Procter & Gamble and MatrixOne Enter License Agreement

MatrixOne to Bring to Market Proven Technical Specifications Management Application for the Consumer Packaged Goods and Pharmaceuticals Industries

Westford, Mass./Cincinnati – June 27, 2002 — MatrixOne, Inc. (NASDAQ: MONE), a leading provider of product lifecycle management solutions for the value chain, and the Procter & Gamble Company (P&G) (NYSE: PG) today announced P&G’s license to MatrixOne to bring to market a proven, innovative technical specifications management application for the consumer packaged goods (CPG) and pharmaceuticals industries. With technical specification management work processes enabled by this application, P&G has already realized cost savings totaling hundreds of millions of dollars in addition to time-to-market and quality improvements.

Based on the MatrixOne® eMatrixTM product collaboration platform, P&G created an application that combines work processes and an information system for managing the creation, review, approval, distribution, and storage in a single database of all technical specifications necessary to run a CPG manufacturing enterprise. MatrixOne will bring to market this proven technical specifications management application as a packaged product. It will enable the CPG and pharmaceuticals industries to streamline their technical specifications processes and realize significant business benefits.

In the CPG industry, for example, a fundamental process begins with the creation of a technical specification for a product or a material in a product. These “specs” may also apply to packaging, test methods, processing methods, country of sale clearances, supplier approvals, and other operating procedures. The specification is then routed for peer review, revised based on those comments and input, and then formally approved. This requires significant effort and time, particularly in global CPG businesses where specifications are more complex than other industries. Combinations of raw materials and formulas that have a wide array of aesthetic

variations; promotional pack components and assemblies; differing regulatory and safety limitations and approvals of test methods, processing methods and suppliers across multiple countries must all be taken into account.

MatrixOne will provide a packaged application to manage this process and automatically enter these completed specifications into a database that can be readily accessed by anyone in an organization who needs them. Specifications can be reused, rework can be eliminated, costs and time-to-market can be significantly reduced, and quality can be improved. These economies of scale are even more considerable when these collaboration capabilities are extended to the organization’s suppliers.

Kevin O’Marah, Research Fellow at AMR Research, said, “By combining P&G’s deep understanding of the technical needs and challenges of CPG companies with MatrixOne’s established leadership position in the emerging Product Lifecycle Management market, this technical specification application has the potential to dramatically impact both costs and time to market for new product development and introduction in the CPG and pharmaceuticals industries.”

The technical specifications management application enables R&D scientists, engineers, manufacturing and purchasing managers, marketers and others throughout a company, as well as their suppliers, to easily locate and reapply approved specifications, resulting in reductions in material costs and time for product development, and improved quality.

  • Cost Savings: By compiling specifications from multiple suppliers for the same material into a single database, CPG and pharmaceuticals organizations can standardize and purchase materials in larger volumes from preferred suppliers. By consolidating their specifications for purchasing across all of its global units, P&G has reduced its direct materials costs on common materials such as corrugated box materials, pigments, and chemicals totaling hundreds of millions of dollars, thereby improving value of its finished consumer products.

  • Time Savings: By eliminating rework and reducing development time, companies can get products to market faster for additional sales revenue. The technical specifications management application speeds the work process for globally creating, reviewing, and approving specifications. P&G has realized dramatic time savings from the point when a specification is created until it is fully approved. By making material specifications universally available to distributed locations through the application, companies can easily reuse a known material specification and eliminate duplicated efforts.

  • Quality Improvements: The technical specifications management application also enables CPG and pharmaceuticals companies to keep direct and outsourced manufacturing facilities and suppliers up-to-date on material specifications, ensuring they are providing the correct materials and the factories are producing against the latest specifications. This eliminates costly rework and ensures high-quality products that meet all specifications.
“We believe MatrixOne’s collaboration technology to be the best-in-class at flexibly compiling and establishing relationships between our specifications. This is critical to success in sharing information in large, global CPG organizations,” said Steve David, CIO for Procter & Gamble. “The technical specifications management application lets us realize dramatic savings by gathering all of our product information in one place to enable global collaboration internally across all of our business units and externally with our suppliers. This license agreement gives MatrixOne the opportunity to bring these benefits to the entire CPG industry to drive higher-quality, lower-cost products to market.”

“By building a technical specifications management application on our eMatrix technology, Procter & Gamble has furthered its tradition of excellence and created an opportunity for the entire CPG industry to realize new levels of innovation, productivity, and cost savings,” said Mark O’Connell, president and CEO of MatrixOne. “Teaming with this pioneer of innovation reinforces MatrixOne's vision to bring the strategic benefits of product lifecycle management to a wide range of industries faced with similar business challenges. Already, our solutions are the de facto standard in the automotive industry, and we are now able to combine that experience with P&G’s vision to benefit CPG and pharmaceutical companies worldwide.”

Forward-looking statements in this release are subject to risks and uncertainties that could cause our actual results to differ materially from those anticipated. Such statements may relate, among other things, to our plans, objectives and expected financial and operating results. The risks and uncertainties that may affect forward-looking statements include, among others: poor product sales, long sales cycles, difficulty developing new products, difficulty in relationships with vendors and partners, higher risk in international operations, difficulty assimilating future acquisitions, difficulty managing rapid growth, and increased competition. For more about the risks and uncertainties of our business, see our periodic and other S.E.C. filings.

About Procter & Gamble
P&G markets 250 brands to five billion consumers in 140 countries. P&G invests nearly $2 billion a year to develop and improve its products -- leading the way in R&D globally among consumer products companies. P&G’s Global Licensing and External Business Development organization is charged with ensuring the company maximizes the value of its technologies and know-how by selling, licensing and, in some cases, donating technologies. The unit is also responsible for licensing select P&G brand trademarks. P&G's brands include Pampers®, Tide®, Ariel®, Always®, Whisper®, Pantene®, Bounty®, Pringles®, Folgers®, Charmin®, Downy®, Lenor®, Iams®, Olay®, Clairol Nice 'n Easy®, Herbal Essences®, Crest®, Vicks® and Actonel®. P&G employs nearly 106,000 people in more than 80 countries worldwide. For more information about P&G, please visit our website at www.pg.com.

About MatrixOne
MatrixOne, Inc. is changing the way the world brings products to market™ by helping customers to accelerate the right products to market profitably. Committed to the success of innovative companies, MatrixOne, together with its partners, offers product lifecycle management (PLM) solutions that enable enterprises to reduce costs, speed innovation, and maximize revenues across global value chains. MatrixOne's approximately 600 global customers represent the aerospace/defense, automotive, consumer products, general machinery, high technology, and life sciences industries, and include GE, Procter & Gamble, Philips, Siemens, Agilent Technologies, Johnson Controls, and Honda. A global corporation, MatrixOne is headquartered in Westford, Massachusetts.

MatrixOne is a registered trademark, and eMatrix, Changing the Way the World Brings Products to Market, Leading Provider of Product Collaboration for the Value Chain, and Value Chain Portfolio, are trademarks of MatrixOne, Inc. All other trademarks and service marks are the property of their respective owners.

Press Contacts:
Alyssa Ross
MatrixOne, Inc
978-589-4067
alyssa.ross@matrixone.com

Martha Depenbrock
Procter & Gamble
513-983-5366
depenbrock.mw@pg.com
Leila Modarres
Porter Novelli
617-450-4300
leila.modarres@porternovelli.com