Trian Partners Activist Presentation Deck

Gillette Case Study In 2005, P&G acquired Gillette for $57bn but has lost 1,250 bps of share in the U.S. men's shave category in just 5 years ■ ■ Lack of innovation: From the 1980s through P&G's acquisition, Gillette launched a new razor/blade platform every 7-9 yrs, cannibalizing prior platforms but distancing itself from competition and growing share. P&G has not launched a new platform since the acquisition (12 yrs and counting; see chart on right) ■ Lack of competitive response: Gillette also did not adequately respond to upstarts such as Dollar Shave Club and Harry's launching less expensive product with internet delivery. These competitors have taken ~1,000 bps of share combined in just the last five years How may P&G's structure have impacted Gillette? We understand that Gillette management advocated for a direct-to- consumer program a year before Dollar Shave Club launched in 2011. Given a combination of razor blades' high prices, small size and weight and regular ordering pattern, the category was a good fit (and susceptible to competition from) online ▪ A proactive and aggressive direct-to-consumer response was quickly "shut down" by corporate and the local sales team In this case, P&G would have benefitted from more decentralized and less homogenized thinking ▪ Now, six years later, P&G is committed to online subscription for Gillette but is still ramping up investment and playing catch-up "Platform" Introductions Have Slowed 1989 1994 1998 2001 2004 2004 2005 Sensor Sensor Excel Mach 3 Mach 3 Turbo Sensor 3 Refillable M3 Power Fusion System Expanded M3 Power Fusion Proglide Fusion Proglide Flexball Fusion Proshield ??? 62% 2005 2010 2014 2016 2017 49% U.S. Men's Grooming Market Share Gillette (P&G) boxe 9 years 7 years Acquired by P&G in 2005 0% 2011 2016 2011 Source: Euromonitor International Limited 2017 O, Wall Street research, Gillette website, investor call transcripts and discussions with former Gillette employees. 12+ years DOLLAR SHAVE CLUB (Unilever) + HARRY'S 10% 2016 - 43 -

View entire presentation