Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Barclays Back to School Consumer Conference 2012
74 slides from Procter & Gamble Company (the)'s conference presentation, Sep 6, 2012
Slide 1: Barclays Back to School Consumer Conference
Barclays Back to School Consumer Conference September 6, 2012
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: Regulations FD and G Disclosures
Regulations FD and G Disclosures For a full reconciliation, please visit: www.pg.com/investors
Slide 4: Barclays Back to School Consumer Conference
Barclays Back to School Consumer Conference September 6, 2012
Slide 5: Jon Moeller, Chief Financial Officer
Jon Moeller Chief Financial Officer
Slide 6: Agenda
Agenda • Recent Results & Outlook • Growth & Productivity Strategy • Q&A
Slide 7: Past Year Results FY'10 - FY'12
Past 3 Year Results FY’10 - FY’12 • ~4% average Organic Sales growth • ~4% average Core EPS growth • Solid free cash flow productivity • ~9% average Dividend increase • Strong levels of cash returned to shareholders
Slide 8: Recent Results: Organic Sales Growth
Recent Results Organic Sales Growth Past 3 year CAGR = 4% 11 consecutive quarters in range of 3% to 5%
Slide 9: Recent Results: Pricing Trend
+5% Recent Results Pricing Trend +4% +1% FY’13 - 8 th consecutive year of positive pricing contribution to sales growth $3.5 billion
Slide 10: Recent Results: Pricing vs. Competition
Recent Results Pricing vs. Competition in April - June Quarter Apr-June Jan-Mar P&G 4 5 Unilever 3.5 4.7 Colgate 3.5 3.5 Kimberly Clark 2 3 Clorox 5 4
Slide 11: Organic Sales Growth led by Developing Markets
Recent Results Organic Sales Growth led by Developing Markets Developing Developed +11%
Slide 12: Sales Growth - BRIC Markets
Recent Results Sales Growth - BRIC Markets 14% CAGR for the Past 3 Years 2012: China +16%; Brazil + 15%; India +16% & Russia +11%
Slide 13: P&G Asia Sales Growth
1991 2001 2012 $15.0B ~$1.5B $4.0B Recent Results P&G Asia Sales Growth Asia Sales up 10X
Slide 14: P&G Latin America Sales Growth
1991 2001 2012 $8.3B $1.0B $2.9B Recent Results P&G Latin America Sales Growth Latin America Sales up 8X
Slide 15: P&G CEEMEA Sales Growth
1991 2001 2012 $12.1B <$1.0B ~$2.5B Recent Results P&G Central & Eastern Europe, Middle East & Africa Sales Growth CEEMEA Sales up 12X
Slide 16: % of Sales Holding or Growing Value Share
Market share data is value basis, constant currency. Recent Results % of Sales Holding or Growing Value Share
Slide 17: Recent Results: Core EPS Growth
Recent Results Core EPS Growth -1% 5% * History adjusted for Snacks moving to Discontinued Operations. 7% ~4%average EPS growth
Slide 18: Adjusted Free Cash Flow Productivity
Recent Results Adjusted Free Cash Flow Productivity 90%, $9.8 billion Consistently Delivering 90% Cash Productivity Target
Slide 19: Returning Value to Shareholders
Recent Results Returning Value to Shareholders $ billions FY ‘12 Past 10 Years Dividends $6 $42 Share Repurchase 4 46 * Value to Shareholders $10 $88 Shareholder Yield** % of market cap 5.5%
Slide 20: FY 2013 Guidance
FY 2013 Guidance FY ‘13 & Q1 Guidance - Unchanged FY ‘13 Q1 Q2 2H Organic Sales Growth +2% to +4% 0% to +2% +3% to +4% +3% to +4% FX 0% to -2% -6% All-In Sales Growth 0% to -2% -4% to -6% Core EPS $3.80 to $4.00 $0.91 to $0.97 Core EPS Growth -1% to +4% -10% to -4% +1% to +6% +1% to +6% Potential Ri
Slide 21: FY 2013 Guidance: Cash Generation and Usage Assumptions
