Form 8-K PROCTER & GAMBLE Co For: Jan 26

On January 26, 2016, The Procter & Gamble Company (the "Company") issued a press release announcing its second quarter results and hosted a conference call related to those results. The Company is furnishing on Form 8-K a series of slides referenced in the conference call, which are also posted on the Company's website.

The Company is furnishing this 8-K pursuant to Item 7.01, "Regulaton FD Disclosure."

 Procter & GambleEarnings Release:Q2 FY 2016 Results  January 26, 2016 

 Business ResultsQ2 FY 2016 

 Oct – Dec 15 (Q2 FY 16) ResultsOrganic Sales Growth*  * Restated for Batteries, Beauty category exits & Venezuela deconsolidation 

 Oct – Dec 15 (Q2 FY 16) ResultsCore EPS Growth*  * Restated for Batteries & Beauty category exits  Core EPS includes 350 basis points of operating margin improvement, including 270 basis points of productivity savings. 

 Oct – Dec 15 (Q2 FY 16) ResultsCurrency Neutral Core EPS Growth*  * Restated for Batteries & Beauty category exits 

 Business SegmentsQ2 FY 2016 

 

 Oct – Dec 15 (Q2 FY 16) ResultsBeauty Segment   1%  -3%  -4%  +4% Pricing, Flat MixOrganic Sales: h Low single digits in Developed markets, Flat in Developing marketsGlobal value share declined 1.1 points versus year agoNet Earnings: Productivity improvements and pricing benefits were more than offset by volume decline and currency headwinds. 

 

 Oct – Dec 15 (Q2 FY 16) ResultsGrooming Segment   3%  -1%  -19%  +6% Pricing, -2% MixOrganic Sales: h Low single digits in Developed markets, h Mid-single digits in Developing marketsGlobal value share declined 1.4 points versus year agoNet Earnings: Productivity improvements and pricing were more than offset by volume decline, mix hurts and currency headwinds.  -5% 

 Category HighlightsQ2 FY 2016 

 Oct – Dec 15 (Q2 FY 16) ResultsBeauty Highlights  Hair Care organic sales were flat versus year ago. Developing markets were up versus year ago, including double-digit organic sales growth in Latin America. Developed markets declined as growth in Head & Shoulders was more than offset by challenges on Herbal Essences and Vidal Sassoon. Skin & Personal Care organic sales grew low single digits versus year ago, as double-digit growth on SKII and strong Old Spice sales in the U.S. were partially offset by declining Olay sales.  By Category  Organic Sales Growth IYA        Global  Developed  Developing  Hair Care  ~=  -  +  Skin & Personal Care  +  +  ~=   + represents growth above 1%, ~= represents growth of 1% to decline of 1%; - represents decline greater than1%. 

 Oct – Dec 15 (Q2 FY 16) ResultsGrooming Highlights  Shave Care organic sales were up low single digits versus year ago, as price increases and growth on Fusion FlexBall and Venus Swirl were partially offset by increased competitive activity and category softness in the U.S.Appliances organic sales grew low single digits behind innovation expansion and strong in-store execution.  By Category  Organic Sales Growth IYA        Global  Developed  Developing  Grooming  +  +  +   + represents growth above 1%, ~= represents growth of 1% to decline of 1%; - represents decline greater than1%. 

 Oct – Dec 15 (Q2 FY 16) ResultsHealth Care Highlights  Oral Care organic sales grew low single digits. Developed market organic sales increased mid-single digits behind strong growth on power toothbrushes and in the premium tier Pro-Health and 3D White franchises. Developing markets were flat as growth on power toothbrushes and price increases were offset by challenges in China.Personal Health Care organic sales increased mid-single digits driven by pricing and strong growth in developing markets.  By Category  Orga

 Oct – Dec 15 (Q2 FY 16) ResultsFabric & Home Care Highlights  Fabric Care organic sales were up low single digits versus year ago. Developed markets increased mid-single digits driven by strong innovation in the U.S, where Fabric Care value share grew half-a-point in the December quarter. Developing markets declined as price increases and new compact liquid detergent launches were more than offset by customer inventory adjustments and declines due to de-prioritizing less profitable brands.Home Care organic sales grew mid-single digits versus year ago driven by solid growth in the U.S. behind strong innovation in the dish care business and benefits from recent pricing taken for devaluation.   + represents growth above 1%, ~= represents growth of 1% to decline of 1%; - represents decline greater than1%.  By Category  Organic Sales Growth IYA        Global  Developed  Developing  Fabric Care  +  +  -  Home Care  +  +  + 

 Oct – Dec 15 (Q2 FY 16) ResultsBaby, Feminine & Family Care Highlights  Baby Care organic sales declined low single digits versus year ago as strong growth on Pampers in the U.S was more than offset by softness in international markets. In the U.S., Pampers value share was up more than one point versus year ago behind premium innovation.Feminine Care organic sales grew mid-single digits versus year ago behind strong share growth in the U.S. and pricing in developing markets.Family Care organic sales were flat as growth in the U.S. was offset by decline in Mexico as we shift our focus from low-tier to premium-tier products.  By Category  Organic Sales Growth IYA        Global  Developed  Developing  Baby Care  -  ~=  -  Feminine Care  +  +  +  Family Care  ~=  +  -   + represents growth above 1%, ~= represents growth of 1% to decline of 1%; - represents decline greater than1%. 

