Colgate-Palmolive Company (NYSE:CL)
- Net sales increased 1.0%, Organic sales* increased 5.5%
- GAAP EPS grew 9% to $0.74, Base Business EPS* grew 3% to
$0.74
- GAAP Gross profit margin increased 110 basis points to 60.8%,
Base Business Gross profit margin* increased 120 basis points to
60.8%
- Net cash provided by operations was $1,794 million
- Colgate’s leadership in toothpaste continued with its global
market share at 40.0% year to date
- Colgate’s leadership in manual toothbrushes continued with its
global market share at 31.0% year to date
- The Company is not providing 2020 financial guidance due to the
continued uncertainty surrounding the business impacts from
COVID-19 and related macroeconomic volatility
Second Quarter Total Company Results
(GAAP)
($ in millions except per share
amounts)
2020
2019
Change
Net Sales
$3,897
$3,866
+1.0%
EPS (diluted)
$0.74
$0.68
+9%
Second Quarter Total Company Results
(Base Business - Non-GAAP)*
($ in millions except per share
amounts)
2020
2019
Change
Organic Sales Growth
+5.5%
Base Business EPS (diluted)
$0.74
$0.72
+3%
*Indicates a non-GAAP financial measure.
Please refer to “Non-GAAP Financial Measures” later in this release
for definitions of non-GAAP financial measures and to “Table 6 -
Geographic Sales Analysis Percentage Changes” and “Table 8 -
Non-GAAP Reconciliations” included with this release for a
reconciliation of these non-GAAP financial measures to the related
GAAP measures.
Colgate-Palmolive Company (NYSE:CL) today reported results for
second quarter 2020. Noel Wallace, Chairman, President and Chief
Executive Officer, commented, “Our momentum continued in the second
quarter, despite the many challenges brought on by the global
COVID-19 pandemic, including government actions to stem the spread
of the virus. Our strategy has accelerated our growth over the past
two years, and we continue to execute that strategy with agility to
position us to win both during the pandemic and during the
recovery. The ability of our teams on the ground to quickly adapt
to new ways of working in the face of these challenges has been
extraordinary.
“While net sales growth was significantly impacted by foreign
exchange, the 5.5% organic sales growth reflected a good balance of
positive volume and higher pricing on a worldwide basis and was led
by strong growth in North America and Hill’s.
“We continue to see elevated demand across our geographies in
certain categories such as liquid hand soap, dish liquid, bar soap
and cleaners. In other categories, we are starting to see the
impact of consumers working down their pantry inventories,
particularly in Europe.
"The gross margin expansion in the quarter allowed us to invest
behind our brands. Over the second half of the year, we will
continue to fund strong consumer programs to drive our
business.
“Looking ahead, we continue to expect a mid-single digit
negative impact on net sales for the year from foreign exchange,
based on current spot rates. Given the continued uncertainty
related to the impact of the virus and government actions to stem
the virus, including macroeconomic impacts, we have decided not to
reinstate our financial guidance for 2020 at this time. As we
proceed through this pandemic we plan to reinstate our guidance
when we have the visibility to forecast our results with more
confidence.”
Divisional Performance
The following are comments about divisional performance for
second quarter 2020 versus the year ago period. See attached "Table
6 - Geographic Sales Analysis Percentage Changes" and "Table 5 -
Segment Information" for additional information on net sales and
operating profit by division.
Second Quarter Sales Growth By
Division
(% change 2Q 2020 vs. 2Q 2019)
Net Sales
Organic Sales*
As Reported Volume
Organic Volume
Pricing
FX
North America
+12.0%
+11.0%
+13.0%
+11.5%
-0.5%
-0.5%
Latin America
-13.5%
+4.5%
-4.5%
-4.5%
+9.0%
-18.0%
Europe
+5.0%
-1.5%
+7.5%
-1.5%
—%
-2.5%
Asia Pacific
-3.0%
+0.5%
-3.0%
-3.0%
+3.5%
-3.5%
Africa/Eurasia
-6.0%
+2.5%
+0.5%
-1.5%
+4.0%
-10.5%
Hill's
+9.5%
+11.5%
+7.5%
+7.5%
+4.0%
-2.0%
Total Company
+1.0%
+5.5%
+3.5%
+2.0%
+3.5%
-6.0%
*Indicates a non-GAAP financial measure.
