After a tough four years at the helm, McDonald announced his retirement from the world’s largest consumer goods company on May 23rd, capping off a total of 33 years with the company.
He is to be replaced by the man he took over the position of CEO and chairman from in 2009. Lafley led P&G through some of its greatest years, overseeing enormous expansion of the business, particularly after it acquired the Gillette business back in 2005.
Lafley back at the helm to oversee turnaround
Lafley has confirmed that he will again take the helm with the primary aim of overseeing a turnaround plan that aims to see the business make cost savings of $10 billion by the year 2016, as well as focusing on the company’s core business and brands.
" The Board expects A.G. to further improve results, implement the current productivity plan, and facilitate an ongoing succession process,” Jim McNerney, presiding director of P&G’s Board, said.
But despite the fact that Lafley’s reappointment to the position takes effect immediately, there is already speculation over his successor, which has been fuelled by a number of press reports last week.
P&G 'planning to promote four key executives'
According to one source close to the executive board, P&G is planning to promote four key executives in an effort to streamline the upper management structure.
The source of the information about the executive promotions, who wished to remain anonymous, told Bloomberg that the move could give a platform for the most likely successor to Lafley reappointment as CEO and chairman.
The company has been suffering from falling revenues and profits for the past two years now, although there have been signs that cost cutting measures are helping to put the company in a better position following the past two quarterly results.
It said that net sales for the quarter were up 2 percent to $20.6bn, which represented an organic sales increase of 3 percent when taking in the negative impact of currency exchange rates.
Although the trend is up, beauty is still suffering
Net income for the January-to-March quarter rose to $2.57bn, compared with net income of $2.41bn in the corresponding period last year.
This reflected the fact that the company either maintained or grew its share of the market in 50 percent of its sales worldwide, while this figure came in at around two-thirds for its performance in the US market.
However, drilling down the results revealed that the company’s personal care operations were far from being the driving force behind that growth.
In the beauty segment, the company reported that sales volumes were down by 1 percent, while net sales were down by 2 percent and 1 percent in organic terms, in what was described as a period of ‘heavy competitive product and promotional activity’.