Colgate-Palmolive Company (NYSE:CL)
- Net sales increased 5.5%, Organic sales* increased 7.5%
- GAAP EPS grew 21% to $0.81, Base Business EPS* grew 11% to
$0.79
- GAAP Gross profit margin and Base Business Gross profit margin*
each increased 220 basis points to 61.2%
- Net cash provided by operations was $2,756 million year to
date
- Colgate’s leadership in toothpaste continued with its global
market share at 39.9% year to date
- Colgate’s leadership in manual toothbrushes continued with its
global market share at 31.1% year to date
- The Company is providing financial guidance for full year
2020
Third Quarter Total Company Results
(GAAP)
($ in millions except per share
amounts)
2020
2019
Change
Net Sales
$4,153
$3,928
+5.5
%
EPS (diluted)
$0.81
$0.67
+21
%
Third Quarter Total Company Results
(Base Business - Non-GAAP)*
($ in millions except per share
amounts)
2020
2019
Change
Organic Sales Growth
+7.5
%
Base Business EPS (diluted)
$0.79
$0.71
+11
%
*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
third quarter 2020. Noel Wallace, Chairman, President and Chief
Executive Officer, commented, “Our performance was strong in the
third quarter, with growth accelerating on both the top and bottom
lines, despite the many challenges brought on by the COVID-19
pandemic. It is particularly encouraging to see double-digit
increases in operating profit, net income and earnings per
share.
“Net sales grew 5.5% and organic sales grew 7.5% as we drove
volume growth and higher pricing in every division.
“It is rewarding to see the growth strategies we are
implementing bear fruit. While we continue to see elevated demand
in personal care and home care related to the virus, premium
innovation is also driving growth across all of our product
categories. We also continue to see strength in eCommerce, led by
our Hill’s business.
“The very strong gross margin expansion in the quarter allowed
us to invest more behind our brands and provides us with the
ability to increase that investment in the balance of the year in
support of a very full innovation pipeline.
“Looking ahead, while uncertainty related to the impact of the
pandemic still exists, including macroeconomic impacts and
government actions to stem the virus, we believe we have better
visibility for the balance of the year and therefore we are
providing annual financial guidance for 2020."
Full Year 2020 Guidance
Based on current spot rates:
- The Company expects 2020 net sales and organic sales to both be
up mid-single digits, with organic sales up at the high end of that
range.
- On a GAAP basis, the Company expects gross margin expansion,
increased advertising investment and double-digit
earnings-per-share growth.
- On a non-GAAP (Base Business) basis, the Company expects gross
margin expansion, increased advertising investment and 6% to 7%
earnings-per-share growth.
Divisional Performance
The following are comments about divisional performance for
third 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.
Third Quarter Sales Growth By
Division
(% change 3Q 2020 vs. 3Q 2019)
Net Sales
Organic Sales*
As Reported Volume
Organic
Volume
Pricing
FX
North America
+6.5%
+5.0%
+3.0%
+1.5%
+3.5%
—%
Latin America
-5.0%
+11.5%
+2.0%
+2.0%
+9.5%
-16.5%
Europe
+17.0%
+3.0%
+12.0%
+2.5%
+0.5%
+4.5%
Asia Pacific
+4.5%
+4.5%
+2.5%
+2.5%
+2.0%
—%
Africa/Eurasia
+2.5%
+12.0%
+6.5%
+5.5%
+6.5%
-10.5%
Hill's
+11.0%
+11.0%
+6.5%
+6.5%
+4.5%
—%
Total Company
+5.5%
+7.5%
+5.0%
+3.0%
+4.5%
-4.0%
*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 joint venture
in Nigeria and the Hello oral care business on as reported volume
was 2% for Total Company and 9.5%, 1.0% and 1.5% for Europe,
Africa/Eurasia and North America, respectively.
Third Quarter Operating Profit By
Division
($ in millions)
3Q 2020
% Change vs
3Q 2019
% to Net
Sales
Change in basis
points vs 3Q 2019 % to Net
Sales
North America
$242
-2%
26.2%
-230
Latin America
$250
6%
29.9%
+320
Europe
$169
10%
23.7%
-150
Asia Pacific
$222
15%
30.7%
+270
Africa/Eurasia
$61
27%
23.9%
+450
Hill's
$196
16%
27.8%
+110
Total Company, As Reported
$1,018
19%
24.5%
+270
Total Company, Base Business*
$1,002
11%
24.1%
+120
*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 (22% of Company
Sales)
- Organic sales growth was led by the United States.
