Procter & Gamble Company (the) · NYSE:PG
Procter & Gamble Company (the) — Proxy Contest (September 2017)
106 slides from Procter & Gamble Company (the)'s proxy contest presentation, Sep 19, 2017
Slide 1: P&G Is Executing a Strategy that is Working
P&G Is Executing a Strategy that is Working September 2017 1
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: At a Glance
At a Glance Company Overview • Founded in 1837, P&G is a global provider of branded consumer packaged goods across 10 core categories – Hair Care, Skin and Personal Care, Grooming, Oral Care, Personal Health Care, Fabric Care, Home Care, Baby Care, Feminine Care and Family Care – across 5 reporting
Slide 5: P&G's Portfolio
P&G’s Portfolio Daily use categories where products solve problems and performance drives purchase Skin & Personal Feminine Baby Family Fabric Home Hair Personal Grooming Oral Health Care Care Care 5
Slide 6: P&G Is the Market Leader in Its Categories
P&G Is the Market Leader in Its Categories More Billion-Dollar Brands than Any Other Competitor U.S. P&G Share vs. #2 • P&G is the market leader in categories where products solve Brand U.S. Rank Market Share(1) Competitor Brand problems and performance drives purchase #1 54% 3.0x — #1 global share
Slide 7: P&G's Strategy Is Producing Results and Creating Shareholder Value
P&G’s Strategy Is Producing Results and Creating Shareholder Value Total Shareholder Return Comparison November 1, 2015 to September 6, 2017 (1) 28 % 23 % 13 % 16 % 4% P&G P&G Peers S&P Consumer S&P 500 Peltz Serving on Staples Index Index Board Source: Bloomberg as of September 6, 2017. (1) The pee
Slide 8: P&G Is a Leader in Returning Capital to Shareholders
P&G Is a Leader in Returning Capital to Shareholders – More than $135 Billion Over the Last 10 Years Dividends $ 181 $ 178 Share Repurchases $ 48 $ 143 $ 138 $ 74 $ 123 $ 109 $ 62 $ 84 $ 65 $ 78 $ 48 $ 68 $ 133 $ 59 $ 105 $ 46 $ 32 $ 13 $ 46 $ 40 $ 76 $ 60 $ 58 $ 61 $ 40 $ 46 $ 34 $ 33 $ 36 $7 $6 (1
Slide 9: P&G Has a Long History of Shareholder Value Creation
P&G Has a Long History of Shareholder Value Creation $ $92.72 (1) 100 +6,281% 90 80 70 60 50 40 30 20 10 0 1968 1973 1979 1984 1990 1995 2001 2006 2012 2017 Strong Share Price Performance Coupled with a History of 127 Consecutive Years of Dividends and 61 Consecutive Years of Dividend Increases 9 (1
Slide 10: A Profoundly Different Company
A Profoundly Different Company Portfolio Strengthening Productivity Skin & Baby Fem Care Family Fabric Home Hair Grooming Oral PHC PC Up to + 4YR Operating Margin +270 bps | Profit per Employee +45% Supply Chain Transformation Organization -32% Roles 10
Slide 11: P&G Has a Streamlined and Strengthened Portfolio
P&G Has a Streamlined and Strengthened Portfolio In 10 Categories Fem Skin & Baby Family Fabric Home Hair Grooming Oral PHC Care PC Daily Use Categories Where Products Solve Problems and Performance Drives Purchase 170 Categories that Leverage P&G’s Core Strengths: Brands Consumer Understanding,
Slide 12: Portfolio Strengthening Is Building Shareholder Value Every Step of the Way
Portfolio Strengthening Is Building Shareholder Value Every Step of the Way Perspectives on Beauty Divestiture Perspectives on Duracell Divestiture “Good deal, in line with preliminary projections… Overall, we view PG's announced “Slimming down P&G will allow proceeds to be invested in developing mo
Slide 13: P&G Is Driving Significant Productivity Improvement
P&G Is Driving Significant Productivity Improvement We delivered our first $10 billion productivity program, which ended in fiscal 2016, and have doubled-down on another $10 billion, starting last fiscal year. We are on track after the first year. Up to Achieved + On Track FY ’12 – FY ‘16 FY ’17 – F
Slide 14: P&G Is Driving Significant Cost Savings and Cash Productivity
P&G Is Driving Significant Cost Savings and Cash Productivity Cost of Goods Savings $8.7Bn Roles (1) $1.6 $1.5 $1.6 $1.5 $1.2 $1.3 -24% -26% FY'12 FY'13 FY'14 FY'15 FY'16 FY'17 FY '12 FY '13 FY '14 FY '15 FY '16 FY '17 Non-Manufacturing Manufacturing Advertising Agency / Production Savings Adj. Free
Slide 15: Market Conditions – Large FX Impacts
