60 slides from Procter & Gamble Company (the)'s conference presentation, Feb 19, 2015
Slide 1: 2015 CAGNY
* 2015 CAGNY February 19, 2015 *
Slide 2: Total Shareholder Return Drivers
SalesGrowth Cash FlowGrowth ProfitGrowth MarginImprovement AssetEfficiency TotalShareholderReturn Operating Total Shareholder Return *
Slide 3: Free Cash Flow Companies Comparison
Free Cash FlowCompanies Comparison Revenue ($bn) Net Income($bn) Free Cash Flow ($bn) Walmart 476.3 16.0 10.1 General Motors 152.1 5.3 2.8 United Health Group 122.5 5.6 5.7 Nestle 92.4 10.0 10.1 P&G 80.5 11.6 10.1 Johnson & Johnson 73.1 13.8 13.8 PepsiCo 66.4 6.7 6.9 Coca-Cola 46.9 8.6 8.0 *
Slide 4: Balanced Growth & Value Creation
Balanced Growth & Value Creation TSR SalesGrowth MarginExpansion CashGeneration *
Slide 5: Strategic Step Forward to Accelerate Performance
Strategic Step Forwardto Accelerate Performance Leading brands, structurally attractive categoriesFaster growing, more profitable portfolio *
Slide 6: *
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Slide 7: July-Dec 2014 Results: Organic Sales & EPS Growth
July-Dec 2014 Organic Sales Growth 2% Currency Neutral Core EPS Growth 7% Core Gross Margin/Currency Neutral -10 bps / +40 bps Core Operating Margin/Currency Neutral - 30 bps / +60 bps FY 2015 ResultsOrganic Sales & EPS Growth *
Slide 8: FY 2015 Adjusted Free Cash Flow Productivity
FY 2015 Adjusted Free Cash Flow Productivity Stretch Objectiveof 95-100% *
Slide 9: Recent Results: Returning Value to Shareholders
$ Billions Jul-Dec 2014 Share Repurchase 4.3 Dividends 3.6 Value to Shareholders 7.9 Recent ResultsReturning Value to Shareholders *
Slide 10: FY 2015 Guidance: Organic Sales & EPS Growth
FY 2015 Organic Sales Growth Low to Mid-Single Digits Currency ~5% All-In Sales Growth -3% to -4% Core Earning Per Share Growth In-line to Down Low Single Digits Currency Neutral Core EPS Growth Double Digit FY 2015 Guidance Organic Sales & EPS Growth *
Slide 11: FY 2015 Guidance: Returning Value to Shareholders
$ Billions FY 2015 Share Repurchase ~5 Dividends ~7 Value to Shareholders ~12 Yield ~5% FY 2015 GuidanceReturning Value to Shareholders * Assumes market cap of $232 Bn *
Slide 12: FY 2015 Guidance Core EPS vs. FY 2014
FY 2015 Guidance Core EPS vs. FY 2014 Low to Mid-Single Digits +11% -12% -1% In-Line to Down Low Single Digits *
Slide 13: Almost All Currencies Have Weakened
Almost All Currencies Have Weakened -93% -195% * Performance from 2/7/14 to 2/6/15 on rates in USD per foreign currency *
Slide 14: Largest FX Impact in P&G's History
Largest Fx Impact in P&G’s History% Earnings Growth Impact *
Slide 15: Foreign Exchange Impact: P&G vs Competition
Foreign Exchange ImpactP&G vs Competition P&G Exposures P&G sales vs. next competitor Competitor currency Russia ~3.0x Henkel EURO Ukraine ~2.5x Henkel EURO Venezuela ~1.5x Colgate USD Japan ~6.0x Unilever EURO Argentina ~0.7x Unilever EURO *
Slide 16: Foreign Exchange Impact FY'15: $1.4 Billion After Tax
Foreign Exchange Impact FY’15: $1.4 Billion After Tax *
Slide 17: Localization Efforts
* Localization Efforts New plants/ capacity Developed regions Developingregions FY’09 – FY’13 2 16 FY’14 – FY’17 7 18 TOTAL 9 34 *
Slide 18: Competition Also Faces FX Headwinds
% Devaluationvs. Year Ago* Vs U.S. Dollar Vs Euro Vs Yen LocalInflation Russia 93% 60% 66% 15%-?? Ukraine 195% 145% 150% >30% Argentina 11% +8% +4% 40% Venezuela 65% Competition Also Faces FX Headwinds * Feb 6, 2015 vs. Feb 6, 2014 * *spot rates Feb-6, 2015 vs. Feb-7, 2014
Slide 19: Pricing Preserves Structural Economics
Pricing Preserves Structural Economics Russia Example Sales BT Profit BT Profit Margin (%) Pre Devaluation (35 USD/RUB) base base base Post Devaluation (65 USD/RUB), no pricing -40% -130% -3,200bpts Margin recovery scenarios (vs. no pricing) ~60% pricing; flat market, -20% share decline +22% +105% +
Slide 20: Russia – '99 Crisis: Rebuilt Business in Six Years
Russia – ‘99 CrisisRebuilt Business in Six Years $ Millions Sales Earnings FY’99 – Pre August’99 Crisis base base FY’00 – First Year Post Crisis -60% -350% FY’05 – Six Years Post Crisis +15% +80% FY’14 (Growth vs FY ‘99) ~4X ~10X *
Slide 21: Mix & Productivity Improvements
Mix & Productivity Improvements Cost of Goods SoldOverhead ReductionsMarketing Efficiencies *
Slide 22: Commodities Improving
* CommoditiesImproving Annualized savings of~$500-700 Million BT *
Slide 23: FY 2015 Guidance: Organic Sales & EPS Growth
FY 2015 Organic Sales Growth Low to Mid-Single Digits Currency ~5% All-In Sales Growth -3% to -4% Core Earning Per Share Growth In-line to Down Low Single Digits Currency Neutral Core EPS Growth Double Digit FY 2015 Guidance Organic Sales & EPS Growth *
