1. Procter & Gamble Presented by Group #4 Calderon, Jennifer Cho, Sunghee
Choi, Okjoo
Desimone, Thomas
Kim, Mi

2. 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

3. 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

4. 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

5. 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

6. 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

7. Alan G. Lafley, CEO & Chairman
Brand Assistant, Joy
Sales Training, Denver Sales District
Assistant Brand Manager, Tide
Brand Manager, Dawn & Ivory Snow
Brand Manager, Special Assignment & Ivory Snow
Brand Manager, Cheer
Associate Advertising Manager, PS&D Division
Advertising Manager, PS&D Division
General Manager, Laundry Products, PS&D Division
Vice President-Laundry and Cleaning Products, Procter & Gamble USA
Group Vice President and President Laundry and Cleaning Products, Procter & Gamble USA
Group Vice President, The Procter & Gamble Company, and President-Procter & Gamble
Far East
Executive Vice President, The Procter & Gamble Company, (President-Asia, Procter &
Gamble Asia)
Executive Vice President, The Procter & Gamble Company, (President-North America,
Procter & Gamble North America)
President-Global Beauty Care and North America
President and Chief Executive
Chairman of the Board, President and Chief Executive
Chairman of the Board and Chief Executive Officer

8. 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

9. 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

10. Corporate Culture 5 principles Integrity: Leadership Ownership
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

11. R&D as % of Total Revenue
COMPETITORS
Revenue
Net income
Operating Margin
R&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

12. CORE STRENGTHS Innovation Advantage Brand Go-to Building Market Scale
Consumer
Understanding

13. Weakness/Controversies
Animal Testing
Environmental record

14. Folgers Coffee – no more P&G’s subsidiary
Smucker bought Folgers on Nov, 6, 2009
This merger is win-win?
-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.

15. P&G and Smucker’s tax game
How to avoid a tax jam
- Reverse Morris Trust transaction: tax avoidance technique
P&G
Folgers Coffee
Spin off
Smucker
Merge into

16. 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 Flows
12.8 billion
10.5 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.

17. 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

18. 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 $ 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

19. Operating cash flow
To finance operating needs and capital expenditures
Shareholders dividends
Share repurchases

20. Procter & Gamble