Trian Partners Activist Presentation Deck
September 2017, 94 slides
  1. Trian Partners
  2. Procter & Gamble
  3. Activist Presentation Decks
revitalize together a sax partners | Trian Partners
disclosure statement and disclaimers | Trian Partners
disclosure statement and disclaimers | Trian Partners
revitalize together | Trian Partners
what we are not recommending objective is to create sustainable long term value at is not advocating for the break up of the company not suggesting that the be replaced not seeking to replace any directors not advocating taking on excessive leverage not seeking to cut pension benefits not suggesting that research development marketing expense or capital expenditures be reduced not seeking cost cuts that could impact product quality not suggesting the company move out of | Trian Partners
why adding a shareholder voice to the is critical | Trian Partners
faces numerous challenges local brands are growing faster than their | Trian Partners
strategic initiatives regain lost market share through the following initiatives | Trian Partners
strategic initiatives regain lost market share through the following initiatives win in digital address insular culture improve corporate governance yell | Trian Partners
has under this board watch yet it claims unequivocally that nelson would not add value | Trian Partners
touts its since became but results must be taken in context under of took over as approximately half of the | Trian Partners
underlying business performance has not improved under annual organic sales growth annual growth | Trian Partners
in share loss and earnings continued despite claims organic sales growth core growth | Trian Partners
also cut advertising spend in breaking a cardinal rule of sales | Trian Partners
management is being paid for and the board accepts mediocrity most recent year long term compensation targets covering pay management for market share losses and bottom quartile growth sales targets targeting organic sales growth from lower than expected market growth suggesting management is being paid in full for market share loss our markets today are growing somewhere between and we want to do a bit better than that consistently analyst day targeting growth from targets translates to bottom quartile growth peers based on consensus estimates for | Trian Partners
consumer companies with nelson on the board have consistently outperformed | Trian Partners
has developed strong relationships with company boards and management teams following prior proxy contests prior to vote after involvement | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
context on key assumptions peer group time frames | Trian Partners
has trailed the vast majority of peers year year year a peg me i | Trian Partners
has trailed the vast majority of peers year year year as on | Trian Partners
organic sales growth has peers | Trian Partners
volume growth continues to trail peers | Trian Partners
is losing market share at the local level across businesses | Trian Partners
operating results have peers | Trian Partners
competitors have grown faster than loreal best my peg | Trian Partners
dividend suffered as revenue and earnings growth stalled loreal a | Trian Partners
has lowered the bar for performance over time | Trian Partners
big picture investments have not generated returns for many years | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
strategic initiative organize in a way that promotes accountability | Trian Partners
organize in a way that promotes accountability | Trian Partners
existing structure suffocating bureaucracy and complexity current organizational structure is highly with power centers a i | Trian Partners
highly allocated costs diminished morale allocated costs create numerous challenges | Trian Partners
matrix structure does not leverage scale and other advantages | Trian Partners
we believe current structure has led to near worst in class international margins | Trian Partners
management says it has improved the structure what says our concern end to end freedom within a framework | Trian Partners
but the results have not improved under the end to end model | Trian Partners
shareholders have heard the same promises before what they say now | Trian Partners
in fact shareholders have been hearing about structural improvements for over a decade | Trian Partners
but the market share losses continue across countries i i | Trian Partners
and across categories nappies diapers pants personal wipes i a depilatories nappies diapers pants shower bath shower surface care conditioner i care a tits toilet paper tile care | Trian Partners
china diapers case study pampers | Trian Partners
case study | Trian Partners
proposed organization structure for strategy run like a series of smaller connected companies to be faster moving more locally adept and more fit to compete in today rapidly changing environment | Trian Partners
proposed structure has numerous advantages over current matrix | Trian Partners
we believe an empowered would have defended market share more aggressively | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
regain lost market share by ensuring productivity plan actually delivers volume generating investments | Trian Partners
headline productivity plans appear unrealistic | Trian Partners
the first cost program did not create value | Trian Partners
peers have outperformed on growth and margin expansion since the productivity plans began woe a a aye loreal peg | Trian Partners
once again is making bold claims but not committing to net savings or market share gains management latest productivity plan targets of gross cost reduction through yet management has only guided to of annual margin improvement including flow through on sales growth what is the disconnect or i | Trian Partners
as a board member nelson will seek to ensure that productivity delivers improved operating results current productivity plan not driving differentiated results with nelson on the board | Trian Partners
cost reduction and faster growth are not mutually exclusive | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
strategic initiative fix the innovation machine | Trian Partners
it has been decades since created a new leading brand ski fide am fairy salvo | Trian Partners
nelson will propose a board led study on the lack of breakthroughs key questions to address regarding innovation where are breakdowns occurring from a process perspective resource allocation governance on decision making i corporate category global local personnel is spending enough of its on research or is spending disproportionately on development of product line extensions and did the company diminish its competency when it implemented connect and develop years ago supplementing internal research with outside partners crowd sourcing are outside partners reticent to bring best ideas to despite scale advantage because of its perceived bureaucracy and difficulty incubating and developing ideas | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
