Reckitt Benckiser is continuing to assess options for its nutrition operations housing the Mead Johnson infant-formula business.

After describing nutrition as "non-core" in July as part of a strategic review, Reckitt confirmed last week that it plans to "exit" the business unit but without committing language to a potential disposal.

A similar exit is planned for the essential home business, which CEO Kris Licht indicated last week is likely before the year-end.

However, Reckitt sought to clarify comments made on an analyst call to discuss the 2024 results, confirming there was no timeframe as yet for the nutrition exit and the potential interest conveyed in that discussion was for the essential home operations.

The London-listed consumer goods giant is moving its focus away from nutrition and the essential home division to concentrate on its “core” or so-called “power brands” within the consumer health and hygiene categories.

"On the separations, look, we're working on this at the moment. We've made very good progress. I would say the process of setting them up is on track," Licht told analysts last week.

"And I've been pleased with the work that the new leadership teams have done. We are sizing the financial impacts."

Reckitt acquired Mead Johnson in 2017 for $17.9bn. The nutrition division is the smallest revenue earner behind the hygiene and health units.

For the time being, the nutrition and essential home divisions are included in Reckitt’s guidance for like-for-like sales growth of 2-4% across the group in the 2025 financial year.

Licht was pressed for an update on the two business exits as he presented the 2024 results to 31 December.

“On the process, I'd love to be able to say more, but I think you understand that where we are in the process doesn't lend itself for me to be overly specific," Licht said with respect to the essential home unit.

“At the same time, as I indicated before, we thought there'd be good interest in these assets [essential home], and so far, there is.”

Reckitt delivered 1.4% like-for-like revenue growth across the business groups to £14.2bn ($18.3bn) last year. However, nutrition sales were down 7.3% at £2.15bn, while hygiene was up 4.2% at £6.14bn and health registered a 2.1% increase to £5.88bn.

Following the exits, Reckitt plans to focus on its “core” portfolio for which guidance in the new year was set at 3-4% in like-for-like terms.

Licht told analysts last week during the Q&A results session: “Our guide…assumed that we effectively operate these segments through '25, just because even if there is a transaction, obviously it takes time for a transaction to close.”

The CEO said he was “confident that nutrition will deliver growth in 2025”.

CFO Shannon Eisenhardt pointed to low single-digit, like-for-like growth in both “essential home and Mead Johnson nutrition in 2025, with both being back-half weighted”, adding the guidance “assumes that we have all three operating segments for the full course of the year”.

The decline in nutrition sales last year was largely attributed to supply-linked volume decreases in North America connected with the tornado that hit Mount Vernon in Indiana last July.

However, not much was said on last week’s analyst call regarding the ongoing litigation in the US related to the alleged health risks to babies from consuming Reckitt’s Enfamil Premature 24 infant formula.

Reckitt faces the prospect of incurring billions of pounds in damages related to the life-threatening necrotizing enterocolitis (NEC) disease, which effects premature babies.

In March 2024, a US court in Illinois awarded $60m in damages to a mother of a baby that died from NEC after being fed Enfamil Premature 24. The judge ruled Mead Johnson was “negligent” because the company failed to warn mothers of the risks from NEC as a result of consuming that type of formula.

Barclays' analysts wrote in July last year that there could potentially be around 400 other cases pending in the US.

“On Mead Johnson nutrition, the team has responded well to the challenges it has faced in 2024. We continue to defend ourselves against all cases in the ongoing litigation,” Licht said last week.