Operating and Net Profit Up Double-Digit NEW YORK, April 25, 2007
/PRNewswire-FirstCall/ -- Colgate-Palmolive Company (NYSE:CL) today
announced excellent worldwide sales and unit volume growth together
with double-digit earnings growth for first quarter 2007. Worldwide
sales grew 12.0% to $3,213.9 million and unit volume grew 8.0%, as
reported. Excluding divestments, worldwide sales and unit volume
grew 12.5% and 8.5%, respectively. Global pricing increased 1.0%,
and foreign exchange added 3.0%. The very strong top-line growth
was supported by a 20% increase in worldwide advertising spending
to a record level. First quarter 2007 results include $29.9 million
of aftertax charges related to the 2004 Restructuring Program. In
the year ago quarter, restructuring charges totaled $46.8 million
aftertax. Consistent with its focused business strategy and as
previously announced, the Company sold its household bleach
business in Latin America (except Colombia, where the sale is still
subject to regulatory approval) during first quarter 2007 for an
aftertax gain of $29.7 million which was offset in its entirety by
restructuring charges. First quarter 2007 results also include an
aftertax charge of $8.2 million related to the limited voluntary
recall of certain Hill's Pet Nutrition feline products and an
income tax benefit of $73.9 million which consists primarily of the
reduction of a tax loss carryforward valuation allowance in Brazil.
As reported, gross profit margin increased 190 basis points to
56.4%. Excluding restructuring charges, gross profit margin
increased 110 basis points to 57.4%, an all-time record. Operating
profit as reported increased 26% versus first quarter 2006.
Excluding restructuring charges and the above noted items,
operating profit rose 13%. On the same basis, operating profit
margin grew from 20.3% to 20.6% as a percent of sales. Reported net
income and diluted earnings per share in first quarter 2007 were
$486.6 million and $.89, respectively. Excluding restructuring
charges and the above noted items, net income in the quarter
increased 13% versus first quarter 2006 to a record $421.1 million,
and diluted earnings per share increased 13% to $.77, also a
record. In first quarter 2006, reported net income and diluted
earnings per share were $324.5 million and $.59, respectively, and
net income and diluted earnings per share excluding restructuring
charges were $371.3 million and $.68, respectively. Net cash
provided by operations year to date increased by 28% to $487.9
million after building selected inventories to support the business
during factory closings related to the 2004 Restructuring Program.
End of first quarter 2007 working capital improved to 1.0% of sales
versus 1.5% last year. Reuben Mark, Chairman and CEO said, "We are
delighted with the strength and breadth of our growth on both the
top and bottom lines. The 8.5% global unit volume growth,
ex-divested businesses, is one of the highest quarterly growth
rates in the last decade and every geographic region participated
in the strong growth. "We are also particularly pleased that every
operating division meaningfully increased advertising while still
delivering strong double-digit growth in operating profit." Ian
Cook, President, COO and CEO designate further commented, "It's
great to see the continued improvement in gross profit margin
worldwide. This has provided funding for the higher level of
advertising support which is driving market share gains worldwide
while still generating 13% operating profit growth, excluding
restructuring charges and other items. "Our global toothpaste
leadership continues to expand with market shares at record highs
in many countries around the world. Colgate's worldwide leadership
in manual toothbrushes also continues to strengthen with our global
market share in this category increasing versus year ago to another
record high. "As we look to the balance of the year we are
confident that the strong top-line growth will continue, driven by
our very full new product pipeline, both here in the U.S. and
abroad. As previously noted, we expect gross profit margin
excluding restructuring charges to be up in the high end of our
targeted range of 75 to 125 basis points for the year as a result
of our ongoing cost-savings initiatives, the benefits from
restructuring, promotional savings and a continued shift towards
higher-margin products. Mr. Cook concluded, "All this combined with
this quarter's strong results adds to our confidence that we will
deliver double-digit earnings per share growth for the year,
excluding restructuring charges and other items." The 2004
Restructuring Program is progressing on schedule. As previously
announced, the four-year restructuring program was to deliver
ongoing savings at an annual rate of $250-$300 million after tax by
2008, with total charges for the program of $550-$650 million after
tax. Incremental savings projects in addition to the $250-$300
million have been identified by the Company during implementation
of the restructuring program which will be obtained without
extending the length of the program beyond the previously announced
completion date of December 31, 2008. These additional projects are
projected to increase planned savings by $50 million after tax to a
revised range of $300 to $350 million after tax by year end 2008.
