P&G To Record Up To $2.5bn In Gillette Writedown, Operations Rejig

By Reuters
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P&G To Record Up To $2.5bn In Gillette Writedown, Operations Rejig

Procter & Gamble said it would record up to $2.5 billion (€2.3 billion) in charges over two fiscal years as it writes down the value of its Gillette business and restructures certain markets.

The consumer goods giant said it would take a $1.3 billion (€1.2 billion) non-cash impairment charge before tax in the current quarter ending 31 December on its Gillette business.

P&G, which bought Gillette for $57 billion (€52.9 billion) in 2005, gets about 8% of its total sales from the grooming business.

The company expected its Gillette business to grow in the range of 5%, chief financial officer Andre Schulten said at a Morgan Stanley conference, in line with growth over the last three years.

In 2019, P&G took an $8 billion (€7.4 billion) charge on the unit due to currency fluctuations.


Restructuring Charges

The company said it expects charges of between $1 billion (€930 million) and $1.5 billion (€1.4 billion) after tax related to the restructuring of its Argentina and Nigeria operations as it deals with difficult macroeconomic conditions.

P&G also blamed a stronger dollar for the twin charges.

"It's very difficult for us as a US dollar-denominated company to create value (in these markets)," Schulten said.

P&G said it was looking to divest its fabric and home care business in Argentina and turn Nigeria into an import-only market.


Total charges will be between $2 billion (€1.9 billion) and $2.5 billion (€2.3 billion) after tax and will be recognised in fiscal years 2024 and 2025.

Net earnings attributable to the company was $14.7 billion (€13.6 billion) for fiscal 2023.

In October, the consumer goods giant's quarterly sales and profit topped market expectations, helped by steady demand for its personal care products and cleaning supplies as well as price hikes.

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