P&G reported a 5% drop in net sales in fiscal 2015, bringing the total value to $76.279bn.
Out of the US consumer giant’s five business segments, which include: Grooming; Health Care; Fabric Care and Home Care; Baby, Feminine and Family Care; and Beauty, Hair and Personal Care, the latter was the only one to register a decline in organic sales, taking a 1% hit. All segments did register a decline in net sales, however, although it was the Beauty, Hair and Personal Care, and Grooming segments that bore the brunt, both sliding 7%.
The consumer goods giant put the decline largely down to a hit from currency effects – and projected organic sales in fiscal year 2016 do not look much rosier. P&G said it expects all-in sales to be “down low-to-mid single digits versus fiscal 2015”. The company clarified that its guidance for 2016 takes into account the impact of its exit from certain beauty categories and its sale of 43 brands – including Max Factor, Wella Professionals and Clairol – to rival Coty, which was confirmed last month (for more, click here).
The company saw currency neutral core EPS growth of 11% on 2014. Core EPS were $4.02, down 2%, while diluted net EPS were $2.44. This included a one-time charge of $2.1bn or $0.71 per share, for a change in the method of accounting for its Venezuelan operations, whereby P&G has stopped consolidating the results of its local Venezuelan operations in its GAAP financial statements.
Remaining positive, Chairman, President, and Chief Executive Officer A.G. Lafley, said: “In fiscal 2015, P&G delivered strong, double-digit constant currency core EPS growth and very good free cash flow productivity of over 100% on modest organic sales growth. We made significant productivity gains and have largely executed the reshaping of our business portfolio. Going forward, our objective is to deliver balanced results across the three main drivers of operating total shareholder return - sales growth, operating profit margin expansion and free cash flow generation. We expect continued strong cost savings and free cash flow productivity, and we are investing behind product innovation to support an improvement in top-line growth.”
