procter & gamble presented by group #4 calderon, jennifer cho, sunghee choi, okjoo desimone,...
TRANSCRIPT
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Procter & Gamble
Presented by Group #4
Calderon, Jennifer
Cho, Sunghee
Choi, Okjoo
Desimone, Thomas
Kim, Mi
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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
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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
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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
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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
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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
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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
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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
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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
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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
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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
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ConsumerUnderstanding
BrandBuilding
InnovationAdvantage
Go-toMarket
ScaleAdvantage
CORE STRENGTHS
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Weakness/Controversies
Animal Testing Environmental record
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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?
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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
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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.
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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
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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
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Operating cash flow
To finance operating needs and capital expenditures
Shareholders dividends Share repurchases
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Procter & Gamble