FMCG giant Procter amp; Gamble has announced plans to offload its market-leading battery brand Duracell, in what should be the first of up to 100 brands axed from the portfolio as part of a strategy, unveiled in August this year, to offload its least profitable brands.
P amp;G announced the sale of Duracell, which has annual sales of $2bn and was acquired as part of Gillette in 2005, late on Friday as it reported third quarter results down slightly on 2013’s. Profits dipped 17% on the same peiod last year.
P amp;G’s CE, AG Lafley, returned to the company last year with the aim of turning round a business whose sales growth and profitability was in decline. He introduced the idea of “focus” as the company’s mantra.
But Jon Moeller, chief financial officer, told The Financial Times: “While Duracell is a very attractive Features > Business, we’ve chosen to focus some of our efforts on even more attractive opportunities.”
P amp;G said it had not yet decided on the form of its exit from the battery Features > Business, although “P amp;G’s current preference is a split-off of the Duracell business into a standalone company”.
Lafley added: “It’s a business with attractive operating profit margins and a history of strong cash generation. I’m confident the business and its employees will continue to thrive as its own company.”
It would expect to complete the split in the second half of 2015.
P amp;G, which has brands including Fairy, Pampers, Ariel and Gillette, said it would shed around 100 of its least profitable brands over the next two years, leaving it with about 70 to 80 core brands. It sold off its last food brand, Pringles, to Kellogg’s in 2012.