Please refer to “Non-GAAP Financial Measures” later in this release
for definitions of non-GAAP financial measures and to “Table 6 -
Geographic Sales Analysis Percentage Changes” included with this
release for a reconciliation of these non-GAAP financial measures
to the related GAAP measures.
The impact of the previously disclosed
acquisitions of the Filorga skin health business, the new joint
venture in Nigeria and the Hello oral care business on as reported
volume was 1.5% for Total Company and 9.0%, 2.0% and 1.5% for
Europe, Africa/Eurasia and North America, respectively.
Second Quarter Operating Profit By
Division
($ in millions)
2Q 2020
% Change vs
2Q 2019
% to Net
Sales
Change in basis
points vs 2Q 2019
% to Net Sales
North America
$254
—%
26.8%
-320
Latin America
$229
-9%
28.4%
+140
Europe
$158
7%
25.6%
+40
Asia Pacific
$176
1%
28.2%
+130
Africa/Eurasia
$56
19%
24.5%
+520
Hill's
$191
14%
28.4%
+110
Total Company, As Reported
$946
7.0%
24.3%
+130
Total Company, Base Business*
$946
1.9%
24.3%
+30
*Indicates a non-GAAP financial measure.
Please refer to “Non-GAAP Financial Measures” later in this release
for definitions of non-GAAP financial measures and to “Table 8 -
Non-GAAP Reconciliations” included with this release for a
reconciliation of these non-GAAP financial measures to the related
GAAP measures.
North America (24% of Company
Sales)
- Organic sales growth was driven by the United States and
Canada.
- In the United States, Colgate's share of the toothpaste market
is 34.9% year to date and its share of the manual toothbrush market
is 40.9% year to date.
- The decrease in Operating profit as a percentage of Net sales
was primarily due to increased advertising investment, unfavorable
mix, higher overhead expenses, primarily driven by higher logistics
costs, and higher raw and packaging material costs, partially
offset by cost savings from the Company’s funding-the-growth
initiatives.
Latin America (21% of Company
Sales)
- Organic sales growth in Argentina, Brazil, the Caribbean region
and Colombia was partially offset by an organic sales decline in
Mexico.
- The increase in Operating profit as a percentage of Net sales
was primarily due to cost savings from the Company’s
funding-the-growth initiatives, higher pricing and lower overhead
costs, partially offset by higher raw and packaging material costs,
which included foreign exchange transaction costs.
Europe (16% of Company
Sales)
- Organic sales declines in the United Kingdom, Germany and Spain
were partially offset by organic sales growth in Switzerland and
Belgium.
- The increase in Operating profit as a percentage of Net sales
was primarily due to cost savings from the Company’s
funding-the-growth initiatives, favorable mix and decreased
advertising investment, partially offset by higher overhead
expenses, higher raw and packaging material costs, which included
foreign exchange transaction costs, and amortization expense
related to the Filorga skin health acquisition.
Asia Pacific (16% of Company
Sales)
- Organic sales growth in the Greater China region and Australia
was partially offset by organic sales declines in Thailand and
India.
- The increase in Operating profit as a percentage of Net sales
was primarily due to higher pricing, cost savings from the
Company's funding-the-growth initiatives and decreased advertising
investment, partially offset by higher raw and packaging material
costs, which included foreign exchange transaction costs, and
higher overhead expenses.
Africa/Eurasia (6% of Company
Sales)
- Organic sales growth was led by Turkey, the Saudi Arabia/Gulf
States region and South Africa.
- The increase in Operating profit as a percentage of Net sales
was primarily due to decreased advertising investment, cost savings
from the Company’s funding-the-growth initiatives and higher
pricing, partially offset by higher overhead expenses and higher
raw and packaging material costs, which included foreign exchange
transaction costs.
Hill's Pet Nutrition (17% of Company
Sales)
- Organic sales growth was led by the United States and
Europe.
- The increase in Operating profit as a percentage of Net sales
was primarily due to lower overhead expenses, cost savings from the
Company’s funding-the-growth initiatives and higher pricing,
partially offset by increased advertising investment and higher raw
and packaging material costs.
Webcast Information
At 8:30 a.m. ET today, Colgate will host a conference call
regarding second quarter results. To access this call as a webcast,
please go to Colgate’s website at www.colgatepalmolive.com.
