Deutsche Bank Global Consumer Conference · Baby Care Pampers DryMax – North America 18. 7 Baby...
Transcript of Deutsche Bank Global Consumer Conference · Baby Care Pampers DryMax – North America 18. 7 Baby...
Deutsche BankGlobal Consumer Conference
June 16, 2010
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• Strong, Multi-Year Innovation Program• Simplification & Productivity• Business Progress
Purpose-inspired Growth
g• Q&A
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Strong, Multi-Year Innovation Program More Consumers…by extending our category portfolios vertically to higher and lower value tiers
In More Parts of the World…by expanding geographically into category whitespaces
More Completely…by improving existing products and extending portfolios into adjacent categories
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Fiscal 2011 – Innovation Impacts
Full year of “first market” launches
Year 2+ leverage plans
Geographic expansion
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3New innovations
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Fiscal 2011 – Innovation Impacts
JAS‘09 OND‘09 JFM‘10 AMJ‘10 JAS‘10 OND‘10 JFM‘11 AMJ‘11
Fekkai Classic
Fiscal Year 2010 Fiscal Year 2011
Ariel & Dash Acti-lift- WE
Bounty Upgrade - NA
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Pampers Dry Max - NA
Fusion ProGlide - NA
Pantene Restage - NA
Crest 3D White - NA
Always Simply Fits - UK
Naturella - China
Dish CareFairy Auto Dish –Western Europe
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Dish CareDawn Hand Renewal –North America
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Dish CareJoy Moist Care –Japan
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Dish CareGain Hand Dishwashing Liquid
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Air CareJapan Febreze Mistral
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Air CareAmbiPur Acquisition
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Air Care ExpansionFebreze & Ambi Pur Market Coverage
Multi-year plans will expand Air Care’s reach to ~3.8 billion consumers
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Fabric CareTide Naturals - India
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Fabric CareAriel Actilift, Dash Actilift
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Fabric CareTide Acti-Lift
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Fabric CarePowder Compaction and Formula Upgrade
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Baby CarePampers Value Tier
Western Europe CEEMEA
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Baby CarePampers DryMax – North America
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Baby CarePampers Dry Max – Western Europe
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Oral CarePro-Health Formula Expansion
Mexico China
2020
Poland, Turkey & Russia
Brazil
Oral CareOral-B Toothpaste Expansion
Benelux
2121
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Oral CarePremium Oral Care Boutique
Crest 3D White
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Hair CarePantene Nature Fusion
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Hair CarePantene Brand Restage
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Blades and RazorsMach 3 India
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Blades and RazorsGillette Fusion ProGlide
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Fiscal 2011 – Innovation Impacts
Full year of “first market” launches
Year 2+ leverage plans
Geographic expansion
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3New innovations
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Investing in GrowthContinued industry leading R&D investment
R&D Spend vs. Major Competitors$2.0 bn
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$0.5
$1.0
$1.5
P&G UnileverL'Oreal Henkel KC Colgate Reckitt Clorox Energ. Avon
Significantly more consumer impressions in FY’10;Continued strong support levels in FY’11
~+20%
Investing in Growth
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FY’09 FY’10 FY’11
Simplification & ProductivityMaterials, Formulas & SpecificationsToday• 1,500 Chassis• 16,000 Formulas• 4,000 Printing & Packaging
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colors• 144,000 Material & Package
SpecificationsFuture• Global Platform strategy
targeting a 30% reduction in formulas, colors & specs
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Simplification & ProductivityAlternative Materials
• C&D effort with key supplier to develop new polymer
• Reduces surfactant level in
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Reduces surfactant level in Laundry powder
• Improves performance, especially in cold water
>100,000 <50,000 75,000
Simplification & ProductivitySupplier Optimization
Suppliers Suppliers
2007 2012
Suppliers
2010
Global Suppliers 32
Simplification & ProductivityManufacturing localization
33Approximate location of new manufacturing facilities over next 5+ years
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Simplification & ProductivityDistribution Center Consolidation
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>500
~250
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Simplification & ProductivityPlanning, Current Locations >300
Simplification & ProductivityPlanning, Future Locations 4 - 8
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Simplification & Productivity“Control Tower” Transportation Management
• Control Tower Approach• State of the Art Technology• Breakthrough TruckBreakthrough Truck
Utilization Rates• Collaboration with Non-
Competing Companies
Simplifying our work, decision
making and structure
Frees up investment for
growth
Cost DisciplineEnables Growth
Frees up capacity for innovation
Consumer
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Leadership Shareholder Value Creation• Profitable Value Share Growth
Organic Sales Growth Ahead of Underlying Markets
Business Objectives
g y gConsistent, Strong EPS Growth
• Significant Cash Generation
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+2%
Fiscal Year 2010 Organic Sales Growth
+5%
+4%+4% to
+5%+3% to
+5%
Q1’10 Q2’10
Q4’09
Q3’09Q2’09Q1’09
+2%
Q3’10
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FY’10eQ4’10e
Organic sales growth is sales growth excluding the impacts of acquisitions, divestitures and foreign exchange.
