Wednesday, October 15, 2003

Aggressive moves pay off with profits

By Cliff Peale
The Cincinnati Enquirer

[IMAGE] A.G. Lafley and Charlotte Otto, global external relations manager, greet Birgit Klesper (right) the spokeswoman and vice president of corporate communications for recently acquired Wella AG at the meeting.
(Glenn Hartong photos)
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DOWNTOWN - Putting the Prilosec anti-heartburn medicine next to the salsa or spaghetti sauce on store shelves is an example of the newly aggressive Procter & Gamble Co.

It's intent on building health care and beauty-care brands, now approaching half its total sales. It's "audacious" about its displays in stores.

And it's now coming off the best financial quarter in its 166-year history.

"We're here to celebrate," chairman and chief executive A.G. Lafley said as he stepped to a microphone before P&G's annual shareholders meeting Tuesday.

It was a festive atmosphere in the Aronoff Center for the Arts, where hundreds of shareholders heard Lafley review P&G's business and promise more to come.

Shareholders were happy, since the company's stock price has increased to a three-year high. Tuesday, it rose 49 cents to close at $95.99.

[IMAGE] Matthew Pillischer, portraying Juan Valdez (left), and Brian Garry, as a horse that small farmers aspire to own, protest outside the meeting.
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"As a stockholder, you start thinking, 'Will they get to $100 and split?' I don't know what they're going to do," said shareholder Dick Crawford of Columbus. "But their record over the years, they just keep going onward and upward."

Lafley said the growth could continue, even without further acquisitions. He declined to comment on reports from Europe that P&G may be pursuing an acquisition of Beiersdorf AG, the German company that owns Nivea.

Also at the meeting:

• Lafley said he was working with other CEOs to use a mediation system to resolve disputes about advertising, instead of lawsuits. P&G has been the target of several lawsuits for misleading claims in ads, including one in which it was ordered to pay $2.96 million for claims made in a commercial for Tampax Pearl.

• Shareholders approved a resolution asking the company to institute annual election of all directors, instead of the staggered system it uses now. It would take at least a year to implement the new procedure.

• Fair-trade coffee advocates congratulated P&G on its decision to sell a fair-trade brand of Millstone, but encouraged it to spread the fair-trade purchases to the mainstream Folgers brand. Fair-trade coffee is bought at a higher price to support small coffee growers, who have been hurt by the falling price of coffee.

• Animal-rights activists continued to accuse P&G of allowing the mistreatment of animals at contract laboratories. But Lafley said P&G had spent $172 million in recent years to develop alternatives to animal testing.

"Let's face it, we have the bull's-eye painted on us," he said.


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