Q4 ’24:
Net Sales 0%; Organic Sales +2%; Diluted EPS
-7%; Core EPS +2%
FY ’24:
Net Sales +2%; Organic Sales +4%; Diluted EPS
+2%; Core EPS +12%
The Procter & Gamble Company (NYSE:PG) reported fourth
quarter and fiscal year 2024 results.
“Fiscal year 2024 was another year of strong results for
P&G,” said Jon Moeller, Chairman of the Board, President and
Chief Executive Officer. “The team met or exceeded our going-in
plans for organic sales growth, core EPS growth, cash generation
and cash returned to shareowners in a challenging economic and
geopolitical environment. As we look forward to fiscal 2025, we
expect to deliver strong organic sales growth, EPS growth and free
cash flow productivity – each in-line with our long-term growth
algorithm. We remain committed to our integrated strategy – a
focused product portfolio of daily use categories where performance
drives brand choice, superiority (of product performance,
packaging, brand communication, retail execution and consumer and
customer value), productivity, constructive disruption and an agile
and accountable organization – all aimed at delivering sustainable,
balanced growth and value creation.”
Fiscal Year ($ billions,
except EPS)
GAAP
2024
2023
% Change
Non-GAAP*
2024
2023
% Change
Net Sales
$84.0
$82.0
+2%
Organic Sales
n/a
n/a
+4%
Diluted EPS
$6.02
$5.90
+2%
Core EPS
$6.59
$5.90
+12%
Fourth Quarter ($ billions,
except EPS)
GAAP
2024
2023
% Change
Non-GAAP*
2024
2023
% Change
Net Sales
$20.5
$20.6
—%
Organic Sales
n/a
n/a
+2%
Diluted EPS
$1.27
$1.37
(7)%
Core EPS
$1.40
$1.37
+2%
* Please refer to Exhibit 1 - Non-GAAP
Measures for the definition and reconciliation of these measures to
the related GAAP measures.
Fiscal Year 2024 Results
The Company reported fiscal year 2024 net sales of $84.0
billion, an increase of two percent versus the prior year. Organic
sales, which excludes the impacts of foreign exchange and
acquisitions and divestitures, increased four percent. Higher
pricing contributed four points of growth to organic sales.
Shipment volumes and mix were unchanged versus the prior year.
Diluted net earnings per share were $6.02, an increase of two
percent versus prior year as the increase in net sales was
partially offset by a non-cash charge to impair the carrying value
of the Gillette trade name intangible asset and higher non-core
restructuring charges. Core net earnings per share increased by 12%
to $6.59. Currency-neutral core EPS increased 16% versus the prior
year EPS.
The Company generated operating cash flow of $19.8 billion and
net earnings of $15.0 billion for the fiscal year. Adjusted free
cash flow productivity was 105%, which is calculated as operating
cash flow less capital spending and certain other items, as a
percentage of net earnings excluding the Gillette impairment charge
and non-cash charge for accumulated foreign currency translation
losses due to the substantial liquidation of operations in certain
Enterprise Markets, including Nigeria.
The Company returned over $14 billion of value to shareholders
in fiscal 2024 via $9.3 billion in dividend payments and $5 billion
of share repurchases. With the dividend increase in April 2024,
this marks the 68th consecutive year that P&G has increased its
dividend and the 134th consecutive year that P&G has paid a
dividend since its incorporation in 1890.
April-June Quarter Results
The Company reported fiscal year 2024 fourth quarter net sales
of $20.5 billion, unchanged versus the prior year. A one percent
increase in all-in volume and one percent increase due to higher
pricing were offset by two percentage points of unfavorable foreign
exchange impacts. Organic sales, which excludes the impacts of
foreign exchange and acquisitions and divestitures, increased two
percent. Excluding the impacts of acquisitions and divestitures,
organic volume increased two percent. Mix had a neutral impact on
sales growth for the quarter.
Diluted net earnings per share were $1.27, a decrease of seven
percent versus the prior year driven primarily by higher
restructuring charges related to the substantial liquidation of
operations in certain Enterprise Markets, including Nigeria. Core
net earnings per share increased two percent to $1.40.
Currency-neutral core EPS increased six percent versus the prior
year EPS.
Operating cash flow was $5.8 billion and net earnings were $3.1
billion, with adjusted free cash flow productivity of 148%.
April-June Quarter Business Discussion
April - June
2024
Volume
Foreign
Exchange
Price
Mix
Other (2)
Net
Sales
Organic
Volume
Organic
Sales
Net Sales
Drivers (1)
Beauty
(1)%
(3)%
3%
—%
—%
(1)%
1%
3%
Grooming
2%
(7)%
5%
—%
—%
—%
2%
7%
Health Care
2%
(1)%
2%
1%
(1)%
3%
1%
4%
Fabric & Home Care
2%
(1)%
(1)%
1%
(1)%
—%
3%
2%
Baby, Feminine & Family Care
(1)%
(2)%
—%
—%
—%
(3)%
(1)%
(1)%
Total P&G
1%
(2)%
1%
—%
—%
—%
2%
2%
(1) Net sales percentage changes are
approximations based on quantitative formulas that are consistently
applied.