Market Conditions – Large FX Impacts $ Billion FY’13 FY’14 FY’15 FY’16 FY’17 Cumulative Sales Impact (1.9) (2.0) (4.4) (4.4) (1.3) ($14.0) % Sales Growth (2%) (3%) (6%) (6%) (2%) (19%) After Tax Profit (0.5) (1.0) (1.5) (1.0) (0.4) ($4.4) Impact % Earnings (4%) (9%) (14%) (9%) (4%) (44%) Growth Over
Slide 16: Productivity Overcame Negative FX Impacts and Significantly Improved Margins
Productivity Overcame Negative FX Impacts and Significantly Improved Margins $ Billion (BT) Foreign Exchange / Commodities 7.0 Wage Rate Inflation 1.0 Venezuela 0.6 Operating Margin Improvement 1.5 Total 10.1 The savings were used to offset $7 billion of FX, $1 billion of related wage rate inflation
Slide 17: P&G Is Driving Significant Constant Currency Core EPS Growth and Margin Improvement
P&G 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 +10% +14% Core EPS Growth +11% +7% +11% Core Gross Margin +50 bps +10 bps +90 bps +290 bps +60 bps Core Op. Margin +50 bps +150 bps +130 bps +240 b
Slide 18: P&G Is Driving Margin Improvement
P&G Is Driving Margin Improvement FY’13 FY’17 Core Gross Margin 48.8% 50.8% Versus 2012/13 +2.0% Constant Currency +4.5% Core Op. Margin 19.4% 22.1% Versus 2012/13 +2.7% Constant Currency +6.1% 18
Slide 19: P&G Earns Industry-Leading Margins and Has Best-in-Class Interest Rates and Tax Rates
P&G Earns Industry-Leading Margins and Has Best-in-Class Interest Rates and Tax Rates 30% Core Operating Margin 3rd 5% Interest Rates Among Highest in Peer Group the Most Favorable 4% 20% 3% 2% 10% 1% 0% 0% Tax Rate Among After-Tax Profit Margin 40% Industry’s Lowest 20% 2nd Highest in Peer Group 30
Slide 20: Sources of Potential Savings from P&G's Second Productivity Plan
Sources of Potential Savings from P&G’s Second Productivity Plan $ Billion (BT) Cost of Goods Sold 7.0 Marketing Efficiencies 2.0 Trade Spending 1.5 Overhead Spending 1.0-2.0 Total 11.5-12.5 P&G continues raising the bar on productivity and has committed up to another $10Bn(1) in productivity saving
Slide 21: P&G's Productivity Program Drives Balanced Growth and Value Creation
P&G’s Productivity Program Drives Balanced Growth and Value Creation “[The CAGNY] presentation marked the four-year anniversary of “Notably, productivity (year-two of second $10B FY17-21 program) Procter’s productivity restructuring announcement. Since the effort provides a high degree of EPS visibi
Slide 22: P&G's Supply Chain Transformation Is Driving Both Top and Bottom Lines
P&G’s Supply Chain Transformation Is Driving Both Top and Bottom Lines 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 cent
Slide 23: P&G's Organization Transformation Is Dismantling the Complex, Matrix Structure
P&G’s Organization Transformation Is Dismantling the Complex, Matrix Structure Old Organizational Structure – “The Thicket” 16 Business 16 Business Units x 16 Business Units x 6 “The Thicket” Units 6 Regions Regions x Functions 16 Global Business Units… …6 Market Development …and heavily staffed fun
Slide 24: P&G's Organization Is Simpler, Faster, Accountable
P&G’s Organization Is Simpler, Faster, Accountable NEW Design “End-to-End” “Freedom in a Framework” 10 Categories Markets 70% of Sales 30% of Sales • Product categories own responsibility for innovation, manufacturing and • In smaller countries where it doesn’t make economic sense to organize this w
Slide 25: Organization Transformation Is Driving Efficiency and Accountability
Organization Transformation Is Driving Efficiency and Accountability “Strategy is clear, focus very evident: With structural changes in place “… the company has made changes to … simplify its matrix structure ("end-to-end" decentralized structure now in ~70% of P&G's markets) to improve decision mak
Slide 26: P&G Is a Profoundly Different, Much Stronger, More Profitable Company
P&G Is a Profoundly Different, Much Stronger, More Profitable Company Research & Manufacturing Advertising & Office Legal Categories Brands Total Roles Development Platforms PR Agencies Buildings Entities Centers -25% -32% -50% -50% -60% -60% -65% -70% 26
Slide 27: P&G Delivered A Strong Year of Results, Meeting or Exceeding All Fiscal 2017 Objectives
P&G Delivered A Strong Year of Results, Meeting or Exceeding All Fiscal 2017 Objectives Going-in Targets FY’17 Q4’17 Organic Sales ~ 2% +2% +2% mid-single Core EPS digits +7% +8% Adjusted Free Cash Flow Productivity 90%+ 94% 125% Capital Return to (1) Shareholders ($Bn) ~22 22 2.5 27 (1) P&G guided
