P&G 2020 net income up 5%: ‘We expect to grow through this crisis’, says CEO

By Kacey Culliney contact

- Last updated on GMT

P&G's fabric and home care division has fared especially well during COVID-19, but beauty and feminine care has also held steady (Getty Images)
P&G's fabric and home care division has fared especially well during COVID-19, but beauty and feminine care has also held steady (Getty Images)

Related tags: Procter & gamble, financial results, Personal care, Feminine hygiene, grooming

Proctor & Gamble (P&G) has reported a net sales rise for the 2020 full fiscal year after a strong fourth quarter – results that indicate the company should continue to grow despite COVID-19, its CEO says.

P&G generated net sales of €60.2bn ($71bn) for 2020 fiscal, up 5% on the previous year, driven by a 10% rise in its health care division; a 7% rise in fabric and home care; a 4% rise in beauty and 3% increase in baby, feminine and family care. Net sales across its grooming division dipped 2%.

In the fourth quarter (Q4) of 2020, net sales across P&G rose 4% to €15bn ($17.7bn), driven by increased demand for household cleaning, personal health and cleansing products, as well as “strong innovation programs”, ​the company said. ​Net sales in fabric and home care rose 11%; were up 3% in baby, feminine and family care; and sat steady for beauty. However, Q4 net sales dipped 1% in health care and 5% in grooming.

P&G ‘to come out stronger’ after COVID-19

David Taylor, chairman, president and CEO of P&G, said the company had delivered “strong, balanced sales and profit results”.

“…We expect to grow through this crisis and come out even stronger on the other side,”​ Taylor said.

He told investors on the company’s earnings call last week that P&G would achieve this by raising the bar on “all aspects of superiority”​, such as product, packaging, consumer communication, retail execution and overall value.

“Superior offerings, science-based products delivered with superior packaging drive market growth, which in turn drives share, sales and profit growth. This creates a winning proposition for all concerned.”

Jon Moeller, company vice chairman, COO and CFO, agreed: “We will continue to face significant challenges, and perhaps a higher degree of uncertainty than any of us have ever faced, but we believe that current consumer dynamics are integrated in mutually reinforcing strategies, and our focus on a few immediate priorities positions us very well for the future.”

P&G issued a fiscal 2021 guidance of 1-3% all-in sales growth on the previous fiscal year and organic sales growth of 2-4%.

Beauty, hair care, grooming results mixed

In Q4, P&G reported mixed results across its divisions and within each business unit. Beauty, for example, continued to be dragged down by a double-digit decline in its super-premium brand SK-II because of pandemic related travel disruption. This was partially offset by volume increases in personal cleansing and an organic sales rise in hair care.

Within grooming, organic sales in shave care decreased due to reduced frequencies in shaving in certain markets due to COVID-19, P&G said, but organic sales of grooming appliances increased.

In health care, sales of oral care products declined amid retail closures but personal health care organic sales increased.

And within P&G’s baby, feminine and family care unit, sales rose due to an increase in organic sales of feminine care products. Organic sales of baby care products, however, were down.

Recent analysis from CosmeticsDesign-Europe has showed that the ongoing COVID-19 pandemic has also created a mixed bag of results among the big brands in beauty and personal care.

Related topics: Business & Financial

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