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Reckitt Benckiser has appointed a new CEO to take over from interim boss Nicandro Durante, while also revealing a strong start to the year as it beat market expectations.
Kris Licht will succeed Durante and join the Dettol to Durex owner as CEO designate on 1 May, immediately beginning a transition to the top role.
Durante, who took over a interim boss in September last year after Laxman Narasimhan stepped down, will stay at the company up to December to ensure “a smooth transition”.
Licht served as president of Reckitt’s health business and chief customer officer since July 2020 after previously holding the role of chief transformation officer from November 2019.
Reckitt said today that he had been pivotal in setting the strategic direction of the company and returning health to a strong growth trajectory.
Licht joined Reckitt from PepsiCo, where he held a variety of senior operational and strategic leadership positions. Prior to PepsiCo, he was a partner at McKinsey & Co with a focus on the consumer, health and retail practices.
Reckitt chairman Chris Sinclair said the board was confident that Licht was the right leader to take the group forward following a “thorough process” to find a new CEO.
“Kris has been instrumental in Reckitt’s transformation through his strategic role and his strong operational leadership in the turnaround of our health GBU over the last three years,” he added.
“He has a deep understanding of Reckitt’s business, customers, brands and culture. He brings extensive experience and a broad range of skills to the role and is an excellent fit to lead Reckitt in the next exciting phase of its journey.”
Licht said: “Over the past four years I have been privileged to be a part of the transformation journey and have seen the extraordinary ownership, entrepreneurial spirit and drive for performance that our people demonstrate every day. As our recent performance shows, it is clear we are delivering, and after significant investment we are well positioned to generate consistent, strong shareholder returns.
“While there is more work to be done to realise our full potential, I see strong momentum and believe it is truly an exciting time for Reckitt.”
Reckitt like-for-like net revenues increased 7.9% to £3.9bn in the first three months of 2023, with pricing up 12.4% and a 4.5% decline in volumes.
The sales and volumes figures came in ahead of analyst expectations, with Reckitt also lifting full-year revenue growth forecasts to 3% to 5%.
It follows stronger-than-expected first-quarter results from Nestle, Danone (see below), Coca-Cola and PepsiCo this week - with Unilever set to report tomorrow.
Reckitt said its growth was broad-based across all business units and geographies, with hygience up 2% on a like-for-like basis to £1.6bn, health by 12.5% to £1.6bn and nutrition by 7.9% to £3.9bn.
In hygiene, there was strong growth from Finish, Harpic and Vanish, while Lysol performed in line with expectations as it struggled to compete with Covid-related comparatives.
Dettol remained on track for growth in the year, despite a slight Q1 decline as it also lapped pandemic-driven highs, with an “excellent performance” in the over-the-counter portfolio (with 30%+ growth) lifting the health division.
Durante said the strong start reflected “further delivery” from the investments made, with more innovations planned in upcoming quarters.
“Considering the strong start to the year, we are now targeting +3% to +5% group LFL net revenue growth for the year, underpinned by our well supported and exciting innovation programme, a resilient supply chain and ongoing executional improvements,” he added.
Reckitt’s shares fell 1.2% to 6,420p on news of the CEO appointment.
Morning update
Danone is the latest global consumer goods group to report a strong start to the year as both sales and volumes grew.
Net sales at the group increased 10.5% on an organic basis to €6.97bn in the first three months of 2023 thanks to a 10.3% rise in pricing and a 0.2% bump in volumes.
Danone highlighted that all geographies and categories contributed to the like-for-like growth, with a 6.2% increase across Europe driven by France, Poland and the UK, while North America registered a 11.8% rise, China, North Asia and Oceania grew 16%, Latin America by 12.6% and the rest of the world by 11.8%.
As a result, the French-headquartered group upgraded full-year sales growth expectations to between 4 and 6%, with a moderate improvement in recurring operating margin.
CEO Antoine de Saint-Affrique said: “This quarter again, we consistently delivered against the pillars of our ‘Renew Danone’ strategy, further improving the quality of our execution, and investing behind our winning brands and platforms, while continuing to streamline and improve our portfolio.
“While this is encouraging progress, there is still much to be done. We remain fully focused on delivering on our ‘Renew Danone’ agenda, setting a solid base for long term sustainable value creation.”
During the first quarter, the dairy division increased sales by 9.3% to €3.8bn, while the water category rose 10.5% to €1.1bn and the specialised nutrition arm grew 11.6% to €2.1bn.
Vimto owner Nichols has reported a 4.2% increase in revenues to £41.2m in the first quarter in a trading update ahead of its AGM today.
The group said the positive performance reflected good progress in the packaged business, which saw revenues increase by 7.7% to £32m.
This was principally driven by an accelerated performance in the international packaged route to market, where revenue grew by 20.1% as strong momentum in Africa continued from FY22.
Within the UK packaged route to market, the group saw revenue marginally ahead of the prior year as the business continued to progress its value-over-volume strategy.
As expected, the group’s out-of-home business has seen a slower start to 2023 than in the prior year, with revenues down 7.8% to £9.2m, as continued significant cost-of-living pressures squeezed consumer demand.
Nichols said it continued to take action to offset significant inflationary pressures and adjusted pre-tax profit expectations for the year remained unchanged.
Heineken this morning announced the completion of its acquisition of Distell Group and Namibia Breweries, which have been combined with the group’s business in South Africa into a new majority-owned business.
The combined businesses will be known as Heineken Beverages, with the rebranding reflecting the new company’s multi-category portfolio.
CEO Dolf van den Brink said: “We are delighted to welcome over 5,400 talented employees of Distell and Namibia Breweries into Heineken and look forward to adding more than €1bn in net revenue and €150m operating profit to our African footprint.
“By combining the strengths of all three entities, we can leverage our expertise and resources to foster growth, create jobs, and contribute to the overall economic development of the region.”
Heineken revealed its plans to form a €4bn African drinks giant back in November 2021 in a move that see the group branch out from its traditional beer and cider portfolio into wines and spirits, including scotch.
The FTSE 100 opened down 0.2% to 7,876.78pts this morning.
Danone saw shares climb 1.4% to €61.28 on its Q1 results, while Nichols is up 0.4% to 1,094.7p.
Other early risers included Hotel Chocolat, up 4.2% to 185p and Greencore, up 2.7% to 84.1p.
Associated British Foods dropped another 2.5% to 1,934.5p, while THG also fell 2.1% to 90.8p.
Yesterday in the City
The FTSE 100 fell 0.3% to 7,891.13pts yesterday.
Nestle shares enjoyed a 0.8% bump to CHF 115.52 as investors appreciated buoyant Q1 sales even as the group continued to hike prices.
PepsiCo was another consumer giant to see a good rise in the stock value as it announced better-than-expected performance. It climbed 2.3% to $189.83 in early US market trading.
In Europe, Coca-Cola Europacific Partners followed the Coca-Cola Company’s outperformance on Monday with news of a 14% jump in Q1 sales as both prices and volumes grew. It helped shares climb 2.2% to $63.50 on the NASDAQ and 2.4% to €57.60 on the London exchange.
McBride also shot up 10.3% to 31.5p as the embattled household goods maker announced its results for year to 30 June would be ahead of expectations.
Conversely, Associated British Foods fell back 3.5% to 1,997.2p as margins were hit in the first half by a reluctance to pass on inflation at Primark and delays in recovering costs at the grocery business.
And Ocado fell 2% to 495.6p after the retail arm revealed plans to close its Hatfield customer fulfilment centre.
Other fallers included THG, down 5.2% to 92.9p, and B&M European Value Retail, down 2.5% to 480p.
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