Total cumulative restructuring charges are projected to increase by
$125 million to a revised range of $675 million to $775 million
after tax by that same time. Also, in line with the Company's
previously announced succession plan, Reuben Mark will retire as
Chief Executive Officer on July 1, 2007. At the Board's request,
Mr. Mark will remain as Chairman of the Company's Board of
Directors for a period of up to 18 months after that date. The
Board stated that it is their intention to elect Ian Cook,
currently President and Chief Operating Officer, to become Chief
Executive Officer, effective upon Mr. Mark's retirement as CEO. Mr.
Mark has served as CEO since 1984. At 11:00 a.m. ET today, Colgate
will host a conference call to elaborate on first 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. North America (21% of
Company Sales) Positive growth continued in North America, fueled
by new product sales and market share gains. As reported, sales and
unit volume grew 7.5% during the quarter. Excluding the divestiture
of the Canadian bleach business, sales and unit volume grew 8.5%.
Pricing and foreign exchange were flat with the year ago period.
Tom's of Maine contributed 1.5% to sales and volume growth in the
first quarter of 2007. North American operating profit increased
15% even after an all-time record level of advertising during the
quarter. In the U.S., a new integrated marketing campaign featuring
Brooke Shields helped drive market share for Colgate Total
toothpaste up .6 share points versus year ago to 14.9% year to date
as measured by ACNeilsen. Colgate's share of the manual toothbrush
market is also growing, reaching an all-time record high of 25.8%
year to date, up 270 basis points versus year ago. New product
activity is contributing to growth across categories. Successful
new products include Colgate 360 degree Sensitive manual
toothbrush, Softsoap brand Decorative Collection liquid hand soap,
Irish Spring MoistureBlast bar soap, Softsoap brand Pure Cashmere
moisturizing body wash and liquid hand soap, and Fabuloso
multi-purpose spray cleaner. Positive growth momentum in the U.S.
is expected to continue driven by a full pipeline of new product
launches. Recent introductions reaching store shelves now include
Palmolive Scrub Buster with Micro Beads dish liquid, Irish Spring
body wash for men, Softsoap brand Nutra-Oil body wash, Colgate Max
Fresh BURST toothpaste with 50% more mini breath strips and
Advanced Clean, a Colgate Total toothpaste which helps maintain a
dentist clean feeling between dentist visits. Latin America (25% of
Company Sales) As reported, Latin American sales and unit volume
grew 14.0% and 13.5%, respectively, in the first quarter. Excluding
the divested bleach businesses, sales and unit volume grew 14.5%
and 14.0%, respectively. This is the third consecutive quarter of
double-digit volume growth for Latin America. Every market in the
region contributed to the very strong volume gains, led by Mexico,
Brazil, Venezuela, Central America, Colombia, Argentina, Chile,
Dominican Republic and Ecuador. Higher pricing added 1.0% and
foreign exchange was negative 0.5%. Latin American operating profit
increased 16%, to an all-time record level even after a strong
double-digit increase in advertising during the quarter. Colgate
continues to build its strong leadership in oral care throughout
Latin America with its regional toothpaste market share at a record
75.1% year to date. Toothpaste share gains were achieved in nearly
every country driven by strong sales of Colgate Total and Colgate
Max Fresh Citrus toothpastes and the launch of Colgate Total
Professional Clean toothpaste during the quarter. Colgate expanded
its leadership in manual toothbrushes during the quarter with its
regional market share reaching 36.9%, nearly three share points
ahead of the nearest competitor. The recent launch of Colgate 360
degree manual toothbrush contributed to this success. In other
categories, Palmolive Naturals Mint & Eucalyptus, Protex Deo 12
and Protex Propolis bar soaps, Lady Speed Stick Double Defense
deodorant and Fabuloso liquid cleaner contributed to market share
gains in the region. Europe/South Pacific (24% of Company Sales)
Europe/South Pacific sales increased 13.0% versus year ago, and
unit volume grew 4.5%. Pricing was negative 1.5% and foreign
exchange added 10.0%. Nearly every country in the region
contributed to the volume gains led by France, Denmark, Germany,
Greece, Italy, Spain, Poland, Romania, Australia and New Zealand.