About Colgate-Palmolive
Colgate-Palmolive is a leading global consumer products company
with 34,000 people dedicated to improving the health and wellness
of people and their pets. Focused on Oral Care, Personal Care, Home
Care and Pet Nutrition and reaching more than 200 countries and
territories, Colgate teams are developing, producing, distributing
and selling health and hygiene products and pet nutrition offerings
essential to society through brands such as Colgate, Palmolive,
elmex, meridol, Tom’s of Maine, hello, Sorriso, Speed Stick,
Softsoap, Irish Spring, Protex, Sanex, Filorga, eltaMD, PCA Skin,
Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s
Science Diet and Hill’s Prescription Diet. The Company also is
recognized for its leadership and innovation in promoting
environmental sustainability and community wellbeing, including its
achievements in saving water, reducing waste, promoting
recyclability and improving the oral health of children through its
Bright Smiles, Bright Futures program, which has reached more than
one billion children since 1991. For more information about
Colgate’s global business and how the Company is building a future
to smile about, visit www.colgatepalmolive.com. CL-E
Market Share Information
Management uses market share information as a key indicator to
monitor business health and performance. References to market share
in this press release are based on a combination of consumption and
market share data provided by third-party vendors, primarily
Nielsen, and internal estimates. All market share references
represent the percentage of the dollar value of sales of our
products, relative to all product sales in the category in the
countries in which the Company competes and purchases data
(excluding Venezuela from all periods).
Market share data is subject to limitations on the availability
of up-to-date information. In particular, market share data is
currently not generally available for certain retail channels, such
as eCommerce and certain club retailers and discounters. The
Company measures year-to-date market shares from January 1 of the
relevant year through the most recent period for which market share
data is available, which typically reflects a lag time of one or
two months. The Company believes that the third-party vendors it
uses to provide data are reliable, but it has not verified the
accuracy or completeness of the data or any assumptions underlying
the data. In certain limited circumstances, the COVID-19 pandemic
has impacted the ability of our third-party vendors to provide the
Company with reliable updated market share data. In addition,
market share information reported by the Company may be different
from market share information reported by other companies due to
differences in category definitions, the use of data from different
countries, internal estimates and other factors.
Cautionary Statement on Forward-Looking
Statements
This press release and the related webcast may contain
forward-looking statements (as that term is defined in the U.S.
Private Securities Litigation Reform Act of 1995 or by the
Securities and Exchange Commission (SEC) in its rules, regulations
and releases) that set forth anticipated results based on
management’s current plans and assumptions. Such statements may
relate, for example, to sales or volume growth, net selling price
increases, organic sales growth, profit or profit margin growth,
earnings per share levels, financial goals, the impact of foreign
exchange, the impact of COVID-19, cost-reduction plans, tax rates,
new product introductions, commercial investment levels,
acquisitions, divestitures, share repurchases, or legal or tax
proceedings, among other matters. These statements are made on the
basis of the Company’s views and assumptions as of this time and
the Company undertakes no obligation to update these statements
whether as a result of new information, future events or otherwise,
except as required by law or by the rules and regulations of the
SEC. Moreover, the Company does not, nor does any other person,
assume responsibility for the accuracy and completeness of these
statements. The Company cautions investors that any such
forward-looking statements are not guarantees of future performance
and that actual events or results may differ materially from those
statements. For more information about factors that could impact
the Company’s business and cause actual results to differ
materially from forward-looking statements, investors should refer
to the Company’s filings with the SEC (including, but not limited
to, the information set forth under the captions “Risk Factors” and
“Cautionary Statement on Forward-Looking Statements” in the
Company’s Annual Report on Form 10-K for the year ended December
31, 2019 and subsequent Quarterly Reports on Form 10-Q). Copies of
these filings may be obtained upon request from the Company’s
Investor Relations Department or on the Company’s website at
www.colgatepalmolive.com.
Non-GAAP Financial
Measures
The following provides definitions and other information
regarding the non-GAAP financial measures used in this press
release and/or the related webcast, which may not be the same as or
comparable to similar measures presented by other companies:
- Base Business: Base Business refers to non-GAAP measures of
operating results that exclude certain items. Base Business
operating results exclude, as applicable, charges resulting from
the Global Growth and Efficiency Program, acquisition-related costs
and a benefit related to a recent reorganization of the ownership
structure of certain foreign subsidiaries and a new operating
structure being implemented within one of the Company's
divisions.
- Organic sales growth: Net sales growth excluding the impact of
foreign exchange, acquisitions and divestments.
- Free cash flow before dividends: Net cash provided by
operations less Capital expenditures.