Slide 28: P&G Has Delivered Strong Returns Driven By Steady Progress and Results
P&G Has Delivered Strong Returns Driven By Steady Progress and Results Breadth of Progress Across P&G Breadth of Progress in China Holding/Growing Share Q4’15 Q4’17 Progress in China FY’16 FY’17 FY’18 +mid-single # Top 20 Countries 2 11 Sales Growth -5% +1% digits Categories Growing # Top 20 Brands
Slide 29: Superiority – Raising the Bar
Superiority – Raising the Bar New Standard of Excellence Irresistibly Irresistibly Superior Superior Superior Consumer Superior Superior Brand In-Store & & Customer Products Packaging Communication Online Execution Value Equations We’ve made the choice to double-down on meaningful superiority – prod
Slide 30: Raising the Bar – Superior Products & Packaging
Raising the Bar – Superior Products & Packaging 1 Raising the Bar | Product Raising the Bar | Product & Packaging Superiority Drive Market Size Growth Irresistibly U.S. Fabric Care Superior Market Size Products Tide Pods and Gain Flings have driven 90% of the U.S. Laundry Detergent category growth.
Slide 31: Raising the Bar – Superior Communication, In-Store & Online Execution, Value Equations
Raising the Bar – Superior Communication, In- Store & Online Execution, Value Equations 3 Raising the Bar | Communication Product and packaging benefits Superior need to be communicated with Brand exceptional brand messaging – Communication Market 4X advertising that drives growth for brands and for
Slide 32: Raising the Bar – Superiority Drives Consumer Delight and Market Leadership
Raising the Bar – Superiority Drives Consumer DelightDawn & and Market Leadership For Decades Bounty are great examples of products meeting all five superiority criteria They delight customers with product performance and packaging with clear and compelling communication to consumers. They look grea
Slide 33: P&G Innovation Leads the Industry
P&G Innovation Leads the Industry P&G Cumulative R&D Spend vs. Peers: Last 5 Years • P&G has been an innovation leader throughout its history $ 10 • P&G brands are 5 of the Top 10 and 7 of the Top 25 1.6x R&D Spend of innovations in the 2016 IRI New Product Pacesetters Largest Competitor Report for
Slide 34: P&G Innovation Drives New Brands and Blockbuster New Sub-Brands
P&G Innovation Drives New Brands and Blockbuster New Sub-Brands Always Discreet Head and Shoulders Women Using Right Product Pre-Always Discreet 1 in 9 Post-Always Discreet 1 in 7 Driving category growth acceleration of 50% #1 Shampoo in the world with $3Bn+ in retail sales In the 8 markets where we
Slide 35: P&G Innovation Drives Breadth of Results
P&G Innovation Drives Breadth of Results Online Presence is Growing Significantly Leadership Brands that Resonate with Millennials Online Sales ~$3Bn #1 #1 BRAND BRANDS EQUITY with Millennials SCORES among Millennials FY2016 FY2017 Larger than Top 2 Peer Competitors Combined 35
Slide 36: P&G Innovation Drives Market Leadership
P&G Innovation Drives Market Leadership P&G U.S. P&G Share vs. P&G U.S. P&G Share vs. Brand Rank Market Share(1) #2 Competitor Brand Rank Market Share(1) #2 Competitor #1 54% 3.0x #1 40% 3.0x #1 44% 5.5x #1 66% 5.0x #1 64% 3.0x #1 34% 2.0x #1 28% 2.0x #1 49% 2.5x #1 36% 1.0x #1 41% 4.0x #1 50% 2.5x
Slide 37: Our Highly Engaged Board Is Overseeing P&G's Transformation
Our Highly Engaged Board Is Overseeing P&G’s Transformation… World-Class Board with the Right Skills & Experiences • Established Leadership Across Industries – Men and women who are leaders in a variety of relevant fields, including consumer products, retail, digital technology, innovation, healthca
Slide 38: With Experience Repositioning Companies to Address Changing Consumer Dynamics
….With Experience Repositioning Companies to Address Changing Consumer Dynamics W. James McNerney, Jr. Meg Whitman Francis Blake • Director since 2003 • Director since 2011 • Director since 2015 • Named 2015 CEO of • #6 on Forbes’s 2016 • Former Chairman the Year by Chief list of Self-Made and CEO o
Slide 39: P&G Has a World-Class Board of Directors
P&G Has a World-Class Board of Directors Frank Angela Amy Ken Scott Terry Blake Braly Chang Chenault Cook Lundgren Jim David Meg Pat Ernesto McNerney Taylor Whitman Woertz Zedillo Our selection process has resulted in a Board that is highly diverse, highly qualified, highly engaged, with the right m
