Proctor and Gamble 2000 Annual Report Download - page 3

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Dear Shareholders,
Fiscal 2000 was a tough year. Earnings came in below the goals we had originally established and felt
we could achieve. In our drive to meet changes in the marketplace – globalization, the Internet, con-
solidation among retailers – we tried to do too much too fast.As a result, we lost critical balance in
several key areas:
>We grew top-line sales more than we had over the past few years, but bottom-line earnings growth
came in below historical rates.
>We introduced more new brands than during any other period in our history, but our biggest, most
profitable brands didn’t grow at acceptable rates.
>We invested for the future – in new businesses and developing markets – but some costs grew faster
than revenues.
>We made important leadership changes, placing people into new jobs as part of our organizational
restructuring, but we lost continuity in some parts of the business.
Even in the face of these challenges, our core earnings were above a year ago – delivering record results.
>Net sales grew 5% on 4% unit volume growth – very strong improvement over last year, when
volume was flat.
>Net earnings were $3.5 billion or $2.47 per share, compared to $3.8 billion or $2.59 per share
in 1999.
>Core net earnings, which exclude $688 million of Organization 2005 costs, were $4.2 billion. Core
earnings per share grew 4% to $2.95.
While these results demonstrate progress, P&G is capable of delivering better results.We are confident
we can reestablish the balance needed to deliver top-line revenue growth and bottom-line earnings
growth.We have the core competencies and strengths to win; our new organizational design remains
fundamentally right; and we have a focused plan to drive both sales
and profit growth.
FUNDAMENTALS TO WIN
Our goal is simple: to create the most successful global brands
in every category everywhere we compete.And we have the
strengths to do it.
Today P&G has more leading brands than any other consumer
products company in the world.We have strong relationships
with our retail customers around the world.And our innova-
tive people continue to set industry standards.
A.G. Lafley and John E. Pepper