This press release discusses Net sales growth (GAAP) and Organic
sales growth (non-GAAP). Management believes the organic sales
growth measure provides investors and analysts with useful
supplemental information regarding the Company’s underlying sales
trends by presenting sales growth excluding the external factor of
foreign exchange as well as the impact from acquisitions and
divestments. See “Geographic Sales Analysis Percentage Changes” for
the three and six months ended June 30, 2020 versus 2019 included
with this release for a comparison of Organic sales growth to Net
sales growth in accordance with GAAP.
Worldwide Gross profit, Gross profit margin, Selling, general
and administrative expenses, Selling, general and administrative
expenses as a percentage of Net sales, Other (income) expense, net,
Operating profit, Operating profit margin, Non-service related
postretirement costs, Effective income tax rate, Net income
attributable to Colgate-Palmolive Company and Diluted earnings per
common share are disclosed on both an as reported (GAAP) and Base
Business (non-GAAP) basis. These non-GAAP financial measures
exclude items that, either by their nature or amount, management
would not expect to occur as part of the Company’s normal business
on a regular basis, such as restructuring charges, charges for
certain litigation and tax matters, gains and losses from certain
divestitures and certain unusual, non-recurring items. Investors
and analysts use these financial measures in assessing the
Company’s business performance, and management believes that
presenting these financial measures on a non-GAAP basis provides
them with useful supplemental information to enhance their
understanding of the Company’s underlying business performance and
trends. These non-GAAP financial measures also enhance the ability
to compare period-to-period financial results. See “Non-GAAP
Reconciliations” for the three and six months ended June 30, 2020
and 2019 included with this release for a reconciliation of these
financial measures to the related GAAP measures.
The Company uses these financial measures internally in its
budgeting process, to evaluate segment and overall operating
performance and as factors in determining compensation. While the
Company believes that these financial measures are useful in
evaluating the Company’s underlying business performance and
trends, 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.
As management uses free cash flow before dividends 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. See “Condensed
Consolidated Statements of Cash Flows” for the six months ended
June 30, 2020 and 2019 for a comparison of free cash flow before
dividends to Net cash provided by operations as reported in
accordance with GAAP.
(See attached tables for second quarter
results.)
Table 1
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Income
For the Three Months Ended
June 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
2019
Net sales
$
3,897
$
3,866
Cost of sales
1,528
1,558
Gross profit
2,369
2,308
Gross profit margin
60.8
%
59.7
%
Selling, general and administrative
expenses
1,395
1,369
Other (income) expense, net
28
51
Operating profit
946
888
Operating profit margin
24.3
%
23.0
%
Non-service related postretirement
costs
20
27
Interest (income) expense, net
35
38
Income before income taxes
891
823
Provision for income taxes
216
205
Effective tax rate
24.2
%
24.9
%
Net income including noncontrolling
interests
675
618
Less: Net income attributable to
noncontrolling interests
40
32
Net income attributable to
Colgate-Palmolive Company
$
635
$
586
Earnings per common share
Basic
$
0.74
$
0.68
Diluted
$
0.74
$
0.68
Supplemental Income Statement
Information
Average common shares outstanding
Basic
857.4
859.4
Diluted
858.9
861.9
Advertising
$
439
$
416
Table 2
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Income
For the Six Months Ended June
30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
2019
Net sales
$
7,994
$
7,750
Cost of sales
3,160
3,155
Gross profit
4,834
4,595
Gross profit margin
60.5
%
59.3
%
Selling, general and administrative
expenses
2,868
2,734
Other (income) expense, net
68
94
Operating profit
1,898
1,767
Operating profit margin
23.7
%
22.8
%
Non-service related postretirement
costs
41
52
Interest (income) expense, net
71
78
Income before income taxes
1,786
1,637
Provision for income taxes
363
419
Effective tax rate
20.3
%
25.6
%
Net income including noncontrolling
interests
1,423
1,218
Less: Net income attributable to
noncontrolling interests
73
72
Net income attributable to
Colgate-Palmolive Company
$
1,350
$
1,146
Earnings per common share
Basic
$
1.58
$
1.33
Diluted
$
1.57
$
1.33
Supplemental Income Statement
Information
Average common shares outstanding
Basic(1)
857.1
860.7
Diluted(1)
858.6
862.7
Advertising
$
923
$
845
Note:
(1) Basic and diluted earnings per share are computed
independently for each quarter and any year-to-date period
presented. As a result of changes in shares outstanding during the
year and rounding, the sum of the quarters' earnings per share may
not equal the earnings per share for any year-to-date period.
