Proctor and Gamble 2006 Annual Report Download - page 28

The Procter &Gamble Company and Subsidiaries
26 Management’s Discussion and Analysis
as a separate reportable segment. In addition, our commercial products
organization, which primarily sells cleaning products directly to
commercial end users, was moved from Snacks and Coffee to our
Fabric Care and Home Care reportable segment. Finally, the adult
incontinence business was aligned with our feminine care business
and as a consequence was removed from Baby Care and Family Care
and moved to P&G Beauty. The balance of the Baby Care and Family
Care reportable segment was moved from the P&G Family Health
GBU to the P&G Household Care GBU, but will continue to be reported
as a separate reporting segment. In conjunction with these changes,
the P&G Beauty GBU was renamed “Beauty and Health,” the Snacks
and Coffee reportable segment was renamed “Pet Health, Snacks and
Coffee,” the P&G Household Care GBU was renamed “Household Care”
and the P&G Family Health GBU was eliminated. The accompanying
financial statements and management discussion of operating results,
including historical results, reflect the new management and
organization structure.
Under U.S. GAAP, the business units comprising the GBUs are
aggregated into seven reportable segments: Beauty; Health Care;
Fabric Care and Home Care; Baby Care and Family Care; Pet Health,
Snacks and Coffee; Blades and Razors; and Duracell and Braun.
The following provides additional detail on the reportable segments
and brand composition of each of our three GBUs:
Beauty and Health
Beauty: We are a global market leader in Beauty and compete in
markets which comprise over $220 billion in global retail sales. We are
the global market leader in hair care with approximately a 24% share
of the global market. We are also the global market leader in the
feminine care category with approximately a 36% share of the market.
Health Care: We compete in oral care, pharmaceuticals and personal
health. In oral care, there are several global competitors in the market,
of which we have the number two share position. In pharmaceuticals
and personal health, we have approximately 33% of the global
bisphosphonates market for the treatment of osteoporosis under the
Actonel brand. We also maintain leadership market share in
nonprescription heartburn medications and in respiratory treatments
behind Prilosec OTC and Vicks, respectively.
Household Care
Fabric Care and Home Care: This segment is comprised of a variety
of products including laundry products, fabric conditioners, dish care,
air fresheners and household cleaners. We generally have the
number one or number two share position in the markets in which
we compete, with particular strength in North America and Europe.
We are the global market leader in fabric care with global market
share of approximately 33%. Our global home care market share is
approximately 21% across the categories in which we compete.
Baby Care and Family Care: In baby care, we compete primarily in
diapers, training pants and baby wipes and have a global market
share of approximately 36%. We are the number one or number two
baby care competitor in most of the key markets in which we compete,
primarily behind the Pampers brand, the Company’s largest brand
with annual net sales in excess of $6 billion. Our Family Care business
is predominantly a North American business comprised primarily of
the Bounty and Charmin brands, with market shares of approximately
43% and 27%, respectively, in the United States.
Pet Health, Snacks and Coffee: In pet health, we compete in several
markets around the globe, primarily in the premium pet health
segment behind the Iams brand. In Snacks, we compete against both
global and local competitors and have a global market share of
approximately 13% in the potato chips market behind the Pringles
brand. Our coffee business competes almost solely in North America,
where we hold a leadership position with approximately 34% of the
U.S. market, primarily behind our Folgers brand.
Gillette GBU
The Gillette GBU was added on October 1, 2005, as a result of the
acquisition of The Gillette Company. This GBU is comprised of the
Blades and Razors and the Duracell and Braun reportable segments.
Blades and Razors: We hold leadership market share in Blades and
Razors on a global basis and across the majority of markets in which
we compete. Our global market share is approximately 72% primarily
behind the MACH3, Fusion, Venus and the Gillette franchise.
Reportable % of % of Net
GBU Segment Net Sales*Earnings*Key Products Billion-Dollar Brands
BEAUTY AND HEALTH Beauty 31% 33% Cosmetics, Deodorants, Feminine Care, Always, Head &Shoulders,
Hair Care, Personal Cleansing, Skin Care Olay, Pantene, Wella
Health Care 11% 13% Oral Care, Pharmaceuticals, Actonel, Crest, Oral-B
Personal Health Care
HOUSEHOLD CARE Fabric Care and 25% 25% Fabric Care, Air Care, Dish Care, Surface Care Ariel, Dawn, Downy, Tide
Home Care
Baby Care and 18% 14% Diapers, Baby Wipes, Bath Tissue, Kitchen Towels Bounty, Charmin, Pampers
Family Care
Pet Health, Snacks 6% 4% Pet Health, Snacks, Coffee Folgers, Iams, Pringles
and Coffee
GILLETTE GBU Blades and Razors 5% 8% Men’s and Women’s Blades and Razors Gillette, MACH3
Duracell and Braun 4% 3% Batteries, Electric Razors, Small Appliances Braun, Duracell
* Percent of net sales and net earnings for the year ended June 30, 2006. Figures exclude results held in the Corporate segment and include Gillette results only for the nine months ended June 30, 2006.