(2) Other includes the sales mix
impact from acquisitions and divestitures and rounding impacts
necessary to reconcile volume to net sales.
- Beauty segment organic sales increased three percent versus
year ago. Skin and Personal Care organic sales were unchanged as
growth from increased pricing was offset by lower sales of the
super-premium SK-II brand and in Greater China. Hair Care organic
sales increased high single digits driven by increased pricing and
favorable product mix due to growth of premium products.
- Grooming segment organic sales increased seven percent versus
year ago driven by increased pricing primarily in Latin America and
volume growth from innovation.
- Health Care segment organic sales increased four percent versus
year ago. Oral Care organic sales increased high single digits due
to premium product mix and volume growth in North America and
Europe. Personal Health Care organic sales were unchanged as growth
due to pricing and volume increases were offset by unfavorable mix
due to lower incidence of cough and cold.
- Fabric and Home Care segment organic sales increased two
percent versus year ago. Fabric Care organic sales were unchanged
as volume growth driven by North America and Europe was offset by
lower pricing due to increased promotional spending. Home Care
organic sales increased high single digits due to volume growth
from innovation and favorable product mix.
- Baby, Feminine and Family Care segment organic sales declined
one percent versus year ago. Baby Care organic sales decreased
mid-single digits due to volume declines from share losses,
partially offset by premium product mix. Feminine Care organic
sales increased low single digits driven by increased pricing and
favorable product mix. Family Care organic sales were unchanged as
volume growth was offset by unfavorable product mix.
Diluted net earnings per share were $1.27 for the quarter, a
decrease of seven percent versus the prior year driven primarily by
higher restructuring charges related to the substantial liquidation
of operations in certain Enterprise Markets, including Nigeria.
Core net earnings per share increased by two percent to $1.40.
Currency-neutral core EPS were up six percent versus the prior year
EPS.
Reported gross margin for the quarter increased 120 basis points
versus year ago. Core gross margin for the quarter increased 140
basis points versus year ago, 180 basis points on a
currency-neutral basis. The increase was driven by 210 basis points
of productivity savings, 100 basis points of lower commodity costs
and 40 basis points of pricing benefit. These were partially offset
by 130 basis points of unfavorable product mix and 40 basis points
of product/package reinvestments and other impacts.
Reported selling, general and administrative expense (SG&A)
as a percentage of sales increased 260 basis points versus the
prior year. Core selling, general and administrative expense
(SG&A) as a percentage of sales increased 240 basis points
versus year ago and 240 basis points on a currency-neutral basis.
The increase was driven by 300 basis points of marketing
reinvestments and 30 basis points of wage inflation and overhead
investments, partially offset by 40 basis points of productivity
savings and 50 basis points of net sales growth leverage and other
impacts.
Reported operating margin for the quarter decreased 140 basis
points due primarily to higher restructuring charges. Excluding 40
basis points of non-core restructuring charges, core operating
margin for the quarter decreased 100 basis points versus the prior
year, 60 basis points on a currency-neutral basis. Core operating
margin included gross productivity savings of 250 basis points.
Limited Market Portfolio Restructuring
In December 2023, the Company announced a limited market
portfolio restructuring of its business operations, primarily in
certain Enterprise Markets, including Argentina and Nigeria, to
address challenging macroeconomic and fiscal conditions. In
connection with this announcement, the Company said that it expects
to record incremental restructuring charges of $1.0 to 1.5 billion
after tax, including foreign currency translation losses to be
recognized upon the substantial liquidation of operations in the
affected markets.
As of June 30, 2024, the Company has substantially liquidated
its operations in certain Enterprise Markets, including Nigeria,
and recorded a non-cash charge of $216 million after tax for
accumulated currency translation losses. On July 1, 2024, the
Company completed the divestiture of its business in Argentina. The
Company expects to record a non-cash charge of approximately $750
million for accumulated currency translation losses in the first
quarter of the fiscal year ended June 30, 2025.
Intangible Asset Impairment
In the October-December 2023 quarter of the fiscal year 2024,
the Company recorded a $1.3 billion before tax ($1.0 billion after
tax) non-cash impairment charge, on intangible assets acquired as
part of the Company’s acquisition of The Gillette Company.
The impairment charge arose from a reduction in the estimated
fair value of the Gillette indefinite-lived intangible asset due to
a higher discount rate, weakening of several currencies relative to
the U.S. dollar and the impact of the non-core restructuring
program described above. This impairment charge adjusted the
carrying value of the Gillette indefinite-lived intangible asset to
fair value.
Fiscal Year 2025 Guidance
P&G expects fiscal year 2025 all-in sales growth in the
range of two to four percent versus the prior year. Foreign
exchange is expected to be a headwind of approximately one
percentage point to all-in sales growth. The Company expects
organic sales growth in the range of three to five percent.
P&G expects fiscal 2025 diluted net earnings per share
growth in the range of 10% to 12% versus fiscal 2024 GAAP EPS of
$6.02. P&G expects its fiscal 2025 core net earnings per share
growth in the range of five to seven percent versus fiscal 2024
core EPS of $6.59. This outlook equates to a range of $6.91 to
$7.05 per share, with a mid-point estimate of $6.98, or an increase
of 6%.
