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

Published 12/05/2023, 09:42 AM
Updated 12/05/2023, 10:31 AM
© Reuters. A plant wall with Procter & Gamble's logo is pictured at the entrance to the company's highly automated cleaning products factory in Tabler Station, West Virginia, U.S., May 28, 2021. REUTERS/Timothy Aeppel/File Photo
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(Reuters) -Procter & Gamble said on Tuesday it would record up to $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% in early trade.

The consumer goods giant said it would take a $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 $57 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 on Tuesday, in line with growth over the last three years.

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

The company said it expects charges of between $1 billion and $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 dollar for the twin charges.

"It's very difficult for us as a U.S. 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.

© Reuters. A plant wall with Procter & Gamble's logo is pictured at the entrance to the company's highly automated cleaning products factory in Tabler Station, West Virginia, U.S., May 28, 2021. REUTERS/Timothy Aeppel/File Photo

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

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

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