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Detergent manufacturers add new benefits to existing products
FOCUS growth in the 2H of 2005. A restructuring programme should deliver after-tax savings of $250-300 M/y by 2008; Henkel is also implementing cost reduction measures [Focus on Surfactants, Feb 2005). Avon expects growth of 10%/y despite a fall in US sales and operating profit. Chemical Market Reporter, 3 Jan 2005 (Website: http://www.chemicalmarketreporter.com)
Detergent manufacturers add new benefits to existing products The laundry detergent sector is incorporating new features to existing brands to entice consumers and boost declining sales. US sales of powder detergent declined more than 10% to $850 M for the year ended 31 Oct 2004, compared with figures from the previous year, according to Information Resources Inc. Liquid laundry detergent sales remained relatively unchanged at $2.4 bn. Total laundry detergent sales in the USA dropped 3.5% to $3.3 bn. Procter & Gamble’s Tide product topped both the liquid and powder categories, having combined sales of approximately $2 bn. P&G, Unilever, Dial Corp and Church and Dwight are still the major US players, leading the market in product sales. Trends indicate the continuing shift by consumers from powder to liquid detergents as liquid detergents come up with new benefits. HAPPI, Household & Personal Products Industry, Jan 2005, 42 (1), 75-84
COMPANY RESULTS P&G beats quarterly earnings expectations, raises outlook for fiscal year 2005 The Procter & Gamble Co announced it sustained strong sales and earnings growth momentum in the Oct-Dec 2004 quarter. Net sales increased 9% to $14.45 bn for 2Q 2004-2005 despite a challenging cost and competitive environment. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 7% for the quarter. Net earnings increased 12% to $2.04 bn 6
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for 2Q 2004-2005, despite higher commodity costs and a challenging competitive environment. Beauty care net sales increased 12% to $5.02 bn for the Oct-Dec 2004 quarter, including a positive foreign exchange impact of 4%, and net earnings increased 24% to $814 M. Fabric and home care net sales increased 11% to $3.78 bn for 2Q 2004-2005, including a foreign exchange benefit of 3%. Net earnings of $566 M were essentially flat. For Jan-Mar 2005 quarter, net sales growth is expected to be in the high-single digits. Net sales for fiscal year 2005 are also expected to grow by high-single digits. Press release from: The Procter & Gamble Co, 1 or 2, Procter & Gamble Plaza, Cincinnati, OH 45201, USA. Tel: +1 513 983 1100. Website: http://www.pg.com (27 Jan 2005)
Novozymes financial statement for 2004 Enzyme producer Novozymes A/S announced net profit up 8% from DKR 726 M in 2003 to DKR 782 M for 2004. Sales rose by 4% to DKR 60.24 bn for 2004 from DKR 58.03 bn in 2003. Sales of technical enzymes rose by 2% compared with 2003. Sales of detergent enzymes were 1% below the figure in 2003. Sales for 4Q 2004 were 5% lower than in 4Q 2003, due in particular to the negative effect of the fall in the USD. Sales of other technical enzymes rose by 5% but were severely hampered by unfavourable exchange rates, particularly for the USD. Other enzyme sales showed healthy growth. R&D costs rose by 3% and continue to represent 13% of turnover. Press release from: Novozymes A/S, Krogshoejvej 36, Bagsvaerd 2880, Denmark. Website: http://www.novozymes.com (31 Jan 2005)
COMPANY NEWS P&G buys Gillette for $57 bn Procter & Gamble is acquiring its US rival Gillette for $57 bn (£30 bn) and, in the process, creating the world’s biggest personal care company. With a projected turnover of about $60 bn/y, the new company will overtake the current number one Unilever (with revenues of about $48 bn/y). P&G currently has turnover of about $51
bn/y. The transaction will be P&G’s biggest ever. The concern will add trademarks such as Mach3, Braun, Oral-B and Duracell to its own brands, including Ariel, Tide, Lenor, Camay, Head & Shoulders, Pantene and Wella. The takeover should be completed in the autumn of 2005 once shareholder and anti-monopoly approvals are obtained. About 6,000 employees will lose their jobs, approximately 4% of the total staff. The company is balancing the high purchasing price with significant savings; costs should be reduced by $14-16 bn/y. P&G took over Clairol (USA) for $4.9 bn in 2001, and in 2003 it acquired Wella (Germany) for $6.3 bn. Some analysts say the P&G/Gillette merger would give the two companies greater leverage with large retail chains, notably Wal-Mart, which accounts for 17% of Procter & Gamble’s sales and 13% of Gillette’s and has a reputation for squeezing suppliers to cut prices. The new look P&G will have 21 brands worth $1 bn/y. It will focus on growing markets. In India, P&G has two subsidiaries, P&G Hygiene and P&G Home Products, with a combined turnover of about Rup 11 bn. Gillette India’s operations could add another Rup 4 bn to P&G. The acquisition helps P&G in its Indian market-share war with FMCG majors like Hindustan Lever. The Independent 29 Jan 2005 (Website: http://www.independent.co.uk), Hospodarske Noviny, 31 Jan 2005, 49 (21), 20 (in Czech) & Business Line, 29 Jan 2005, 12 (28), 1
P&G purchase heaps pressure on Unilever Analysts say P&G’s purchase of Gillette will put pressure on an already embattled Unilever, which issued a profit warning in Sep 2004 and looks set to lose its prized emerging market crown following completion of the P&G deal in mid 2005. Unilever will also face much greater competition for shelf space in the lucrative US market because the enlarged P&G will have far greater clout with retailers such as Wal-Mart. P&G has ratcheted up the pressure on Unilever during the past few years by slashing the price of its detergents in traditional Unilever strongholds such as India. The US group has also spent more money on marketing its products such as Olay lotions and MARCH 2005
