pg 2012 analyst slides

7/28/2019 PG 2012 Analyst Slides

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11/15/2012

November 15, 20122012 Analyst Meeting

Agenda

Results & Outlook

Growth & Productivity Strategy Strengthen Core Developed Markets Maintain Developing Market Momentum Strengthen Innovation Productivity Plans and Progress

Q&A

P&G Vice Chairmen

Werner Geissler Vice Chairman, Global Operations

Dimitri PayanotopoulosVice Chairman, Global Business Units


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Todays Presenters

Bob McDonaldChairman of the Board

President and Chief Executive Officer

Jon Moeller Chief Financial

Officer

Melanie HealeyGroup PresidentNorthAmerica

and Global Hyper,Super, Mass Channel

Patrice LouvetPresident

Global Shave Care

Alex KeithVice President

Fabric Care, North America and Brand

Fabric Leader,Fabric Enhancers

ShantanuKhosla

Vice PresidentIndia

Bruce BrownChief Technology

Officer

Laurent PhilippeGroup President

Central and EasternEurope, Middle East

and Africa and GlobalHigh FrequencyStores Channel

Jorge MesquitaGroup President

New BusinessCreation and Innovation

and Global Pet Care

Yannis SkoufalosGlobal ProductSupply Officer

Marc PritchardGlobal Brand

Building Officer

Jorge UribeGlobal Productivity and

OrganizationTransformationOfficer

Teri List-StollSenior Vice

President andTreasurer

Creating Value for Shareholders

122 93% 56 Consecutive Yearsof Dividends

Consecutive Years of Dividend Increases

Rolling 10-year quarterly returns haveexceeded the S&P 500

and Dow Jones


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Big, Highly Profitable Businesses

Strategies

Maintaining Strong Developing Market Momentum Strengthening Core Developed Markets Building a Strong Innovation Pipeline Improving Productivity
http://news.duracell.com/sites/duracell.newshq.businesswire.com/files/logo/image/Duracell_Logo_Black.jpghttp://www.ariel-info.com/images/ariel-logo.pnghttp://upload.wikimedia.org/wikipedia/fr/0/07/Vicks_Logo.jpg


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Productivity

Across all Operations Global Business Units Market Development

Organizations Global Business

Services Corporate Functions

Jul Sept 12 (Q1 FY 13) ResultsOrganic Sales Growth

0%

1%

2%

3%

4%

5%

6%

JAS 11 OND 11 JFM 12 AMJ 12 JAS 12

Organic sales up in 4 of 5 reporting segments

4% 4%

3% 3%

2%

0%

10%

20%

30%

40%

50%

60%

70%


Jul Sept 12 (Q1 FY 13) Results% of Global Sales In-Line or Growing Value Share

Market share data is value basis, constant currency.

Intervention plans on key businesses are driving improvedshare results


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Jul Sept 12 (Q1 FY 13) Results% of U.S. Sales In-Line or Growing Value Share

0%

10%

20%

30%

40%

50%

60%

70%


Intervention plans on key businesses are driving improvedshare results

Market share data is value basis, constant currency.

Jul Sept 12 (Q1 FY 13) ResultsCore EPS Growth

-5%

0%

5%

10%


0%0%1%

-2%

5%

* History adjusted for Snacks moving to Discontinued Operations.

Results largely driven by strong productivity progress

Jul Sept 12 (Q1 FY 13) ResultsCash

Free Cash Flow $2B

Dividends $1.6B

Share Repurchase $2.6B

Value to Shareholders $4.2B


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FY 2013 GuidancePricing

0

1

2

3

4

5

6

FY 09 FY 10 FY 11 FY 12 FY 13E

+1%

+2%

+5%

+4%

+1%

$3.5billion

FY 2013 GuidanceFY 13 Guidance Unchanged

FY 13

Organic Sales Growth +2% to +4%FX -2% to -3%

All-In Sales Growth 0% to +1%

Core EPS $3.80 to $4.00Core EPS Growth -1% to +4%

FY 2013 GuidanceItems Included in Guidance

Included in GuidanceLower interest expense & minor brand divestitures $0.04 - 0.05

Higher effective tax rate on core earnings $(0.04) - (0.05)