Slide 40: P&G Has a Rigorous Board Selection Process
P&G Has a Rigorous Board Selection Process Defined Minimum Criteria Actively Assess Board Needs Find the Right Candidate • Represents interests of all shareholders • Board continually evaluates the skills • Board maintains list of potential vs. special constituencies and experiences needed, based on
Slide 41: Recent Board Addition Demonstrates Rigorous Selection Process
Recent Board Addition Demonstrates Rigorous Selection Process Examples of Specific Attributes Currently Desired in Candidates Most Recent Addition to Board • Experience in science, technology or Experience healthcare innovation Founder & CEO • Gender diversity Head of Product, • Ethnic diversity Goo
Slide 42: P&G's World-Class Board
P&G’s World-Class Board Mr. Blake is the former Chairman of the Board and Chief Executive Officer of The Home Depot, Inc. He served as Chairman of the Board from 2007 until his retirement in 2015 and as CEO from 2007 to 2014. He previously served as Francis (Frank) S. Blake a Director of Southern Co
Slide 43: P&G's World-Class Board
P&G’s World-Class Board Ms. Chang is the founder and CEO of Accompany, Inc. (a relationship intelligence company), a position she has held Amy since 2013. She previously held positions of increasing responsibility at Google, Inc. from 2005 to 2012, most recently Chang serving as Global Head of Produ
Slide 44: P&G's World-Class Board
P&G’s World-Class Board Scott D. Mr. Cook is Chairman of the Executive Committee of the Board of Intuit Inc. (a software and web services company), Cook which he co-founded in 1983. He served as President and CEO of Intuit from 1983 to 1994 and as Chairman of the Board of Intuit from 1993 through 19
Slide 45: P&G's World-Class Board
P&G’s World-Class Board Mr. McNerney is a Senior Advisor at Clayton, Dubilier & Rice, LLC (a private equity investment firm). He retired as W. James (Jim) Chairman of the Board of The Boeing Company in 2016. He was President of The Boeing Company from 2005 to 2013, McNerney, Jr. CEO from 2005 to 201
Slide 46: P&G's World-Class Board
P&G’s World-Class Board Margaret (Meg) Ms. Whitman is President and CEO of Hewlett Packard Enterprise. She was President and CEO of Hewlett-Packard Company from C. Whitman 2011 through 2015, as well as Chairman from 2014 through 2015, and President and CEO of eBay Inc. from 1998 to 2008. Since 2015,
Slide 47: P&G Has Best-in-Class Governance Practices
P&G Has Best-in-Class Governance Practices... • 10 of 11 Directors are independent • Lead Independent Director Independent and • 4 fully independent Board Committees Actively Engaged • 4 Directors added in the last 5 years Board • >95% average attendance of Board and Committee meetings • 6 of 11 Dir
Slide 48: Shareholder-Focused Corporate Governance Relative to Peers
...And Shareholder-Focused Corporate Governance Relative to Peers Church & Kimberly- vs. S&P 500 Clorox Colgate Edgewell Dwight Clark Constituents Annually Elected Board 89% Lead Independent Director 87% Shareholder Right to Call Special Meetings 63% Shareholder R
Slide 49: P&G Is at the Forefront of ESG Initiatives
P&G Is at the Forefront of ESG Initiatives Diversity & Inclusion Gender Equality We desire to be as diverse as the people who use our products. The At P&G, we aspire to build a better world, inside and outside of P&G – a more we reflect the diversity of our consumers, the better equipped we world fr
Slide 50: P&G Has Strong Compensation Practices
P&G Has Strong Compensation Practices What We Do What We Don’t Do Target compensation at the median of an No employment contracts with executives appropriate peer group, with substantial variation containing special severance payments (e.g., based on performance golden parachutes) Significant
Slide 51: P&G's Management Compensation Is Aligned with Shareholder Interests
P&G’s Management Compensation Is Aligned with Shareholder Interests Incentive Compensation Targets Emphasize Pay for Performance and Focus on Long- Balanced Across Top and Bottom Line Results Term Success • Goals established based on both short-term (1 year) and long-term (3 NEO Compensation by Type
Slide 52: P&G's Compensation Targets Are Based on High Standards and Above-Market Growth Rates
