Procter & Gamble

We are focused on strategies that we believe are right for the long- term health of the Company and will deliver total shareholder return in the top one-third of our peer group.

The Company’s long-term financial targets are:

• Grow organic sales 1% to 2% faster than market growth in the categories and geographies in which we compete,
• Deliver earnings per share (EPS) growth of high single digits to low double digits, and
• Generate free cash flow productivity of 90% or greater.

In order to achieve these targets, we are prioritizing the strategies and resources that will make P&G more focused and fit to win over the near- and long-terms.

Strengthening our Core Business

We are prioritizing resources on our biggest, most profitable businesses and on the innovations and developing markets that offer the greatest opportunity for growth.

• Top 40 Businesses: We define our core business as the top 40 country/category combinations, 20 in Household Care and 20 in Beauty & Grooming, which generate the highest level of annual sales and profit.
• Top 20 Innovations: Our 20 most important innovations offer significantly higher growth potential than the balance of the innovation portfolio. Therefore, the growth of the Company depends substantially on the success of our biggest innovations.
• Top 10 Developing Markets: Maintaining the strong growth momentum we have established in developing markets is critical to delivering our near- and long-term growth objectives. We are focusing resources first on the markets that offer the greatest growth opportunity. We will assess the potential for further portfolio expansions beyond the top 10 developing markets based on the top- and bottom-line growth progress of the core business.

Improving Productivity and Creating a Cost Savings Culture

We have taken significant steps to accelerate cost savings and create a more cost focused culture within the Company, including a five-year, $10 billion cost savings initiative, which was announced in February 2012. The cost savings program is based on:

• The reduction of approximately 5,700 non-manufacturing overhead positions by the end of fiscal year 2013.
• Approximately $1.2 billion in annual cost of goods savings across raw materials, manufacturing and transportation and warehousing expenses.
• Generating efficiencies to enable us to grow marketing costs at a slightly slower rate than sales growth while still increasing consumer reach and effectiveness, saving approximately $1 billion over the five year period.

Strengthening our Upstream Innovation Program and Pipeline

Innovation has always been — and continues to be — P&G’s lifeblood. To consistently win with consumers around the world across price tiers and preferences, and to consistently win versus our best competitors, each P&G product category must have a full portfolio of innovation. The innovation portfolios must include a mix of commercial programs, incremental product improvements and discontinuous innovations. We have made the creation of more discontinuous innovation a top priority, dedicating R&D resources and funding to develop new innovations aimed at changing the game in existing product categories and creating new ones.