Q3 2014 Earnings Call Transcript

Transcript Call Date 04/23/2014

Partially as a result of devaluation, we're seeing significant wage inflation in developing markets which we also need to offset, and we are making targeted investments in innovation and in selling covers drive growth. The majority of the offset though has been FX which hopefully will annualize and will be partially offset by pricing. As more savings come on line and we see several more years of significant opportunity, we will get a greater percent reinvested in growth or brought to the bottom line. We're committed to make productivity a core strength and a sustainable competitive advantage.

We're equally committed to maintaining innovation leadership in our industry. Innovation and productivity are the two most powerful and sustainable ways we can drive value creation for consumers and shareholders. The IRI Pacesetters results for calendar year 2013 demonstrate our commitment to leading innovation. P&G launched seven of the top 10 non-food U.S. consumer product innovations in 2013 with Tide PODS topping the list. In addition, six P&G innovations were included in their list of Rising Stars.

Innovation is creating value and building cumulative advantage in the Fabric and Home Care sector. Our breakthrough and proprietary three-chamber unit-dose laundry technology launched as Tide PODS, Ariel PODS and Gain flings! has reset the delightful consumer usage experience, product performance and convenience bar.

Unit-dose detergents are currently available in over 20 markets around the world and have generated well over $1 billion in retail sales. The recent launch Gain flings! has gone extremely well, reaching nearly a 3% value share in the U.S. Laundry category in just two months. Unit-dose now represents 11% of category sales of which we have an 80% share. The balance of the Fabric Care innovation bundle that we launched in North America in February is also off to a good start.

In-store execution of Tide Simply Clean & Fresh has gone very well. Total Tide share was up more than 0.5 points over the past three month period, an indication that so far Tide Simply Clean & Fresh is attracting incremental users to the brand.

Improved scents and new sizes of Downy Unstopables and Gain Fireworks in-wash scent beads have helped accelerate growth in this new product segment.

The broad range of Baby Care innovations launched in the U.S. last fall continued to deliver excellent results. Nearly every diaper across all sizes and price tiers was improved to deliver better absorbency, comfort or design. Overall, P&G U.S. Baby Care share is up 2 points, with share growing in 90% of retail customers.

This has led to our largest market share in the past 20 years, enabling us to retake market leadership from Kimberly-Clark. The extension of the Swaddlers form into sizes 4 and 5 has been particularly successful. Swaddlers share is up 3 points to a 10% value share of the U.S. diaper category.

At the CAGNY conference in February, we announced we will be launching two new innovations in blades and razors. The first was the launch of Gillette Body, which is going well, the second and more significant innovation will be announced next Tuesday, April 29th. Men have told us they prefer the new innovation two to one versus the bestselling razor in the world.

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