Good morning and welcome to Procter & Gamble’s quarter-end conference call. Today’s event is being recorded for replay. This discussion will include a number of forward-looking statements. If you refer to 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, Procter & Gamble needs to make you aware that during the discussion, the company will make a number of references to non-GAAP and other financial measures. Procter & Gamble believes these measures provide investors with useful perspective on underlying business trends and has posted on its Investor Relations website a full reconciliation of non-GAAP financial measures. Now I will turn the call over to P&G’s Chief Financial Officer, Andre Schulten.

Good morning everyone. Joining me on the call today are Jon Moeller, Chairman of the Board, President and Chief Executive Officer, and John Chevalier, Senior Vice President, Investor Relations. I will start with an overview of results for fiscal year ’24 and for the fourth quarter. Jon will add perspective on our strategic focus areas and capabilities and will close with guidance for fiscal ’25 and then take your questions. Fiscal ’24 was another very strong year. Execution of our integrated strategies enabled the company to meet or exceed going-in guidance ranges for organic sales growth, core EPS growth, cash productivity and cash return to shareholders, all this despite significant market-level headwinds that were largely unknown when we gave our initial outlook for the year. Organic sales growth for the fiscal year was 4%, our sixth consecutive year of 4% or better organic growth against a strong 7% comp in the prior year and in more challenging market conditions. Growth was broad-based across business units with eight of ten product categories growing organic sales. Home care, hair care and grooming were up high single digits, oral care and feminine care up mid singles. Fabric care, family care, and personal healthcare grew low single digits. Skin and personal care and baby care were down low singles. Focus markets grew 4% for the year with North America up 5% and Europe focus markets up 8%. Greater China organic sales were down 9% versus the prior year, driven by soft market conditions and brand-specific headwinds on SK-II. Enterprise markets were up 6%, led by Latin America with 15% organic sales growth. E-commerce sales increased 9%, now representing 18% of the total company. Our strategy focused on driving market growth continues to drive share growth for P&G. All channel market value sales in the U.S. categories in which we compete grew around 5% in fiscal ’24. P&G consumption grew ahead of our fair share of category growth, driving modest value and volume share growth for the year. We grew global aggregate value share. Thirty of fifty category country combinations held or grew share for the year. Importantly, this share growth is broad-based. Six of ten product categories grew share globally over the past year. Core earnings per share were $6.59, up 12% for the year. Core gross margin improved 360 basis points and core operating margin increased 170 basis points. Over $2.3 billion of productivity improvements were enabled by a significant increase in investment in superior products, packages and brand communication to drive market growth. On a currency-neutral basis, core EPS was up 16% and core operating margin increased 250 basis points. Adjusted free cash flow productivity was 105%. We increased our dividend by 7% and returned over $14 billion of value to shareholders, $9.3 billion in dividends, and $5 billion in share repurchase. Moving onto fourth quarter results, organic sales rounded down to 2%, volume was up 2%, solid sequential progress. Pricing was up 1% and mix was in line with the prior year. Growth continues to be broad-based across categories and regions. Nine of ten product categories grew or held organic sales in the quarter. Home care, hair care, grooming and oral care were each up high single digits, feminine care up low singles, skin and personal care, fabric care, personal health care and family care were each in line with the prior year, and baby care was down mid singles. Five of seven regions grew organic sales with focus markets up 2% and enterprise markets up 2% for the quarter. Organic sales in North America grew 4% with four points of volume growth and price mix, in line with the prior year. European focus markets organic sales were up 2% against a strong 12% comp in the base period. Volume was up 3%. Price mix was down a point as the region has now fully annualized prior year inflation-driven pricing. Latin America organic sales were up 8%, including high singles growth in Brazil. Of note, Argentina’s overall contribution to organic sales for the region and the company were lower than the last two quarters due to the divestiture of a portion of the business in March and a notable decline in shipment volume for the remaining categories. As was announced earlier this month, we have divested the remaining portions of our operations in Argentina. As a result, Argentina will be largely removed from our organic sales reporting in fiscal year ’25. Select P&G brands will still be available in the market through a distribution and licensing agreement with the new owner of the operations. Greater China organic sales declined 8%. Underlying market conditions have remained weak and the 6/18 key consumption period was down sharply versus the prior year, just as we saw in the 11/11 Chinese New Year and Valentine’s Day shopping periods. Also, brand-specific headwinds have continued on SK-II due to its Japanese heritage. We expect general market trends and the dynamics related to SK-II to improve over time, though it will likely be another quarter or two until we return to growth. Volume trends in some Europe enterprise and Asia Pacific, Middle East, Africa countries such as Egypt, Saudi Arabia, Turkey, Indonesia, Malaysia and Russia have remained soft. We expect these headwinds to moderate or annualize over the coming periods. Global aggregate market share was down 30 basis points as we are now annualizing very strong growth in European-focused markets. Twenty-five of our top fifty category country combinations held or grew share for the quarter. On the bottom line, core earnings per share were $1.40, up 2% versus the prior year. On a currency-neutral basis, core EPS increased 6%. Core gross margin increased 140 basis points and core operating margin decreased 100 basis points. Strong productivity improvements of 250 basis points, funding a meaningful increase in marketing investment, currency-neutral core operating margin decreased 60 basis points. Adjusted free cash flow productivity was 148%. We returned nearly $4 billion of cash to shareholders this quarter, over $2.4 billion in dividends, and $1.5 billion in share repurchases. In summary, we met or exceeded each of our going-in target ranges for the year: organic sales growth, core EPS growth, free cash productivity and cash returns to shareholders, strong performance again this year in a challenging economic and geopolitical environment. With that, I’ll pass it over to Jon.