- In the United States, Colgate's share of the toothpaste market
is 35.0% 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 higher overhead expenses, primarily driven by
higher logistics costs, increased advertising investment, an
inventory write off and higher raw and packaging material costs,
partially offset by cost savings from the Company’s
funding-the-growth initiatives and higher pricing.
Latin America (20% of Company
Sales)
- Organic sales growth was led by Brazil, Argentina, Mexico and
Colombia.
- 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 a value added
tax matter in Brazil, partially offset by higher raw and packaging
material costs, which included foreign exchange transaction
costs.
Europe (17% of Company
Sales)
- Organic sales growth in France, the Netherlands and Denmark was
partially offset by an organic sales decline in the United
Kingdom.
- The decrease in Operating profit as a percentage of Net sales
was primarily due to increased advertising investment, higher
overhead expenses, amortization expense related to the Filorga skin
health acquisition and higher raw and packaging material costs,
partially offset by cost savings from the Company’s
funding-the-growth initiatives and favorable mix.
Asia Pacific (18% of Company
Sales)
- Organic sales growth was led by Australia, India, the
Philippines and the Greater China region.
- 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, lower overhead
expenses and decreased advertising investment, partially offset by
higher raw and packaging material costs.
Africa/Eurasia (6% of Company
Sales)
- Organic sales growth was led by Russia, South Africa and
Turkey.
- 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, lower overhead
expenses and decreased advertising investment, partially offset by
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, Europe,
Australia and Canada.
- 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 third quarter results. To access this call as a webcast,
please go to Colgate’s website at www.colgatepalmolive.com.
About Colgate-Palmolive
Colgate-Palmolive Company is a caring, innovative growth company
reimagining a healthier future for all people, their pets and our
planet. Focused on Oral Care, Personal Care, Home Care and Pet
Nutrition and reaching more than 200 countries and territories,
Colgate teams are developing 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. Colgate seeks to deliver sustainable, profitable growth and
superior shareholder returns and to provide Colgate people with an
innovative and inclusive work environment. Colgate does this by
developing and selling products globally that make people’s lives
healthier and more enjoyable and by embracing its sustainability,
diversity, equity and inclusion and social responsibility
strategies across the organization. For more information about
Colgate’s global business, its efforts to improve the oral health
of children through its Bright Smiles, Bright Futures program 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 and benefits
resulting from the Global Growth and Efficiency Program, a charge
related to U.S. tax reform, 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 nine months ended September 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 nine months ended September 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 nine months ended
September 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 third quarter
results.)
Table 1
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Income
For the Three Months Ended
September 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
2019
Net sales
$
4,153
$
3,928
Cost of sales
1,613
1,612
Gross profit
2,540
2,316
Gross profit margin
61.2
%
59.0
%
Selling, general and administrative
expenses
1,518
1,429
Other (income) expense, net
4
31
Operating profit
1,018
856
Operating profit margin
24.5
%
21.8
%
Non-service related postretirement
costs
15
27
Interest (income) expense, net
36
35
Income before income taxes
967
794
Provision for income taxes
222
167
Effective tax rate
23.0
%
21.0
%
Net income including noncontrolling
interests
745
627
Less: Net income attributable to
noncontrolling interests
47
49
Net income attributable to
Colgate-Palmolive Company
$
698
$
578
Earnings per common share
Basic
$
0.81
$
0.67
Diluted
$
0.81
$
0.67
Supplemental Income Statement
Information
Average common shares outstanding
Basic
859.0
858.7
Diluted
861.8
861.2
Advertising
$
476
$
423
Table 2
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Income
For the Nine Months Ended
September 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
2019
Net sales
$
12,147
$
11,678
Cost of sales
4,773
4,767
Gross profit
7,374
6,911
Gross profit margin
60.7
%
59.2
%
Selling, general and administrative
expenses
4,386
4,163
Other (income) expense, net
72
125
Operating profit
2,916
2,623
Operating profit margin
24.0
%
22.5
%
Non-service related postretirement
costs
56
79
Interest (income) expense, net
107
113
Income before income taxes
2,753
2,431
Provision for income taxes
