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Procter Gamble Co (PG) SEC Filing 10-K Annual report for the fiscal year ending Friday, June 30, 2017

Procter Gamble Co

CIK: 80424 Ticker: PG


pglogoa02.jpg
News Release
The Procter & Gamble Company
 
One P&G Plaza
 
Cincinnati, OH 45202
P&G ANNOUNCES FOURTH QUARTER AND FISCAL YEAR 2017 RESULTS
Q4’17: Net Sales Unchanged; Organic Sales +2%; Diluted Net EPS $0.82, +19%; Core EPS $0.85, +8%
FY’17: Net Sales Unchanged; Organic Sales +2%; Diluted Net EPS $5.59, +51%; Core EPS $3.92, +7%
CINCINNATI, July 27, 2017 - The Procter & Gamble Company (NYSE: PG) reported April - June 2017 quarter net sales were $16.1 billion, unchanged versus the prior year period including a negative two percentage point impact from foreign exchange. Organic sales increased two percent for the quarter driven by a two percent increase in organic shipment volume. Diluted net earnings per share were $0.82, an increase of 19% versus the prior year period. Core earnings per share were $0.85, an increase of eight percent versus the prior year period. The Company generated $3.7 billion of operating cash flow in the quarter, with adjusted free cash flow productivity of 125%.
For fiscal year 2017, net sales were $65.1 billion, unchanged versus the prior year, including a negative two percentage point impact from foreign exchange. Organic sales increased two percent for the year driven by a two percent increase in organic shipment volume. Diluted net earnings per share were $5.59, an increase of 51% versus the prior year period. Core earnings per share were $3.92, an increase of seven percent versus the prior year period. Excluding the impact of foreign exchange, constant currency core earnings per share increased 11% for the year. The Company generated $12.8 billion of operating cash flow in fiscal 2017, with adjusted free cash flow productivity of 94%. P&G returned nearly $22 billion of value to shareholders in fiscal 2017 through the combination of $7.2 billion of dividend payments, $9.4 billion of share exchanges in the Beauty Brands transaction completed in October and $5.2 billion of direct share repurchases.
“We met or exceeded each of our going-in objectives for fiscal year 2017 in a challenging macro and competitive environment,” said David Taylor, Chairman, President and Chief Executive Officer. “We made significant progress on our key priorities: accelerating organic sales growth, continuing to drive strong productivity improvement and cost savings, strengthening our organization and culture and completing moves to simplify and strengthen our product portfolio. Looking forward, we will continue to drive productivity improvement and cost savings to provide the fuel for investments needed to accelerate and sustain faster top-line growth while expanding operating profit margin. Our long-term objective is to deliver results at levels that support our goal of balanced growth and value creation and operating total shareholder return in the top third of our competitive peer group.
“As an organization, we are accelerating efforts to execute and deliver on the plans we’ve put into action. Achieving our objectives will not only require continued focus as an organization, but also that we prevent anything from derailing the work that is delivering improvement. We, as a management team and Board, are confident we have the right plan in place.”
April - June 2017 Quarter Discussion
In the April - June quarter net sales were unchanged at $16.1 billion, including a negative two percentage point impact from foreign exchange. Organic sales grew two percent on a two percent increase in organic volume. All-in volume also increased two percent.
April - June 2017 Net Sales Drivers*
Volume
Foreign Exchange
Price
Mix
Other**
Net Sales
Organic Volume
Organic Sales
Beauty
(1)%
(2)%
2%
2%
1%
2%
1%
5%
Grooming
3%
(2)%
(4)%
—%
1%
(2)%
3%
(1)%
Health Care
—%
(2)%
(1)%
(1)%
—%
(4)%
1%
(1)%
Fabric & Home Care
3%
(3)%
1%
—%
1%
2%
4%
5%
Baby, Feminine & Family Care
1%
(1)%
(2)%
1%
(1)%
(2)%
1%
—%
Total P&G
2%
(2)%
—%
—%
—%
—%
2%
2%
* Net sales percentage changes are approximations based on quantitative formulas that are consistently applied.
** Other includes the sales mix impact of acquisitions/divestitures and rounding impacts necessary to reconcile volume to net sales.
Beauty segment organic sales increased five percent versus year ago. Organic sales were up high single digits in Skin & Personal Care driven by the continued growth of the super-premium SK-II skin care brand and increased pricing behind product innovation. Organic sales increased low single digits in Hair Care, primarily due to increased pricing across multiple regions and brands.
Grooming segment organic sales decreased one percent, primarily due to reduced pricing in Shave Care. Organic sales decreased low single digits in Shave Care due to lower pricing in the U.S., partially offset by increased volume globally. Organic sales increased double digits in Appliances, driven by increased volume from the continued success of innovation on Braun shavers and styling tools, along with improved pricing due to more efficient promotional spending.
Health Care segment organic sales decreased one percent for the quarter. Oral Care organic sales decreased low single digits due to competitive activity and reduced pricing on paste, partially offset by the continued success of product innovation on power toothbrushes. Personal Health Care organic sales decreased low single digits due to an earlier cough and cold season versus prior year along with reductions in trade inventories.