Thanks Andre. I’ll start with a few thoughts on results before discussing the strategy. Our team continues to execute the strategy with excellence, enabling strong results over each of the past six years pre-COVID, during COVID, through a historic inflationary and pricing cycle, and through geopolitical tensions. Organic sales growth of plus-5, plus-6, plus-6, plus-7, plus-7, and plus-4 over the last fiscal years. Strong earnings growth and growth in operating margin expansion. Very strong cash generation and over $96 billion of cash returned to shareholders over those six years. For fiscal ’24, going-in organic sales guidance was 4% to 5%. We delivered 4% in a very volatile environment. Flat volume for the year with an improving trajectory through the year, 2% growth in the fourth quarter. Strong volume growth in North America and Europe focus markets offsetting soft markets in enterprise regions in China. Going-in core EPS guidance of 6% to 9%, delivered 12%. Core gross margin at a 17-year high with strong productivity improvement funding strong marketing investments. Going-in cash productivity outlook of 90% delivered 105% which enabled a 7% dividend increase, the 68th consecutive year of increase and the 134th consecutive year paying a dividend. As Andre said, strong results in a challenging environment. To be very clear, there’s still more work to do to continue improving areas in our control, which will be needed to offset the headwinds that are largely not in our control. We’ll double down on superiority across all five vectors. We’ll double down on productivity up and down the P&L and across the balance sheet. We’ll double down on enabling our organization to execute our integrated strategy with excellence, delight consumers and win in the marketplace, delivering the level of balanced growth and value creation results you and we expect. Our strategy is dynamic and sustainable. It adapts to the changing needs of consumers, customers and society and is focused on growing markets, creating versus taking business, the most sustainable and typically most profitable way to grow. A focused portfolio of daily use products and categories where performance drives brand choice. The portfolio is performing, delivering broad-based growth across nearly all categories and most geographies. As you know, we are active managers of our portfolio. Over the last several years, we have made some targeted additions and subtractions in that portfolio. We have adjusted our operating model in several markets. Each of these moves was made with a focus on long-term balanced growth and value creation. The second strategy element, ongoing commitment to and investment in irresistible superiority through innovation across the five vectors of product, package, brand communication, retail execution, and value holistically defined. Leveraging that superiority to delight consumers, grow markets and our share in them, jointly creating value with retail partners. The plans across the businesses are broader and stronger than at any time in the recent past as each team works to increase their margin of superiority and consumer delight. Superior innovations that are driven by deep consumer insights, communicated to consumers with more effective and efficient marketing programs, executed in stores and online in conjunction with retailer strategies to grow categories and our brands, and priced to deliver superior value across each price tier where we compete. We’ve talked many times about the superiority-driven market growth, share growth, and sales growth we’ve achieved with products like Tide and Ariel pods, Downy and Lenor laundry scent beads, and Dawn and Fairy easy squeeze and power wash. Two more examples: Oral B IO power toothbrushes deliver superior cleaning and a delightful user experience. Superior communication includes the insight that manual brushes leave 50% of plaque behind, but Oral B IO delivers 100% more plaque bacterial removal with its round head and removes plaque in hard-to-reach places. This superior proposition is accelerating power brush trial and adoption, bringing new power brush users into the category, driving high single-digit market growth of the power brush category, double-digit sales growth for Oral B power, and two points of Oral B value share growth over the past 12 months. Native, our premium personal care brand is delivering superiority across all five vectors and across multiple product forms, including deodorants, body wash, shampoo and conditioners, with superior performance, fewer ingredients, and irresistible scents. Transparent labeling and clean white packaging, superior retail execution, and strong retailer partnerships showcase the full range of forms and scents. Premium positioning within the category provides superior value for the consumer looking for an offering with more natural ingredients. Native has driven a step change in market value growth for the U.S. deodorants and personal care categories from low singles to mid-teens. Native sales have grown nearly 10 times over the last five years to over $700 million in fiscal ’24. Third strategy element, productivity improvement in all areas of our operations. In order to fund investments in innovation, brand building, and market growth to mitigate cost and currency challenges and to expand margins and generate cash. We delivered very strong cost savings in fiscal ’24. Visibility to more savings opportunities is increasing as the businesses continue to build their three-year rolling productivity master plans. We have an objective for gross savings in cost of goods sold of up to $1.5 billion before tax, enabled by platform programs with global application across categories like supply chains 3.0. We’re working in a new way with retailers on the totality of the supply chain end to end versus simply trying to optimize our respective pieces. One example is using data and machine learning algorithms to optimize truck scheduling to minimize idle time for drivers. We’re also using digital tools to optimize fill rates and for our dynamic routing and sourcing optimization. $200 million to $300 million of savings opportunity across these areas. We have line of sight to savings from improved marketing productivity. More efficiency and greater effectiveness, avoiding excess frequency and reducing waste while increasing reach. We’re taking targeted steps to reduce overhead as we digitize more of our operations. Next, constructive disruption of ourselves and our industry, a willingness to change, adapt and create new trends, technologies, and capabilities that will shape the future of our industry and extend our competitive advantage. We continue to be a constructive disruptor of brand building, in-housing more of the media planning and placement activity using our proprietary tools and consumer data to increase the effectiveness and efficiency of our communication. We’re disrupting traditional lab-based innovation models to dramatically increase the speed and breadth of discovery. Last but clearly not least, we’ve designed and continued to refine an empowered, agile, and accountable organization, an inclusive and diverse organization, enabling us to better serve an increasingly diverse set of consumers. Strong progress across all strategic pillars with significant opportunities ahead of us. No reason to stand still, as illustrated by the four focus areas that we’ve outlined previously. Number one, supply chain 3.0 is delivering productivity, as you can see in the results. We’re also driving improved agility, flexibility, scalability, and transparency in a rapidly evolving landscape. Optimized sustainable and flexible up and down the supply chain, inclusive of our retail partners. All of this drives higher quality, increased supply assurance, and higher on-shelf availability of our products, and of course better cash and cost structures. These programs improve superiority with consumers and further strengthen what is already the top-ranked supply chain by our retail partners in third-party industry surveys. Next, environmental sustainability. Superior propositions for consumers, customers, and shareholders that are more sustainable. Driving sales and profitability while reducing the footprint of our operations, enabling consumers to reduce their footprint, and innovating to deliver cross-industry solutions for some of our most pressing challenges. The next focus area is digital acumen, leveraging data and digitization to delight consumers, streamline the supply chain, increase quality, drive productivity, all driving shareholder value. One example is the improvement we’ve delivered in ad copy qualification and media buying with proprietary digital tools we’ve developed and the digital molecule development work in fabric care. We’ve built similar tools to drive faster, cheaper, and better innovation in perfume, which benefits almost every product category in the company. We’re also digitizing more of our back-office work processes to lower costs and drive efficiencies while delivering higher quality output. Each of these examples has obvious cost benefits, but they’re also driving product and package superiority, superior brand communication to consumers, superior retail execution in-store and online, stronger internal controls, and jobs that enable people to focus on higher-order tasks with greater business impact. Last focus area, a superior value equation for all employees, for all roles to ensure we continue to attract, retain and develop the best talent and are best positioned to serve all consumers. These four focus areas are not separate strategies; they simply strengthen our ability to execute our integrated growth strategy. Our strategic choices on portfolio, superiority, productivity, constructive disruption of our organization reinforce and build on each other. We continue to believe there’s merit in doubling down on this integrated strategy, starting with a commitment to deliver irresistibly superior propositions to consumers and retail partners, fueled by productivity. We remain as confident as ever in our strategy and our ability to drive market growth and to deliver balanced growth in value creation to delight consumers, customers, employees, society, and shareholders. At the end of the day, P&G serves people with a strong desire to improve their lives and the lives of their families. I believe in the capabilities and commitment of P&G people to serve consumers and to do this in the most responsible way, consistent with P&G’s values and principles. I’m excited about what lies ahead. Of course, we’ll continue to face challenges, but the future holds great promise. We have many opportunities ahead to grow markets, grow our business, and create significant value for our owners. With that, I’ll hand it back to Andre to outline our guidance for the new year.