The Company said its outlook estimates a net headwind of around
$500 million after-tax from unfavorable commodity costs and
unfavorable foreign exchange. The net headwind equates to a $0.20
per share for fiscal 2025, or a three percentage drag on core EPS
growth.
In addition, the prior fiscal year included benefits from minor
brand divestitures and tax impacts that are unlikely to repeat to
the same extent in the new fiscal year. Combined, these are an
additional $0.10 to $0.12 headwind to core EPS.
The Company is not able to reconcile its forward-looking
non-GAAP cash flow and tax rate measures without unreasonable
efforts given the unpredictability of the timing and amounts of
discrete items, such as acquisitions, divestitures, or impairments,
which could significantly impact GAAP results.
P&G said it expects a core effective tax rate to be in the
range of 20% to 21% in fiscal 2025.
Capital spending is estimated to be in the range of four to five
percent of fiscal 2025 net sales.
P&G said it expects adjusted free cash flow productivity of
90% and expects to pay around $10 billion in dividends and to
repurchase $6 to $7 billion of common shares in fiscal 2025.
Forward-Looking Statements
Certain statements in this release, other than purely historical
information, including estimates, projections, statements relating
to our business plans, objectives and expected operating results,
and the assumptions upon which those statements are based, are
"forward-looking statements" within the meaning of the Private
Securities Litigation Reform Act of 1995, Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange
Act of 1934. These forward-looking statements generally are
identified by the words "believe," "project," "expect,"
"anticipate," "estimate," "intend," "strategy," "future,"
"opportunity," "plan," "may," "should," "will," "would," "will be,"
"will continue," "will likely result" and similar expressions.
Forward-looking statements are based on current expectations and
assumptions, which are subject to risks and uncertainties that may
cause results to differ materially from those expressed or implied
in the forward-looking statements. We undertake no obligation to
update or revise publicly any forward-looking statements, whether
because of new information, future events or otherwise, except to
the extent required by law.
Risks and uncertainties to which our forward-looking statements
are subject include, without limitation: (1) the ability to
successfully manage global financial risks, including foreign
currency fluctuations, currency exchange or pricing controls; (2)
the ability to successfully manage local, regional or global
economic volatility, including reduced market growth rates, and to
generate sufficient income and cash flow to allow the Company to
effect the expected share repurchases and dividend payments; (3)
the ability to successfully manage uncertainties related to
changing political and geopolitical conditions and potential
implications such as exchange rate fluctuations, market
contraction, boycotts, sanctions, or other trade controls; (4) the
ability to manage disruptions in credit markets or to our banking
partners or changes to our credit rating; (5) the ability to
maintain key manufacturing and supply arrangements (including
execution of supply chain optimizations and sole supplier and sole
manufacturing plant arrangements) and to manage disruption of
business due to various factors, including ones outside of our
control, such as natural disasters, acts of war or terrorism or
disease outbreaks; (6) the ability to successfully manage cost
fluctuations and pressures, including prices of commodities and raw
materials and costs of labor, transportation, energy, pension and
healthcare; (7) the ability to compete with our local and global
competitors in new and existing sales channels, including by
successfully responding to competitive factors such as prices,
promotional incentives and trade terms for products; (8) the
ability to manage and maintain key customer relationships; (9) the
ability to protect our reputation and brand equity by successfully
managing real or perceived issues, including concerns about safety,
quality, ingredients, efficacy, packaging content, supply chain
practices or similar matters that may arise; (10) the ability to
successfully manage the financial, legal, reputational and
operational risk associated with third-party relationships, such as
our suppliers, contract manufacturers, distributors, contractors
and external business partners; (11) the ability to rely on and
maintain key company and third-party information and operational
technology systems, networks and services and maintain the security
and functionality of such systems, networks and services and the
data contained therein; (12) the ability to successfully manage the
demand, supply and operational challenges, as well as governmental
responses or mandates, associated with a disease outbreak,
including epidemics, pandemics or similar widespread public health
concerns; (13) the ability to stay on the leading edge of
innovation, obtain necessary intellectual property protections and
successfully respond to changing consumer habits, evolving digital
marketing and selling platform requirements and technological
advances attained by, and patents granted to, competitors; (14) the
ability to successfully manage our ongoing acquisition, divestiture
and joint venture activities, in each case to achieve the Company’s
overall business strategy and financial objectives, without
impacting the delivery of base business objectives; (15) the
ability to successfully achieve productivity improvements and cost
savings and manage ongoing organizational changes while
successfully identifying, developing and retaining key employees,
including in key growth markets where the availability of skilled
or experienced employees may be limited; (16) the ability to
successfully manage current and expanding regulatory and legal
requirements and matters (including, without limitation, those laws
and regulations involving product liability, product and packaging
composition, manufacturing processes, intellectual property, labor
and employment, antitrust, privacy, cybersecurity and data
protection, artificial intelligence, tax, the environment, due
diligence, risk oversight, accounting and financial reporting) and
to resolve new and pending matters within current estimates; (17)
the ability to manage changes in applicable tax laws and
regulations; and (18) the ability to successfully achieve our
ambition of reducing our greenhouse gas emissions and delivering
progress towards our environmental sustainability priorities.