585
586
Effective tax rate
21.2
%
24.1
%
Net income including noncontrolling
interests
2,168
1,845
Less: Net income attributable to
noncontrolling interests
120
121
Net income attributable to
Colgate-Palmolive Company
$
2,048
$
1,724
Earnings per common share
Basic(1)
$
2.39
$
2.00
Diluted(1)
$
2.38
$
2.00
Supplemental Income Statement
Information
Average common shares outstanding
Basic
857.7
860.1
Diluted
859.5
862.4
Advertising
$
1,399
$
1,268
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 September 30, 2020,
December 31, 2019 and September 30, 2019
(Dollars in Millions)
(Unaudited)
September 30,
December 31,
September 30,
2020
2019
2019
Cash and cash equivalents
$
989
$
883
$
948
Receivables, net
1,292
1,440
1,495
Inventories
1,578
1,400
1,371
Other current assets
508
456
535
Property, plant and equipment, net
3,506
3,750
3,689
Goodwill
3,711
3,508
3,532
Other intangible assets, net
2,838
2,667
2,535
Other assets
1,044
930
921
Total assets
$
15,466
$
15,034
$
15,026
Total debt
$
7,236
$
7,847
$
8,151
Other current liabilities
4,216
3,524
3,726
Other non-current liabilities
2,941
3,105
2,975
Total liabilities
14,393
14,476
14,852
Total Colgate-Palmolive Company
shareholders’ equity
653
117
(324)
Noncontrolling interests
420
441
498
Total liabilities and equity
$
15,466
$
15,034
$
15,026
Supplemental Balance Sheet
Information
Debt less cash, cash equivalents and
marketable securities(1)
$
6,167
$
6,941
$
7,094
Working capital % of sales
(5.7)
%
(1.6)
%
(2.8)
%
Note: (1) Marketable securities of $80, $23 and $109 as of
September 30, 2020, December 31, 2019 and September 30, 2019,
respectively, are included in Other current assets.
Table 4
Colgate-Palmolive
Company
Condensed Consolidated
Statements of Cash Flows
For the Nine Months Ended
September 30, 2020 and 2019
(Dollars in Millions)
(Unaudited)
2020
2019
Operating Activities
Net income including noncontrolling
interests
$
2,168
$
1,845
Adjustments to reconcile Net income
including noncontrolling interests to Net cash provided by
operations:
Depreciation and amortization
400
386
Restructuring and termination benefits,
net of cash
(66)
11
Stock-based compensation expense
85
83
Deferred income taxes
(124)
79
Voluntary benefit plan contributions
—
(113)
Cash effects of changes in:
Receivables
62
(65)
Inventories
(214)
(69)
Accounts payable and other accruals
468
(52)
Other non-current assets and
liabilities
(23)
58
Net cash provided by operations
2,756
2,163
Investing Activities
Capital expenditures
(249)
(226)
Purchases of marketable securities and
investments
(109)
(152)
Proceeds from sale of marketable
securities and investments
42
14
Payment for acquisitions, net of cash
acquired
(352)
(1,711)
Net cash used in investing activities
(668)
(2,075)
Financing Activities
Principal payments on debt
(3,269)
(4,184)
Proceeds from issuance of debt
2,500
6,008
Dividends paid
(1,162)
(1,140)
Purchases of treasury shares
(578)
(1,024)
Proceeds from exercise of stock
options
640
490
Purchases of non-controlling interests in
subsidiaries
(99)
—
Net cash provided by (used in) financing
activities
(1,968)
150
Effect of exchange rate changes on Cash
and cash equivalents
(14)
(16)
Net increase (decrease) in Cash and cash
equivalents
106
222
Cash and cash equivalents at beginning of
the period
883
726
Cash and cash equivalents at end of the
period
$
989
$
948
Supplemental Cash Flow
Information
Free cash flow before dividends (Net cash
provided by operations less Capital expenditures)
Net cash provided by operations
$
2,756
$
2,163
Less: Capital expenditures
(249)
(226)
Free cash flow before dividends
$
2,507
$
1,937
Income taxes paid
$
606
$
669
Table 5
Colgate-Palmolive
Company
Segment Information
For the Three and Nine Months
Ended September 30, 2020 and 2019
(Dollars in Millions)
(Unaudited)
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Net Sales
Oral, Personal and Home Care
North America
$
923
$
869
$
2,801
$
2,568
Latin America
837
881
2,531
2,700
Europe
712
607
2,004
1,798
Asia Pacific
722
690
1,980
2,035
Africa/Eurasia
255
248
736
732
Total Oral, Personal and Home Care
3,449
3,295
10,052
9,833
Pet Nutrition
704
633
2,095
1,845
Total Net Sales
$
4,153
$
3,928
$
12,147
$
11,678
Three Months Ended September
30,
Nine Months Ended September
30,
2020
2019
2020
2019
Operating Profit
Oral, Personal and Home Care
North America
$
242
$
248
$
753
$
750
Latin America
250
235
728
718
Europe
169
153
482
452
Asia Pacific
222
193
559
557
Africa/Eurasia
61
48
174
141
Total Oral, Personal and Home Care
944
877
2,696
2,618
Pet Nutrition
196
169
588
501
Corporate(1)
(122)
(190)
(368)
(496)
Total Operating Profit
$
1,018
$
856
$
2,916
$
2,623
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
September 30, 2020 included benefits of $16 resulting from the
Global Growth and Efficiency Program. Corporate Operating profit
(loss) for the three months ended September 30, 2019 included
charges of $26 resulting from the Global Growth and Efficiency
Program, which ended on December 31, 2019, and acquisition-related
costs of $18.
