Manufacturer Procter & Gamble has managed to increase its net profit by 2 % in 2014's first quarter, even though turnover disappointingly remained level with exchange rates a huge pressure on the results.
Turnover does not grow
P&G has made a 2.61 billion dollar profit (1.89 billion euro) in its first quarter of 2014, a 1.7 % rise compared to the 2.57 billion dollars (1.86 billion euro) it managed the year before. Turnover remained level though, at 20.6 billion dollars (14.9 billion euro). Without exchange rate fluctuations, turnover would have increased 3 %.
Because of the exchange rates, the company decided to revise its goals for fiscal year 2013/2014 back in February as it suffers tremendously when currencies are exchanged into dollars. It now expects a 0 to 2 % turnover increase and a 3 to 5 % profit increase.
P&G is currently in a 5-year restructuring program, which should eliminate costs significantly in order to improve the results. A major focus is to increase market share in emerging markets, as its organic growth there grew by more than 5 %. The developed markets only managed a 1 % organic growth, but these have a larger profit margin compared to the emerging markets. That is because P&G spends on marketing to gain more brand awareness in emerging markets.