Date of Report (Date of earliest event reported)
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April 23, 2019
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THE PROCTER & GAMBLE COMPANY
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(Exact name of registrant as specified in its charter)
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Ohio
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1-434
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31-0411980
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(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification Number)
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One Procter & Gamble Plaza, Cincinnati, Ohio
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45202
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(Address of principal executive offices)
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Zip Code
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(513) 983-1100
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45202
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(Registrant's telephone number, including area code)
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Zip Code
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☐
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
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☐
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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☐
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
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☐
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Pre-commencement communications pursuant to Rule
13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
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Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934
(§240.12b-2 of this chapter).
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||
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Emerging growth company
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☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended tramsition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. | ☐ | ||
ITEM
7.01 REGULATION FD DISCLOSURE
On April 23, 2019, The Procter & Gamble Company (the "Company") issued a press release announcing its
third quarter results and hosted a conference call related to those results. The Company is furnishing on Form 8-K a series of slides referenced in the conference call, which are also posted on the Company's website.
This 8-K is being furnished pursuant to Item 7.01, "Regulation FD Disclosure."
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ITEM 9.01 FINANCIAL STATEMENTS AND EXHIBITS
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Exhibit Number
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Description
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99.1
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Informational Slides Provided by The Procter & Gamble Company dated April 23, 2019
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this Report to be signed on its behalf by the undersigned hereunto duly authorized.
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Exhibit Number
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Description
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1.
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Organic sales growth — page 3
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2.
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Core EPS and currency-neutral Core EPS — pages 4
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3.
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Constant currency Core operating profit growth – page 6
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4.
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Core operating profit margin, constant currency Core operating profit margin, and Core operating profit margin excluding
currency and commodities — page 6
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5.
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Core gross margin and currency neutral Core gross margin — page 6
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6.
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Free cash flow — page 6
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7.
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Free cash flow productivity — page 7
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8.
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Adjusted free cash flow productivity – page 7
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•
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Incremental restructuring: The Company
has had and continues to have an ongoing level of restructuring activities. Such activities have resulted in ongoing annual restructuring related charges of approximately $250 - $500 million before tax. In 2012 the Company began a $10
billion strategic productivity and cost savings initiative that included incremental restructuring activities. In 2017, the Company communicated details of an additional multi-year productivity and cost savings plan. This results in
incremental restructuring charges to accelerate productivity efforts and cost savings. The adjustment to Core earnings includes only the restructuring costs above what we believe are the normal recurring level of restructuring costs.
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•
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Gain on Dissolution of the PGT Healthcare
Partnership: The Company finalized the dissolution of our PGT Healthcare partnership, a venture between the Company and Teva Pharmaceuticals Industries, Ltd (Teva) in the OTC consumer healthcare business, in the quarter
ended September 30, 2018. The transaction was accounted for as a sale of the Teva portion of the PGT business; the Company recognized an after-tax gain on the dissolution of $353 million.
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•
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Transitional Impact of U.S. Tax Reform:
In December 2017, the U.S. government enacted comprehensive tax legislation commonly referred to as the Tax Cuts and Jobs Act (the "U.S. Tax Act"). This resulted in a net charge of $650 million for the nine months ended March 31, 2018,
comprised of an estimated repatriation tax charge of $3.9 billion and a net deferred tax benefit of $3.2 billion. The adjustment to Core earnings only includes this transitional impact. It does not include the ongoing impacts of the
lower U.S. statutory rate on current year earnings.
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•
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Early debt extinguishment charges: In
fiscal 2018 and 2017, the Company recorded after-tax charges of $243 million and $345 million, respectively, due to the early extinguishment of certain long-term debt. These charges represent the difference between the reacquisition
price and the par value of the debt extinguished. Management does not view this charge as indicative of the Company’s operating performance or underlying business results.
