1. 1 Case Study 19 th August 2004

2. 2 Johnson & Johnson?

3. 3 Consumer

4. 4 Sales Results By Segment 35 % 17 % 47 % Medical Devices & Diagnostic Consumer Pharmaceutical

5. 5 Medical Devices & Diagnostics

6. 6 PharmaceuticalPharmaceutical

7. 7 Overview of Johnson & Johnson A Broadly Based Health Care Company Johnson & Johnson is the world’s most comprehensive and broadly based manufacturer of health care products and services for the consumer, pharmaceutical, and medical & diagnostics markets. The Corporation achieved this leadership by concentrating on a unique form of decentralized management, following the ethical principles embodied in our Credo and managing the business for the long term.

8. 8 Overview Founded in 1886 as a supplier of health care products Headquartered in New Brunswick, NJ Companies in 57 countries, selling products in more than 175 countries 2003 sales were US$41.9 billion Over 110,600 employees worldwide Extensive worldwide research and supply chain capabilities More than US$280 million pa philanthropy Founded in 1886 as a supplier of health care products Headquartered in New Brunswick, NJ Companies in 57 countries, selling products in more than 175 countries 2003 sales were US$41.9 billion Over 110,600 employees worldwide Extensive worldwide research and supply chain capabilities More than US$280 million pa philanthropy

9. 9 Leadership position in ethical and OTC pharmaceuticals, medical/surgical supplies, diagnostics and a variety of consumer products 75% of sales from categories where we are No.1 or No.2 globally. Strong commitment to R&D. $ 15 billion spent in the last 5 years. One of only eight corporations with a Triple A credit rating World’s Leading Health Care Supplier

10. 10 Sales By Region61% 12% 21% U.S. Asia-Pacific/Africa Europe 6% Latin America & Canada

11. 11 30 % Products Introduced *Products Introduced in Past 5 Years Products Introduced *Products Introduced in Past 5 Years New Products Products* 2001 Worldwide Sales

12. 12

13. 13 Structure A family of companies consisting of more than 190 decentralized operating units Organized around three groups –Pharmaceuticals –Consumer & Personal Care –Medical Devices & Diagnostics A family of companies consisting of more than 190 decentralized operating units Organized around three groups –Pharmaceuticals –Consumer & Personal Care –Medical Devices & Diagnostics

14. 14 The Johnson & Johnson family of companies in Australasia. Johnson & Johnson Medical/DePuy Johnson & Johnson Pacific Janssen-Cilag Visioncare (Vistakon) Johnson & Johnson Research Tasmanian Alkaloids Ortho Clinical Diagnostics Johnson & Johnson Medical/DePuy Johnson & Johnson Pacific Janssen-Cilag Visioncare (Vistakon) Johnson & Johnson Research Tasmanian Alkaloids Ortho Clinical Diagnostics

15. 15 Employer of Choice Values – Credo Standards of Leadership Process Excellence HR Strategy Basics – not Rocket Science

16. 16 J&J Credo What is it? History –1935 “Try Reality” –1943 first published –1975 Credo Challenge meetings –1982 & 84 Tylenol poisonings –1986 Credo Survey –1997 EC III

17. 17 Our Credo We believe our first responsibility is to the doctors, nurses and patients, to mothers and fathers and all others who use our products and services. In meeting their needs everything we do must be of high quality. We must constantly strive to reduce our costs in order to maintain reasonable prices. Customers’ orders must be serviced promptly and accurately. Our suppliers and distributors must have an opportunity to make a fair profit. We are responsible to our employees, the men and women who work with us throughout the world. Everyone must be considered as an individual. We must respect their dignity and recognise their merit. They must have a sense of security in their jobs. Compensation must be fair and adequate, and working conditions clean, orderly and safe. We must be mindful of ways to help our employees fulfil their family responsibilities. Employees must feel free to make suggestions and complaints. There must be equal opportunity for employment, development and advancement for those qualified. We must provide competent management, and their actions must be just and ethical.

