Proctor and Gamble 2011 Annual Report Download - page 5

I’ll share one more example. Head & Shoulders was a relatively
small, primarily North American brand a decade ago. We invested
in a combination of marketing and product innovations and
then began to expand the brand globally. Since then, we have
more than tripled sales and Head & Shoulders is now the largest
shampoo brand in the world.
These and other experiences reinforce our commitment to
innovation as the fundamental driver of P&G’s growth.
We invest about $billion a year in Research &
Development —about 60% more than our next
closest competitor and more than most of our
competitors combined.
The investment continues to pay off. We currently have the
strongest innovation and global expansion program in P&G history.
We are globalizing products such as Gillette Fusion ProGlide,
Crest 3D White, Laundry additives, and the Pampers thinness
and absorbency upgrade.
We’re also expanding successful marketing innovation such
as the Shiksha education program in India, in which P&G
contributes a brick to build a school for each pack of product
purchased, or the Pampers “One Pack Equals One Vaccine”
campaign with its focus on eradicating maternal and neonatal
tetanus. The Old Spice “Smell Like a Man, Man” campaign
generated consumer excitement and demand that catapulted
the brand to market leadership. P&G’s global sponsorship
of the Olympic Games provides an outstanding platform for
integrated, multi-branded commercial innovation.
In this past fiscal year, we grew or held market share on
businesses representing about 60% of our sales, which is the best
indication that consumers are rewarding P&G innovation despite
a highly competitive and demanding economic environment.
We also continue to earn external recognition for our
innovations. In 2010, P&G launched eight of the top 25 most
successful new products in the consumer products industry
in North America, as measured by SymphonyIRI Group
(which recognized us last year as one of the most innovative
manufacturers in the U.S. Consumer Packaged Goods Industry
for the past decade, presenting us with an Outstanding
Achievement in Innovation Award). Crest 3D White was
the most successful new product launch measured by
SymphonyIRI Group last year. For the past 16 years, P&G has
had132 products on the top 25 New Product Pacesetters list,
more than our six largest competitors combined.
In 2011, P&G along with our agencies brought
home a record-setting 32 Cannes Lion awards
(which recognize the world’s best advertising and
communications) at the Cannes Lions International
Festival of Creativity (formerly known as the
International Advertising Festival). This was nearly
double our previous record of 17—and more than
double the combined number of Lions awarded to
our six closest competitors. We were also awarded
the title of Most Effective Marketer in the World
byEffie Worldwide.
Purpose-inspired Growth Strategy: Our path forward
fy 2011 annual growth targets
Organic Sales Growth (1) 4%1–2%above global market growth rates
Core EPS Growth (2) 8%High single to low double digits
Free Cash Flow (3) 84%of net earnings 90% of net earnings
(1) Organic sales growth is a non-GAAP measure of sales growth. See page 51 for a reconciliation of net sales growth to organic sales growth.
(2) Core EPS growth is a non-GAAP measure of the Company’s diluted net earnings per share from continuing operations. See page 51 for a reconciliation of Core EPS to diluted
net earnings per share from continuing operations.
(3) Free cash flow productivity is defined as the ratio of free cash flow to net earnings.
The Procter & Gamble Company 3