Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Proxy Contest (September 2017)
20 slides from Procter & Gamble Company (the)'s proxy contest presentation, Sep 25, 2017
Slide 1: Appendix A Background Information on Trian Investments & Company Performance
Appendix A Background Information on Trian Investments & Company Performance
Slide 2: Scope of Analysis
Scope of Analysis Reviewed all past Trian investments and focused on investments greater than $25 million that Trian held for more than two years Purpose was to better understand performance at companies where Trian had the opportunity to influence operational performance Review is based solely on p
Slide 3: Trian Cited P&G's Recent Underperformance, But Since November 2015 P&G Has Outperformed Peers
Trian Cited P&G’s “Recent Underperformance”, But Since November 2015 P&G Has Outperformed Peers Source: Bloomberg as of 06-Sep-2017 Note: Peltz Serving on Board TSR represents market cap weighted TSR, based on market capitalization on 30-Oct-2015. Value creation is calculated based on beginning mark
Slide 4: Life Cycle of Selected Exited Trian Investments
Life Cycle of Selected Exited Trian Investments 75 Source: Bloomberg Note: Includes all publicly disclosed past Trian investments, which Trian has exited, greater than $25mm with holding period of at least two years. Returns are based on stock price performance of each company (excluding dividends)
Slide 5: Life Cycle of Selected Exited Trian Investments
Life Cycle of Selected Exited Trian Investments 76 Source: Bloomberg Note: Includes all publicly disclosed past Trian investments, which Trian has exited, greater than $25mm with holding period of at least two years. Returns are based on stock price performance of each company (excluding dividends),
Slide 6: Performance of Selected Trian Investments During Ownership Period
Performance of Selected Trian Investments During Ownership Period 77 Source: Bloomberg Note: Includes all publicly disclosed Trian investments, current and exited, greater than $25mm with holding period of at least two years. Returns are based on stock price performance of each company (excluding di
Slide 7: Performance of Selected Trian Investments During Ownership Period (continued)
78 Source: Bloomberg Note: Includes all publicly disclosed Trian investments, current and exited, greater than $25mm with holding period of at least two years. Returns are based on stock price performance of each company (excluding dividends), and calculated prior to any fees charged by Trian to its
Slide 8: Holding Periods of P&G's Top Shareholders Far Exceed Those of Trian
Holding Periods of P&G’s Top Shareholders Far Exceed Those of Trian Source: Thomson Note: Ownership data from later of 1997 and firm inception. Includes all Trian investments, regardless of size. Top 25 Institutional Shareholders exclude Trian Partners. (1) According to the Trian Group’s own website
Slide 9: Mondelez Organic Sales and Volume Growth Declined Beginning in 2014
Mondelez Organic Sales and Volume Growth Declined Beginning in 2014 Source: Mondelez company filings Note: Adj. Operating Income margin not available for FY2012 as figures restated for coffee divestiture not available. Results since FY2013 restated for coffee divestiture. (1) Trian’s July 17, 2013 P
Slide 10: Mondelez Sales Growth During Trian Board Tenure
Mondelez Sales Growth During Trian Board Tenure Source: Mondelez company filings (1) Trian’s July 17, 2013 PepsiCo White Paper detailed its recommendation to pursue a transaction with Mondelez. Since Trian’s appointment to the Board, Mondelez transitioned from volume-led organic sales growth to pric
Slide 11: Mondelez's operating margins were materially below peers in 2013
82 Source: Press releases (1) Adjusted Operating Margin excludes Coffee. (2) Confectionery Peer Median includes Hershey and Nestlé. Mondelez’s operating margins were materially below peers in 2013 2013 Adjusted Operating Margin(1) 2016 Adjusted Operating Margin(1) (2) (2) (6.6) ppts deficit vs. peer
Slide 12: Mondelez Operating Margin Improvement Compared to Peers
Mondelez Operating Margin Improvement Compared to Peers 83 Source: Press releases (1) Adjusted Operating Margin excludes Coffee. Mondelez’s operating margins were materially below peers in 2013 2013 Adjusted Operating Margin(1) 2016 Adjusted Operating Margin(1) +4.7 ppts +0.1 ppts +1.2 ppts 2016 Imp
Slide 13: Review of Trian's Plan to Enhance Value at Heinz
Review of Trian’s “Plan to Enhance Value at Heinz” Source: Trian’s Heinz position paper dated 23-May-2006, Heinz company filings Trian used cost savings as a platform to get onto Heinz’s Board Heinz’s results following Trian’s addition to the Board do not reflect Trian’s proposals Trian’s Recommenda
Slide 14: Heinz Organic Sales Growth During Trian Ownership
Heinz Organic Sales Growth During Trian Ownership Source: Heinz company filings During Trian’s ownership, Heinz transitioned from volume-led organic sales growth to pricing-led organic sales growth 102% Volume-Driven 87% Pricing-Driven Organic Sales Growth Other Impacts Reported FYE (April) Volume P
Slide 15: Margins at Heinz Did Not Improve During Trian's Tenure
Margins at Heinz Did Not Improve During Trian’s Tenure One of Trian’s primary proposals was to improve margins at Heinz, however following joining the Board, margins did not improve Heinz Gross Margins Heinz SG&A % of Sales EBIT Margins Source: Public filings Note: 2006 financials based on results f
Slide 16: Heinz Operating Profit Growth and EPS Growth Below Peers After Normalizing Change in Tax Rate
Heinz Operating Profit Growth and EPS Growth Below Peers After Normalizing Change in Tax Rate Source: Company filings Note: North American Food peers include Campbell, ConAgra, General Mills, Hershey, Kellogg and Kraft Foods. (1) Average impact of normalized taxes on bottom line calculated as differ
Slide 17: Reduction in Tax Rate Was a Driver of Heinz's Earnings Growth
Reduction in Tax Rate Was a Driver of Heinz’s Earnings Growth Source: Company filings Heinz’s change in tax rate from 2006-2011 helped improve earnings growth Heinz Effective Tax Rate U.S. Federal Statutory Tax Rate 35.0% 35.0% 35.0% 35.0% 35.0% 35.0% Tax on Income of Foreign Subsidiaries (3.6) (5.4
Slide 18: Trian's Recipe for Successful Value Creation at Wendy's
Trian’s “Recipe for Successful Value Creation” at Wendy’s Source: Company filings, press releases and Trian’s letter to Wendy’s dated December 12, 2005 Trian used a variety of operational and strategic arguments against Wendy’s Trian’s Recommendations at Wendy’s What Happened Increase Margins Increa
Slide 19: Comparison of Wendy's Results vs. Burger King
Comparison of Wendy’s Results vs. Burger King Source: Press releases Note: Wendy’s has December fiscal year end, Burger King has June fiscal year end through 2010, and then December fiscal year end for 2011 – 2016.(1) Margins represent whole company data for all years. (2) EV of Burger King’s sale t
Slide 20: Combining Wendy's With Arby's Reversed Trian's Action Plan
Combining Wendy’s With Arby’s Reversed Trian’s “Action Plan” Source: Press releases, SEC Filings, and Capital IQ as of 06-Sep-2017 (1) Permission to quote neither obtained nor sought.(2) $80 million of tax benefit to Wendy’s not included in EV. “I am delighted to announce the completion of this merg