For additional information concerning factors that could cause
actual results and events to differ materially from those projected
herein, please refer to our most recent 10-K, 10-Q and 8-K
reports.
About Procter & Gamble
P&G serves consumers around the world with one of the
strongest portfolios of trusted, quality, leadership brands,
including Always®, Ambi Pur®, Ariel®, Bounty®, Charmin®, Crest®,
Dawn®, Downy®, Fairy®, Febreze®, Gain®, Gillette®, Head &
Shoulders®, Lenor®, Olay®, Oral-B®, Pampers®, Pantene®, SK-II®,
Tide®, Vicks®, and Whisper®. The P&G community includes
operations in approximately 70 countries worldwide. Please visit
https://www.pg.com for the latest news and information about
P&G and its brands. For other P&G news, visit us at
https://www.pg.com/news.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Consolidated Earnings
Information
Three Months Ended June
30
Fiscal Year Ended June
30
2024
2023
% Chg
2024
2023
% Chg
NET SALES
$
20,532
$
20,553
—
%
$
84,039
$
82,006
2
%
Cost of products sold
10,348
10,613
(2
)%
40,848
42,760
(4
)%
GROSS PROFIT
10,183
9,940
2
%
43,191
39,246
10
%
Selling, general and administrative
expense
6,299
5,778
9
%
23,305
21,112
10
%
Indefinite-lived intangible asset
impairment charge
—
—
1,341
—
OPERATING INCOME
3,884
4,162
(7
)%
18,545
18,134
2
%
Interest expense
(220
)
(240
)
(8
)%
(925
)
(756
)
22
%
Interest income
107
116
(8
)%
473
307
54
%
Other non-operating income, net
98
195
(50
)%
668
668
—
%
EARNINGS BEFORE INCOME TAXES
3,870
4,233
(9
)%
18,761
18,353
2
%
Income taxes
726
841
(14
)%
3,787
3,615
5
%
NET EARNINGS
3,144
3,392
(7
)%
14,974
14,738
2
%
Less: Net earnings/(loss) attributable to
non controlling interests
7
8
(13
)%
95
85
12
%
NET EARNINGS ATTRIBUTABLE TO PROCTER
& GAMBLE
$
3,137
$
3,384
(7
)%
$
14,879
$
14,653
2
%
EFFECTIVE TAX RATE
18.8
%
19.9
%
20.2
%
19.7
%
NET EARNINGS PER COMMON SHARE:
(1)
Basic
$
1.30
$
1.40
(7
)%
$
6.18
$
6.07
2
%
Diluted
$
1.27
$
1.37
(7
)%
$
6.02
$
5.90
2
%
DIVIDENDS PER COMMON SHARE
$
1.0065
$
0.9407
7
%
$
3.8286
$
3.6806
4
%
Diluted Weighted Average Common Shares
Outstanding
2,472.2
2,477.5
2,471.9
2,483.9
COMPARISONS AS A % OF NET SALES
Basis Pt Change
Basis Pt Change
Gross margin
49.6
%
48.4
%
120
51.4
%
47.9
%
350
Selling, general and administrative
expense
30.7
%
28.1
%
260
27.7
%
25.7
%
200
Operating margin
18.9
%
20.3
%
(140
)
22.1
%
22.1
%
—
Earnings before income taxes
18.8
%
20.6
%
(180
)
22.3
%
22.4
%
(10
)
Net earnings
15.3
%
16.5
%
(120
)
17.8
%
18.0
%
(20
)
Net earnings attributable to Procter &
Gamble
15.3
%
16.5
%
(120
)
17.7
%
17.9
%
(20
)
(1)
Basic net earnings per common
share and Diluted net earnings per common share are calculated on
Net earnings attributable to Procter & Gamble.
