Broad Organic Top-Line Growth NEW YORK, July 25, 2006
/PRNewswire-FirstCall/ -- Colgate-Palmolive Company (NYSE:CL) today
announced strong worldwide sales and unit volume growth for second
quarter 2006, with every operating division showing top-line
organic growth. Worldwide sales and unit volume, as reported
including divestments, grew 6.0% and 4.0%, respectively. Excluding
divestments, worldwide sales and unit volume grew 8.5% and 6.5%,
respectively, on top of 8.0% volume growth in the year ago quarter.
Global pricing increased 1.5% and foreign exchange added 0.5%. The
very strong top line growth was supported by record advertising
spending, which increased absolutely and as a percent to sales.
Second quarter 2006 results include $115.9 million of aftertax
charges related to the 2004 Restructuring Program. These
restructuring charges include costs associated with the Company's
previously disclosed voluntary early retirement program. In the
year-ago quarter, restructuring charges totaled $28.7 million
aftertax. Also as previously disclosed, effective January 1, 2006,
the Company adopted FAS 123R related to stock-based compensation,
which resulted in an incremental $8.3 million non-cash, aftertax
charge in the current quarter or less than $.02 per share, with no
such charge in 2005. Reported net income and diluted earnings per
share were $283.6 million and $.51, respectively, including the
restructuring and FAS 123R stock compensation charges noted above.
Excluding these items in both periods, net income in the quarter
increased 10% versus second quarter 2005 to an all-time record
$407.8 million, and diluted earnings per share increased 10% to
$.74, also an all-time record. In second quarter 2005, reported net
income and diluted earnings per share were $342.9 million and $.62,
respectively, and net income and diluted earnings per share
excluding restructuring charges were $371.6 million and $.67,
respectively. As reported, gross profit margin was 54.2%. Excluding
restructuring charges, gross profit margin was 56.1%, a second
quarter record and a 100 basis point improvement versus the year
ago period. Operating profit as reported declined 15% versus second
quarter 2005. Excluding the restructuring and stock compensation
charges, operating profit rose to an all-time record level, up 11%
versus second quarter 2005, with increases in every operating
division. On the same basis, operating profit margin grew from
20.3% to 21.2% of sales. Net cash provided by operations during the
first half decreased 4.5% to $695.9 million versus first half 2005,
due to increased income tax payments year to date. The increase in
year to date income taxes paid is primarily timing-related and does
not change the Company's previously announced expected full year
tax range of 31% to 32%, excluding the impact of restructuring
charges. End of second quarter working capital improved to 3.9% of
sales versus 4.3% last year. Reuben Mark, Chairman and CEO said,
"We're delighted that our objectives of simultaneously increasing
gross margin, building advertising spending and boosting
profitability are all being achieved, and are accompanied by very
strong internally generated top-line growth. "Our core businesses
are robust, with our oral care sales growing 12% worldwide, led by
double-digit growth in North America, Latin America and Greater
Asia." Ian Cook, President and COO further commented, "We are
pleased that new product activity supported by record level
advertising worldwide is generating market share gains both here in
the U.S. and abroad." Mr. Mark continued, "Colgate's fundamentals
are strong. In addition to gross margin improvements, overhead as a
percentage to sales is down in every operating division. This
combination has allowed us to offset material cost increases while
maintaining heavy advertising pressure. This pressure, in turn, has
lead to our excellent top-line growth. We expect the robust organic
sales trends that we saw in the first half to continue. Looking
ahead, we expect our gross profit margin, before restructuring
charges, to be up nicely for the year as a result of our ongoing
cost-savings initiatives, improved pricing, restructuring and
promotional savings. "All this adds to our confidence that Colgate
will deliver good quality double-digit E.P.S. growth for this year,
excluding restructuring and stock compensation charges, and for
2007 as well." At 11:00 a.m. ET today, Colgate will host a
conference call to elaborate on second quarter results. To access
this call as a webcast, please go to Colgate's web site at
http://www.colgate.com/. The following are comments about
divisional performance. See attached Geographic Sales Analysis and
Segment Information schedules for additional information on
divisional sales and operating profit. The information regarding
Europe/South Pacific and Greater Asia/Africa reflects the modified
geographic reporting structure implemented by Colgate effective
January 1, 2006, as previously disclosed. North America (21% of
Company Sales) Positive growth continued in North America, fueled
by new product sales and market share gains. Sales as reported rose
2.5%, on 2.0% volume growth during the quarter. Sales and unit
volume, excluding the divestment of the North American detergent
business, grew 8.5% and 8.0%, respectively, to a record level, on
top of very strong growth in the year ago period. Positive foreign
exchange added 0.5% while pricing was even with the year ago
period. North American operating profit increased 6% even after the
negative profit impact of the detergent divestment and an increase
in advertising spending. Excluding the divestment, operating profit
growth from North America was up double-digits. Effective May 1,
2006, Colgate entered the fast-growing Naturals segment in the U.S.
