Proctor and Gamble 2005 Annual Report Download - page 12

Download and view the complete annual report

Please find page 12 of the 2005 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.

Page out of 72

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72

On฀July฀12,฀2005,฀P&G฀and฀Gillette฀shareholders฀overwhelmingly฀approved฀the฀
combination฀of฀the฀two฀companies,฀with฀more฀than฀96%฀of฀voting฀shareholders฀
in฀favor฀of฀the฀acquisition.฀The฀Gillette฀integration฀team฀is฀jointly฀led฀by฀P&G฀
Chief฀Financial฀Officer฀Clayt฀Daley฀and฀Gillette฀CEO฀Jim฀Kilts.฀In฀this฀discussion,฀
P&G฀CEO฀A.G.฀Lafley฀addresses฀questions฀about฀the฀planned฀integration.
“Mega-mergers”฀often฀fail,฀even฀when฀the฀companies฀are฀฀
in฀the฀same฀industry.฀How฀will฀this฀acquisition฀be฀different?
There฀are฀a฀number฀of฀important฀differences฀that฀make฀us฀
confident฀this฀combination฀will฀not฀just฀work,฀but฀thrive.฀฀
The฀first฀is฀the฀health฀of฀our฀businesses.฀Often,฀when฀
companies฀are฀acquired,฀one฀of฀the฀companies฀is฀struggling.฀
That’s฀not฀the฀case฀here.฀Both฀Gillette฀and฀P&G฀are฀delivering฀
strong฀top-฀and฀bottom-line฀growth.฀We’re฀combining฀
Gillette’s฀and฀P&G’s฀healthy฀brand฀franchises฀and฀core฀
strengths.฀And,฀we’re฀coming฀together฀at฀a฀time฀when฀there฀
are฀abundant฀opportunities฀for฀even฀more฀growth.฀We฀believe฀
we฀can฀and฀will฀grow฀faster฀together฀than฀either฀company฀
could฀grow฀alone.
Another฀key฀difference฀is฀the฀unique฀flexibility฀of฀P&G’s฀
organization฀structure.฀P&G’s฀Global฀Business฀Unit฀(GBU),฀
Market฀Development฀Organization฀(MDO),฀and฀Global฀
Business฀Services฀(GBS)฀structure฀gives฀us฀the฀ability฀to฀
integrate฀new฀businesses฀while฀continuing฀to฀build฀฀
existing฀businesses.฀
The฀Iams,฀Clairol,฀and฀Wella฀acquisitions฀demonstrated฀this฀
capability.฀Our฀market฀development฀organizations฀have฀taken฀
Clairol’s฀Herbal฀Essences฀brand฀global฀while฀concurrently฀
building฀Pantene฀to฀record฀global฀market฀share฀and฀turning฀
Head฀&฀Shoulders฀into฀one฀of฀our฀fastest-growing฀billion-
dollar฀brands.฀Likewise,฀P&G’s฀Global฀Business฀Services฀
organization฀has฀been฀integrating฀back-office฀support฀for฀the฀
new฀acquisitions฀while฀also฀raising฀service฀levels฀and฀lowering฀
costs฀for฀P&G’s฀base฀business.฀No฀other฀consumer฀products฀
company฀has฀created฀similar฀organization฀capabilities.฀
Gillette’s฀businesses฀will฀take฀full฀advantage฀of฀P&G’s฀GBU,฀
MDO,฀and฀GBS฀organization฀structure.
Do฀you฀remain฀confident฀that฀you฀can฀achieve฀the฀cost฀and฀
revenue฀synergy฀goals?฀Yes.฀We’ve฀identified฀more฀than฀a฀
billion฀dollars฀in฀cost฀synergy฀opportunities.฀Integration฀teams฀
are฀developing฀plans฀to฀deliver฀them.฀We฀will฀eliminate฀
administrative฀overlap฀by฀integrating฀Gillette’s฀and฀P&G’s฀
corporate฀staffs.฀We฀will฀deliver฀critical฀support฀through฀P&G’s฀
Global฀Business฀Services฀organization,฀leveraging฀scale฀to฀
deliver฀best-in-class฀costs฀not฀available฀to฀Gillette฀today.฀We฀
see฀significant฀synergy฀opportunities฀in฀purchasing,฀
manufacturing,฀logistics,฀marketing,฀and฀retail฀selling.฀
10
Integrating฀Gillette
$10.5฀billion
2004฀sales฀with฀$1.7฀billion฀net฀income
Duracell฀increased฀its฀leading฀
global฀market฀share฀of฀alkaline฀
batteries฀to฀40%฀in฀2004.฀
Blades฀and฀Razors฀
has฀more฀than฀a฀
70%฀global฀market฀
share฀–฀nearly฀five฀฀
times฀higher฀
than฀the฀nearest฀
competitor.
Oral-B฀has฀a฀strong฀portfolio฀in฀
manual,฀battery,฀and฀rechargeable฀
toothbrushes฀and฀is฀the฀global฀
leader฀with฀a฀36%฀share฀of฀market.
Braun฀is฀the฀฀
#1฀global฀brand฀
in฀the฀premium฀
electric฀shaver฀
market.