Reckitt CEO to Step Down at Year's End

By Saabira Chaudhuri 

LONDON -- Reckitt Benckiser Group PLC's Chief Executive Rakesh Kapoor will step down at the end of 2019 after eight years at the helm of the Durex and Lysol owner.

The consumer-goods company, which also owns brands like Air Wick fresheners and Dettol cleaning products, said Wednesday it has started its search for a successor and will consider both internal and external candidates.

Mr. Kapoor, who has led the British company since 2011, is credited with pushing Reckitt deeper into higher-margin consumer-health products and away from slower-growing packaged food.

But after a period of strong growth Mr. Kapoor has more recently presided over a string of disappointing results. The company was hit by cyberattacks, failed innovations and manufacturing disruptions. It also was hit by protests in South Korea over a humidifier disinfectant that killed people, for which it apologized.

During his tenure, Reckitt's share price outperformed the European consumer staples sector by 9%, but over the last three years underperformed by 13% according to RBC, an investment bank. In early trading on Wednesday the stock was down 1.8%.

Reckitt for years was seen as a shining example of how a consumer-goods company should operate. It consistently delivered strong sales and also good profit margins, enabled by its laser focus on costs and exposure to products like fast-acting painkillers and dishwasher tablets consumers are willing to pay more money for.

However, its performance -- and low-cost model -- has been questioned more recently amid high turnover among senior executives, volatile sales growth and lower margins.

As growth slowed, Mr. Kapoor tried to spark sales with a 2017 deal to buy baby-food maker Mead Johnson Nutrition Co. for $16.6 billion and a restructuring that split the company into two divisions, consumer health and home and hygiene, the former of which he headed directly.

Mr. Kapoor, one of Britain's highest paid executives, attracted controversy with his salary particularly after sales began to drop although in recent years that pay declined as his long-term incentives lost value amid weak performance.

The India-born Mr. Kapoor, a company lifer, is known for his down-to-earth style of interacting with investors, speaking about the merits of Reckitt's new sex products and women's tights and painkillers with equal equanimity.

Write to Saabira Chaudhuri at [e-mail]

(END) Dow Jones Newswires

January 16, 2019 04:41 ET (09:41 GMT)

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