Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
BTW. I think you do a great job on this board. I drop in every now and then, and you always have good info.
Thanks for what you do.
Great points. I see these multi nationals see emerging markets as this golden fruit and when they get there they spend a good deal of money to develop market for folks who do not have money for nor "need" the high quality high priced products. That is in addition to dealing with corrupt govts, lack of enforcement of copyrights/patents and dealing with a very uninformed customer base.
True, the gross margin is lower in emerging markets; however, SG&A as a % of sales is also lower in emerging markets, so the operating-profit margin is almost the same as in developed markets. Moreover, income-tax rates in many emerging markets are lower than in the US and Europe, which gives a further boost to the net profit margin.
I do agree with your contention that 1% year-over-year volume growth is pathetic, but I presume that it will get better in the nest few quarters.
Agree. But two main things concern me. First is revenue growth. Only 1% is coming from increased sales, remainder is from price increase. 2nd is focusing all efforts on expansion of new markets that deliver much lower gross margins, while they are letting their share in US and Europe escape to competitors.
All big companies go through a funk from time to time. It happened to IBM, GE, CSCO, UL, and many others.
PG will be fine in due course, IMHO.
Wow. Price increase rejected. No innovation. What is happening to this stalwart??? Interesting to see how these "premium" product companies are dealing with drawn out weak economy. Seems they are focusing too much on new regions and leaving their US bread and butter on the table for others.
More on PG’s hit from the devaluation in Venezuela: #msg-75128230.
Thanks DewDiligence. Reposted/linked back.
Big Board Trading.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=75126707
Updated FY2012 non-GAAP EPS guidance: $3.83-3.88.
Angry Analysts Scorch P&G CEO (from WSJ, with my annotations on PG’s FY3Q12 results):
#msg-75125839
PG boosts dividend 7% to annualized payout of $2.25:
http://www.sec.gov/Archives/edgar/data/80424/000008042412000032/aprilpressrelease.htm
Based on the current share price, the new payout has a dividend yield of 3.4%.
Why PG will be just fine: #msg-72516793.
New 4,100-job layoff: #msg-72516698.
PG’s CC slides from CAGNY webcast today:
http://www.sec.gov/Archives/edgar/data/80424/000008042412000026/informationalcagnyslides.htm
PG sells $1B of 10-year bonds @2.3% (!): #msg-71612450.
Any thoughts on the quarter by PG?
Emerging markets is growing, but developed market had declining sales. Plus, there seems to be some margin compression. Even some withdrawal of price increases in the laundry segment.
Seems like a trend with these consumer companies. Similar to Pepsi, etc.
Reconciliations between PG’s new segment breakdown and its old segment breakdown are in an 8-K filed today:
http://www.sec.gov/Archives/edgar/data/80424/000008042412000004/gbustructurechanges.htm
You may ignore this info unless you’re an accounting geek :- )
PG imposes hiring freeze through 6/30/12:
http://www.reuters.com/article/2011/12/19/pg-hiring-idUSL3E7NJ0UM20111219
Former Procter & Gamble CEO John Smale dies at 84
[Oddly enough, he always said that the success of Crest was the biggest highlight of his career, more than the P&G push into China.]
November 19, 2011 1:30 PM
(AP) CINCINNATI — Former Procter & Gamble Co. chief executive and chairman John G. Smale, who expanded the consumer products maker with a major acquisition and a push into China and other emerging markets overseas, died Saturday. He was 84.
A spokesman for the Cincinnati-based company didn't immediately give details about where Smale died or what he died of.
Smale led P&G from 1981 to 1990 and was the seventh chief executive of the 174-year-old company. He also was chairman of General Motors Co. from 1992 to 1995 and was a board member of the automaker for more than two decades, beginning in 1982.
Smale was born in Canada and graduated from Miami University in Ohio in 1949. He joined P&G in 1952, working for what was then called the Toilet Goods division. He rose through the company, becoming president in charge of all U.S. operations in 1974 and chief executive in 1981. He added the chairmanship in 1986.
During his tenure, Smale moved P&G businesses into new markets in huge developing countries such as China, setting the stage for the P&G's rapid growth in Asia in recent years. P&G also acquired Richardson-Vicks, which broadened the P&G portfolio to include Pantene shampoo, Olay skin cream and Vicks cough medicines, which are major brands today.
As CEO, Smale pushed P&G to become more efficient, speeding up development of new products and getting them to market.
He also is credited with boosting the Crest toothpaste brand, increasing its market share against rival Colgate-Palmolive's popular Colgate toothpaste. Crest gained American Dental Association approval and promoted itself with a campaign that became an advertising classic: "Look Mom, No Cavities!"
