Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Proxy Contest (October 2017)
41 slides from Procter & Gamble Company (the)'s proxy contest presentation, Oct 2, 2017
Slide 1: Support P&G's Winning Transformation
Support P&G’s Winning Transformation October 2017
Slide 2: Forward-Looking Statements
Forward-Looking Statements Certain statements in this release or presentation, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based,
Slide 3: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It The Company has filed a definitive proxy statement on Schedule 14A and form of associated BLUE proxy card with the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies for its 2017 Annual Meeting of Shareholde
Slide 4: Strong Share Price Performance Coupled with Consecutive Years of Dividends
Evolving and Winning over 180 years Strong Share Price Performance Coupled with 127 Consecutive Years of Dividends and 61 Consecutive Years of Dividend Increases
Slide 5: A Profoundly Different Company
Roles A Profoundly Different Company Portfolio Strengthening Productivity $10Bn $10Bn + Supply Chain Transformation Organization 4YR Operating Margin +270 bps | Profit per Employee +45% -32% Up to Fem Care Baby Family Fabric Home Hair Skin & PC Grooming Oral PHC Daily use categories where products s
Slide 6: P&G Has a Streamlined and Strengthened Portfolio
P&G Has a Streamlined and Strengthened Portfolio In 10 Categories 65 Brands 10 Categories 170 Brands 16 Categories Daily Use Categories Where Products Solve Problems and Performance Drives Purchase Categories that Leverage P&G’s Core Strengths: Consumer Understanding, Branding, Product & Package Inn
Slide 7: P&G Is Driving Significant Productivity Improvement
P&G Is Driving Significant Productivity Improvement $10Bn $10Bn + FY ’12 – FY ‘16 FY ’17 – FY ‘21 Roles -32% | Profit per Employee +45% We delivered our first $10 billion productivity program, which ended in fiscal 2016, and have doubled-down on another $10 billion, starting last fiscal year. We are
Slide 8: Old Organizational Structure – The Thicket
Old Organizational Structure – “The Thicket” 16 Business Units x 6 Regions 16 Business Units 16 Business Units x 6 Regions x Functions “The Thicket” 16 Global Business Units… …6 Market Development Organizations with staffing and responsibilities that overlapped the GBUs… …and heavily staffed functio
Slide 9: P&G's Organization Is Simpler, Faster, Accountable
NEW Design “End-to-End” 10 Categories “Freedom in a Framework” Markets There is now one organizing principle for P&G – the product category P&G’s Organization Is Simpler, Faster, Accountable 70% of Sales 30% of Sales Product categories own responsibility for innovation, manufacturing and marketing C
Slide 10: A Strong Year of Results, Meeting or Exceeding All Fiscal 2017 Objectives
P&G Delivered A Strong Year of Results, Meeting or Exceeding All Fiscal 2017 Objectives Going-in Targets FY’17 Organic Sales ~ 2% +2% Core EPS mid-single digits +7% Capital Return to Shareholders ($Bn) 22 Adjusted Free Cash Flow Productivity 90%+ 94% Q4’17 +2% +8% 125% 2.5 ~22 (1) (1) P&G guided $7B
Slide 11: Organic Sales Growth Accelerating in Slowing Market
P&G Organic Sales Growth Accelerating in Slowing Market Market FY 2018 est. ~2.5% FY 2017 +3% FY 2016 +4% P&G vs. Market = -1 pt. -3 pts. * Mid-point of FY 2018 organic sales guidance range of +2% to +3%. P&G ~2.5%* +2% +1%
Slide 12: P&G is Making Progress Across Top Markets and Brands
P&G is Making Progress Across Top Markets and Brands
Slide 13: P&G Is On The Right Track: Total Shareholder Return Comparison
P&G Is On The Right Track Total Shareholder Return Comparison November 1, 2015 to September 6, 2017 (1) FY 2017 Results – A Strong Year Source: Bloomberg as of September 6, 2017. (1) The peers selected by Trian in its September 6, 2017 White Paper are as follows: Beiersdorf, Church & Dwight, Clorox,
