P&G sees emerging markets, Teva deal to fuel sales

AP News
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Posted: Sep 08, 2011 10:44 AM
P&G sees emerging markets, Teva deal to fuel sales

Procter & Gamble Co. expects that offering more products in big emerging markets will help offset sluggish sales in the United States and other developed countries.

CEO Bob McDonald told investors Thursday that the maker of Pampers diapers, Gillette shavers and Pantene shampoo has bolstered sales in Brazil, Russia, India and China by more than doubling the product categories _ from an average of 8 in each country to 20 _ in which it competes over the last 18 months.

The category expansions "have driven strong historical top-line growth even higher," McDonald said at the Barclays Capital conference in Boston.

P&G forecasts that its $82.6 billion in annual sales will rise by 5 percent to 9 percent in the coming year, with double-digit emerging market growth mitigating continued slow growth in the U.S., Europe and Japan. Recent overseas sales launches have included Downy fabric softener into Indonesia and Brazil, and global expansion of Crest and Oral-B teeth care products.

McDonald sees huge potential for expanding P&G health care product sales from a partnership with Israel-based drug maker Teva Pharmaceutical Industries Ltd., expected to become final by year's end. The combination will expand the global reach of brands such as Vicks cough medicine and Pepto-Bismol stomach relief, helping P&G build its 6 percent market share in the business.

"We think this combination of capabilities is unmatched ... and may be unmatchable," he said.

He also sees sales help coming from P&G's new international Olympics sponsorship. The "Thank you, mom" U.S. marketing campaign that P&G credits with adding $100 million in North America sales during the 2010 Vancouver games will be expanded globally for the 2012 London Summer Games.

P&G also expects to increase profits by continuing to cut its costs, becoming more efficient with technology and employee productivity, and by rolling out more new products from an innovation pipeline McDonald says gives P&G "great confidence."

P&G shares rose 32 cents to $63.04 in morning trading. They have traded from $57.56 to $67.72 in the past year.

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