by completing its purchase of 84 percent of the outstanding shares
of Tom's of Maine, a leading natural oral and personal care
company. Tom's of Maine toothpaste strengthened its leadership in
the Naturals segment during the quarter with its ACNielsen market
share expanding year to date. Tom's of Maine added 1.5% to North
American sales and unit volume growth. Colgate's leadership of the
U.S. toothpaste market continues to grow, with its ACNielsen market
share reaching 37.3% year to date, up 20 basis points versus the
year ago period and over three share points ahead of the nearest
competitor. Colgate's share of the manual toothbrush market is also
growing now at 23.3% year to date, up 80 basis points versus year
ago. In the U.S., new product activity is contributing to growth
across categories. Successful new products include Colgate Luminous
toothpaste, Colgate 360 Degree manual toothbrush, Palmolive Oxy
Plus Odor Eliminator dish liquid, Irish Spring MicroClean bar soap,
Softsoap Brand Kitchen Fresh Hands and Softsoap Brand Shea Butter
liquid hand soaps, and Softsoap Brand Pure Cashmere moisturizing
body wash. Positive growth momentum in the U.S. is expected to
continue throughout the year driven by new product launches
supported by higher advertising spending. New launches planned for
second half 2006 include Colgate Max Fresh Kiss Me Mint toothpaste,
Palmolive Oxy Foam dishwashing liquid, Fabuloso multi-purpose spray
cleaner and Suavitel Ultra fabric conditioner. Latin America (25%
of Company Sales) Latin American sales grew 14.0% in the second
quarter to an all-time record level. Unit volume for the region
grew 7.5% on top of 11% growth in the year ago period. Virtually
every country in the region contributed to the strong volume gains,
led by Brazil, Mexico, Venezuela, Central America, the Dominican
Republic and Argentina. Positive foreign exchange added 1.5% and
higher pricing contributed 5.0%. Latin American operating profit
increased 23%, to an all-time record level even after a strong
double-digit increase in advertising behind Colgate brands during
the quarter. Colgate continues to build its strong leadership in
oral care throughout Latin America with toothpaste market share
gains seen in nearly every country in the region, reaching record
highs in Venezuela, Colombia, Ecuador and Chile. Colgate's regional
share of the manual toothbrush market also expanded during the
quarter with its leading positions strengthening in Brazil,
Ecuador, Peru and the Dominican Republic. New products contributing
to share gains include Colgate Max Fresh toothpaste, the relaunch
of Colgate Total toothpaste, Colgate 360 Degree manual toothbrush,
Colgate MicroSonic battery-powered toothbrush, Colgate Smiles line
of manual toothbrushes for kids, Protex Oats and Protex Propolis
bar soaps, Palmolive Aromatherapy Vitality and Protex Propolis
shower gels, Lady Speed Stick Double Defense deodorant and
Palmolive Hydra Natura ActiFirm and Extra Dry body lotions.
Europe/South Pacific (24% of Company Sales) As reported,
Europe/South Pacific sales were flat with the year ago period, and
unit volume grew 1.5%. Excluding divestments, Europe/South Pacific
volume grew 2.5% on top of good growth in the year ago quarter.
Strong volume gains in the United Kingdom, Denmark, Spain, Greece,
Holland, Poland, the Czech Republic, Romania and Australia more
than offset low single- digit volume declines in France, Italy and
Germany due to challenging economic conditions in those countries.
