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					Designed to grow
P&G in Western Europe 2008

Three billion times a day, P&G brands touch the lives of people around the world.

Designed to grow year after year
P&G has designed a diversified business portfolio to grow consistently and reliably. We’ve designed the core strengths we need to win in our industry. We’ve designed strategic, operational and financial processes that ensure we have the discipline to deliver. And we’ve designed a management team and organisation to lead. With clear choices, smart and sufficient investments and an unwavering focus on the long-term health of our business, we have designed P&G to meet or exceed its growth targets reliably year after year.

Building trusted brands
P&G has 23 Billion-Dollar brands all across the world. In Western Europe – home to 18 of these – Always, Ariel, Actonel, Braun, Crest, Duracell, Fairy, Gillette, Head & Shoulders, Iams, Lenor, Mach3, Olay, Oral-B, Pampers, Pantene, Pringles and Wella are just some of the brands that delight our consumers. Our brands are inspired by our passion for understanding the needs, desires and aspirations of consumers and by our commitment to R&D. Through collaborative – and often groundbreaking – research, we build brands that excite, delight and deliver. We’re active in every market throughout Western Europe. This gives us some very special opportunities – it means we can develop deep connections with diverse consumers and build highly collaborative relationships with our retail partners. By connecting the people and ideas across our businesses, innovation comes naturally. We connect with 120,000 shoppers each year in more than 200 retailers in 15 countries across Western Europe. Worldwide, we connect with over four million consumers each year in nearly 60 countries.

Financial results
Key financial figures for the fiscal year that ended on 30 June 2007 (exchange rate: €1 = $1.30094) were as follows: 2007 net sales Net Sales Net Earnings $76.5 billion (€58.8 billion) $10.3 billion (€7.9 billion)

ET SALES

al business segments)

Western Europe accounts for about a quarter of our global net sales. 2007 net sales by Global Business Unit* Beauty and Health: $31.9 billion (€24.6 billion)
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12% 41% 47%

Household Care: $36.2 billion (€27.9 billion)
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hold Care GBU

Gillette: and Health $9.3 billion (€7.1billion)

*Partially offset by net sales in corporate to eliminate the sales of unconsolidated entities included in business unit results Full details of our financial statement can be found in our Annual Report at www.pg.com

We also interact with and support our consumers at every opportunity. For example, our Pampers website www.pampers.com gives parents access to helpful information about babies, parenting and pregnancy. And people appreciate it – it’s the most frequently visited branded site for parenting content throughout most of Europe. More than 24 million consumers visit the site every year.

P&G brands are platforms for innovation.

Driving innovation
Innovation is our lifeblood at P&G. Because of this, we spend nearly $2.1 billion (€1.6 billion) a year on research and development activities. This represents 2.7 per cent of our sales. Our investment means that we have a competitive advantage in at least a dozen core technologies. Our 8,000 scientists – almost 3,000 of whom work in Western Europe – have deep expertise in many different technologies. They lead the way in everything from enzymes to fragrances. We multiply the power of our internal innovation capability by connecting it to our vast external network of scientists from some of the best institutes and companies around the world. We find that by connecting people, ideas and technologies, we’re able to create a virtually unparalleled innovation pipeline. We see our approach to innovation as a partnership and call it ‘Connect & Develop’. We build our brands not just on the strength of our science alone. They are successful because we’ve developed them with deep consumer understanding in mind. We listen, understand and anticipate and never lose touch with the needs or aspirations of the person we call our boss – the consumer. By connecting what consumers want with what technology can deliver, we come up with some of the best product innovation in the world.

Brand innovations
Wella Inspire by Koleston Perfect is the first hair colour product that allows for true personalisation. It gives salon professionals the chance to create an unlimited range of hair colours and offers something that truly reflects the personality of their clients. It helps them showcase their expertise and involve clients in the creative process. Miracle Touch Liquid Illusion Foundation by Max Factor is transformed on contact with the skin. It changes from a solid into a lightweight and supple liquid so that it can be applied smoothly across even – and uneven – skin texture areas. The result is the ultimate finish – a smooth and uniform texture that gives consistent coverage. And all in a single touch. Febreze Plug & Refresh is the first dual chamber plug-in air freshener that eliminates odours and automatically switches every 45 minutes between two different – but complementary – fragrances. The scentswitching technology means your nose doesn’t get used to the same scent, keeping a consistent scent intensity throughout the whole period of use. This combination of odour elimination and long-lasting scent results in true freshness day after day, week after week. The launch of Vicks Cold and Flu Care Daymed shows how the time to market can be transformed by our approach to innovation. Through working with Wrafton (Perrigo), we re-launched Vicks in the UK market with a new line-up that included three products providing daytime relief for cold and flu symptoms. Partnering with Wrafton meant we could take advantage of existing product licences, reducing our time to market by a factor of three.