Free Cash Flow Productivity: ~ 90% Capital Spending, % Sales: ~5.5% Dividends: $6bn+ Share Repurchase: $4bn Value to Shareholders: $10bn+ Shareholder Yield: ~5.5% FY 2013 Guidance Cash Generation and Usage Assumptions
Slide 22: Agenda
Agenda • Recent Results & Outlook • Growth & Productivity Strategy • Developing Markets - Maintain the Momentum • Strengthen the Core - 40/20/10 • Productivity Plans and Progress • Q&A
Slide 23: Developing Markets: Market Growth Potential
Developing Markets Market Growth Potential • Population is forecast to grow 800 million people with ~95% from developing markets
Slide 24: Developing Markets: P&G Sales Progression 2000 to 2012
80% 62% 20% 38% Developed Developing $32 bn $8 bn Developing Markets P&G Sales Progression: 2000 to 2012 12% Sales Growth CAGR over 12 Years
Slide 25: Developing Markets: Current Footprint & Sales
Developing Markets Current Footprint & Developing Market Sales P&G Unilever L’Oreal Colgate $32B $22B $9B $9B Developed Developing Developing Market Sales
Slide 26: Developing Markets Expansions - Oral Care
Developing Markets Expansions - Oral Care
Slide 27: Developing Markets Expansions - Eastern Europe Vicks
Developing Markets Expansions - Eastern Europe Vicks
Slide 28: Developing Markets Expansions - Africa Safeguard
Developing Markets Expansions - Africa Safeguard
Slide 29: Brazil Hair Care Market Growth
2.8% P&G Value Share JF’08 10% P&G Value Share MJ ‘12 *Constant FX @ 1.76 Developing Markets Brazil Hair Care Market Growth
Slide 30: China Baby Care Market Growth
28.7% P&G Value Share FY08/09 30.2% P&G Value Share FY11/12 Developing Markets China Baby Care Market Growth *Constant FX
Slide 31: India Blades & Razors Market Growth
38.2% P&G Value Share FY 08 48.7% P&G Value Share FY12 *Constant FX Developing Markets India Blades & Razors Market Growth
Slide 32: India Diapers Market Growth
36.1% P&G Value Share FY 08 56.5% P&G Value Share FY12 *Constant FX Developing Markets India Diapers Market Growth
Slide 33: Developing Markets: Brazil Hair Care
Developing Markets Brazil Hair Care Sales per Unit FY 09 179 Index Eee 121 Index @ = EA nit Treatments 400ml Cond Pantene 200m! @ = Volume Share *All numbers at constant FX (at 2.03) Sh Pantene 200m :up+ 42% FY 13E 307 Index 197 Index C394) 253 Index 138 Index @ % 48% © EA Ampoules (Pack with 3) me
Slide 34: Developing Markets: India Blades & Razors Care
Developing Markets India Blades & Razors Care Sales per Unit: up +25% FY08 FY12 2000 Index 475 Index 595 Index 900Index 450 Index eee @ @ 116 Index @ 46% 44% Shave Shave 28% Preps = Disposables Disposables Preps Systems Double- Systems Double- Edge Edge 3000 Index = % of Volume *All numbers at const
Slide 35: Developing Markets: Russia Feminine Care
Developing Markets Russia Feminine Care Sales per unit up +9% FY 11 FY12 “All numbers at constant FX
Slide 36: Developing Markets: China Baby Care
Developing Markets China Baby Care Sales per unit: +8% FY10 443 Index 200 Index ap pa Pampers e e Be ce Seem Mid Tier Premium Tier tx) = Volume split% Base 38% Value Tier Value Tier FY13E 192 Index 158 Index > ‘e =i Tier 101
Slide 37: BRIC Sales per Unit Growth
Developing Markets BRIC Sales per Unit Growth + Double- Digit Sales per unit Increase vs. FY 11
Slide 38: Localized Manufacturing