Pension & employee benefit plan impacts ($0.06)

VZ mandated prices & AR import restrictions ($0.06)


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FY 2013 GuidanceItems Not Included in Guidance

Included in Guidance Not Included in Guidance

Lower interest expense & minor branddivestitures $0.04 - 0.05 Foreign Exchange Items:

Higher effective tax rate on core earnings $(0.04) - (0.05) - Significant strengthening of U.S. Dollar

Pension & employee benefit plan impacts ($0.06) - Venezuela devaluation post election

VZ mandated prices & AR importrestrictions ($0.06) Market Growth Deceleration from:

- Deepening European financial crisis

- Uncertainty from U.S. fiscal cliff

U.S. Tax Policy Extensions:

- Subpart F "Look Through"

- R&D Tax Credit

Q2 FY 2013 GuidanceQ2 FY 13 Guidance Unchanged

FY 13

Organic Sales Growth +1% to +3%FX -2%

All-In Sales Growth -1% to +1%

Core EPS $1.07 to $1.13Core EPS Growth -2% to +4%

Capital StructureStrategy Maintaining Strong

Balance Sheet to

Ensure adequate liquidity

Optimize interest expense

Give flexibility to act on valuecreation opportunities(e.g. dividends, share repurchase,strategic acquisitions)


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8

105%

120%Consistently Delivering 90%

Cash Productivity Target

Adjusted Free Cash Flow Product iv ity

0%

15%

30%

45%

60%

75%

90%

FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12 FY 13e

Working Capital

$1.8bn cash from freedinventory & receivables overpast 3 years

funding large portion of accelerated capital spendingin developing markets

Debt & Interest Expense

Maintaining AA-credit rating

$700 million savings over past 4 years

FY12 average effective interest rate =2.5% Down 140 bps vs. FY 08 Top 10% of S&P 500

Last 5 long-term debt instruments issued atrecord-low coupon rates

Low-cost commercial paper providingdependable liquidity in volatile markets


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Returning Value to Shareholders

$ Billions Past 10 Years

Dividends $42

Share Repurchase * 46

Value to Shareholders $88

*P10Yr share repurchase excludes $20 billion of repurchases associated with the Gillette acquisition.

90% of Net Earnings Returned to Shareholders

Dividends

FY13 = >$6bn in dividends 122 consecutive years of dividend payments 56 consecutive years of dividend increases

$0.00

$0.25

$0.50

$0.75

$1.00

$1.25

$1.50

$1.75

$2.00

$2.25

1956 1964 1972 1980 1988 1996 2004 2012

Dividends per Share

ShareRepurchase Will purchase $4bn from

July 12 Dec. 12 Front- end loaded to

Minimize price paid Maximize EPS impact Increase flexibility to buy

more in second-half of FY

Now expect range of $4bn to $6bn in FY13


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Returning Value to ShareholdersFY13 Cash Outlook

Free Cash Flow Productivity ~90%Capital Spending, % sales 5.5%

Dividends >$6bn

Share Repurchase $4 to 6bn

Value to Shareholders $10 to $12bn

Shareholder Yield * 5.3% to 6.3%

*Shareholder yield calculated based on current market cap value of approximately $190 billion

Developing MarketsCurrent Footprint & Developing Market Sales

62%

38%32%

68%63%37% 46%54%

DevelopingMarket Sales

Developed

Developing

P&G Unilever LOreal Colgate

$32B $22B $9B $9B

Developing MarketsP&G Sales Progression: 2000 to 2012

FY '00 FY '12

% o

f T o t a l C o m p a n y

S a

l e s

Developed

Developing

80%

62%

38%

$32 bn

$8 bn

12% Sales Growth CAGR Over 12 Years

20%


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Developing MarketsP&G Asia Sales Growth

1991 2001 2012

$15.0B

~$1.5B

$4.0B

Asia Sales Up 10X

Developing MarketsP&G Latin America Sales Growth

1991 2001 2012

$8.3B

$1.0B

$2.9B

Latin America Sales Up 8X

Developing MarketsP&G Central & Eastern Europe, Middle East

& Africa Sales Growth

1991 2001 2012

$12.1B


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Developing MarketsMarket Growth Potential

