A.G. Lafley, chairman, president and chief executive officer of the Procter & Gamble Company, addressed shareholders at the company’s annual meeting in October.
“Broad-based growth in fiscal 2004 reflected momentum that has been building since 2001,” Mr. Lafley said. “We’ve grown cumulative sales more than 30% over the past three years—the equivalent of adding a Nike or Sun Microsystems to our top line. P&G businesses have generated more than $20 billion in free cash flow, enabling the company to increase dividends 33% since July 2001. We have delivered cumulative shareholder return of 81% over the past three years, and more than 100% over the past four years. The price of P&G stock has more than doubled.”
Mr. Lafley said P&G still has plenty of room to keep growing, noting that P&G’s portfolio of “billion-dollar brands” has grown significantly.
“There is another group of 10 brands with sales in excess of $500 million a year that are growing an average of 11% and have potential to reach sales of a billion dollars in the next few years,” he added. “These brands are drivers of future P&G growth.”
Citing examples of P&G extending its global market share lead in core businesses, Mr. Lafley said, “We’ve added nearly three points to P&G’s share of global fabric care. We’ve strengthened P&G leadership in home care, where we now have a nearly 40% share in North America.”
He said brands such as Tide, Gain, Febreze, Swiffer and Mr. Clean have set the pace of innovation in their categories and have strengthened P&G’s global leadership. “We’re growing leading brands in big countries with winning retailers,” he commented. “We want to be the preferred partner for winning retailers.”
In addition, P&G is now the No. 1 consumer packaged goods company in 17 development markets including Russia, China and Mexico, Mr. Lafley pointed out.
For fiscal 2004, P&G sales exceeded $50 billion for the first time ever. Earnings increased 25% to $6.5 billion. Compared to the previous year’s core results, net earnings rose 13%. Earnings a share were up 25% to $2.32. Earnings a share increased 14% compared to prior-year core results.