Slide 24: Market Headwinds and Tailwinds
* Market Headwinds and Tailwinds * Headwinds Now Tailwinds Coming Foreign Exchange Commodity costs Oil prices – producing countries Oil prices – consuming countries Political / Economic instability Strengthening U.S. economy Tax policy changes Low interest rates
Slide 25: Portfolio Plan
* Portfolio Plan Category / Brand Choices Plan to divest, discontinue or consolidate 100 brands P3Y CAGR100 Chosen Brands P3Y CAGR100 Chosen Brands Sales - Low single digits BT Profit - Double digits BT Margin High single digits *
Slide 26: Portfolio Plan Update
Portfolio Plan Update 60% 60% - Z 40% ~ 20% - 14% | = 0% — Brand Reduction Sales BT Profit 26
Slide 27: Portfolio Progress
Portfolio Progress To date, 35 brands divested, discontinued or plans to consolidate *
Slide 28: Productivity: Non-Manufacturing Enrollment
Productivity Non-Manufacturing Enrollment Cumulative Reduction -5% -12% -15% -22% Original Target: -10% by June 2016Current Plan: -22% by June 2015 *
Slide 29: Productivity: Cost of Goods Savings
ProductivityCost of Goods Savings ($bn) *
Slide 30: Manufacturing Productivity and Enrollment
* Reduction -5% -5% -5% Manufacturing Productivity 7% 7% 6%+ Productivity Manufacturing Enrollment *
Slide 31: Productivity: Cost of Goods Opportunities
LocalizationAffordable automationDigitizing supply chainSupplier integration ProductivityCost of Goods Opportunities *
Slide 32: Supply Chain Redesign Previous
* Supply Chain Redesign Previous *
Slide 33: Supply Chain Redesign Today
* Supply Chain Redesign Today *
Slide 34: *
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Slide 35: What does it mean to do things #LikeAGirl?
What does it mean to do things #LikeAGirl?
Slide 36: Productivity Improvements
Productivity Improvements Cost of Goods SoldOverhead ReductionsMarketing Efficiencies *
Slide 37: Consumer-Driven TSR
* Consumer-Driven TSR OTSR SalesGrowth Cash FlowGrowth ProfitGrowth MarginImprovement AssetEfficiency TotalShareholderReturn SMOT FMOT ZMOT How OftenThey Buy # of Buyers How MuchThey Buy Price TheyPay
Slide 38: Pampers: Point of Market Entry
* Build Relationship Create Preference Introduce Brand Pampers: Point of Market Entry *
Slide 39: U.S. Diapers Market Share
* U.S. Diapers Market Share P&G 44% Huggies 35% *
Slide 40: Pampers Premium Care Pants
* Pampers Premium Care Pants *
Slide 41: U.S. Fabric Care
* U.S. Fabric Care *
Slide 42: Price per Load vs. Competition
* Cat Avg $0.13 P&G Avg $0.19 P&G Competition $0.28$0.24$0.20$0.16$0.15$0.08$0.04 Source: Nielsen, AMJ14 Average Price per load
Slide 43: Trade In, Trade Up, Trade Across
* Trade InHH Penetration, Verticalize Portfolio Trade UpSuperior Products, New Forms Trade AcrossRegimen *
Slide 44: U.S. Laundry Market Share
* Note: ‘14 share is FYTD US AOS through Dec 2014 U.S. Laundry Market Share ~60 ~40 *
Slide 45: U.S. Fabric Enhancers
U.S. Fabric Enhancers AHH
Slide 46: U.S. Fabric Enhancer Category Market Growth
* U.S. Fabric Enhancer CategoryMarket Growth *
Slide 47: * *
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Slide 48: Gillette Flexball
* Gillette Flexball *
Slide 49: Venus Swirl
Venus Swirl WN 49
Slide 50: Hair Care
Hair Care a PANTENE Moisture RENEWAL
Slide 51: Organic Sales Growth
* Organic Sales Growth % 12/13 13/14 14/15 4% 6% 7%
Slide 52: * *
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Slide 53: Instant relief, instant oil control
INSTANT relief INSTANT oil control instant cooling relief a clean you can feel, instantly — 3 moisturizers for ‘i instant hydration
Slide 54: Personal Care
* Personal Care +6% Organic Sales CAGR+21% AT Profit Growth Profit Sales *
Slide 55: Olay Regenerist Luminous
reaey rome OIAY REGENERIST LUMINOUS OlAY’ Recenenist \unnous ‘ark circle correcting hydraswirl EYE ‘educes the look of ‘Under eye darkness 0.5 FLOZ(15 ml)
Slide 56: Beauty, Hair & Personal Care
* Beauty, Hair & Personal Care
Slide 57: Always Discreet Value Share and Category Growth
* Always Discreet Value Share Category Growth U.K. +7% ~50% faster U.S. +9% More than 2X *
Slide 58: U.S. Market: 35% of Sales, >40% of Profit
* U.S Market: 35% of Sales, >40% of Profit Market Growth Rates Unemployment rates GDP Evolution Gas Prices
Slide 59: 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 60: Regulations FD and G Disclosure
* Regulations FD and G Disclosure For a full reconciliation, please visit:www.pg.com/investors * 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 F