Business OutlookFY 2010 Guidance Evolution
Core EPS
May ‘09$3.62 to
$3.68
CurrentOct. ‘09
C EPS 0% to +3%
Organic Sales Growth
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+4% to +6%-1% to +3%
+3% to +5%+2% to +4%+1% to +3%
Core EPS Growth
Core earnings per share growth is a measure of diluted net earnings per share from continuing operations excluding charges for pending European legal matters, the impact of recently enacted U.S. health care legislation and incremental restructuring charges related to the Folgers divestiture in the prior fiscal year.
$8
$10
$12
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Cash DisciplineAdjusted Free Cash Flow Productivity*
Target = 90%+
ow, $
Bn
146% 117%
100%
101%128%99% 102%
$0
$2
$4
$6
FY '0
3
FY '0
4
FY '0
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FY '0
6
FY '0
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FY '0
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FY '0
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FYTD
'10
Adj
uste
d Fr
ee C
ash
Flo 146% 117% 92%
* Ratio of adjusted free cash flow to net earnings excluding major divestiture gains. 42
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FY ’08
Shareholder Value CreationCash Returned to Shareholders
Adjusted FCF* ($ Billion)
FY ‘09 FY ’10e
$12.0 $11.7 ~$12.3
V l t Sh h ld ^
Shareholder Yield(% of Market Cap)
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7.8% 6.5% ~6.5%
*Adjusted free cash flow is operating cash flow less capital plus tax impacts from major divestitures. ^Value to shareholders includes dividends and share repurchases.
Value to Shareholders^($ Billion) $14.7 $11.4 ~$11.5
Business OutlookImproving Global Market Share Trends
19.9%
P12M
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P6M P3M
Constant currency value basis; Data thru April 2010; change versus prior year
(0.2%) +0.1% +0.2%
“Basics” Sales
Growth3X to 4X
North America Family CareFY’09 vs. FY’06
CategoryAT
Margin
CategoryValueShare
+200 bps
+1.5 point
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SalesGrowth 2.5 times
Feminine Care RussiaFY’09 vs. FY’06
AT Margin
ValueShare
+900 bps
+6 points
SalesGrowth 6 times
Fabric Care IndiaFY’10e vs. FY’03
BTMargin
ValueShare
+900 bps
+8 points
Investing in Growth
+5%
Pricing & Promotion Activity
Fiscal year net pricing impact on organic sales growth
FY’09
FY’10e48
FY’11e
+1%
Neutralto
Positive
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Forward Looking StatementAll statements, other than statements of historical fact included in this release or presentation, are forward-looking statements, as that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on financial data, market assumptions and business plans available only as of the time the statements are made, which may become out of date or incomplete. We assume no obligation to update any forward-looking statement as a result of new information, future events or other factors. Forward-looking statements are inherently uncertain, and investors must recognize that events could differ significantly from our expectations. In addition to the risks and uncertainties noted in this release or presentation, there are certain factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include: (1) the ability to achieve business plans, including growing existing sales and volume profitably despite high levels of competitive activity, especially with respect to the product categories and geographical markets (including developing markets) in which theCompany has chosen to focus; (2) the ability to successfully manage ongoing acquisition and divestiture activities to achieve the cost and growth synergies in accordance with the stated goals of these transactions without impacting the delivery of base business objectives; (3) the ability to successfully manage ongoing organizational changes designed to support our growth strategies, while successfully identifying, developing and retaining key employees; (4) the ability to manage and maintain key customer relationships; (5) the ability to maintain key manufacturing and supply sources (including sole supplier and plant manufacturing sources); (6) the ability to successfully manage regulatory, tax and legal requirements and matters (including product liability, patent, intellectual property, competition law matters, and tax policy), and to resolve pending matters within current estimates; (7) the ability to successfully implement, achieve and sustain cost improvement plans in manufacturing andoverhead areas, including the Company's outsourcing projects; (8) the ability to successfully manage currency (including currency issues in certain countries, such as Venezuela, China and India), debt, interest rate and commodity cost exposures and significant credit or liquidity issues; (9) the ability to manage continued global political and/or economic uncertainty and disruptions,especially in the Company's significant geographical markets, as well as any political and/or economic uncertainty and disruptions due to a global or regional credit crisis or terrorist and other hostile activities; (10) the ability to successfully manage competitive factors, including prices, promotional incentives and trade terms for products; (11) the ability to obtain patents and respond to technological advances attained by competitors and patents granted to competitors; (12) the ability to successfully manage increases in the prices of raw materials used to make the Company's products; (13) the ability to stay close to consumers in an era of increased media fragmentation; (14) the ability to stay on the leading edge of innovation and maintain a positive reputation on our brands; and (15) the ability to rely on and maintain key information technology systems. For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports.
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Regulation G Disclosure
For full reconciliation, visit:www.pg.com/investors
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