Sales in the region, excluding divestments, rose 1.0%, as unit
volume growth was partially offset by 0.5% negative foreign
exchange and negative pricing of 1.0%. Operating profit for the
region grew 4% to an all-time record level. Colgate maintained its
oral care leadership in Europe led by toothpaste market share gains
in the United Kingdom, Spain, Greece, Sweden, Holland, Bulgaria and
the Baltic States. Successful new products driving these gains
include Colgate Time Control, Colgate Max Fresh and Colgate
Sensitive Multi- Protection toothpastes. Recent innovations
contributing to gains in other categories include Colgate 360
Degree manual toothbrush, Colgate MicroSonic battery-powered
toothbrush, Plax Overnight mouth rinse, Palmolive Naturals with
Olive Milk shower gel, Soupline Aromatherapy fabric conditioner and
Ajax Professional Degreaser and Ajax Professional Double Power
spray cleaners. New products driving strong market share gains
throughout the South Pacific region include Colgate Max Fresh
toothpaste, Colgate 360 Degree manual toothbrush, Colgate
MicroSonic battery-powered toothbrush and Ajax Professional
Degreaser spray cleaner. Greater Asia/Africa (16% of Company Sales)
Greater Asia/Africa sales and unit volume, as reported, increased
8.0% and 4.5%, respectively. Excluding the divestment of the
detergent business in Southeast Asia, sales and unit volume for the
division grew 13.0% and 9.5%, respectively. Strong volume gains
were achieved in nearly every country in the region led by Hong
Kong, Malaysia, Thailand, Philippines, India, Russia, Ukraine,
Turkey, the Gulf States, Kenya and South Africa. Colgate sales in
the Greater China region increased by 4%. For the Division as a
whole, pricing increased 2.0% and foreign exchange was positive
1.5%. Operating profit for the region increased 22% to a record
level, despite a record level of advertising supporting Colgate
brands during the quarter. Colgate strengthened its oral care
leadership in the Greater Asia region with 9 out of 14 countries
reporting toothpaste market share gains led by record highs in
Russia and Ukraine. Successful new products driving the oral care
growth include Colgate Max Fresh, Colgate Propolis Fresh and
Colgate Sensitive toothpastes, Colgate 360 Degree manual toothbrush
and Colgate MicroSonic battery-powered toothbrush. New products
contributing to growth in other categories in the region include
Palmolive Aromatherapy with Propolis shower gel and liquid hand
soap, Palmolive Naturals shampoo and conditioner, and Lady Speed
Stick multiform deodorants. Hill's (14% of Company Sales)
Innovative new products and veterinary endorsements continue to
drive growth at Hill's, a world leader in specialty pet food.
Hill's sales and unit volume grew 9.5% and 5.5%, respectively, to a
second quarter record level. Pricing increased 4.0% while foreign
exchange was flat with the year ago period. Operating profit
increased 5% to a record level during the quarter after a strong
double-digit increase in advertising. Innovative new products
contributing to growth in the U.S. specialty retail channel during
the quarter include Science Diet Lamb Meal & Rice Recipe Large
Breed dog food, Science Diet Lamb Meal & Rice Recipe Small
Bites dog food, and Science Diet Indoor Cat food. In the U.S.
veterinary channel, sales of Prescription Diet j/d Canine, a food
clinically proven to improve mobility in dogs with arthritis, and
the relaunch of Prescription Diet d/d Canine and Feline, which
addresses a range of inflammatory skin conditions, continue to
exceed expectations. Internationally, growth was strong led by
Belgium, Germany, Denmark, Greece, South Africa, Australia, New
Zealand, Hong Kong and Russia. * * * About Colgate-Palmolive:
Colgate-Palmolive is a leading global consumer products company,
tightly focused on Oral Care, Personal Care, Home Care and Pet
Nutrition. Colgate sells its products in over 200 countries and
territories around the world under such internationally recognized
brand names as Colgate, Palmolive, Mennen, Softsoap, Irish Spring,
Protex, Sorriso, Kolynos, Elmex, Ajax, Axion, Soupline, and
Suavitel, as well as Hill's Science Diet and Hill's Prescription
Diet pet foods. For more information about Colgate's global
business, visit the Company's web site at http://www.colgate.com/.
