In a review of the business over the past year, Lafley said P&G had met or exceeded its key financial commitments, including organic sales growth, core earnings per share and free cash flow productivity. The company returned $12.5 billion in cash to shareowners. However, he emphasized that the company can do better.
Lafley explained that P&G has established four areas to improve performance-value creation for consumers and shareowners, productivity and innovation, significant improvements to operating discipline and investments in research and development and go-to-market capabilities.
“The changes we are making in these four areas – reestablishing value creation as our primary measure of success, investing in innovation and go to market capabilities, accelerating productivity savings and improving operating discipline and execution – are important changes that we believe will improve performance,” he said.
Lafley emphasized that the company will focus on its core businesses, which include the leading, most profitable brands, categories and countries. P&G must ensure its US business is strong and growing while investing in developing markets that have the largest size of prize and where P&G has the highest likelihood of winning. Resources will be allocated to businesses where value can be created and the Company will exit those that cannot deliver acceptable shareowner returns.
“We have taken a hard look at what we need to do and how we need to change to perform better," Lafley concluded. "We’re committed to do what it takes to get P&G back to balanced, consistent, reliable and sustainable growth and value creation for consumers, customers, and you, our shareowners.”