Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Proxy Contest (September 2017)
41 slides from Procter & Gamble Company (the)'s proxy contest presentation, Sep 26, 2017
Slide 1: No Case For Change
No Case For Change September 2017
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: Important Additional Information and Where to Find It
Important Additional Information and Where to Find It The Company has filed a definitive proxy statement on Schedule 14A and form of associated BLUE proxy card with the Securities and Exchange Commission (“SEC”) in connection with the solicitation of proxies for its 2017 Annual Meeting of Shareholde
Slide 4: Table of Contents
Table of Contents By Segment P&G Continues to Create Value By Successfully Executing on the Most Significant Transformation in Our Company’s History… 5 …That Has Strengthened Our Core Portfolio Across 10 Key Categories… 6 …Driven Meaningful Productivity and Supply Chain Improvements… 8 …And Strength
Slide 5: P&G Continues to Create Value By Successfully Executing on the Most Significant Transformation
P&G Continues to Create Value By Successfully Executing on the Most Significant Transformation in Our Company’s History… The Board has been overseeing and guiding the most significant transformation in the Company’s history P&G flawlessly executed a large number of divestitures within a short time,
Slide 6: That Has Strengthened Our Core Portfolio Across Key Categories
…That Has Strengthened Our Core Portfolio Across 10 Key Categories… 65 Brands 10 Categories 170 Brands 16 Categories Daily Use Categories Where Products Solve Problems and Performance Drives Purchase Categories that Leverage P&G’s Core Strengths: Consumer Understanding, Branding, Product & Package I
Slide 7: P&G is the market leader in categories where products solve problems
P&G is the market leader in categories where products solve problems and performance drives purchase #1 global share position in 7 of our 10 categories #2 global share position in our 3 other categories Accelerating market share progress 50%+ of top 20 countries growing / holding market share 70%+ o
Slide 8: Driven Meaningful Productivity and Supply Chain Improvements
…Driven Meaningful Productivity and Supply Chain Improvements… $10Bn $10Bn + FY ’12 – FY ‘16 FY ’17 – FY ‘21 Roles -32% | Profit per Employee +45% We delivered our first $10 billion productivity program, which ended in fiscal 2016, and have doubled-down on another $10 billion, starting last fiscal y
Slide 9: Transforming our supply chain
2013 2017 We’re dramatically transforming our supply chain – in North America, followed by Europe and Latin America, with plans in India, Middle-East and Africa. Savings will ramp up over the next 2 years New U.S. mixing centers are up and running – putting 80% of shipments within 24 hours of retail
Slide 10: Old Organizational Structure – The Thicket
Old Organizational Structure – “The Thicket” 16 Business Units x 6 Regions 16 Business Units 16 Business Units x 6 Regions x Functions “The Thicket” 16 Global Business Units… …6 Market Development Organizations with staffing and responsibilities that overlapped the GBUs… …and heavily staffed functio
Slide 11: New Design: End-to-End Categories
NEW Design “End-to-End” 10 Categories “Freedom in a Framework” Markets There is now one organizing principle for P&G – the product category 70% of Sales 30% of Sales Product categories own responsibility for innovation, manufacturing and marketing Category leaders have ownership and accountability a
Slide 12: Transformation Driving Core EPS Growth and Margin Improvement
This Transformation is Driving Significant Constant Currency Core EPS Growth and Margin Improvement… Constant Currency FY ‘13 FY ‘14 FY ‘15 FY ‘16 FY ‘17 Core EPS Growth Core EPS Growth +10% +14% +11% +7% +11% Core Gross Margin +50 bps +10 bps +90 bps +290 bps +60 bps Core Op. Margin +50 bps +150 bp
Slide 13: And P&G is Producing Results
…And P&G is Producing Results… Going-in Targets FY’17 Organic Sales ~ 2% +2% Core EPS mid-single digits +7% Capital Return to Shareholders ($Bn) 22 Adjusted Free Cash Flow Productivity 90%+ 94% Q4’17 +2% +8% 125% 2.5 ~22 (1) (1) P&G guided $7Bn of dividends and ~$15Bn of share repurchase / exchange.
