Ear Earning nings s Relea elease se Q1 FY 2021 Results October 20, 2020
Business Results Q1 FY 2021
IMMEDIATE PRIORITIES 1. Ensuring the health and safety of P&G employees around the world. 2. Maximizing the availability of products we produce to help people and their families with their cleaning, health and hygiene needs. 3. Supporting communities, relief agencies and people who are on the front lines of this global pandemic.
STRATEGIC FOCUS AREAS PORTFOLIO : DAILY USE, PERFORMANCE DRIVES BRAND CHOICE New Standard Of Excellence SUPERIORITY TO WIN WITH CONSUMERS Packaging Communication Retail Execution Value Products PRODUCTIVITY TO FUEL INVESTMENTS LEADING CONSTRUCTIVE DISRUPTION FOCUSED & AGILE ORGANIZATION
Q1 FY 2021 HIGHLIGHTS Strong start to the fiscal year enabling us to increase guidance for organic sales growth, core EPS growth, adjusted free cash flow productivity and cash return to shareholders. Organic sales grew +9% driven by volume, pricing and mix. 9 of 10 global categories grew organic sales mid-single digits or higher. Aggregate market share growth of 30 basis points. Focus remains on executing our strategies to deliver balanced top-line and bottom-line growth along with strong cash generation.
Q1 Fiscal Year 2021 Q1 FY ‘21 +9% Organic Sales Growth +7% Organic Volume Growth +19% Core EPS Growth Currency Neutral +22% Core EPS Growth Adjusted Free Cash 95% Flow Productivity
Q1 FY 2021 RESULTS ORGANIC SALES GROWTH Q1 Organic sales were driven by volume, pricing and mix. Organic volume up +7%, pricing +1% and mix +1%. 9% 7% 6% 6% 5% Q1 FY '20 Q2 FY '20 Q3 FY '20 Q4 FY '20 Q1 FY '21
Q1 FY 2021 RESULTS CORE EPS GROWTH • Core gross margin +140 basis points • Core operating margin +300 basis points • Total productivity savings +230 basis points 22% 20% 19% 15% 14% 10% 10% 5% 5% 0% Q1 FY '20 Q2 FY '20 Q3 FY '20 Q4 FY '20 Q1 FY '21
Q1 FY 2021 RESULTS CURRENCY-NEUTRAL CORE EPS GROWTH • Core gross margin ex-FX +170 basis points • Core operating margin ex-FX +350 basis points 25% 24% 22% 20% 15% 15% 15% 10% 11% 5% 0% Q1 FY '20 Q2 FY '20 Q3 FY '20 Q4 FY '20 Q1 FY '21
Business Segment Results and Highlights Q1 FY 2021
Q1 FY 2021 RESULTS BEAUTY SEGMENT Constant Currency Organic Sales Organic Volume Net Earnings Net Earnings 14% 12% 7% 7% • +1% Pricing, flat Mix • Global value share decreased 0.4 points versus year ago • Net Earnings: Volume growth, pricing help, and productivity savings were partially offset by slower growth on premium SK-II brand and currency headwinds.
Q1 FY 2021 RESULTS BEAUTY HIGHLIGHTS • Beauty Segment has delivered 20 consecutive quarters of organic sales growth through Q1. • In Q1, Hair Care organic sales increased high single digits versus year ago. North America and Greater China each grew double digits driven by premium product innovation and strong retail execution. Latin America grew mid-teens led by innovation and pricing. • In Q1, Skin & Personal Care organic sales increased high single digits versus year ago led by strong growth in Personal Care. North America sales grew mid-teens behind the launch of Safeguard hand soap and hand sanitizer and premium innovations on Olay. Greater China sales grew high teens with strong growth across Personal Care (Safeguard) and SK-II domestic market, partially offset by Olay sales decline. Global SK-II sales were flat, with strong growth in the mainland of China fully offset by disruptions in global travel primarily impacting the Japan and Hong Kong markets.
Q1 FY 2021 RESULTS GROOMING SEGMENT Constant Currency Organic Sales Organic Volume Net Earnings Net Earnings 8% 6% 5% 1% • +2% Pricing, flat Mix • Global value share decreased 1.8 points versus year ago. Sub-category mix reduced total Grooming share. Global Shave share decreased 0.6 points versus year ago. Global Appliances share increased 1.1 points versus year ago. • Net Earnings: Volume growth and pricing were mostly offset by a legal settlement help in the base period and currency headwinds.
