Proctor and Gamble 2012 Annual Report Download - page 37
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mid-single digits due to market contraction in Western
Europe and the impact of competitive activity. Global
market share of the dry shave category was down over 2
points.
Net earnings increased 2% to $1.8 billion due to higher net
sales and a 10-basis point increase in net earnings margin.
The net earnings margin increase was driven by a decrease
in SG&A as a percentage of net sales, largely offset by gross
margin contraction. SG&A as a percentage of net sales
decreased due to reductions in both overhead and marketing
spending. Gross margin decreased primarily due to an
increase in commodity costs and unfavorable geographic and
product mix, partially offset by price increases.
Fiscal year 2011 compared with fiscal year 2010
Grooming net sales increased 5% in 2011 to $8.2 billion on
volume growth of 3%. Organic sales were up 5%. Price
increases, taken primarily across blades and razors in Latin
America and developed regions, contributed 2% to net sales
growth. Volume grew high single digits in developing
regions and decreased low single digits in developed
regions. Volume for blades and razors was up low single
digits due to market growth in developing regions, partially
offset by reduced volume in the developed regions. Gillette
Fusion and Venus shipments increased double digits behind
distribution expansion and initiative activity; while Mach3
shipments increased low single digits due to growth in
developing regions, partially offset by decreases in
developed markets. Global market share of the blades and
razors category was down about half a point. Volume in
Appliances decreased low single digits due to competitive
activity and a shift from low-tier, high volume products to
higher-tier product offerings. Global market share of the dry
shave category was down half a point.
Net earnings increased 10% to $1.8 billion behind higher net
sales and a 90-basis point increase in net earnings margin.
Net earnings margin increased due to gross margin
expansion, a lower effective tax rate and a decrease in
SG&A as a percentage of net sales. Gross margin increased
due to price increases, the favorable impact of volume scale
leverage and manufacturing cost savings. The tax rate
decrease was due to a shift in the geographic mix of earnings
to countries with lower statutory tax rates. SG&A as a
percentage of net sales was down due to lower foreign
currency exchange costs and lower overhead spending as a
percentage of net sales due to sales leverage, partially offset
by higher marketing spending.
HEALTH CARE
($ millions) 2012
Change vs.
Prior Year 2011
Change vs.
Prior Year
Volume n/a +1% n/a +5%
Net sales $ 12,421 +3% $ 12,033 +5%
Net earnings $ 1,826 +2% $ 1,796 -3%
Fiscal year 2012 compared with fiscal year 2011
Health Care net sales increased 3% to $12.4 billion in 2012
on 1% growth in unit volume. Organic sales were up 2% on
flat organic volume. Price increases contributed 3% to net
sales growth. Mix negatively impacted net sales by 1% due
to disproportionate growth in certain developing countries
and products with lower than segment average selling prices.
Global market share of the Health Care segment decreased
0.1 points. Volume increased mid-single digits in
developing regions and decreased low single digits in
developed regions. Oral Care volume was in line with the
prior year period as the expansion of Oral-B toothpaste in
Western Europe and Latin America were offset by the
impact of competitive activity in developed markets and
Asia and the lost volume following the price increases in
Asia. Global market share of the oral care category was
down slightly. Volume in Personal Health Care increased
low single digits driven by the addition of the PGT
Healthcare partnership. Organic volume was down low
single digits as the benefits from market growth were more
than offset by lower shipments of Prilosec OTC in North
America. All-outlet value share of the U.S. personal health
care market was down slightly. Volume in Feminine Care
was up low single digits driven by mid-single digit growth in
developing markets due to market growth and initiative
activity in India, Brazil and CEEMEA. Feminine Care
global market share was down about half a point.
Net earnings increased 2% to $1.8 billion behind higher net
sales partially offset by a 20-basis point decrease in net
earnings margin. Net earnings margin decreased due to
gross margin contraction, partially offset by lower SG&A as
a percentage of net sales. Gross margin declined due to
higher commodity costs and unfavorable product and
geographic mix, partially offset by manufacturing cost
savings and price increases. SG&A as a percentage of net
sales decreased primarily due to scale leverage from
increased sales.
Fiscal year 2011 compared with fiscal year 2010
Health Care net sales increased 5% in 2011 to $12.0 billion
on 5% growth in unit volume. Organic sales were up 5%.
Volume increased high single digits in developing regions
and low single digits in developed regions. Volume in Oral
Care grew mid-single digits behind initiative activity and
incremental merchandising support of Crest and Oral-B.
Global market share of the oral care category was up over
half a point. Volume in Personal Health Care grew low
single digits behind higher shipments of Vicks in North
America and the developing regions, partially offset by
continuing decline of Prilosec OTC in North America due to
competitive activity. All-outlet value share of the U.S.
personal health care market increased about half a point.
Volume in Feminine Care was up mid-single digits mainly
due to higher shipments of Naturella, behind expansion into
developing regions, and Always, behind initiative activity in
developing regions. Global market share of the feminine
care category was down less than half a point.