Operating profit for the region grew 17% even after a significant
increase in advertising during the quarter. Colgate maintained its
oral care leadership in Europe/South Pacific led by toothpaste
market share gains in France, Germany, Italy, Spain, Greece,
Austria, Norway, Ireland, Australia and New Zealand. Successful new
premium products driving these gains include Colgate Time Control,
Colgate Sensitive Multi Protection and Colgate Max Fresh
toothpastes. Gaba's toothpaste market share also grew in many
markets across the region, in both the food and pharmacy channels.
In the manual toothbrush category, strong sales of Colgate 360
degree and Colgate 360 degree Sensitive contributed to new market
leadership in this category for the region. Recent premium
innovations contributing to gains in other categories include
Palmolive Pure Cashmere and Palmolive BodYogurt body washes,
Palmolive shower gel for men, Colgate Plax Gentle Care mouth rinse
and Ajax Professional bucket dilutable cleaner. Greater Asia/Africa
(17% of Company Sales) Greater Asia/Africa sales and unit volume
increased 13.5% and 9.0%, respectively. Volume gains were achieved
in nearly every country in the region led by Malaysia, Thailand,
India, Russia, Turkey and South Africa. Unit volume in Greater
China increased 10% during the quarter. For the division as a
whole, pricing increased 1.5% and foreign exchange added 3.0%.
Operating profit for the region increased 24%, even after a sizable
increase in advertising spending 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 India, Philippines, Ukraine, Russia and the rest of the CIS
countries. Colgate's share of the manual toothbrush market also
strengthened throughout the region with nearly every country
achieving record high shares in the category. Successful new
products driving the oral care growth include Colgate Max Fresh
Green Tea, Colgate Sensitive Multi Protection and Colgate Total
Propolis toothpastes and Colgate 360 degree and Colgate Twister
Fresh manual toothbrushes. New products contributing to growth in
other categories in the region include Palmolive Pure Cashmere
shower cream and bar soap, Palmolive Naturals Silky Straight
shampoo, Protex Icy Cool bar soap and Lady Speed Stick Aloe
deodorant. Hill's (13% of Company Sales) Innovative new products
and veterinary recommendations continue to drive growth at Hill's,
a world leader in specialty pet food. As reported, Hill's sales and
unit volume grew 12.0% and 5.0%, respectively, including the
limited voluntary product recall during the quarter. Pricing
increased 4.5% and positive foreign exchange added 2.5%. Operating
profit increased 11% during the quarter. The increase in operating
profit does not reflect the impact of the limited voluntary product
recall as these costs have been included in the Corporate segment
for reporting purposes. Like most major North American pet food
producers, Hill's was affected by the unfortunate recent pet food
recalls concerning the FDA's discovery of melamine in certain wheat
gluten supplies during March 2007. Hill's took the precaution of
voluntarily recalling two feline products, its only products that
may have contained the affected wheat gluten. These products
accounted for 0.5% of Hill's Pet Nutrition's annual sales and the
related sales loss is not anticipated to have a significant impact
on the Company's 2007 annual net sales or operating profit. Hill's
Pet Nutrition's operating profit does not reflect the impact of the
recall as these cost have been included in the Corporate segment,
as noted above. Strong sales of Science Diet Indoor Cat food in new
chicken and seafood flavors drove growth in the U.S. specialty
retail channel during the quarter. In the U.S. veterinary channel,
Prescription Diet j/d Canine, a food clinically proven to improve
mobility in dogs with arthritis, the relaunch of Prescription Diet
d/d Canine and Feline foods, which address a range of inflammatory
skin conditions, and Prescription Diet z/d, a food designed to
address adverse food reactions contributed to growth.
