There’s Still Room For Growth, According to P&G

A.G. Lafley, chairman, president and chief executive of the Procter & Gamble Company,addressed shareholders at the company’s annual meeting today.

“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 equivalentof 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 y ears, and more than100% 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 from ten to 10 in four years.

“There is another group of 10 brands with sales in excess of $500 million a year that are growingan average of 11% and have potential to reach sales of a billion dollars in the next few years,” headded. “These brands are drivers of future P&G growth.”

Citing examples of P&G extending its global market share lead in core businesses, Mr. Lafleysaid, “We’ve added nearly three points to P&G’s share of global fabric care. We’ve strengthenedP&G leadership in home care, where we now have a nearly 40% share in North America.” Heexplained that brands such as Tide, Gain, Febreze, Swiffer and Mr. Clean have set the pace ofinnovation 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 tobe the preferred partner for winning retailers.”

In addition, P&G is now the No. 1 consumer packaged goods company in 17 development marketsincluding Russia, China and Mexico, Mr. Lafley said.

For fiscal 2004, P&G sales exceeded $50 billion for the first time ever, executives said. Organicsales (excluding acquisitions, divestitures and currency) were up 8%, volume was up 17% andorganic volume was up 10%.

Earnings increased 25% to $6.5 billion. Compared to the previous year’s core results, net earningsrose 13%. Earnings a share were up 25% to $2.32. Earnings a share increased 14% compared toprior-year core results.