Gillette CEO Presents Business Overview, Outlines Action Plan for Strong, Sustained Growth

Business Wire, June 6, 2001

Business Editors

NEW YORK--(BUSINESS WIRE)--June 6, 2001

James M. Kilts, Chairman and Chief Executive Officer of The Gillette Company (NYSE:G), today offered his assessment of the Company and its businesses, as well as details of his plan to deliver top-tier performance and enhance Gillette's position as a premium player in the consumer products industry.

Mr. Kilts's comments were made during a two-hour presentation to a gathering of more than 300 financial analysts, institutional investors and the media at a Gillette-sponsored event in New York City.

Despite having great brands, great people and a great legacy of innovation, Gillette has had a record of chronic underachievement, Mr. Kilts said. To restore top performance, "our short-term focus is to stabilize market share, aggressively reduce costs and improve organizational effectiveness," he said, adding that "2001 is a transition year ... you won't see every issue solved, but there will be progress."

Mr. Kilts addressed several issues that have adversely affected Gillette performance, including excess trade inventories of blades and a decline in the Company's Duracell battery business.

In the thriving global blade and razor business, where Gillette is the world leader with a 70% value share, Mr. Kilts said that Gillette blade shipments have outpaced consumer consumption, leading to excess trade inventories. He said that stringent trade inventory reduction programs are under way, as the Company ends this unhealthy practice "once and for all."

Duracell alkaline batteries remain number one worldwide, but shares have declined despite category growth, due to issues of organizational disruption, trade loading and flawed decision-making on pricing and market segmentation.

"We have an aggressive action plan to address each of these issues and revitalize the battery business," Mr. Kilts said. He described a number of initiatives, including upgrading the Duracell organization, restaging the Copper & Black line by improving its performance and renaming it CopperTop, and increasing marketing support behind the brand.

He added that, "We anticipate earnings growth from Duracell that will make it a solid performer in our portfolio."

Mr. Kilts concluded his remarks by stating that Gillette is "ready to deal with its problems and leverage its strengths ... confident that it will end the year leaner, stronger and better focused than when we began."