+800MMWorld population growth by 2020

+1.5BMiddle class incomes by 2020

95%World population growth indeveloping markets

Developing MarketsMarket Growth Potential

150 YearsFor Britain to Double GDP per Capita

Less than 20 YearsFor China & India to Double GDP per Capita

50 YearsFor U.S. to Double GDP per Capita

Developing Markets

Resources concentrated on biggestopportunities

Profitable expansion by focusing on: Growing Markets Increasing Market Share Improving Mix Localizing Production Leveraging Scale


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Top 10 Developing Markets IndiaOrganic Sales Growth

FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 FY 12

Decade of +20% OrganicSales Growth

Top 10 Developing Markets IndiaValue Share Growth

FY 02 FY 12

Value Share from3.5% to ~12%

Top 10 DevelopingMarkets India

30% Sales GrowthPast 2 Fiscal Years

95% of Sales Growing ShareFY 2012

Recent Growth


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Top 10 Developing Markets IndiaShare Leadership

Value SharePosition

Diapers 1Laundry 2Batteries 1Respiratory 1Hair Care 2Salon Professional 2Male Blades & Razors 1Pre & Post Shave Care 2Feminine Care 1Toothbrushes 2


6 million retail storesSelling P&G brands

700 Million Indian ConsumersUsed at least 1 P&G Brand in the Last Year

Distribution Expansion &Household Penetration


Products of superior performance and value

Strong Innovation

Effective Communicationof product benefits

Improved Productivity

Winning with:


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Top 10 Developing Markets IndiaInnovation




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6

10

14

FY 09 FY 10 FY 11 FY 12

India Laundry Value Share


20

35

50

65

JFM 07 JFM 08 JFM 09 JFM 10 JFM 11 JFM 12

Huggies Pampers



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Top 10 Developing Markets IndiaProductivity

FY 09 FY 10 FY 11 FY 12 FY 13E

Rupees Per Employee

Top 10 Developing Markets Sub-Sahara Africa

TUNISIAMOROCCO

SAHARA

ALGERIA

MAURITANIAMALI

NIGER

LIBYA

CHAD

Sea

EGYPT

SUDAN

ETHIOPIA

DJIBOUTI

ERITREA

KENYA

TANZANIA

DEMOCRATIC

(ZAIRE)

CENTRAL

RWANDA

CONGO

NIGERIABENIN

DIVOIRESIERRA

SENEGAL

GHANA

GUINEA

LIBERIA CAMEROON

MALAWI

ZAMBIA

MOZAMBIQUE MADAGASCARZIMBABWE

BOTSWANA

SWAZILANDLESOTHO

NAMIBIA

ANGOLA

WESTERN

Red

UGANDA

OF THECONGO

REPUBLIC

BURUNDI

REP.OF

TOGOCOTE

BURKINAFASO

GUINEA

LEONE

GAMBIA

BISSAU

SOUTH

REPUBLIC

AFRICAN

THE

AFRICA

EQUATORIAL

GABONGUINEA

SAOTOMEandPRINCIPE

CAPEVERDE

Top 10 Developing Markets Sub-Sahara AfricaPopulation Growth

0%

5%

10%

15%

20%

25%

Sub-Sahara India China

% of Global Population

2012 2025 2050


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Top 10 Developing Markets Sub-Sahara AfricaPast 10 Year Average GDP Growth

2.8

5.3

4.7

3.7

World Sub-Sahara Russia Brazil


GROWING

DYNAMIC

BIGGeographyPopulationStores

EconomyUrbanizationTechnologyEducation

Women:-Mums-Professionals-Beauty

Growth Potential


Source: Adapted from McKinsey Global Institute Report: Lions on the move: The progress and potential of African economies, June 2010

0%

20%

40%

60%

80%

100%

2000 2008 2020Struggling ($20,000)

Wealth Potential


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Top 10 Developing Markets Sub-Sahara AfricaExpansion Model

New LaunchesOral-B, Safeguard

Growing FastDuracell, Gillette

Core BrandsPampers, Always, Ariel

Top 10 Developing Markets Sub-Sahara AfricaFabric Care

Top 10 Developing Markets Sub-Sahara AfricaFeminine Care


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Top 10 Developing Markets Sub-Sahara AfricaBaby Care

