Procter and Gamble FY 4Q16 Earnings Call Notes

Procter & Gamble (PG) David S. Taylor on Q4 2016 Results

We see China sequentially improving

“on China. We see it sequentially improving. We are not done yet with hitting our portfolio right in China. That will take time. There are several categories that we are still losing share. And we’re not positioned with the appropriate portfolio in the premium and super premium segments.”

Chinese ecommerce has accelerated

“Having said that, the online portion has accelerated and is certainly in the double- digit, but you see many categories, 130%, 140%, 150%. And what is encouraging to me is our online business is starting to accelerate. We’re growing share the past 6 months. And we’ve at least now got a couple of our categories where our online share is higher than our off-line share, which bodes well for the future, given the choice Chinese consumers are making.”

Thoughts on the dollar shave club acquisition

“I do understand and certainly it is very real that the cost to enter a category has changed dramatically today versus 5 years and 10 years ago. And part of what we are doing by category again is looking to see how do we leverage the capability that exists. I expect we’ll continue to see competitors that can pop up. But generally to sustain and grow a business, you have to have a product and a product experience that meets the consumer’s need. There are many, many examples of Internet-based competitors that have been popping up, both here and China. Tremendous number of those that get trial. Repurchase though is another story. And repurchase and a profitable business model is the highest bar. And that’s the one that we’re working against, which is to have a substantive product that meets the consumers’ need, to have communication programs that meet consumers when and where they’re receptive to the message, and understand they want less to be sold and less to be – and more to be part of their life. And we’re adjusting our marketing and communication programs to do just that. And I think that’s the right way by category to win.”

Jon R. Moeller – Chief Financial Officer

Moving away from trend driven businesses

“We’re moving away from businesses that are more trend driven, where fashion, fragrance, and flavor drive consumer purchase decisions. We’re focusing on businesses where product and performance drive purchase decisions, where there are clear consumer jobs to be done and clear objective measures of performance. These are products that consumers purchase and use on a daily basis. And they’re in structurally attractive categories.”