Colgate Reports Strong 1st Quarter
EPS up 14% to $ .56 on 6% Unit Volume Growth
Highest Dollar Sales Growth in Seven Years
NEW YORK, April 17, 2003 -- Colgate-Palmolive Company (NYSE: CL) achieved
all-time records in sales, operating profit and net income in first quarter
2003. Worldwide dollar sales rose 7%, the largest increase in over seven years.
Global unit volume grew 6% in the first quarter with every operating division
contributing strong volume gains. Gross profit margin increased 50 basis points
to 55.3%, another all-time record, on top of a very strong gain in the year ago
quarter. Dollar operating profit increased 11% and net income rose 12% to a
record $324.0 million. Earnings per share increased a better-than-expected 14%
to $0.56 vs. $0.49 in the year ago quarter. This is Colgate's 28th consecutive
quarter of increased net income and increased earnings per share.
Reuben Mark, Colgate's Chairman and CEO said, "We are pleased to begin 2003
with a double-digit profit increase on very encouraging top-line growth. All
financial ratios improved further, which together with well-balanced unit
volume growth gives us added confidence in a strong 2003.
"Excellent sales growth and record gross profit margin during the quarter
funded a very substantial increase in commercial and media investment while
still generating strong increases in operating profit and earnings per share.
"The increased commercial and media investment supported a great number of new
products around the globe which in turn helped drive market share increases in
key categories.
"Colgate's already strong balance sheet continues to strengthen with cash
generation up sharply versus the year ago period. Year to date after-tax return
on capital reached 35.3%, a 440 basis point increase over the prior year and
another all-time record. All interest coverage ratios improved during the
quarter and worldwide working capital was reduced versus the comparable year
ago period.
"We are encouraged by the strength of our results this quarter and are
optimistic that high-quality performance will continue in the balance of the
year."
At 11:00 a.m. EDT today, Colgate will host a conference call to further
elaborate on first quarter results and to discuss the Company's ongoing
expectations. To access this call as a webcast, please go to Colgate's website
on the internet at www.colgate.com.
The following are comments about divisional performance:
North America (25% of Company Sales)
North America delivered strong 6.0% unit volume growth in the first quarter,
driven by continued new product activity across categories. Dollar sales
increased 2.0%, below the rate of volume growth due to investments in
growth-oriented promotional activity, including 360-degree marketing programs.
Commercial and media investment in North America was at record levels during
the quarter and substantially above last year's level. North American operating
profit increased 3% versus a very strong year ago performance.
Colgate's leadership of the U.S. toothpaste market continues with a year to
date national ACNielsen market share of 35.1%, almost two full share points
above full year 2002. Further, Colgate Total, the individual brand leader in
the U.S., achieved its highest quarterly share ever. New products driving
growth across categories in North America include Colgate Simply White at-home
tooth whitening gel, Colgate Total Plus Whitening and Colgate Herbal White
toothpastes, Colgate Motion Kids battery-powered toothbrush, Colgate Massager
manual toothbrush, Softsoap Aromatherapy body wash and liquid hand soap, Speed
Stick 24/7 deodorant, Lady Speed Stick Naturals deodorant, Irish Spring Icy
Blast deodorant bar soap, and Palmolive Aromatherapy dishwashing liquid.
Continuing the fast new product launch pace in the U.S., introductions recently
announced to the retail trade include Colgate Simply White Night
at-home tooth whitening gel, Colgate Total Advanced Fresh toothpaste and
Palmolive DishWipes, a new form in the category featuring disposable dish wipes
pre-treated with Palmolive dishwashing liquid.
Latin America (21% of Company Sales)
Latin America achieved a higher-than-expected 6.5% unit volume growth in the
first quarter driven by new product success and market share increases. Chile,
Central America, Colombia, Brazil, Mexico and Peru all contributed volume
gains. Due to Latin American currency weaknesses, first quarter dollar sales
declined 7.0% and dollar operating profit declined 6%. In local currencies,
sales grew 17% and operating profit increased 18%.
Colgate's Oral Care leadership position in the region continues to strengthen,
with latest toothpaste shares at their highest level in five years. New
products contributing to this growth include Colgate Total Plus Whitening,
Colgate Fresh Confidence Xtreme Gel and Colgate Triple Action toothpastes,
Sorriso Jua + Propolis toothpaste, Colgate Active Angle and Colgate Active
Flexible manual toothbrushes, and Colgate Motion Kids
battery-powered toothbrush. Standouts in Personal Care include Palmolive
Naturals bar soap and the Caprice specialty variants of shampoo. Ajax with
Baking Soda and Citrus liquid cleaner and Axion Shine with Mint Vinegar dish
paste were growth drivers in Household Surface Care.
