Jefferies

Global Consumer Conference
June 22, 2010 1
Purpose-inspired Growth

• Strong, Multi-Year Innovation Program

• Simplification and Productivity
g
• Business Progress
• Q&A

Strong, Multi-Year Innovation Program

More Consumers…by extending our category
portfolios vertically to higher and lower value tiers

In More Parts of the World…by expanding

geographically into category whitespaces

More Completely…by improving existing products

and extending portfolios into adjacent categories

1
Fiscal 2011 – Innovation Impacts

1 Full year of “first market” launches

2 Year 2+ leverage plans

3 Geographic expansion

4 New innovations

Fiscal 2011 – Innovation Impacts

Fiscal Year 2010 Fiscal Year 2011

JAS‘09 OND‘09 JFM‘10 AMJ‘10 JAS‘10 OND‘10 JFM‘11 AMJ‘11

Fekkai Classic
Ariel & Dash Acti-lift- WE
Bounty Upgrade - NA
Always Simply Fits - UK
Naturella - China
Crest 3D White - NA

Pampers Dry Max - NA

Fusion ProGlide - NA
Pantene Restage - NA

Dish Care
Fairy Auto Dish –
Western Europe

2
Dish Care
Dawn Hand Renewal –
North America

Dish Care
Joy Moist Care –
Japan

Dish Care
Gain Hand
Dishwashing Liquid

3
Air Care
Japan Febreze Mistral

10

Air Care
AmbiPur Acquisition

11

Air Care Expansion

Febreze & Ambi Pur Market Coverage

Multi-year plans will expand Air Care’s

reach to ~3.8 billion consumers

12

4
Fabric Care
Tide Naturals - India

13

Fabric Care
Ariel Actilift, Dash Actilift

14

Fabric Care
Tide Acti-Lift

15

5
 Fabric Care
Powder Compaction and Formula Upgrade

16

Baby Care
Pampers Value Tier

Western Europe CEEMEA

17

Baby Care
Pampers DryMax – North America

18

6
Baby Care
Pampers Dry Max – Western Europe

19

Oral Care
Pro-Health Formula Expansion

Mexico China

Poland, Turkey & Russia

20

Oral Care
Oral-B Toothpaste Expansion

Brazil Benelux

21

7
 Oral Care
Premium Oral Care Boutique

Crest 3D White

22

Hair Care
Pantene Nature Fusion

23

Hair Care
Pantene Brand Restage

24

8
 Blades and Razors
Mach 3 India

25

Blades and Razors

Gillette Fusion ProGlide

26

Fiscal 2011 – Innovation Impacts

1 Full year of “first market” launches

2 Year 2+ leverage plans

3 Geographic expansion

4 New innovations

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9
Investing in Growth
Continued industry leading R&D investment

R&D Spend vs. Major Competitors

$2.0 bn

$1.5

$1.0

$0.5

P&G Unilever L'Oreal Henkel KC Colgate Reckitt Clorox Energ. Avon

28

Investing in Growth
Significantly more consumer impressions in FY’10;
Continued strong support levels in FY’11

~+20%

FY’09 FY’10 FY’11

29

Simplification and Productivity

Cost of Goods

• Materials, Formulas & Specifications

¾ Global Platform Strategy targeting 30% reduction in
formulas, colors and specs
• Alternative Materials
¾ C&D effort with key supplier to develop new polymer

30

10
Simplification and Productivity
SG&A

• Streamlined Management Structure

¾ VP level and above reduced by ~15%
¾ 2 levels below VP reduced by ~10%

• Productivity improvement via ongoing work

process and systems enhancements

31

Cost Discipline
Enables Growth
Simplifying our
Frees up work, decision
investment for making and
growth structure

Consumer

Frees up capacity
for innovation
32

Business Objectives

Leadership Shareholder Value Creation

• Profitable Value Share Growth
¾ Organic
g Sales Growth Ahead of Underlying
y g Markets
¾ Consistent, Strong EPS Growth
• Significant Cash Generation

33

11
 Fiscal Year 2010
Organic Sales Growth
+5%
+4%
+4% to +3%
+5% to
+5%

+2%

Q1’09 Q2’09 Q3’09 Q1’10 Q2’10 Q3’10 Q4’10e FY’10e

Q4’09

Organic sales growth is sales growth excluding the impacts of acquisitions, divestitures and foreign exchange.
34

Business Outlook
FY 2010 Guidance Evolution
May ‘09 Oct. ‘09 Current
$3.62 to
Core EPS $3.68

Core EPS
C -1% to +3% 0% to +3% +4% to +6%
Growth

Organic Sales
+1% to +3% +2% to +4% +3% to +5%
Growth

Core earnings per share growth is a measure of diluted net earnings per share from continuing operations excluding charges for
pending European legal matters, the impact of recently enacted U.S. health care legislation and incremental restructuring
charges related to the Folgers divestiture in the prior fiscal year.
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36