Table 3
Colgate-Palmolive
Company
Condensed Consolidated Balance
Sheets
As of June 30, 2020, December
31, 2019 and June 30, 2019
(Dollars in Millions)
(Unaudited)
June 30,
December 31,
June 30,
2020
2019
2019
Cash and cash equivalents
$
997
$
883
$
863
Receivables, net
1,231
1,440
1,590
Inventories
1,524
1,400
1,322
Other current assets
460
456
480
Property, plant and equipment, net
3,483
3,750
3,793
Goodwill
3,628
3,508
2,536
Other intangible assets, net
2,787
2,667
1,609
Other assets
1,031
930
958
Total assets
$
15,141
$
15,034
$
13,151
Total debt
$
7,392
$
7,847
$
6,645
Other current liabilities
4,072
3,524
3,777
Other non-current liabilities
2,945
3,105
2,739
Total liabilities
14,409
14,476
13,161
Total Colgate-Palmolive Company
shareholders’ equity
268
117
(347
)
Noncontrolling interests
464
441
337
Total liabilities and equity
$
15,141
$
15,034
$
13,151
Supplemental Balance Sheet
Information
Debt less cash, cash equivalents and
marketable securities(1)
$
6,370
$
6,941
$
5,716
Working capital % of sales
(5.5
)%
(1.6
)%
(2.9
)%
Note: (1) Marketable securities of $25, $23 and $66 as of June
30, 2020, December 31, 2019 and June 30, 2019, 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, 2020 and 2019
(Dollars in Millions)
(Unaudited)
2020
2019
Operating Activities
Net income including noncontrolling
interests
$
1,423
$
1,218
Adjustments to reconcile Net income
including noncontrolling interests to Net cash provided by
operations:
Depreciation and amortization
266
256
Restructuring and termination benefits,
net of cash
(35
)
21
Stock-based compensation expense
32
34
Deferred income taxes
(147
)
53
Voluntary benefit plan contributions
—
(102
)
Cash effects of changes in:
Receivables
121
(178
)
Inventories
(176
)
(63
)
Accounts payable and other accruals
347
(14
)
Other non-current assets and
liabilities
(37
)
24
Net cash provided by operations
1,794
1,249
Investing Activities
Capital expenditures
(159
)
(146
)
Purchases of marketable securities and
investments
(48
)
(80
)
Proceeds from sale of marketable
securities and investments
42
14
Payment for acquisitions, net of cash
acquired
(352
)
—
Net cash used in investing activities
(517
)
(212
)
Financing Activities
Principal payments on debt
(2,102
)
(3,105
)
Proceeds from issuance of debt
1,620
3,368
Dividends paid
(784
)
(770
)
Purchases of treasury shares
(228
)
(664
)
Proceeds from exercise of stock
options
353
267
Net cash provided by (used in) financing
activities
(1,141
)
(904
)
Effect of exchange rate changes on Cash
and cash equivalents
(22
)
4
Net increase (decrease) in Cash and cash
equivalents
114
137
Cash and cash equivalents at beginning of
the period
883
726
Cash and cash equivalents at end of the
period
$
997
$
863
Supplemental Cash Flow
Information
Free cash flow before dividends (Net cash
provided by operations less Capital expenditures)
Net cash provided by operations
$
1,794
$
1,249
Less: Capital expenditures
(159
)
(146
)
Free cash flow before dividends
$
1,635
$
1,103
Income taxes paid
$
349
$
463
Table 5
Colgate-Palmolive
Company
Segment Information
For the Three and Six Months
Ended June 30, 2020 and 2019
(Dollars in Millions)
(Unaudited)
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Net Sales
Oral, Personal and Home Care
North America
$
949
$
846
$
1,878
$
1,699
Latin America
805
929
1,694
1,818
Europe
617
588
1,292
1,190
Asia Pacific
625
646
1,258
1,346
Africa/Eurasia
229
244
481
484
Total Oral, Personal and Home Care
3,225
3,253
6,603
6,537
Pet Nutrition
672
613
1,391
1,213
Total Net Sales
$
3,897
$
3,866
$
7,994
$
7,750
Three Months Ended June 30,
Six Months Ended June 30,
2020
2019
2020
2019
Operating Profit
Oral, Personal and Home Care
North America
$
254
$
254
$
512
$
503
Latin America
229
251
478
483
Europe
158
148
312
299
Asia Pacific
176
174
337
363
Africa/Eurasia
56
47
112
93
Total Oral, Personal and Home Care
873
874
1,751
1,741
Pet Nutrition
191
167
393
331
Corporate(1)
(118
)
(153
)
(246
)
(305
)
Total Operating Profit
$
946
$
888
$
1,898
$
1,767
Note: (1) Corporate operations include costs related to stock
options and restricted stock units, research and development costs,
Corporate overhead costs and gains and losses on sales of non-core
product lines and assets.
