Reckitt Benckiser's next CEO has 'tough act to follow'

Reckitt Benckiser Group shareholders may have their best returns behind them as Chief Executive Officer Bart Becht steps down after more than a decade at the helm of the household-cleanser company he formed.

Rakesh Kapoor, 52, named yesterday to take over in September, may struggle as sales slow in Europe and competition intensifies, analysts including Carl Short of Standard & Poor’s said. Under Becht, Reckitt Benckiser’s comparable sales growth has risen more than 5 per cent a year since 2005 and posted double-digit net-income growth in eight of the past 10 years.

The new CEO is “not going to produce the same kind of growth we’ve seen over the next decade,” Short said. “Becht is going to be a very tough act to follow, especially given that we’ve entered much more challenging conditions for consumers in developed markets.”

Becht, 54, who led the company through the 1999 merger of Benckiser and Reckitt & Colman, has increased market value more than sixfold with a steady stream of product innovation such as Lysol hands-free soap dispensers and mergers and acquisitions including last year’s purchase of Durex condom maker SSL International. Reckitt Benckiser’s stock fell 7.5 per cent yesterday, the most since 2003.

The Dutchman “seemed to define Reckitt’s culture to us,” said Martin Deboo, an analyst at Investec. “We see this event as strongly negative for the shares.” He cut his recommendation from “hold” to “sell”.