Stresses Importance of Near-Term Priorities of Employees, Consumers, and Communities
Today P&G reported results for the third quarter of our 2020 fiscal year. You can read the full details in today’s news release. Slides with more detail and the webcast replay of earnings results are available at www.pginvestor.com/event.
“The strong results we delivered this quarter are a direct reflection of the integral role our products play in meeting the daily health, hygiene and cleaning needs of consumers around the world,” said David Taylor, Chairman, President and Chief Executive Officer. “Our organization has been doing a terrific job against our near-term priorities – protecting the health and safety of each other, maximizing availability of P&G products to meet heightened consumer need and helping society meet and overcome the challenges of this crisis.”
We had a strong quarter – organic sales were up 6%, with 9 of 10 categories growing globally. Core earnings per share were up 10% to $1.17. And earlier this week, we announced a 6% increase in our dividend, reflecting the confidence we have in P&G’s future. This was the 64th consecutive annual increase, and the 130th consecutive year in which P&G has paid a dividend.
But most important at this time is that as a company that’s 183 years old, we have a long history of supporting employees, consumers and communities in times of need. These are our priorities right now: protecting P&G employees, serving consumers in a time of unprecedented demand, and supporting communities on the front lines.
Our first priority in this crisis is to ensure the health and safety of the men and women we work with - our colleagues - around the world. With guidance from medical professionals, we’re constantly evaluating and updating the robust measures already in place to help our people stay safe at work, regardless of whether they are working at home or making, packing and shipping P&G products at our sites. This includes temperature scans, shift rotations, queueing avoidance, and physical distancing. We’re performing comprehensive, methodical cleaning of all production areas, including regular sanitization and surface disinfection that exceeds the most rigorous health authority standards.
We’re also equipping and encouraging all employees to make smart, appropriate choices, such as staying at home if they feel unwell, are part of high-risk groups, or have pre-existing medical conditions. In all cases, we partner with our colleagues individually and proactively to ensure they feel - and are - protected and safe.
Our industry-leading benefits plans play a critical role in providing P&G people with the resources they need to care for themselves and their families. From paid leave and comprehensive medical care, to flexible work arrangements and financial support, P&G people can work confidently knowing the Company stands with and behind them.
Second, we’re maximizing the availability of products that help people and their families with their health, hygiene and cleaning needs, which have never been greater.
Many of our facilities are running around-the-clock to deliver P&G products during this period of increased demand. We’re running extra shifts, putting idled equipment back into service quickly, and constantly finding new ways to deliver more of the products consumers depend on.
These products are more important than ever given the needs presented by the current crisis, the increased awareness around health and hygiene, and additional time we’re all spending at home.
Our third priority is helping society meet and overcome the challenges they face. P&G has a long history of supporting communities in times of need - with the products we produce and other forms of support.
P&G donations of product and cash support are significant and will continue to increase as we work with communities around the world to support their efforts to help people through this crisis.
Millions of P&G products are being donated, helping to ensure that families have basic access to the everyday essentials many of us take for granted.
We’re partnering to provide additional support with some of the world’s leading relief organizations, including the International Federation of Red Cross, Americares and Direct Relief, and key regional organizations such as Feeding America, Matthew 25: Ministries, the China Youth Development Foundation, One Foundation, the Korea Disaster Relief Association, the United Way, and more.
We’re working to protect health care workers and first responders. The United States Center for Disease Control has issued guidance recommending proper shaving when wearing N95 and similar respiratory masks to ensure proper mask fit for protection. Gillette is donating razors around the world to hospitals and other facilities to protect the people working to care for others.
We have modified equipment to produce hand sanitizer in nearly a dozen manufacturing sites around the world, using it to ensure our people can continue operating safely and sharing it with hospitals, health care facilities and relief organizations.
Colleagues in our Gattatico plant in Italy volunteered to create an extra shift to produce surface cleaning and sanitizing products that are being donated to 70 hospitals across the country.
Work is underway to produce critically needed non-medical face masks. We’re already up and running in China and the US. We have teams working to install additional capacity in every region of the world and will quickly begin production in the coming weeks. When fully operational in July, we expect to be producing millions of masks per month.
We have leveraged P&G R&D, engineering and manufacturing capability to quickly produce face shields in Boston and Cincinnati, which are currently being used in hospitals and COVID-19 testing centers.
And we’re using our marketing and communications expertise to encourage consumers to support public health measures to help flatten the curve and slow the spread of the virus.
P&G is committed to these priorities of ensuring the health and safety of our employees, maximizing availability of products and helping society overcome the challenges of this crisis. Taken together, these priorities help ensure P&G is there for those who have always been there for us.
Serving each of these three priorities are our strategic choices, which remain the right ones:
- A portfolio of daily use products, many providing health, hygiene and cleaning benefits in categories where performance plays a significant role in brand choice.
- Superior, science-based products delivered with superior packaging, retail execution, consumer communication and value…in all price tiers where we compete.
- Cost and cash productivity...up and down the income statement and across the balance sheet…to fund investments in superiority, manage macro headwinds and build profit margin.
- A mindset of constructive disruption. A willingness to change, adapt, and create new trends and technologies that will shape our industry for the future. In this environment, that agility and constructive disruption mindset are even more important.
- A more empowered, agile and accountable organization with little overlap or redundancy, flowing to new demands, seamlessly supporting each other to deliver our priorities - around the world.
These integrated and mutually reinforcing strategies are delivering strong results, and are a foundation for strong, balanced growth and value creation.
The best response to what we are challenged with today is to push forward, not to pull back, and that’s exactly what we intend to do.
You can learn more about our robust COVID-19 response in this infographic or at www.pg.com/covid19/.