Detergent manufacturers add new benefits to existing products The laundry detergent sector is incorporating new features to existing brands to entice consumers and boost declining sales. US sales of powder detergent declined more than 10% to $850 M for the year ended 31 Oct 2004, compared with figures from the previous year, according to Information Resources Inc. Liquid laundry detergent sales remained relatively unchanged at $2.4 bn. Total laundry detergent sales in the USA dropped 3.5% to $3.3 bn. Procter & Gamble’s Tide product topped both the liquid and powder categories, having combined sales of approximately $2 bn. P&G, Unilever, Dial Corp and Church and Dwight are still the major US players, leading the market in product sales. Trends indicate the continuing shift by consumers from powder to liquid detergents as liquid detergents come up with new benefits. HAPPI, Household & Personal Products Industry, Jan 2005, 42 (1), 75-84
COMPANY RESULTS P&G beats quarterly earnings expectations, raises outlook for fiscal year 2005 The Procter & Gamble Co announced it sustained strong sales and earnings growth momentum in the Oct-Dec 2004 quarter. Net sales increased 9% to $14.45 bn for 2Q 2004-2005 despite a challenging cost and competitive environment. Organic sales, which exclude the impacts of acquisitions and divestitures and foreign exchange, increased 7% for the quarter. Net earnings increased 12% to $2.04 bn 6
ON
S U R FA C TA N T S
for 2Q 2004-2005, despite higher commodity costs and a challenging competitive environment. Beauty care net sales increased 12% to $5.02 bn for the Oct-Dec 2004 quarter, including a positive foreign exchange impact of 4%, and net earnings increased 24% to $814 M. Fabric and home care net sales increased 11% to $3.78 bn for 2Q 2004-2005, including a foreign exchange benefit of 3%. Net earnings of $566 M were essentially flat. For Jan-Mar 2005 quarter, net sales growth is expected to be in the high-single digits. Net sales for fiscal year 2005 are also expected to grow by high-single digits. Press release from: The Procter & Gamble Co, 1 or 2, Procter & Gamble Plaza, Cincinnati, OH 45201, USA. Tel: +1 513 983 1100. Website: http://www.pg.com (27 Jan 2005)
Novozymes financial statement for 2004 Enzyme producer Novozymes A/S announced net profit up 8% from DKR 726 M in 2003 to DKR 782 M for 2004. Sales rose by 4% to DKR 60.24 bn for 2004 from DKR 58.03 bn in 2003. Sales of technical enzymes rose by 2% compared with 2003. Sales of detergent enzymes were 1% below the figure in 2003. Sales for 4Q 2004 were 5% lower than in 4Q 2003, due in particular to the negative effect of the fall in the USD. Sales of other technical enzymes rose by 5% but were severely hampered by unfavourable exchange rates, particularly for the USD. Other enzyme sales showed healthy growth. R&D costs rose by 3% and continue to represent 13% of turnover. Press release from: Novozymes A/S, Krogshoejvej 36, Bagsvaerd 2880, Denmark. Website: http://www.novozymes.com (31 Jan 2005)
COMPANY NEWS P&G buys Gillette for $57 bn Procter & Gamble is acquiring its US rival Gillette for $57 bn (£30 bn) and, in the process, creating the world’s biggest personal care company. With a projected turnover of about $60 bn/y, the new company will overtake the current number one Unilever (with revenues of about $48 bn/y). P&G currently has turnover of about $51
bn/y. The transaction will be P&G’s biggest ever. The concern will add trademarks such as Mach3, Braun, Oral-B and Duracell to its own brands, including Ariel, Tide, Lenor, Camay, Head & Shoulders, Pantene and Wella. The takeover should be completed in the autumn of 2005 once shareholder and anti-monopoly approvals are obtained. About 6,000 employees will lose their jobs, approximately 4% of the total staff. The company is balancing the high purchasing price with significant savings; costs should be reduced by $14-16 bn/y. P&G took over Clairol (USA) for $4.9 bn in 2001, and in 2003 it acquired Wella (Germany) for $6.3 bn. Some analysts say the P&G/Gillette merger would give the two companies greater leverage with large retail chains, notably Wal-Mart, which accounts for 17% of Procter & Gamble’s sales and 13% of Gillette’s and has a reputation for squeezing suppliers to cut prices. The new look P&G will have 21 brands worth $1 bn/y. It will focus on growing markets. In India, P&G has two subsidiaries, P&G Hygiene and P&G Home Products, with a combined turnover of about Rup 11 bn. Gillette India’s operations could add another Rup 4 bn to P&G. The acquisition helps P&G in its Indian market-share war with FMCG majors like Hindustan Lever. The Independent 29 Jan 2005 (Website: http://www.independent.co.uk), Hospodarske Noviny, 31 Jan 2005, 49 (21), 20 (in Czech) & Business Line, 29 Jan 2005, 12 (28), 1
P&G purchase heaps pressure on Unilever Analysts say P&G’s purchase of Gillette will put pressure on an already embattled Unilever, which issued a profit warning in Sep 2004 and looks set to lose its prized emerging market crown following completion of the P&G deal in mid 2005. Unilever will also face much greater competition for shelf space in the lucrative US market because the enlarged P&G will have far greater clout with retailers such as Wal-Mart. P&G has ratcheted up the pressure on Unilever during the past few years by slashing the price of its detergents in traditional Unilever strongholds such as India. The US group has also spent more money on marketing its products such as Olay lotions and MARCH 2005