Cash Discipline
Adjusted Free Cash Flow Productivity*
99% 102%
$12 128%
Target = 90%+
101%
$10
ow, $Bn

100%
$8
Adjusted Free Cash Flo

146% 117%
92%
$6

$4

$2

$0
0
3

'1
'0

'0

'0

'0

'0

'0

'0

TD
FY

FY

FY

FY

FY

FY

FY

FY

* Ratio of adjusted free cash flow to net earnings excluding major divestiture gains. 36

12
Shareholder Value Creation
Cash Returned to Shareholders

FY ’08 FY ‘09 FY ’10e

Adjusted FCF*
($ Billion)
$12.0 $11.7 ~$12.3
V l tto Sh
Value Shareholders^
h ld ^
($ Billion) $14.7 $11.4 ~$11.5
Shareholder Yield
(% of Market Cap)
7.8% 6.5% ~6.5%

*Adjusted free cash flow is operating cash flow less capital plus tax impacts from major divestitures.
^Value to shareholders includes dividends and share repurchases.
37

Business Outlook
Improving Global Market Share Trends

19.9%

(0.2%) +0.1% +0.2%

P12M P6M P3M

Constant currency value basis; Data thru April 2010;

change versus prior year
38

North America Family Care

FY’09 vs. FY’06

“Basics”
Sales 3X to 4X
Growth

Category
AT +200 bps
Margin

Category
Value +1.5 point
Share

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Feminine Care Russia
FY’09 vs. FY’06

Sales
Growth 2.5 times

AT
Margin
+900 bps

Value
Share +6 points

Fabric Care India

FY’10e vs. FY’03

Sales
Growth 6 times

BT +900 bps
Margin

Value
Share +8 points

Investing in Growth
Pricing & Promotion Activity

+5% Fiscal year net pricing impact

on organic sales growth

Neutral
FY’09 to
+1% Positive

FY’10e FY’11e
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Forward Looking Statement
All statements, other than statements of historical fact included in this release or presentation, are forward-looking statements, as
that term is defined in the Private Securities Litigation Reform Act of 1995. Such statements are based on financial data, market
assumptions and business plans available only as of the time the statements are made, which may become out of date or
incomplete. We assume no obligation to update any forward-looking statement as a result of new information, future events or
other factors. Forward-looking statements are inherently uncertain, and investors must recognize that events could differ
significantly from our expectations. In addition to the risks and uncertainties noted in this release or presentation, there are certain
factors that could cause actual results to differ materially from those anticipated by some of the statements made. These include:
(1) the ability to achieve business plans, including growing existing sales and volume profitably despite high levels of competitive
activity, especially with respect to the product categories and geographical markets (including developing markets) in which the
Company has chosen to focus; (2) the ability to successfully manage ongoing acquisition and divestiture activities to achieve the
cost and growth synergies in accordance with the stated goals of these transactions without impacting the delivery of base
business objectives; (3) the ability to successfully manage ongoing organizational changes designed to support our growth
strategies, while successfully identifying, developing and retaining key employees; (4) the ability to manage and maintain key
customer relationships; (5) the ability to maintain key manufacturing and supply sources (including sole supplier and plant
manufacturing sources); (6) the ability to successfully manage regulatory, tax and legal requirements and matters (including
product liability, patent, intellectual property, competition law matters, and tax policy), and to resolve pending matters within
current estimates; (7) the ability to successfully implement, achieve and sustain cost improvement plans in manufacturing and
overhead areas, including the Company's outsourcing projects; (8) the ability to successfully manage currency (including currency
issues in certain countries, such as Venezuela, China and India), debt, interest rate and commodity cost exposures and significant
credit or liquidity issues; (9) the ability to manage continued global political and/or economic uncertainty and disruptions,
especially in the Company's significant geographical markets, as well as any political and/or economic uncertainty and disruptions
due to a global or regional credit crisis or terrorist and other hostile activities; (10) the ability to successfully manage competitive
factors, including prices, promotional incentives and trade terms for products; (11) the ability to obtain patents and respond to
technological advances attained by competitors and patents granted to competitors; (12) the ability to successfully manage
increases in the prices of raw materials used to make the Company's products; (13) the ability to stay close to consumers in an
era of increased media fragmentation; (14) the ability to stay on the leading edge of innovation and maintain a positive reputation
on our brands; and (15) the ability to rely on and maintain key information technology systems. For additional information
concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent
10-K, 10-Q and 8-K reports.
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Regulation G Disclosure

For full reconciliation, visit:

www.pg.com/investors

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