Fabric & Home Care segment organic sales increased five percent versus year ago. Fabric Care and Home Care organic sales both increased mid-single digits due to increased volume from product innovation.
Baby, Feminine & Family Care segment organic sales were unchanged versus prior year. Baby Care organic sales decreased low single digits as volume declined mainly due to competitive activity. Feminine Care organic sales increased low single digits due primarily to favorable product mix from the growth of Always Discreet and other premium innovation. Family Care organic sales increased low single digits driven by higher volume from product innovation and increased distribution.
Diluted net earnings per share were $0.82, an increase of 19% versus the prior year. Current year results included non-core restructuring costs of $0.02 per share. Core earnings per share, which exclude non-core restructuring charges and the results of discontinued operations, were $0.85, an increase of eight percent versus the prior year.
Reported gross margin increased 50 basis points, including approximately 50 basis points of benefit due to lower non-core restructuring charges. Core gross margin declined 10 basis points, including 20 basis points of negative foreign exchange impacts. On a currency-neutral basis, core gross margin increased 10 basis points, driven primarily by 270 basis points of productivity cost savings, which more than offset headwinds from increased commodity costs of 120 basis points, 90 basis points of unfavorable mix and 50 basis points of product reinvestments and other impacts.
Selling, general and administrative expense (SG&A) as a percent of sales declined 240 basis points on a reported basis versus the prior year, including approximately 10 basis points of benefit due to lower non-core restructuring charges. Core SG&A as a percentage of sales declined 220 basis points, including approximately a 60 basis point benefit from lower foreign exchange impacts. On a currency-neutral basis, core SG&A declined 170 basis points versus the prior year driven by 80 basis points of productivity savings from overhead, agency fee and ad production costs. Digital ad spending was lower versus a high base period and due to current period choices to temporarily restrict spending in digital forums where our ads were not being placed according to our standards and specifications.
Reported operating profit margin increased 280 basis points. Core operating profit margin increased 210 basis points versus the prior year, including approximately a 40 basis point net benefit from foreign exchange. On a currency-neutral basis, core operating profit margin improved 180 basis points. Total productivity cost savings were 350 basis points for the quarter.
Fiscal Year 2017 Results
Fiscal year 2017 net sales were $65.1 billion, unchanged versus the prior year, including a negative two percentage point impact from foreign exchange. Organic sales grew two percent on a two percent increase in organic shipment volume. Diluted net earnings per share were $5.59, an increase of 51% versus the prior year, including diluted net earnings per share from discontinued operations of $1.90 driven by the gain on the sale of the Beauty Brands to Coty in the second fiscal quarter. Core earnings per share were $3.92, an increase of seven percent. Excluding the impact of foreign exchange, currency-neutral core earnings per share increased 11% for the year.
Operating cash flow was $12.8 billion for the year. Adjusted free cash flow productivity was 94%. The Company reduced common stock outstanding at a value of nearly $15 billion through the combination of direct share repurchases and shares that were exchanged in the Beauty Brands transaction. The Company also returned $7.2 billion in cash to shareholders as dividends. In total, nearly $22 billion in value was returned to shareholders via dividends, share exchange and share repurchase. P&G announced an increase to the quarterly dividend in April, making this the 61st consecutive year of dividend increases.
Fiscal Year 2018 Guidance
P&G said it is projecting organic sales growth in the range of two to three percent for fiscal year 2018. P&G estimates all-in sales growth of about three percent for fiscal 2018, which includes a neutral to half-a-percentage point benefit to sales growth from the combined impacts of foreign exchange and acquisitions & divestitures.
The Company said it expects core earnings per share growth of five to seven percent for fiscal 2018 versus core EPS of $3.92 in fiscal 2017. P&G said it expects core EPS growth in fiscal 2018 to be driven primarily by core operating profit growth. Additionally, a modest benefit to core EPS from a reduction in common shares outstanding will be partially offset by a net headwind from changes in interest expense, interest income and other non-operating income. P&G expects the core effective tax rate to be around 24%, essentially in-line with the fiscal 2017 rate.
All-in GAAP earnings per share are expected to decrease 26% to 28% versus fiscal year 2017 GAAP EPS of $5.59, which included the significant benefit from the Beauty Brands transaction that was completed in October 2016. The fiscal 2018 GAAP EPS estimate includes approximately $0.10 per share of non-core restructuring costs.
P&G said it expects results for the first quarter of fiscal 2018 to be the lowest organic sales and core EPS growth period of the year, as the period compares against the highest organic growth base period. Top-line headwinds from portfolio choices and the recent Gillette price reduction in the U.S. will primarily impact the first half of fiscal 2018 and will annualize as the year progresses. Additionally, productivity savings are expected to build throughout fiscal 2018.