P&G’s Compensation Targets Are Based on High Standards and Above-Market Growth Rates • Balanced formula focused on top and bottom-line growth PSP Long-Term — Organic sales growth (30% weighting) Incentive Program — Operating profit growth (20% weighting) Based on Formula — EPS growth (30% weighting)
Slide 53: P&G's Board Is Focused on Creating Long-Term Shareholder Value
P&G’s Board Is Focused on Creating Long-Term Shareholder Value • 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, resulting in a stronger, more focused portfolio – Over
Slide 54: Trian Has Not Produced Any New Ideas That Make Sense For P&G
Trian Has Not Produced Any New Ideas That Make Sense For P&G • P&G Board and management have maintained an open dialogue and have had more than sixteen interactions with Trian. In these discussions: − Mr. Peltz was initially supportive of P&G and its ongoing transformation and plan − Mr. Peltz offer
Slide 55: Chronology of P&G's Engagement with Mr. Peltz and Trian
Chronology of P&G's Engagement with Mr. Peltz and Trian • P&G’s Board and management team had no less than 16 interactions with Trian • Mr. Peltz asked for a Board seat or suggested he should be added to the Board no less than 9 times between March 7 and July 17 • After consideration by the Board, M
Slide 56: Chronology of P&G's Engagement with Mr. Peltz and Trian
Chronology of P&G's Engagement with Mr. Peltz and Trian 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.
Slide 57: Initiatives Offered Confirm Trian Has an Outdated and Misinformed View of P&G
"Initiatives" Offered Confirm Trian Has an Outdated and Misinformed View of P&G Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy • Prior to implementing our transformation, we studied numerous organization design structures, including one similar to what Mr. Peltz proposed 1 • Adding a l
Slide 58: Initiatives Offered Confirm Trian Has an Outdated and Misinformed View of P&G
"Initiatives" Offered Confirm Trian Has an Outdated and Misinformed View of P&G Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy • P&G’s 2012-2016 productivity initiatives exceeded the $10 billion 2 commitment on an accelerated timeframe, demonstrating management’s ability to achieve its
Slide 59: Initiatives Offered Confirm Trian Has an Outdated and Misinformed View of P&G
"Initiatives" Offered Confirm Trian Has an Outdated and Misinformed View of P&G Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy • Rather than “study” innovation, P&G delivers superior innovation that meets consumer needs and grows share 3 • We hold leading brand market positions across
Slide 60: Initiatives Offered Confirm Trian Has an Outdated and Misinformed View of P&G
"Initiatives" Offered Confirm Trian Has an Outdated and Misinformed View of P&G Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy • We intend to deliver on top- and bottom-line growth goals organically and have large opportunities in front of us to do exactly that 5 Change culture and str
Slide 61: Initiatives Offered Confirm Trian Has an Outdated and Misinformed View of P&G
"Initiatives" Offered Confirm Trian Has an Outdated and Misinformed View of P&G Trian’s “Initiative” Trian’s Approach P&G’s Current Strategy • Our strategy is to hire and promote the best people, whether from inside or from outside 7 Set goal for ~25 of top 100 • External management-level hiring has
Slide 62: Trian's Holding Company Concept Is Its Only Idea, and It Is a Bad Idea
Trian's "Holding Company" Concept Is Its Only Idea, and It Is a Bad Idea P&G Has Developed an Approach that This is Not a New Concept Increases Accountability • Another example of Mr. Peltz’s misguided • P&G’s new organizational approach creates a view of P&G’s business structure even more granular
Slide 63: When Trian Has Offered Specific Criticisms, They Are Demonstrably Wrong
When Trian Has Offered Specific Criticisms, They Are Demonstrably Wrong P&G Productivity Initiatives P&G Advertising Initiatives “While P&G has identified an incremental $10-$13 billion of “P&G itself meaningfully reduced digital advertising last savings, Trian is concerned that this initiative coul
Slide 64: When Trian Has Offered Specific Criticisms, They Are Demonstrably Wrong
