P&G Sets Quarterly Records in Volume and Sales

The Procter & Gamble Company announced volume and sales results set a new record for the quarter ended Sept. 30, 2003. Unit volume increased 12%, including the impact of the recently completed acquisition of Wella AG. Net sales increased 13% to $12.20 billion. This solid growth reflects the combination of base business growth, strong innovation and the expansion of developing market businesses.

“We’re off to a very strong start this year. Business strength is broad based across leading brands, top countries and top customers,” said chairman of the board, president and chief executive A. G. Lafley. “We’re delivering strong sales growth and strong gross margin improvement, which enabled investments in new products like Olay Regenerist and Prilosec OTC. Strong first quarter results give us confidence we will again deliver our fiscal year target of double-digit earnings per share growth.”

For the quarter, net earnings grew 20% to $1.76 billion. Earnings growth was primarily driven by volume, the absence of restructuring program charges due to its completion last year — $113 million in July-September 2002 — and lower manufacturing costs. This was partially offset by marketing investments to support base business growth and new initiatives.

Fabric and home care delivered record volume (up 8%) and sales (up 8%) behind strong growth in fabric care in the developing regions and double-digit growth in global home care. Beauty care posted strong double-digit earnings growth, volume increased 21% and net sales increased 20% to $3.75 billion, including a positive foreign exchange impact of 3%. The segment benefited from acquisitions and divestitures, primarily Wella.

Executives said baby and family care delivered very strong results this quarter unit volume up 6% and net sales up 7% to $2.61 billion, including a positive foreign exchange impact of 3%. Volume was primarily driven by continued momentum in the Baby Stages of Development line in Western Europe and North America, growth in Japan and broadening of the diaper product line in Latin America. Health care delivered outstanding volume (up 23%), sales (up 23% to $1.73 billion) and earnings growth (41% to $276 million), driven by the Prilosec OTC launch in September and the continued success of Actonel, Crest Whitestrips and Night Effects.

For the December quarter, the company expects total sales to increase 14 to 19%. The Wella acquisition is expected to add sales growth of 6 to 7%. For the fiscal year, total sales are expected to increase by 13 to 16%.