Proctor and Gamble 2004 Annual Report Download - page 3
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Please find page 3 of the 2004 Proctor and Gamble annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.P&Gisdeliveringbroad-based,organicgrowthdrivenby
clearstrategiesandauniquecombinationofP&Gstrengths.
TheCompany’sperformancehasacceleratedoverthepast
threeyears,andweareconfidentdouble-digitearnings-per-
sharegrowthissustainablefortheforeseeablefuture.
P&G’sgoalsaretodeliver4%–6%salesgrowth(excluding
theimpactofforeignexchange),10%orbetterearnings-
per-sharegrowth,andfreecashflowequalto90%ormore
ofnetearnings.1Weknowwehavetoearnyourtrust
everyyearbymeetingorexceedingthesegoalsconsistently
andreliably.
P&Gexceededallitsfinancialgoalsinfiscal2004.
•Volumeisup17%.Organicvolumeisup10%.2
•Salesare$51.4billion,up19%.Organicsalesareup8%.3
•Earningsare$6.5billion,up25%.Earningsareup13%
versusprior-yearcoreearnings.4
•Earningspershareare$2.32,up25%.Earningsper
shareareup14%versusprior-yearcoreearningspershare.
•FreeCashFlowis$7.3billion,or113%ofearnings.
•Dividendsareup13%,annualized.
•TotalShareholderReturnis24%.
Growthwasbroad-based.AllfiveGlobalBusinessUnits
deliveredatorabovethesalesgoal;fouroffivewereator
abovetheearningsgoal.EveryMarketDevelopment
Organizationdeliveredsalesandvolumegrowthatorabove
Companytargets.P&Gbrandsgrewshareincategories
accountingformorethantwo-thirdsoftotalCompanysales.
Thisyear’sresultsculminateincreasinglystrongperformance
overthepastthreeyears.SinceJuly2001:
•P&Gcumulativesaleshavegrown30%.Fiscal2004
markedthefirsttimeinP&Ghistorythatsalesexceeded
$50billion.
•Earningspersharehavegrownover40%,cumulatively,
fromcoreresultsthreeyearsago.4
•P&Gbusinesseshavegeneratedmorethan$20billion
incumulativefreecashflow.
•Mostimportant,P&Ghasdeliveredacumulative
shareholderreturnof81%overthepastthreeyears,
andthepriceofP&G’sstockhasincreasedmore
than70%.(Infact,overthepastfouryears,cumulative
shareholderreturnisabove100%.)
Threeyearsofstrongperformanceisagoodstart.Butwe
knowit’sonlythat–astart.Necessary,butnotsufficient.
It’sconsistentlong-termperformancethatcounts,and
consistentperformanceisnoteasy.GrowingP&Gsales
4%–6%peryear,forexample,istheequivalentofadding
abusinessthesizeofP&G’stotalbusinessintheU.K.ora
brandthesizeofTide–everyyear.
Thechallengeissignificant,andwedon’ttakeitlightly,
butI’mconfidentP&Gcanreliablydeliverthebalanced,
consistentgrowthtowhichwe’vecommitted.Thereare
threereasonsformyconfidence:
1.P&Gstrategiesareworking,andthereisstillconsiderable
roomforgrowth.
2.P&Gstrengthsgiveustheabilitytorespondtomajor
externaltrendsandchallenges.
3.Systemicandstructuralchangesimplementedover
thepastseveralyearsareimprovingtheconsistencyand
reliabilityofP&Gperformance.
WhencombinedwiththestrengthofP&G’scultureand
P&Gpeople,thesethreefactorsmakeP&Gabetter
investmentpropositiontodaythanwehavebeenin
manyyears.
GrowthStrategiesAreWorking
Inmy2001LettertoShareholders,Ioutlinedfivegrowth
Sustaining
P&G’s
Growth
1
2
3
4
P&Gisdeliveringbroad-based,organicgrowthdrivenbyclearstrategies
andauniquecombinationofP&Gstrengths.P&G’sperformancehas
acceleratedoverthepastthreeyears,andweareconfidentdouble-digit
earnings-per-sharegrowthissustainablefortheforeseeablefuture.
FellowShareholders,