Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Q4 2019 Earnings Presentation
33 slides from Procter & Gamble Company (the)'s earnings presentation, Jul 30, 2019
Slide 1: Earnings Release FY 2019 and Q4 2019 Results
Earnings ReleaseFY 2019 and Q4 2019 ResultsJuly 30, 2019
Slide 2: Business Results Fiscal Year 2019
Business ResultsFiscal Year 2019
Slide 3: Fiscal Year 2019 Highlights
Fiscal Year 2019 ee ame 33 D & HIGHLIGHTS tetera e®s' Organic sales grew +5% driven by volume, pri r 9 of 10 global categories grew organic sales. Organic sales broad based with 15 of our top 15 Targes aie qual ahead of year ago. i Strong and improving market share trends. 33 of our top 50 country/c
Slide 4: FY 2019 Results Going In Guidance
FY 2019 RESULTS GOING IN GUIDANCE FY ’19 Results Organic Sales 2 to 3% +5% Core EPS 3 to 8% +7% Currency Neutral Core EPS +15% Adjusted Free Cash Flow Productivity 90% 105% Cash Returned to Shareholders Up to $12bn $12.5bn
Slide 5: Organic Sales Growth Annual Progression
ORGANIC SALES GROWTHANNUAL PROGRESSION
Slide 6: Core EPS Growth Annual Progression
CORE EPS GROWTHANNUAL PROGRESSION
Slide 7: Currency-Neutral Core EPS Growth Annual Progression
CURRENCY-NEUTRAL CORE EPS GROWTHANNUAL PROGRESSION
Slide 8: Gillette Shave Care Impairment GAAP Earnings Impact
GILLETTE SHAVE CARE IMPAIRMENTGAAP EARNINGS IMPACT In Q4 FY ’19, the Company took a one-time, non-cash accounting charge of $8 billion to adjust the goodwill and intangibles carrying values of Gillette Shave Care business. The charge is a non-core earnings per share adjustment of $3.02 in Q4 FY ’19
Slide 9: Impairment & Anti-Dilutive Accounting Q4 EPS Impacts
IMPAIRMENT & ANTI-DILUTIVE ACCOUNTINGQ4 EPS IMPACTS GAAP earnings reflect a one-time, non-cash accounting charge to adjust the goodwill and intangibles carrying values of Gillette shaving businessThe reduction in net earnings caused the anti-dilutive accounting principle to be triggered – resulting
Slide 10: Impairment & Anti-Dilutive Accounting FY EPS Impacts
GAAP Earnings reflect a one-time, non-cash accounting charge to adjust the goodwill and intangibles carrying values of Gillette shaving businessThe reduction in net earnings caused the anti-dilutive accounting principle to be triggered – resulting in a partial dilution adjustment on the FY GAAP dilu
Slide 11: P&G Results Q4 FY 2019
4 Business P&G Results Q4 FY 2019
Slide 12: Q4 Fiscal Year 2019 Results
Q4 Fiscal Year 2019 Organic Sales Growth Organic Volume Growth Core EPS Growth Free Cash Flow Productivity Q4 FY ‘19 +7% +3% +17% 122% Currency Neutral Core EPS Growth +26%
Slide 13: Organic Sales Growth Quarterly Progression
ORGANIC SALES GROWTHQUARTERLY PROGRESSION Organic sales were driven by volume, pricing and mix. Organic volume up +3%, pricing +3% and mix +2%.
Slide 14: Q4 FY 19 Results Core EPS Growth
Q4 FY ‘19 ResultsCORE EPS GROWTH Core gross margin +120 basis pointsCore gross margin ex-FX +160 basis pointsCore operating margin +130 basis pointsCore operating margin ex-Fx +210 basis pointsTotal productivity savings +340 basis points
Slide 15: Q4 FY 19 Results Currency-Neutral Core EPS Growth
Q4 FY 19 ResultsCURRENCY-NEUTRAL CORE EPS GROWTH Constant currency core operating margin increased 210 basis points.
Slide 16: Business Segment Results and Highlights Q4 FY 2019
Business Segment Results and HighlightsQ4 FY 2019
Slide 17: Factors Impacting All Segment Results: Tax Reform
FACTORS IMPACTING ALL SEGMENT RESULTSTAX REFORM Tax Reform: In FY 2018, impact from the U.S. Tax Act was reflected in the Corporate Segment. In FY 2019, the impact of the lower U.S. federal tax rate is reflected in each reportable Business Segment and a benefit to segment earnings. This treatment re
Slide 18: Q4 FY 19 Results Beauty Segment
+2% Pricing, +5% MixOrganic Sales: h Mid-single digits in Developed markets, h High single digits in Developing marketsGlobal value share flat versus year agoNet Earnings: Volume growth, pricing, cost of goods sold savings and tax help were partially offset by brand communication investments and cur
Slide 19: Beauty Highlights
Hair Care organic sales grew low single digits versus year ago. Developed markets increased mid-single digits behind innovation led volume growth and strong retail execution. Developing markets were flat with devaluation pricing and innovation growth in LA and IMEA regions offset by softness in Chin
Slide 20: Q4 FY 19 Results Grooming Segment
+3% Pricing, +1% Mix Organic Sales: h Low single digits in Developed markets, h Mid-single digits in Developing marketsGlobal value share declined 0.9 points versus year ago. Net Earnings: Boston Real Estate sale gain, Devaluation pricing, productivity savings, and tax help were partially offset by
Slide 21: Grooming Highlights
Grooming organic sales increased mid-single digits versus year ago. Shave Care organic sales increased low single digits. Developed markets decreased low single digits as innovation led volume and positive mix were more than offset by value investments and competitive activity. Developing markets gr
Slide 22: Q4 FY 19 Results Health Care Segment
+3% Pricing, +4% MixOrganic Sales: h High single digits in Developed markets, h Double digits in Developing marketsGlobal value share increased 0.3 points versus year agoNet Earnings: Small brand divestiture gains, volume growth, pricing, productivity savings and tax help were partially offset by cu
Slide 23: Health Care Highlights
Oral Care organic sales increased high single digits versus year ago. Developed and Developing markets both grew high single digits with growth in power toothbrushes, premium toothpaste innovation and pricing. Personal Health Care organic sales increased mid-teens versus year ago due to innovation-d
Slide 24: Q4 FY 19 Results Fabric & Home Segment
+4% Pricing, +1% MixOrganic Sales: h High single digits in Developed markets, h Double digits in Developing marketsGlobal value share increased 0.7 points versus year agoNet Earnings: Innovation-driven volume growth, pricing, productivity improvements and tax help were partially offset by more profi
Slide 25: Fabric & Home Highlights
Fabric Care organic sales grew double digits versus year ago. Developed markets increased high single digits behind premium innovation-driven volume growth across laundry and fabric enhancers. Developing markets increased double digits driven by premium innovation and devaluation pricing.Home Care o
Slide 26: Q4 FY 19 Results Baby, Feminine and Family Care Segment
+3% Pricing, +1% MixOrganic Sales: h Low single digits in Developed markets, h Double digits in Developing marketsGlobal value share increased 0.1 points versus year agoNet Earnings: Volume, pricing, productivity savings and tax help were partially offset by brand communication investments, negative
Slide 27: Baby, Feminine and Family Care Highlights
Baby Care organic sales increased low single digits driven by strength of premium tier offerings and pricing partially offset by continued softness on mid-tier and value tier diapers due to competitive activity. Continued strong growth on Pant forms across markets. Feminine Care organic sales increa
Slide 28: FY 2020 Guidance
FY 2020 Guidance
Slide 29: FY 2020 Guidance: Sales
FY ‘20 Organic Sales Growth +3% to +4% All-in Sales Growth +3% to +4% Organic sales growth of +3% to +4% All-in sales growth of +3% to +4%Includes a modest negative impact from foreign exchange, which is largely offset by a positive net impact from acquisitions and divestitures. FY 2020 GuidanceSALE
Slide 30: FY 2020 Guidance: Earnings Per Share
FY ‘20 Core EPS Growth +4% to +9% All-in EPS Growth +222% to +240% Core EPS growth of +4% to +9% Core effective tax rate range of 17% to 18% All-in EPS of +222% to +240% with the Gillette Shave Care carrying value adjustment in the base period (Q4). Impact in base is $3.03 on FY and $3.02 in Q4. FY
Slide 31: FY 2020 Guidance: Cash Generation and Usage
Free Cash Flow Productivity: 90%Capital Spending, % Sales: 4.5% to 5.0%Dividends: Over $7.5BDirect Share Repurchase: $6 to $8B FY 2020 GuidanceCASH GENERATION AND USAGE
Slide 32: Potential Headwinds Not Included in Guidance
Significant deceleration of market growth ratesSignificant currency weaknessSignificant commodity cost increasesAdditional geo-political disruptions and economic volatility FY 2020 GuidancePOTENTIAL HEADWINDS NOT INCLUDED IN GUIDANCE
Slide 33: 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,