Thank you Jon. As we enter fiscal ’25, we continue to expect the environment around us to remain volatile and challenging, from input costs and currencies to consumers, competitors, retailers, and geopolitical dynamics. As Jon said, we’ll navigate these challenges with our dynamic integrated strategy guided by consumers every step of the way. Our going-in guidance for fiscal ’25 is consistent with our long-term algorithm. On the top line, we currently expect the markets in which we compete to deliver local currency sales growth in the range of 3% to 4% for the year. Our objective is to grow organic sales modestly ahead of the underlying growth in these markets. This translates to an organic sales growth guidance range of 3% to 5% for the fiscal year - apologies, I had my mic muted. On the bottom line, our algorithm calls for mid to high single-digit core earnings per share growth. Our core EPS guidance range for fiscal ’25 starts the year at 5% to 7% versus fiscal ’24 core EPS of $6.59. This guidance equates to a range of $6.91 to $7.05 per share, $6.98 up 6% at the center of the range. This outlook includes a commodity cost headwind of approximately $300 million after tax and a foreign exchange headwind of approximately $200 million after tax. Combined, foreign exchange and commodities are projected to be a headwind of $0.20 per share for fiscal ’25, or a 3 percentage point drag on core EPS growth. In addition, the prior fiscal year included benefits from several minor brand divestitures, and we expect a somewhat higher tax rate in the new fiscal year. Combined, these are an additional $0.10 to $0.12 headwind to core EPS. We expect adjusted free cash flow productivity of 90% for the year. This includes an increase in capital spending as we add capacity in several categories. We expect to pay around $10 billion in dividends and to repurchase $6 billion to $7 billion of common stock, combining a plan to return $16 billion to $17 billion of cash to shareholders this fiscal year. While we are clear-eyed on the challenges in the market and the work needed to continue to drive the business, fiscal ’25 guidance for top line, bottom line, and cash are each consistent with our long-term algorithm. A few items for you to consider as you build your quarter-to-quarter estimates. On the top line, please keep in mind that the July to September period has the most difficult comp for the year, and many of the market-level challenges we’ve noted will not fully annualize or improve materially in our estimate until the second half of the year. On the bottom line, the foreign exchange and commodity headwinds skew a bit toward the front half of the year, and the back half comps include the benefit of the tax items and minor brand divestitures I mentioned earlier. This outlook is based on current market growth rate estimates, commodity prices, and foreign exchange rates. Significant additional currency weakness, commodity cost increases, geopolitical disruptions, major supply chain disruptions, or store closures are not anticipated within the guidance ranges. With that, I’ll hand it back to Jon for his closing thoughts.

We’re very pleased with the strong results P&G people have delivered over the last year and inclusive of prior years in a very challenging and volatile environment. The earnings power and value creation potential of the company are as strong as ever. We continue to believe that the best path forward to deliver sustainable, balanced growth is to double down on the strategy, excellent execution of an integrated set of market constructive strategies delivered with a focus on balanced top and bottom line growth and value creation, starting with a commitment to deliver irresistibly superior propositions to consumers and retail partners. With that, we will be happy to take your questions.

Our first question will come from Bryan Spillane of Bank of America. Please proceed.

Thanks Operator, and good morning everyone. I guess the question that we’ve fielded a few times this morning, and if you could touch on this a bit, the last couple of quarters, it seems like organic sales have come in maybe slower or lower than expected than you were expecting at the start of each quarter, so maybe if you can touch a little bit on just what’s developed, especially in the fourth quarter, maybe different than what you were expecting, and then if you can add to that also, is that true for the market? At a 2% organic sales for this quarter, are we above, below, or in line with market growth? Thanks.

Morning Bryan. I’ll start and then Jon, I’m sure, will add some perspective as well. I’ll start back where we kind of started the prepared remarks. I think we delivered a year where we exceeded on all of our incoming guidance metrics. Now, the year wasn’t linear, as you highlight, and I’d distinguish two parts of the business. Eighty-five percent of the business is performing right in line with expectations and right in line with what we would have expected throughout the year. We have strong growth in North America, 4% in the quarter, 4% volume growth in the quarter. Europe focus markets growing volumes at 3%, Europe enterprise markets growing volumes at 6%, LA normalizing to about 8% organic sales growth, so that’s part of the business where the trajectory is not impacted by significant external events. I think it’s moving right along. We expected the normalization and price-mix contribution, as we have talked throughout the quarters. If you look at the headwinds that we started to communicate in December, they are really still with us throughout the second half; and that’s what’s driving the volatility in the top line results. Those headwinds have accelerated in part, and honestly in quarter four, some of them developed late in the quarter, so when you think about China and SK-II, we’re heavily impacted by 6/18, a weaker key consumption period in China, and overall market sentiment in China has not improved throughout H2. We had highlighted that we expect the China recovery to be slow and to take time, and I think that’s playing out in the results we see in the second half. The Middle East situation has not really improved, so we continue to see developing stronger impacts on western retailers in some of these markets, and while the team has implemented many interventions, the execution in-store has been limited by some of these headwinds in the Middle East. The last element, we saw a softening in quarter four on the Argentina volumes driven by the general circumstances in the market, strong high translation pricing in Argentina, so there was a softer contribution on organic sales growth in quarter four than what we’d seen in quarter three. If you step back, though, the performance of the business and the way we set up for ’25, I think is very strong. Eighty-five percent of the business is developing right in line with what we would have expected. We’re growing share in North America. The balance of the markets are growing volume, which is really the shift we needed to see. Our gross margin is at record levels. Our productivity is very strong. That has enabled us to remain fully invested from a media perspective and from an innovation perspective, and so going into the year, we feel all the structural elements of the business are strong. Now, what is important to understand, and we mentioned it in the prepared remarks, those headwinds that we have experienced in H2 will still be with us in H1 of this fiscal year, so we expect this year not to be linear and we have to accelerate sales growth throughout the quarters as some of these headwinds annualize and we return to growth. But overall, I think we’re well set up to deliver against the guidance metrics we just communicated.

