Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — 2013 CAGNY Conference
84 slides from Procter & Gamble Company (the)'s conference presentation, Feb 21, 2013
Slide 1: 2013 CAGNY
2013 CAGNY PeG February 21, 2013
Slide 2: Forward Looking Statements
Forward Looking Statements Certain statements in this release or presentation, otherthan purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, andthe assumptions upon which those statements are based, a
Slide 3: Results & Outlook; Growth & Productivity Strategy; Q&A
« Results & Outlook ¢ Growth & Productivity Strategy ° Q&A
Slide 4: Oct–Dec (Q2 FY13) Results: Organic Sales Growth
Oct — Dec 12 (Q2 FY 13) Results Organic Sales Growth 8% | Organic sales growing 2% or more in all reporting segments 5% 4 4% 4 4% 3% 3% 3% 5 2% 2% 5 0% ~ OND 11 JFM 12 AMJ12 JAS 12 OND 12 3%
Slide 5: Oct–Dec (Q2 FY13) Results: Value Share
Oct — Dec 12 (Q2 FY 13) Results % of G 70% 60% 50% 40% 30% 20% 10% 0% Market share data i obal Sales In-Line or Growing Value Share Intervention plans on key businesses are driving improved share results OND 11 JFM 12 AMJ12 JAS 12 OND 12 js value basis, constant currency through Dec 12
Slide 6: Oct–Dec (Q2 FY13) Results: Core EPS Growth
Oct — Dec 12 (Q2 FY 13) Results Core EPS Growth Results driven by top-of range sales growth & strong productivity savings 12% 15.0% 10.0% 5% 5.0% -2% 0% 0% 0.0% Lonpit | JFM 12 AMJ12 JAS 12 OND 12 -5.0% *Histary adjusted for Snacks moving to Discontinued Operations
Slide 7: Oct–Dec (Q2 FY13) Results: Cash
Oct — Dec 12 (Q2 FY 13) Results Cash Free Cash Flow $3.1B Dividends $1.6B $1.4B Share Repurchase Value to Shareholders Ee
Slide 8: FY 2013 Guidance
FY 2013 Guidance FY ‘13 Guidance FY ‘13 Organic Sales Growth +3% to +4% FX -2% All-In Sales Growth +1% to +2% Core EPS $3.94 to $4.04 Core EPS Growth +2% to +5%
Slide 9: Q3 FY 2013 Guidance
Q3 FY 2013 Guidance Q3 FY ‘13 Guidance FY ‘13 Organic Sales Growth +3% to +4% FX Neutral All-In Sales Growth +3% to +4% Core EPS $0.90 to $0.96 Core EPS Growth -4% to +2%
Slide 10: FY'13 Returning Value to Shareholders
Q3 FY 2013 Guidance FY’13 Returning Value to Shareholders Dividends >$6bn Share Repurchase $5 to 6bn Value to Shareholders $11 to $12bn Shareholder Yield* ~5.5% to 6% *Shareh older yield calculated based on market cap value of approximately $210 billion
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Slide 13: Innovation: Unit Dose Segment
Innovation . “One Tide POD outperforms the next 6 Unit Dose Segment competitors...combined!”
Slide 14: Innovation: Unit Dose Segment
Innovation Unit Dose Segment “It Cleans, Lifts Stains, and Brightens: ALL YOU NEED’
Slide 15: Downy
Downy Doon un Un STOPABLES STOPABLES mosh scent booster
Slide 16: Innovation: Air Care
Innovation Air Care “Works anywhere in your home to keep it fresh and odor-free” are
Slide 17: Better Clean, Fresh Scent
BETTER CLEAN’ FRESH SCENT BETTER CLEAN‘ FRESH SCENT. sonal methods,
Slide 18: Innovation: Dish Care
Innovation Dish Care “Even removes hidden grease from your dishwasher parts”
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Slide 20: Innovation: Sleep Aids Category
Innovation Sleep Aids Category “Not for colds, not for pain, JUST FOR SLEEP” _ ZzzQuil - ZzzQ il : _ NIGHTTIME SLEEP-AID NIGHTTIME SLEEP-AID- le IN Forming Ween borne ‘btior' ) Seg tes GFLOZUTTl mon zee ame se rdnigshe, ——_—_————
Slide 21: Illumina Color
ILLUMINA COLOR [65 WeLLA, 40109 YNINAT1I
Slide 22: Innovation: Hair Care
Innovation Hair Care ‘ SECTION (77 PANTENE: EXPERT “For hair that acts up to 10 years younger” fk iv
Slide 23: Innovation: Hair Care
Innovation Hair Care
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Slide 25: Innovation: Cosmetics Portfolio
Innovation Cosmetics Portfolio “High gloss color, no top coat needed” SOVERGII outlast stay brill ASLONG AS AWEEKOF HIGH GLOSS COLOR!
