Developing markets offset falling revenue for P&G
03 August 2012
Almost all of P&G’s business units have seen declining revenue in 2012, mitigated by growth in developing markets according to the company’s Q4 and end of year financial reports.
Overall revenue generated during the company’s fourth quarter dropped by 1% year-on-year to $20.2bn. This resulted in a year-on-year decrease of 4% in operating income to $3bn.
Beauty care units decreased in revenue year-on-year by 4% to $4.8bn and grooming units decreased by 6% to $2bn. In both cases, the units saw growth in Asia but this was offset by poor performance in North America and Western Europe.
Health Care saw a year-on-year drop in revenue of 1% to $2.9bn and fabric care and home care saw a 1% drop to $6.6bn. The baby care and family care units were the only division to buck the trend and saw a 1% rise in revenue to $4.1bn.
For P&G’s total financial year, it saw a 14% year-on-year decrease in operating income to $13.2bn, despite growing its revenues by 3% to $83.6bn.
During the quarter, P&G also completed the sale of its snacks business to Kellogg. The Pringles brand sold for $2.7bn after a deal to sell it to Diamond Foods fell through.
“We enter fiscal 2013 with very strong developing market momentum, strengthened plans on our core developed market business, and with the benefit of a $10 billion cost savings program, which is well underway,” says P&G chairman, president and chief executive Bob McDonald. “Despite a difficult macro environment, we see significant opportunities for top- and bottom-line growth.”
McDonald recently faced down a potential investor revolt over the poor performance of the company. The board has since stated that it supports his restructuring plan that the company is in the process of executing. He was named chief executive in 2009 and has been with the company for more than 30 years.
P&G chief marketing officer Marc Pritchard is featured in M&M Global’s Q2 issue talking about his purpose and the company’s $100m global sponsorship of the Olympics running through to 2020.
David Hing, London