P&G announces ‘in line’ Q1 results, plans to exit battery business
CINCINNATI — Procter & Gamble posted first-quarter results in line with expectations, and announced plans to shed its Duracell battery business as it works to restructure its portfolio.
“We continue to accelerate and increase productivity savings, sharpen our strategies and strengthen our portfolio by focusing on our biggest opportunities. The pet care divestiture and exit of the battery business will allow us to further focus these efforts,” stated P&G CEO A.G. Lafley.
On the heels of the divesture of its pet business in July to Mars, Inc., P&G is now looking to exit the Duracell business in a two-step process. The first step was finalizing an agreement to sell its interest in a China-based battery joint venture, which it accomplished in late August. Now, P&G is planning to exit the Duracell business and is hoping to split off the business into a stand-alone company.
“We greatly appreciate the contributions of our Duracell employees. Since we acquired the business in 2005 as part of Gillette, Duracell has strengthened its position as the global market leader in the battery category,” stated Lafley. “It’s a business with attractive operating profit margins and a history of strong cash generation. I’m confident the business and its employees will continue to thrive as its own company.”
Net sales during the quarter totaled $20.8 billion, essentially unchanged compared with the year-ago period. Organic sales grew 2%.
Net income dropped 34% to $1.99 billion during the quarter. Diluted net earnings per share were 69 cents, including non-core items. Excluding items, earnings per share were $1.07.
In beauty, hair and persona care, organic sales were unchanged as pricing benefits from prior year increases across all business units were offset by lower prestige volume.
In the grooming segment, organic sales were unchanged as higher pricing and innovation on blades and razors and higher volume in appliances from innovation were offset by lower blades and razors volume in developed regions, the company stated.