I agree with everything that Andre just said. I would remind you relative to the comment of performing versus our own expectations, precisely because of the volatility of the world that we all live and operate in, we don’t provide quarterly guidance, we only provide annual guidance, and as Andre said, we met our beat, each of those numbers that were provided. There have been two primary questions that have been - that we’ve all been working through. One is can we re-accelerate volume, and as Andre said, that is broadly happening and impressively so. If you look at North America over the course of the fiscal year, plus-3, plus-3, plus-4, plus-3. If we look at Europe, plus-2, plus-3, plus-4, plus-2. Andre gave you figures for some of the other regions, but broadly that question if volume can be re-accelerated is answered with an emphatic yes. The second question that at least we’ve been working through is, can that happen in the context of continued margin expansion? If you look at the fiscal year numbers, top line to bottom line that’s definitely happened. If you look at gross margin in the quarter we just completed, which comes in at a 17-year high, we’re certainly able to continue to re-accelerate volume growth while holding or building margins. Like Andre, I approach next year in a realistic fashion, realizing that the first couple quarters are going to look a little bit more like the one we just completed, but with overall a belief that the fundamentals of the business are in very strong shape and that as we bring the innovation that’s planned to market throughout the fiscal year, we’re going to be happy with the results in line with the guidance that he’s provided. One other element of the strength and health of the business fundamentally, if you look at the last fiscal year at a brand level, 21 out of 25 brands were growing. Eleven of those 25 brands were growing at high single digits or higher rates, so again from a breadth standpoint, I think we’re positioned very well and the team’s doing a great job.

Hey, good morning. I actually just wanted to follow up on those last two points you made, Jon. On the 3% to 5% organic sales growth guidance for fiscal ’25, can you just parse out a bit more detail in terms of how you’re thinking about the balance between pricing and volume? I know you won’t want to be exact, but how you’re thinking about that and the 3% to 4% category growth assumption? Do you think there’s good visibility there given the slowing pricing? And then if you bless me with a Part B, I guess just how do you think about earnings flex relative to top line, given some of the top line volatility, obviously significant year-over-year gross margin expansion in fiscal ’24 but that’s been dissipating, you’ve boosted marketing a lot, you’ve got strong productivity, as you mentioned, so there’s a lot going on sort of in the margin line items, so just how do you think about earnings flex next year relative to top line growth, given some of this volatility? Thanks.

Yes, thanks for the question, Dara. The volume versus price mix contribution is expected to be broadly balanced. We expected markets to return to more sustainable growth rates of 3% to 4% - that is largely happening now, and if you look at the construction of that market growth, about half of that is driven by volume, the other half is driven by price mix. I would expect our construct to look similar for the fiscal year. Obviously, it will differ by quarter and front half versus back half, but broadly balanced between volume and price mix. On the margin perspective, you saw us make a choice to continue to invest fully in the business. We have delivered very strong productivity, more than $2 billion in productivity for the year, and we have significantly increased our media support, and we see the results for those investments in the strong growth we continue to deliver in North America, including share growth consistently across every period. The strong results in Europe focus markets, including strong volume growth consistent across the quarters, so we feel good about those investments. We’ll continue to be very disciplined and, as you can appreciate, not all of those investments will have paid out, so as we do our post-event analysis, we’ll reassess every step of the way, whether those are better flowing to the P&L or reinvested somewhere else. Productivity for fiscal ’25 is also very strong, as I mentioned in my previous comments, so that will allow us to maintain full investment both in terms of market support, as well as innovation, which is really the underpinning driver for our growth next year.

I would just add two or three comments. One, as Andre indicated, where you see the increase in marketing investment, that is largely in the geographies where we’re seeing the growth accompany that from a top-line standpoint. As he also said, we will continue to monitor the effectiveness of that spending and will adjust either up or down accordingly. Also, I just want to make sure we all understand the return on those investments is not an overnight occurrence. We have a commercialization cycle that needs to run its course; we have consumer purchase cycles that can be annual in some cases. While our portfolio is constructed to focus on categories where the product is used daily, that doesn’t mean it’s purchased daily, and so it sometimes takes a little bit of time to evaluate and see the market response to those investments. But if you look at the last several years, it’s generally always been there, and it’s been one of the reasons for the growth over the last, call it six years as I mentioned in my remarks - plus-5, plus-6, plus-6, plus-7, plus-7, plus-4 in a more challenging environment. Like Andre, I feel good about the balance that’s implied in the guidance and in our internal plans, but it’s something we wake up every day and continue to re-evaluate and deliver in an optimal way.

Good morning guys, thank you. I was hoping that we could talk about fabric and home and baby and family specifically. It seems like those are the two segments that drove the most disconnect, at least versus external forecasts. The release cites promotional spending and at least a degree of share loss across those segments, so maybe you could just drill down further into the headline numbers, give us a bit more context of what you’re seeing, both competitively and within your own momentum, and just how we should think about both the drivers and the timing of the build back in those businesses, noting you’ve obviously got some challenging first-half comparisons especially in the current quarter, but just really understanding where you expect those businesses to trend and land over the course of fiscal ’25.