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Three Months Ended
March 31, 2019 |
Net Sales Growth
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Foreign Exchange Impact
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Acquisition &
Divestiture Impact/Other* |
Organic Sales Growth
|
|||
Beauty
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4%
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5%
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-%
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9%
|
|||
Grooming
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(8)%
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7%
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-%
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-1%
|
|||
Health Care
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9%
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4%
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(8)%
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5%
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|||
Fabric Care & Home Care
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2%
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4%
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1%
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7%
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|||
Baby, Feminine & Family Care
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(2)%
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4%
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-%
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2%
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|||
Total P&G
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1%
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5%
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(1)%
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5%
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Total Company
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Net Sales Growth
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Foreign Exchange Impact
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Acquisition/ Divestiture Impact*
|
Organic Sales Growth
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|||
FYTD 2019
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1%
|
3%
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-%
|
4%
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Total Company
|
Net Sales Growth
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Foreign Exchange Impact
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Acquisition/ Divestiture Impact*
|
Organic Sales Growth
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|||
JFM 2018
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4%
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(4)%
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1%
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1%
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|||
AMJ 2018
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3%
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(2)%
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-%
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1%
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|||
JAS 2018
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-%
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3%
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1%
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4%
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|||
OND 2018
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-%
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4%
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-%
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4%
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Total Company
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Net Sales Growth
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Combined Foreign Exchange &
Acquisition/Divestiture Impact*
|
Organic Sales Growth
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|||
FY 2019 (Estimate)
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-% to 1%
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3% to 4%
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+4%
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Three Months Ended
March 31 |
|||
2019
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2018
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||
Diluted Net Earnings Per Share from Continuing Operations
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$1.04
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$0.95
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Incremental Restructuring
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0.02
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0.04
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Transitional Impacts of the US Tax Act
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0.01
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||
Core EPS
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$1.06
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$1.00
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Percentage change vs. prior period
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6%
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Currency Impact to Earnings
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0.09
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Currency-Neutral Core EPS
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$1.15
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Percentage change vs. prior period Core EPS
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15%
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Nine Months Ended
March 31 |
|||
2019
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2018
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||
Diluted Net Earnings Per Share from Continuing Operations
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$3.48
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$2.94
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Incremental Restructuring
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0.07
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0.09
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Transitional Impacts of the US Tax Act
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-
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0.24
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Gain on Dissolution of PGT Partnership
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(0.13)
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||
Rounding
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0.01
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Core EPS
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$3.42
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$3.28
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Percentage change vs. prior period
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4.3%
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Total Company
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Diluted EPS Growth
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Impact of Incremental
Non-Core Items*
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Core EPS Growth
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FY 2019 (Estimate)
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+17% to +24%
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(14)% to (16)%
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+3% to +8%
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Total Company
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Core EPS Growth
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Foreign Exchange Impact