Top 10 Developing Markets Sub-Sahara AfricaBaby Care Local Manufacturing

Top 10 Developing Markets Sub-Sahara AfricaDistribution Expansion

2012 2015

Stores Covered

Doubling # of covered storesin the next 3 years


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Top 10 Developing Markets Sub-Sahara AfricaSales Growth

FY 03 FY 13E FY 20E

Quadruple Sub-SaharaSales by 2020

Top 10 Developing Markets Sub-Sahara AfricaOperating Margin Growth

FY 03 FY 13E

Margin growth while expandinginto new categories

Developing Markets

Continued StrongLevels of Investment

Delivering ProfitableGrowth


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Developing MarketsIntegrating for Faster Growth

Sales Growth

P3 Fiscal Years

Top 10 Developing Markets (113)

Integration impact on Top 10Developing Markets:

~40% increase inrate of sales growth

Developing Markets

Top 10 Developing Market After Tax Profit +35%*

Building Scale & Profitable Growth through: Geographic expansion of portfolio Innovation that accelerates category development &

trade-up Productivity from localizing the supply chain &

overhead efficiency

* Based on mid-October fx rates

FY 2013 Profit Growth Expectation

Strengthening Our Core Business

40 Largest and MostProfitable BusinessesTop 40 Focus

MarketsHousehold

CareBeauty &Grooming

United States 7 6Other Developed 7 7China 2 4Other Developing 4 3Total 20 20


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Top 40 Businesses United States

North America

Sales All Other Regions

Sales

P&G Global Sales


1. Win with Base Business2. Win with Innovation3. Win with Productivity

Top 40 Investment Plan


P&GRetailSales

HenkelC&D

Energizer

Reckitt

JNJ

ColgateL'Oreal

Unilever KC

All OtherManufacturers

Retail Sales

Base Business: Retail Sales >$30B


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Top 40 Businesses United StatesBase Business: Consumer Value

Top 40 Businesses United StatesBase Business: Value and Power Claims



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Top 40 Businesses United StatesBase Business: Driving Growth at Shelf


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Top 40 Businesses United StatesInnovation

Top 40 Businesses United StatesPremium Innovation

Top 40 Businesses United StatesInnovation: In-Store


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Top 40 Businesses United StatesInnovation: In-Store

Top 40 Businesses United StatesInnovation: Hair Care


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Top 40 Businesses United StatesInnovation: Multi-Brand


FY 11 FY 12 FY 13E

# of US MDO Employees

Productivity

Top 40 Businesses United StatesShare Improvements

June Quarter (CYA) September (CYA)

Value Share (-0.8pts) (-0.2pts)

Volume Share (-0.9pts) ~Flat

% of Sales Holding or Growing $ Share ~15% ~60%

US AOS thru 9/29/12


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Top 40 Businesses U.S. Shave CareGlobal Leadership

Top 40 Businesses U.S. Shave Care

US Male B&R Retail Sales($MM)

U.S. Leadership

P&G Energizer Bic AO Market

Fusion

Mach

All Other Gillette

Hydro

Sensor

AO ENRQuattro

Xtreme 3

Productivity

Top 40 Businesses U.S. Shave CareKey Strategies

IrresistibleInnovation

StrategicPortfolio

Activation

CommunicatePerformance

and Value

BeCompetitive

In-StoreEveryday

Unlock thePower of Gillette

Branding


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Top 40 Businesses U.S. Shave Care

14%Value Share

14%Value Share

Innovation

Top 40 Businesses U.S. Shave CareInnovation

70%of men believe to

have Sensitive Skin

Top 40 Businesses U.S. Shave CareStrategic Portfolio Activation

FusionProglide

Styler Fusion

ProGlide Mach 3Sensor 3

DisposablesGood NewsDisposables

PriceIndex

647 148 Base 66 23


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Top 40 Businesses U.S. Shave CarePower of the Gillette Brand

Top 40 Businesses U.S. Shave CareIn-Store Trial Generation

Top 40 Businesses U.S. Shave CareProductivity

FY 12 FY 13E

>10% reduction byend of FY 13

# of Global B&R Employees


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Top 40 Businesses U.S. Fabric CareMarket Leader

0

15

30

45

60

P&G C&D Sun Henkel Private Label Reckitt All Other

US Laundry Value Share*

Gain

Tide

Era, Cheer & Dreft

A&H

Xtra

* P3M Value share thru 9/29/12

Top 40 Businesses U.S. Fabric Care

Trade In: Making P&G Fabric Care brandsattractive to more consumers

Trade Up: By innovating to grow market & share

Trade Across: By leveraging competitiveadvantage across categories

Key Strategies


Just one sheet of Bounce Outdoor Freshgives you more freshness than two sheets

of the leading value brand.

