Neutrogena EMEA innovation fuels 2019 Johnson & Johnson sales amid baby care dip

By Kacey Culliney

- Last updated on GMT

Sales across global baby care declined 9.3% for Johnson & Johnson but Neutrogena was up 6% (Getty Images)
Sales across global baby care declined 9.3% for Johnson & Johnson but Neutrogena was up 6% (Getty Images)

Related tags Johnson & johnson financial results Neutrogena Skin care EMEA

Personal care major Johnson & Johnson has reported stable full-year 2019 results, with marginal growth in consumer health driven largely by Neutrogena innovation despite a sales dip in baby care.

Johnson & Johnson pulled in sales of €74bn ($82.1bn) for 2019, totting up a net income of €13.62bn ($15.1bn) for the full year, down 1.2% on the previous despite a 31.8% surge in net earnings for the fourth quarter.

Neutrogena anti-ageing and cleansing innovation in EMEA

Its consumer health division – with brands like Neutrogena, Aveeno, Johnson’s and Listerine – generated €12.5bn ($13.89bn) for the full-year, up just 0.3% on the previous year with an adjusted overall growth of 1.4%. Johnson & Johnson said Neutrogena beauty products had been key to growth for the year, offsetting lower sales of baby care products.

Speaking to investors on the company’s full-year earnings call yesterday, Christopher DelOrefice, vice president of investor relations at Johnson & Johnson, said: “Neutrogena delivered strong performance globally with growth of 4% outside the US, driven by anti-ageing and cleansing innovation in EMEA as well as hand and body moisture category strength in the Asia Pacific region.” ​Neutrogena sales globally, DelOrefice said, were up 6%. 

Baby care, however, declined 9.3% globally, he said. “This decline was primarily due to continued competitive pressures as well as comparisons to prior year relaunch activities, most notably in the United States.”

2020 growth plans – ‘we plant to rationalise approximately 10% of the SKUs’

Joseph J. Wolk, executive vice president and CFO at Johnson & Johnson, said this coming year would see strategic readjustments across its consumer health unit to stimulate growth.

“As part of our efforts to further improve profitability in 2020, the consumer segment will continue to invest in platforms where we have differentiated brands with the greatest potential,”​ Wolk said.

“Therefore, we plan to rationalise approximately 10% of the SKUs across the global portfolio,” ​he said.

This plan, Wolk said, would largely be focused outside of the US market and the larger impact would be felt in the second half of the year across Johnson & Johnson’s baby and beauty franchises. The move would obviously result in a negative impact on top line 2020 growth for the consumer health unit, he said.

Alex Gorsky, chairman and CEO of Johnson & Johnson, told investors: “As we enter into 2020 and this decade, our strategic investments focused on advancing our pipelines and driving innovation across our entire product portfolio position us well to deliver long-term sustainable growth and value to our shareholders.”

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