Slide 14: Growth Objectives to Deliver Leadership Levels of Total Shareholder Return
P&G Growth Objectives are to Deliver Leadership Levels of Total Shareholder Return Market Growth Rate ~2.5% 3% to 4% Organic Sales Growth 2% to 3% ~50 bps Above Market Implied Market Share Growth ~In-line with Market Value Share Growth Core EPS Growth 5% to 7% Mid-to-High Single Digits FY ‘18 Initia
Slide 15: Trian's Points – Nothing New or Helpful
Trian’s 8 Points – Nothing New or Helpful "Initiatives" offered confirm Trian has an outdated and misinformed view of P&G Trian's “holding company" concept is its only idea, and it is a bad idea When Trian has offered specific criticisms, they are demonstrably wrong P&G has the right plan, structure
Slide 16: P&G is Now Organized in a way that Promotes Accountability
P&G is Now Organized in a way that Promotes Accountability “End-to-End” 10 Categories “Freedom in a Framework” Markets 70% of Sales 30% of Sales P&G’s Organization is Simpler, Faster, Accountable
Slide 17: P&G's Productivity Plan is Delivering Results
FY’13 FY’17 Core Gross Margin 48.8% 50.8% Versus 2012/13 Constant Currency +2.0% +4.5% Core Op. Margin 19.4% 22.1% Versus 2012/13 Constant Currency +2.7% +6.1% P&G’s Productivity Plan is Delivering Results Profit per Employee +45% | Constant Currency Core EPS Growth +11% P5YR Avg.
Slide 18: Industry-Leading Margins and Best-in-Class Interest and Tax Rates
P&G Earns Industry-Leading Margins and Has Best-in-Class Interest Rates and Tax Rates Interest Rates Among the Most Favorable Tax Rate Among Industry’s Lowest After-Tax Profit Margin 2nd Highest in Peer Group Core Operating Margin 3rd Highest in Peer Group
Slide 19: P&G has been an innovation leader throughout its history
P&G has been an innovation leader throughout its history P&G brands are 5 of the Top 10 and 7 of the Top 25 innovations in the 2016 IRI New Product Pacesetters™ Report. Since the first IRI New Product Pacesetters™ Report in 1995, P&G has had more than 170 products make the top 25 list in non-food ca
Slide 20: P&G Innovation Drives Market Leadership
#1 40% #1 28% #1 36% #1 50% #1 64% P&G Innovation Drives Market Leadership P&G Brand U.S. Market Share(1) Rank P&G Brand U.S. Market Share(1) Rank #1 #1 #1 #1 54% 44% 49% 47% (1) U.S. market share as of July 2017. #1 34% #1 66% #1 41% P&G Share vs. #2 Competitor 2.0x 1.0x 2.5x 3.0x 3.0x 5.5x 3.0x 2.
Slide 21: P&G Develops and Grows Brands with the Consumer at the Center
P&G Develops and Grows Brands with the Consumer at the Center Brand size is not a purchase criteria for consumers In our categories, consumers seek products that solve problems and where performance drives purchase Superior performing brands drive overall category growth
Slide 22: New Brands and Product Forms Are Leading Category Growth
Women Using Right Product Pre-Always Discreet Post-Always Discreet 1 in 9 1 in 7 Global market is growing 15% and is ~25% of diapers. P&G is global leader with 28% share, up 5 pts. vs. year ago. Pampers Pants Tide PurClean Always Discreet Downy Scent Beads Driving category growth acceleration of 50%
Slide 23: Leading Brands Are Growing Fastest Driven by Innovation
P&G’s Leading Brands are Growing Fastest Driven by Superior Performing Innovation FY’17 Household Penetration 16% in 2016 23% Old Spice has delivered sales growth over 6% for each of the past 5 years led by innovation including the Hardest Working Collection. Old Spice Hard Working Collection Tide P
Slide 24: P&G is an Active Manager of the Portfolio
P&G is an Active Manager of the Portfolio Each Category President is an active manager of their category portfolio. Serial M&A is not a strategy. M&A can be a supplement to organic growth. We actively assess opportunities across our 10 categories.
