Proctor and Gamble 2001 Annual Report Download - page 16

Feminine care volume declined 3% due to a challenging competitive
environment in North America and Northeast Asia, partially offset
by growth in developing markets. Net sales were comparable to the
prior year – excluding a 5% negative exchange impact.
In 2000, paper segment net sales were $12.04 billion, down 1%
from the prior year on flat unit volume. Excluding the impact of
exchange rates, primarily the euro, net sales were up 1%. Excluding
the impact of the Attends divestiture in 1999, unit volume increased
2%. Net earnings were $1.07 billion, down 16%, reflecting family
care expansion in Western Europe, investments in new product
initiatives on Charmin, a tough competitive environment in baby
care and feminine care businesses, increased capacity and
unfavorable raw and packing material cost trends.
Looking forward, initiative programs are currently underway to drive
future growth. Though challenges remain, a continued focus on
innovation and cost reductions should lead to stronger
performance.
BEAUTY CARE
Beauty care increased profitability behind innovative, high-margin,
global brands. Net sales were $7.26 billion, down 2% versus $7.39
billion in 2000. Excluding a 4% impact of unfavorable exchange
rates, primarily in Western Europe and Asia, net sales increased 2%.
Unit volume was down 1% versus the prior year. Excluding the
impact of divestitures, volume was flat. Volume growth in hair care
and skin care was offset by competitive activity in deodorants and
bar soaps. Net earnings were $972 million, a 9% improvement
behind the successful expansion of high-performance, premium-
priced products.
Positive results in hair care were primarily driven by the global
restage of Pantene and Head & Shoulders. Latin America, in
particular, posted record results on double-digit top-line growth.
The Company is committed to strengthening the business in
Western Europe. Strategic plans are in place to improve the
business through a differentiated portfolio of brands that provide
superior value, meet a variety of consumer needs and build to a
total leadership position.
In 2000, net sales for fabric and home care were $12.16 billion, an
increase of 7% over 1999. Excluding unfavorable foreign exchange
impacts, primarily in Western Europe, net sales grew 9% on 5% unit
volume growth. Top-line growth was spurred by the introduction of
new brands and solid base business performance. Net earnings for
the segment were $1.45 billion, down 3% versus the prior year,
primarily due to investments in product initiatives.
PAPER
The paper segment, which includes baby, feminine and family care,
reflected mixed results. Net sales were $11.99 billion, compared to
$12.04 billion in 2000. Excluding a 4% negative impact of
exchange rates, primarily the euro, net sales increased 4%. Unit
volume grew 2%, driven by family care and baby care. Commodity-
related cost increases and weaker foreign currencies resulted in net
earnings decreasing 2% to $1.04 billion, despite progress in family
care and feminine care. These were partially offset by pricing
actions and lower overhead and marketing spending.
Family care volume grew 3% due to new product introductions and
base business growth in North America. Net sales increased 10%,
excluding a 2% unfavorable impact of exchange, resulting from
commodity-driven global pricing actions on Charmin and Bounty.
Baby care volume increased 3% driven by Latin America and Central
and Eastern Europe. Excluding a 5% negative exchange impact, net
sales increased 1%.
The Procter & Gamble Company and Subsidiaries
14
Financial Review (continued)