Pg Annual Report 2012

Robert A. McDonald Chairman of the Board, President and Chief Executive Officer

Dear Shareholders:

P&G is the world’s largest and most profitable consumer packaged goods company, with nearly $84 billion in sales and more than $10 billion in net earnings. We have built a portfolio of 25 billion-dollar brands — each of which generates from $1 billion to more than $10 billion of sales per year. They span a broad range of product categories — including household care, beauty, grooming, and personal health care — and are household names around the world, including Pampers, Gillette, Tide, Ariel, Downy, Pantene, Head & Shoulders, Olay, Oral-B, Crest, Dawn, Fairy and Always. We have three times more billion-dollar brands in our categories than our next-largest competitor and more than most of our remaining competitors combined.

Focusing Our Growth Strategy

WE ARE FOCUSING P&G’S growth strategy on

our biggest opportunities:

40

We are focusing on our 40 largest and most profitable product categories in the most important geographic markets. These 40 businesses represent about 50% of sales and nearly 70% of operating profit.

We’re celebrating P&G’s 175th anniversary this year, a milestone that very few companies have achieved. Our long track record of success is based on a time-tested business model — we discover meaningful insights into what consumers need and want; we translate those insights into noticeably superior products focused on those needs; we communicate that superiority through advertising that includes compelling claims, performance demonstrations, and superior benefit visuals; and we price our products at a point where consumers experience superior overall value. All of this drives leadership market share, higher sales and lower costs, which enable us to reinvest in our business and win on a sustained basis. This model is simple and clear — and when we execute it consistently, we win.

20

We are focusing resources on winning with our 20...