Morning Steve. Look - home care, I think is just performing outstandingly well, 9% organic sales growth on the year, 13 quarters of sustained share growth and gaining momentum, so I think I’d focus my comments on fabric care. I would tell you two things. Number one, we are annualizing record periods in Europe with differentiated pricing between competitors, where we had a bit of a tailwind last year that is turning into a high base comp. But structurally, the business is in great shape in Europe - Ariel continues to perform extremely well, the innovation across unit dose and the broader portfolio, including FE, is doing very well, so I expect that business to re-accelerate very quickly. In North America, we are just launching the innovation bundle, the spring innovation bundle which is supported with the right level of investment, including promotional investment and merchandising investment, and that’s why you see the negative price mix component in the North American business. But the business is picking up momentum, we’re growing share, so I expect also North America to continue to move in the right direction on fabric care, and we’re very encouraged with the innovation, both the innovation that just launched and the innovation that is in the pipeline. Last point maybe on fabric care, in China specifically, we also made a portfolio choice to focus on the most profitable part of the business, and so there are some short-term implications in terms of base period there. Again, for the longer-term benefit of the China fabric care business, I think that’s the right decision, but it’s part of the softness that you see right now in the current quarter. Baby care, I’ll talk two regions. One is North America - the baby care business on the premium end continues to be doing very well. We have Swaddlers growing share by 1.4%, Cruisers 360 is growing, so on the premium end of the spectrum where we’ve been able to innovate over the past one to two years, we continue to see the momentum accelerating across Pampers. We have an opportunity, we’ve had an opportunity on Luvs, the mid-tier brand, where we postponed innovation due to some supply chain challenges. That innovation is now in the market, so again very significant acceleration expected given the innovation just launched in the market over the next few quarters. In Europe, again base period mostly in terms of share data, and that is something we need to work through, and certainly in Europe baby, I think that’s one of the areas where we’re watching our sufficiency of innovation very closely, simply because the spread versus private label is the most significant, so again the team is working through strong communication and innovation that will be launching here over the next few quarters.

I’m just going to go in a slightly different direction here, Steve. I fully agree with Andre’s description. There are also categories and sectors that are making really strong progress, that as we annualize the few challenges within them should manifest itself more clearly than it is now, so we’ll have the benefit of those as we go through the year. What am I talking about? If you look at beauty as an example, the aggregate results are being heavily impacted by two things: SK-II and China, both of which should annualize by the second half of the year. If you then step back and look at the balance of the business, Head & Shoulders, in part behind the BARE innovation, increased sales by 7% last year. Pantene, in part behind the Pantene Miracles innovation, grew 10% last year. The personal care side of the business is growing extremely well as well. I just want to kind of complete the picture in terms of some of the progress that isn’t as obvious in an aggregate look, but will make a difference going forward.

Great, thanks. I was wondering if you could comment a bit, because one thing that’s been absent is a discussion on the consumer broadly, so I think it could be helpful to get some perspective on the consumer environment. It feels like in U.S. and Western Europe, from what we’ve heard from other companies, things in the last month or two have kind of gotten demonstrably worse, as a general statement, so curious your perspective on that, and then also differences in channel performance and what you’re doing around that in terms of areas of particular focus or investment. Thanks.

From a consumer perspective, we generally don’t observe the trends that some have described. While I’m not dismissing their views, if we examine certain factors, like private label shares, we typically expect those to increase during times of significant consumer pressure, but that's not the case currently. Private label shares in both North America and Europe remain consistent with pre-COVID levels and have not changed significantly from last quarter to this quarter. Another point we evaluate is whether unit growth is declining, and again, that’s not what we’re generally witnessing. While I’m sure some consumers are under increased pressure and adjusting their purchasing behaviors accordingly, in our categories, which are essential and daily use items that drive brand choice, we typically strive to have the best-performing products in the market, and as a result, we’re not seeing any major impact driven by consumer changes. I’ve spent a considerable amount of time in Europe recently and will return there tomorrow. I, along with Andre, attended the Deutsche Bank conference earlier this month and engaged with our business, and I'm not observing any significant changes there either. We are optimistic as we move forward. It's an important aspect that we monitor closely, but so far, things are looking good.

And the market growth rates, I think substantiate the point that Jon made. If you look at the U.S., I think the key point is over the past one, three, six, twelve months, the category volume growth in our categories is consistently 2%, so consumers are not decelerating consumption across our categories, and similarly if you look at value growth in Europe, it’s also very consistent over the same period, so as Jon said, we’re watching it, but we don’t see it in the data.

And even if we look at the responsiveness to many of our strong innovations, I mentioned in my remarks Oral B IO, which is a significant premium to the balance both within the power segment and across power and manual, and it’s growing at double digits. We built two share points in the last year, so just an example of responsiveness to strong innovation in these categories where performance drives brand choice.

Great, thank you very much. A couple of follow-ups. Could you just talk a little bit about the enterprise markets, what they would have looked like ex-Argentina, and then as you look at your guidance, how much of an actual rebound in China are you assuming, how much, if any, rebound in the Middle East issues are you assuming, and is that part of the range or is there no rebound at all in the range, if that’s clear? Thank you.

Hey Robert. Enterprise markets, I think in aggregate are performing strongly for the year, up 6%, last year they were up, I think 10%, so I think very strong continued growth. Latin America, as we said, is growing on the year 15% and in the most recent quarter 8%. Europe focus markets up 8% for the year. Where we see headwinds is in the Middle East, in line with what we have described, so you see our Asia-Middle East-Africa markets impacted by those Middle East headwinds, and again we expect those to be temporary. The Argentina contribution to the total number is decreasing by almost a point quarter-over-quarter, so it was only 30 basis points in the current quarter. Most importantly, we divested the Argentina business, so that effect will not matter anymore in the current year because it will be removed from the organic sales base as we move through the quarter here. In terms of assumptions, I think that’s part of the range, right? I would say we largely assume annualization. The upper end of the range would assume some level of improvement, but I think the main contribution to the midpoint of the range would be a normalization and annualization of those headwinds we were describing, including China, SK-II, the Middle East, and again Argentina coming out of the base because of the divestiture of the business.