The following information was filed by Procter Gamble Co (PG) on Thursday, July 27, 2017 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Procter Gamble Co's 10-K Annual Report:

Financial Statements, Disclosures and Schedules

Inside this 10-K Annual Report

Document And Entity Information
Consolidated Balance Sheets
Consolidated Balance Sheets (parenthetical)
Consolidated Statements Of Cash Flows
Consolidated Statements Of Cash Flows (parenthetical)
Consolidated Statements Of Comprehensive Income
Consolidated Statements Of Comprehensive Income (parenthetical)
Consolidated Statements Of Earnings
Consolidated Statements Of Shareholders' Equity
Consolidated Statements Of Shareholders' Equity (parenthetical)
Accumulated Other Comprehensive Income
Accumulated Other Comprehensive Income (tables)
Accumulated Other Comprehensive Income - Additional Information (details)
Accumulated Other Comprehensive Income - Statement Of Aoci (details)
Commitments And Contingencies
Commitments And Contingencies (tables)
Commitments And Contingencies - Operating Lease Payments (details)
Commitments And Contingencies - Purchase Obligations (details)
Discontinued Operations
Discontinued Operations (tables)
Discontinued Operations - Additional Information (details)
Discontinued Operations - Additional Information On Tables (details)
Discontinued Operations - Cash Flows For Beauty Brands (details)
Discontinued Operations - Major Components Of Assets And Liabilities For Beauty Brands (details)
Discontinued Operations - Major Components Of Assets And Liabilities For Beauty Brands - Additional Information (details)
Discontinued Operations - Net Earnings From Discontinued Operations (details)
Discontinued Operations - Net Earnings From Discontinued Operations For Batteries And Pet Care (details)
Discontinued Operations - Net Earnings From Discontinued Operations For Beauty Brands (details)
Earnings Per Share
Earnings Per Share (details)
Earnings Per Share (tables)
Earnings Per Share - Antidilutive Securities (details)
Goodwill And Intangible Assets
Goodwill And Intangible Assets (tables)
Goodwill And Intangible Assets - Additional Information (details)
Goodwill And Intangible Assets - Amortization Of Intangible Assets (details)
Goodwill And Intangible Assets - Estimated Amortization Expense (details)
Goodwill And Intangible Assets - Goodwill By Global Business Unit (details)
Goodwill And Intangible Assets - Goodwill By Global Business Unit - Additional Information (details)
Goodwill And Intangible Assets - Intangible Assets (details)
Income Taxes
Income Taxes (tables)
Income Taxes - Additional Information (details)
Income Taxes - Additional Information Other (details)
Income Taxes - Deferred Income Tax Assets And Liabilities (details)
Income Taxes - Earnings From Continuing Operations Before Income Taxes (details)
Income Taxes - Income Tax Rate Reconciliation (details)
Income Taxes - Provision For Income Taxes On Continuing Operations (details)
Income Taxes - Unrecognized Tax Benefits Reconciliation (details)
Postretirement Benefits And Employee Stock Ownership Plan
Postretirement Benefits And Employee Stock Ownership Plan (tables)
Postretirement Benefits And Employee Stock Ownership Plan - Esop Shares Outstanding (details)
Postretirement Benefits And Employee Stock Ownership Plan - Additional Information (details)
Postretirement Benefits And Employee Stock Ownership Plan - Amounts Expected To Be Amortized From Accumulated Other Comprehensive Income Into Net Periodic Benefit Cost (details)
Postretirement Benefits And Employee Stock Ownership Plan - Components Of Net Periodic Benefit Cost (details)
Postretirement Benefits And Employee Stock Ownership Plan - Components Of Net Periodic Benefit Cost - Additional Information (details)
Postretirement Benefits And Employee Stock Ownership Plan - Defined Contribution Retirement Plans (details)
Postretirement Benefits And Employee Stock Ownership Plan - Defined Contribution Retirement Plans - Additional Information (details)