Trade In

Basedonstainremovalperformanceof1 doseofEraliquidvs.2 doses of the leadingliquidbargainbrandbasevariantina standardtoploadingmachine.


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Top 40 Businesses U.S. Fabric CareTrade In


Just one sheet of Bounce Outdoor Freshgives you more freshness than two sheets

of the leading value brand.

Trade In


* Era claimbased on stainremoval performance of 1 dose of Era liquid vs. 2 doses of the leading liquid bargain brand base variant ina standard top loading machine.


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Top 40 Businesses U.S. Fabric CareTrade Up

* Freshness outof storage

Top 40 Businesses U.S. Fabric CareTrade Across


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Top 40 Businesses U.S. Fabric CareProductivity

Top 40 Businesses U.S. Fabric CareProductivity

FY 11 FY 13E

# of US Fabric Care Employees

>20% Reductionby end of FY 13

-4

-2

0

2

4

Top 40 Businesses U.S. Fabric CareResults: Tide Value Share

Tide Pods Launch


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3

0

1

2

3

4

5

6

7

Unstopables Purex Crystals

% o

f w e

i g h t t h a

t s p e r f u m e

i n g r e

d i e n t s

% of Weight that's Perfume Ingredients

Top 40 Businesses U.S. Fabric CareResults: Downy Unstopables

Top 40 Businesses U.S. Fabric CareResults: Gain

Top 40 Businesses U.S. Fabric CareResults: Fabric Care Value Share*

-1.0

-0.5

0.0

0.5

1.0

1.5

P12M P6M P3M Sept 12

US Fabric Care US Laundry

* US AOS thru 9/29/12


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Why InnovationMatters Lifeblood of the company

Differentiates brands Prevents commoditization Wins the consumer

value equation Creates value for

retail partners Creates new businesses

Investing for GrowthR&D Spending

Investing for GrowthConnect + Develop Innovation Network


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Innovation

Unmatched portfolio of brands and businesses

Science andTechnology Platforms

Geographic Reach

Sustained Competitive Advantage

Innovation

Top 2 new products of 2011 8 of the Top 25 new products 140 products on Top 25 Pacesetter List in the

past 17 years more than our six biggestcompetitors combined

2012 IRI New Product Pacesetters List

InnovationDiscontinuous Innovation


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InnovationFabric CareOne Tide POD outperforms the next6 competitors combined !

InnovationFabric CareKeeps clothes fresh in your closet for up to 12 weeks until you wear them.

InnovationPersonal Health CareNot for colds, not for pain, JUST FOR SLEEP


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InnovationOral Care

InnovationSalon Professional

InnovationPrestige Fragrances


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InnovationDish CareEven removes hidden grease from your dishwasher parts

InnovationSkin Care1st Mass Skin Careproduct delivering

Anti-Aging benefits &BB type instant coverage

InnovationSkin Care


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InnovationSkin Care

InnovationHair Care

InnovationHair Care


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InnovationHair Care

InnovationShave Care

TransformativePlatform Technologies

Leverage corporate scaleto solve tough problems

Create ownabletechnologies

Applied across multiplebusiness areas

Span multiple generationsof product improvements


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Solid State Formation

Sustainable Materials

Change Innovation


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Change InnovationPortfolio

09/10 10/11 11/12 12/13 13/14 14/15 15/16

Number of Change Projects

Productivity

Accelerates Innovation 50% faster to market

Drives Greater Value 70% greater value

versus non C+D projects

Improves Productivity

Connect + Develop

Productivity

Virtual Design Validation

Enhanced Prototyping

Simulation Tools

Fast & Agile Capabilities


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Mega-Hubs

Specialist Hubs

Trend Translation

R&D FootprintProductivity

Current Goal

3-Year Sufficiency vs. Growth Goals 121% 100%

5-Year Sufficiency vs. Growth Goals 113% 100%

Bigger Sales per Initiative +62% +50%

Forward Looking PortfolioInnovation

Disruptive Market Innovation

First safety razor, conceived by King C. Gillettein 1895, is patented in 1904

1904: Gillette


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First heavy-duty household synthetic