And Robert, my perspective on these matters, as reflected in our guidance, aligns with what Andre mentioned regarding annualization. I believe that if conditions improve in the Middle East or China, we could achieve even better results than the midpoint of the guidance range, assuming other factors remain constant. However, I am not presuming that the situation will worsen, as that is always a possibility. Therefore, we are focused on a realistic expectation of outcomes.

Thank you, good morning. I would like to know more about the pricing elasticity you're observing in the category. I understand that there is a low penetration of private label and that consumers still prefer your brands. However, I'm curious about the laundry segment where you've had some promotions. It seems that some of the factors discussed aren't necessarily driven by unclear elements, but I'm interested in how you anticipate pricing changes as they are incorporated into your base guidance. I know you aim for balanced organic sales growth at a midpoint of 4%, but I'm wondering if there are ways to mitigate effects in other areas where it's typical, allowing for some pricing adjustments related to inflation and those driven by innovation. Thank you.

Hey Andrea. Yes, I mean, pricing and mix have been a positive contribution to our results for 19 years. I don’t expect this year to be different. I think it will be pricing for foreign exchange headwinds in some of the enterprise markets, which is in line with what the market generally executes. I also expect innovation base pricing and trade-up as we have a strong innovation pipeline in the year. From a promotion environment, we see stability at the moment. We have pockets of incremental promotion. We’re still operating at about 85% versus pre-COVID levels, and we see general stability, so as I said in the guidance deconstruction on the top line, roughly we see the market half price mix driven, half volume driven. I don’t expect our fiscal year numbers to be different than that, but they will look different obviously H1 versus H2 because of base period, but the general model is still the same as we executed over the last 19 years.

Hi, good morning everyone. I wanted to ask about the commodity outlook. Andre, you mentioned a $300 million headwind expected in fiscal ’25. Can you discuss the components of this headwind, including key commodities like pulp and resins, and the impact of the recent rise in ocean freight on transportation? Also, while I know some commodities cannot be hedged, what is the level of visibility regarding your contracted rates on that headwind? Thank you.

Yes, hey Filippo. The commodity portfolio is actually at the moment relatively stable. Most of that headwind that is in the guidance is pulp at the moment. We continue to see strong demand on some of the grades and limited supply, so that’s driving the run-up. The rest of the portfolio is actually stable. It won’t be that throughout the year, as you know - I mean, these things change quickly, so there’s a level of variability here, obviously, and we’re forecasting a spot rate as we always do. The commodity effect as we think through visibility, look - I mean, the flow through is different by commodity class, but I think we discussed this when we were in the middle of the commodity crisis, it generally takes three months to nine months to flow through the P&L, so I think at the end of quarter one, we probably had relatively good visibility on most of it through H1, and then we’ll go step by step. But again, this is one that we forecast on spot, we don’t hedge, so the flow through again is the key driver of latency in terms of P&L. In terms of transportation, look - generally energy, oil is relatively stable, so overall transportation is flat. Yes, we see some impact from increased transportation on the sea routes, but it is not material in the context of the year at this point.

Thanks Operator, good morning everyone. Hope you’re doing well. I wanted to go back to Lauren’s question on the consumer, and totally recognize that you may not be seeing some of the indicators that the consumer is under pressure today, but when we think about the 3% to 4% category growth assumptions you’re embedding for your outlook, is there any cushion for the 85% of the markets that are currently performing well to potentially slow at all? I totally get the annualization commentary on the Middle East and China, but just would love to get some perspective on what you expect maybe in North America and Western Europe from here. Thanks.

Hey Peter. Yes, the 3% to 4% is a global number. Deconstructing that by market or by region is increasingly difficult, and we somewhat rely on the total aggregate of regions to play out in that 3% to 4% range. To your question on the 85% of the business slowing, what we see is actually what we had expected, right, that those regions slow down from a market growth in the range of 5% to 8% to this 3% to 4% range, because the price mix component is coming down and the volume component is coming up, and that stabilization is built into our assumption for the year, so we expect most of those regions to play out the same way that we’re projecting the global number, which is 3% to 4%, half of it volume, half of it price mix.

Thank you, good morning. I had a question on your beauty segment. China has been a drag to your volumes for a while, as you mentioned, and we’ve been hearing about the ongoing challenges in the region. But more recently, we’re also hearing about the slowdown in the U.S. beauty market, so curious if that’s consistent with what you’re seeing, and then how should we think about the growth potential for your beauty segment this fiscal year, and is it fair to assume that these challenges could drive a further slowdown from here? Thanks.

If you examine the beauty results outside of China and SK-II, they offer a clearer picture of our growth potential and direction. Excluding SK-II, the business grew by 6% in the fourth quarter and 7% in the recently closed fiscal year. When we analyze the segments and core brands like Head & Shoulders, Pantene, and Herbal Essences, we see growth in the high single digits to double digits, representing the best results in the last five years. In personal care, brands like Old Spice, Secret, and Native showed double-digit growth. Jon mentioned that Native sales have now reached $700 million, which is ten times what we initially achieved with the brand. Our new brands are also growing at double digits, indicating strong performance across the portfolio. Hair care in North America is up 12%, and global hair care has seen a 9% increase, while the personal care business is performing very well. The main aspect we are annualizing is China, specifically the Olay and SK-II businesses, and we expect to see annualization there. However, we do not anticipate a significant acceleration in the upcoming fiscal year. Overall, the core of the business remains strong, but we need to see annualization from China in the first half.

We primarily operate in the foundational segments of the beauty market rather than in the prestige category. The commentary about a slowdown in the marketplace does not really pertain to the core segments in which we are involved, where we have seen robust growth, as Andre mentioned. I wanted to emphasize this in response to an earlier question because it may not be fully captured in the overall numbers, but it's significant for both acknowledging our team's efforts and recognizing our potential.

Hi, good morning. I know we’re later in the call, so apologies for another China question, but maybe a bit more focus. It has been sluggish for a few years, which I think is why there’s been so many questions about the effect of annualizing. You’re not the only company to see slower results in China, so I wonder if you could just maybe comment on clearly there are macro dynamics in the market versus micro parts of your portfolio which specifically need some work. SK-II has been well covered by this point, so perhaps you can speak to some other businesses that are performing in line with your expectations or not, so that we can have a bit more of a portfolio view on why the annualization should deliver the outcomes you’re expecting into the back half of the year. Sorry for another question on China, but it felt important. Thanks.

