P&G says it is still looking to boost beauty through acquisitions
The comments were made by the company’s CFO Jon Moeller, during its Morgan Stanley Global & Retail Conference, given on Friday, December 20.
During the conference Moeller referred to ‘constant speculation’ over the company’s portfolio management, underlining the fact that the acquisitions would not be likely to become a core part of the company’s objective.
“We have talked for some time about wanting additional skin care brands, we are also working on developing [sales] organically as well, so I wouldn’t say that we will acquire, but that would be something we would be interested in,” said Moeller.
Category acquisition objectives
Likewise, Moeller underlined that the category acquisition objectives overruled any geographically-specific acquisition, because of the complexities associated with many international markets.
Moeller said these complexities were highlighted by the fact that often brands operate on regional rather national lines, while also stressing the fact that issues such as ownership often mean “you just don’t know what you are getting yourself into.”
However, when pressed by journalists and analysts at the end of the 20 minute presentation, Moeller said that as well as beauty, the company’s acquisition focus would also concentrate on the areas of consumer health care and household products.
How to top the Gillette acquisition?
P&G made the $57bn acquisition of Gillette back in 2005, a move that has helped provide the company with significant growth, until the financial downturn started to impact growth at the beginning of this year.
Since then the company has not made any major acquisitions, although in the first half of this year it did expand its prestige men’s grooming portfolio with the acquisition of two brands.
Meanwhile, in late August the company sold off its OTC pharmaceutical business Warner Chilcott for $3.1bn, increasing the company’s bank balance and adding to speculation that further acquisitions would follow.
During the conference presentation Moeller also said that the key area for growth will remain focused on the company’s core brands, with respect to new price tiers, new geographic markets and breaking into new categories.
Likewise he said that this will be backed up with a significant increase in marketing expense to support the increasing levels of innovation and new product launches that are planned during the next financial year.