laundry detergent

1946: Tide


First Fluoride toothpaste recognized by the ADA tobe effective against cavities

1955: Crest


First successful, mass-marketed disposable diaper

1961: Pampers


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Swiffer

98/99 99/00 00/01 01/02 02/03 03/04 04/05 05/06 06/07 07/08 08/09 09/10 10/11 11/12



New Business Creation

LEAP Team: R&D Managers

Technologists

Marketers

Consumerists

Industrial Designers

Organization
http://rds.yahoo.com/_ylt=A0WTefiWfLFKbgkB6AuJzbkF;_ylu=X3oDMTBzNjVvbTlxBHBvcwMzMDIEc2VjA3NyBHZ0aWQDSTExNl8xMzc-/SIG=1jlorsvdu/EXP=1253232150/**http:/images.search.yahoo.com/images/view?back=http://images.search.yahoo.com/search/images?p=swiffer&b=295&ni=21&ei=utf-8&pstart=1&fr=yfp-t-701&w=500&h=235&imgurl=www.kitchenadd.com/images/12CT-Wet-Swiffer-Refill-B0007P743Y-L-A1IZCISXTFZ9OX_.jpg&rurl=http://www.kitchenadd.com/Procter-Gamble/12CT-Wet-Swiffer-Refill-B0007P743Y.htm&size=25k&name=12CT+Wet+Swiffer...&p=swiffer&oid=ad15cab46b0c9e4e&fr2=&no=302&tt=16094&b=295&ni=21&sigr=12fjm16st&sigi=12ivdh53j&sigb=131o0egq4


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Focus on category and

brand-creating innovations Sold in current retail

channels Leveraging our current

business model With sufficient opportunities

to grow the brand andcategory over time

Portfolio

FebrezeDisruptive Market Innovation

1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012


New jobs to be done thatcreate new categories or disrupt existing markets

Clear technology right to win,with strong IP positions

Structurally attractive

Contribute sales within a fiveyear time horizon

Portfolio Criteria


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Portfolio Size: 2X versus YA

Balance of long and shortterm potential

Large, profitable new markets

Balance across GBUs andinnovation type

Portfolio


Pure new jobs to be done

Portfolio


Reinvention of existing tasks

Portfolio


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Meet the needs of

underserved consumers Demographic Groups

PsychographicSegmentation

Portfolio

Innovation at P&G

Lifeblood of the Company Robust innovation portfolio Focus on discontinuous innovation

ImprovingProductivity Drives shareholder

value creation Fuels growth

investments Provides bottom-line

cushion in volatilemacro environment


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Productivity & Cost Savings$10 Billion Over 5 Years through FY16

Non-manufacturingOverhead

10Billion

$

Cost of Goods Marketing

Efficiencies

$3B

$1B$6B

Productivity & Cost Savings

Cost of Goods Sold: >$1bn savings in FY12 Plans for $1.2bn with stretch goal of $1.4bn in FY13

Marketing: Reinvesting savings to strengthen our core developed

market business

Non-manufacturing Overhead: ~4,700 roles reduced as of 10/31/12 Ahead of original plan to reduce 5,700 roles by

end of FY13

Savings Progress

Productivity & CostSavings Product Supply Organization

$42 billion in COGS annually 137 Plants 280 Distribution Centers 79,000 Suppliers 75,000 Employees

A huge cost pool and ahuge savings opportunity!


