John Waples, Business Editor
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Bart Becht, chief executive of Reckitt Benckiser, has one of the lowest profiles among his peers in the FTSE 100.
His pay package may be one of the largest — £22m last year — but when it comes to providing personal details, the Dutchman, who turns 52 this week, doesn’t do it.
Becht likes it that way. Up to now he has let his figures do the talking and you can see why.
The global household-goods company, with a market value of £18 billion, will set the bar for its sector this week with half-year operating profits approaching £600m — at the top end of expectations — and sales of £3 billion.
The figures will be greeted warmly in the City — hit in recent weeks by a series of earnings upsets from some of our biggest companies.
Analysts at Credit Suisse said: “In a market awash with fears of trading downgrades, own-label growing and emerging-market declines . . . we expect Reckitt to offer some words of comfort.”
Credit Suisse is not alone. Deutsche Bank still has a share-price target of £30 against Friday’s closing price of £25.36.
And Becht is comfortable with the group’s defensive characteristics.
He said in an interview with The Sunday Times last week: “Typically, our industry does not turn negative.”
Reckitt’s financial growth is ultimately down to the people it hires. “We are picky in whom we employ and they have to be entrepreneurial,” said Becht.
Not that Reckitt is overstaffed compared with its competitors. It employs 23,000 people, generating annual sales last year of £5 billion.
Most of the group’s earnings come from 17 global power brands ranging from Vanish, the fabric treatment, Nurofen and Gaviscon, the healthcare products, Airwick, the air freshener, and Finish, the dishwashing product. However, Lemsip has quietly been dropped from this line-up because it was perceived as being too UK-focused.
Last year these brands accounted for 64% of net revenues and 85% of growth.
Reckitt Benckiser thrives on innovation and a relentless drive to cut costs. To pursue this policy, Becht wants only the best recruits.
He said the company was a multi-cultural organisation with 18 different nationalities among its top 40 executives.
In other words, a model company that fits Gordon Brown’s vision of how British-based companies can succeed internationally — the UK can ill-afford to drive such companies away. Even Becht appears to be tested by the government’s meddling with the taxation of overseas earnings, something that would have a huge impact on Reckitt.
Alistair Darling, the chancellor, attempted to backpedal last week from the proposed changes, but Becht is far from impressed.
“The devil is in the detail. From an international management point of view this is a good place to be, but financially it has also got to work and if it doesn’t we will have to take the appropriate decision. I hope that it will not come to that.”
The City will be keen to hear how the company is tackling inflationary pressures and the answer is expected to be that, so far, rising costs are being passed on. This has been combined with cutting back on excess packaging material. “It’s about cost optimisation, packaging the product in a different way without taking anything away from the consumer,” said Becht.
For a marketplace that is being knocked sideways by a slew of earnings downgrades, Reckitt will remind its investors tomorrow that a consumer company with global scale can still prosper in a downturn.
At a time like this, the group’s confidence in the future will be well received.
It should also be a reminder to Brown that we must not take global companies that base their headquarters in Britain for granted.
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