UPDATE 3-P&G says cost cuts, expansion to drive growth

* Streamlining of operations to also spur growth

* Reiterates full-year EPS forecast $3.91 to $4.01

* Shares up 30 cents at $63.94

NEW YORK, Dec 16 (BestGrowthStock) – Procter & Gamble Co (PG.N: ),
the world’s largest consumer products maker, has “plenty of
room to keep growing,” Chief Executive Officer Bob McDonald
said on Thursday.

The company stood by its forecast that organic sales, or
sales from existing operations, will rise by 4 to 6 percent in
fiscal 2011. It also maintained its forecast for earnings of
$3.91 to $4.01 per share from continuing operations.

“This continues to be a difficult operating environment,”
said Chief Financial Officer Jon Moeller, citing rising
commodity costs and a stronger dollar. “We’re seeing little to
no category growth in developed markets, but we continue to
deliver solid, broad-based market share growth.”

P&G executives told analysts that to drive growth, the
company will introduce its products in more markets, integrate
its global operations and continue its focus on product
development.

By 2016, the company plans to introduce 250 products in
countries where they have not been sold before, while also
selling products at hundreds of new price points and through
more distribution channels.

P&G, which makes Tide laundry detergent, Gillette razors
and dozens of other well known brands, announced efforts to
simplify its structure and cut costs, including reducing the
number of global manufacturing platforms from 300 to 150 by
2014.

It also aims to reduce the number of global suppliers from
75,000 to less than 50,000 in 2012. Other cost-cutting efforts
will focus on streamlining packaging, reducing the number of
brands and product formulas it sells, and using technology,
such as video communication instead of travel.

“Those billion-dollar brands are 90 percent of our sales,
and almost an equal percent of our profit,” Moeller said. “So
it behooves us both to make them more productive, to simplify
the lineup, and to work on bigger brands.”

Developing markets account for 34 percent of P&G’s sales,
up from 20 percent a decade ago. The company expects the figure
to approach 50 percent by 2020.

McDonald said the company has outperformed its competitors
for the last three or four quarters in Latin America, while
seeing seeing double-digit growth in Asia.

The company’s forecast for fiscal 2011 earnings of $3.91 to
$4.01 per share from continuing operations compares with an
average Wall Street estimate of $3.98, according to Thomson
Reuters I/B/E/S.

P&G shares were up 30 cents to $63.94 in afternoon trading
on the New York Stock Exchange.
(Reporting by Jon Lentz, editing by Dave Zimmerman and John
Wallace)

UPDATE 3-P&G says cost cuts, expansion to drive growth