Amounts in millions of dollars
except per share amounts or as otherwise specified. Certain columns
and rows may not add due to rounding.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Consolidated Earnings
Information
Three Months Ended June 30,
2024
Net Sales
% Change
Versus Year
Ago
Earnings/(Loss) Before
Income Taxes
% Change
Versus Year
Ago
Net Earnings/(Loss)
% Change
Versus Year
Ago
Beauty
$3,724
(1)%
$690
(17)%
$536
(17)%
Grooming
1,657
—%
395
(7)%
311
(10)%
Health Care
2,674
3%
433
7%
325
9%
Fabric & Home Care
7,265
—%
1,598
(5)%
1,240
(5)%
Baby, Feminine & Family Care
5,009
(3)%
1,109
(11)%
847
(12)%
Corporate
202
N/A
(355)
N/A
(116)
N/A
TOTAL
$20,532
—%
$3,870
(9)%
$3,144
(7)%
Three Months Ended June 30,
2024
(Percent Change vs. Year Ago)
(1)
Volume with
Acquisitions &
Divestitures
Volume Excluding
Acquisitions &
Divestitures
Foreign
Exchange
Price
Mix
Other (2)
Net Sales
Growth
Beauty
(1)%
1%
(3)%
3%
—%
—%
(1)%
Grooming
2%
2%
(7)%
5%
—%
—%
—%
Health Care
2%
1%
(1)%
2%
1%
(1)%
3%
Fabric & Home Care
2%
3%
(1)%
(1)%
1%
(1)%
—%
Baby, Feminine & Family Care
(1)%
(1)%
(2)%
—%
—%
—%
(3)%
TOTAL
1%
2%
(2)%
1%
—%
—%
—%
Fiscal Year Ended June 30,
2024
Net Sales
% Change
Versus Year
Ago
Earnings/(Loss) Before
Income Taxes
% Change
Versus Year
Ago
Net Earnings/(Loss)
% Change
Versus Year
Ago
Beauty
$15,220
1%
$3,805
(5)%
$2,963
(7)%
Grooming
6,654
4%
1,845
2%
1,477
1%
Health Care
11,793
5%
2,941
7%
2,258
6%
Fabric & Home Care
29,495
4%
7,339
16%
5,687
18%
Baby, Feminine & Family Care
20,277
—%
5,253
14%
4,020
13%
Corporate
601
N/A
(2,422)
N/A
(1,430)
N/A
TOTAL
$84,039
2%
$18,761
2%
$14,974
2%
Fiscal Year Ended June 30,
2024
(Percent Change vs. Year Ago)
(1)
Volume with
Acquisitions &
Divestitures
Volume Excluding
Acquisitions &
Divestitures
Foreign
Exchange
Price
Mix
Other (2)
Net Sales
Growth
Beauty
—%
—%
(2)%
4%
(1)%
—%
1%
Grooming
1%
1%
(5)%
8%
—%
—%
4%
Health Care
(1)%
(1)%
—%
4%
2%
—%
5%
Fabric & Home Care
1%
1%
(1)%
3%
1%
—%
4%
Baby, Feminine & Family Care
(2)%
(2)%
(2)%
3%
1%
—%
—%
TOTAL
—%
—%
(2)%
4%
—%
—%
2%
(1)
Net sales percentage changes are
approximations based on quantitative formulas that are consistently
applied.
(2)
Other includes the sales mix
impact from acquisitions and divestitures and rounding impacts
necessary to reconcile volume to net sales.
Amounts in millions of dollars
except per share amounts or as otherwise specified. Certain columns
and rows may not add due to rounding.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Consolidated Statements of
Cash Flows
Fiscal Year Ended June
30
2024
2023
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, BEGINNING OF YEAR
$
8,246
$
7,214
OPERATING ACTIVITIES
Net earnings
14,974
14,738
Depreciation and amortization
2,896
2,714
Share-based compensation expense
562
545
Deferred income taxes
(244
)
(453
)
Loss/(gain) on sale of assets
(215
)
(40
)
Indefinite-lived intangible asset
impairment charge
1,341
—
Change in accounts receivable
(766
)
(307
)
Change in inventories
(70
)
(119
)
Change in accounts payable and accrued and
other liabilities
1,814
313
Change in other operating assets and
liabilities
(1,414
)
(1,107
)
Other
969
564
TOTAL OPERATING ACTIVITIES
19,846
16,848
INVESTING ACTIVITIES
Capital expenditures
(3,322
)
(3,062
)
Proceeds from asset sales
346
46
Acquisitions, net of cash acquired
(21
)
(765
)
Other investing activity
(507
)
281
TOTAL INVESTING ACTIVITIES
(3,504
)
(3,500
)
FINANCING ACTIVITIES
Dividends to shareholders
(9,312
)
(8,999
)
Additions to short-term debt with original
maturities of more than three months
3,528
17,168
Reductions in short-term debt with
original maturities of more than three months
(7,689
)
(13,031
)
Net additions/(reductions) to other
short-term debt
857
(3,319
)
Additions to long-term debt
3,197
3,997
Reductions of long-term debt
(2,335
)
(1,878
)
Treasury stock purchases
(5,006
)
(7,353
)
Impact of stock options and other
1,905
1,269
TOTAL FINANCING ACTIVITIES
(14,855
)
(12,146
)
EFFECT OF EXCHANGE RATE CHANGES ON
CASH, CASH EQUIVALENTS AND RESTRICTED CASH
(251
)
(170
)
CHANGE IN CASH, CASH EQUIVALENTS AND
RESTRICTED CASH
1,235
1,032
CASH, CASH EQUIVALENTS AND RESTRICTED
CASH, END OF YEAR
$
9,482
$
8,246
Amounts in millions of dollars
except per share amounts or as otherwise specified. Certain columns
and rows may not add due to rounding.