I’ll start, and Jon will add. To begin, I believe the China business has experienced a shift from a double-digit growth trajectory to a significant dip, and we do not anticipate a return to double-digit growth. Over time, we expect growth to stabilize in the mid-single digits, aligning more closely with other developed markets. We definitely do not foresee a return to the pre-COVID growth rates. In China, the SK-II brand has now reached a stable run rate in terms of both volume and dollar sales, although we have yet to align the base period with these run rates. Unless there is a substantial reduction in run rates, we are confident that annualization will occur. Additionally, the most challenging category to compete in China at the moment is likely baby care, with birth rates declining by 15% to 25%, depending on market definitions. Despite this, our team has successfully increased sales by 6% and gained market share because the portfolio and innovations were designed specifically to meet the needs and preferences of Chinese consumers. We have also seen growth in the Braun business through strong innovation, indicating that while we need to expand this success across more categories, there are areas where we are leading the market. In fabric care, we are concentrating on the profitable segments of the portfolio, enabling us to drive innovation and category growth. Overall, the primary factor influencing our outlook is that run rates are stabilizing. Unless there is a significant decline in the market, which is possible, if run rates remain steady, we anticipate annualization will occur in the latter half of the year.

Just to round that out, the largest business for P&G in China is hair care, and we spent the last year-plus as we came out of COVID ensuring that we had very strong hair care plans. I am very pleased with the plans that we’ve put together and the execution of them on Pantene, the same on Head & Shoulders, really significantly improved propositions, significantly improved packaging, really looking strong. Andre mentioned somewhere in our discussion that we had made the choice to exit the third brand, which was Vidal Sassoon, so that should not be a source of drag going forward. We’re still working, to be candid, on the plans for Rejoice, but the net of all of that is pretty encouraging.

Good morning everyone. I have a question for both of you regarding investment levels, particularly in trade spending for advertising and marketing, which are clearly increasing. The growth in gross margin has naturally supported this. You’ve likely noticed what your main competitor in oral care is doing; their advertising and marketing expenses as a percentage of sales are at a high not seen in decades, and there has been an increase in trade spending in their North America segment. Procter has raised advertising and marketing spending by 200 basis points this year, with a significant increase of 300 basis points in the latest quarter. Earlier, we discussed fabric care, which is a major point here. Could you provide some context for these higher investment levels we’re observing across the industry? Additionally, from Procter’s perspective, are we satisfied with the return on sales we’re seeing as spending levels rise? I understand there were some specific challenges this quarter, and we’re forecasting growth in line with historical trends. Thank you for your insights; any additional context would be appreciated.

Yes, let me start, Kevin - morning. Generally, what I’d tell you is we’re happy with the payout that we’re seeing in the markets where we can read the payout cleanly, and that’s really where 95% of the investment is, meaning Europe focus markets, some of the Europe enterprise markets, Latin America and North America, and I think the top line results support the overall payout of the aggregate of the media spend. We’ll obviously go way lower in terms of penetration, and it is probably the strongest push that both Jon and I and Shailesh have as we engage with the businesses to ensure that that spending truly is productive, truly is driving market growth and sales growth, and therefore helps us to deliver top line and bottom line for the quarter and for the fiscal year. If that’s no longer the case, then we will change gears and adjust. In terms of overall spend, I’m actually pleased to see an increase in media spend and market support that’s market constructive. I think it helps the consumer understand the category better. It helps drive penetration, which is still a huge opportunity across multiple categories, so that’s very positive. Again, the promotion environment in aggregate remains productive, and as long as those two results in what we see in North America, which is sustained volume growth on the category and sustained value growth on the category, I think we’re in a good place.

I've been advocating for this for some time. When you focus on innovation and quality while maintaining relatively low advertising reach, it doesn't quite add up. We previously referred to it as confidential superiority. Our objective is to effectively and efficiently increase our reach so that more consumers are aware of our products and their benefits. While this effort will eventually reach a mature level, we are still in the growth phase, which is the right approach. It takes time for the business to respond, as purchase and commercialization cycles do not happen overnight. But as mentioned, with a former CFO now in the CEO position, we are committed to ensuring that your money is utilized wisely.

Great, thanks. Good morning. Just a follow-up on promotions, if you could just talk about how much is competitors catching up on innovation, driving you to spend more to stay superior versus a response to the tougher macros and needing to make yourself competitive on price. Then more importantly, you’ve obviously done substantial innovation at the premium end. What are you doing as we think about this evolving macro in your mid-tier products to remind consumers of the value proposition there? Thank you.

Hey Olivia. Our goal is to drive market growth through exceptional superiority, starting with our product, packaging, and communication, while also incorporating value as you mentioned. I don't anticipate any changes in that approach. The competitive landscape regarding promotions remains fairly stable. Our promotional strategy is consistent across regions where we have the most visibility, particularly in Europe and North America, so I don't see any differences in that regard. Our focus on superiority, which we've been discussing for nearly a year, involves resetting the expectations for what our businesses should achieve. The goal is not just to outperform the closest competitor, but to establish a level of superiority that attracts consumers to the category, ultimately leading to new consumption and increased usage or trading up. That is our benchmark for success, and I'm confident in the innovation pipeline we have for this year. I'm sure Jon has more insights to share. Regarding the mid-tier, it is essential for us to be irresistibly superior at every level where we compete, which is exemplified by the Luvs innovation. If we do not maintain superiority in the mid-tier, consumers will respond accordingly, as reflected in the results. Therefore, our proactive approach to innovation and driving superiority is crucial, regardless of the tier. We must ensure we deliver on all five vectors across every tier, pack size, price point, and channel we operate in.

If we assume for a moment that our ongoing discussion about consumers being under pressure is incorrect, and that situation changes, it becomes crucial for us to innovate in categories that may see increased demand during a consumer downturn. For instance, if people start eating at home more frequently and going out less, categories like hand dishwashing may become more significant. Our innovation in that area, such as the power spray on Dawn and easy squeeze options, is noteworthy, along with the growth we’re experiencing in our dish business. Historically, including during the extreme conditions of COVID, people tend to use more paper products when staying home, which is why innovations like the Charmin easy tear scallop perforation are important, contributing to a 5% growth in the Charmin brand last year. This illustrates our ongoing commitment to innovate in categories that could be even more relevant during a consumer downturn. Overall, the hand wash business is more of a mid-tier offering compared to the auto dish business, but we maintain our dedication to innovation across all tiers.

