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MarketScreener Homepage  >  Equities  >  London Stock Exchange  >  Reckitt Benckiser    RB.   GB00B24CGK77

RECKITT BENCKISER

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Pepsi Executive Picked To Lead U.K.'s Reckitt -- WSJ

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06/13/2019 | 02:48am EDT

By Saabira Chaudhuri

LONDON -- Reckitt Benckiser Group PLC has tapped one of PepsiCo. Inc.'s most senior people to be its new chief executive, as the supplier of Durex condoms and Dettol cleaning products looks to revive growth after a challenging few years.

The U.K.-based company said Wednesday that Laxman Narasimhan, currently Pepsi's global chief commercial officer, would join Reckitt in July before taking the reins from CEO Rakesh Kapoor in September.

At Pepsi, Mr. Narasimhan had been tipped as a potential successor to CEO Indra Nooyi before the role went last year to Ramon Laguarta. His exit is the latest senior departure from the beverage-and-snacks company following that of its chief scientific officer in March.

Just three months ago Mr. Narasimhan was appointed Pepsi's commercial head, a new position focused on creating long-term strategy for the soda giant. He previously led the company's operations in Latin America, Europe and sub-Saharan Africa.

Reckitt began its search for a new CEO earlier this year after announcing that Mr. Kapoor would step down at the Slough, England-based company by year-end.

Mr. Kapoor, who has run Reckitt since 2011, is credited with pushing it deeper into higher-margin consumer-health products and away from slower-growing packaged food. He split the company into two divisions, running the consumer-health business himself and putting the home-and-hygiene division in the hands of a deputy.

For years, Reckitt was seen as an example of how a consumer-goods company should operate. It consistently delivered strong sales and ample profit margins, reflecting a laser focus on costs and products like fast-acting painkillers and dishwasher tablets that it convinced consumers to pay more for.

However, the company also attracted criticism from investors during Mr. Kapoor's tenure for its high pay. And more recently the low-cost model's performance has been questioned amid high turnover among senior executives, volatile sales growth and narrowing margins -- all challenges awaiting Reckitt's new CEO.

After a period of strong growth, Reckitt has run into trouble, including a cyberattack, failed innovations and manufacturing disruption. Also, confronted by protests in South Korea, management had to apologize for a humidifier disinfectant that killed more than 100 people. More recently, Reckitt reported weak first-quarter sales in its consumer-health arm, once a huge growth driver.

Mr. Narasimhan said in a statement Wednesday it was "an exciting time for the business" and that he would "continue to transform" Reckitt.

Analysts said his appointment reduces the likelihood that Reckitt would spin off its home-and-hygiene unit -- a move that has been widely speculated about -- because it is doubtful Mr. Narasimhan would have signed on at a company bound to shrink significantly. Like Mr. Kapoor, the new CEO will run Reckitt's consumer-health business.

Although Mr. Narasimhan's seven-year stint at Pepsi has focused on food and drink, he previously co-led McKinsey & Co.'s consumer and shopper insights business as well as the consulting company's research on emerging-market consumers.

While at Pepsi the 52-year-old India native is credited with having bolstered sales and profit in part by focusing more on technology and strengthening leadership. He managed GBP14.5 billion ($18.4 billion) in revenue across 100 countries and 125,000 employees, said Reckitt.

Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
LONDON SUGAR -0.15% 331.5 End-of-day quote.-0.75%
PEPSICO 0.13% 134.14 Delayed Quote.21.26%
RECKITT BENCKISER 2.25% 6349 Delayed Quote.5.59%
RECKITT BENCKISER GROUP PLC-ADR End-of-day quote.
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Financials (GBP)
Sales 2019 12 989 M
EBIT 2019 3 471 M
Net income 2019 2 349 M
Debt 2019 9 238 M
Yield 2019 2,81%
P/E ratio 2019 18,21
P/E ratio 2020 16,95
EV / Sales 2019 4,10x
EV / Sales 2020 3,86x
Capitalization 44 010 M
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Mean consensus OUTPERFORM
Number of Analysts 21
Average target price 69,2  GBP
Spread / Average Target 11%
EPS Revisions
Managers
NameTitle
Rakesh Kapoor Chief Executive Officer & Executive Director
Christopher A. Sinclair Chairman
Adrian Nevil Hennah Chief Financial Officer & Executive Director
Seth Cohen Chief Information Officer
Warren Gordon Tucker Independent Non-Executive Director
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