18. 18 Our Credo We are responsible to the communities in which we live and work and to the world community as well. We must be good citizens – support good works and charities and bear our fair share of taxes. We must encourage civic improvements and better health and education. We must maintain in good order the property we are privileged to use, protecting the environment and natural resources. Our final responsibility is to our stockholders. Business must make a sound profit. We must experiment with new ideas. Research must be carried on, innovative programs developed and mistakes paid for. New equipment must be purchased, new facilities provided and new products launched. Reserves must be created to provide for adverse times. When we operate according to these principles, the stockholders should realise a fair return.

19. 19 The Credo – How is it Kept Alive? Credo Survey - PE Standards of Leadership Credo Decision Making Process training 360 degree survey Corporate Orientation Credo Challenge Meetings Business Conduct Policy - signoffs Moments of Truth - video

20. 20 Credo Survey

21. 21 Standards of Leadership

22. 22

23. 23 Process Excellence a set of preferred tools to help make the business perform better AssessmentImprovementRecognition Process Excellence

24. 24 ASSESSMENT Customer/Market Focus Customer/Market Focus Results Leadership Business Information Management and Analysis Business Information Management and Analysis Business Planning Business Planning Human Resource Development & Management Human Resource Development & Management Process Management Process Management Business Results SystemDriver

25. 25

26. 26 Recognition Wall Street Journal Corporate Reputation Survey –2004 J&J ranked #1 for fifth year in a row Source Wall Street Journal Feb 2004 based on results of annual reputation survey by Harris Interactive and the Reputation Institute Wall Street Journal Corporate Reputation Survey –2004 J&J ranked #1 for fifth year in a row Source Wall Street Journal Feb 2004 based on results of annual reputation survey by Harris Interactive and the Reputation Institute

27. 27 Recognition Global Most Admired Companies Fortune Magazine Global Most Admired Companies –2002 J&J ranked #6 –2003 J&J ranked #5 –2004 J&J ranked #7 Source The World's Most Admired Companies FORTUNE Magazine

28. 28 Recognition AGSM, AFR, Hewitt “Best Employers to Work For” study –2004 J&J named in “Best Employers” group for third consecutive year Source “Best Employers to Work for in Australia”, published by Hewitt Associates Dec 2001, Mar 03, Jul 04 AGSM, AFR, Hewitt “Best Employers to Work For” study –2004 J&J named in “Best Employers” group for third consecutive year Source “Best Employers to Work for in Australia”, published by Hewitt Associates Dec 2001, Mar 03, Jul 04

29. 29 Recognition Australian Human Resources Awards –2003 J&J Winner – Employer of Choice – more than 500 employees Ranked in top 4 – Best Learning & Development Strategy Ranked in top 5 – Best e-Learning Strategy –2002 J&J Winner – Best HR Technology Ranked in top 4 – Best Learning & Development Program –2001 J&J Winner – Best Retention Strategy Ranked in top 3 – Most Innovative Recruitment Strategy Source Human Resources Magazine, “Australian Human Resources Awards ” 2001/2/3, Australian Human Resources Awards –2003 J&J Winner – Employer of Choice – more than 500 employees Ranked in top 4 – Best Learning & Development Strategy Ranked in top 5 – Best e-Learning Strategy –2002 J&J Winner – Best HR Technology Ranked in top 4 – Best Learning & Development Program –2001 J&J Winner – Best Retention Strategy Ranked in top 3 – Most Innovative Recruitment Strategy Source Human Resources Magazine, “Australian Human Resources Awards ” 2001/2/3,

30. 30 Standards of Leadership

31. 31 Business Results 71 Consecutive years of Sales increases 19 Consecutive years of double digit Earnings increases 42 Consecutive years of Dividend increases 71 Consecutive years of Sales increases 19 Consecutive years of double digit Earnings increases 42 Consecutive years of Dividend increases Reported Net Income Reported Sales Operational Sales Year 100 +10.6 +11.0 +10.7 50 +10.5 +11.2 +13.1 20 +9.5 +10.5 +13.5 10 +10.1 +11.9 +15.1 5 +8.5% +11.3% +14.8%