Trian Partners Activist Presentation Deck
Trian's Strategic Initiatives: Regain Lost Market Share Through
The Following Initiatives
1
3
Organize P&G
in Way That
Promotes
Accountability
2 $12-$13bn
4
Ensure
Management's
"Productivity Plan"
Delivers Results
Fix The Innovation
Machine
Develop Small,
Mid-Size & Local
Brands
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We believe P&G's current "matrix" structure results in limited accountability
Selling & Market Operations (SMOS) sit outside the Global Business Units (GBUs),
creating three dimensions to P&G's matrix structure GBUS, SMOS and Corporate
Functions / Global Business Services (GBS)
Corporate Functions and GBS report to Corporate, not the GBUS; resources within
those organizations often have dual-line reporting
We believe P&G should be organized as three standalone GBUS under a lean holding company:
1) Beauty, Grooming & Health Care ($26bn sales)
2) Fabric & Home Care ($21bn sales)
3) Baby, Feminine & Family Care ($18bn sales)
Each GBU will have regional leaders with full and clear profit & loss ("P&L") ownership
Benefits vs. current matrix: accountability, faster decisions & responsiveness to local preferences
Management lacks credibility on costs: two "productivity plans" announced since 2012 total
$23bn, or 33% of net sales...appears unrealistic
The first $10 billion productivity plan from 2012 plan did not deliver results; operating profit
was flat and market share losses continued
Management acknowledges there is up to $12-$13bn of additional cost savings opportunity, (1
yet P&G's long-term compensation plan targets market share loss and bottom-quartile EPS
growth through 2019(2)
P&G hasn't created a new leading brand in nearly 20 years, while innovation for legacy
brands has not stemmed market share losses. This is despite spending more on research and
development ("R&D”) than Henkel, Kimberly-Clark, Colgate-Palmolive, Beiersdorf, Reckitt
Benckiser, Clorox, Church & Dwight, and Edgewell Personal Care, combined (³)
Nelson Peltz will propose a Board-led study to understand why the innovation machine is
broken. He will not propose cutting R&D; rather to regain share, P&G must again become
best-in-class at both new product/brand development and upgrading existing products/brands
P&G doubled-down on its large and global brands just as the world went smaller / more
local(4)
P&G's structure and culture must adapt to manage and develop high-growth small, mid-size
& local brands that delight the consumer in a way that the big brands cannot
(1) Company transcript from Deutsche Bank Global Consumer Conference held on June 15, 2017. (2) See page 14 of this presentation. Throughout this presentation, P&G's Performance
Stock Program is referred to as the company's long-term compensation plan. (3) See page 56 of this presentation. (4) See page 60 of this presentation.
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