Adbrands Weekly Update
31st Oct 2013:
There was evidence of improvement in P&G's performance for the
first quarter of its new financial year, although challenges remain,
especially in the beauty and grooming divisions. Combined revenues edged up 2%
to $21.2bn, while net earnings jumped 8% to $3.0bn as a result of significant
reductions in costs and tax charge. However sales in the beauty and healthcare
units slipped 1%, and in grooming by 2%, offset by increases of 3%-5% in other
Adbrands Weekly Update 8th Aug 2013: Procter & Gamble's newly reinstated CEO AG Lafley reported annual figures for the year to June 2013, and the results were perhaps a little better than some had expected, despite a poor final quarter in which net
earnings almost halved. For the full year, however, earnings were up 5% to $11.3bn, better than last year but still well below past results. Revenues edged up by just 1%, but still hit an all-time high of $84.2bn. The weakest performances were from the group's giant beauty and grooming businesses, both which reported a decline in full-year revenues. Lafley
acknowledged problems at the Pantene and Olay brands, which have been outpaced in recent months by competitors. He admitted that P&G's beauty business had "stalled", but reassured investors, "We know what we need to do and we're on it." Gillette too, core of the men's grooming division,
faces multiple challenges, including less frequent facial shaving and a rise in popularity in body shaving, a segment where the group remains weak. Those declines were offset by modest increases at other group divisions, notably health care. Lafley said he has spent the two months since he was reappointed as CEO on a
"deep dive" into P&G's business, "trying hard to see things as they are, not as we want them to be." The group is, he explained, pushing forward urgently to increase productivity and efficiency. "We've got to get to a much more agile, a much faster, a much more decisive culture."
However he warned that the process wouldn't take effect overnight. "We're threading a needle here... It's going to take a couple of years before we've got everything in place so that we're hitting on enough cylinders to perform to our full potential."
Adbrands Weekly Update 6th Jun 2013:
The race is on at P&G. As had been widely anticipated since 66-year-old AG Lafley was reinstated two weeks ago as CEO of P&G, he announced a new reporting structure which effectively fires the starting gun on a contest between four senior executives to succeed him. Lafley is expected
to stay for no more than two or three years, and the group's two current vice chairmen are already too close to retirement to become viable candidates. Instead, Lafley reshuffled P&G's global business units to create four possible choices for next leader. The beauty division is left more or less
unchanged under group president Deb Henretta. The fabric & home care division is also largely unchanged in structure, but Giovanni Ciserani was promoted to group president. In a new development, the Always/Tampax business that was previously part of P&G Health Care is to be merged into Baby
& Family Care to create a new grouping which will be led by Martin Riant, already head of baby care. Another change combines the rest of the health business with Gillette to form P&G Health & Grooming, under the leadership of David Taylor. A fifth runner could be Melanie Healey, current
president of North
America & global hyper, super and mass retail channels. She will also now report directly to Lafley, as well as to her current boss, group vice chairman Werner Geissler.
Adbrands Weekly Update 30th May 2013:
Procter & Gamble removed Bob McDonald as CEO and reinstated his predecessor AG Lafley. McDonald's four years at the helm of P&G have proved disappointing, as the packaged goods giant struggled with economic turbulence, rising costs, low productivity in the US and increased competition in developing
markets from long-time adversaries such as Unilever. He has come under increasing pressure from investors after several sets of lacklustre quarterly results. By contrast, Lafley's period as CEO, from 2000 to 2009, is perceived as one of the most dynamic in the group's recent history, coming as it did
after another stagnation at the end of the 1990s. After a slowish start, Lafley transformed the group with a series of large acquisitions, and established it as one of the global leaders in beauty. He earned widespread plaudits in the process, but astutely chose to step down while at the top of his
game, hand-picking then-COO McDonald - a P&G lifer who had spent 33 years at the company - to succeed him. However, the growing consensus is that McDonald was a fine COO under Lafley, but lacked the vision necessary in a CEO. Ironically, many of the problems with which the new man had to wrestle were direct results of
Lafley's expansionist agenda and the push into premium products. Now it's down to the 66-year-old Lafley to fix those concerns
while also grooming another future leader to take over the reins once again.
Adbrands Weekly Update
25th Apr 2013:
P&G reported disappointing figures for the latest quarter,
resurrecting worries among analysts that its turnaround plan isn't working.