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Currency-Neutral Core EPS Growth
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FY 2019 (Estimate)
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+3% to +8%
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8%
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+11% to +16%
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JFM 18
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JFM 17
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AMJ 18
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AMJ 17
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JAS 18
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JAS 17
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OND 18
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OND 17
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Diluted Net Earnings Per Share from Continuing Operations, attributable to P&G
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$ 0.95
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$ 0.93
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$ 0.72
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$ 0.82
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$ 1.22
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$ 1.06
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$ 1.22
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$ 0.93
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Incremental Restructuring
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0.04
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0.03
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0.14
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0.02
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0.03
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0.03
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0.03
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0.02
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Early Debt Extinguishment Charges
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-
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-
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0.09
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-
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-
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-
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-
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-
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Transitional Impact of U.S. Tax Act
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0.01
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(0.02)
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-
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-
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-
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0.24
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||
Gain on Dissolution of PGT Partnership
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-
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-
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-
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-
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(0.14)
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-
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-
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-
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Rounding
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-
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-
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0.01
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0.01
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0.01
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-
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-
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-
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Core EPS
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$ 1.00
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$ 0.96
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$ 0.94
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$ 0.85
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$ 1.12
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$ 1.09
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$ 1.25
|
$ 1.19
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Percentage change vs. prior period
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4%
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11%
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3%
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5%
|
||||
Currency Impact to Earnings
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(0.03)
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0.01
|
0.09
|
0.09
|
||||
Currency-Neutral Core EPS
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$ 0.97
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$ 0.95
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$ 1.21
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$ 1.34
|
||||
Percentage change vs. prior period Core EPS
|
1%
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12%
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11%
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13%
|
Three Months Ended
March 31 |
||
2019
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2018
|
|
Operating Profit
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$3,229
|
$3,209
|
Incremental Restructuring
|
$47
|
$134
|
Rounding
|
$1
|
$1
|
Core Operating Profit
|
$3,277
|
$3,344
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Percent change vs. prior year Core profit
|
(2)%
|
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Currency Impact to Profit
|
$314
|
|
Constant Currency Core Operating Profit
|
$3,591
|
|
Percent change vs. prior year Core profit
|
7%
|
Three Months Ended
March 31 |
||
2019
|
2018
|
|
Operating Profit Margin
|
19.6%
|
19.7%
|
Incremental Restructuring
|
0.3%
|
0.8%
|
Core Operating Profit Margin
|
19.9%
|
20.5%
|
Basis point change vs. prior year Core margin
|
(60)
|
|
Currency Impact to Margin
|
1.00%
|
|
Constant Currency Core Operating Profit Margin
|
20.9%
|
|
Basis point change vs. prior year Core margin
|
40
|
|
Commodity Impact to Margin
|
0.7%
|
|
Core Operating Profit Margin Excluding Currency and Commodities
|
21.6%
|
|
Basis point change vs prior year Core margin
|
110
|
Three Months Ended
March 31 |
||
2019
|
2018
|
|
Gross Margin
|
48.8%
|
48.5%
|
Incremental Restructuring
|
0.4%
|
0.7%
|
Core Gross Margin
|
49.2%
|
49.2%
|
Basis point change vs. prior year Core margin
|
-
|
|
Currency Impact to Margin
|
0.6%
|
|
Constant Currency Core Gross Margin
|
49.8%
|
|
Basis point change vs prior year Core margin
|
60
|
Three Months Ended March 31, 2019
|
||||
Operating Cash Flow
|
Capital Spending
|
Free Cash Flow
|
||
$3,517
|
$(752)
|
$2,765
|
Three Months Ended March 31, 2019
|
||||
Free Cash Flow
|
Net Earnings
|
Free Cash Flow
Productivity
|
||
$2,765
|
$2,776
|
100% |
FY
|
Operating Cash
Flow
|
Capital Spending
|
Adjustments*
|
Adjusted Free
Cash Flow
|
Net Earnings
|
Adjustments**
|
Adjusted Net
Earnings
|
Adjusted
Free Cash Flow
Productivity
|
||||||||
2012
|
$13,284
|
$(3,964)
|
$519
|
$9,839
|
$10,904
|
$85
|
$10,989
|
90%
|
||||||||
2013
|
$14,873
|
$(4,008)
|
-
|
$10,865
|
$11,402
|
$(333)
|
$11,069
|
98%
|
||||||||
2014
|
$13,958
|
$(3,848)
|
-
|
$10,110
|
$11,785
|
-
|
$11,785
|
86%
|
||||||||
2015
|
$14,608
|
$(3,736)
|
$729
|
$11,601
|
$7,144
|
$4,187
|
$11,331
|
102%
|
||||||||
2016
|
$15,435
|
$(3,314)
|
-
|
$12,121
|
$10,604
|
$(72)
|
$10,532
|
115%
|
||||||||
2017
|
$12,753
|
$(3,384)
|
$418
|
$9,787
|
$15,411
|
$(4,990)
|
$10,421
|
94%
|
||||||||
2018
|
$14,867
|
$(3,717)
|
-
|
$11,150
|
$9,861
|
$845
|
$10,706
|
104%
|
||||||||
P7 Yrs |
$99,778 |
$(25,971) |
$1,666 |
$75,473 | $77,111 | $(278) |
$76,833 |
98% |
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