Corporate Operating profit (loss) for the three months ended
June 30, 2019 included charges of $40 resulting from the Global
Growth and Efficiency Program, which ended on December 31,
2019.
Corporate Operating profit (loss) for the six months ended June
30, 2020 included a charge for acquisition-related costs of $6.
Corporate Operating profit (loss) for the six months ended June 30,
2019 included charges of $68 resulting from the Global Growth and
Efficiency Program, which ended on December 31, 2019.
Table 6
Colgate-Palmolive
Company
Geographic Sales Analysis
Percentage Changes
For the Three Months Ended
June 30, 2020 vs. 2019
(Unaudited)
COMPONENTS OF SALES
CHANGE
Pricing
Coupons
Sales
Consumer &
Change
Organic
As Reported
Organic
Trade
Foreign
Region
As Reported
Sales Change
Volume
Volume
Incentives
Exchange
Total Company(1)
1.0
%
5.5
%
3.5
%
2.0
%
3.5
%
(6.0
)%
North America(1)
12.0
%
11.0
%
13.0
%
11.5
%
(0.5
)%
(0.5
)%
Latin America
(13.5
)%
4.5
%
(4.5
)%
(4.5
)%
9.0
%
(18.0
)%
Europe(1)
5.0
%
(1.5
)%
7.5
%
(1.5
)%
—
%
(2.5
)%
Asia Pacific
(3.0
)%
0.5
%
(3.0
)%
(3.0
)%
3.5
%
(3.5
)%
Africa/Eurasia(1)
(6.0
)%
2.5
%
0.5
%
(1.5
)%
4.0
%
(10.5
)%
Total CP Products(1)
(1.0
)%
4.0
%
2.5
%
0.5
%
3.5
%
(7.0
)%
Hill’s
9.5
%
11.5
%
7.5
%
7.5
%
4.0
%
(2.0
)%
Emerging Markets(2)
(9.0
)%
2.5
%
(3.5
)%
(4.0
)%
6.5
%
(12.0
)%
Developed Markets(2)
10.0
%
8.0
%
10.0
%
7.0
%
1.0
%
(1.0
)%
Notes: (1) The impact of the previously disclosed acquisitions
of the Filorga skin health business, the new joint venture in
Nigeria and the Hello oral care business on as reported volume was
1.5% for Total Company and 1.5%, 9.0%, 2.0% and 2.0% for North
America, Europe, Africa/Eurasia and Total CP Products,
respectively.
(2) Emerging Markets include Latin America, Asia (excluding
Japan), Africa/Eurasia and Central Europe. The impact of the
previously disclosed acquisitions of the Filorga skin health
business, the new joint venture in Nigeria and the Hello oral care
business on as reported volume was 0.5% for Emerging Markets and
3.0% for Developed Markets.
Table 7
Colgate-Palmolive
Company
Geographic Sales Analysis
Percentage Changes
For the Six Months Ended June
30, 2020 and 2019
(Unaudited)
COMPONENTS OF SALES
CHANGE
Pricing
Coupons
Sales
Consumer &
Change
Organic
As Reported
Organic
Trade
Foreign
Region
As Reported
Sales Change
Volume
Volume
Incentives
Exchange
Total Company(1)
3.0
%
6.5
%
5.5
%
4.0
%
2.5
%
(5.0
)%
North America(1)
10.5
%
9.5
%
11.0
%
9.5
%
—
%
(0.5
)%
Latin America
(7.0
)%
7.5
%
(0.5
)%
(0.5
)%
8.0
%
(14.5
)%
Europe(1)
8.5
%
2.5
%
12.0
%
3.5
%
(1.0
)%
(2.5
)%
Asia Pacific
(6.5
)%
(3.5
)%
(6.0
)%
(6.0
)%
2.5
%
(3.0
)%
Africa/Eurasia(1)
(0.5
)%
5.0
%
5.5
%
3.5
%
1.5
%
(7.5
)%
Total CP Products(1)
1.0
%
4.5
%
4.0
%
2.0
%
2.5
%
(5.5
)%
Hill’s
14.5
%
16.0
%
12.0
%
12.0
%
4.0
%
(1.5
)%
Emerging Markets(2)
(6.0
)%
2.5
%
(2.0
)%
(2.5
)%
5.0
%
(9.0
)%
Developed Markets(2)
12.0
%
10.0
%
12.0
%
9.0
%
1.0
%
(1.0
)%
Notes: (1) The impact of the previously disclosed acquisitions
of the Filorga skin health business, the new joint venture in
Nigeria and the Hello oral care business on as reported volume was
1.5% for Total Company and 1.5%, 8.5%, 2.0% and 2.0% for North
America, Europe, Africa/Eurasia and Total CP Products,
respectively.