"John brought together wisdom and courage, concern for people, and commitment to the long term in a manner I've never seen exceeded," said John E. Pepper, P&G CEO in from 1995 to 1999. "He was quite simply the most effective executive I've ever known."
Smale married in 1950, and he and his wife, Phyllis, had four children. He courted his wife, who died previously, when he attended Miami and she attended the Western College for women, both in Oxford, Ohio.
Smale's ancestry was German, but he was born in Listowel, Ontario. He retired to Florida.
He served on the boards of several other companies, including Eastman Kodak and J.P. Morgan & Co. He received honorary doctorates from Miami, and several other schools, and had maintained his ties with Miami.
In a 2009 interview for the school's "Miamian" magazine, Smale credited his wife's support with enabling him to immerse himself into work he enjoyed, often staying on the job late at night and on weekends.
"Life would be awful long if you were working at something you didn't like to do," he said.
"I never really envisioned that I was going to end up as chief executive of Procter & Gamble," Smale told the magazine. "That's probably a good thing because it seems to me that if you're focused on making a success out of what you're doing, then, certainly at a company like P&G, you could assume that your personal success is going to take care of itself."
My wife strolled in while I read the article you posted,
so I read it to her out loud. Her comments.
Do these smart men have wives who actually do the laundry?
For those who do, the economy is such that store brands
on bottom shelf and in dollar stores are very much what
women are buying. While I have a box of Tide, my favorite,
I do not use it for every load BECAUSE IT IS TOO EXPENSIVE
to use for routine laundry.
I'm happy they found out that their mothers were right.
How much did that research cost them. When we lived in
Asia, I used to watch the maid go down to the river and
beat the clothes with a rock. But I didn't plan on going
home and do that to save energy. F**k Al Gore anyway.
PG’s new guidance for FY2012* non-GAAP EPS is $4.15-4.33, a 2-cent decrease in the lower bound compared to the old guidance of $4.17-4.33; the 2-cent change is from the sale of Pringles, which has not yet closed. (On a GAAP bases, the Pringles sale will add $0.55-0.65 to FY2012 EPS from the one-time gain on the sale.)
http://ih.advfn.com/p.php?pid=nmona&article=49793100
*Ending 6/30/12.
PG, Teva announce the formation of PGT Healthcare:
http://ih.advfn.com/p.php?pid=nmona&article=49792380
For additional commentary, see #msg-68710041.
Tide Coldwater Is Tough Sell Despite Environmental Benefits
http://www.nytimes.com/2011/09/17/business/cold-water-detergents-get-a-chilly-reception.html
›September 16, 2011
By ANDREW MARTIN and ELISABETH ROSENTHAL
Newly formulated laundry detergents can wash most clothes perfectly well in cold water, manufacturers say, but customers are stubbornly refusing to turn down the temperature. Although some of these detergents have been available for several years, customers cling to mom’s age-old advice that hot water washes best — squandering energy and contributing to greenhouse gas emissions.
Even in Germany, where consumers tend to be more environmentally attuned than in the United States, manufacturers have discovered that cold-water washing is such a hard sell that they have relegated claims about it — and the attendant green benefits — to the fine print, choosing to emphasize other attributes.
“For selling, it is much more effective to focus on stain removal and whiteness, performance and price,” said Dr. Thomas Mueller-Kirschbaum, a senior vice president for research and development at Henkel, the German company that markets cold-water formulas under the Persil and Purex brands. “In market research, when you ask consumers, they currently don’t see the immediate benefit of saving energy.”
Of course, some consumers have long preferred to wash their clothes in cold water to prevent them from shrinking or the colors from fading, and many others wash darks or delicate clothes on the cold cycle.
But the idea of reformulating detergent so that all types of clothes can be washed in cold water is relatively new, at least in North America and Europe. (In Japan, consumers routinely do their laundry in cold water.)
About three-quarters of the energy use and greenhouse-gas emissions from washing a load of laundry come from heating the water — a practice that, scientists say, is often wasteful and unnecessary.
Procter & Gamble, the consumer products giant that makes brands like Crest and Gillette in addition to Tide, takes credit for the innovation in North America, which emerged from an evaluation of the company’s energy footprint in 2003.
After realizing how much energy was used to heat water for laundry, Procter set a goal to convert 70 percent of all washing-machine loads to cold water by 2020; by Procter’s estimate currently 38 percent of laundry loads globally were done in cold water.