THE PROCTER & GAMBLE
COMPANY AND SUBSIDIARIES
(Amounts in Millions Except Per
Share Amounts)
Condensed Consolidated Balance
Sheets
June 30, 2024
June 30, 2023
Cash and cash equivalents
$
9,482
$
8,246
Accounts receivable
6,118
5,471
Inventories
7,016
7,073
Prepaid expenses and other current
assets
2,095
1,858
TOTAL CURRENT ASSETS
24,709
22,648
PROPERTY, PLANT AND EQUIPMENT,
NET
22,152
21,909
GOODWILL
40,303
40,659
TRADEMARKS AND OTHER INTANGIBLE ASSETS,
NET
22,047
23,783
OTHER NONCURRENT ASSETS
13,158
11,830
TOTAL ASSETS
$
122,370
$
120,829
Accounts payable
$
15,364
$
14,598
Accrued and other liabilities
11,073
10,929
Debt due within one year
7,191
10,229
TOTAL CURRENT LIABILITIES
33,627
35,756
LONG-TERM DEBT
25,269
24,378
DEFERRED INCOME TAXES
6,516
6,478
OTHER NONCURRENT LIABILITIES
6,398
7,152
TOTAL LIABILITIES
71,811
73,764
TOTAL SHAREHOLDERS' EQUITY
50,559
47,065
TOTAL LIABILITIES AND SHAREHOLDERS'
EQUITY
$
122,370
$
120,829
The Procter & Gamble Company
Exhibit 1: Non-GAAP Measures
The following provides definitions of the non-GAAP measures used
in Procter & Gamble's July 30, 2024, earnings release and the
reconciliation to the most closely related GAAP measure. We believe
that these measures provide useful perspective on underlying
business trends (i.e., trends excluding non-recurring or unusual
items) and results and provide a supplemental measure of
period-to-period results. The non-GAAP measures described below are
used by management in making operating decisions, allocating
financial resources and for business strategy purposes. These
measures may be useful to investors, as they provide supplemental
information about business performance and provide investors a view
of our business results through the eyes of management. These
measures are also used to evaluate senior management and are a
factor in determining their at-risk compensation. These non-GAAP
measures are not intended to be considered by the user in place of
the related GAAP measures but rather as supplemental information to
our business results. These non-GAAP measures may not be the same
as similar measures used by other companies due to possible
differences in method and in the items or events being adjusted.
The Company is not able to reconcile its forward-looking non-GAAP
cash flow and tax rate measures because the Company cannot predict
the timing and amounts of discrete items such as acquisition and
divestitures, which could significantly impact GAAP results.
The Core earnings measures included in the following
reconciliation tables refer to the equivalent GAAP measures
adjusted as applicable for the following items:
- Incremental restructuring: The
Company has historically had an ongoing level of restructuring
activities of approximately $250 - $500 million before tax. On
December 5, 2023, the Company announced a limited market portfolio
restructuring of its business operations, primarily in certain
Enterprise Markets, including Argentina and Nigeria. The adjustment
to Core earnings includes the restructuring charges that exceed the
normal, recurring level of restructuring charges.
- Intangible asset impairment: In
the fiscal year ended June 30, 2024, the Company recognized a
non-cash, after-tax impairment charge of $1.0 billion ($1.3 billion
before tax) to adjust the carrying value of the Gillette intangible
asset acquired as part of the Company's 2005 acquisition of The
Gillette Company.
We do not view the above items to be part of our sustainable
results, and their exclusion from core earnings measures provides a
more comparable measure of year-on-year results. These items are
also excluded when evaluating senior management in determining
their at-risk compensation.
Organic sales growth: Organic sales
growth is a non-GAAP measure of sales growth excluding the impacts
of acquisitions and divestitures and foreign exchange from
year-over-year comparisons. We believe this measure provides
investors with a supplemental understanding of underlying sales
trends by providing sales growth on a consistent basis. This
measure is used in assessing the achievement of management goals
for at-risk compensation.
Core EPS and Currency-neutral EPS:
Core net earnings per share, or Core EPS, is a measure of diluted
net earnings per common share (diluted EPS) adjusted for items as
indicated. Currency-neutral EPS is a measure of the Company's Core
EPS excluding the incremental current year impact of foreign
exchange. Management views these non-GAAP measures as useful
supplemental measures of Company performance over time.
Core gross margin and Currency-neutral
Core gross margin: Core gross margin is a measure of the
Company's gross margin adjusted for items as indicated.
Currency-neutral Core gross margin is a measure of the Company's
Core gross margin excluding the incremental current year impact of
foreign exchange. Management believes these non-GAAP measures
provide a supplemental perspective to the Company’s operating
efficiency over time.
Core selling, general and administrative
(SG&A) expense as a percentage of sales and Currency-neutral
Core SG&A expense as a percentage of sales: Core
SG&A expense as a percentage of sales is a measure of the
Company's selling, general and administrative expense as a
percentage of net sales adjusted for items as indicated.
Currency-neutral Core SG&A expense as a percentage of sales is
a measure of the Company's Core selling, general and administrative
expense as a percentage of net sales excluding the incremental
current year impact of foreign exchange. Management believes these
non-GAAP measures provides a supplemental perspective to the
Company's operating efficiency over time.
Core operating margin and Currency-neutral
Core operating margin: Core operating margin is a measure of
the Company's operating margin adjusted for items as indicated.
Currency-neutral Core operating margin is a measure of the
Company's Core operating margin excluding the incremental current
year impact of foreign exchange. Management believes these non-GAAP
measures provide a supplemental perspective to the Company’s
operating efficiency over time.