Communicating science and safety
We actively promote the responsible production and use of chemical products, and better information sharing with the public. We launched and then expanded a P&G internet site www.scienceinthebox.com to help inform consumers and stakeholders about the science and safety behind our European cleaning products. Very high public interest in this site led to a similar site covering the science and safety of skin and hair care products www.pgbeautyscience.com and another site covering P&G’s approaches to product safety and views on a variety of chemical management and science policy issues www.perspectives.com

P&G’s unique organisational structure offers the global scale benefits of a multinational company and the local focus to be relevant for consumers and customers in each country where our brands are sold.

Combining local understanding and global scale
P&G is designed for sustainable growth. This year is our 170th anniversary – and in all that time we’ve been working hard to delight consumers. It began back in 1837 when William Procter, a candle maker from England, and James Gamble, a soap maker from Ireland, joined forces. We set foot in Europe in 1930, with our first subsidiary in the UK. We now have on the ground operations in almost every country and market over 100 brands. Western Europe represents about a quarter of our total business. These days, our structure combines global business units, local market organisations and global shared business services, all supported by corporate teams.

European headquarters l Geneva, Switzerland
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Principal national office or representative office

Research centres P&G has nine research centres in Western Europe and 27 worldwide. Each centre focuses on a specific area of the business.
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Belgium, Strombeek-Bever − Brussels Innovation Centre: Fabric Care, Home Care, Snacks UK, Reading − Gillette Advanced Technical Centre: Blades and Razors UK, Egham − Rusham Park Technical Centre: Health Care, Beauty Care UK, Newcastle − Newcastle Technical Centre: Fabric Care, Home Care Germany, Schwalbach – German Innovation Centre: Baby Care, Feminine Care, Family Care Germany, Kronberg – German Innovation Centre: Braun, Electric Appliances Germany, Darmstadt – German Innovation Centre: Wella Hair Care Italy, Pomezia and Pescara − Italian Innovation Centres: Fabric Care, Home Care, Feminine Care, Adult Incontinence Switzerland, Freiburg − Wella Technical Centre: Hair Care

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Our people are very important to us. And so are our communities.

Beyond our brands
It’s only by employing a diverse and completely inclusive workforce that we can meet the needs of all our consumers. Globally, we employ more than 138,000 people – about a quarter of these work in Western Europe. Our headquarters in Geneva is a great example of our diverse workforce which includes 68 different nationalities. A career with P&G is very rewarding and as you’d expect, more than a little challenging. But we’re passionate about creating a good work-life balance (we offer various flexible working arrangements) and about supporting personal development so that our people can reach their full potential. Because of this, P&G is recognised as an employer of choice in many countries in Western Europe. As well as caring about our own people, we also work hard for the communities in which we do business. P&G people – both past and present – have long worked as volunteers on projects within their own communities and beyond. This year, we contributed more than $125 million (€96 million) in cash and product to communities around the world. And at the same time we helped 50 million children in need.
Doctor Dream and Child – Theodora Foundation. Photographer Magali Koenig

We help children to Live, Learn and Thrive, wherever they are in the world.
Live, Learn and ThriveTM is our global corporate cause that helps focus our energy on helping children in need, wherever they may be. In Western Europe, we bring this cause to life in all countries where we operate.

