Proctor and Gamble 2013 Annual Report Download - page 36

34 The Procter & Gamble Company
HEALTH CARE
($ millions) 2013
Change vs
2012 2012
Change vs
2011
Volume n/a +3% n/a +1%
Net sales $12,830 +3% $12,421 +3%
Net earnings $1,898 +4% $1,826 +2%
% of Net Sales 14.8% 10 bps 14.7% (20) bps
Fiscal year 2013 compared with fiscal year 2012
Health Care net sales increased 3% to $12.8 billion in 2013
on a 3% increase in unit volume. Organic sales were up 5%.
Price increases contributed 1% to net sales growth.
Favorable product mix, partially offset by unfavorable
geographic mix, increased net sales by 1%. Unfavorable
foreign exchange reduced net sales by 3%. The mix impact
from acquisitions and divestitures increased net sales by 1%.
Global market share of the health care segment decreased
0.3 points. Volume increased mid-single digits in
developing regions and increased low single digits in
developed regions. Oral Care volume increased mid-single
digits due to geographic expansion, innovation and market
growth. Global market share of the oral care category was
down slightly. Volume in Personal Health Care increased
mid-single digits partially due to a net increase from prior
year acquisition and divestiture activity (the addition of the
PGT Healthcare partnership and New Chapter VMS,
partially offset by the divestiture of the PuR business).
Organic volume increased low single digits primarily due to
the launch of ZzzQuil and geographic expansion for Vicks.
Volume in Feminine Care increased low single digits with
mid-single-digit growth in developing markets behind
market growth and innovation partially offset by a low
single-digit decrease in developed regions due to increased
promotional activity from competition and market
contraction. Global market share of the feminine care
category was down half a point.
Net earnings increased 4% to $1.9 billion due to higher net
sales and a 10-basis point increase in net earnings margin.
Net earnings margin increased due to a reduction in
overhead spending, partially offset by an increase in
marketing spending and gross margin contraction. Gross
margin decreased due to increased commodity costs and
supply chain investments, partially offset by higher pricing
and manufacturing cost savings.
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 was offset by the impact
of competitive activity in developed markets and Asia and
lost volume following 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 $1.8 billion behind higher net
sales partially offset by a 20-basis point decrease in net
earnings margin. Net earnings margin decreased due to
gross margin contraction, partially offset by lower SG&A as
a percentage of net sales. Gross margin declined due to
higher commodity costs and unfavorable product and
geographic mix, partially offset by manufacturing cost
savings and price increases. SG&A as a percentage of net
sales decreased primarily due to scale leverage from
increased sales.
FABRIC CARE AND HOME CARE
($ millions) 2013
Change vs
2012 2012
Change vs
2011
Volume n/a +3% n/a -1%
Net sales $27,448 +1% $27,254 +3%
Net earnings $3,126 +7% $2,915 -6%
% of Net Sales 11.4% 70 bps 10.7% (100) bps
Fiscal year 2013 compared with fiscal year 2012
Fabric Care and Home Care net sales increased 1% in 2013
to $27.4 billion on a 3% increase in unit volume. Organic
sales were up 3%. Price increases contributed 1% to net
sales growth. Unfavorable product mix decreased net sales
by 1% driven by a reduction in Pet Care volume, which has
higher than segment average selling prices. Unfavorable
foreign exchange reduced net sales by 2%. Global market
share of the Fabric Care and Home Care segment decreased
0.3 points. Volume increased mid-single digits in
developing regions and low single digits in developed
regions. Fabric Care volume increased low single digits
behind low single-digit growth in developed regions and
mid-single-digit growth in developing regions, driven
primarily by Asia. Overall growth due to innovation and
market growth was partially offset by the impacts of
competitive activity. Global market share of the fabric care
category decreased more than half a point. Home Care
volume increased mid-single digits driven by a high single-
digit increase in developing markets, behind innovation and
distribution expansion, and a low single-digit increase in
developed markets primarily due to the impact of reduced