But in trying to create Tide Coldwater, Procter’s scientists were confronted with a problem: hot water does help get clothes cleaner. In fact, thermal energy is one of three secrets to cleaning clothes, along with mechanical energy and chemicals.
“When you reduce one, you have to do better in the others,” said James Danzinger, a senior scientist who works on detergents for Procter & Gamble.
So the company set its scientists loose to find new chemicals to compensate, and what they came up with was a detergent, Tide Coldwater, with different enzymes and surfactants that work better in cold water.
Tide Coldwater was introduced in 2005. Several competitors followed with their own cold-water formulas, including Purex from Henkel, Wisk from Sun Products and Biokleen from a small company by the same name.
Do cold-water detergents work? Consumer Reports ranked Tide Coldwater among its top detergents last year, though some of its competitors did not rate as high.
The chemical composition of the new cold-water detergents, which cost about the same as regular detergents, is “totally different” from what was found in detergents a decade ago, said Dr. Mueller-Kirschbaum of Henkel. Some even contain chemicals that coat fabric fibers so that they are less likely to absorb dirt in the interval before the next washing.
Tide Coldwater, by far the best-selling cold-water detergent, now accounts for $150 million in sales in the United States and $60 million in Canada, the company says. By comparison, regular Tide has well more than $1 billion a year in sales in the United States alone.
Kiem Ho, director of laundry care for Henkel, predicted that cold-water detergents would remain a niche, unless the government provided incentives to use them or the industry waged a major campaign.
Sales data provided by Henkel shows that sales of cold-water detergents have declined by 16 percent in the last year in the United States. Procter’s data shows a 5 percent increase, although company officials acknowledge some stagnation in recent years.
In Germany, a country dotted with wind turbines, solar panels and a Green Party that is part of the political mainstream, detergent makers waged an advertising war several years ago after they created detergents that worked equally well in all temperatures, including cold water.
On television and in magazines, on detergent boxes and bottles, they promoted the environmental benefits of the new cold-water products.
But the detergents languished on the shelves.
“I’ve never even tried it,” said Ottilie Theis, 53, who was shopping for detergent recently in Philippsburg, a city in southwestern Germany. “I’m just skeptical that normal dirt and spots can be washed out with cooler water.”
Dr. Mueller-Kirschbaum said he believed that consumer education, not advertising, would eventually change buying behavior. The average washing temperature is only slowly coming down in Germany, by about a degree a year, market research shows.
At a Target store in suburban New Jersey, Lara Snyder said she wanted to be part of the cold-water revolution and had bought Tide Coldwater. But so far, she said, she’s not ready to switch over entirely.
“I find that sometimes I wash it in cold,” Ms. Snyder said, “and have to wash it again in warm water.”
Despite the challenges, Procter & Gamble officials remain undeterred.
New advertising is promoting the virtues of Tide Coldwater, and the company is working with washing machine manufacturers to improve cold-water cycles in high-efficiency machines.
In September, for instance, Whirlpool’s Maytag brand is introducing the Bravos XL, in which the cold cycle has been designed to work with cold-water detergents.
Procter officials said they were encouraged by company surveys that showed more consumers were washing in cold water. When Tide Coldwater was introduced in 2005, just 30 percent of laundry loads were washed in cold water; now, it’s pushing 40 percent.
“We have people moving from warm to cold,” said Dawn French, the company’s director of North America laundry products research and formula design. “But hot-water loads have remained very steady.”
Currently, about 7 percent of white laundry loads are done in cold water, compared with 22 percent for lights and 57 percent for darks, according to company studies.
“If we can chip away, load by load, we can get to 70 percent,” Ms. French said.‹
PG article in Monday’s WSJ focuses on disparate price points:
http://online.wsj.com/article/SB10001424053111904836104576558861943984924.html
Mostly old hat, but worth reading.
Musings on why PG is a good play on The Global Demographic Tailwind (by ‘oldberkeley’):
#msg-61384535
Oldie but goodie on The Global Demographic Tailwind: #msg-42162914
PG’s 2Q11 results with my annotations: #msg-65909016.
PG has more than doubled the number of product categories in BRIC countries during the past 18 months:
#msg-66939129
Have a large holding in P&G. Never thought to look at a board for it. Lol. Just keep increasing dividend and buying great brands and I'm very very long.
Gonna grab some MAY 65 calls here in the AM on monday. The chart looks strong as it closed above a resistance AND needs to fill that gap @ 66.
GLTA
TB
Pampers, Bounty, Charmin prices just went up 3-7%:
http://www.reuters.com/article/2011/04/25/us-procter-idUSTRE73O4WT20110425
True! I did prefer Pampers though when my boys were little they just seemed better true or not.