Internationally, growth was strong led by Russia, Denmark, South
Africa, the United Kingdom, Italy, Mexico and France. New pet food
products contributing to the international growth include
Prescription Diet j/d Canine, Prescription Diet Feline Chunks in
Gravy pouches, Science Plan Canine Lamb & Rice and Science Plan
Neutered Cat, a new veterinary exclusive product. * * * 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,
Tom's of Maine, Ajax, Axion, Soupline, and Suavitel, as well as
Hill's Science Diet and Hill's Prescription Diet. 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, 2006)
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. Net sales, cost of
sales, gross profit margin, operating profit, operating profit
margin, other (income) expense, net and 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 reported in the corporate segment, as explained below: -- The
restructuring charges relate 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").
These restructuring charges 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 these
items should be presented separately to enhance an investor's
overall understanding of its ongoing operations. -- The three Other
Items, which pertain only to 2007, are comprised of the gain on
sale of the Company's household bleach business in Latin America, a
charge related to the limited voluntary product recall of certain
Hill's feline products, and tax adjustments which consist of the
reduction of a tax loss carryforward valuation allowance in Brazil,
partially offset by tax provisions for the recapitalization of
certain overseas subsidiaries. The amount of each such excluded
item for the three months ended March 31, 2007 is set forth in the
table entitled "Supplemental Consolidated Income Statement
Information - Other Items" included with this release. In light of
their nature and magnitude, the Company believes that these three
Other Items should be presented separately to enhance an investor's
overall understanding of its ongoing operations. 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 Items" for the three months ended
March 31, 2007 and 2006 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 - First quarter 2007
vs. 2006" 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 first quarter results.) Table 1
Colgate-Palmolive Company Consolidated Income Statement and
Supplemental Information Reconciliation Excluding the 2004
Restructuring Program and Other Items For the Three Months Ended
March 31, 2007 and 2006 (in Millions Except Per Share Amounts)
(Unaudited) 2007 Excluding As Reported Restructuring Other
Restructuring Items (a) & Other Items Net sales $3,213.9 $-
$(2.1) $3,216.0 Cost of sales 1,401.7 31.7 (1.1) 1,371.1 Gross
profit 1,812.2 (31.7) (1.0) 1,844.9 Gross profit margin 56.4% 57.4%
Selling, general and administrative expenses 1,170.2 11.1 - 1,159.1
Other (income) expense, net (9.1) 3.1 (36.0) 23.8 Operating profit
651.1 (45.9) 35.0 662.0 Operating profit margin 20.3% 20.6%
Interest expense, net 42.7 - - 42.7 Income before income taxes
608.4 (45.9) 35.0 619.3 Provision for income taxes 121.8 (16.0)
(60.4) 198.2 Effective tax rate 20.0% 32.0% Net income 486.6 (29.9)
95.4 421.1 Earnings per common share Basic $0.94 $(0.06) $0.19
$0.81 Diluted $0.89 $(0.05) $0.17 $0.77 Average common shares
outstanding Basic 512.7 512.7 512.7 512.7 Diluted 547.0 547.0 547.0
547.0 (a) See Table 2 "Supplemental Consolidated Income Statement
Information - Other Items" for details. Table 1 Colgate-Palmolive
Company Consolidated Income Statement and Supplemental Information
