Reckitt Benckiser chief forgoes business class to cut costs

Rakesh Kapoor says maker of Cillit Bang, Durex and Harpic is also merging divisions and reducing spending on stationary in economy drive

The chief executive of Reckitt Benckiser is giving up business class flights on trips of less than six hours as the consumer products company seeks to save up to £150m a year.

Rakesh Kapoor said he would give up the flat beds and posh food as part of an efficiency plan called “project supercharge”. Other executives will also have to follow his example.

Banks and other companies cut back on business class travel during the financial crisis but it is unusual for a FTSE 100 boss to commit himself to the economy lounge on all but the longest flights.

The maker of Cillit Bang, Harpic and Nurofen sells its products in more than 100 countries. Trips to many major markets such as Brazil, China and the US would still allow Kapoor to fly business class.

Kapoor, who has run Reckitt since 2011, is reducing the number of geographic businesses to two from three by merging the two emerging markets divisions. Russia and CIS (Commonwealth of Independent States, comprising the former Soviet countries) will move into the Europe, North America and Australasia business.

He said the change would make decisions quicker by cutting out overlapping functions. He also wants to reduce spending on everyday items such as stationery. Kapoor said there may be job losses among the 34,000 workforce but that they would not be the main reason for cost reductions.

Kapoor said: “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.”

Kapoor announced the plan as he unveiled operating profit, excluding exceptional items, up 2% to £2.19bn. Net revenue for the year ended 31 December fell 5% to £8.84bn, but the company cut costs to support profits.

Business picked up in the final three months of 2014 with strong sales of Scholl footcare products, Durex condoms and Dettol driving 5% growth in net revenue.


Sean Farrell

The GuardianTramp

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