We have to be careful too many posts here and this could become #1 on the breakout boards. LMAO I like companies that are easier to follow and run like a watch. Ive had P&G in my portfolio since I was 19 years old it was the first stock I ever bought. I still have shares
Well, it's not such a bad mistake. After all, most of us probably don't even know the difference between Luvs and Pampers :- )
Thats not even a current artcle. Like I said I just read the article about the 50 year anniversary today and it was part of it. LOL well you seem to know your P&G I follow them lightly I have family that works for P&G here in Cincinnati but not in that GBU.
The article is wrong—they’re including Luvs as well as Pampers in the $9B figure.
Alright this is from the biz journal I have attached a link and an article that I found from May of last year.
http://www.bizjournals.com/cincinnati/stories/2010/05/24/story7.html
Web rumors put P&G's Pampers at risk
Premium content from Business Courier - by Jon Newberry, Staff Reporter
Date: Monday, May 24, 2010, 12:00am EDT - Last Modified: Saturday, May 22, 2010, 3:46am EDT
Related:
Manufacturing
Click here to find out more!
Recent complaints that its new Dry Max diaper technology is causing severe diaper rash pose a threat to Procter & Gamble Co.’s biggest global brand, one that’s a key to its prospects in fast-growing developing markets.
Pampers is the top-seller among P&G’s portfolio of 23 billion-dollar brands, generating around $9 billion in annual sales – more than 10 percent of P&G’s total. If P&G’s diaper business was a stand-alone company, its size would dwarf almost every other public and private company in the region. Of Cincinnati-based public companies, only P&G itself, Kroger Co. and Macy’s Inc. have higher annual sales. Aside from GE Aviation, a unit of General Electric Co., no other business in the area generates as much revenue.
It’s also responsible for hundreds of local jobs, including the direct employment of several hundred people at P&G’s Winton Hill Business Center and indirect jobs at local companies that supply the Pampers business.
“It’s the global headquarters for the global Pampers business. This is where it all comes together,” said Pampers spokesman Bryan McCleary, who said total Pampers employment in the area was “hundreds and hundreds” but less than 1,000. The diaper business’s top managers are all based here, including people who oversee marketing, sales, manufacturing oversight and research and development. It’s also the home of Pampers? ...
Recent complaints that its new Dry Max diaper technology is causing severe diaper rash pose a threat to Procter & Gamble Co.’s biggest global brand, one that’s a key to its prospects in fast-growing developing markets.
Pampers is the top-seller among P&G’s portfolio of 23 billion-dollar brands, generating around $9 billion in annual sales – more than 10 percent of P&G’s total. If P&G’s diaper business was a stand-alone company, its size would dwarf almost every other public and private company in the region. Of Cincinnati-based public companies, only P&G itself, Kroger Co. and Macy’s Inc. have higher annual sales. Aside from GE Aviation, a unit of General Electric Co., no other business in the area generates as much revenue.
It’s also responsible for hundreds of local jobs, including the direct employment of several hundred people at P&G’s Winton Hill Business Center and indirect jobs at local companies that supply the Pampers business.
“It’s the global headquarters for the global Pampers business. This is where it all comes together,” said Pampers spokesman Bryan McCleary, who said total Pampers employment in the area was “hundreds and hundreds” but less than 1,000. The diaper business’s top managers are all based here, including people who oversee marketing, sales, manufacturing oversight and research and development. It’s also the home of Pampers’ consumer research center that conducts user panels, focus groups and in-home visits to develop new products.
Local suppliers include Clopay Plastic Products (plastic film), Amantea Nonwovens LLC (nonwoven textiles), and Multi-Color Corp. (labels for Pampers wipes), among others.
Company dismisses rumors
P&G has touted Dry Max as its biggest diaper innovation in 25 years, claiming Pampers diapers made with Dry Max are twice as absorbent and 20 percent thinner than the prior version. The company introduced Dry Max in North America beginning in March. Complaints began surfacing online shortly after its introduction and started attracting national publicity in late April. Some complaints alleged severe diaper rash experienced by babies who had not been bothered by it before using Dry Max diapers. Some claimed the diapers caused chemical burns. In a May 6 press release, P&G officials said the rumors were “completely false” and were being fueled via social media by “a small number of parents.”
Even if the allegations that there’s something wrong with the diapers prove groundless, as most people familiar with P&G’s product development practices seem to expect, “clearly the company has a PR problem,” said Lauren DeSanto, a stock analyst who follows P&G for Morningstar. “Anytime you see any kind of negative publicity around such a prominent brand, that’s a problem.”
