Summary
Procter & Gamble's (PG) 2017 10-K filing highlights a year of strategic portfolio reshaping, marked by the divestiture of approximately 100 non-strategic brands to focus on a core portfolio of 65 brands where P&G holds leading market positions. This strategic shift, particularly the significant Beauty Brands divestiture, contributed to a substantial increase in reported net earnings. Despite flat net sales, organic sales saw a 2% increase driven by volume growth. The company demonstrated strong operational execution with improved gross margins, driven by manufacturing cost savings, and a reduction in SG&A as a percentage of net sales. P&G continued its commitment to shareholder returns, increasing its dividend for the 61st consecutive year, underscoring its long-standing dividend history. Operationally, P&G reported stable net sales, with organic sales growth reflecting a 2% increase in volume. The company's diverse segment performance showed resilience, with notable growth in Fabric & Home Care and Baby, Feminine & Family Care, while Beauty experienced a volume decline offset by favorable mix. Key financial metrics show continued focus on productivity and cash generation, with adjusted free cash flow productivity at 94%. The company maintained strong liquidity and credit ratings, positioning it well for future operations and investments despite facing global economic uncertainties and foreign exchange headwinds.
Financial Highlights
58 data points| Revenue | $65.06B |
| Cost of Revenue | $32.53B |
| Gross Profit | $32.52B |
| R&D Expenses | $1.90B |
| SG&A Expenses | $18.65B |
| Operating Income | $13.77B |
| Interest Expense | $465.00M |
| Net Income | $15.33B |
| EPS (Basic) | $5.80 |
| EPS (Diluted) | $5.59 |
| Shares Outstanding (Basic) | 2.60B |
| Shares Outstanding (Diluted) | 2.74B |
Key Highlights
- 1Completed strategic portfolio reshaping by divesting approximately 100 non-strategic brands, streamlining focus to 65 core brands.
- 2Reported flat net sales of $65.1 billion, with organic sales growing 2% driven by a 1% increase in unit volume.
- 3Net earnings attributable to Procter & Gamble increased significantly by 46% to $15.3 billion, largely due to a $5.3 billion gain on the sale of Beauty Brands.
- 4Diluted net earnings per share from continuing operations increased 6% to $3.69, while Core EPS grew 7% to $3.92.
- 5Maintained a strong dividend payout history, increasing the quarterly dividend to $0.6896 per share, marking the 61st consecutive annual increase.
- 6Adjusted free cash flow productivity remained strong at 94%.
- 7Operated with effective internal controls over financial reporting, as confirmed by independent auditors.