LONDON, June 16 - Reckitt CEO Kris Licht said on Tuesday he expects the inflationary impact of the Iran crisis to materialize only after a delay. Licht made the comments during an interview at the NEXT Europe summit in London.
"In terms of the inflationary effects of the crisis, which are clear, that will start to flow through", he said. "There’s actually a bit of a delay on some of that," he added, flagging a lag between the geopolitical shock and its full effect on costs and prices.
Consumer goods firms are operating in a challenging global backdrop characterized by weak consumer sentiment, elevated input costs and supply disruptions tied to the Iran war, Licht said. Those pressures have already been reflected in company guidance: Reckitt warned in April that first-half margins would be lower, citing high oil prices and a weak cold and flu season.
The company’s shares have also been affected. Reckitt’s share price is down around 23% so far this year, the CEO noted, underscoring investor concern over profit margins and demand trends.
While diplomatic steps are under way - Licht referenced that the U.S. and Iran have agreed on a framework for a peace deal - he cautioned it is too early to draw firm conclusions about how the situation will evolve or how quickly it will influence markets and costs.
Licht stressed that Reckitt has experience managing inflationary shocks and described the group as well placed across major markets. He cited the U.S. and emerging markets such as China and India as important footholds.
"We’re seeing strong growth" in those emerging markets, he said. "And that is really where you can source most growth." The CEO suggested that geographic exposure to faster-growing regions helps offset some near-term pressures on margins and demand in other markets.
Overall, Licht portrayed a business adapting to rising costs and fluctuating demand while leaning on growth opportunities outside developed markets as inflationary effects from geopolitical events work their way through global supply chains and pricing.