Can Procter & Gamble’s Revenue Cross $72 Billion By 2021?

by Trefis Team
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Procter & Gamble (NYSE: PG) is one of the largest manufacturers of consumer goods in the world with operations in over 180 countries. P&G manufactures and sells consumer goods across multiple product segments such as beauty, grooming, fabric care, health care, household care, and baby care.

P&G’s Total Revenue has grown from $65.06 billion in 2017 to $67.68 billion in 2019, and we expect this steady growth to continue, driving total revenue to $72.33 by 2021.

Revenue growth of around $4.6 billion over the next two years to be primarily driven by growth in the beauty, baby & family care, and fabric & home care segments.

  • P&G’s revenue has grown from $65.06 billion in 2017 to $67.68 billion in 2019, on the back of an increase in selling prices and steady growth in revenue from emerging markets.
  • After shedding over 100 underperforming brands and reinventing its supply chain in the last 5 years, P&G is finally expected to report steady, consistent revenue growth.
  • We expect this growth to drive revenues to $72.33 billion in 2021, a 3.35% compounded growth over 2 years.

P&G Has Five Primary Operating Segments:-

To know more about P&G’s operating segments, and what products they offer, you can view our interactive dashboard, Procter & Gamble Revenue: How Does P&G Make Money?

(A) Revenue from Beauty products to grow by $1.05 billion over the next 2 years, and make up around 19% of total revenue

  • This segment includes skin care brands such as Olay and SK-II, hair care brands such as Pantene and Head & Shoulders, and deodorants sold under Old Spice and Gillette brands.
  • Revenue from this segment has grown from $11.71 billion in 2017 to $12.86 billion in 2019, and we expect it to touch $13.91 billion by 2021.
  • Olay, Pantene, Head & Shoulders, and Gillette are brands recognized worldwide, and their steady growth in emerging markets has helped drive this segment.

(B) Revenue from Grooming products to make up about 10% of Total revenue in 2021, contributing around $7.15 billion

  • Revenue from this segment is primarily driven by Gillette, that sells shaving razors and blades, gels, foams, and other shaving lotions.
  • It also includes revenue from Braun, the electrical grooming appliances brand.
  • Revenue has grown from $6.51 billion in 2017 to $6.77 billion in 2019.
  • We expect this number to be around $7.15 billion by 2021.

(C) Revenue from the health care segment to make up about 12% of total revenue at $8.7 billion

  • This segment includes OTC drugs like Prilosec and Vicks, and Oral Care products marketed under Crest and Oral-B.
  • This segment has seen steady growth from $7.81 billion in 2017 to $8.12 billion in 2019, on the back of steady demand growth and strong international presence of Vicks and Oral-B.
  • We expect this growth to continue, driving revenue from this segment to $8.7 billion by 2021.

(D) Revenue from the fabric and home care segment to make up about 32% of total revenue by 2021

  • P&G has a leading market share of around 25% of the global laundry care market, with brands like Tide and Ariel.
  • This segment also includes other dish washing and house cleaning products.
  • Revenue from this segment has grown from $20.82 billion in 2017 to $21.66 billion in 2019 and we expect it to touch $23.09 billion by 2021.

(E) Revenue from baby care and family care to be around $19.48 billion, making up almost 27% of total revenue

  • This segment includes revenues from baby diapers and wipes, female hygiene products, and paper towels and toilet tissue.
  • P&G has a leading market share of over 20% in both the global baby diaper market and the female hygiene care market.
  • However, increasing competition from local players in emerging markets has been weighing on revenue, which has remained roughly flat between 2017 and 2019.
  • However, we expect revenue from this segment to grow to around $19.48 billion in 2021.

 

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