Q1 FY 2021 RESULTS GROOMING HIGHLIGHTS • Shave Care organic sales were flat, as high single digit growth in female blades & razors was offset by market softness in male blades & razors due to pandemic-related consumption decline. North America grew sales low single digits with volume growth from premium innovation. Europe declined mid- single digits due to market contraction related to the global pandemic. Greater China grew mid-teens behind mix help from premium innovation and strong retail execution. Latin America organic sales grew double digit behind volume and devaluation-driven pricing. • Appliances organic sales increased more than 30% due to innovation, increased demand for dry shaving and styling products and increased pricing.
Q1 FY 2021 RESULTS HEALTH CARE SEGMENT Constant Currency Organic Sales Organic Volume Net Earnings Net Earnings 35% 31% 12% 9% • +1% Pricing, +2% Mix • Global value share increased 1.4 points versus year ago • Net Earnings: Volume growth, positive mix, pricing and productivity savings were partially offset by investments in brand communication and currency headwinds.
Q1 FY 2021 RESULTS HEALTH CARE HIGHLIGHTS • Oral Care organic sales increased mid-teens versus year ago. North America sales increased mid-teens behind premium paste and power toothbrush innovation and strong retail execution, including improved run rates in the professional channel. Europe organic sales grew mid-teens led by strong innovation on power toothbrush. Greater China grew organic sales double digits driven by premium paste innovation and expansion of whitening. Latin America grew organic sales more than 20% due to innovation-driven volume and pricing. • Personal Health Care organic sales increased high single digits versus year ago led by innovation-driven volume, increased brand communication investments, pricing and consumer consumption increases across Digestive Health and Wellness segments related to the global pandemic. The Merck consumer health business acquired a year ago continues to deliver strong results, growing double digits versus year ago.
Q1 FY 2021 RESULTS FABRIC & HOME SEGMENT Constant Currency Organic Sales Organic Volume Net Earnings Net Earnings 34% 31% 14% 10% • Flat Pricing, +4% Mix • Global value share increased 1.2 points versus year ago • Net Earnings: Strong premium innovation-driven volume growth, productivity savings and commodity tailwinds were partially offset by investments in brand communication and currency headwinds.
Q1 FY 2021 RESULTS FABRIC & HOME HIGHLIGHTS • Fabric Care organic sales grew high single digits versus year ago. North America delivered strong high teens organic sales growth led by premium innovation-driven volume growth across Laundry and Fabric Enhancers, investments in brand communication, strong retail execution and market growth. Europe sales increased low single digits due to pricing and premium innovation, partially offset by market contraction related to the global pandemic. Greater China Fabric Care increased low single digits driven by premium innovation, partially offset by market contraction and competitive activity. • Home Care organic sales increased more than 30% with growth 20% or above across all segments: Dish, Air and Surface. Sales increased behind consumer demand for home cleaning products during the pandemic resulting in double digit growth in every region.
Q1 FY 2021 RESULTS BABY, FEMININE, and FAMILY CARE SEGMENT Constant Currency Organic Sales Organic Volume Net Earnings Net Earnings 19% 16% 4% 3% • +1% Pricing, flat Mix • Global value share decreased 0.4 points versus year ago • Net Earnings: Volume growth, pricing, productivity savings and commodity tailwinds were partially offset by investments in brand communication and currency headwinds.
Q1 FY 2021 RESULTS BABY, FEMININE, and FAMILY CARE HIGHLIGHTS • Baby Care organic sales declined low single digits. North America grew low single digits driven by retailer inventory re-stocking and consumption growth across premium products, pants and wipes. Greater China and Europe declined low single digits driven by market contraction. Latin America declined high single digits related to market contraction, partially offset by devaluation pricing. • Feminine Care organic sales increased high single digits led by strong growth in North America and Greater China. Sales growth driven by premium innovation, retailer inventory restocking, pricing and favorable product mix from Always Discreet. • Family Care organic sales increased double digits driven by increased consumer consumption and pricing help related to lower promotional spending partially offset by negative product/size mix.
FY 2021 Guidance
FY 2021 Guidance SALES • Increased organic sales growth guidance to +4% to +5% • Increased all-in sales growth to +3% to +4% • Includes a one percent negative impact from foreign exchange. FY ‘21 Organic Sales Growth (increased) +4% to +5% All-in Sales Growth (increased) +3% to +4%
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