01—Abstract
Summary
Summary of the 10-K filed August 8, 2013. Cited figures are marked; the original filing is the authoritative source.
The Procter & Gamble Company (PG) 10-K filing for the fiscal year ended June 30, 2013, highlights a period of modest net sales growth driven by volume increases and price adjustments, alongside a significant boost in net earnings from continuing operations.
This improvement in profitability was largely attributable to favorable acquisition/divestiture impacts and a reduction in impairment charges compared to the prior year. The company continues to focus on its core, profitable brands and markets, emphasizing innovation and productivity to drive future growth. Despite facing a competitive landscape and global economic uncertainties, P&G demonstrated strong free cash flow generation and maintained a robust dividend payout, underscoring its commitment to shareholder returns.
Key financial metrics showed net sales reaching $84.2 billiona, a 1% increase, with organic sales growing by 3%. Diluted earnings per share from continuing operations saw a substantial rise of 24% to $3.86, while reported diluted EPS increased by 5% to $3.86. The company successfully managed its costs, with gross margin expanding by 30 basis points.
Significant divestitures, including the snacks business, were completed in the prior year, impacting year-over-year comparisons. P&G also initiated a productivity and cost savings plan, aiming for over $2 billionb in annual savings over five years.
02—Key points
Key Highlights
- Net sales increased by 1% to $84.2 billion, with organic sales growth of 3%.
- Diluted net earnings per share from continuing operations increased by 24% to $3.86.
- Free cash flow generation was strong at $10.9 billion, with a productivity of 95%.
- The company continued its commitment to shareholders by increasing its dividend for the 57th consecutive year.
- A significant productivity and cost savings plan was in place, aiming for over $2 billion in annual savings.
- Impairment charges were significantly lower than the prior year, contributing to the net earnings improvement.
- The company's largest customer, Wal-Mart, accounted for 14% of net sales.
03—One dollar
Follow one dollar
Of each $1.00 of revenue in FY2013, Procter & Gamble Co kept $0.14.
- Revenue$80.12B100.0%
- Cost of revenue−$39.99B49.9%
- Gross profit$40.13B50.1%
- Operating costs−$26.31B32.8%
- Operating income$13.82B17.2%
- Interest, other & tax−$2.50B3.1%
- Net income$11.31B14.1%
04—Financials
Financial Highlights
Figures from 10-KFY2013filed August 8, 2013Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $80.12B$82.01B | −2.3% |
| Cost of Revenue | $39.99B$41.41B | −3.4% |
| Gross Profit | $40.13B$40.59B | −1.2% |
| R&D Expenses | $1.90B$2.00B | −5.0% |
| SG&A Expenses | $26.00B$25.98B | +0.1% |
| Operating Income | $13.82B$13.04B | +6.0% |
| Interest Expense | $667.00M$769.00M | −13.3% |
| Net Income | $11.31B$10.76B | +5.2% |
| EPS (Basic) | $4.04$3.82 | +5.8% |
| EPS (Diluted) | $3.86$3.66 | +5.5% |
| Shares Outstanding (Basic) | 2.74B2.75B | −0.3% |
| Shares Outstanding (Diluted) | 2.93B2.94B | −0.4% |
05—Questions
Frequently Asked Questions
What was P&G's overall financial performance in fiscal year 2013?
In fiscal year 2013, Procter & Gamble reported net sales of $84.2 billion, a 1% increase from the prior year, with organic sales growing by 3%. Net earnings from continuing operations increased significantly by 22% to $11.4 billion, largely due to reduced impairment charges and favorable acquisition/divestiture impacts compared to fiscal year 2012. Diluted earnings per share from continuing operations rose 24% to $3.86.
How did P&G manage its costs and profitability?
P&G focused on managing costs through a productivity and cost savings plan designed to generate over $2 billion in annual savings. This focus, combined with higher pricing and manufacturing cost savings, led to a gross margin expansion of 30 basis points to 49.6% of net sales.
What is the company's strategy for future growth?
P&G's strategy involves focusing resources on its leading, most profitable categories and markets, both in core markets like the U.S. and in high-potential developing markets. Innovation in products and operations, along with improving operating discipline, are key pillars of its growth strategy.
What is the company's approach to returning capital to shareholders?
P&G demonstrated a strong commitment to shareholder returns by increasing its quarterly dividend for the 57th consecutive year and repurchasing approximately $6.0 billion of its shares during fiscal year 2013. The company aims to deliver total shareholder returns in the top third of its peer group.
06—Continue