Proctor and Gamble 2002 Annual Report Download - page 23

Financial Review 21The Procter & Gamble Company and Subsidiaries
$4.35 billion, up 11%. Excluding a 3% unfavorable ex-
change impact, net sales grew 14%. Net earnings were
$390 million, a 16% increase over fiscal 2000.
Fabric and Home Care
Fabric and home care delivered strong earnings driven by an
excellent program of cost reduction and sharpened consum-
er value. Unit volume grew 3%, with growth across every
geographic region. Net sales for the year were flat at $11.62
billion. Excluding a 1% unfavorable foreign exchange impact,
net sales increased 1%, as volume growth was partially offset
by pricing investments to improve in-store presence and the
consumer value equation, primarily in Western Europe.
Net earnings were $1.83 billion, up 11% behind lower
material prices, product reformulations and manufacturing
plant efficiencies. North America delivered exceptional earn-
ings progress, reflecting disciplined cost management and
increased marketing support efficiencies. This earnings prog-
ress further expands the segment’s strong net earnings
margin – to well above the Company average.
In 2001, unit volume decreased 2% due to heavy
competitive activity, primarily in Western Europe. Net sales
were $11.66 billion, down 4% versus a strong 2000 base
which included new brand introductions. Excluding a 3%
unfavorable foreign exchange impact, net sales decreased
1%. Net earnings increased 13% to $1.64 billion.
Baby, Feminine and Family Care
Baby, feminine and family care delivered strong earnings
progress driven by volume growth and extensive cost
reduction. Family care and baby care drove a 3% increase in
unit volume. Net sales for the year were down 1% to $11.88
billion. Excluding a 2% negative impact of exchange rates,
net sales increased 1%, as commodity driven price declines
and pricing adjustments on Luvs and Western European
diapers partially offset volume growth.
Net earnings were $1.17 billion, up 11% behind an ongoing
program of product and overhead cost reductions, including
benefits from restructuring activities that have streamlined
manufacturing operations.
Family care volume grew 7% behind strength in the North
America Bounty and Charmin businesses. Net sales increased
1%, as commodity pricing actions largely offset volume
growth.
Baby care volume increased 4% behind Pampers growth in
North America and Western Europe driven by the Baby
Stages of Development product launch. Net sales declined
1% as foreign exchange and targeted pricing adjustments
more than offset volume growth.
Feminine care volume declined 3%, stabilizing in the second
half, and net sales declined 5%. Nevertheless, net earnings
improved mainly due to cost efficiencies.
In 2001, baby, feminine and family care segment unit volume
grew 2%, driven by family care and baby care. Net sales
were $11.99 billion, compared to $12.04 billion in 2000.
Excluding a 4% negative impact of exchange rates, net sales
increased 4%. Net earnings decreased 2%, to $1.05 billion,
despite progress in family care and feminine care.
Beauty Care
Beauty care delivered strong results behind the Clairol
acquisition, completed in the second quarter. Throughout the
fiscal year, beauty care’s quarterly growth rates for unit
volume and net sales increased sequentially – delivering unit
volume growth of 19% and net sales of $8.08 billion, up
11%. Excluding a 2% negative foreign exchange impact, net
sales grew 13%. Excluding the impacts of the Clairol acquisi-
tion, fiscal year unit volume grew 3%, primarily behind
strength in the base hair care business and solid growth in
fine fragrances and cosmetics. Net earnings were $1.18 bil-
lion, up 22%, driven by marketing support efficiencies behind
growing businesses and a continued focus on cost reductions.
The Clairol integration went according to plan during the
year with North America, the largest region, being complet-
ed in May. The Clairol acquisition provides a strong presence
in the high-margin colorants business and rounds out the
Company’s hair care offerings.
In 2001, beauty care unit volume was down 1%. Excluding
the impact of divestitures, volume was flat. Net sales were
$7.26 billion, down 2%, versus $7.39 billion in 2000. Exclud-
ing a 4% impact of unfavorable exchange rates, primarily in
Western Europe and Asia, net sales grew 2%. Net earnings
were $967 million, an 8% improvement behind the success-
ful expansion of high-performance, premium-priced products.
Food and Beverage
Food and beverage delivered solid earnings growth despite
top-line challenges. Unit volume declined 6%, including a 4%