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The Worst Job in America?

P&G CEO David Taylor may be in for a rough 2016.


By: Tom Branna

The Worst Job in America?

Turns out AG Lafley had the easy part. The recently-departed CEO of Procter & Gamble cut costs, slashed brands and trimmed the workforce of the world's largest FMCG company. All that means is that he left the dirty work—finding growth—to new CEO David Taylor, writes Reuters' Kevin Allison, who insists the recently-promoted Taylor may just have the worst job in the USA heading into the new year. By the time Lafley left, he had turned P&G from an $80 billion company into one that is expected to post 2016 sales of about $66 billion. P&G expects sales to rise in the low-single digits this year (like for like), but Q1 sales fell 1% through September.

And it's not just worn-out consumers who are contributing to the company's woes. Allison noted that P&G has lagged key competitors in recent years. P&G shares have returned just 7%, including reinvested dividends, since mid-2013, when activist hedge fund manager Bill Ackman helped engineer Lafley’s return from retirement. That’s well short of what peers such as Clorox have generated over the same period and the 34% from the S&P 500 Index.

If finding growth in a slow-growth world isn't bad enough, Taylor may hear new calls for slicing up what's left of his Cincinnati pie. According to Bernstein analysts, breaking up P&G would help for various reasons. The shares fetch just under 20 times forecast earnings, a discount to the multiple of 25 where rivals trade.

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