(2) Emerging Markets include Latin America, Asia (excluding
Japan), Africa/Eurasia and Central Europe. The impact of the
previously disclosed acquisitions of the Filorga skin health
business, the new joint venture in Nigeria and the Hello oral care
business on as reported volume was 0.5% for Emerging Markets and
3.0% for Developed Markets.
Table 8
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Three Months Ended
June 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
Gross Profit
2020
2019
Gross profit, GAAP
$
2,369
$
2,308
Global Growth and Efficiency Program
—
(3
)
Gross profit, non-GAAP
$
2,369
$
2,305
Basis Point
Gross Profit Margin
2020
2019
Change
Gross profit margin, GAAP
60.8
%
59.7
%
110
Global Growth and Efficiency Program
—
%
(0.1
)%
Gross profit margin, non-GAAP
60.8
%
59.6
%
120
Selling, General and Administrative
Expenses
2020
2019
Selling, general and administrative
expenses, GAAP
$
1,395
$
1,369
Global Growth and Efficiency Program
—
(10
)
Selling, general and administrative
expenses, non-GAAP
$
1,395
$
1,359
Selling, General and Administrative
Expenses as a Percentage of Net Sales
2020
2019
Basis Point
Change
Selling, general and administrative
expenses as a percentage of Net sales, GAAP
35.8
%
35.4
%
40
Global Growth and Efficiency Program
—
%
(0.2
)%
Selling, general and administrative
expenses as a percentage of Net sales, non-GAAP
35.8
%
35.2
%
60
Other (Income) Expense, Net
2020
2019
Other (income) expense, net, GAAP
$
28
$
51
Global Growth and Efficiency Program
—
(33
)
Other (income) expense, net, non-GAAP
$
28
$
18
Operating Profit
2020
2019
% Change
Operating profit, GAAP
$
946
$
888
7
%
Global Growth and Efficiency Program
—
40
Operating profit, non-GAAP
$
946
$
928
2
%
Basis Point
Operating Profit Margin
2020
2019
Change
Operating profit margin, GAAP
24.3
%
23.0
%
130
Global Growth and Efficiency Program
—
%
1.0
%
Operating profit margin, non-GAAP
24.3
%
24.0
%
30
Non-Service Related Postretirement
Costs
2020
2019
Non-service related postretirement costs,
GAAP
$
20
$
27
Global Growth and Efficiency Program
—
(2
)
Non-service related postretirement costs,
non-GAAP
$
20
$
25
Table 8
Continued
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Three Months Ended
June 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
Income Before
Income Taxes
Provision For
Income Taxes(1)
Net Income
Including
Noncontrolling
Interests
Net Income
Attributable To
Colgate-Palmolive
Company
Effective
Income
Tax Rate(2)
Diluted Earnings
Per Share
As Reported GAAP
$
891
$
216
$
675
$
635
24.2
%
$
0.74
Non-GAAP
$
891
$
216
$
675
$
635
24.2
%
$
0.74
2019
Income Before
Income Taxes
Provision For
Income Taxes(1)
Net Income
Including
Noncontrolling
Interests
Net Income
Attributable To
Colgate-Palmolive
Company
Effective
Income
Tax Rate(2)
Diluted Earnings
Per Share
As Reported GAAP
$
823
$
205
$
618
$
586
24.9
%
$
0.68
Global Growth and Efficiency Program
42
11
31
31
0.1
%
0.04
Non-GAAP
$
865
$
216
$
649
$
617
25.0
%
$
0.72
The impact of non-GAAP adjustments may not necessarily equal the
difference between “GAAP” and “non-GAAP” as a result of
rounding.