This press release and the related webcast (other than historical
information) may contain forward-looking statements. Actual events
or results may differ materially from those statements. Investors
should consult the Company's filings with the Securities and
Exchange Commission (including the information set forth under the
captions "Risk Factors" and "Cautionary Statement on
Forward-Looking Statements" in the Company's Form 10-K for the year
ended December 31, 2005) for information about factors that could
cause such differences. Copies of these filings may be obtained
upon request from the Company's Investor Relations Department or
the Company's web site at http://www.colgate.com/. Non-GAAP
Financial Measures The following provides information regarding the
non-GAAP measures used in this earnings release: To supplement
Colgate's condensed consolidated financial statements presented in
accordance with accounting principles generally accepted in the
United States of America (GAAP), the Company has disclosed non-GAAP
measures of operating results that exclude certain items. Gross
profit margin, operating profit, effective tax rate, net income,
and earnings per share are discussed in this release both as
reported (on a GAAP basis) and excluding the impact of certain
items, which are composed of charges related to the restructuring
program that began in the fourth quarter of 2004 and is expected to
be substantially completed by 2008 (the "2004 Restructuring
Program") as well as the incremental charge associated with the
adoption of a new accounting standard, "Other Item," as explained
below. The restructuring charges, which are reported in the
corporate segment, include separation- related costs, incremental
depreciation and asset write-downs and other costs related to the
implementation of the 2004 Restructuring Program. In light of their
nature and magnitude, the Company believes the above items should
be presented separately to enhance an investor's overall
understanding of its ongoing operations. The Other Item, which
pertains to 2006, reflects an incremental non-cash charge
associated with the Company's adoption of Financial Accounting
Standards Board Statement of Financial Accounting Standards No.
123R, "Share-Based Payment" (FAS 123R). The Company adopted FAS
123R effective January 1, 2006 using the modified prospective
transition method and therefore has not restated prior periods'
results. However, as required by FAS 123R, the Company recorded an
incremental stock-based compensation charge related to the
expensing of stock options and the accelerated expense recognition
of restricted stock awards granted to retirement eligible
individuals in the results for the three months ended June 30, 2006
and for the six months ended June 30, 2006. To enhance an
investor's ability to make period over period comparisons, the
Company believes this item should be presented separately for as
long as the prior period does not include the charge. Management
believes these non-GAAP financial measures provide useful
information to investors regarding the underlying business trends
and performance of the Company's ongoing operations and are useful
for period over period comparisons of such operations. The Company
uses these financial measures internally in its budgeting process
and as factors in determining compensation. While the Company
believes that these financial measures are useful in evaluating the
Company's business, this information should be considered as
supplemental in nature and is not meant to be considered in
isolation or as a substitute for the related financial information
prepared in accordance with GAAP. In addition, these non-GAAP
financial measures may not be the same as similar measures
presented by other companies. See "Consolidated Income Statement
and Supplemental Information - Reconciliation Excluding the 2004
Restructuring Program and Other Item" for the three months ended
June 30, 2006 and 2005 and the six months ended June 30, 2006 and
2005 included with this release for a reconciliation of these
financial measures to the related GAAP measures. Sales and unit
volume growth, both worldwide and in relevant geographic divisions,
and operating profit in certain geographic divisions are discussed
in this release both as reported and excluding divestments.
