Is Home Care Segment Revenue Driving P&G’s Total Revenue Growth?

by Trefis Team
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Procter & Gamble
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Procter & Gamble’s (NYSE: PG) revenue comes from mainly five segments: Beauty, Grooming, Baby Care & Family Care, Fabric Care & Home Care, and Health Care. Here, Trefis analysis shows how important the Home Care segment is to P&G. For detailed analysis please check our interactive dashboard – How important is the Home care segment to P&G? In addition, here is more Consumer Staples data. 

P&G recently released its full year results where revenue stood at around $67.7 billion, up 1% y-o-y, while earnings were reported at $1.45, down by 61% primarily due to the one-time, non-cash accounting adjustments to the carrying values of the Gillette Shave Care business of $8.3 billion.

How has P&G’s Revenue moved in the past and what is its forecast?

  • Total Revenue has seen a steady but consistent increase over the last few years. Revenue increased from $65.1 billion in 2017 to $67.7 billion in 2019. Trefis estimates revenue to reach $69.4 billion in 2020.
  • Beauty segment has seen a steady revenue growth from $11.7 billion in 2017 to $12.9 billion in 2019. Trefis estimates revenue to be around $13.4 billion in 2020.
  • Grooming segment has seen a steady revenue growth from $6.5 billion in 2017 to $6.8 billion in 2019. Trefis estimates revenue to be around $6.8 billion in 2020.
  • Baby Care and Family Care segment is the second highest contributor to Total Revenue and has seen a steady revenue growth from $18.2 billion in 2017 to $18.3 billion in 2019. Trefis estimates revenue to be around $18.5 billion in 2020.
  • Fabric care and Home care segment contributed the highest revenue in 2019. It increased from $20.8 billion in 2017 to $21.7 billion in 2018. Trefis estimates revenue to reach $22.2 billion in 2020.
  • Health Care segment has seen a steady revenue growth from $7.8 billion in 2017 to $8.1 billion in 2019. Trefis estimates revenue to be around $8.4 billion in 2020.

 

How has P&G’s Home Care segment fared with respect to its peers?

  • P&G has the highest revenue from the Home Care segment when compared to Unilever and Colgate-Palmolive.
  • P&G’s Fabric and Home care segment revenue grew from $20.9 billion in 2016 to $21.4 billion in 2018. Trefis estimates the revenue to grow to $22 billion in 2019.
  • Colgate Oral, Personal & Home Care segment revenue grew from $12.9 billion in 2016 to $13.2 billion in 2018. Trefis estimates the revenue to grow to $13.3 billion in 2019.
  • Unilever’s Home Care segment revenue grew from $11.1 billion in 2016 to $12 billion in 2018. Trefis estimates the revenue to grow to $12.1 billion in 2019.

Note: For this section we have taken the revenue numbers as per calendar years of 2016 to 2019E as P&G year ends in June while Colgate and Unilever follow calendar year. Thus for the sake of comparison in this section the P&G revenue numbers are also as per calendar years. In the rest of the dashboard the P&G numbers are as per year ended in June.

 

What is the trend and relative contribution of Home Care Segment to Total Revenue and Total EBITDA for P&G?

  • Fabric and Home care segment revenue contributed the highest revenue in 2019 (ended June 2019) and has been contributing the highest in the past years, too. Contribution to Total Revenue has remained stable at 32% from 2017 to 2019. Trefis estimates it will increase slightly to 32.1% in 2020.
  • Fabric and Home care segment EBITDA is also the highest contribution to Total EBITDA narrowly beating Baby Care & Family Care segment in the metric. Contribution to Total EBITDA has remained stable at around 28.1-28.2% from 2017 to 2019. Trefis estimates it will increase slightly to 28.5% in 2020.

 

Thus, as discussed above, Fabric and Home Care segment is the highest contributor to Total Revenue and Total EBITDA of the company which makes it a very important segment to P&G’s growth.

 

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