Postretirement Benefits And Employee Stock Ownership Plan - Fair Value Of Plan Assets (details)
Postretirement Benefits And Employee Stock Ownership Plan - Fair Value Of Plan Assets - Additional Information (details)
Postretirement Benefits And Employee Stock Ownership Plan - One-percentage Point Change In Assumed Health Care Cost Trend Rates (details)
Postretirement Benefits And Employee Stock Ownership Plan - Pension Plans With Accumulated And Projected Benefit Obligations In Excess Of Plan Assets (details)
Postretirement Benefits And Employee Stock Ownership Plan - Reconciliation Of Benefit Obligations And Plan Assets (details)
Postretirement Benefits And Employee Stock Ownership Plan - Reconciliation Of Benefit Plans Recognized In The Balance Sheet (details)
Postretirement Benefits And Employee Stock Ownership Plan - Target And Actual Asset Allocation (details)
Postretirement Benefits And Employee Stock Ownership Plan - Total Benefit Payments Expected To Be Paid (details)
Postretirement Benefits And Employee Stock Ownership Plan - Weighted Average Assumptions For The Benefit Calculations As Well As Assumed Health Care Trend Rates (details)
Quarterly Results (unaudited)
Quarterly Results (unaudited) (details)
Quarterly Results (unaudited) (tables)
Risk Management Activities And Fair Value Measurements
Risk Management Activities And Fair Value Measurements (tables)
Risk Management Activities And Fair Value Measurements - Additional Information (details)
Risk Management Activities And Fair Value Measurements - Assets - Additional Information (details)
Risk Management Activities And Fair Value Measurements - Fair Value And Amount Of Gains And Losses On Qualifying And Non-qualifying Financial Instruments Used In Hedging Transactions (details)
Risk Management Activities And Fair Value Measurements - Financial Assets And Liabilities Measured At Fair Value On A Recurring Basis (details)
Risk Management Activities And Fair Value Measurements - Liabilities - Additional Information (details)
Segment Information
Segment Information (tables)
Segment Information - Additional Information (details)
Segment Information - Additional Information Other (details)
Segment Information - Global Segment Results (details)
Segment Information - Percent Of Sales By Business Unit (details)
Short-term And Long-term Debt
Short-term And Long-term Debt (tables)
Short-term And Long-term Debt - Long-term Debt (details)
Short-term And Long-term Debt - Long-term Debt Maturities (details)
Short-term And Long-term Debt - Short-term Debt (details)
Stock-based Compensation
Stock-based Compensation (tables)
Stock-based Compensation - Additional Information (details)
Stock-based Compensation - Assumptions Utiilized In The Binomial Lattice-based Valuation Model (details)
Stock-based Compensation - Options Outstanding (details)
Stock-based Compensation - Schedule Of Non-vested Rsus And Psus (details)
Stock-based Compensation - Share-based Compensation Activity (details)
Summary Of Significant Accounting Policies
Summary Of Significant Accounting Policies (policies)
Summary Of Significant Accounting Policies - Additional Information (details)
Supplemental Financial Information
Supplemental Financial Information (tables)
Supplemental Financial Information - Accrued And Other Liabilities (details)
Supplemental Financial Information - Additional Information (details)
Supplemental Financial Information - Other Costs (details)
Supplemental Financial Information - Property, Plant And Equipment (details)
Supplemental Financial Information - Restructuring Activity (details)
Ticker: PG
CIK: 80424
Form Type: 10-K Annual Report
Accession Number: 0000080424-17-000047
Submitted to the SEC: Mon Aug 07 2017 4:05:16 PM EST
Accepted by the SEC: Mon Aug 07 2017
Period: Friday, June 30, 2017
Industry: Soap Detergents Cleang Preparations Perfumes Cosmetics

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