Fiscal year 2020 will go down as one of the most challenging years for P&G in our 183-year history. Despite numerous issues presented by the global COVID-19 pandemic, P&G people delivered strong results, meeting or exceeding our financial goals for the year with 6% organic sales growth and 13% core earnings per share growth.
Before I go into more detail on our fiscal year 2020 results, I want to briefly outline the immediate priorities we established to carry us through the pandemic:
• Protect the health and well-being of P&G people;
• Maximize the availability of our products that help people and their families with their health, hygiene and cleaning needs, which have never been greater;
• Support the communities, relief agencies and people on the front lines of this global pandemic.
Taken together, these priorities ensure P&G is there for the employees, consumers and communities who have always been there for us, and they remain in place today.
Importantly, they work hand-in-hand with our strategic choices — a portfolio of daily use brands; meaningful superiority across products, packages, communication, retail execution and value; driving productivity in everything we do; constructive disruption across all areas of our business; and a more empowered, agile and accountable organization.
This strategy is unwavering, and it’s delivering strong, balanced growth and value creation.
Fiscal Year 2020 Results
Last fiscal year, we grew markets and increased household penetration in multiple categories — driving top-line growth, bottom-line growth and market share.
Organic sales grew 6%. On a two-year stacked basis, organic sales growth has accelerated from 3% (across fiscal years 17 and 18) to 6% (across fiscal years 18 and 19) to 11% (across fiscal years 19 and 20) indicating the underlying strength of our brands and our strategy which are driving our business.
On the bottom line, core earnings per share were up 13% versus the prior year. On a constant currency basis, core earnings per share were up 17%. All-in GAAP earnings per share were up significantly versus a year ago because of last year’s one-time, non-cash accounting charge to reduce the carrying value of the Gillette Shave Care business.
Adjusted free cash flow productivity was 114%.
It’s important to note that we were at 6% organic sales growth, 18% core earnings per share growth, and 96% adjusted free cash flow productivity for the first half of the fiscal year, before the impact of the pandemic.
We maintained this strong momentum in the second half of fiscal year 2020, overcoming many challenges, including the lockdown in China, channel shutdowns, operational challenges to safely staff our facilities and source materials necessary to maintain production, and a significant increase in production in some categories to serve heightened consumer cleaning, health and hygiene needs.
Nine of 10 product categories grew organic sales. Home Care and Personal Health Care grew in the teens. Family Care grew double digits. Fabric Care and Feminine Care grew high single digits. Hair Care, Skin & Personal Care, and Oral Care grew mid-single digits. Grooming grew 1%, and Baby Care was down 1%.
We delivered very strong results in our two largest and most profitable markets. The U.S. grew organic sales 10% for the year, including 5% growth in the first half of the fiscal year. Greater China grew 8%, including 13% organic growth in the first half of the fiscal year.
E-commerce organic sales grew 40% and are now over 10% of our total Company sales.
We returned $15.2 billion of value to shareowners through a combination of share repurchases and dividends. In April, we announced a 6% increase in the dividend. This was the 64th consecutive annual increase and the 130th consecutive year in which P&G has paid a dividend.
Summing up, we delivered or over-delivered on each of our going-in targets for the year — organic sales growth, core EPS growth, free cash flow productivity and cash returned to shareowners. We built strong momentum heading into the COVID-19 crisis, and arguably built this further during the challenging second half of the fiscal year.
Credit for these results goes to all of the employees of P&G, who have demonstrated incredible creativity, agility and commitment to serving consumers, customers and communities every day during these unprecedented circumstances.
Please see Measures Not Defined by U.S. GAAP in the Downloads section, or page 74 of the print Annual Report, for definitions of non-GAAP measures and reconciliations to the most closely related GAAP measure. VARIOUS STATEMENTS IN THIS ANNUAL REPORT, including estimates, projections, objectives and expected results, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934 and are generally identified by the words “believe,” “expect,” “anticipate,” “intend,” “opportunity,” “plan,” “project,” “will,” “should,” “could,” “would,” “likely” and similar expressions. Forward-looking statements are based on current assumptions that are subject to risks and uncertainties that may cause actual results to differ materially from the forward-looking statements, including the risks and uncertainties discussed in Item 1A – Risk Factors of the Form 10-K/A included in this Annual Report. Such forward-looking statements speak only as of the date they are made, and we undertake no obligation to update or revise publicly any forward-looking statements, except as required by law.