42 slides from Procter & Gamble Company (the)'s earnings presentation, Aug 3, 2012
Slide 1: Procter & Gamble Earnings Release: Q4 FY 12
Procter & Gamble Earnings Release: Q4 FY 12 August 3, 2012
Slide 2: April-June 2012 (Q4 FY 12) Business Results
April-June 2012 (Q4 FY 12) Business Results
Slide 3: Organic Sales Growth
Apr – Jun 12 (Q4 FY 12) Results O Organic i Sales S l Growth G th 6% +5% O Organic i sales l up iin 4 off 5 reporting ti segments t 5% +4% +4% 4% +3% +3% 3% 2% 1% 0% AMJ 11 JAS 11 OND 11 JFM 12 AMJ 12
Slide 4: % of Sales In-Line or Growing Value Share
Apr – Jun 12 (Q4 FY 12) Results % off S Sales l In-Line I Li or Growing G i Value V l Share Sh 70% Intervention plans on key businesses drove 60% improved share results in June 2012 50% 40% 30% 20% 10% 0% AMJ 11 JAS 11 OND 11 JFM 12 AMJ 12 June 12 Market share data is value basis, constant currency.
Slide 5: Pricing Trend
Apr – Jun 12 (Q4 FY 12) Results Pricing Trend 6 4th consecutive quarter with positive pricing in all business segments +5% 5 +4% +4% +4% 4 +3% 3 2 1 0 AMJ 11 JAS 11 OND 11 JFM 12 AMJ 12
Slide 6: Core EPS
Apr – Jun 12 (Q4 FY 12) Results C Core EPS 20% +19% 15% 10% 5% +1% - 2% 0% 0% 0% AMJ 11 JAS 11 OND 11 JFM 12 AMJ 12 -5% * History adjusted for Snacks moving to Discontinued Operations.
Slide 7: Core Operating Profit Growth
Apr – Jun 12 (Q4 FY 12) Results C Core O Operating Profit f G Growth 15% Improved core operating profit driven by 280 bps +11% of productivity improvements and cost savings 10% +4% 5% +2% 2% -4% -4% 0% AMJ 11 JAS 11 OND 11 JFM 12 AMJ 12 -5% -10% * History adjusted for Snacks moving to Discontinued O
Slide 8: Fiscal Year Results: Non-Manufacturing Enrollment
Fiscal Year 12 Results N Non-Manufacturing M f i Enrollment E ll Non-Mfg Overhead Total Company Starting June 30, 2011 57,300 Net Role Changes (+Hiring-Attrition-Separations) (2,000) M&A Impacts (300) Total Company Ending June 30, 2012 55,000 July 1, 2012 Separations (1,000) Net Role Changes as of J
Slide 9: Business Segment Results
Business Segment Results
Slide 10: Beauty Care & Grooming
Apr – Jun 12 (Q4 FY 12) Results B Beauty C Care & G Grooming i Beauty Care Segment Grooming Segment 1% -1% 1% 0% 0% Organic Sales Organic Volume Organic Organic Sales Volume • +4% Pricing, -3% Mix • +1% Pricing, -1% Mix • Volume: Mid-singles Developed, • Volume: Flat Developed, Low-singles Devel
Slide 11: Beauty Care & Grooming Organic Volume Growth by Category
Apr – Jun 12 (Q4 FY 12) Results B Beauty C Care & G Grooming i O Organic i Volume V l Growth G th IYA By Category Global Developed Developing Hair Care ~= = - ++ Skin Care, Personal Care & Cosmetics - - - Salon Professional - - - Prestige ++ ~= ++ Bl d & R Blades Razors ~= ~= + Braun ++ ++ - • ++ re
Slide 12: Beauty Care Highlights
Apr – Jun 12 (Q4 FY 12) Results B Beauty C Care Hi Highlights hli h • Global Head & Shoulders shipments were up high single digits and the brand delivered the 11th consecutive year of double-digit sales growth. • Asia Hair Care volume grew high-single digits. India shipments increased over 30% and v
Slide 13: Grooming Highlights
Apr – Jun 12 (Q4 FY 12) Results G Grooming i Highlights Hi hli h • Global Blades & Razors volume increased low-single digits and value share was about flat. • Fusion grew global value share for the 22nd straight quarter of share growth since launch. • Central & Eastern Europe, Middle East & Africa b
Slide 14: Health Care Segment
Apr – Jun (Q4 FY 12) Results H l h Care Health C Segment S 3% 0% Organic Organic Sales Volume • +4% Pricing, -1% Mix • Volume: Low-singles Developed, Mid-singles Developing • P&G global value market share declined 0 0.2 2
