Reckitt Benckiser to slash costs ahead of a difficult year

Kasmira Jefford
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Chief executive Rakesh Kapoor said he plans to make Reckitt a leaner and faster business

Reckitt Benckiser has embarked on a major cost saving drive after the maker of Durex condoms and Dettol cleaning products beat market expectations with a four per cent jump in full-year sales.

Chief executive Rakesh Kapoor said the efficiency plan, dubbed Project Supercharge, aims to deliver up to £150m in savings a year by 2017 by spending less on travel, cutting overlapping jobs and merging some of its regions.
“This will make Reckitt Benckiser a leaner, faster and more coordinated business. It will also drive cost savings that will enable us to deliver sustainable earnings growth as we enter the second half of the decade,” he said.
Consumer goods companies battled with sluggish growth in emerging and developed markets last year, and Kapoor warned that 2015 would not be any easier. As a result, the company has cut its annual revenue growth target from four to five per cent to four per cent, in line with last year.
But despite his cautious statement, Reckitt’s 2014 results were ahead of expectations, thanks to cost saving measures, which in turn boosted its margins. Pre-tax profits increased by 13.5 per cent to £2.1bn.
It said growth in the last quarter was led by its health and hygiene divisions, with sales of Scholl footwear products, Durex and Dettol helping to drive a five per cent rise in revenue.


■ The new cost-saving plan will look at everything from travel to spending on everyday products such as stationery. Rakesh Kapoor, for example, said he will now fly economy class for flights under six hours. But with a journey time of around six hours and 20 minutes, he will still be able to fly business class to RB’s US offices near New York as well as other key markets such as China.
■ Reckitt will also restructure its operations into two geographic divisions. Russia and the former Soviet countries will be combined with its Europe and North America business and Latin America and Asia will merge with the Middle East and Africa.
■ The savings will result in some job losses – however, Reckitt declined to say how many people could be affected. The plans should have no effect on the £100m research facility it is building in Hull, the company insisted.
■ Reckitt aims to deliver between £100m-£150m in annual savings by 2017.

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