Developing Markets Localized Manufacturing FY ’13 & ‘14 Start-ups New Plant Start-ups • China • Brazil • Nigeria • Indonesia New Category Start-ups • Poland • Venezuela • India Capacity Increases • India • EMEA - multiple sites
Slide 39: Localized Manufacturing: Margin Increases
Developing Markets Localized Manufacturing • Oral Care (Brazil) • +4% increase in BT margin • Baby Care (Nigeria) • >10% increase in BT margin
Slide 40: Developing Markets Scale Driven Efficiencies
Developing Markets Scale Driven Efficiencies
Slide 41: Developing Markets Profit Growth
Developing Markets Profit Growth FY 2013 Expectation 9 of 10 Top Developing Markets Profitable Top 10 Developing Market After Tax Profit +40%* * Based on mid-August fx rates
Slide 42: Developing Markets Per Capita Spending
Developing Markets Per Capita Spending $94 $64 $40 $21 $19 $11 $5 $2 $1 $1 >$50 billion sales opportunity
Slide 43: Agenda
Agenda • Recent Results & Outlook • Growth & Productivity Strategy • Developing Markets - Maintain the Momentum • Strengthen the Core - 40/20/10 • Productivity Plans and Progress • Q&A
Slide 44: Strengthen the Core: Top 40 Category/Country Businesses
• Products with superior value and performance • Competitive pricing • Strong innovation • Effective communication to consumers • Sufficient marketing support Strengthen the Core Top 40 Category/Country Businesses
Slide 45: Innovation Fabric Care: Tide Pods
Innovation Fabric Care “One Tide POD outperforms the next 6 competitors… combined !”
Slide 46: Innovation Fabric Care: Tide Pods Value Equation
Index vs. Tide Liquids Index vs. Tide PODS Index Same Brand Unit Dose vs. Liquid Base 120 55 150 61 170 Innovation Fabric Care Tide PODS… • Reframes category value equation • Provides platform for future innovation and growth
Slide 47: Innovation Fabric Care
Innovation Fabric Care “Keeps clothes fresh in your closet for up to 12 weeks - until you wear them.”
Slide 48: Innovation Personal Health Care
Innovation Personal Health Care “Not for colds, not for pain, JUST FOR SLEEP”
Slide 49: Innovation Dish Care
Innovation Dish Care “Even removes hidden grease from your dishwasher parts ”
Slide 50: Innovation Batteries
Innovation Batteries “ Guaranteed for 10-Years in Storage”
Slide 51: Innovation Family Care
Innovation Family Care “ Use 4 times less vs. the leading value brand”
Slide 52: Innovation Oral Care
DEFENDS AGAINST THE CONDITIONS PEOPLE OVER 50 EXPERIENCE DER, INFLAMED GUMS Cox? PLAQUE PRO-HEALTH + BAD BREATH FORLIFE ‘ = Ma ciate Govpihion yoo as PRO-HEALTH Cera? + Oral B) FOR LIFE
Slide 53: Innovation Baby Care
Innovation Baby Care “Up to 12 hours of protection for beautiful mornings ”
Slide 54: Innovation Prestige Fragrances
Innovation Prestige Fragrances
Slide 55: Innovation Prestige Skin Care
Innovation Prestige Skin Care
Slide 56: Innovation Skin Care
Innovation Skin Care 1 st Mass Skin Care product delivering Anti-Aging benefits & BB type instant coverage
Slide 57: Innovation Skin Care
Innovation Skin Care 1 st Mass total eye care product - designed to give women younger, brighter looking eyes in just 1 week
Slide 58: Innovation Skin Care
Innovation Skin Care
Slide 59: Innovation Skin Care
Innovation Skin Care
Slide 60: Innovation Hair Care
Innovation Hair Care up to 100% Flake Free Leaves hair up to10x stronger* 7 Benefits of cleaning * Strength against damage vs. non-conditioning shampoo.
Slide 61: Pantene
@ PMT paNTENE | PANTENE PANTENE ce
Slide 62: Innovation Hair Care: Vertical Portfolio Expansion in U.S.