Slide 15: Health Care Organic Volume Growth by Category
Apr – Jun 12 (Q4 FY 12) Results H l h Care Health C Organic Volume Growth IYA By y Category g y Global Developed Developing Oral Care - - ~= Feminine Care + - ++ Personal Health Care - - ~= • ++ represents growth above 2%, + represents growth of 2%, ~= represents growth of 1% to decline of 1%; - rep
Slide 16: Health Care Highlights
Apr – Jun 12 (Q4 FY 12) Results H l h Care Health C Highlights Hi hli h • Latin America Oral Care shipments were up over 25% driven by the Oral B toothpaste expansion i across th the region. i • Western Europe Oral Care volume grew mid-single digits and value share grew nearly 1 point behind the Ora
Slide 17: Health Care Highlights (continued)
Apr – Jun 12 (Q4 FY 12) Results H l h Care Health C Highlights Hi hli h (continued) • Central & Eastern Europe, Middle East & Africa Feminine Care shipments grew high single digits and share was up over 1 point. • Latin America Feminine Care volume increased double-digits and share was up nearly 1 p
Slide 18: Household Care
Apr – Jun 12 (Q4 FY 12) Results H Household h ld Care C Fabric & Home Care Segment g Baby & Family Segment 3% 5% 1% -1% 1% Organic Organic Organic Organic Sales Volume Sales Volume • +5% Pricing, -1% Mix • +4% Pricing, Flat Mix • Volume: Mid-singles Developed, • Volume: Low-singles Developed,
Slide 19: Household Care Organic Volume Growth by Category
Apr – Jun 12 (Q4 FY 12) Results H Household h ld Care C Organic g Volume Growth IYA By Category Global Developed Developing Fabric Care - - + Home Care ++ ~= ++ Batteries - - ~= P&G Professional ++ + ++ Baby Care ++ + ++ Family Care - - - Pet Care - - ++ • ++ represents growth above 2%, + represents
Slide 20: Household Care Highlights
Apr – Jun 12 (Q4 FY 12) Results H Household h ld C Care Hi Highlights hli ht • North America Fabric Care volume declined mid-single digits as strong Tide PODS and liquid laundry shipments were off off-set set by declines in powder laundry due to price gaps versus competition. • U.S. Fabric Care valu
Slide 21: Household Care Highlights (continued)
Apr – Jun 12 (Q4 FY 12) Results H Household h ld C Care Hi Highlights hli ht (continued) • North America Batteries volume declined mid-single digits due to distribution losses and price gaps versus competition. • North America Pet Care volume declined double-digits due to timing of promotional activ
Slide 22: FY 2013 & Quarterly Guidance
FY 2013 & Quarterly Guidance
Slide 23: FY 2013 Guidance: Organic Sales Growth
FY 2013 Guidance O Organic i Sales S l Growth G h 6% 5% 4% 2 to 4% 4% 3% 3% 3% 2% 1% 0% FY 10 FY 11 FY 12 FY 13E
Slide 24: FY 2013 Guidance: Core EPS Growth
FY 2013 Guidance C Core EPS SGGrowth 10% $3.80 $3 80 to $4.00 $4 00 guidance - maintaining preliminary outlook shared in June 8% 7% 6% 5% -1 to 4% 4% 2% -1% 0% FY 10 FY 11 FY 12 FY 13E -2%
Slide 25: FY 2013 Core EPS Guidance versus Preliminary Outlook
FY 2013 Core EPS Guidance versus Preliminary P li i Outlook* O tl k* Fiscal 2012, Q1-Q3 Results $3.03 Fiscal 2012, Q4 Guidance Mid-Point (range = $0.75 to $0.79) $0.77 Fiscal 2012 Core EPS Guidance Mid-Point $3.80 Preliminary Fiscal 2013 Core EPS Growth, provided June 20, 2012 0% to 5% Preliminary F
Slide 26: FY 2013 Guidance: Core Operating Profit Growth
FY 2013 Guidance C Core O Operating Profit f G Growth 10% 4% -2% 5% to 3% 2% -4% -4% 0% JAS 11 OND 11 JFM 12 AMJ 12 FY 13E -5% * History adjusted for Snacks moving to Discontinued Operations.
