Procter & Gamble on Tuesday revealed its plans to incur charges of up to USD 2.5 billion over two fiscal years, attributing them to the devaluation of its Gillette business and strategic restructuring in specific markets.
In early trade, the company’s shares experienced an approximately 2 per cent decline.
P&G detailed a non-cash impairment charge of USD 1.3 billion before taxes in the current quarter ending 31 December, specifically related to its Gillette business, which contributes around 8 per cent to the company’s overall sales. P&G acquired Gillette for USD 57 billion in 2005.
Addressing the performance expectations, Chief Financial Officer Andre Schulten stated at a Morgan Stanley conference on Tuesday that the company anticipated a 5 per cent growth range for the Gillette business, aligning with the growth pattern of the past three years.
In 2019, P&G incurred a USD 8 billion charge on the unit due to currency fluctuations.
Furthermore, P&G disclosed anticipated charges, ranging from USD 1 billion to USD 1.5 billion after tax, linked to the restructuring of its operations in Argentina and Nigeria, citing challenging macroeconomic conditions in these regions
The company cited a stronger dollar as a contributing factor to these charges, with Schulten expressing the difficulty in creating value in markets denominated in US dollars.
As part of its strategic moves, P&G revealed plans to divest its fabric and home care business in Argentina, while transitioning Nigeria into an import-only market.
The total charges, expected to fall between USD 2 billion and USD 2.5 billion after tax, will be recognised in fiscal years 2024 and 2025. Net earnings attributable to the company for fiscal 2023 were reported at USD 14.7 billion.
