THE PROCTER & GAMBLE COMPANY
NEWS RELEASE One P&G Plaza
Cincinnati, OH 45202
FOR IMMEDIATE RELEASE
PROCTER & GAMBLE EXPECTS STRONGER VOLUME GROWTH
FOR SECOND QUARTER AND FISCAL YEAR 2004/05
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CINCINNATI, Dec. 8, 2004 - The Procter & Gamble Company (NYSE: PG)
stated it expects second quarter shipment volume to increase six to seven
percent, toward the top end of the previous guidance range. Sales for the
quarter are expected to grow six to eight percent, including a one to two
percent benefit from foreign exchange. Mix and pricing are expected to decrease
sales by one percent. The strong top-line momentum continues to be led by rapid
growth in developing markets as well as broad-based, innovation-driven growth
across global business units.
For the fiscal year, the company now expects shipment volume to grow
six to eight percent versus the prior year, slightly above previous
expectations, behind developing market momentum and strong innovations planned
for the second half of the fiscal year. Total sales are estimated to increase
six to nine percent, an increase versus prior guidance which was five to six
percent. The higher sales outlook is due to the increased volume projection and
an additional one to two percent top-line benefit from foreign exchange. Prior
guidance assumed foreign exchange would be essentially neutral for the fiscal
year.
P&G confirmed it remains comfortable with the current range of
analysts' earnings estimates for the October to December quarter. The analysts'
estimates for the second quarter are for earnings of $0.71 to $0.72 per share,
an increase of 9 percent to 11 percent. This is versus a very strong base period
with core earnings growth of 15 percent driven mainly by Health Care behind the
early and severe cough/cold season.
For fiscal year earnings per share, P&G stated it is comfortable with
the upper-half of analysts' range of estimates, which equates to $2.59 to $2.61
per share, an increase of approximately 12 percent versus the prior year. The
company added that operating profit margin is still expected to improve modestly
for both the second quarter and fiscal year despite continuing pressure on gross
margins from rising commodity costs.
All statements, other than statements of historical fact included in
this release, are forward-looking statements, as that term is defined in the
Private Securities Litigation Reform Act of 1995. In addition to the risks and
uncertainties noted in this release, there are certain factors that could cause
actual results to differ materially from those anticipated by some of the
statements made. These include: (1) the ability to achieve business plans,
including with respect to lower income consumers and growing existing sales and
volume profitably despite high levels of competitive activity, especially with
respect to the product categories and geographical markets (including developing
markets) in which the company has chosen to focus; (2) successfully executing,
managing and integrating key acquisitions (including the Domination and Profit
Transfer Agreement with Wella); (3) the ability to manage and maintain key
customer relationships; (4) the ability to maintain key manufacturing and supply
sources (including sole supplier and plant manufacturing sources); (5) the
ability to successfully manage regulatory, tax and legal matters (including
product liability matters), and to resolve pending matters within current
estimates; (6) the ability to successfully implement, achieve and sustain cost
improvement plans in manufacturing and overhead areas, including the success of
the company's outsourcing projects; (7) the ability to successfully manage
currency (including currency issues in volatile countries), interest rate and
certain commodity cost exposures; (8) the ability to manage the continued global
political and/or economic uncertainty and disruptions, especially in the
company's significant geographical markets, as well as any political and/or
economic uncertainty and disruptions due to terrorist activities; (9) the
ability to successfully manage increases in the prices of raw materials used to
make the company's products; (10) the ability to stay close to consumers in an
era of increased media fragmentation; and (11) the ability to stay on the
leading edge of innovation. 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 8-K reports.
NON-GAAP MEASURES
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In accordance with the SEC's Regulation G, this provides the definition
of the non-GAAP measure used in this release and the reconciliation to
the most closely related GAAP measure. The reference to base period "core" net
earnings per share growth excludes restructuring charges from base period
results. On a reported basis, October to December 2003 net earnings per share
growth was 23% versus the prior year reported results.
ABOUT P&G
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Two billion times a day, P&G brands touch the lives of people around
the world. The company has one of the strongest portfolios of trusted, quality,
leadership brands, including Pampers(R), Tide(R), Ariel(R), Always(R),
Whisper(R), Pantene(R), Bounty(R), Pringles(R), Folgers(R), Charmin(R),
Downy(R), Lenor(R), Iams(R), Crest(R), Actonel(R), Olay(R), Clairol Nice `n
Easy(R), Head & Shoulders(R) and Wella(R). The P&G community consists of about
110,000 employees working in almost 80 countries worldwide. Please visit
http://www.pg.com for the latest news and in-depth information about P&G and its
brands.
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P&G MEDIA CONTACT:
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US: 1-800-866-PROCTER or 1-866-776-2837
International: +1-513-945-9087
P&G INVESTOR RELATIONS CONTACT:
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Thomas Tippl - +1-513-983-2414