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Conference Call
-EPS grew 37%, Sales 10% to $21.3 billion, organic sales 5%, organic volume 4%. Pricing added 3%. FX added 6%
-Higher commodity and energy costs impacted the quarter by over 300bps. Gross margin decreased 160bps
-Beauty grew 11% with organic up 4%. Baby care up 10%
-Some brands mentioned: Olay Skin Care, Pantene, Head & Shoulders, Gillette, Nice ‘N Easy, Cover Girl, Crest, Oral-B, Pringles, Folgers, Duracell, Pampers, Luvs, Charmin
-Coffee sales decline mid-single digits
-Global market growth at 3-4% with 1-2% lower on a volume basis
-They see evidence of trade-down. Tide went from high single digits to mid-single digits, while Gain continued to grow high single digits
-Selling Folgers to JMP Smucker Company
-FY2009 guidance of organic sales growth of 4-6% with price contributing 3%, FX 2-3%, so end sales growth of 5-7%
-Organic volume will grow 2-3% which is below 4-5% achieved in the first half of the year
-Distributor network in China reaches 2300 cities and 40% of towns and villages. 60% of the country’s population. In India they have a distributor network of 4.5 million stores. In Russia they reach 80% of the population
-In China they are number 1 in 11 of the 12 categories they compete
-30% of revenue is from developing markets. Leadership shares in China, Russia, Poland, Turkey, and Saudi Arabia

Take-away
-Unlike so may other companies, P&G has built brand equity which lets them have pricing power