Innovation Hair Care Vertical Portfolio Expansion in U.S. New Super Premium Line 200 - 250 Price Index Pantene Base
Slide 63: Agenda
Agenda • Recent Results & Outlook • Growth & Productivity Strategy • Developing Markets - Maintain the Momentum • Strengthen the Core - 40/20/10 • Productivity Plans and Progress • Q&A
Slide 64: Productivity Plans and Progress
Productivity Plans and Progress • Strategic imperative Non-manufacturing Overhead Billion $ Cost of Goods Marketing Efficiencies $3B $1B $6B
Slide 65: Non-Manufacturing Staffing
Productivity Plans and Progress Non-Manufacturing Staffing Original Plan FY ’12** FY ’13 FY ’14 Sub- Total FY’15 & FY’16 Total % Reduction* ~3% ~7% ++ ~10% ++ >10% Positions 1,600 4,100 ++ 5,700 ++ >5,700 Savings, $MM $240 $560 $800 $200 ~$1,000
Slide 66: Non-Manufacturing Staffing: Original vs. Updated Plan
Original Plan FY ’12** FY ’13 FY ’14 Sub- Total FY’15 & FY’16 Total % Reduction* ~3% ~7% ++ ~10% ++ >10% Positions 1,600 4,100 ++ 5,700 ++ >5,700 Savings, $MM $240 $560 $800 $200 ~$1,000 Updated Plan % Reduction* 5.3% 4.7% ++ ~10% ++ >10% Positions 3,000 2,700 ++ 5,700 ++ >5,700 Savings, $MM $50 $40
Slide 67: Core SG&A Overhead - 2012 Building Blocks
Productivity Plans and Progress Core SG&A Overhead - 2012 Building Blocks % of Sales Reported SG&A* 33.5% Less: Advertising (11.2) Less: Other Marketing (5.3) Less: Non-Core Restructuring (0.6) Less: Goodwill & Intangible Impairments (1.9) Core SG&A 14.4% * Excludes Transportation & Warehousing
Slide 68: Core SG&A Overhead Benchmarking
Productivity Plans and Progress Core SG&A Overhead* Benchmarking * Excludes Transportation & Warehousing, Marketing and Non-Core Items
Slide 69: P&G Business Segment Composition
Productivity Plans and Progress P&G Business Segment Composition Sales* $Bn FY’12 % Mix Beauty $20 24% Grooming 8 10% Fabric Care & Home Care 27 32% Baby Care & Family Care 16 19% Health Care 12 15% Total $83.7 100%
Slide 70: Core SG&A Overhead Competitive Benchmarks
Productivity Plans and Progress Core SG&A Overhead Competitive Benchmarks Core SG&A Overhead FY'12 % Mix Benchmark Companies Beauty 24% 20% Beiersdorf, L'Oreal, Unilever Grooming 10% 19% ENR, Beiersdorf Fabric Care & Home Care 32% 10% CHD, CLX, Henkel, Reckitt, Unilever Baby Care & Family Care 19% 1
Slide 71: P&G Core SG&A Overhead Objective
Productivity Plans and Progress P&G Core SG&A Overhead Objective 12% - 13% Core SG&A Overhead FY'12 Benchmark Target Beauty 20% 17% - 18% Grooming 19% 16% - 17% Fabric Care & Home Care 10% ~9% Baby Care & Family Care 10% ~9% Health Care 15% 13% - 14% Total 14.4% ~14% 12% - 13%
Slide 72: Accountability
Accountability Simplified set of 7 performance metrics that tie directly to shareholder value creation: 1. Volume 2. Sales 3. Market Share 4. Operating Profit 5. Productivity 6. Cash Flow 7. Internal Controls
Slide 73: Path to Target EPS Growth Range
Path to Target EPS Growth Range High-Single Digits to Low-Double Digits EPS Growth Organic sales growth at market level (fully loaded, i.e. no leverage) 4% Cost savings at full run rate and leverage; get range of half-to-all of projected savings 6% to 11% Share repurchase 2% High-side Potential ~12%
Slide 74: 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
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