Management believes this provides useful information to investors
as it allows comparisons of sales growth and volume growth and
operating profit from ongoing operations. See "Geographic Sales
Analysis, Percentage Changes - Second Quarter 2006 vs. 2005" for a
comparison of sales excluding divestments to sales as reported in
accordance with GAAP. The Company defines free cash flow before
dividends as net cash provided by operations less capital
expenditures. As management uses this measure to evaluate the
Company's ability to satisfy current and future obligations,
repurchase stock, pay dividends and fund future business
opportunities, the Company believes that it provides useful
information to investors. Free cash flow before dividends is not a
measure of cash available for discretionary expenditures since the
Company has certain non-discretionary obligations such as debt
service that are not deducted from the measure. Free cash flow
before dividends is not a GAAP measurement and may not be
comparable to similarly titled measures reported by other
companies. (See attached tables for second quarter results.) Table
1 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Item For the Three Months Ended
June 30, 2006 and 2005 (in Millions Except Per Share Amounts)
(Unaudited) 2006 Adoption Excluding As Impact of Restructuring
Reported Restructuring FAS 123R & FAS 123R Net sales $3,014.3
$- $- $3,014.3 Cost of sales 1,381.2 57.7 - 1,323.5 Gross profit
1,633.1 (57.7) - 1,690.8 Gross profit margin 54.2% 56.1% Selling,
general and administrative expenses 1,052.3 14.1 11.8 1,026.4 Other
(income) expense, net 119.9 96.1 - 23.8 Operating profit 460.9
(167.9) (11.8) 640.6 Operating profit margin 15.3% 21.2% Interest
expense, net 41.3 - - 41.3 Income before income taxes 419.6 (167.9)
(11.8) 599.3 Provision for income taxes 136.0 (52.0) (3.5) 191.5
Effective tax rate 32.4% 32.0% Net income 283.6 (115.9) (8.3) 407.8
Earnings per common share Basic $0.54 $(0.22) $(0.02) $0.78 Diluted
$0.51 $(0.21) $(0.02) $0.74 Average common shares outstanding Basic
515.8 515.8 515.8 515.8 Diluted 551.4 551.4 551.4 551.4
Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Item For the Three Months Ended
June 30, 2006 and 2005 (in Millions Except Per Share Amounts)
(Unaudited) 2005 Excluding As Reported Restructuring Restructuring
Net sales $2,837.5 $- $2,837.5 Cost of sales 1,298.4 23.1 1,275.3
Gross profit 1,539.1 (23.1) 1,562.2 Gross profit margin 54.2% 55.1%
Selling, general and administrative expenses 959.1 - 959.1 Other
(income) expense, net 38.9 12.9 26.0 Operating profit 541.1 (36.0)
577.1 Operating profit margin 19.1% 20.3% Interest expense, net
30.9 - 30.9 Income before income taxes 510.2 (36.0) 546.2 Provision
for income taxes 167.3 (7.3) 174.6 Effective tax rate 32.8% 32.0%
Net income 342.9 (28.7) 371.6 Earnings per common share Basic $0.64
$(0.06) $0.70 Diluted $0.62 $(0.05) $0.67 Average common shares
outstanding Basic 521.4 521.4 521.4 Diluted 557.4 557.4 557.4 Table
2 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Item For the Six Months Ended June
30, 2006 and 2005 (in Millions Except Per Share Amounts)
(Unaudited) 2006 Adoption Excluding As Impact of Restructuring
Reported Restructuring FAS 123R & FAS 123R Net sales $5,884.9
$- $- $5,884.9 Cost of sales 2,688.3 109.8 - 2,578.5 Gross profit
3,196.6 (109.8) - 3,306.4 Gross profit margin 54.3% 56.2% Selling,
general and administrative expenses 2,069.9 19.1 29.4 2,021.4 Other
(income) expense, net 148.3 104.8 - 43.5 Operating profit 978.4
(233.7) (29.4) 1,241.5 Operating profit margin 16.6% 21.1% Interest
expense, net 78.6 - - 78.6 Income before income taxes 899.8 (233.7)
(29.4) 1,162.9 Provision for income taxes 291.7 (71.0) (9.0) 371.7
Effective tax rate 32.4% 32.0% Net income 608.1 (162.7) (20.4)
791.2 Earnings per common share Basic $1.15 $(0.32) $(0.04) $1.51
Diluted $1.10 $(0.30) $(0.04) $1.44 Average common shares
outstanding Basic 515.5 515.5 515.5 515.5 Diluted 550.8 550.8 550.8
