Personal care and cosmetics giant Procter & Gamble (P&G) has announced that it will be undergoing a portfolio restructuring of its business operations amid ongoing “challenging macroeconomic and fiscal conditions”.
The move will primarily be focused on the group’s businesses in certain Enterprise Markets, including Argentina and Nigeria, where it expects charges of between one billion and 1.5 billion dollars after tax, anticipated to be recognised in the fiscal years ending June 30, 2024, and 2025.
Alongside this announcement, the group also said it would be recording a further 1.3 billion dollars in charges in regards to the writedown of its Gillette business, bringing its total to be between two and 2.5 billion dollars.
For Gillette, P&G said it would be taking the non-cash impairment in the current quarter ending December 31, 2023, on “intangible assets acquired as part of the company’s 2005 acquisition of The Gillette Company”.
P&G had snapped up the personal care brand for 57 billion dollars, but later took an eight billion dollar charge on the business due to currency fluctuations in 2019.
It explained in the regulatory filing that the latest impairment was linked to “a reduction in the estimated fair value of the Gillette indefinite-lived intangible asset due to a higher discount rate”, as well as the weakening of several currencies in regards to the US dollar.
It continued: “Underlying performance of the Gillette business remains strong. However, future adverse changes in the business or macroeconomic environment may trigger a further impairment charge.”