SLOWER growth in China, Europe and the US prompted Procter & Gamble (P&G) to cut its growth forecasts yesterday.
The world’s largest household product maker is expecting lower growth rates as it has cut costs by £6.35bn.
Its chief executive, Bob McDonald, said at an investor conference in Paris yesterday, that the company would adjust strategy to focus on big markets and new products.
McDonald said growth in developed markets, making up 60 per cent of sales, had dropped off significantly, while in emerging markets, it suffered mandated price cuts in Venezuela and import curbs in Argentina.
“We have seen sequential deterioration in the rates of market growth in both the US and Europe, and there has been a slowdown in the rate of market growth in China,” he said.
Procter & Gamble has forecasted growth to be two to three per cent down from four to five per cent in April to June, while the core quarterly earnings target was trimmed from 79-85 cents to 75-79 cents per share.
McDonald said it would take time to reverse the negative trends, and expected little improvement in the 2013 fiscal year which starts 1 July. He forecast underlying sales growth of two to four per cent, and said 2013 core earnings would be flat to up by a mid-single digit percentage.
P&G is currently undergoing a restructuring plan to cut 5,700 non-manufacturing jobs and $10bn worth of costs by the end of 2015/16.
City A.M. Reporter