Marginal FY'13 sales increase at P&G

Core earnings per share were $4.05, an increase of five percent versus the prior year. Net sales were $84.2 billion, an increase of one percent including a negative two point impact from foreign exchange. Organic sales grew three percent for the fiscal year.

Core earnings per share were $0.79 for the April – June quarter. Diluted net earnings per share from continuing operations were $0.64, including non-core items of $0.15 per share. Organic sales grew four percent, on five percent unit volume growth. Net sales were $20.7 billion, an increase of two percent versus the prior year period including a negative two percentage point impact from foreign exchange.

“The Company met its objectives for the fourth quarter and fiscal year, and we will build on these results in fiscal 2014,” said Chairman, President and Chief Executive Officer, A.G. Lafley.

“With an overriding focus on value creation, we will strengthen and accelerate productivity plans. We will continue to make choiceful investments in core brands, our biggest innovation opportunities, and in our core developed and most promising developing markets. In all we do, we will stay focused on winning with consumers, customers and shareholders.”

Fiscal Year Discussion

In fiscal year 2013, results were in line with objectives set at the beginning of the fiscal year. Organic sales were in line with initial guidance, with market share trends improving throughout the year. Core earnings per share were ahead of initial projections. Cash results were also ahead of plan, with free cash flow productivity of 95%. The Company increased the quarterly dividend by seven percent and repurchased $6 billion of its shares over the fiscal year.

Net sales increased one percent to $84.2 billion for fiscal 2013. Unit volume growth contributed two percent to sales growth, and pricing added one percent. Unfavorable foreign exchange reduced net sales by two percentage points. Organic sales increased three percent, with all segments growing organic sales.

Diluted net earnings per share from continuing operations were $3.86, an increase of 24 percent versus the prior year period. Excluding non-core items, core earnings per share were $4.05, an increase of five percent versus the prior year period.

Reported and core gross margin increased 30 basis points. Manufacturing and productivity savings improved gross margin by approximately 160 basis points, and pricing improved gross margin by 70 basis points. These benefits were largely offset by product and geographic mix and manufacturing start-up costs.

Core SG&A costs increased 10 basis points. Overhead cost savings from the Company’s productivity program of approximately 70 basis points and the benefit of sales leverage were more than offset by the impacts of foreign exchange, marketing investments, higher employment costs and merchandising spending. Including restructuring costs and other non-core impacts, reported SG&A increased 50 basis points.

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