revealed revenues in the year to December were £11.5 billion, unchanged from 2016.
Kapoor had been trying to strike an upbeat note after a string of setbacks hit the business last year. A devastating cyber attack hit systems and factories, and the firm also took a £318 million hit amid a US pharmaceuticals probe linked to competition and consumer protection laws.
It suffered a humiliating climbdown over Kapoor’s blockbuster pay in March. It slashed his pay by more than a third to £14.6 million in 2016 to stave off an investor revolt.
During the year it saw challenging market conditions in the Middle East and Brazil, while it continued to feel the effects of the failure of its latest Scholl footcare product.
But Kapoor was bullish today and said: “We returned to growth after a solid finish to the year.”
He pointed to an improved performance at US baby formula firm Mead Johnson, which Reckitt Benckiser bought last year for £13.3 billion, and increased its forecast for cost savings from that deal to around $300 million, from the $250 million previously expected.
The chief executive also praised fourth-quarter comparable sales growth of 2%, boosted by demand in its healthcare division, with strong performances from Mucinex cold medicine and Strepsils.
However, Investec analyst Eddy Hargreaves said: “2% is in line with company-compiled consensus, but possibly a little short of the more optimistic hopes given the strong flu performance from peers for the same period.”
UBS analyst Pinar Ergun agreed: “Management remains vague on its margin expectations for the year. Given the market’s high expectations around the strong cold/flu season, we think these results are unlikely to convert the sceptics into buyers today.”
Reckitt Benckiser is trying to focus on its health and hygiene arms, and last year agreed to sell its food business to US spices maker McCormick for $4.2 billion.
Kapoor declined to comment on reports that his company is one of the remaining bidders for rival Pfizer’s consumer healthcare unit. It has an estimated price tag of $15 billion to $20 billion.