Durex Owner Names Pepsi Executive as CEO
June 12 2019 - 5:18AM
Dow Jones News
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
owner 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 the
business in July before taking the reins from outgoing CEO Rakesh
Kapoor in September.
Mr. Narasimhan's departure is a blow to Pepsi, which three
months ago appointed him commercial head, a new position focused on
creating long-term strategy for the soda giant. He previously led
Pepsi's Latin America, Europe and sub-Saharan Africa arm. His exit
follows that of Chief Scientific Officer Mehmood Khan in March to
join an anti-ageing startup.
For Reckitt, the appointment offers the opportunity to move past
a number of recent challenges. The Slough, England-based company
began its search for a new CEO earlier this year after announcing
that Mr. Kapoor would step down at the end of 2019.
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 while
the home-and-hygiene division was run by a deputy. However, the
company also attracted criticism from investors during his tenure
for its high pay.
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, its performance -- and low-cost model -- has been
questioned more recently amid high turnover among senior
executives, volatile sales growth and narrowing margins, all
challenges its new CEO will have to contend with.
After a period of strong growth, Reckitt in recent years has
disappointed investors with underwhelming results. The company was
hit by a cyberattack, failed innovations and manufacturing
disruption. Also, confronted by protests in South Korea, it had to
apologize for a humidifier disinfectant that killed more than 100
people. More recently, Reckitt has reported weak first-quarter
sales in its consumer-health arm, once a huge growth driver.
Mr. Narasimhan said in a statement 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 since the restructuring -- since the Pepsi
executive is unlikely to have joined a company on track to shrink
significantly. Like Mr. Kapoor, he will be group CEO while directly
running the consumer health business.
Although the India-born 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 its
research on emerging-market consumers.
While at Pepsi the 52-year-old is credited with having grown
sales and profits by focusing more on consumer needs, technology,
strengthening leadership and driving productivity. He managed
GBP14.5 billion ($18.4 billion) in revenue across 100 countries and
125,000 employees.
Write to Saabira Chaudhuri at saabira.chaudhuri@wsj.com
(END) Dow Jones Newswires
June 12, 2019 05:03 ET (09:03 GMT)
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