550.8 Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Item For the Six Months Ended June
30, 2006 and 2005 (in Millions Except Per Share Amounts)
(Unaudited) 2005 Excluding As Reported Restructuring Restructuring
Net sales $5,580.5 $- $5,580.5 Cost of sales 2,537.8 33.8 2,504.0
Gross profit 3,042.7 (33.8) 3,076.5 Gross profit margin 54.5% 55.1%
Selling, general and administrative expenses 1,903.5 - 1,903.5
Other (income) expense, net 105.5 51.9 53.6 Operating profit
1,033.7 (85.7) 1,119.4 Operating profit margin 18.5% 20.1% Interest
expense, net 62.5 - 62.5 Income before income taxes 971.2 (85.7)
1,056.9 Provision for income taxes 328.2 (12.4) 340.6 Effective tax
rate 33.8% 32.2% Net income 643.0 (73.3) 716.3 Earnings per common
share Basic $1.20 $(0.14) $1.34 Diluted $1.15 $(0.13) $1.28 Average
common shares outstanding Basic 523.1 523.1 523.1 Diluted 559.5
559.5 559.5 Table 3 Colgate-Palmolive Company Condensed
Consolidated Balance Sheets As of June 30, 2006, December 31, 2005
and June 30, 2005 (Dollars in Millions) (Unaudited) June 30,
December 31, June 30, 2006 2005 2005 Cash and cash equivalents
$430.4 $340.7 $392.1 Receivables, net 1,380.7 1,309.4 1,315.4
Inventories 986.7 855.8 915.7 Other current assets 321.8 251.2
306.2 Property, plant and equipment, net 2,504.5 2,544.1 2,548.6
Other assets, including goodwill and intangibles 3,337.1 3,205.9
3,189.2 Total assets $8,961.2 $8,507.1 $8,667.2 Total debt 3,613.4
3,446.2 3,889.1 Other current liabilities 2,202.8 2,214.8 2,031.2
Other non-current liabilities 1,549.5 1,496.0 1,552.0 Total
shareholders' equity 1,595.5 1,350.1 1,194.9 Total liabilities and
shareholders' equity $8,961.2 $8,507.1 $8,667.2 Supplemental
Balance Sheet Information Debt less cash and marketable securities*
$3,162.4 $3,095.2 $3,487.7 Working capital % of sales 3.9% 1.7%
4.3% * Marketable securities of $20.6, $10.3 and $9.3 as of June
30, 2006, December 31, 2005 and June 30, 2005, respectively, are
included in Other current assets. Table 4 Colgate-Palmolive Company
Condensed Consolidated Statements of Cash Flows For the Six Months
Ended June 30, 2006 and 2005 (Dollars in Millions) (Unaudited) 2006
2005 Operating Activities Net income $608.1 $643.0 Adjustments to
reconcile net income to net cash provided by operations:
Restructuring, net of cash 153.4 61.8 Depreciation and amortization
162.4 165.2 Stock-based compensation expense 51.0 19.0 Cash effects
of changes in: Receivables (58.3) (26.8) Inventories (116.7) (95.7)
Accounts payable and other accruals (92.9) (39.3) Other non-current
assets and liabilities (11.1) 1.2 Net cash provided by operations
695.9 728.4 Investing Activities Capital expenditures (136.7)
(159.2) Payment for acquisitions, net of cash acquired (104.2) 0.0
Other (11.1) (4.9) Net cash used in investing activities (252.0)
(164.1) Financing Activities Principal payments on debt (932.3)
(1,119.9) Proceeds from issuance of debt 1,044.3 1,432.5 Dividends
paid (329.9) (291.2) Purchases of treasury shares (335.7) (513.5)
Proceeds from exercise of stock options and excess tax benefits
200.0 19.3 Net cash used in financing activities (353.6) (472.8)
Effect of exchange rate changes on Cash and cash equivalents (0.6)
(19.0) Net increase in Cash and cash equivalents 89.7 72.5 Cash and
cash equivalents at beginning of period 340.7 319.6 Cash and cash
equivalents at end of period $430.4 $392.1 Supplemental Cash Flow
Information Free cash flow before dividends (Net cash provided by
operations less capital expenditures) Net cash provided by
operations $695.9 $728.4 Less: Capital expenditures (136.7) (159.2)
Free cash flow before dividends $559.2 $569.2 Income taxes paid
$392.1 $298.3 Table 5 Colgate-Palmolive Company Segment Information
For the Three and Six Months Ended June 30, 2006 and 2005 (Dollars
in Millions) (Unaudited) Three Months Six Months Ended Ended June
30, June 30, 2006 2005 2006 2005 Net sales Oral, Personal and Home
Care North America $647.4 $632.1 $1,265.0 $1,241.8 Latin America