When Trian Has Offered Specific Criticisms, They Are Demonstrably Wrong P&G’s Organization Structure P&G’s Compensation and Long-Term Targets “P&G’s organizational structure is highly “In 2017, management’s 3-year compensation plan targeted lackluster 2.8% ‘matrixed,’ which Trian believes adds compl
Slide 65: When Trian Has Offered Specific Criticisms, They Are Demonstrably Wrong
When Trian Has Offered Specific Criticisms, They Are Demonstrably Wrong P&G’s Shareholder Returns (Inappropriate Time Periods) P&G’s Shareholder Returns (Misleading Comparisons) If you had invested $1,000 in P&G stock ten‐years ago, “P&G has an iconic portfolio of brands and strong market your inves
Slide 66: P&G Has Done Its Homework – Mr. Peltz Has No Magic
P&G Has Done Its Homework – Mr. Peltz Has No Magic Trian often points to past investments as a measure of Trian’s impact while an owner. However, a review of selected investments within the consumer sector highlight themes that can harm long-term objectives Conducted analysis of Trian’s past investm
Slide 67: P&G Has Done Its Homework – Mr. Peltz Has No Magic
P&G Has Done Its Homework – Mr. Peltz Has No Magic • 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
Slide 68: P&G Growth Objectives
P&G Growth Objectives FY ‘18 Initial Guidance Long-Term 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
Slide 69: P&G Is a Leading Company
P&G Is a Leading Company… Market Leadership Across Categories Strong Results Driving Shareholder Value Creation P&G Market P&G Share vs. P&G Market P&G Share vs. Total Shareholder Return Comparison Rank Rank Brand Share (1) #2 Competitor Brand Share (1) #2 Competitor November 1, 2015 to September 6,
Slide 70: That is Delivering Results
…That is Delivering Results Since our CEO transition, we have Operating Performance outperformed peers and the market in terms of TSR 2% 610bps 11% Organic Sales Increase in Core Core EPS Growth Fiscal 2017 results demonstrate the Growth in FY2017, Operating Profit Margin in FY2017, excl. effectiven
Slide 71: The Board Recommends That You 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 For Each Nominee Recommended Item 1 Election of Directors By Our Board Item 2 Ratification of Independent Registered Public Accounting Firm For Item 3 Advisory
Slide 72: Appendix A
Appendix A Background Information on Trian Investments & Company Performance 72
Slide 73: Background Information on Trian Investments & Company Performance
Background Information on Trian Investments & Company Performance In addition to speaking to executives and board members that have worked with Mr. Peltz, the Company and its Board reviewed Trian’s past investments to better understand stock price performance and operational performance while Mr. Pe
Slide 74: Since November 2015 P&G Has Outperformed Peers
Trian Cited P&G’s “Recent Underperformance”, But Since November 2015 P&G Has Outperformed Peers In the period since November 1, 2015, P&G created $59 billion of value for its shareholders, while companies where Mr. Peltz sits on the Board created a cumulative value of $4 billion Total Shareholder Re
Slide 75: Life Cycle of Selected Exited Trian Investments
Life Cycle of Selected Exited Trian Investments Based on public information, we reviewed all exited Trian investments greater than $25mm that were held for more than 2 years. In aggregate, Trian purchased stocks that underperformed the market by 5% in the year up to its investment, saw modest stock
Slide 76: Life Cycle of Selected Exited Trian Investments
Life Cycle of Selected Exited Trian Investments Based on public information, we reviewed all exited Trian investments greater than $25mm that were held for more than 2 years Step 2: Pull Forward Stock Step 3: Companies Step 1: Buy on the Dip Price Performance Face Lasting Effects Overall Change Annu
Slide 77: Performance of Selected Trian Investments During Ownership Period
Performance of Selected Trian Investments During Ownership Period Investment returns during Trian’s ownership period have varied by investment, and in aggregate is in-line with performance of the S&P 500. Many of Trian’s highest performing investments were those without a Trian board seat Annualized
Slide 78: Performance of Selected Trian Investments During Ownership Period