Adjusted free cash flow: Adjusted
free cash flow is defined as operating cash flow less capital
spending and excluding payments for the transitional tax resulting
from the U.S. Tax Act. Adjusted free cash flow represents the cash
that the Company is able to generate after taking into account
planned maintenance and asset expansion. We view adjusted free cash
flow as an important measure because it is one factor used in
determining the amount of cash available for dividends, share
repurchases, acquisitions and other discretionary investments.
Adjusted free cash flow
productivity: Adjusted free cash flow productivity is
defined as the ratio of adjusted free cash flow to net earnings
excluding the Gillette indefinite-lived intangible asset impairment
charge and non-cash charge for accumulated foreign currency
translation losses related to the substantial liquidation of
operations in certain Enterprise Markets, including Nigeria. We
view adjusted free cash flow productivity as a useful measure to
help investors understand P&G’s ability to generate cash.
Adjusted free cash flow productivity is used by management in
making operating decisions, in allocating financial resources and
for budget planning purposes. This measure is also used in
assessing the achievement of management goals for at-risk
compensation.
THE PROCTER & GAMBLE COMPANY
AND SUBSIDIARIES
Reconciliation of Non-GAAP
Measures
Three Months Ended June 30,
2024
Three Months Ended
June 30, 2023
Amounts in millions except per share
amounts
As Reported
(GAAP)
Incremental
Restructuring
Intangible
Impairment
Core
(Non-GAAP)
As Reported
(GAAP) (1)
Cost of products sold
$
10,348
$
(45
)
$
—
$
10,303
$
10,613
Gross profit
10,183
45
—
10,229
9,940
Gross margin
49.6
%
0.2
%
—
%
49.8
%
48.4
%
Currency impact to Core gross margin
0.4
%
Currency-neutral Core gross margin
50.2
%
Selling, general and administrative
expense
6,299
(28
)
—
6,271
5,778
Selling, general and administrative
expense as a % of net sales
30.7
%
(0.2
)%
—
%
30.5
%
28.1
%
Currency impact to Core selling, general
and administrative expense as a % of net sales
—
%
Currency-neutral Core selling, general and
administrative expense as a % of net sales
30.5
%
Operating income
3,884
73
—
3,958
4,162
Operating margin
18.9
%
0.4
%
—
%
19.3
%
20.3
%
Currency impact to Core operating
margin
0.4
%
Currency-neutral Core operating margin
19.7
%
Other non-operating income, net
98
248
—
346
195
Income taxes
726
(6
)
—
720
841
Net earnings attributable to P&G
3,137
327
—
3,464
3,384
Core EPS
Diluted net earnings per common share
(2)
$
1.27
$
0.13
$
—
$
1.40
$
1.37
Currency impact to Core EPS
$
0.05
Currency-neutral Core EPS
$
1.45
Diluted weighted average common shares
outstanding
2,472.2
2,477.5
Common shares outstanding - June 30,
2024
2,357.1
(1) For the period
ending June 30, 2023, there were no adjustments to or reconciling
items for Core EPS.
(2) Diluted net earnings
per common share are calculated on Net earnings attributable to
Procter & Gamble.
CHANGE VERSUS YEAR AGO
Gross margin
120
BPS
Core gross margin
140
BPS
Currency-neutral Core gross margin
180
BPS
Selling, general and administrative
expense as a % of net sales
260
BPS
Core selling, general and administrative
expense as a % of net sales
240
BPS
Currency-neutral Core selling, general and
administrative as a % of net sales
240
BPS
Operating margin
(140
)
BPS
Core operating margin
(100
)
BPS
Currency-neutral Core operating margin
(60
)
BPS
Diluted EPS
(7
)%
Core EPS
2
%
Currency-neutral Core EPS
6
%
THE PROCTER & GAMBLE COMPANY
AND SUBSIDIARIES
Reconciliation of Non-GAAP
Measures
Fiscal Year Ended June 30,
2024
Fiscal Year Ended
June 30, 2023
Amounts in
millions except per share amounts
As Reported
(GAAP)
Incremental
Restructuring
Intangible
Impairment
Core
(Non-GAAP)
As Reported
(GAAP) (1)
Cost of products sold
$
40,848
$
(70
)
$
—
$
40,778
$
42,760
Gross profit
43,191
70
—
43,261
39,246
Gross margin
51.4
%
0.1
%
—
%
51.5
%
47.9
%
Currency impact to Core gross margin
0.6
%
Currency-neutral Core gross margin
52.1
%
Selling, general and administrative
expense
23,305
(33
)
—
23,273
21,112
Selling, general and administrative
expense as a % of net sales
27.7
%
—
%
—
%
27.7
%
25.7
%
Currency impact to Core selling, general
and administrative expense as a % of net sales
(0.2
)%
Currency-neutral Core selling, general and
administrative expense as a % of net sales
27.5
%
Operating income
18,545
103
1,341
19,988
18,134
Operating margin
22.1
%
0.1
%
1.6
%
23.8
%
22.1
%
Currency impact to Core operating
margin
0.8
%
Currency-neutral Core operating margin
24.6
%
Other non-operating income, net
668
248
—
916
668
Income taxes
3,787
(25
)
315
4,077
3,615
Net earnings attributable to P&G
14,879
376
1,026
16,281
14,653
Core EPS
Diluted net earnings per common share
(2)
$
6.02
$
0.15
$
0.42
$
6.59
$
5.90
Currency impact to Core EPS
$
0.23
Currency-neutral Core EPS
$
6.82
Diluted weighted average common shares
outstanding
2,471.9
2,483.9
Common shares outstanding - June 30,
2024
2,357.1
(1) For the fiscal year ended June 30, 2023,
there were no adjustments to or reconciling items for Core EPS. (2)
Diluted net earnings per common share are
calculated on Net earnings attributable to Procter &
Gamble.