Reconciliation Excluding the 2004 Restructuring Program and Other
Items For the Three Months Ended March 31, 2007 and 2006 (in
Millions Except Per Share Amounts) (Unaudited) 2006 Excluding As
Reported Restructuring Restructuring Net sales $2,870.6 $- $2,870.6
Cost of sales 1,307.1 52.1 1,255.0 Gross profit 1,563.5 (52.1)
1,615.6 Gross profit margin 54.5% 56.3% Selling, general and
administrative expenses 1,017.6 5.0 1,012.6 Other (income) expense,
net 28.4 8.7 19.7 Operating profit 517.5 (65.8) 583.3 Operating
profit margin 18.0% 20.3% Interest expense, net 37.3 - 37.3 Income
before income taxes 480.2 (65.8) 546.0 Provision for income taxes
155.7 (19.0) 174.7 Effective tax rate 32.4% 32.0% Net income 324.5
(46.8) 371.3 Earnings per common share Basic $0.62 $(0.09) $0.71
Diluted $0.59 $(0.09) $0.68 Average common shares outstanding Basic
515.2 515.2 515.2 Diluted 549.8 549.8 549.8 Table 2
Colgate-Palmolive Company Supplemental Consolidated Income
Statement Information Other Items For the Three Months Ended March
31, 2007 (Dollars in Millions) (Unaudited) Three Months Ended March
31, 2007 Gain on Hill's Product Bleach Voluntary Tax Total Other
Sale Recall Adjustments* Items Net sales $- $(2.1) $- $(2.1) Cost
of sales - (1.1) - (1.1) Gross profit - (1.0) - (1.0) Selling,
general and administrative expenses - - - - Other (income) expense,
net (48.6) 12.6 - (36.0) Operating profit 48.6 (13.6) - 35.0
Interest expense, net - - - - Income before income taxes 48.6
(13.6) - 35.0 Provision for income taxes 18.9 (5.4) (73.9) (60.4)
Net income 29.7 (8.2) 73.9 95.4 Earnings per common share Basic
$0.06 $(0.02) $0.15 $0.19 Diluted $0.05 $(0.02) $0.14 $0.17 *
Reduction of tax loss carryforward valuation allowances in Brazil
of $94.6, partially offset by tax provisions for the
recapitalization of certain overseas subsidiaries. Table 3
Colgate-Palmolive Company Condensed Consolidated Balance Sheets As
of March 31, 2007, December 31, 2006 and March 31, 2006 (Dollars in
Millions) (Unaudited) March 31, December 31, March 31, 2007 2006
2006 Cash and cash equivalents $474.4 $489.5 $382.8 Receivables,
net 1,589.7 1,523.2 1,320.8 Inventories 1,095.4 1,008.4 949.5 Other
current assets 333.2 279.9 296.6 Property, plant and equipment, net
2,715.0 2,696.1 2,519.6 Other assets, including goodwill and
intangibles 3,149.9 3,140.9 3,226.5 Total assets $9,357.6 $9,138.0
$8,695.8 Total debt 3,608.7 3,671.2 3,491.6 Other current
liabilities 2,870.8 2,518.3 2,372.9 Other non-current liabilities
1,460.3 1,537.6 1,543.5 Total liabilities 7,939.8 7,727.1 7,408.0
Total shareholders' equity 1,417.8 1,410.9 1,287.8 Total
liabilities and shareholders' equity $9,357.6 $9,138.0 $8,695.8
Supplemental Balance Sheet Information Debt less cash and
marketable securities* $3,116.9 $3,170.2 $3,093.0 Working capital %
of sales 1.0% 2.3% 1.5% * Marketable securities of $17.4, $11.5 and
$15.8 as of March 31, 2007, December 31, 2006 and March 31, 2006,
respectively, are included in Other current assets. Table 4
Colgate-Palmolive Company Condensed Consolidated Statements of Cash
Flows For the Three Months Ended March 31, 2007 and 2006 (Dollars
in Millions) (Unaudited) 2007 2006 Operating Activities Net income
$486.6 $324.5 Adjustments to reconcile net income to net cash
provided by operations: Restructuring, net of cash 10.1 45.6
Depreciation and amortization 81.0 80.2 Gain before tax on sale of
non-core product lines (48.6) - Stock-based compensation expense
32.7 28.8 Deferred income taxes (94.5) (17.9) Cash effects of
changes in: Receivables (54.8) (7.2) Inventories (80.8) (85.3)
