The Procter & Gamble Company (NYSE:PG) Q2 2015 Earnings Conference Call - Final Transcript

Jan 27, 2015 • 08:30 am ET

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The Procter & Gamble Company (NYSE:PG) Q2 2015 Earnings Conference Call - Final Transcript

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Presentation
Operator
Operator

Good morning and welcome to Procter and Gamble's quarter end conference call. Today's discussion will include a number of forward-looking statements. If you will refer the P&G's most recent 10-k, 10-Q and 8-k reports, you will see a discussion of factors that could cause the company's actual results to differ materially from these projections.

As required by regulation G, P&G needs to make you aware of that during the call the company will make a number of references to non-GAAP and other financial measures. Management believes these measures provide investors valuable information on the underlying growth trends of the business. Organic were first reported results excluding the impacts of acquisitions and divestitures and foreign exchange where applicable.

Adjusted free cash flow represents operating cash flow, less capital expenditures, and excluding tax payments for the Petcare divestiture. Adjusted free cash flow productivity is the ratio of adjusted free cash flow to net earnings adjusted for impairment charges. Any measure described as core refers to the equivalent GAAP measure adjusted for certain items. Currency neutral refers to the equivalent GAAP measure excluding the impact of foreign exchange rate changes. P&Gs posted on its website www.pg.com, a full reconciliation of non-GAAP and other financial measures.

Now, I will turn the call over to P&Gs Chief Financial Officer, Jon Moeller.

Executive
Jon Moeller.

October, December was another challenging quarter from a macro standpoint. With significant foreign exchange headwinds, modest market growth and continued political and economic volatility. Against this backdrop, we were able to deliver organic top line growth and currency neutral core earnings growth that were in line with our going in expectations. Organic sales grow 2% four or five business segments, babies feminine and Family Care, grooming, healthcare and fabric and homecare reported growth versus the prior year. Topline growth trends improved as we move sequentially through the quarter, finishing with mid-single digit organic sales growth in December.

Organic volume was in line with the prior year, organic volume was up one point in developed markets. Developing market volume was down slightly as we took pricing to offset foreign exchange devaluation across several countries. Pricing and mix each added a point to sales growth. Overall, we held our group worldwide share on businesses representing about half a company's sales at about 60% of sales in the home US market. To continue to grow share in Latin America, and help share in Europe and India, Middle East and Africa. We lost some share in Asia principally in China and Japan.

As we reported at the analyst meeting in November, we're growing share on more of our category leading brands in countries where it matters most. Pampers, Tide, Gillette and Pantene in the United States for example. We have opportunities on other important businesses like family care in the US and in countries like China. On a constant currency basis, core earning for share were up 6% in line with our expectations, keeping us on track for double digit constant currency core earnings per share growth for the