Pershing Square Activist Presentation Deck
Gross Margins - COGS Productivity at 3.5%
If P&G could achieve 3.5% annual COGS productivity over the course
of its restructuring program from FY 2011 to 2016, we believe the
Company would easily generate 51.5% gross margins
FY 2011 Gross Margin (Start of Restructuring)
Plus: 3.5% Annual COGS Productivity
Less: Reinvestment, Inflation, Negative Mix Shift
FY 2016E Gross Margin
Pershing View
50.9 %
-750bps
~(690)bps
22
51.5%
We estimate that P&G can utilize more than 90% of its COGS
savings to reinvest in pricing, offset commodity inflation,
counterbalance negative product and geographic mix and still
achieve our gross margin estimate
Note: FY 2011 gross margin of 50.9% represents the fiscal year prior to P&G's restructuring program. FY 2012 gross margin of 49.6% declined 130bps from FY 2011 as the
negative impact of reinvestment more than offset the positive impact of COGS productivity. Estimate of 750bps of total COGS productivity based on a 5-year total of COGS
savings of more than $7.2bn and FY 2016E Revenue of $97bn.View entire presentation