Proctor and Gamble 2015 Annual Report Download - page 5

Germany, the U.K. and Japan, where household penetration rates can still be
improved, and
in developing markets such as China, Brazil, India, Russia, Turkey
and Mexico, where
P&G has been improving its strategic position. They have
played and will continue to play to P&G’s core strengths: consumer understanding,
innovation, productivity, branding, go-to-market execution and leveraging
Company scale and scope.
After decades of category extension and geographic expansion to get bigger, we
are narrowing our focus to these  categories to get better. Ultimately, a more
focused P&G will lead to becoming the best-performing company in the consumer
products industry
— winning with consumers and delivering the most consistent and
reliable performance in our chosen categories, countries, channels and customers.
Committed to Growth and Value Creation
At P&G, we win with shoppers and consumers by providing consumer-preferred
brands and products that become leading value creators in their categories.
The best measure of winning is Operating Total Shareholder Return (TSR). We like
Operating TSR because it is a single, coordinated and integrated measure of
growth and value creation that brings together winning with shoppers and
consumers to deliver sales growth, gross and operating margin improvement,
and asset efficiency.
The foundational building block of Operating TSR is operating cash flow, and
our strong cash flow performance for many years has enabled reinvestment in
the business and steady returns to shareowners. The second building block is
operating margins, which we have started to improve and will continue to
improve as we move into the core business portfolio and continue to execute
our innovation and productivity programs with excellence. The third building
block is organic sales growth, which has been modest, but will improve as we
build household penetration on more of our brands and introduce an even
stronger lineup of new and improved products that are coming to market over
the next one, two and three years.
Operating TSR is a balanced measure of performance, and everyone in the
Company
— the technician on the manufacturing floor, the sales person in the
retail store, the scientist in the innovation lab
— is focused on their contribution
to deliver consistent and reliable growth and value creation.
More Innovative and More Productive
We have always believed that product innovation is the lifeblood of our business.
We invent brands and products that create and transform categories, and that
build consumer trial and create value in those categories for years
— often for
decades. Our brand and product innovations drive category market growth, which
creates value for our retail customers and suppliers. We’re rededicating ourselves
to product innovation that “wins from the top”
— offering the best-performing
products in the category, with the highest quality, at a modest price premium
—
yielding superior consumer value and growth. We’re investing more in R&D and
SK-II, P&G’s billion-dollar prestige skin care
brand, has introduced two new essentials:
SK-II Mid-Day Miracle Essence and SK-II
Mid-Night Miracle Essence, to deliver a
boost of crystal-clear skin anytime, anywhere,
and strengthen the skin barrier over time.
We developed Pampers Premium Care
Pants to delight moms and babies with
comfort and skin protection. Pants are
the preferred style in many countries and
the fastest-growing segment of the diaper
market. They’re available in China and
Russia, and expanding to more markets.
The Procter & Gamble Company 3