Slide 27: FY 2013 Guidance versus FY 2012 Results
FY 2013 Guidance versus FY 2012 R Results lt Core EPS Growth Organic sales growth slightly below market level (global market 2% to 4% growth assumed at 4-5%) p modestly Commodities up y ((at mid-July y spot p rates)) -1% to Flat Cost savings net of reinvestments 4% to 6% Foreign Exchange (at mid-Jul
Slide 28: Macro Assumptions Included in Guidance
FY 2013 Guidance Macro Assumptions Included in Guidance G Global Market Growth 4% to 5% Commodity Prices* Slight EPS headwind Foreign Exchange Exchange* -4% Top-line -3% Bottom-line * Based on mid-July spot rates
Slide 29: Key Risks Not Included in Guidance
FY 2013 Guidance Key Risks Not Included in Guidance G Foreign g Exchange g items: • Significant strengthening of U.S. Dollar • Break in Swiss Franc peg exchange rate • Venezuela devaluation post upcoming election Market Growth Deceleration from: • Deepening European financial crisis • Uncertainty fr
Slide 30: Cash Generation and Usage Assumptions
FY 2013 Guidance C Cash G Generation and Usage Assumptions Free Cash Flow Productivity: ~ 90% Capital Spending, % Sales: ~5.5% Dividends: $6bn + Share Repurchase: $4bn
Slide 31: Returning Value to Shareholders
FY 2013 Guidance Returning Value to Shareholders S FY ‘12 FY ‘13 E Dividends $6B $6B+ Share Repurchase $4B $4B Value to Shareholders $10B $10B+ Shareholder Yield, 5.5% 5.5%+ % of market cap Dividend increase and $4 billion repurchase assumed in FY 2013 Shareholder Yield is calculated based on market
Slide 32: Q1 FY 13 Guidance: Organic Sales Growth
Q1 FY 13 Guidance O Organic i Sales S l Growth G h 6% 3% 3% to to 4% 4% 4% 4% 4% 3% 3% 0% to 2% 2% 0% JAS 11 OND 11 JFM 12 AMJ 12 JAS 13E OND 13E 2Half 13E
Slide 33: Q1 FY 13 Guidance: Core EPS Growth
Q1 FY 13 Guidance C Core EPS SGGrowth 20% • Q1 ’13 Core EPS g growth includes -3% impact from foreign exchange 15% • Q2 and 2H ‘13 estimates improve as cost savings accumulate 1% 1% 10% to to 6% 6% 5% 4% -4% 1% -2% 0% 0% to -10% 0% JAS 11 OND 11 JFM 12 AMJ 12 JAS 13E OND 13E 2Half 13E -5% -10% * His
Slide 34: Path to Target EPS Growth Range
Path to Target EPS Growth Range Hi h Si l Digits High-Single Di it to t Low-Double L D bl Digits Di it EPS Growth Organic sales growth at market level 4% (fully loaded, i.e. no leverage) Cost savings at full run rate and leverage; 6% to o 11% % gett range off half-to-all h lf t ll off projected j t
Slide 35: Slide 35
Slide 36: 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 37: Reg G Reconciliation of Non-GAAP measures
The Procter & Gamble Company: Reg 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 earnings call and slides with the reconciliation to the most closely related GAAP measure. The measures provided
Slide 38: Net Sales Growth and Organic Sales Growth
Foreign Acquisition/ Organic Net Sales Exchange Divestiture Sales Growth Impact Impact* Growth AMJ 12 Developing 3% 7% 0% 10% Brazil -1% 18% 0% 17% Russia 9% 9% 0% 18% India 2% 19% 0% 21% China 11% -2% 0% 9% Net Foreign Acquisition/ Organic Sales Exchange Divestiture Sales AMJ 2012 Growth Impact Imp
Slide 39: Core EPS
2. Core EPS: This is a measure of the Company’s diluted net earnings per share from continuing operations excluding certain items that are not judged to be part of the Company’s sustainable results or trends. This includes current year impairment charges for goodwill and indefinite lived intangible
Slide 40: Diluted Net Earnings Per Share to Core EPS
JAS 12 (est.) JAS 11 Diluted Net Earnings Per Share-Continuing Operations $0.83 to $0.91 $1.01 Incremental restructuring $0.08 to $0.06 - Core EPS $0.91 to $0.97 $1.01 Core EPS Growth -10% to -4% JFM 12 JFM 11 Diluted Net Earnings Per Share $0.82 $0.96 Snacks Results of Operations – Discontinued ($0
Slide 41: Core Operating Profit Margin, Gross Margin and SG&A
3. Core Operating Profit Margin: This is a measure of the Company’s operating margin adjusted for current year charges related to incremental restructuring charges due to increased focus on productivity and cost savings: AMJ 12 AMJ 11 Operating Profit Margin 15.2% 15.5% Incremental restructuring 1.2
Slide 42: Core Effective Tax Rate and Free Cash Flow
7. Core Effective Tax Rate: This is a measure of the Company’s effective tax rate adjusted for current year impairment charges for goodwill and indefinite lived intangible assets and charges in current and prior year related to the European legal matters. The table below provides a reconciliation of