Slide 25: P&G is Winning in Digital
P&G has the largest e-commerce sales in our industry with Leadership Brands among Millennials ~$3Bn ~30% growth BRAND EQUITY SCORES among Millennials BRANDS with Millennials #1 #1 Larger than Top 2 Peer Competitors Combined P&G is Winning in Digital
Slide 26: P&G is Committed to Field the Best Team
P&G is Committed to Field the Best Team 2017 200 2015 50 Quadrupled external, experienced management hiring x 4 = “Going forward, we will selectively hire from the outside to add the skills and experiences needed to win and field the best team possible.” – David Taylor, P&G Analyst Day, November 18,
Slide 27: P&G's Corporate Governance is Best in Class
Declassified Board with all Directors annually elected Shareholders have right to call a special meeting Shareholders have right to act via written consent No poison pill Specified retirement age (72) and term limit (18 years) for Directors No supermajority voting provisions Receptive and responsive
Slide 28: ISS Recognizes Transformation-Driven Improvement
ISS Recognizes Transformation-Driven Improvement Board Mandated, Management Designed & Executed “Current management has taken appropriate steps to optimize the company to a core portfolio which it is able to profitably manage.” Portfolio Transformation “Management has begun to reduce organizational
Slide 29: ISS Recognizes Transformation-Driven Improvement
“…initiatives undertaken by CEO Taylor appear to have reversed a prolonged period of underperformance and are beginning to drive positive returns to shareholders.” Transformation is Driving TSR Improvement “It also seems clear that many of Taylor’s initiatives are beginning to bear fruit, even again
Slide 30: P&G's TSR Time Frame Is the Right Comparison
P&G’s TSR Time Frame Is the Right Comparison Nelson Peltz claimed – in prior campaigns (DuPont and Pepsi) – the right period to measure performance is that of the current CEO and management team Current P&G leadership team was put in place 2 years ago Transformation plan was fully underway 2 years a
Slide 31: Even ISS Highlights the Potential Risks of Nelson Peltz
“Though the dissident has indicated that it is ‘not advocating for the break-up of the company,’ the word ‘ever’ is conspicuously absent from that statement.” “Shareholders must therefore assess whether Peltz is essentially a wolf in sheep’s clothing, as the board suggests, based on their view of th
Slide 32: Nelson Peltz is the Wrong Person at the Wrong Company at the Wrong Time
Nelson Peltz is the Wrong Person at the Wrong Company at the Wrong Time “…the optimal time for a typical activist intervention was perhaps a few years ago.” - ISS Proxy Analysis, September 29, 2017 SUPPORT THE CURRENT BOARD AND MANAGEMENT EXECUTING THE BIGGEST TRANSFORMATION IN P&G’S 180 YEAR HISTOR
Slide 33: Vote for the Future of Procter & Gamble
Vote for the Future of Procter & Gamble We are energized by our transformation journey, and excited about our future. We are on the road to meeting current and future consumer and customer needs with products that exceed their expectations. P&G has reinvented itself many times in the last 180 years
Slide 34: Vote FOR ALL of P&G's Highly Qualified Board of Directors
Vote FOR ALL of P&G’s Highly Qualified Board of Directors Our Board is highly diverse, highly qualified, highly engaged, with the right mix of skills and experiences that are needed to oversee the Company’s continuing transformation Frank Blake Angela Braly Amy Chang Ken Chenault Scott Cook Terry Lu
Slide 35: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures In accordance with the SEC's Regulation G, the following provides definitions of the non-GAAP measures used in the attached presentation and the reconciliation to the most closely related GAAP measure. We believe that thes
Slide 36: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Organic sales growth: Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons. Managements believes this measure p
Slide 37: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Organic sales growth:
Slide 38: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 39: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 40: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 41: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures