Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Proxy Contest (July 2017)
23 slides from Procter & Gamble Company (the)'s proxy contest presentation, Jul 17, 2017
Slide 1: Revitalize P&G - Together
Revitalize P&G - Together July 17, 2017 © 2017 Trian Fund Management, L.P. All rights reserved.
Slide 2: Disclosure Statement and Disclaimers
Disclosure Statement and Disclaimers Additional Information Trian Fund Management, L.P. (“Trian”) and certain of the funds and investment vehicles it manages (collectively, Trian with such funds, “Trian Partners”), together with other Participants, intend to file with the SEC a definitive proxy stat
Slide 3: Disclosure Statement and Disclaimers
Disclosure Statement and Disclaimers Forward-Looking Statements This presentation contains forward-looking statements. All statements contained in this presentation that are not clearly historical in nature or that necessarily depend on future events are forward-looking, and the words “anticipate,”
Slide 4: Revitalize P&G – Together
Revitalize P&G – Together The following pages summarize our view of the challenges facing Procter & Gamble and why adding Nelson Peltz to the P&G Board will help address these challenges. We look forward to sharing our comprehensive White Paper as we get closer to P&G’s 2017 Annual Meeting of Shareh
Slide 5: Weak Total Shareholder Returns (“TSR”)
Weak Total Shareholder Returns (“TSR”) -4-
Slide 6: P&G’s TSR Has Been Weak Relative to Benchmarks Across Timeframes
P&G’s TSR Has Been Weak Relative to Benchmarks Across Timeframes TSR – 10-Year TSR – 5-Year TSR – 4-Year 210% 118% 67% 64% 171% 102% 56% 90% 67% 97% 93% 30% Peers Consumer S&P P&G Peers S&P Consumer PG Peers S&P Consumer PG Staples Staples Staples Index Index Index TSR – 3-Year TSR – 2-Year TSR – 1-
Slide 7: TSR Has Trailed the Vast Majority of Peers
TSR Has Trailed the Vast Majority of Peers TSR – 10-Year TSR – 5-Year TSR – 4-Year CHD 402% RB 175% RB 97% RB 289% HE 162% CHD 86% HE 278% UL 141% UL 85% UL 276% LO 126% CLX 84% CLX 195% CLX 123% HE 78% CL 189% CHD 120% S&P 64% KMB 174% S&P 102% LO 62% Consumer Consumer 171% BE 93% 56% Staples Stapl
Slide 8: TSR Has Trailed the Vast Majority of Peers (Cont’d)
TSR Has Trailed the Vast Majority of Peers (Cont’d) TSR – 3-Year TSR – 2-Year TSR – 1-Year UL 76% UL 63% UL 42% RB 69% RB 47% HE 26% CLX 69% CLX 41% BE 22% CHD 62% CHD 34% S&P 21% LO 55% KMB 31% RB 20% Consumer HE 55% 27% LO 19% Staples Consumer 39% BE 26% PG 11% Staples S&P 35% HE 24% CHD 10% Consu
Slide 9: Deteriorating Market Share
Deteriorating Market Share -8-
Slide 10: Deteriorating Market Share on Global and Local Basis Over Past 5 Years
Deteriorating Market Share on Global and Local Basis Over Past 5 Years % of Country-Category Pairs in Top 20 Markets Losing Market Share – Last 5 Years 75% 75% 68% 55% (1) Tissue & Hygiene Home Care Beauty & Personal Total P&G Care Source: Euromonitor International and Consumer Edge research. Catego
Slide 11: Organic Sales Growth Has Trailed Peers
Organic Sales Growth Has Trailed Peers Organic Sales Growth CAGR – Last 5 Fiscal Years 6.2% 5.2% 4.7% 4.6% Peer Avg: 3.9% 4.1% 3.9% 3.7% 3.5% 3.5% 2.2% (0.4%) UL CL BEI RB KMB HE LC CLX CHD PG EPC (ex-Pet (ex- (Consumer (ex-Food) (Consumer) (ex-Adhesive) Products) Nutrition) Professional) Source: SE
Slide 12: Organic Sales Growth Has Deteriorated Over The Last 5 Years
Organic Sales Growth Has Deteriorated Over The Last 5 Years P&G Organic Sales Growth (% year-over-year) 4% 2011-2016 CAGR: 2.2% 3% 3% 3% 2% 2% 0% 2006-2011 2012 2013 2014 2015 2016 YTD 2017 CAGR Source: Company SEC filings. Note: Organic sales growth measures underlying sales growth excluding the ef
Slide 13: Volume Growth Has Been Worst-in-Class
Volume Growth Has Been Worst-in-Class Indexed Organic Volume Growth P&G 115% 113% 110% Peers 107% -1,200bps 104% 105% 100% 104% 103% 100% 102% 2011 2012 2013 2014 2015 2016 Unilever (ex-Food) 6.4% 5.6% 1.6% 2.9% 1.5% Henkel (ex- 1.3% 3.8% 3.8% 1.8% 3.5% Adhesive) Colgate (ex-Pet) 3.5% 5.5% 3.5% 1.5%
Slide 14: P&G is Losing Market Share at the Local Level Across Businesses
P&G is Losing Market Share at the Local Level Across Businesses Market shares are down in 68% of the top 20 country-category pairings Losing share in 14 of top 20 countries over the past 5 years, and 18 of top 20 countries over the past 3 years Losing market share in every category on a global
Slide 15: Excessive Cost and Bureaucracy
Excessive Cost and Bureaucracy - 14 -
Slide 16: Efforts to Reduce Expenses Have Not Created Value
Efforts to Reduce Expenses Have Not Created Value In 2012, P&G announced a Today, P&G claims that they over- $10bn productivity plan achieved against this target(1) $3bn reinvested in business Of the $10bn, P&G claims that $7bn was offset by foreign exchange (FX)(2) $7bn lost and the rest was to FX
Slide 17: New Expense Reduction Initiatives Require Additional Accountability
New Expense Reduction Initiatives Require Additional Accountability While P&G has identified an incremental $10-$13 billion of savings, Trian is concerned that this initiative could be as ineffective as the 2012 productivity program in driving sales growth, earnings growth and shareholder value crea
Slide 18: Overly Complex Organizational Structure
Overly Complex Organizational Structure COMPLEXITY = Less Accountability + Lower Sales Growth + Higher Cost P&G’s organizational structure is highly “matrixed,” which Trian believes adds complexity and impedes accountability, growth and efficiency The current P&G structure consists of three dist
Slide 19: Adding Nelson Peltz to the P&G Board Will Help P&G Address Its Challenges
Adding Nelson Peltz to the P&G Board Will Help P&G Address Its Challenges - 18 -
Slide 20: Long Track Record of Value Creation in the Consumer Sector
Long Track Record of Value Creation in the Consumer Sector Trian has worked closely with numerous companies across the consumer landscape, and has demonstrated a consistent track record of value creation with numerous corporate and brand turnarounds Trian’s Engaged …Where Nelson Peltz Consumer Has
Slide 21: Trian: A Highly Engaged Shareowner
Trian: A Highly Engaged Shareowner Trian Overview – Founded in November 2005 by Nelson Peltz, Peter May, and Ed Garden – Investment management firm with total AUM of $12.7 billion and Callable Commitments of $900 million.* – Focused on buying large stakes in high quality companies where we see sig
Slide 22: What Differentiates Trian
What Differentiates Trian • Average investment horizon of >5 years when a Trian Partner joins a board, longer than the holding period of most equity mutual funds(1) Long-Term • ~7 years when Nelson Peltz joins the board • Stable “blue-chip” capital base, with substantial amount of capital locked up
Slide 23: Management Testimonials
Management Testimonials Bill Johnson (CEO from 1998-2013): “I said to another CEO…who had called me and inquired about Nelson, that if I were to form the board today, Nelson would be one of the first directors I’d ask to serve because he is an insightful, communicative, enthusiastic, energetic and a