P&G focus on delivering industry-leading top and bottom line growth
(P&G), told shareholders at its annual meeting this week that
it is now focused on delivering a full decade of industry-leading
top and bottom line growth, having successfully integrated Gillette
into it's fold.
CEO, A.G. Lafley stated: "we have the strategies, strengths and the structure to continue to transform our company in the face of unrelenting change and competition".
Speaking at the conference, Lafley assured attendees that he was confident that the company could deliver on a full decade of growth, citing P&G's strategies and structures as a main reason for this.
These strategies include continuing to grow its core business, including leading brands in the growing developed and developing markets, and winning retail customers around the world.
It is also hoping to develop faster-growing, higher-margin, more structurally attractive businesses in areas that have had significant potential to achieve global leadership. The company says that this would specifically target business in the beauty, health and personal care industries.
The final point Lafley stressed is the company's need to accelerate growth in developing markets and with low-income consumers everywhere.
In 2005 P&G finalised a groundbreaking $57 billion merger with cosmetic giants Gillette, after it received support from 96.5 per cent of votes cast by shareholders - the equivalent to over 70 per cent of the issued and outstanding shares.
Following this merger, in January 2006 P&G launched the new Gillette Fusion men's shaving system. And having gained retail sales of more than $220 million during the first seven months it was the biggest product launch in the US that year.
The deal helped to make P&G the largest consumer goods company in the world boasting leading brands, such as Clairol, Wella and more recently Gillette. The company has over 135,000 employees and operates in over 80 countries worldwide.
During the meeting Lafley discussed why he believed the merger with Gillette was working so well. Citing that the integration of the Gillette brand happened quickly, without disruption to the balance of P&G businesses.
P&G has also retained many original Gillette employees in all levels of the business with 'acceptance rates exceeding 95 per cent who were offered new roles or asked to stay in their current roles'.
However, last week saw P&G cut 300 jobs at Gillette, bringing the total job losses to an estimated 5000 as a result of the takeover.
The company said it was also pleased with the fact that financial commitments made at the time of the merger were being followed through, with things remaining on track to achieve approximately $750 revenue growth in synergies during the third year.
This was despite an 8 per cent to 9 per cent dilution of earnings per share, as an initial impact of the merger.
Lafley also discussed what P&G is doing to ensure the success of the merger, stating that: "P&G has adopted best practices from both Gillette and P&G in every critical part of the business. Where P&G is the strongest, the P&G approach is being brought to Gillette. Where Gillette is strongest, the Gillette capability is being brought to P&G".
He also added that with the inclusion of the strong brands brought in by Gillette, P&G's portfolio would shift towards the faster-growing, higher margin, more asset-efficient businesses. He claimed that Gillette has added five brands with annual revenue 'in excess of one billion dollars' to the P&G portfolio.