short term thinking doubled down on proven brands just as the world went small local | Trian Partners
must learn to play the small and local game men shave owned by owned by owned by china diapers pampers owned by | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
outsiders will come up with great ideas that can take advantage of through a as peers have done nana ore clark or gee wee | Trian Partners
but must make a integration a core capability the company has either given up or is struggling with past deals | Trian Partners
which will require a change in culture | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
must have more anxiety over commerce | Trian Partners
small competitors are doing more with less in digital social | Trian Partners
commerce brands are now entering traditional channels threatening core business a a titty | Trian Partners
in case there is concern nelson lacks digital awareness case study ree company | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
strategic initiative address insular culture believes decade long record of relates in great part to a culture that is insular rejecting outsiders and new ways of thinking in our experience there is a correlation between companies and the unwillingness to embrace outside perspectives told nelson that we cannot bring in outside people at too senior a level or they will fail according to as of not a single or leader appears to have any experience outside increase mix of external talent set goal for approximately of top executives to have significant outside experience ensure that future succession planning from the to the three proposed presidents and down through the ranks gives proper consideration to outside candidates | Trian Partners
navigating changes in consumer tastes social media and technology requires external experience | Trian Partners
no leaders in operating roles have external experience today believes that should embrace a best athlete approach to filling every position considering both internal and external hires for roles the goal should be to have at least of the top commercial executives with significant external experience | Trian Partners
detail on leadership team as listed on its | Trian Partners
future succession process should plan for potential external candidates today years experience | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
strategic initiative improve corporate governance | Trian Partners
by own standards nelson would be a valuable director | Trian Partners
nelson will add significant experience to the board nelson board excluding | Trian Partners
nelson will bring an entrepreneurial to board in addition to experience improving large national companies nelson has successfully invested in and grown small and mid size consumer brands these brands have successfully competed against industry giants by getting the most out of available resources being agile thinking out of the box and being open to disruptive strategies many of existing board members have developed their careers at large institutions express walt however in a world increasingly moving towards fragmenting consumer brands where large businesses like need to act more nimbly embracing a smaller company will be critical nelson has helped turn around large national companies in part by instilling the principles he learned as an owner and operator of small mid size companies sap school case study paha see | Trian Partners
succession planning has been an area of weakness for board a bob a | Trian Partners
flip flopped on strategy over the past decade long term strategic planning is the board responsibility back a few years ago when we went to more countries more places we got out of balance on the top line we went hard on the top line and what happened is we started to have real profit issues we got overextended in some countries then we went i think pretty hard the other way on costs we went through cuts and cuts many of us around the world were reorganizing trying to work at cost august employee performance has deteriorated we believe partly due to the lack of an appropriate and consistent long term strategy to address critical challenges a direct responsibility of the board | Trian Partners
management has received generous bonuses despite poor results as a result of steadily declining financial targets management has been paid out approximately of their annual target bonus over the past and years even with weak operating results and near worst in class in | Trian Partners
| Trian Partners
despite the benefits of adding nelson to the board the request was rejected on the spot at both meetings held with independent directors without feedback from the meetings being presented to the full board notably did not allow nelson to meet the entire board prior to turning down the request he only met with two independent directors in person and one by phone nelson offered to visit all directors individually or in group sessions whenever it might be convenient for them the board decided to spend an estimated of shareholder money engaging in a proxy contest while out of directors have not even met nelson in person they can take all those fees and save them and put this man on the board who done more homework than anyone else and he give you this homework for free memo to gamble is than all of those advisors and knows the space squawk on the street source sec filings | Trian Partners
revitalize together i a record of strategic initiatives regain lost market share a organize in way that promotes accountability ensure management productivity plan delivers results fix the innovation machine develop small mid size local brands make a a growth strategy and a core competency win in digital address insular culture improve corporate governance appendix overview | Trian Partners
long track record of value creation in the consumer sector has worked closely with numerous companies across the consumer landscape and has demonstrated a consistent track record of value creation with numerous corporate and brand turnarounds consumer investments where nelson served on the board growth company | Trian Partners
a highly engaged we i ana | Trian Partners
what differentiates long term operations strategy focused highly collaborative engagement with management boards | Trian Partners
experience revitalizing consumer brands including nationals | Trian Partners
experience revitalizing consumer brands including nationals | Trian Partners
management board testimonials | Trian Partners
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