Slide 14: Outperformed peers and the market in TSR
Since our CEO transition, we have outperformed peers and the market in terms of TSR Fiscal 2017 results demonstrate the effectiveness of the actions we have taken and the plan in place We have leading governance practices and a world-class, highly engaged and diverse Board of Directors Now is the ti
Slide 15: FY18 Guidance and Long-Term Growth Targets
Market Growth Rate ~2.5% 3% to 4% Organic Sales Growth 2% to 3% ~50 bps Above Market Implied Market Share Growth ~In-line with Market Value Share Growth Core EPS Growth 5% to 7% Mid-to-High Single Digits Long-term, expect bottom-line results to track with top-line results: stronger sales growth deli
Slide 16: Total Shareholder Return Comparison
Our Ongoing Transformation is Producing Attractive Shareholder Returns… Total Shareholder Return Comparison November 1, 2015 to September 6, 2017 (1) Source: Bloomberg as of September 6, 2017. The peers selected by Trian in its September 6, 2017 White Paper are as follows: Beiersdorf, Church & Dwigh
Slide 17: Ensuring P&G Remains a Global Leader
P&G Brand …And Ensuring P&G Remains a Global Leader Market Leadership Across Categories Best-in-Class Margins History of Superior Capital Returns Strong Results Driving Shareholder Value Creation Core Operating Margin 3rd Highest in Peer Group After-Tax Profit Margin 2nd Highest in Peer Group $135bn
Slide 18: P&G's Board Has the Right Skills and Experience
P&G’s Board Has the Right Skills and Experience… Established Leadership Across Industries Men and women who are leaders in a variety of relevant fields, including consumer products, retail, digital technology, innovation, healthcare, government, law, technology, and education Experience in Key Execu
Slide 19: Chosen Through a Rigorous Board Selection Process
…And Was Chosen Through a Rigorous Board Selection Process… Represents interests of all shareholders vs. special constituencies Demonstrates character & integrity Inquiring mind Experience at a strategy / policy setting level or high level managerial experience in a complex organization Works effect
Slide 20: Best-in-Class Governance Practices
…According to Our Best-in-Class Governance Practices Declassified Board with all Directors annually elected Shareholders have right to call a special meeting Shareholders have right to act via written consent No poison pill Specified retirement age (72) and term limit (18 years) for Directors No sup
Slide 21: P&G's Board is Highly Diverse, Qualified and Engaged
P&G’s Board is Highly Diverse, Qualified and Engaged Our selection process has resulted in a Board that is highly diverse, highly qualified, highly engaged, with the right mix of skills and experiences that are needed to oversee the Company’s continuing transformation Frank Blake Angela Braly Amy Ch
Slide 22: Nelson Peltz Has Presented No New Ideas
Nelson Peltz Has Presented No New Ideas With the Exception of One – Which is a Bad Idea Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy Increase Accountability Reorganize P&G into a holding company structure with three business units Prior to implementing our transformation, we studied
Slide 23: Ensure Productivity Plan Delivers Results
Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy Ensure Productivity Plan Delivers Results “Seek to ensure” P&G delivers on its productivity targets, and that they are reinvested in the business and grow operating profit P&G’s 2012-2016 productivity initiatives exceeded the $10 billion c
Slide 24: Improve Innovation
Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy Improve Innovation “Propose a Board-led study” Rather than “study” innovation, P&G delivers superior innovation that meets consumer needs and grows share We hold leading brand market positions across our categories, which does not happen i
Slide 25: Focus on Growth via M&A; Focus on Digital
Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy Focus on Growth via M&A Change culture and structure in order to develop improved post-merger integration and retain outside executives We intend to deliver on top- and bottom-line growth goals organically and have large opportunities in f
Slide 26: Address Insular Culture; Improve Corporate Governance
Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy Address “Insular Culture” Set goal for ~25 of top 100 executives to have significant outside experience Our strategy is to hire and promote the best people, whether from inside or from outside External management-level hiring has quadruple
Slide 27: P&G Stands By Its Homework – Mr. Peltz Has No Magic
P&G Stands By Its Homework – Mr. Peltz Has No Magic Conducted analysis of Trian’s past investments, including those in the consumer sector, and identified occurrences of: “Pulling forward” share price performance Many investments initiated following period of share price underperformance Following a
Slide 28: Feedback from investors and executives affected by Trian
P&G has spoken with investors, analysts, members of Boards and senior executives at companies that have been impacted by Trian and the feedback we received was clear Several people, however, would only speak candidly about their experiences with Mr. Peltz if those discussions were kept confidential,
Slide 29: We Diligently Evaluated Nelson Peltz's Board Candidacy
We Diligently Evaluated Nelson Peltz’s Board Candidacy… Date Event February 14 News outlets reported Trian had taken a stake in P&G and Trian filed Schedule 13F disclosing ownership position February 16 Mr. Taylor and Mr. Peltz spoke by telephone and agreed to meet in person March 7 Messrs, Taylor a
Slide 30: Timeline of Engagement with Mr. Peltz
Date Event May 4 Messrs, Peltz and another Trian employee came to the Company’s Global Leadership Council (GLC) meeting, where Mr. Peltz spoke to the GLC for approximately an hour May 8 Messrs, Peltz and Taylor spoke telephonically and Mr. Peltz continued to ask for a seat on the Board May 18 Messrs
Slide 31: At P&G Today, There is No Case For Change
P&G is a profoundly different, much stronger, and more profitable Company than it was just a few years ago P&G people are transforming the Company, and working with passion, ownership and commitment to create value for consumers and shareholders The Company is successfully executing a strategy that
Slide 32: Board Recommends Vote the BLUE Proxy Card
The Board of Directors Recommends That You Vote the BLUE Proxy Card as Follows: Additional Voting Matters Unanimous Board Recommendation Item Election of Directors For Each Nominee Recommended By Our Board Item Ratification of Independent Registered Public Accounting Firm Item Advisory Approval of E
Slide 33: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation 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 attached presentation and the reconciliation to the most closely related GAAP measure. We believe that thes
Slide 34: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Organic sales growth: Organic sales growth is a non-GAAP measure of sales growth excluding the impacts of acquisitions, divestitures and foreign exchange from year-over-year comparisons. Managements believes this measure p
Slide 35: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures *Acquisition/Divestiture Impact includes mix impacts of acquired and divested businesses and rounding impacts necessary to reconcile net sales to organic sales. Organic Sales Growth:
Slide 36: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 37: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 38: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 39: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 40: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures
Slide 41: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures