Sales: $55.7 billion
Sales:$55.7 billion for household, personal care and oral care products. Corporate sales: $76.4 billion. Net income: $10.3 billion for the year ended June 30, 2007.
Key Personnel:A.G. Lafley, chairman, president and chief executive officer; Susan E. Arnold, president, global business units; Robert A. McDonald, chief operating officer; Clayton C. Daley Jr., vice chairman and chief financial officer; Dimitri Panayotopoulos, vice chairman, global household care; Robert A. Steele, vice chairman, global health and well-being; Ed Shirley, vice chairman, global beauty & grooming; Werner Geissler, vice chairman, global operations; Steve Bishop, president, P&G North America; Charles V. Bergh, group president, global personal care; Christopher de Lapuente, group president, global hair care; Virginia C. Drosos, president, global personal beauty; Robert Jongstra, president, global professional care; Hartwig Langer, president, global prestige products.
Major Products:Baby care—Pampers and Luvs wipes; Beauty care—cosmetics, fragrances, hair care, antiperspirants and skin/beauty care marketed under such brands as Gillette, Pantene, Olay, Head & Shoulders, Cover Girl, Clairol Herbal Essences, Max Factor, Hugo Boss, Secret, SK-II, Zest, Safeguard, Rejoice, Vidal Sassoon, Clairol Nice ‘n Easy, Old Spice, Pert, Ivory, Sure, Camay, Laura Biagiotti, Physique, Noxzema, Giorgio and Muse. Fabric and Home care—bleach and pre-wash additives, care for special fabrics, dish care, fabric conditioners, household cleaners and laundry care including brands such as Tide, Ariel, Downy, Lenor, Gain, Cascade, Ace, Cheer, Bold, Swiffer, Bounce, Dash, Dawn, Fairy, Joy, Febreze, Era, Bonux, Dreft, Daz, Vizir, Salvo, Mr. Proper, Mr. Clean, Flash, Viakal, Dryel, Alomatik, Ivory, Maestro Limpio and Rindex. Health care—Crest toothpaste, Scope mouthwash and Thermacare heat pads.
New Products:Home care—Pure Essentials and Simple Pleasures laundry detergents, Tide with Dawn Stain Scrubbers, Downy Simple Pleasures Radiance Collection, Mr. Clean Magic Eraser with Febreze fresh scent, Febreze to Go, Febreze Candles. Oral care—Crest Healthy Radiance Toothpaste System. Personal care—Old Spice Pro Strength. Fragrance—Boss Pure fragrance. Beauty—Nice’n Easy Perfect 10. To be launched: Olay Definity Color Recapture (July), Olay Definity Night Anti-Spot Treatment (July), Olay Total Effects Plus Touch of Foundation (July), Avril Lavigne fragrance (2009).
Comments:It was another year of double-digit gains for the largest household and personal products company in the world. Corporate sales rose 12% last year, while net income increased 13.5%. By global business unit (GBU), beauty accounted for 30% of net sales, followed by fabric and home care (24%); baby care and family care (16%); health care (12%); blades and razors (7%); snacks, coffee and pet care (6%); and Duracell and Braun (5%).
Sales were up behind 9% unit volume growth, including the impact of an extra three months of Gillette results in the current year. Organic volume increased 5% and growth was broad-based, with 15 of P&G’s top 16 countries posting year-on-year growth. Developing regions continued to lead the growth with double-digit increases for the year. Organic sales increased 7% versus the prior year.
By business segment, fabric and home care grew organic sales 8%, with double-digit growth in developing markets and mid-single-digit growth in developed regions. Key growth drivers included Tide Simple Pleasures, Gain Joyful Expressions and Febreze Noticeables. Net sales rose 11% to nearly $19 billion. Unit volume was up 8%. Global market share increased 1%.
Beauty organic sales increased 5%, led by strong growth in feminine care, prestige fragrances and hair care. Billion-dollar brands Always, Olay and Head & Shoulders each grew sales double-digits for the year. Overall, beauty sales rose 9% to nearly $23 billion and net earnings increased 12% to nearly $3.5 billion. Unit volume was up 5%, driven by double-digit gains in developing regions. Prestige fragrance volume was up double digits behind The One, Boss Selection and Boss Femme fragrance initiatives and the addition of Dolce & Gabbana. Now P&G wants more. Last month, the company signed a fragrance licensing deal with singer Avril Lavigne, a pop star who hits high notes with consumers in their early teens. A fragrance will debut in 2009. Ms. Lavigne joins a growing stable of youth-oriented fragrance licenses including Puma, Christina Aguilera and Replay, an Italian jeans brands. Last year, P&G Prestige Products sold 4711 cologne to Maurer + Wirtz.
Skin care volume was up in the high single digits, behind Olay Definity and Regenerist product initiatives. Hair care volume increased in the mid-single digits, due to product initiatives on Pantene, Head & Shoulders and Herbal Essences, and continued expansion in developing regions.
Health care organic sales increased 6%, driven by very strong growth in oral care. Net sales increased 14% to $9 billion. In the U.S., Crest extended its category market leadership to 38% behind the success of the Pro-Health line.
More than 80% of P&G’s sales come from its 41 largest brands—each generating more than $500 million in annual sales. At the end of fiscal 2007, the company boasted 23 billion-dollar brands. Among the highlights, Head & Shoulders has nearly doubled its annual sales in just four years, making it the second largest shampoo brand in the world. Meanwhile, Pantene is the largest hair care brand in the world, with sales approaching $3 billion. In laundry care, Gain has doubled sales in the past five years on the strength of its fragrance. Finally, Crest remains the largest toothpaste brand in the U.S. thanks to demand for Nature’s Expressions and Pro-Health.
In fiscal 2007, P&G generated more than $20 billion in sales from developing markets, which is more than double the sales level at the beginning of the decade.
Gross margins improved 60 basis points to 52%.
For fiscal 2008, the company has restructured its global business units into three groups: Beauty (beauty and grooming), Health and Well-being (health care, snacks, coffee and pet care) and Household Care (fabric care and home care, baby care and family care).
For the nine months ended March 31, 2008, P&G’s sales rose 9% to $62.2 billion and net income rose 2% to $9 billion. Sales of beauty products rose 8% to $14.4 billion. Grooming product sales increased 11% to $6.1 billion. Health care sales increased 9% to $10.9 billion, and fabric and home care sales increased 10% to $17.7 billion.
In May, P&G put its Stamford, CT property on the market. The nearly 33-acre site had been the home of Clairol.
“Clairol has enjoyed its tenure in Stamford. Now with the sale of this property we are committed to bringing a positive influence to the future of Stamford as a vital community,” said Patrice Louvet, vice president and general manager of P&G global retail hair color, in a statement.
Also in May, P&G announced that G. Gilbert Cloy, chief technology officer, will retire Sept. 1, 2008 after more than 33 years of service. Bruce Brown, who had been vice president, research & development, global hair care and global hair colorants, is the new CTO.
Last month, P&G sold its Folgers coffee business to J.M. Smucker Company. The all-stock transaction is valued at $3.3 billion.
“Strategically, P&G has exited certain categories in order to focus on our core businesses and enhance the growth profile of the portfolio,” said A.G. Lafley, chairman and chief executive officer of Procter & Gamble. “The structure and terms of this transaction deliver on the goals we stated for the separation of the coffee business from P&G. This transaction maximizes the after-tax value of the coffee business for P&G shareholders and minimizes earnings per share dilution.”
Also last month, P&G elected Ed Shirley, 51, vice chairman, global beauty & grooming, reporting to Susan E. Arnold, president, global business units. Steve Bishop, 44, replaces Mr. Shirley as group president, P&G North America. Mr. Bishop had been president, North America market operations.
Febreze Marks a Milestone
For the past several years, fragrance has been an important facet of Procter & Gamble’s growth strategy. The marketing departments and R&D staffs have worked overtime to enhance the consumer’s experience via fragrance. It’s no surprise then, that P&G took time in May to celebrate the 10th anniversary of the Febreze launch.
“Through leadership in air care innovation, fragrance development and by listening to the needs of our consumers, Febreze has become the leading brand for creating a fresh and clean ambience for the home,” said Martin Hettich, North American marketing director of Febreze. “The future of Febreze will continue to be driven by our desire to offer a high quality, long-lasting freshness experience to our consumers.”
Within two years of that 1998 launch, more than 50% of U.S. households had tried Febreze. Since its debut, the Febreze brand has grown to include nine products, including candles and an allergen reducer. In February, P&G added the scent of Febreze to Swiffer and Mr. Clean products to help consumers keep their homes looking and smelling clean. Swiffer Dusters, Dry and Wet Cloths, WetJet Anti-Bacterial Solution and Mr. Clean’s sprays, liquids and Magic Erasers are now available with Febreze fresh scents.
This summer, the company will restage Febreze Fabric Refresher with better freshness experience supported by updated packaging, enhanced product performance and a new advertising campaign, according to the company.
P&G Brands Bag Viva Beauty Awards
P&G beauty brands Wella and Braun Satin Hair were named as Viva readers’ ultimate beauty products at the Viva Beauty Awards 2008 held in Dubai. Wella Koleston was named Best Hair Colourant, while Braun Satin Hair was triumphant in the Best Curling Iron category and runner-up for Best Straightener. The ceremony, held at the Monarch hotel in Dubai last month, honored the most premium beauty brands in the Middle East, with the winners selected by a panel of beauty experts from the fields of hair care, skin care and makeup. In the category of Best Hair Colourant, Wella Koleston, the premium brand of home coloring products, was chosen as winner.