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Procter & Gamble is a giant in household products, for many years the world's biggest advertiser, and the company which defined many of the marketing strategies which we now take for granted. It was the first company to advertise nationally direct to US consumers (in 1880) and it literally created the concept of "soap opera" by sponsoring radio and television dramas targeting women. Other inventions included the first Fluoride-based toothpaste (Crest), the revolutionary synthetic detergent Tide, and the first mass-marketed disposable diaper (Pampers). Yet P&G found life in the last few years of the 20th century more difficult than it may have expected, with earnings below expectations and a series of management shake-ups as a result of under-performance. New CEO AG Lafley got the group back on track during 2002 with the purchases of Clairol and Wella and a renewed focus on core products. Following dynamic performance in 2003 and 2004, P&G demonstrated the strength of its recovery a year later with the acquisition of legendary personal care rival Gillette. The next few years delivered strong growth, and a push into prestige beauty. However Lafley's retirement in 2009 prefaced another slowdown in performance from which the group has yet to fully emerge. In 2013, in a surprise development, the board brought Lafley out of retirement in the hope that he could persuade lightning to strike twice. Two years later, that hadn't happened, and Lafley passed over control to rising star David Taylor, who oversaw the sale of a large collection of high-end beauty products (including several of Lafley's acquisitions) to Coty. However, performance has been slow to improve. Finally in 2020 the group managed to shake off most of its past problems with its best financial performance for more than a decade. Revenues for the year ending Jun 2020 came in at just under $71.0bn with net income of $13.1bn.
Capsule checked 29th April 2019
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Historical profile information for P&G Beauty
|P&G Beauty||P&G Health|
|P&G Baby, Fem & Family||P&G Grooming|
|P&G Fabric & Home Care||P&G Latin America|
|P&G UK||P&G France|
|P&G Europe||P&G Japan|
Adbrands Daily Update 31st Jul 2020: Procter & Gamble reported its best set of annual results since before the credit crisis, enjoying a strong lift across several sectors in the final quarter from lockdown panic-buying. An increase of 5% in reported annual sales (6% organic) to $71.0bn was the best yearsly increase since 2006, while net income more than tripled to $13.1bn. The previous year was impacted by a huge write-off against Gillette and other shaving brands. That business was still suffering in the most recent financial year as the popularity of beards continued to rise. It was the only reporting division to report a year-on-year decline in sales, down 2%, while other units enjoyed increases ranging from 3% in Baby, Fem & Family to 10% in Health Care.
Adbrands Daily Update 11th Jun 2020: "The Choice" Respect to Procter & Gamble for grasping the nettle so firmly. The packaged goods giant has delivered what is arguably the boldest statement to-date from any major advertiser over the burning issue of the racial divide in modern America. It's an incendiary debut for Keith Cartwright's new eponymous creative boutique, backed by Grey. To its considerable credit, P&G has form in this field. It has taken a firm stance for at least the past three years on issues of race, with ads such as 'The Talk', and last year's 'The Look', also overseen by Cartwright under the auspices of the Saturday Morning collective. While other advertisers including McDonald's and Nike have paid their respects to victims of police brutality, P&G dares to go much further: "Being white in America is not needing to state your life matters. And when your life matters you have power. Now is the time to use it..." Perhaps most surprisingly of all, this is an actual call to the barricades: "Words and feelings are not enough. Now is the time to take action." Stirring stuff.
Adbrands Daily Update 21st Apr 2020: The Coronavirus crisis is having a devastating impact on manufacturers of non-essential items, but there are some positives for other companies. Procter & Gamble reported soaring sales of some products, offsetting equally dramatic declines elsewhere across its portfolio. For the first quarter of 2020 - P&G's 3Q - the company reported the biggest organic sales increase it has experienced in the US for several decades. Revenues there jumped 10% overall as customers rushed to stock up on staples such as detergent, hand soap, toilet paper and healthcare products. That offset an 8% drop in the company's #2 market China, and came despite weak performance globally in P&G's beauty and grooming divisions. Combined organic sales rose 6%, helped by a 10% jump in fabric & home care, 9% in healthcare and 7% in family care. Beauty and grooming sales were flat or slightly negative, but net earnings in those two divisions plunged by 21% and 26% respectively, even as the other three units reported increases of between 13% (fabric & home) and a staggering 32% in family care. P&G CFO Jon Moeller said he expects demand to continue through the rest of the year. "Consumption of our products is not likely to dissipate. We will serve what will likely become a forever altered health, hygiene and cleaning focus for consumers." However, Moeller warned that there is likely to be considerable medium-term pressure later in the year. "We have never faced the level of unemployment that we're likely to see in this country and potentially in others, and we don't know how long that will occur for." That is likely to result in increased consumer sensitivity to prices.
Adbrands Daily Update 31st Jul 2019: Procter & Gamble reported its best quarterly growth for more than a decade in the final quarter of the year to June 2019; an organic uplift of 7%, fed almost equally by higher prices and higher volumes. For the year as a whole, the organic increase was 5% to reported revenues of $67.7bn. That was the good news, but problems remain in some areas, especially P&G's grooming division: in other words Gillette. With overall growth at its highest level since the 2008 credit crisis, P&G took the opportunity to take an $8.3bn impairment charge against Gillette, which is still struggling to fend off the impact from online rivals like Dollar Shave Club and Harrys. That charge left the group nursing a shock $5.2bn net loss for the quarter, while full year net income plunged 60% to $3.9bn. Fabric & Home Care remains the group's biggest business by far with revenues of $22.1bn. Baby Feminine & Family Care came next with $17.8bn followed by Beauty ($12.9bn), Health Care ($8.2bn) and finally Grooming ($6.2bn).
Adbrands Social Media 27th Jun 2019: "The Look". Here's Procter & Gamble's excellent follow-up to "The Talk", the promotional film from 2017 which presented the ways in which black Americans have, for the past 100 years or so, had to explain to their kids how to deal with everyday racism. This latest - not this time from BBDO but from creative collective Saturday Morning - takes a slightly different tack. The prejudice is even more insidious here by being unvoiced. White viewers can get a small taste of what it feels like from the point of view of just one black American running the daily gauntlet of unspoken bias.
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