Notes: (1) The income tax effect on non-GAAP items is calculated
based upon the tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
(2) The impact of non-GAAP items on the Company’s effective tax
rate represents the difference in the effective tax rate calculated
with and without the non-GAAP adjustment on Income before income
taxes and Provision for income taxes.
Table 9
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Six Months Ended June
30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
Gross Profit
2020
2019
Gross profit, GAAP
$
4,834
$
4,595
Acquisition-related costs
4
—
Global Growth and Efficiency Program
—
8
Gross profit, non-GAAP
$
4,838
$
4,603
Basis Point
Gross Profit Margin
2020
2019
Change
Gross profit margin, GAAP
60.5
%
59.3
%
120
Global Growth and Efficiency Program
—
%
0.1
%
Gross profit margin, non-GAAP
60.5
%
59.4
%
110
Selling, General and Administrative
Expenses
2020
2019
Selling, general and administrative
expenses, GAAP
$
2,868
$
2,734
Global Growth and Efficiency Program
—
(14
)
Selling, general and administrative
expenses, non-GAAP
$
2,868
$
2,720
Selling, General and Administrative
Expenses as a Percentage of Net Sales
2020
2019
Basis Point
Change
Selling, general and administrative
expenses as a percentage of Net sales, GAAP
35.9
%
35.3
%
60
Global Growth and Efficiency Program
—
%
(0.2
)%
Selling, general and administrative
expenses as a percentage of Net sales, non-GAAP
35.9
%
35.1
%
80
Other (Income) Expense, Net
2020
2019
Other (income) expense, net, GAAP
$
68
$
94
Acquisition-related costs
(2
)
—
Global Growth and Efficiency Program
—
(46
)
Other (income) expense, net, non-GAAP
$
66
$
48
Operating Profit
2020
2019
% Change
Operating profit, GAAP
$
1,898
$
1,767
7
%
Acquisition-related costs
6
—
Global Growth and Efficiency Program
—
68
Operating profit, non-GAAP
$
1,904
$
1,835
4
%
Basis Point
Operating Profit Margin
2020
2019
Change
Operating profit margin, GAAP
23.7
%
22.8
%
90
Global Growth and Efficiency Program
—
%
0.9
%
Operating profit margin, non-GAAP
23.8
%
23.7
%
10
Non-Service Related Postretirement
Costs
2020
2019
Non-service related postretirement costs,
GAAP
$
41
$
52
Global Growth and Efficiency Program
—
(3
)
Non-service related postretirement costs,
non-GAAP
$
41
$
49
Table 9
Continued
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Six Months Ended June
30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
Income Before
Income Taxes
Provision For
Income Taxes(1)
Net Income
Including
Noncontrolling
Interests
Net Income
Attributable To
Colgate-Palmolive
Company
Effective
Income
Tax Rate(2)
Diluted
Earnings
Per Share
As Reported GAAP
$
1,786
$
363
$
1,423
$
1,350
20.3
%
$
1.57
Subsidiary and operating structure
initiatives
—
71
(71
)
(71
)
4
%
(0.08
)
Acquisition-related costs
6
2
4
4
—
%
—
Non-GAAP
$
1,792
$
436
$
1,356
$
1,283
24.3
%
$
1.49
2019
Income Before
Income Taxes
Provision For
Income Taxes(1)
Net Income
Including
Noncontrolling
Interests
Net Income
Attributable To
Colgate-Palmolive
Company
Effective
Income
Tax Rate(2)
Diluted
Earnings
Per Share
As Reported GAAP
$
1,637
$
419
$
1,218
$
1,146
25.6
%
$
1.33
Global Growth and Efficiency Program
71
18
53
53
—
%
0.06
Non-GAAP
$
1,708
$
437
$
1,271
$
1,199
25.6
%
$
1.39
The impact of non-GAAP adjustments may not necessarily equal the
difference between “GAAP” and “non-GAAP” as a result of
rounding.
Notes: (1) The income tax effect on non-GAAP items is calculated
based upon the tax laws and statutory income tax rates applicable
in the tax jurisdiction(s) of the underlying non-GAAP
adjustment.
(2) The impact of non-GAAP items on the Company’s effective tax
rate represents the difference in the effective tax rate calculated
with and without the non-GAAP adjustment on Income before income
taxes and Provision for income taxes.
View source
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