Yes, thanks and good morning everybody. I wanted to ask about SK-II more broadly and just how do you see this part of today’s portfolio for P&G. You know, I guess the slower improvement in China than anticipated, but just curious if you take a look over the last, call it four or five years, it does seem like the brand has grown in totality a little bit below what I’d peg as the peer group, so I guess I’m curious why you think that is, how you weave in improving trends in China with the overall expectations for the brand on a go-forward basis, and I say all that too in the context of weakness pre-dating the wastewater release in Japan, so what is there? Is there more competition, are you doing more from an innovation standpoint to broaden the appeal for the brand? Can you move it beyond prestige skin care? Just broader strokes, again in the context of how does it fit within the portfolio, thank you.

Yes, Mark. Your question is specifically about China. I am confident in our brand portfolio; it is strong. When we engage the consumer effectively, we see significant progress in baby care even under challenging market conditions. Jon highlighted our advancements in hair care with brands like Head & Shoulders and Pantene. In areas where we had uncertainties, we made the right decisions, such as divesting Vidal Sassoon, which was a positive move in hair care. We have also streamlined our fabric care portfolio to focus on market segments where we can deliver value for both consumers and the company, so I feel optimistic about our product offerings. The challenge in China, however, stems from a shift in channels. Our business was largely built over 30 years on a brick-and-mortar model, but the digital shift accelerated by COVID has pushed us towards online sales faster than anywhere else globally. Within the online space, particularly on Douyin, we see a heavy reliance on promotions. We are taking our time to adjust our portfolio to ensure we find the right balance between serving consumers in physical stores and supporting our brands with appropriate messaging, brand equity, price stability, and innovation in online channels. This transition is ongoing, but I believe it is progressing well, and I am confident that our portfolio can maintain mid-single growth and value creation in China.

Hey everybody, good morning. I know as we get deep into the call, it gets quite granular, but if we could bring it back a little bit on something I think might have been missed as we chat global versus domestic, which is maybe just thinking about North America specifically and the first half specifically. What is the direction of travel that you’re assuming for the consumer, and when we think about annualization of pricing and such, should we be modeling a drag for North America in the first half that then reverses, or is it meant to be closer to that balance for the full year of 50/50?

Kaumil, it’s very hard to predict, obviously, by quarter or H1 versus H2. I think you’re in-going hunch is what I would share, as I think the price mix neutralization will continue through H1, and the volume component, I think is relatively stable. As I said, the market is continuing to grow at 2%, price mix has come down to about a point and a half, and I think that’s what I would expect from a market growth perspective for the front half. Our objective is, as always, to be within that range, so that’s my view; but again, that volatility can be driven by different innovation cycles, it can be driven by different promotion cycles, by channel shifts, so there is a lot of variability within that, but purely extrapolating from what we see in the market today, I think your hunch is right.

Hi, thanks for the question. I guess the only thing not covered on this call is the Olympics. I think I’ve seen about 100 ads for Procter & Gamble products, some of them great, but I haven’t noticed an increase in merchandising activity in our Nielsen tracking data in the U.S. around it. I was just wondering, do you view the Olympic sponsorship more as a brand-building exercise for consumers, or have you been getting and do you expect to get a lot of merchandising activity around it in the U.S. that we’ll be able to see in our tracking? Thanks.

We definitely view support of the Olympics as a brand-building opportunity, as a consumer outreach opportunity, and frankly as a customer outreach opportunity. Where you’ll see the activation in store is typically closer to the region of the event, so I wouldn’t expect it to have large activation in North America. I’m headed to Paris overnight tonight, I do expect to see significant activation in Europe. I’ll be meeting with many of our retail partner CEOs at the Games, we host them there and spend up to a couple of days together building plans going forward, which would include both during the event and post-event activation of the assets that we’ve put in place for the Olympics. Just like our earlier discussion on return, this is something that we look at annually, but thus far it’s proving to be an attractive vehicle when we focus the messaging on brands and not so much when we focus the messaging on company, simply because nobody buys P&G, they buy Tide and Ariel and Pampers, Pantene and Head & Shoulders, etc. So all good, and I’m looking forward to being there with our customers and our European team over the balance of the week. Before we officially conclude the call, I want to share some long-term perspectives and I’m available for discussion throughout the day. We have collectively faced significant challenges over the past few years, including COVID, inflation, war, political divisions, and regulatory issues. It's important to reflect on how our strategy is performing, not just for this quarter but over longer periods, including pre-COVID, during COVID, post-COVID, and amidst inflation and geopolitical tensions. Over the last six years, our team has generated $17 billion in sales, ranking us in the 88th percentile of the S&P 500, and has added $5 billion in profit, placing us in the 93rd percentile. Our market capitalization has grown by over $200 billion in this timeframe, creating more value than most of our competitors have in their entire histories, which highlights the success of our approach. As we move forward, we're better positioned than ever to execute our strategy. We’ve discussed investing in innovation, enhancing superiority, and improving productivity. We’ve also talked about the support for our business, resuming volume growth in major markets while increasing margins and investing further. If faced with a tougher consumer economy, we internally discuss whether we would adjust our approach. We believe that maintaining our focus on daily-use categories, delighting consumers with superior products, and ensuring productivity for funding investments are imperative in any scenario. These strategies are beneficial for consumers, customers, employees, society, and shareholders, which is why we continue to invest in them. I have mentioned before that our journey will not be a straight path, and various factors will influence our business trends. However, historically, our approach has yielded significantly positive results, and I anticipate this will persist. I wanted to express this as we wrap up the call. While we must acknowledge the challenges we've discussed regarding the current quarter and the first half of next year, they do not overshadow our mid- to long-term outlook. Have a great day, and I look forward to reconnecting soon.

Thanks everyone.

That concludes today’s conference. Thank you for your participation. You may now disconnect. Have a great day.