Procter & Gamble Co., the world’s largest consumer-products maker, will streamline its businesses into four industry-based groups as recently returned Chief Executive Officer A.G. Lafley works to reignite growth.
The groups will be global baby, feminine and family care; global beauty; global health and grooming; and global fabric and home care, the Cincinnati-based company said in a statement yesterday.
“We expect this structure to facilitate faster global expansion of brand and product innovations to win with consumers,” Lafley said in the statement. “Taken together, these organization changes will help us operate better and faster as one unified team to win.”
P&G is reorganizing after bringing back Lafley as CEO two weeks ago to replace Bob McDonald, who had succeeded him in 2009. The company had been losing market share in some of its established businesses to competitors such as Unilever.
The shares rose (PG:US) 0.2 percent to $76.82 at the close in New York. P&G has climbed 13 percent this year, compared with a 14 percent advance for the Standard & Poor’s 500 Index. (SPX)
The four units will be overseen by executives from within P&G. Martin Riant will serve as president of the global baby, feminine and family care unit, Deborah Henretta will head the global beauty group and Giovanni Ciserani will be president of global fabric and home care, the company said.
David Taylor, currently president of global home care, will become president of global health and grooming. Taylor will also take over responsibilities of Jorge Mesquita, head of pet care, who is leaving the company “to pursue outside interests,” P&G said. Charles Pierce, president of global oral care, will also take the duties for new business creation and innovation from Mesquita. He will report to Taylor for oral care and to Lafley for new business.
The four divisional heads will report directly to Lafley. They may also be in line to succeed the newly returned CEO, a person familiar with the matter, who requested anonymity because the issue is private, said last week.
In addition to the structural changes, Dimitri Panayotopoulos, the current vice chairman of global business units, will become vice chairman and adviser to Lafley as of July 1. Lafley is both chairman and CEO of P&G.
Panayotopoulos will report to Lafley, as will Melanie Healey, president of North America and global hyper, super and mass channel, and Werner Geissler, vice chairman of global operations.
Lafley, who stepped aside almost four years ago, returned to replace McDonald on May 23 with immediate effect. The 65-year-old executive has said he will continue a turnaround plan that McDonald embarked on last year aiming at cutting $10 billion in costs through 2016 and renewing focus on the company’s leading businesses.
P&G’s sales growth has averaged 2 percent over the past three years, compared with 8.7 percent for Unilever, according to data compiled by Bloomberg Industries. The company’s fourth-quarter forecast trailed analysts’ estimates, prompting the shares to plunge the most in more than four years.
In established markets, P&G has lost customers in such key categories as detergents. The beauty business, which last year generated 24 percent of sales, is waning as competitors such as L’Oreal SA (OR) gain share in emerging markets.
McDonald, 59, will retire on June 30 after 33 years of service.
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