Procter & Gamble Earnings Call NUGGETS: Long-Run Negative Margin Mix, U.S. Market Share Trends
Long-Run Negative Margin Mix
Christopher Ferrara – Bank of America Merrill Lynch: Can you talk about mix a little bit? Obviously, you’ve talked I think about long-term you think what the mix effect is on the top line, but bottom line or gross margin I should say hit you guys by about 200 basis points a quarter. This quarter it dropped to 100 basis points. I was wondering if you could try to frame a little bit, put a little color around first that drop from 200 to 100 right in the spirit of trying to understand how high that wall is that you have to climb on cost savings to get to EBIT growth and can you talk a little about – trying to take a shot what you think the long run negative margin mix would be on product and geography?
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Bob McDonald – Chairman, President and CEO: Part of the reason for the improvement in the last quarter is that we got full pricing for devaluation into the developing markets and so that that mix will impact that the disproportionate growth in developing markets was less negative than it would’ve been prior to that pricing being fully reflected, but it also reflects and this should be something that we continue to see going forward improved progress and profitability in developing markets behind the things we’ve been talking about for quite a while, getting local sourcing in place, benefiting from the full-scaled portfolio as it gets put in place and then we continue to see really significant trade up in developing markets which is also improving margins. So as those margins improve, the mix impact of this disproportion developing market growth also improves. I don’t have a specific number for you Chris in terms of what to expect going forward, but we’ll try to work on that and give you some dimensionalization of it.
U.S. Market Share Trends
Bill Schmitz – Deutsche Bank: Just wanted to ask one question if I could, will you guys be able to give us the productivity savings in that $10 billion either every quarter, every year, I think that’s kind of an important thing to track and then my main question is I guess about 32% of the portfolio had market share flat or up in the quarter which obviously was low, we saw nice little uptick in June. Can you give us that metrics for the U.S. and then in total what the U.S. growth was and sort of leaving a quarter, did you see any good sign of progress in the U.S. market share trends.
Bob McDonald – Chairman, President and CEO: The first Bill on tracking the $10 billion, of course, we’ll definitely do that. It will probably be more of a annual or every six month report back as opposed to every quarter, but we’ll definitely do that. And you can imagine; we’re doing that internally. It’s part of our performance metrics. So, we should have that ability. Bob, do you want to comment on market share?
Bob McDonald – Chairman, President and CEO: Well, you’re right, Bill, we said that the market share was about 33%, one-third for the quarter, but ticked up to about 45% over the last month, and Jon covered some of the progress that we’re seeing in market share gains in the U.S. in the categories where we’ve taken the corrective pricing action.
Jon R. Moeller – CFO: Or where we strengthened our plans…
Bob McDonald – Chairman, President and CEO: Or where we strengthened our plans.
Jon R. Moeller – CFO: (indiscernible) with the Tide PODS addition, for example.
Bob McDonald – Chairman, President and CEO: Yeah. And Tide PODS, as you recall, added 2.5 points to the share of Tide.