Slide 26: Innovation: Grooming Portfolio
Innovation Grooming Portfolio “The best shave for sensitive skin”
Slide 27: Innovation: Value Creation
Innovation Value Creation
Slide 28: Innovation: Value Creation
ee. cee = AceDery Hh PANTENEI2 EXPERT Innovation Value Creation
Slide 29: Change Innovation Portfolio
Change Innovation Portfolio Number of Change Projects 09/10 10/11 1112 12113 13/14 14115 15/16
Slide 30: Innovation: Geographic Expansions
Innovation Geographic Expansions
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Slide 32: Productivity & Cost Savings: Cost Opportunity by FY'16
Productivity & Cost Savings Cost Opportunity by FY’16 ~$10 billion Cost Reduction ~$6 bn Cost of Goods Sold ~$1 bn Marketing ~$3 bn Non-Manufacturing Overhead
Slide 33: Productivity & Cost Savings: Cost of Goods Sold
Productivity & Cost Savings Cost of Goods Sold Material Manufacturing Transportation Savings Productivity & Warehousing
Slide 34: Expressions
Expressions
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Slide 38: Manufacturing Productivity
Manufacturing Productivity 5% annual net productivity improven “ Enables ~20 new sites in developin ale Y markets with no incremental head Equivalent of 4 plant closures per y Up to $1 billion in savings thru FY 16 6.5% net productivity improvement through December 31st jp
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Slide 40: Manufacturing Productivity: Family Care
Manufacturing Productivity Family Care
Slide 41: Transportation & Warehousing
Transportation & Warehousing Quantum Tunnel ¢ Direct fulfillment of orders from P&G warehouses ¢ Reduces customer costs while increasing replenishment speed ¢« P&G eliminates all T&W costs ¢ Multi-category sites enable further reapplication
Slide 42: Productivity & Cost Savings: Cost of Goods Sold
Productivity & Cost Savings Cost of Goods Sold Material Manufacturing Transportation Savings Productivity & Warehousing FY' 13: $1.2 billion & $1.4 billion stretch
Slide 43: Advertising — Fewer, Bigger Ideas That Travel
Advertising — Fewer, Bigger Ideas That Travel
Slide 44: Productivity & Cost Savings: Investment in Digital
Productivity & Cost Savings Investment in Digital facebook.
Slide 45: Productivity & Cost Savings: Best Job Ad
Productivity & Cost Savings Best Job Ad = P&G Q8e5 WORLDWIDE PARTNER
Slide 46: Tide Super Bowl Ad
Productivity & Cost Savings Tide Super Bowl Ad
Slide 47: Tide Super Bowl Ad
Productivity & Cost Savings Tide Super Bowl Ad #2 on USA today ad meter; nipped at the post by 0.01 - lowest margin possible 150 million Paid Impressions + 1.15 Billion FREE impressions in less than 2 days! First ever organic #1 global trending topic on twitter for Tide (at one point, more then one
Slide 48: Core SG&A Overhead
Core SG&A Overhead Objective ¢ Best-in-class, business-weighted, scale-adjusted Core SG&A % of sales ° 12% to 13% of sales would put P&G 100 to 200 basis points below competitive benchmark
Slide 49: Core SG&A Overhead
Core SG&A Overhead e Plan to reduce 5,700 roles by end of FY’13 e Updated Results — have already reduced 5,850 roles by end-January 2013...reached objective 5 months ahead of schedule ¢ PLUS...additional 2% to 4% annual overhead enrollment reduction from FY’14 to FY‘16
Slide 50: Overhead Savings
Overhead Savings Global Brand Building Organization GBU (Design & Delivery) Global Region Category Business Strategy Units MDO (Operations) Local Market Execution
Slide 51: Overhead Savings
Overhead Savings Global Finance & Accounting * “De-dedicated” Product Supply Finance * Forecast Simplification
Slide 52: Productivity: Organization Transformation
Productivity & Organization Transformation * Organization design-based productivity improvements * Productivity Council of senior executives with cross-section of responsibilities (e.g. GBU, MDO, GBS, Function Heads)
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Slide 54: Developed Markets: Largest and Most Profitable Businesses
Developed Markets 4 @) Largest and Most Profitable Businesses UE Renae! Household Care eau United States 7 6 Other Developed 7 4 China 2 4 Other Developing 4 3 Total 20 20
Slide 55: Developed Markets
Developed Markets % of U.S. Sales In-Line or Growing Value Share 70% > 60% 4 50% 4 40% | 30% 4 20% 4 = a 0% OND 11 JFM 12 AMJ 12 JAS 12 OND 12 US AOS value share thru Dec 12
Slide 56: Developed Markets
Developed Markets Top 20 U.S. Brands In-Line or Growing Value Share 70% > 60% 4 50% 4 40% | 30% 4 20% 4 10% | 0% - P12M P3M P1M US AOS value share thru Dec 12
Slide 57: Developed Markets
