The Proctor and Gamble Company

Consumer Non-Durables
Written By Candy Cowan

The Procter & Gamble Company is focused on providing branded products of superior quality and value to improve the lives of the world's consumers, now and for generations to come.

The Company was incorporated in Ohio in 1905, having first been established as a New Jersey corporation in 1890, and was built from a business founded in Cincinnati in 1837 by William Procter and James Gamble.

Today, their products are sold in approximately 180 countries and territories.

Employees: 97,000 +

Revenue: $80.281B for FY2022

HQ Location: Cincinatti, Ohio, U.S.

What they do:

Making every day more than ordinary

  • They manufacturer and market fast-moving consumer goods.

  • The company's products include conditioners, shampoo, male and female blades and razors, toothbrushes, toothpaste, dish-washing liquids, detergents, surface cleaners, and air fresheners.

Their Strategy:

Financial and Business Goals

Outlook for 2023

  • All-in sales are predicted to be in line with the prior fiscal year from a prior range of down three percent to down one percent.

  • Organic sales growth is expected to be four to five percent versus the prior fiscal year from a prior growth range of three to five percent.

  • Foreign exchange is expected to be a five percentage point headwind to all-in sales growth for the fiscal year.

  • Given continued significant cost headwinds from commodity and materials costs and foreign exchange impacts, it continues to expect EPS results to be towards the lower end of the fiscal year guidance range.

  • Its current fiscal 2023 outlook includes headwinds of approximately $1.2 billion after tax due to unfavorable foreign exchange rates, $2.3 billion due to higher commodity and materials costs, and $200 million from higher freight costs.

  • It expects a core effective tax rate of approximately 20% in fiscal 2023.

  • Capital spending is estimated to be approximately 5% of fiscal 2023 net sales.

Things to know right now

Four areas of improvement to focus on

They are striving to improve the execution of the integrated strategies

1) Supply Chain 3.0

2) Digital acumen

3) Environmental sustainability

4) Employee value creation.

These are not new or separate strategies. They are necessary elements in continuing to build superiority, reduce the cost to enable investment and value creation, and to further strengthen their organization.

Their strategic choices on portfolio, superiority, productivity, constructive disruption, and organization are interdependent strategies. They reinforce and build on each other. When executed well, they grow markets, which in turn grow share, sales, and profit.

Business Segments:

Beauty Segment

  • 18% of all net sales

  • Hair Care (Conditioner, Shampoo, Styling Aids, Treatments)
    Skin and Personal Care ( Antiperspirant and Deodorant, Personal Cleansing, Skin Care )Head & Shoulders, Herbal Essences, Pantene, Rejoice

  • Brands: Olay, Old Spice, Safeguard, Secret, SK

Grooming Segment

  • 8% of all net sales

  • Grooming (Shave Care - Female Blades & Razors, Male Blades & Razors, Pre- and Post-Shave Products, Other Shave Care; Appliances)

  • Brands: Braun, Gillette, Venus

Health Care Segment

  • 14% of all net sales

  • Oral Care (Toothbrushes, Toothpaste, Other Oral Care)

  • Personal Health Care (Gastrointestinal, Rapid Diagnostics, Respiratory, Vitamins/Minerals/Supplements, Pain Relief, Other Personal Health Care )

  • Brands: Crest, Oral-B, Metamucil, Neurobion, Pepto Bismol, Vicks

Fabric & Home Care Segment

  • 35% of all net sales

  • Fabric Care (Fabric Enhancers, Laundry Additives, Laundry Detergents)

    Home Care (Air Care, Dish Care, P&G Professional, Surface Care)

  • Brands: Ariel, Downy, Gain, Tide, Cascade, Dawn, Fairy, Febreze, Mr. Clean, Swiffer

Baby, Feminine & Family Care Segment

  • 25% of all net sales

  • Baby Care (Baby Wipes, Taped Diapers, and Pants)
    Feminine Care (Adult Incontinence, Feminine Care)
    Family Care (Paper Towels, Tissues, Toilet Paper)

  • Brands: Luvs, Pampers, Always, Always Discreet, Tampax, Bounty, Charmin, Puffs

Their Competitors

  • Colgate-Palmolive

  • Church and Dwight

  • Unilever

Their financial calendar

Q1: July-September - Earnings October 2022

Q2: October-December- Earnings 19th January 2023

Q3: January-March - Earnings 21st April 2023

Q4: April -June - Around 28th July 2023

Next Earnings Report: 21st April 2023

Positives from the last earnings report Q2FY23:

  • Organic sales, which exclude the impacts of foreign exchange and acquisitions and divestitures, increased by five percent. The organic sales increase was driven by a ten percent increase from higher pricing and a one percent increase from a positive product mix, partially offset by a six percent decrease in shipment volumes.

  • Per Segment:

    • Baby, Feminine, and Family Care Segment

      • Organic sales increased four percent versus year ago.

      • Baby Care organic sales increased by low single digits due to increased pricing, partially offset by volume declines from market contraction.

      • Feminine Care organic sales increased by high single digits driven by increased pricing and a positive geographic mix, partially offset by volume declines in emerging markets.

      • Family Care organic sales increased by low single digits due to increased pricing, partially offset by lower volumes due to market contraction and market share softness.

    • Fabric and Home Care Segment:

      • Organic sales increased eight percent versus year ago.

      • Fabric Care organic sales increased by high single digits due to increased pricing, partially offset by volume declines due to market contraction and increased pricing, primarily in Europe.

      • Home Care organic sales increased by high single digits due to increased pricing, partially offset by volume declines versus a high base period of increased consumption of cleaning products.

    • Healthcare Segment:

      • Organic sales increased eight percent versus a year ago.

      • Oral Care organic sales increased by low single digits due to increased pricing and a favorable geographic mix, partially offset by volume declines due to portfolio reduction in Russia and COVID-related disruptions in Greater China.

      • Personal Health Care organic sales increased in the high teens due to increased pricing, favorable mix, and volume growth driven by a strong cough, cold and flu season.

    • Grooming Segment:

      • Grooming segment organic sales were unchanged versus a year ago as higher pricing was fully offset by volume decline and negative mix, due to market contraction and retailer inventory reductions of appliances.

    • Beauty Segment:

      • Organic sales increased three percent versus a year ago.

      • Skin and Personal Care organic sales increased by low single digits due to innovation-driven volume growth and higher pricing, partially offset by a negative mix from COVID-related declines in SK-II.

      • Hair Care organic sales increased by mid-single digits driven by increased pricing, partially offset by volume declines due to market contraction.

Challenges from the last earnings report Q2FY23:

  • Net sales in the second quarter of the fiscal year 2023 were $20.8 billion, a one percent decrease versus the prior year.

  • Unfavorable foreign exchange had a six percent impact on net sales.

Candy Cowan
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