Jon Moeller
Chairman of the Board, President and Chief Executive Officer at Procter & Gamble
Thanks, Andre. P&G employees have delivered great results over the past 4 years in a very challenging macro environment against very capable competition. In those 4 years, P&G people have added more than $13 billion in annual sales and roughly $5 billion in after-tax profit, executing our integrated strategies with excellence. I want to publicly thank our colleagues in product supply and R&D, who have enabled this progress with formulation, sourcing, manufacturing and logistics agility and extraordinary commitment to serve consumers, customers and each other through walk-downs, inbound supply shortages, outbound truck shortages, port blockages, natural disasters and geopolitical tensions. What P&G's people have accomplished together is truly extraordinary.
Still, we're very clear-eyed about the trials ahead. The list of challenges we face heading into our new fiscal year is longer than any I can recall. The progress we've made and our collective commitment to our strategies give me confidence we can manage through these challenges. We've never been better positioned. A portfolio that's focused on daily-use categories where performance drives brand choice; superiority across product, package, brand communication, in-store execution and value; leveraging that superiority to grow markets and our share in them; creating business versus taking business, powerful with our retail partners as we work to jointly create value.
We've developed a productivity muscle that helps address some of the challenges we face. We remain fully committed to cost and cash productivity in all facets of our business, up and down the income statement and across the balance sheet in each business and corporately. Productivity improvement is a necessity to drive balanced top and bottom line growth and strong cash generation.
Success in our highly competitive industry and in this dynamic and challenging environment requires agility that comes with a mindset of constructive disruption, a willingness to change, adapt and create new trends and technologies that will shape our industry for the future. In the current environment, that agility and constructive disruption mindset are even more important.
Our organization structure is yielding what we intended: a more empowered, agile and accountable organization with little overlap or redundancy, flowing to new demands, seamlessly supporting each other. This improved agility and accountability have been important enablers of our strong results in the dynamic[Phonetic] environment we faced.
Going forward, there are 4 areas in which we need to be even more deliberate and intentional to strengthen the execution of the strategy. The first is supply, improved capacity, agility, cost efficiency and resilience for a new reality and a new age. The capability investments we made prior to COVID to improve our manufacturing and distribution networks have helped us to manage through the last few years with relatively few prolonged issues. We're already making the next round of investments needed to ensure we have multiple qualified suppliers for key inputs, sufficient manufacturing capacity to satisfy growing demand and flexibility to meet the changing needs of all types of retailers.
The second area is environmental sustainability, integrated into our product packaging and supply chain innovation work, irresistibly superior offerings that are sustainable. New cardboard packaging on Gillette razors is an improvement for the environment and a noticeably superior experience for consumers at the first and second moments of truth. New fully recyclable paper packaging on our premium Always cotton protection pads recently launched in Germany. Laundry detergent formulations that deliver superior cleaning in cold water, reducing energy usage, saving money and extending garment lifespans for consumers.
Third, increasing our digital acumen to drive consumer and customer preference, reduce cost and enable rapid and efficient decision-making. Increased digitization on manufacturing lines. More use of AI, more use of blockchain are not ends onto themselves. They are tools we can use to delight consumers and customers at the most reasonable cost possible.
Fourth, our employee value equation for all gender identities, races, ethnicities, sexual orientations, ages and abilities for all roles to ensure we continue to attract, retain and develop the best talent. By definition, this must include equality. To deliver a superior employee value equation, there must be something in it for everyone. These are not new or separate strategies. They are necessary elements in continuing to build superiority and reducing cost to enable investment to value creation and strengthening our organization. They are part of the constructive disruption we must continue to lead.
The operational costs and currency challenges we faced over the last 2 years will continue in fiscal '23. We began the new fiscal year with consumers facing inflation levels not seen in the last 40 years. We know one of the most pressing questions out there is how we plan to deal with the severe cost and currency impacts we're facing: $6.5 billion after-tax in just 2 years, nearly an $8 billion hit to operating profit.
I'll repeat what I said on our April 2020 earnings call: the best response to uncertainties and challenges we face is to double down on the integrated set of strategies that are delivering very strong results. It won't be easy, there will be bumps along the road, but we have the portfolio, superiority, productivity and in my not-so-humble opinion, the best organization in the world. We have everything we need. So again, I think we are very well positioned.
We're committed to keep investing to strengthen the superiority of our brands across innovation, supply chains and brand equity to deliver superior value for consumers in every price tier in which we compete. Alongside our productivity work, we'll continue to offset a portion of the cost impacts with price increases. Whenever possible, we'll close a couple of those price increases with innovation. Those moves will be tailored to the market, category and brand.
As consumers face increased pressure on nearly every aspect of their household budgets, we invest to deliver truly superior value in combination of price and product performance to earn their loyalty every day. So far, elasticities in most categories where we've taken price increases have been better than our historical experience.
Our strategic choices on portfolio, superiority, productivity, constructive disruption and organization are not independent strategies. They reinforce and build on each other, and the 4 focus areas that I mentioned strengthen the execution of that strategy. When all of this is executed well, we grow markets, which in turn grow share, sales and profit. These integrated strategies are a pathway to delivering a balanced growth.
We've been talking about the importance of balance for a long time in the context of needing both top line and bottom line growth to deliver value for shareowners. We're in a world that needs more from us now. We need to expand that concept to serve and delight consumers, customers, employees, society and our shareowners. And I firmly believe that if we fail to do any of those, we will fail to do all of them.
Our consumers increasingly rely on us to deliver superior solutions that are sustainable. Our world requires that we do our part in this regard. This challenge is also a wonderful opportunity to extend our margin of superiority, further grow our categories and create more value, all while positively impacting the environment and society. These strategies were delivering strong results before the pandemic and have served us well during these volatile times. We're confident they remain the right strategic framework as we move forward.
With that, I'll hand it back to Andre to outline our guidance for fiscal 2023.