Summary
Procter & Gamble's (PG) 2019 10-K filing highlights a challenging year primarily impacted by a significant $8.3 billion goodwill and intangible asset impairment charge related to its Shave Care business. This charge led to a substantial decrease in reported net earnings and diluted EPS. Despite this, the company demonstrated resilience with a 5% organic sales increase driven by a 2% rise in organic volume across its segments, with notable strength in Beauty and Fabric & Home Care. Operationally, P&G continued its focus on productivity improvements, evident in its strong Adjusted Free Cash Flow (AFF) of $12.1 billion and robust AFF productivity of 105%. The company also returned significant capital to shareholders through dividends, increasing the payout by 4% for the 63rd consecutive year, and share repurchases. Strategic acquisitions, like the Merck KGaA OTC healthcare business, were completed, while organizational changes were implemented to drive future growth. Investors should note the company's ongoing efforts to streamline its portfolio and focus on core, high-performing brands.
Financial Highlights
58 data points| Revenue | $67.68B |
| Cost of Revenue | $34.77B |
| Gross Profit | $32.92B |
| R&D Expenses | $1.90B |
| SG&A Expenses | $19.08B |
| Operating Income | $5.49B |
| Interest Expense | $509.00M |
| Net Income | $3.90B |
| EPS (Basic) | $1.45 |
| EPS (Diluted) | $1.43 |
| Shares Outstanding (Basic) | 2.50B |
| Shares Outstanding (Diluted) | 2.54B |
Key Highlights
- 1Significant $8.3 billion goodwill and intangible asset impairment charge in the Shave Care segment negatively impacted reported net earnings and EPS.
- 2Organic sales grew 5% driven by a 2% increase in organic volume, with Beauty and Fabric & Home Care segments showing mid-to-high single-digit organic sales growth.
- 3Adjusted Free Cash Flow (AFF) was $12.1 billion, with AFF productivity at a strong 105%, indicating effective cash generation.
- 4The company continued its commitment to shareholder returns by increasing its dividend by 4% for the 63rd consecutive year and repurchasing $5 billion in shares.
- 5Acquired the Merck KGaA OTC healthcare business for $3.7 billion to strengthen its Health Care segment.
- 6Implemented organizational design changes effective July 1, 2019, reorganizing into six Sector Business Units (SBUs) to drive future growth.
- 7Walmart remains the largest customer, accounting for approximately 15% of total sales, with no other single customer exceeding 10%.