CHANGE VERSUS YEAR AGO
Gross margin
350
BPS
Core gross margin
360
BPS
Currency-neutral Core gross margin
420
BPS
Selling, general and administrative
expense as a % of net sales
200
BPS
Core selling, general and administrative
expense as a % of net sales
200
BPS
Currency-neutral Core selling, general and
administrative as a % of net sales
180
BPS
Operating margin
—
BPS
Core operating margin
170
BPS
Currency-neutral Core operating margin
250
BPS
Diluted EPS
2
%
Core EPS
12
%
Currency-neutral Core EPS
16
%
Organic sales growth:
The reconciliation of reported sales growth to organic sales is
as follows:
April - June
2024
Net
Sales Growth
Foreign
Exchange
Impact
Acquisition &
Divestiture
Impact/Other (1)
Organic
Sales Growth
Beauty
(1)%
3%
1%
3%
Grooming
—%
7%
—%
7%
Health Care
3%
1%
—%
4%
Fabric & Home Care
—%
1%
1%
2%
Baby, Feminine & Family Care
(3)%
2%
—%
(1)%
Total Company
—%
2%
—%
2%
(1)
Acquisition & Divestiture
Impact/Other includes the volume and mix impact of acquisitions and
divestitures and rounding impacts necessary to reconcile net sales
to organic sales.
Total
Company
Net
Sales Growth
Foreign
Exchange Impact
Acquisition & Divestiture
Impact/Other (1)
Organic
Sales Growth
FY 2024
2%
2%
—%
4%
(1)
Other includes the sales mix
impact from acquisitions and divestitures and rounding impacts
necessary to reconcile volume to net sales.
Total
Company
Net
Sales Growth
Combined
Foreign Exchange &
Acquisition/Divestiture Impact
Organic
Sales Growth
FY 2025 (Estimate)
+2% to +4%
+1%
+3% to +5%
Core EPS growth:
Total
Company
Diluted
EPS Growth
Impact
of change in Non-Core Items (1)
Core EPS
Growth
FY 2025 (Estimate)
+10% to +12%
-5%
+5% to +7%
(1)
Includes the impact of Gillette
indefinite-lived intangible asset impairment charge and incremental
non-core restructuring charges incurred in fiscal 2024 and expected
impact of a non-cash charge of approximately $750 million for
accumulated foreign currency translation losses in the first
quarter of the fiscal year ended June 30, 2025
Adjusted free cash flow (dollars in
millions):
Three
Months Ended June 30, 2024
Operating Cash Flow
Capital
Spending
Adjusted
Free Cash Flow
$5,754
$(783)
$4,971
Fiscal
Year Ended June 30, 2024
Operating Cash Flow
Capital
Spending
U.S. Tax
Act Payments
Adjusted
Free Cash Flow
$19,846
$(3,322)
$422
$16,946
Adjusted free cash flow productivity
(dollars in millions):
Three
Months Ended June 30, 2024
Adjusted
Free Cash Flow
Net
Earnings
Adjustments to Net
Earnings (1)
Net
Earnings as Adjusted
Adjusted
Free Cash Flow
Productivity
$4,971
$3,144
$216
$3,360
148%
(1)
Adjustments to Net Earnings
relate to non-cash charge for accumulated foreign currency
translation losses due to the substantial liquidation of operations
in certain Enterprise Markets, including Nigeria.
Fiscal
Year Ended June 30, 2024
Adjusted
Free Cash Flow
Net
Earnings
Adjustments to Net
Earnings (1)
Net
Earnings as Adjusted
Adjusted
Free Cash Flow
Productivity
$16,946
$14,974
$1,242
$16,216
105%
(1)
Adjustments to Net Earnings
relate to the Gillette indefinite-lived intangible asset impairment
charge ($1.0 billion) and non-cash charge for accumulated foreign
currency translation losses ($216) due to the substantial
liquidation of operations in certain Enterprise Markets, including
Nigeria.
Category: PG-IR
View source
version on businesswire.com: https://www.businesswire.com/news/home/20240729082205/en/
P&G Media: Wendy
Kennedy, 513.780.7212 Jennifer Corso, 513.983.2570
P&G Investor Relations:
John Chevalier, 513.983.9974
Procter and Gamble (NYSE:PG)
Gráfica de Acción Histórica
De Jun 2024 a Jul 2024
Procter and Gamble (NYSE:PG)
Gráfica de Acción Histórica
De Jul 2023 a Jul 2024