Some projects in Western Europe
Pampers joins forces with UNICEF Every year, maternal and neonatal tetanus kills more than 30,000 mothers and 140,000 babies around the world. Most of those affected live in remote areas in the poorest countries. By purchasing Pampers nappies, parents in Western Europe were able to support a campaign aiming to save the lives of thousands of mothers and their unborn children. This campaign has meant that P&G, through its Pampers brand, has been able to help UNICEF provide up to 30 million vaccinations for those at risk of the disease. Community Relations P&G employees are actively involved in community projects wherever we are based. In Switzerland, for example, employees of 40 different nationalities created an international cookery book sharing their favourite recipes. Proceeds raised from the cookery book were donated to the Theodora Foundation, an organisation that brings fun and laughter to children in hospital. In the UK, we are working with educational charity Young Enterprise – an organisation that runs programmes for more than 325,000 young people each year to introduce them to the world of work, citizenship, business and enterprise. SOS Children’s Villages P&G is working with Aldeas Infantiles SOS, the Spanish partner of the global charity SOS Children’s Villages. The charity offers accommodation, education and emotional support to vulnerable children. Our people provide teaching and training resources and share skills with charity staff, as well as helping to raise awareness and funding. In Germany, via SOS-Kinderdörfer, P&G employees also support the Children’s Village of Monrovia in Africa for orphaned and abandoned children. Children’s Safe Drinking Water Our Children’s Safe Drinking Water programme involves bringing P&G’s PuR water purification technology to the developing world on a not-for-profit basis. PuR offers a quick, easy and affordable way to clean contaminated water. The programme has already delivered more than 700 million litres of clean water, and we are committed to deliver another two billion litres of clean water by 2012, preventing 80 million days of disease and saving 10,000 lives. Our Children’s Safe Drinking Water programme was recognised by the Environmental Protection Agency’s 2007 Children’s Environmental Health Excellence Award and the United Nations Association USA’s 2007 Global Leadership Award.

Ensuring a better quality of life for everyone, now and for generations to come.

Designed to grow... sustainably
Over the past decade, P&G has made good progress. We’re helping to save energy and reduce greenhouse emissions through products like Ariel Cool Clean that reduce energy use by washing at lower temperatures. We’re helping children in need through our Live, Learn and Thrive corporate cause. And we’re providing clean, safe drinking water in developing countries and in times of natural disaster. As we look towards the next 170 years and more, we are designing Sustainability even more deeply into the way P&G does business: through our Purpose, products, operations and relationships. We are embedding Sustainability in our Company Purpose, which makes it explicit that we are focused on improving consumers’ lives “now and for generations to come”. In a Purposedriven company like P&G, this addition is enormously important. It will provide inspiration and guide choices and actions throughout our Company. We are designing Sustainability even more deeply into our products, packaging and operations. Our focus is on providing products and services that don’t require consumers to make choices between Sustainability and their need for performance and value. We are leveraging our expertise and relationships to create new opportunities and new approaches. As a member of the Dow Jones Sustainability Index since its inception and as a partner with the world’s leading retailers, NGOs and others, P&G can help bring tremendous resources to some of the toughest sustainability challenges.

Sustainability in action
Cool Clean detergents save energy P&G has launched Dash Cool Clean in Italy, Ariel Actif à Froid in France and Ariel Cool Clean in the UK, along with campaigns to help consumers change their energy consumption habits. The Cool Clean detergents encourage consumers to wash at lower temperatures in order to save energy, which still gives them brilliantly clean clothes. By washing at a lower temperature, consumers can save 41% of the energy used in the wash cycle. Sustainable Operations A P&G global engineering project is focusing on designing and constructing sustainable manufacturing and distribution centres and transporting finished product in a sustainable way. A critical pilot in 2007 was the development of the “Big Box” Distribution Centre in Amiens, France. This is the biggest conventional distribution centre in Western Europe, about 600,000 square feet, able to store 70,000 pallets of P&G products. The Amiens distribution centre incorporates the best thinking on sustainable design, from within P&G and outside. Examples of sustainable solutions adopted at the distribution centre are: – solar panels for hot water supply and photovoltaic cells for energy production – windmill turbine to produce up to 10% of the energy needed on site – natural light via translucent roof panels (energy savings up to 30%) – energy efficient fluorescent lighting, daylight dimming and motion detection (energy savings up to 70%) – forklift trucks with AC regenerative motors (the battery is recharged when the forklift’s mast comes down), yielding energy savings up to 30%) – recyclable wall and roof cladding panels – carpet with 80% recyclable yarn – wood from sustainable tree plantations – local vegetation

For more information about P&G’s approach to sustainable development please visit our website at www.pg.com/sr

To learn more about P&G: Visit us online at: www.eu.pg.com


				
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