Performance of Selected Trian Investments During Ownership Period Investment returns during Trian’s ownership period have varied by investment, and in aggregate is in-line with performance of the S&P 500. Many of Trian’s highest performing investments were those without a Trian board seat Annualized
Slide 79: 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 Trian’s publicly stated target investment holding period is 3-5 years(1) and when analyzing all past investments, the median holding period for investments owned for at least one year is approximately 2.5 years Investment Holding Pe
Slide 80: Mondelez Organic Sales and Volume Growth Declined Beginning in 2014
Mondelez Organic Sales and Volume Growth Declined Beginning in 2014 Mondelez volume growth has been negative every year since Mr. Peltz was appointed to the Board Volume Growth Mar-2013 Jan-2014 Trian amasses $1.2bn stake in Nelson Peltz appointed Pre-Trian Board Seat Mondelez and $1.0bn stake in Pe
Slide 81: Mondelez Sales Growth During Trian Board Tenure
Mondelez Sales Growth During Trian Board Tenure Since Trian’s appointment to the Board, Mondelez transitioned from volume-led organic sales growth to pricing-led organic sales growth at nearly half the rate Organic Sales Growth Other Impacts Oct-2012 Overall Reported Completion of FYE (December) Vol
Slide 82: Mondelez Operating Margin Improvement Compared to Peers
Mondelez Operating Margin Improvement Compared to Peers Mondelez’s operating margins were materially below peers in 2013 Margins have improved by 470bps over four years, but still lag the overall peer group 2013 Adjusted Operating Margin(1) 2016 Adjusted Operating Margin(1) 22.0 % (6.7) ppts deficit
Slide 83: Mondelez Operating Margin Improvement Compared to Peers
Mondelez Operating Margin Improvement Compared to Peers Mondelez’s operating margins were materially below peers in 2013 Margins have improved by 470bps over four years, but still lag the overall peer group 2013 Adjusted Operating Margin(1) 2016 Adjusted Operating Margin(1) Peer Median: 16.8% Peer M
Slide 84: Review of Trian's Plan to Enhance Value at Heinz
Review of Trian’s “Plan to Enhance Value at Heinz” 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 Recommendations at Heinz What Happened • Increase gross margins 200bps Margins remained
Slide 85: Heinz Organic Sales Growth During Trian Ownership
Heinz Organic Sales Growth During Trian Ownership During Trian’s ownership, Heinz transitioned from volume-led organic sales growth to pricing-led organic sales growth Organic Sales Growth Other Impacts Reported FYE (April) Volume Pricing Overall Organic FX Acq. / Div. Growth FY2005 2.4% 0.0% 2.4% 3
Slide 86: 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 37% 37% 38% 37% 36% 37% 37% Trian’s Promise: 200 bps Actual: 7 bps 2005 2006 2007 2008 2009 2010 2
Slide 87: Heinz Operating Profit Growth and EPS Growth Below Peers
Heinz Operating Profit Growth and EPS Growth Below Peers After Normalizing Change in Tax Rate From 2006-2011 Heinz grew EPS at an annualized rate of approximately 9%, but earnings growth was below peers after normalizing for a change in tax rate FY2006 – FY2011 EBIT CAGR FY2006 – FY2011 EPS CAGR 8.6
Slide 88: Reduction in Tax Rate Was a Driver of Heinz's Earnings Growth
Reduction in Tax Rate Was a Driver of Heinz’s Earnings Growth Heinz’s change in tax rate from 2006-2011 helped improve earnings growth Heinz Effective Tax Rate 36.2% Trian won 2 seats on the Board on 08-Sep-2006 30.6% 29.6% 28.4% 27.8% 26.2% 2006 2007 2008 2009 2010 2011 U.S. Federal Statutory Tax R
Slide 89: Trian's Recipe for Successful Value Creation at Wendy's
Trian’s “Recipe for Successful Value Creation” at Wendy’s Trian used a variety of operational and strategic arguments against Wendy’s Trian’s Recommendations at Wendy’s What Happened Increase EBITDA to $463 million (68% increase) Margins remained flat for many years Increase Increase EBITDA marg
Slide 90: Comparison of Wendy's Results vs. Burger King
Comparison of Wendy’s Results vs. Burger King Margin improvement at Wendy’s was modest, and improved after Burger King implemented refranchising and cost initiatives Wendy’s Adjusted EBITDA Margin(1) Mar-2006 Apr-2008 Sep-2008 Jul-2013 Wendy’s settles with Trian Wendy’s and Triarc Nelson Peltz added
Slide 91: Combining Wendy's With Arby's Reversed Trian's Action Plan
