Procter & Gamble Executive Insights Cheat Sheet

Procter & Gamble Co (NYSE:PG) recently reported its second quarter earnings and discussed the following topics in its earnings conference call.


Christopher Ferrara – Bank of America Merrill Lynch: I guess the question is about the sales acceleration, and so obviously the sheer number of new products you guys are launching is much higher than what we’ve seen more recently, and that alone is going to drive better sales and market share. But I guess, can you give us a sense for why specifically you think that we’re truly seeing the impact of higher quality innovation that might lead to more sustainable sales growth, and why it’s not just the result of – you just accelerated activity that isn’t necessarily sustainable?

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Bob McDonald – Chairman, President and CEO: Well, I think, Chris, Tide PODS is a great example of that. We introduced Tide PODS which is a very discontinuous innovation. It’s taken about three quarters of the unit dose category in the United States. When we look at the consumers that it’s gaining, it’s gaining consumers from up and down the income spectrum. So, even though it might be priced as a premium on a per wash basis, you’ve got consumers who would buy lower-priced brands trading up to that innovation. And as Jon said in his remarks, we expect by the end of the year this will be $0.5 business. So, you take $0.5 billion of new business on one innovation – one discontinuous innovation, one country, one brand, and as John said, we’ve already built the plan, we’re expanding in Western Europe in the April to June quarter. So, you can just imagine the sales and earnings potential of just that one discontinuous innovation as we expanded around the world. I think that’s probably the best example.

Jon R. Moeller – CFO: And you’ll also remember, Chris, I think, in our Analyst Day discussion and Bruce Brown’s presentation on innovation, we talked about an acceleration we’re expecting and what we refer to as, change innovation, which goes beyond the commercial activity that’s truly changed the consumer experience and the dynamics of a category. So, we do think we’re on a much stronger innovation footing as we go forward.

Bob McDonald – Chairman, President and CEO: And, of course, there are new categories we’ve entered too. Jon mentioned ZzzQuil and sleep-aid. We entered the auto care fragrance category, and as we also talked, we’ve bolstered our new category innovation as well and we fully expect some of those innovations to come to market over the next year or so.