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Materials Savings

$26 billion in spending annually $20 billion raw materials

$6 billion packaging materials

~$1 billion in savings annuallyfrom three key areas: Supplier localization &

synchronization

Formula and package redesign

Strategic supplier relationships

Materials SavingsFormula & Package Redesign

Materials SavingsFormula & Package Redesign


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Materials Savings Strategic Supplier Relationships

Materials Savings Supplier Localization

ManufacturingProductivity 5% annual net productivity

improvement

Enables ~20 new sites indeveloping markets with noincremental headcount

Equivalent of 4 plant closuresper year

Up to $1 billion in savings thruFY 16


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ManufacturingProductivityIntegrated Work Systems Cost

Customer Service

Process Reliability

Work Process Improvement

Quality

Safety

ManufacturingProductivity Manufacturing Platforms

Drives productivity andreduces cost

Enables reapplication of process improvements

Improves flexibility and agility

Increases speed to market

Facilitates faster globalexpansions to new markets

Transportation &WarehousingSupply Network Design

FY 13 & 14 developing marketmanufacturing start-ups

New plant start-ups China Nigeria Brazil Indonesia

New category start-ups Poland India Venezuela

Capacity increases India EMEA (multiple sites)


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Transportation & WarehousingChina

Multi-category supply chain

P&G Benchmark for T&W costs

Getting all regions to this benchmarkrepresents $1 billion in savings

Direct fulfillment of orders fromP&G warehouses

Reduces customer costswhile increasing replenishmentspeed

P&G eliminates all T&W costs

Multi-category sites enablefurther reapplication

Transportation &WarehousingQuantum Tunnel

MaterialSavings

ManufacturingProductivity

Transportation& Warehousing

~$4.5 billion ~$1.5billion

Productivity & Cost Savings Cost of Goods Sold


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Productivity & Cost Savings Advertising + Other Marketing Costs

14.0%

15.0%

16.0%

17.0%

FY '06 FY '07 FY '08 FY '09 FY '10 FY '11 FY '12 FY '13e

% S

a l e s



We are developing fewer, bigger creativeideas that travel around the world.

In the past, multiple campaigns, multiplemarkets, with multiple agencies create:

Too many messages on air Fragmented media spending Ads undermining core equity benefit


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Productivity & Cost Savings Advertising Fewer, Bigger Ideas That Travel

Productivity & Cost SavingsInvestment in Digital


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FY '06 FY '07 FY '08 FY '09 FY '10 FY '11 FY '12

Productivity & Cost SavingsOther Marketing Percent of Sales


Applying purchasing scale Save up to 20%

Consolidating suppliers From 20,000 to 13,000 suppliers already

Eliminating wasteful spending

Fewer, bigger multi-brand commercial programs

Other Marketing


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$1 Billion in savingswhile still building

Mass Awarenessto drive Growth

Improving Productivity Core SG&A Overhead

~4,700 roles reducedas of 10/31/12

Ahead of original planto reduce 5,700 rolesby end of FY13

Core SG&A Overhead

Best-in-class, business-weighted, scale-adjusted Core SG&A % of sales

12% to 13% of sales would put P&G 100to 200 basis points below competitivebenchmark

Aggressive goalneed to do MORE,beyond plans announced

Objective


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Core SG&A Overhead

Plan to reduce 5,700roles by end of FY13

PLUS additional 2%to 4% annual overheadenrollment reductionfrom FY14 to FY16

P&G Latin AmericaGrowth & Productivity

3X organic salesover past 8 years

>15% enrollmentreduction over past5 years

Productivity &OrganizationTransformation

Organization design-based productivityimprovements

Productivity Councilof senior executiveswith cross-section of responsibilities(e.g. GBU, MDO, GBS,Function Heads)


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Productivity &OrganizationTransformation

Creating a culture of productivity and costsavings

Empowering theorganization bygenerating more fuelfor growth

Design-Based Overhead Savings

Streamlined responsibilities Eliminated duplications ~1,000 role reductions

Global Brand Building Organization

Global Brand Building Organization

GBU(Design & Delivery)

GlobalCategoryStrategy

RegionBusiness Units

MDO(Operations)

Design-Based Overhead Savings

Local MarketExecution


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Core SG&A Overhead

Best-in-class business-weighted, scale-adjusted Core SG&A % of sales

12% to 13% of sales would put P&G 100to 200 basis points below competitivebenchmark