Developed Markets Top 40 Interventions Value Share P3M | P6M P12M Country/Category U.S. Laundry U.S. Auto Dish Washing U.S. Blades & Razors U.S. Toothpaste US AOS value share thru Dec 12
Slide 58: Developing Markets
Developing Markets Market Growth Potential +800MM World population growth by 2020 95% World population growth in developing markets +1.4B Middle class incomes by 2020
Slide 59: Developing Markets
Developing Markets Market Growth Potential 150 Years For Britain to Double GDP per Capita 50 Years For U.S. to Double GDP per Capita Less than 20 Years For China & India to Double GDP per Capita
Slide 60: Developing Markets: P&G Asia Sales Growth
Developing Markets P&G Asia Sales Growth Asia Sales Up 10X $15.0B 1991 2001 2012
Slide 61: Developing Markets: P&G Latin America Sales Growth
Developing Markets P&G Latin America Sales Growth Latin America Sales Up 8X $8.3B $2.9B 1991 2001 2012
Slide 62: Developing Markets: P&G CEEMEA Sales Growth
Developing Markets P&G Central & Eastern Europe, Middle East & Africa Sales Growth CEEMEA Sales Up 12X $12.1B 1991 2001 2012
Slide 63: Developing Markets: P&G Sales Progression 2000 to 2012
Developing Markets P&G Sales Progression: 2000 to 2012 12% Sales Growth CAGR Over 12 Years 80% 62% Developed Il Developing 20% FY ‘00 FY'12 % of Total Company Sales
Slide 64: Developing Markets: Geographic Expansion since FY'10
Developing Markets Geographic Expansion since FY ‘10 +100 new Category/Country Entries +$50 billion in new Markets
Slide 65: Developing Markets: Consumers Served by P&G
Developing Markets Consumers Served by P&G Billions of Consumers Growing by ~200 million consumers per Year 3.6B FY 09 Ev 44 3.8B re
Slide 66: Developing Markets: Current Footprint & Sales
Developing Markets Current Footprint & Developing Market Sales Developing P&G Unilever L'Oreal Market Sales $328 $228 $98 [i Developed Bl Developing Colgate $9B
Slide 67: Developing Markets: Distribution Expansion - India
Developing Markets Distribution Expansion - India 6 million retail stores Selling P&G brands 700 Million Indian Consumers Used at least 1 P&G brand in the last year
Slide 68: Developing Markets: Distribution Expansion - China
Developing Markets Distribution Expansion — China Direct Store Coverage More than doubled # of covered stores over 3 years 7 FY 10 EY 44 FY 12 EY12E ™ Stores Covered
Slide 69: Developing Markets: Distribution Expansion - Sub-Saharan Africa
Developing Markets Distribution Expansion — Sub-Saharan Africa Doubling # of covered stores in the next 3 years 2012 2015 = Stores Covered
Slide 70: Developing Markets: Profitable Growth
Developing Markets Profitable Growth Top 10 Developing Market After Tax Profit +35%* Building Profitable Growth through: ¢ Returns on earlier investments * Improving Price/Mix + Localizing Production e Leveraging Scale *Based on mid-February fx rates
Slide 71: Top Developing Markets: Marketing Investments
Top 10 Developing Markets Marketing Investments* 160% All Top 10 markets have increased marketing spending over the past 2 years 140% - | ; | 100% io + u + ll + [| + i + + : + + 1 Market#1 Market#2 Market#3 Market#4 Market#5 Market#6 Market#7 Market#8 Market#9 Market#10 * Constant currency
Slide 72: Improving Mix: Russia Blades & Razors
Improving Mix: Russia Blades & Razors — a) 35 Index 4 25 Index ® Disposables Sales per unit up +42% 125 Index Mach 3 e Sales split % FY 13E 157 Index 160 Index 129 Index Fusion Disposables
Slide 73: Improving Mix: China Baby Care
Improving Mix: China Baby Care FY 10 123 Index 102 Index Value Tier Sales per unit up +9% 112 Index 101 Index Pampers 122 Index Mid Tier FY 13E 156 Index 8% Premium Tier
Slide 74: Improving Mix: Brazil Oral Care
Improving Mix: Brazil Oral Care Sales per unit up +35% FY114 FY13E 800 Index Bodiindex 230 Index 4168 Index pore Clinical Protection | 2a 125 Index 28% 150 Index Gara Base 3D-White ae 400 Index © = — — ee aaa ace Gold | Grats Peay — [ere = L Complete! 123 1234 123 © = % of Volume
Slide 75: Profitable Growth: Improving Mix
Profitable Growth: Improving Mix BRIC Constant $ Price per Unit Growth BYGO) FY 11 FY 12
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Slide 79: Profitable Growth: Leveraging Scale
Profitable Growth: Leveraging Scale Non-Manufacturing Overhead — Developing Markets Sales Per Employee (USD$) FY 10. Ey ee
Slide 80: Profitable Growth: Leveraging Scale
Profitable Growth: Leveraging Scale Non-Manufacturing Overhead - Brazil Sales Per Employee (Reales) FY 09. FY 11 yg RY 13E
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Slide 84: 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 Procter & Gamble's February 21, 2013 CAGNY presentation and associated slides with the reconciliation to the most clo