02 August 2000

Reporting disappointing fourth quarter results, Procter & Gamble’s new chief executive Alan Lafley warned investors that the multinational company was unlikely to return to double-digit growth rates until the second half of next year.

"It's clear it will take more time than originally anticipated to deliver expected results," said Lafley. His priority, meantime, will be to focus resources on "big leadership brands, big markets and big customers."

Ten main brands, with aggregated sales of $1 billion-plus, will be the marketing focal point. These include Pampers, Tide and Bounty which together account for half the company’s sales and profits, and virtually two-thirds of its growth over the past ten years.

Addressing P&G’s smaller brands and second-tier markets, Laffley said his aim is to balance better cost control and cash management with investment in innovation. However, he would not be drawn into giving detailed information on this score.

Competitive pressure in western Europe, primarily from Unilever, Henkel and Kimberly-Clark, had impacted adversely on the business, as had a "significant contraction" of the beauty care market in China.

Fourth-quarter earnings before restructuring charges slid 3% to $777 million (55 cents per share) in line with analysts' consensus estimates. Sales rose 2% to $9.66 billion, benefiting from a weak euro which offset an improved pricing mix.

News source: Financial Times