Aggressive goalneed to do MORE,beyond plans announced

Objective

Balancing ProductivityImprovement andGrowth

~19% core operatingprofit margin in FY12

Among best inindustryregardless of business mix

Significant value creationopportunity fromGROWTH

Balancing ProductivityImprovement andGrowth

Ultimate objective isVALUE CREATION

SubstantialPRODUCTIVITYopportunityAND Substantial GROWTHopportunity


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Numerous Growth Opportunities

New markets, price tiers and channels Category growth and trade-up

Growing share in existing products Disrupting current categories with innovation Creating entirely new categories

P&Gs People Are ItsMost Important

Competitive Advantage

RightStrategies

RightLeaders

BestPeople

Accountability & Common Objectives

7 metrics tied to shareholder value creation:1. Volume2. Sales3. Market Share4. Operating Profit5. Productivity6. Cash Flow7. Internal Controls


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Focused on DeliveringSuperior Shareholder Return

Forward Looking StatementsCertain statements in this release or presentation, other than purely historical information, including estimates, projections, statements relating toour business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, ar e forward-lookingstatements within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, and Section 21Eof the Securities Exchange Act of 1934. These forward- looking statements generally are identified by the words believe, project, anticipate,estimate, intend, strategy, future, opportunity, plan, may, should, will, would, will be, will continue, will likely results, and similar expressions. Forward-looking statemen ts are based on current expectation and assumptions that are subject to risks and uncertainties which maycause results to differ materially from the forward-looking statements. We undertake no obligation to update or revise publicly any forward-lookingstatements, whether because of new information, future events or otherwise. Risks and uncertainties to which our forward-looking statements aresubject include: (1) the ability to achieve business plans, including growing existing sales and volume profitably and maintaining and improvingmargins and market share, despite high levels of competitive activity, an increasingly volatile economic environment, lower than expected marketgrowth rates, especially with respect to the product categories and geographical markets (including developing markets) in which the Company haschosen to focus, and/or increasing competition from mid- and lower tier value products in both developed and developing markets; (2) the ability tosuccessfully manage ongoing acquisition, divestiture and joint venture activities to achieve the cost and growth synergies in accordance with thestated goals of these transactions without impacting the delivery of base business objectives; (3) the ability to successfully manage ongoingorganizational changes and achieve productivity improvements designed to support our growth strategies, while successfully identifying,developing and retaining key employees, especially in key growth markets where the availability of skilled employees is limited; (4) the ability tomanage and maintain key customer relationships; (5) the ability to maintain key manufacturing and supply sources (including sole supplier andplant manufacturing sources); (6) the ability to successfully manage regulatory, tax and legal requirements and matters (including product liability,patent, intellectual property, price controls, import restrictions, environmental and tax policy), and to resolve pending matters within currentestimates; (7) the ability to resolve the pending competition law inquiries in Europe within current estimates; (8) the ability to successfullyimplement, achieve and sustain cost improvement plans and efficiencies in manufacturing and overhead areas, including the Company'soutsourcing projects; (9) the ability to successfully manage volatility in foreign exchange rates, as well as our debt and currency exposure(especially in certain countries with currency exchange controls, such as Venezuela, China and India); (10) the ability to maintain our current creditrating and to manage fluctuations in interest rate, increases in pension and healthcare expense, and any significant credit or liquidity issues; (11)the ability to manage continued global political and/or economic uncertainty and disruptions, especially in the Company's significant geographical

markets, due to a wide variety of factors, including but not limited to, terrorist and other hostile activities, natural disasters and/or disruptions tocredit markets, resulting from a global, regional or national credit crisis; (12) the ability to successfully manage competitive factors, including prices,promotional incentives and trade terms for products; (13) the ability to obtain patents and respond to technological advances attained bycompetitors and patents granted to competitors; (14) the ability to successfully manage increases in the prices of commodities, raw materials andenergy, including the ability to offset these increases through pricing actions; (15) the ability to develop effective sales, advertising and marketingprograms; (16) the ability to stay on the leading edge of innovation, maintain a positive reputation on our brands and ensure trademark protection;and (17) the ability to rely on and maintain key information technology systems and networks (including Company and third-party systems andnetworks), the security over such systems and networks, and the data contained therein. For additional information concerning factors that couldcause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8-K reports.

Regulations FD and G Disclosures

For a full reconciliation, please visit:www.pg.com/investors

pg 2012 analyst slides

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