741.1 651.4 1,433.8 1,239.9 Europe/South Pacific 721.2 722.1
1,412.9 1,442.3 Greater Asia/Africa 493.8 456.4 977.1 921.6 Total
Oral, Personal and Home Care $2,603.5 $2,462.0 $5,088.8 $4,845.6
Pet Nutrition 410.8 375.5 796.1 734.9 Total Net sales $3,014.3
$2,837.5 $5,884.9 $5,580.5 Three Months Six Months Ended Ended June
30, June 30, 2006 2005 2006 2005 Operating profit Oral, Personal
and Home Care North America $142.9 $135.3 $275.2 $272.1 Latin
America 219.9 179.3 431.1 342.4 Europe/South Pacific 163.1 156.9
315.6 311.3 Greater Asia/Africa 68.0 55.9 133.4 118.7 Total Oral,
Personal and Home Care 593.9 527.4 1,155.3 1,044.5 Pet Nutrition
107.9 102.6 211.7 200.8 Corporate (240.9) (88.9) (388.6) (211.6)
Total Operating profit $460.9 $541.1 $978.4 $1,033.7 Effective
January 1, 2006, the Company modified the geographic reporting
structure of its Oral, Personal and Home Care segment in order to
address evolving markets and more closely align countries with
similar consumer needs and retail trade structures. Management
responsibility for Eastern European operations including Russia,
Turkey, Ukraine and Belarus, transferred to Greater Asia management
and responsibility for countries in the South Pacific, including
Australia, was transferred to European management. The financial
information for 2005 has been reclassified to conform to the new
reporting structure. The Company evaluates segment performance
based on several factors, including Operating profit. The Company
uses Operating profit as a measure of operating segment performance
because it excludes the impact of corporate- driven decisions
related to interest expense and income taxes. Corporate operations
include research and development costs, unallocated overhead costs,
stock-based compensation related to stock options and restricted
stock awards, restructuring and related implementation costs, and
gains and losses on sales of non-core brands and assets. Corporate
operating expenses for the three and six months ended June 30, 2006
include $167.9 and $233.7 of charges related to the Company's 2004
Restructuring Program, respectively. Additionally, Corporate
operating expenses for the three and six months ended June 30, 2006
include an incremental charge of $11.8 and $29.4 related to the
adoption of FAS 123R, respectively. Corporate operating expenses
for the three and six months ended June 30, 2005 include $36.0 and
$85.7 of charges related to the Company's 2004 Restructuring
Program, respectively. Table 6 Colgate-Palmolive Company Geographic
Sales Analysis Percentage Changes - Second Quarter 2006 vs 2005
June 30, 2006 (Unaudited) COMPONENTS OF SALES CHANGE SECOND QUARTER
Pricing 2nd Qtr 2nd Qtr Coupons Sales Sales Consumer & Change
Change Ex-Divested Trade Region As Reported Ex-Divestment Volume
Incentives Exchange Total Company 6.0% 8.5% 6.5% 1.5% 0.5%
Europe/South Pacific 0.0% 1.0% 2.5% -1.0% -0.5% Latin America 14.0%
14.0% 7.5% 5.0% 1.5% Greater Asia/ Africa 8.0% 13.0% 9.5% 2.0% 1.5%
Total International 7.0% 8.5% 6.0% 2.0% 0.5% North America 2.5%
8.5% 8.0% 0.0% 0.5% Total CP Products 5.5% 8.5% 6.5% 1.5% 0.5%
Hill's 9.5% 9.5% 5.5% 4.0% 0.0% Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes - Second Quarter 2006
vs 2005 June 30, 2006 (Unaudited) COMPONENTS OF SALES CHANGE SIX
MONTHS Pricing 6 Months 6 Months Coupons Sales Sales Consumer &
Change Change Ex-Divested Trade Region As Reported Ex-Divestment
Volume Incentives Exchange Total Company 5.5% 7.5% 6.5% 1.5% -0.5%
Europe/South Pacific -2.0% -1.0% 5.0% -1.5% -4.5% Latin America
15.5% 15.5% 7.5% 5.5% 2.5% Greater Asia/ Africa 6.0% 10.5% 8.0%
2.0% 0.5% Total International 6.0% 7.5% 6.5% 2.0% -1.0% North
America 2.0% 7.5% 7.0% 0.0% 0.5% Total CP Products 5.0% 7.5% 6.5%
1.5% -0.5% Hill's 8.5% 8.5% 5.5% 4.5% -1.5% DATASOURCE:
Colgate-Palmolive Company CONTACT: Bina Thompson, +1-212-310-3072,
or Hope Spiller, +1-212-310-2291, both of Colgate-Palmolive Company
Web site: http://www.colgate.com/
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