Europe (23% of Company Sales)
European unit volume grew 3.0% in the first quarter 2003, driven by widespread
success of new products throughout the region. Healthy volume increases were
achieved in Austria, France, Germany, Hungary, Romania, Russia, Turkey and
Ukraine. In the first quarter, dollar sales rose 19.5% and dollar operating
profit increased 19%, primarily reflecting favorable foreign exchange.
New products driving growth in Western Europe include Colgate Total Plus
Whitening and Colgate Herbal White toothpastes, Colgate Motion Kids
battery-powered toothbrush, Colgate Massager manual toothbrush, Palmolive
Aromatherapy shower gel, bath foam and liquid hand soap, Palmolive Oxygen
dishwashing liquid, Ajax Minerals all-purpose cleaners, and Ajax Shower Power
bathroom cleaner.
Throughout Central Europe and Russia, successful new products include Colgate
Total Plus Whitening and Colgate Herbal White toothpastes, Colgate Motion
battery-powered toothbrush, Colgate Active Angle manual toothbrush, and
Palmolive Aromatherapy shower gel, bath foam and bar soap.
Asia/Africa (18% of Company Sales)
Asia/Africa unit volume grew a higher-than-expected 8.5% in the first quarter.
China, Hong Kong, Kenya, Malaysia, Morocco, New Zealand, the Philippines,
Senegal, Thailand, Vietnam and Zimbabwe all contributed strong volume growth.
Dollar sales grew 14.5% in the first quarter, and dollar operating profit
increased 20% to an all-time record. Excluding the impact of exchange, first
quarter sales rose 7% and operating profit increased 13%.
Building on its substantial North American success, Colgate Simply White
at-home tooth whitening gel is now rolling out in Hong Kong, Australia and New
Zealand, contributing to incremental sales in those countries. Other successful
new products driving growth throughout the region include Colgate Herbal,
Colgate Herbal White and Colgate Total Plus Whitening toothpastes, Colgate 2 in
1 toothpaste and mouthwash, Colgate Extra Clean manual toothbrush and Palmolive
Aromatherapy shower gel and Protex bar soap.
Hill's Pet Nutrition (13% of Company Sales)
New product activity and veterinary endorsements continue to fuel growth at
Hill's, the world leader in specialty pet food. First quarter unit volume grew
7.0%, dollar sales increased 14.5% and dollar operating profit grew 34%.
Continued improvements in supply chain efficiencies generated savings that
funded increased commercial investment for the quarter. Excluding foreign
exchange, sales increased 9.0% and operating profit grew 23%.
In the U.S., Hill's dollar share grew in specialty channel outlets and
consumption growth continues to outpace category growth for both Science Diet
and Prescription Diet. The recent introduction of Science Diet Nature's Best
continues to contribute incremental volume and share, supported by effective
advertising and trial-generating promotions in the quarter.
Strong international growth at Hill's was driven by Asia/Pacific and Europe,
specifically Australia, France, Greece, Japan, New Zealand, Nordic, Russia,
Switzerland and Turkey.
* * *
About Colgate-Palmolive: Colgate-Palmolive is a leading global consumer
products company, tightly focused on Oral Care, Personal Care, Household
Surface Care, Fabric 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, Ajax, Axion, Soupline, Suavitel and Fab, 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 website on the
internet at www.colgate.com.
This press release and the subject presentation (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 for information
about factors that could cause such differences (including the information set
forth under the caption "Cautionary Statement on Forward-Looking Statements" in
the Company's Form 10-K for the year ended December 31, 2002). Copies of these
filings may be obtained upon request from the Company's Investor Relations
Department or the Company's website on the internet at www.colgate.com.
(See attached table for first quarter results.)
Colgate-Palmolive Company Summary of Consolidated Results
For the three months ended March 31, 2003 and 2002
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2003 2002
Net Sales $2,348.4 $2,195.2
Cost of Sales 1,050.2 992.4
Gross Profit 1,298.2 1,202.8
Gross Profit Margin 55.3% 54.8%
Selling, General & Administrative Expenses 787.7 742.1
Operating Profit 510.5 460.7
Operating Profit Margin 21.7% 21.0%
Net Interest Expense 34.0 34.9
Income Before Income Taxes 476.5 425.8
Provision for Income Taxes 152.5 136.1
Effective Tax Rate 32.0% 32.0%
Net Income 324.0 289.7
Net Earnings Per Common Share
Basic $.59 $.52
Diluted $.56 $.49
Average Common Shares Outstanding
Basic 537.1 549.2
Diluted 579.7 597.2
SOURCE Colgate-Palmolive Company
-0- 04/17/2003
/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/
(CL)
END