By Saabira Chaudhuri 

This article is being republished as part of our daily reproduction of WSJ.com articles that also appeared in the U.S. print edition of The Wall Street Journal (January 17, 2019).

LONDON -- Reckitt Benckiser Group PLC's chief executive, Rakesh Kapoor, will step down at the end of 2019 after eight years leading the owner of the Durex and Lysol brands.

The consumer-goods company, whose other offerings include 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. Also, confronted by protests in South Korea, it had to apologize for a humidifier disinfectant that killed more than 100 people.

During Mr. Kapoor's tenure, Reckitt's share price has outperformed the European consumer-staples sector by 9%, but over the last three years underperformed it 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 ample profit margins, reflecting a laser focus on costs and products like fast-acting painkillers and dishwasher tablets that 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 narrowing 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. In recent years, his pay declined as long-term incentives lost value amid the company's weak performance.

The India-born Mr. Kapoor, who has been with the company for more than 30 years, 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 saabira.chaudhuri@wsj.com

 

(END) Dow Jones Newswires

January 17, 2019 02:47 ET (07:47 GMT)

Copyright (c) 2019 Dow Jones & Company, Inc.
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