That’s especially so for Pampers because it makes products for babies, so the sensitivity threshold is much more strict, DeSanto said.
Further complicating matters is P&G’s embrace of social media in its marketing, especially with moms. Since moms seem to be posting most of the online complaints, that will make it tricky to manage the issue without coming off looking like the bad guys, DeSanto said.
The issue could damage the Pampers brand, even if it’s not permanent, DeSanto said.
“Between the short term and the long term, there’s a lot that can happen,” she said.
Expert: CPSC investigation ‘a way out’
Despite the highly publicized complaints about diaper rash, Dry Max has been a winner in the marketplace, said Pampers spokesman McCleary.
“It has been one of the most successful new product introductions in years for Pampers,” McCleary said. Some 2.5 million households are purchasing and repurchasing Dry Max diapers, representing “huge numbers voting for this day in and day out.”
However much of a threat the Dry Max complaints are or could develop into, it’s a risk that shouldn’t come as a total surprise. P&G’s 2009 annual report includes the following warning that damage to the reputation of one of its billion-dollar brands could have a material impact on its financial results:
“The success of these brands can suffer if our marketing plans or product initiatives do not have the desired impact on a brand’s image or its ability to attract consumers. Further, our results could be impacted if one of our leading brands suffers a substantial impediment to its reputation due to real or perceived quality issues.”
Chris Allen, a professor of marketing at the University of Cincinnati’s College of Business, said an investigation by the U.S. Consumer Product Safety Commission could be a “way out of the woods” for P&G.
“I would think that P&G would welcome that. P&G understands testing,” he said. “To work out of the controversy, they need some other voice saying they can’t find anything wrong.”
Read Full ArticleSee Comments
Read more: Web rumors put P&G's Pampers at risk | Business Courier
I don’t post here very often because I cover PG at #board-15427.
You know only me and you read this board...Now I have to check the source and get a breakdown for it. I will though I know how you are. LOL
Not true. Remember that Pampers are not even the entire diapers portion of the Family & Baby Care business unit.
You found the same info as me but remember Pampers is the king of that unit and is the majority player there so 10bil still holds water.
Here is the latest from the 10Q for the last 6 months that division which has it major component being Pampers did 7.5 billion is sales for the last 6 months so I could see Pampers alone doing 10 billion
Amounts in millions Net Sales Earnings from
Continuing
Operations
Before
Income Taxes Net
Earnings
from
Continuing
Operations Net Sales Earnings from
Continuing
Operations
Before
Income Taxes Net
Earnings
from
Continuing
Operations
Beauty and Grooming GBU
Beauty
2010 $ 5,290 $ 1,141 $ 896 $ 10,219 $ 2,222 $ 1,725
2009 5,217 1,137 876 10,138 2,164 1,653
Grooming
2010 2,164 635 482 4,062 1,159 880
2009 2,095 613 433 3,953 1,102 784
Health and Well-Being GBU
Health Care
2010 3,138 779 531 6,122 1,520 1,026
2009 3,071 790 534 6,050 1,620 1,084
Snacks and Pet Care
2010 798 93 67 1,507 170 121
2009 835 143 98 1,590 256 172
Household Care GBU
Fabric Care and Home Care
2010 6,308 1,165 758 12,605 2,582 1,695
2009 6,311 1,433 965 12,441 2,943 1,974
Baby Care and Family Care
2010 3,930 802 502 7,582 1,551 972
2009 3,817 925 579 7,406 1,810 1,136
Corporate
2010 (281 ) (554 ) 97 (628 ) (861 ) (5 )
2009 (319 ) (557 ) (336 ) (744 ) (1,227 ) (627 )
Total
2010 21,347 4,061 3,333 41,469 8,343 6,414
2009 21,027 4,484 3,149 40,834 8,668 6,176
- 5 -
The entire Family & Baby Care unit, which includes baby wipes, diapers, paper towels, facial tissues, and toilet paper, does about $15B of annual sales.
Yeah it does according to the piece I read just today from the local paper here in Cincinnati the headquarters of P&G. To be fair I didnt pull the 10K on it though.
I wore them in the early part of the 80's and they had been around for awhile then....LOL
Pampers by itself does not sell $10B per year. Not even close.
Followers
|
36
|
Posters
|
|
Posts (Today)
|
0
|
Posts (Total)
|
284
|
Created
|
02/20/02
|
Type
|
Free
|
Moderators |
Volume | |
Day Range: | |
Bid Price | |
Ask Price | |
Last Trade Time: |