Accounts payable and other accruals 132.2 (21.3) Other non-current
assets and liabilities 24.0 35.1 Net cash provided by operations
487.9 382.5 Investing Activities Capital expenditures (92.7) (51.7)
Sale of non-core product lines 66.5 - Other 6.7 (3.8) Net cash used
in investing activities (19.5) (55.5) Financing Activities
Principal payments on debt (714.6) (657.4) Proceeds from issuance
of debt 653.2 704.2 Dividends paid (166.8) (151.6) Purchases of
treasury shares (339.6) (214.6) Proceeds from exercise of stock
options and excess tax benefits 84.0 31.9 Net cash used in
financing activities (483.8) (287.5) Effect of exchange rate
changes on Cash and cash equivalents 0.3 2.6 Net (decrease)
increase in Cash and cash equivalents (15.1) 42.1 Cash and cash
equivalents at beginning of period 489.5 340.7 Cash and cash
equivalents at end of period $474.4 $382.8 Supplemental Cash Flow
Information Free cash flow before dividends (Net cash provided by
operations less capital expenditures) Net cash provided by
operations $487.9 $382.5 Less: Capital expenditures (92.7) (51.7)
Free cash flow before dividends $395.2 $330.8 Income taxes paid
$94.9 $160.4 Table 5 Colgate-Palmolive Company Segment Information
For the Three Months Ended March 31, 2007 and 2006 (Dollars in
Millions) (Unaudited) Three Months Ended March 31, 2007 2006 Net
sales Oral, Personal and Home Care North America $662.4 $617.6
Latin America 790.3 692.7 Europe/South Pacific 781.6 691.7 Greater
Asia/Africa 548.5 483.3 Total Oral, Personal and Home Care $2,782.8
$2,485.3 Pet Nutrition 431.1 385.3 Total Net sales $3,213.9
$2,870.6 Three Months Ended March 31, 2007 2006 Operating profit
Oral, Personal and Home Care North America $152.2 $132.3 Latin
America 245.3 211.2 Europe/South Pacific 178.7 152.5 Greater
Asia/Africa 81.4 65.4 Total Oral, Personal and Home Care $657.6
$561.4 Pet Nutrition 115.6 103.8 Corporate (122.1) (147.7) Total
Operating profit $651.1 $517.5 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. For the three months ended March 31, 2007 and
2006, Corporate operating expenses include $45.9 and $65.8 of
charges related to the Company's 2004 Restructuring Program,
respectively. Additionally, Corporate operating expenses for the
three months ended March 31, 2007 were reduced by a $48.6 gain
related to the sale of the Company's household bleach business in
Latin America. As a result of a limited voluntary recall of Hill's
product in March 2007, Pet Nutrition Net sales were reduced by $2.1
and Corporate operating expenses increased by $13.6. Table 6
Colgate-Palmolive Company Geographic Sales Analysis Percentage
Changes - First Quarter 2007 vs 2006 March 31, 2007 (Unaudited)
COMPONENTS OF SALES CHANGE FIRST QUARTER Pricing 1st Qtr 1st Qtr
Coupons Sales Sales Consumer & Change Change Ex-Divested Trade
Region As Reported Ex-Divestment Volume Incentives Exchange Total
Company 12.0% 12.5% 8.5% 1.0% 3.0% Europe/South Pacific 13.0% 13.0%
4.5% (1.5%) 10.0% Latin America 14.0% 14.5% 14.0% 1.0% (0.5%)
Greater Asia/ Africa 13.5% 13.5% 9.0% 1.5% 3.0% Total International
13.5% 13.5% 9.0% 0.0% 4.5% North America 7.5% 8.5% 8.5% 0.0% 0.0%
Total CP Products 12.0% 12.5% 9.0% 0.0% 3.5% Hill's 12.0% 12.0%
5.0% 4.5% 2.5% NOTE: The impact of the May 2006 acquisition of
Tom's of Maine on North American sales and volume was 1.5% in the
first quarter. Hill's reported sales and volume were reduced by
0.5% in the first quarter due to a limited voluntary recall in
March 2007. 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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