 FY 2016 Guidance 

 FY 2016 Guidance*Sales    FY’16  Organic Sales Growth  In-line to Up Low Single Digits  Currency  -7%  Venezuela & Minor brand divestitures  -2% to -3%  All-in Sales Growth  Down High Single Digits  * Guidance assumes that Batteries & transitioning Beauty businesses are accounted for as discontinued operations  Maintaining organic sales growth guidance of in-line to up low single digits versus fiscal 2015. Expect all-in sales growth to be down high single digits versus fiscal 2015. 

 FY 2016 Guidance*Earnings Per Share    FY’16  Constant Currency Core EPS Growth  Up Mid to High Single Digits  Core EPS Growth  -3% to -8%  All-in EPS Growth  +38% to +46%  * Guidance assumes that Batteries & transitioning Beauty businesses are accounted for as discontinued operations  Maintaining constant currency core EPS guidance of mid to high singles, with current outlook at the low end of this range.Reducing core EPS guidance to a range of -3% to -8% versus fiscal 2015 due to a $0.26 per share greater FX impact than expected at the beginning of the fiscal year. 

 FY 2016 GuidanceCash Generation & Usage  Adjusted Free Cash Flow Productivity: 100%Capital Spending, % Sales: 5% to 6%Dividends: $7B+Share Retirement/Repurchases*: $8B to $9B  * Includes shares retired at the close of the Duracell transaction.  Given very strong progress to date, we are increasing our free cash flow productivity target from 90% to 100% of earnings. 

 FY 2016 GuidancePotential Headwinds Not Included in Guidance  Further foreign currency weaknessChange in market growth rates Further unrest in the Middle East, Russia & the UkraineFurther deterioration in markets like Argentina and Brazil – with softened market conditions 

 FY 2016 GuidancePotential Tailwinds Not Included in Guidance  Strengthening of foreign currencies Expansion of marketsU.S. economic growth accelerates 

 Forward Looking Statements  Certain statements in this release or presentation, other than purely historical information, including estimates, projections, statements relating to our business plans, objectives, and expected operating results, and the assumptions upon which those statements are based, are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements generally are identified by the words “believe,” “project,” “expect,” “anticipate,” “estimate,” “intend,” “strategy,” “future,” “opportunity,” “plan,” “may,” “should,” “will,” “would,” “will be,” “will continue,” “will likely result,” and similar expressions. Forward-looking statements are based on current expectations and assumptions, which are subject to risks and uncertainties that may cause results to differ materially from those expressed or implied in the forward-looking statements. We undertake no obligation to update or revise publicly any forward-looking statements, whether because of new information, future events or otherwise. Risks and uncertainties to which our forward-looking statements are subject include, without limitation: (1) the ability to successfully manage global financial risks, including foreign currency fluctuations, currency exchange or pricing controls and localized volatility; (2) the ability to successfully manage local, regional or global economic volatility, including disruptions in credit markets, reduced market growth rates or changes affecting our credit rating, and generate sufficient income and cash flow to allow the Company to effect the expected share repurchases and dividend payments; (3) the ability to maintain key manufacturing and supply arrangements (including sole supplier and sole manufacturing plant arrangements) and manage disruption of business due to factors outside of our control, such as natural disasters and acts of war or terrorism; (4) the ability to successfully manage cost fluctuations and pressures, including commodity prices, raw materials, labor costs, energy costs and pension and health care costs, and achieve cost savings described in our announced productivity plan;  (5) the ability to stay on the leading edge of innovation, obtain necessary intellectual property protections and successfully respond to technological advances attained by, and patents granted to, competitors; (6) the ability to compete with our local and global competitors in new and existing sales channels by successfully responding to competitive factors, including prices, promotional incentives and trade terms for products; (7) the ability to manage and maintain key customer relationships; (8) the ability to protect our reputation and brand equity by successfully managing real or perceived issues, including concerns about safety, quality, efficacy or similar matters that may arise; (9) the ability to successfully manage the financial, legal, reputational and operational risk associated with third party relationships, such as our suppliers, contractors and external business partners; (10) the ability to rely on and maintain key information technology systems and networks (including Company and third-party systems and networks) and maintain the security and functionality of such systems and networks and the data contained therein; (11) the ability to successfully manage regulatory and legal requirements and matters (including, without limitation, those laws and regulations involving product liability, intellectual property, antitrust, privacy, accounting standards and environmental) and to resolve pending matters within current estimates; (12) the ability to manage changes in applicable tax laws and regulations; (13) the ability to successfully manage our portfolio optimization strategy, as well as ongoing acquisition, divestiture and joint venture activities, to achieve the Company’s overall business strategy, without impacting the delivery of base business objectives; and (14) the ability to successfully achieve productivity improvements and manage ongoing organizational changes, while successfully identifying, developing and retaining particularly key employees, especially in key growth markets where the availability of skilled or experienced employees may be limited.  For additional information concerning factors that could cause actual results to materially differ from those projected herein, please refer to our most recent 10-K, 10-Q and 8K reports.