Combining Wendy’s With Arby’s Reversed Trian’s “Action Plan” Trian’s Campaign Against Wendy’s Merger Between Wendy’s and Triarc (Arby’s) In 2005, Trian advocated for Board Representation In 2008, Trian orchestrated a merger between its 10% owned Wendy’s and its Trian pushed for greater focus o
Slide 92: Appendix B
Appendix B Supplemental Materials 92
Slide 93: P&G's TSR Time Frame Is the Right Comparison
P&G’s TSR Time Frame Is the Right Comparison 1 End Date: Current Share Price • P&G’s results are driving share price performance, not outside influences — In aggregate, P&G operational events in 2017 moved P&G’s share price 1.9x more than Trian events 2 Start Date: November 1, 2015 • In prior campai
Slide 94: P&G's Stock Price Performance Driven By Our Results, Not Outside Influences
1 P&G’s Stock Price Performance Driven By Our Results, Not Outside Influences P&G Year-to-Date Share Price Performance $94 26-Apr-2017 27-Jul-2017 $ 92.72 Q3-17 results 18-Jul-2017 Q4 and FY17 results Announced early $92 20-Jan-2017 release of Q4 results Q2-17 results $90 Closing Price (USD) $88 $86
Slide 95: Total Shareholder Return Comparison
2 Total Shareholder Return Comparison Longer Time Horizons are Less Relevant When Evaluating Our Share Price Performance Last 5 Year Total Shareholder Return 87 % • P&G underwent a significant transformation and longer historical time horizons are not representative of 84% 91% our current strategy a
Slide 96: Total Shareholder Return Comparison
3 Total Shareholder Return Comparison Trian’s Comparison of Longer Term TSR Ignores the Impact of Changes in FX Rates Last 3 Year Total Shareholder Return Averages (1) • Significant changes in FX rates also 70 % Trian Peers (Local) 39 % Trian Peers (USD) 30 % influence TSR comparisons — Trian’s ten
Slide 97: Additional Shareholder Proposals
Additional Shareholder Proposals Nominating Voting Matter Shareholder Summary Rationale Against P&G already has several principles in Make all possible lawful efforts to implement and/or increase activity on place for non-discrimination and Adopt Holy Land Holy Land each of the eight Holy Land Princ
Slide 98: 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 99: 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 100: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Organic Sales Growth: Net Sales Foreign Exchange Acquisition/ Organic Sales Total Company Growth Impact Divestiture Impact* Growth Q4 FY 2017 --% 2% -% 2% FY 2017 --% 2% -% 2% *Acquisition/Divestiture Impact includes mix i
Slide 101: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Three Months Ended June 30 2017 2016 Diluted Net Earnings Per Share from Continuing Operations $0.82 $0.71 Incremental Restructuring 0.02 0.08 Rounding 0.01 - Core EPS $0.85 $0.79 Percentage change vs. prior period 8% Curr
Slide 102: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Core operating profit margin: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 Operating Profit Margin 17.1% 17.7% 18.7% 15.6% 20.6% 21.5% Incremental Restructuring 0.8% 0.7% 0.5% 0.9% 0.9% 0.6% Charges for Certain European Legal Matte
Slide 103: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Core gross margin: FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 Gross Margin 48.2% 48.5% 47.5% 47.6% 49.6% 50.0% Incremental Restructuring 0.2% 0.3% 0.4% 0.7% 1.0% 0.8% Rounding - - - 0.1% - - 4-yr total Core Gross Margin 48.4% 48.
Slide 104: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Adjusted free cash flow: Three Months Ended June 30, 2017 Cash Tax Payment – Adjusted Free Operating Cash Flow Capital Spending Free Cash Flow Beauty Sale Cash Flow $3,688 $(1,154) $2,534 $215 $2,749 Twelve Months Ended Ju
Slide 105: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Adjusted free cash flow: Operating Tax Payment on Cash Flow Capital Spending Divestitures Adjusted Free Cash Flow FY 16 $15,435 $(3,314) $- $12,121 FY 15 14,608 (3,736) 729 11,601 FY 14 13,958 (3,848) - 10,110 FY 13 14,873
Slide 106: Regulation G Reconciliation of Non-GAAP Measures
The Procter & Gamble Company Regulation G Reconciliation of Non-GAAP Measures Adjusted free cash flow productivity: Impairment & Net Earnings Adjusted Free Adjusted Free Divestiture Venezuela Excl. Gain and Cash Flow Cash Flow Net Earnings Gain Charge Impairment Productivity FY 16 $12,121 $10,604 $(