Financial Data and Key Metrics - Organic sales growth for fiscal year 2024 was 4%, marking the sixth consecutive year of 4% or better organic growth despite challenging market conditions [7] - Core earnings per share (EPS) for the year were 14 billion to shareholders, including 5 billion in share repurchases [9] - In Q4 2024, organic sales growth was 2%, with volume up 2% and pricing up 1% [10] - Core EPS for Q4 was 2 3 billion were achieved in fiscal 2024, enabling increased investment in innovation and marketing [9][22] - The company is focusing on supply chain optimization, environmental sustainability, digital acumen, and employee value to strengthen its competitive position [25][26][27][28] Management Commentary on Operating Environment and Future Outlook - Management acknowledged the challenging economic and geopolitical environment but expressed confidence in the company's ability to deliver balanced growth and value creation [14][17] - For fiscal 2025, the company expects organic sales growth of 3% to 5% and core EPS growth of 5% to 7%, despite headwinds from commodity costs and foreign exchange [30][31] - The company plans to return 17 billion to shareholders through dividends and share repurchases in fiscal 2025 [32] Other Important Information - The company divested its operations in Argentina, which will be largely removed from organic sales reporting in fiscal 2025 [11] - The company expects headwinds in China and the Middle East to moderate or annualize over the coming periods, with a return to growth anticipated in the second half of fiscal 2025 [12][41] Q&A Session Summary Question: Organic sales growth in Q4 and market performance [36] - Response: 85% of the business performed in line with expectations, with strong growth in North America and Europe, while headwinds in China, the Middle East, and Argentina impacted results [37][38][39] Question: Balance between pricing and volume in fiscal 2025 guidance [46] - Response: The company expects a balanced contribution from volume and price mix, with productivity improvements supporting continued investment in marketing and innovation [49][50] Question: Performance of fabric care and baby care segments [55] - Response: Fabric care is expected to re-accelerate with new innovations, while baby care shows strong performance in North America but faces challenges in Europe [57][59][60] Question: Consumer environment and channel performance [64] - Response: The company does not see significant consumer pressure in North America or Europe, with private label shares stable and consistent category growth [65][66][68] Question: Enterprise markets and assumptions for China and the Middle East [71] - Response: Enterprise markets grew 6% for the year, with Latin America up 15% The company assumes annualization of headwinds in China and the Middle East, with potential for improvement in the upper end of the guidance range [72][73] Question: Pricing elasticity and promotional environment [76] - Response: Pricing and mix have been positive contributors for 19 years, with a stable promotional environment in North America and Europe [77] Question: Commodity outlook and transportation costs [79] - Response: The commodity headwind for fiscal 2025 is primarily driven by pulp, with transportation costs remaining stable [80][81] Question: Beauty segment performance and growth potential [85] - Response: Excluding SK-II, the beauty segment grew 6% in Q4 and 7% for the year, with strong performance in hair care and personal care brands [87][88] Question: China market dynamics and portfolio performance [91] - Response: The company expects China to return to mid-single-digit growth over time, with stable run rates and strong performance in baby care and hair care [92][93][95] Question: Investment levels in trade spending and advertising [97] - Response: The company is satisfied with the payout from increased media spend, which is driving market growth and sales growth in key regions [99][100] Question: Promotions and mid-tier product innovation [104] - Response: The company remains focused on delivering superior value at every price tier, with innovation driving growth in mid-tier products like Luvs [105][107] Question: SK-II brand performance and portfolio fit [111] - Response: The company is transitioning its portfolio to better align with digital channels in China, with a focus on creating value in both brick-and-mortar and online channels [113] Question: North America consumer trends and pricing annualization [115] - Response: The company expects price mix neutralization to continue through the first half of fiscal 2025, with stable volume growth [116] Question: Olympic sponsorship and brand building [118] - Response: The company views Olympic sponsorship as a brand-building opportunity, with activation focused on regions closer to the event [119][120] Question: Long-term strategy and performance [121] - Response: The company's strategy has delivered strong results over the past six years, with significant sales, profit, and market cap growth, and remains confident in its ability to navigate future challenges [122][123]
P&G(PG) - 2024 Q4 - Earnings Call Transcript