Trian Partners Activist Presentation Deck
Regain Lost Market Share By Ensuring P&G's "Productivity Plan" Actually
Delivers Volume Generating Investments
Management's latest productivity plan targets $12-$13 billon of gross cost reduction through 2021
▪ Trian believes that management lacks credibility for three reasons:
1)
■
Management has announced two major “productivity plans” since 2012 which total $23bn
$23bn represents ~33% of net sales...appears unrealistic
2)
The first $10bn productivity plan from 2012 never showed up on the income statement
Cost savings did not drive operating profit growth
Cost savings did not drive volume growth or market share, to the extent reinvested
Most peers expanded margins more than P&G since 2011
3)
Once again, management is making bold claims but not willing to provide an explicit commitment on net
savings or market share gains from reinvestment
Public guidance of 30-70bps of margin expansion per year implies that virtually none of the
$12-$13 billion will drop to the bottom line(¹)
▪ As a Board member, Nelson will seek to ensure that management actually delivers on its $12-$13bn
"productivity" commitment. Specifically, as Director Nelson will work to ensure that 1) $12-$13bn of
unproductive spending, which management acknowledges, is largely re-directed towards volume generating
investments and 2) that those investments actually grow operating profit:
1) Marketing
2) Pricing
3)
4)
Promotion
R&D
(1) Source: Investor call transcripts. Assumes P&G will generate 30-40% incremental margins on volume growth
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