P&G to record up to US$2.5 billion in Gillette writedown, operations rejig

PROCTER & Gamble said on Tuesday (Dec 5) it would record up to US$2.5 billion in charges over two fiscal years as it writes down the value of its Gillette business and restructures certain markets.

The company’s shares fell about 2 per cent in early trade.

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

P&G, which bought Gillette for US$57 billion in 2005, gets about 8 per cent of its total sales from the grooming business.

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

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

The company said it expects charges of between US$1 billion and US$1.5 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 US 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.

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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 US$2 billion and US$2.5 billion after tax and will be recognized in fiscal years 2024 and 2025.

Net earnings attributable to the company was US$14.7 billion for fiscal 2023. REUTERS