Procter & Gamble

Presented by Group #4

Calderon, Jennifer

Cho, Sunghee

Choi, Okjoo

Desimone, Thomas

Kim, Mi

Procter & Gamble History

1837 – founded by William Procter and James Gamble

Family operated soap and candle business in Cincinnati Ohio

1879 – Introduced Ivory soap, the floating soap

1890 – Incorporates 1930 – International Corporation

History Continue…

1946 – Tide is introduced with new formula 1955 – Crest is co-developed with Indiana University 1957 – Acquired Charmin Paper Company 1961 – Pampers, the first affordable successful

disposable diapers

History Continue….

1985 – Acquired Richardson-Vicks Late 1980s – Acquired Noxell, Max Factor & Ellen

Betrix 1996 – Febreze to eliminate odors 2001 – Crest Whitestrips 2005 – P&G acquires Gillette

P&G Today

2008 sales of $83.5 billion Over 138,000 employees and in over 180 countries Divided in three business units 300 brands and 24 are billion dollar brands $8.6 billion in advertising expense 98% of household have a P&G product

Alan G. Lafley, CEO & Chairman

MBA – Harvard School of Business – 1977 Started at PG in 1977 as Brand Assistant Help several positions on path to CEO

Alan G. Lafley, CEO & Chairman

1977 - Brand Assistant, Joy 1978 - Sales Training, Denver Sales District 1978 - Assistant Brand Manager, Tide 1980 - Brand Manager, Dawn & Ivory Snow 1981 - Brand Manager, Special Assignment

& Ivory Snow 1982 - Brand Manager, Cheer 1983 - Associate Advertising Manager,

PS&D Division 1986 - Advertising Manager, PS&D Division 1988 - General Manager, Laundry Products,

PS&D Division 1991 - Vice President-Laundry and Cleaning

Products, Procter & Gamble USA 1992 - Group Vice President and President

Laundry and Cleaning Products, Procter & Gamble USA

1994 - Group Vice President, The Procter & Gamble Company, and President-Procter & Gamble

Far East 1995 - Executive Vice President, The

Procter & Gamble Company, (President-Asia, Procter &

Gamble Asia) 1998 - Executive Vice President, The

Procter & Gamble Company, (President-North America,

Procter & Gamble North America) 1999 - President-Global Beauty Care

and North America 2000 - President and Chief Executive 2002 - Chairman of the Board, President

and Chief Executive 2007 - Chairman of the Board and Chief

Executive Officer

Alan G. Lafley, CEO & Chairman

1992 – delivered record sales and profits– Introduced Liquid Tide and Tide with Bleach

1995 – built growth in Japan and Asia markets– Brought $1 mil. Chinese market to $90 bil.

1999 – N.A. record high net sales

Alan G. Lafley, CEO & Chairman

2000 – Elected to CEO Laid extensive pathway for PG

– several acquisitions - Gillette

Stock price has more than doubled from 2000 to 2004

Named CEO of the Year, Chief Executive Magazine, 2006

Corporate Culture

5 principles– Integrity:

honest culture with employees and stakeholders; respect

– Leadership Develop goals and pathway to achievement

– Ownership Personal responsibility over actions

– Passion for Winning Must be better than the competition

– Trust

COMPETITORS

  Revenue Net

incomeOperating

MarginR&D

Spending

R&D as % of Total

Revenue

Revenue Growth

from 2006/2007

P&G $83,503 $12,075 20.46% $2,226 2.67% 9.00%

Unilever $58,508 $6,022 13.05% $1,264 2.16% 1.37%

L'oreal $24,842 $3,870 20.21% $815 3.28% 8.06%

Kimberly-Clark

$18,266 $1,822 14.32% $277 1.52% 9.07%

Unit: $M            

ConsumerUnderstanding

BrandBuilding

InnovationAdvantage

Go-toMarket

ScaleAdvantage

CORE STRENGTHS

Weakness/Controversies

Animal Testing Environmental record

Folgers Coffee – no more P&G’s subsidiary

-P&G will have $350 million less debt.

-Folgers is expected to produce 42% of Smuckers’ future sale.

-Smuckers will be more than double its current size.

Smucker bought Folgers on Nov, 6, 2009 This merger is win-win?

P&G and Smucker’s tax game

How to avoid a tax jam

- Reverse Morris Trust transaction: tax avoidance technique

P&G Spin off

Merge into

Folgers Coffee

Smucker

How did the P&G finance growth?Operating Activities

　 2008 2007 2006

Net earnings 12,075 10,340 8,684

Total Operating Cash Flow 15,814 13,435 11,375

　 　 　 　

Free Cash Flows12.8

billion10.5

billion

8.7 billion

In 2007, Net earning included the benefit of an additional three months of Gillette. The Gillette business was acquired on Oct 1, 2005.

Investing activities

In 2008, Acquisition of Frederic Fekkai, a premium hair care brand

In 2007, Acquisition of Beauty and health care, including the Swiss Precision Diagnostic business

　 2008 2007 2006

Capital expenditures(% of net sale)

-3,046(3.6%)

-2,945(3.9%)

-2,667

Acquisitions, net of cash acquired -381 -492 171

Total Investing Cash Flow -2,549 -2,483 -730

Financing Activities

Dividends per common shares increased 13% in 2008($1.45, $1.28, $1.15 per share in 08, 07 and 06)

Total Debt $36.7 billion in 2008, $35.4 billion in 2007, $38.1 billon in 2006

Stock Repurchase $24 -30 billion of shares at a rate of $8 -10 billion per year.

　 2008 2007 2006

Dividends to shareholders -4,655 -4,209 -3,703

Additions to long-term debt 7,088 4,758 22,545

Reductions of long-term debt -11,747 -17,929 -5,282

Treasury stock purchases -10,047 -5,578 -16,830

Total Financing Cash Flow -15,650 -12,478 -10,578

Operating cash flow

To finance operating needs and capital expenditures

Shareholders dividends Share repurchases

Procter & Gamble