Corporate Operating profit (loss) for the nine months ended
September 30, 2020 included a charge for acquisition-related costs
of $6 and benefits of $16 resulting from the Global Growth and
Efficiency Program. Corporate Operating profit (loss) for the nine
months ended September 30, 2019 included charges of $94 resulting
from the Global Growth and Efficiency Program, which ended on
December 31, 2019, and acquisition-related costs of $18.
Table 6
Colgate-Palmolive
Company
Geographic Sales Analysis
Percentage Changes
For the Three Months Ended
September 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)
5.5
%
7.5
%
5.0
%
3.0
%
4.5
%
(4.0)
%
North America(1)
6.5
%
5.0
%
3.0
%
1.5
%
3.5
%
—
%
Latin America
(5.0)
%
11.5
%
2.0
%
2.0
%
9.5
%
(16.5)
%
Europe(1)
17.0
%
3.0
%
12.0
%
2.5
%
0.5
%
4.5
%
Asia Pacific
4.5
%
4.5
%
2.5
%
2.5
%
2.0
%
—
%
Africa/Eurasia(1)
2.5
%
12.0
%
6.5
%
5.5
%
6.5
%
(10.5)
%
Total CP Products(1)
4.5
%
6.5
%
4.5
%
2.0
%
4.5
%
(4.5)
%
Hill’s
11.0
%
11.0
%
6.5
%
6.5
%
4.5
%
—
%
Emerging Markets(2)
(1.0)
%
8.5
%
2.5
%
2.5
%
6.0
%
(9.5)
%
Developed Markets(2)
12.0
%
6.5
%
7.0
%
3.5
%
3.0
%
2.0
%
Notes: (1) The impact of the previously disclosed acquisitions
of the Filorga skin health business, the joint venture in Nigeria
and the Hello oral care business on as reported volume was 2% for
Total Company and 1.5%, 9.5%, 1.0% and 2.5% 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 joint venture in Nigeria and the Hello oral care
business on as reported volume was 0.0% for Emerging Markets and
3.5% for Developed Markets.
Table 7
Colgate-Palmolive
Company
Geographic Sales Analysis
Percentage Changes
For the Nine Months Ended
September 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)
4.0
%
6.5
%
5.5
%
3.5
%
3.0
%
(4.5)
%
North America(1)
9.0
%
8.0
%
8.5
%
7.0
%
1.0
%
(0.5)
%
Latin America
(6.0)
%
8.5
%
0.5
%
0.5
%
8.0
%
(14.5)
%
Europe(1)
11.5
%
2.5
%
12.0
%
3.0
%
(0.5)
%
—
%
Asia Pacific
(2.5)
%
(1.0)
%
(3.0)
%
(3.0)
%
2.0
%
(1.5)
%
Africa/Eurasia(1)
0.5
%
7.5
%
5.5
%
4.0
%
3.5
%
(8.5)
%
Total CP Products(1)
2.0
%
5.5
%
4.5
%
2.5
%
3.0
%
(5.5)
%
Hill’s
13.5
%
14.5
%
10.0
%
10.0
%
4.5
%
(1.0)
%
Emerging Markets(2)
(4.5)
%
4.5
%
(0.5)
%
(0.5)
%
5.0
%
(9.0)
%
Developed Markets(2)
12.0
%
9.0
%
10.5
%
7.5
%
1.5
%
—
%
Notes: (1) The impact of the previously disclosed acquisitions
of the Filorga skin health business, the joint venture in Nigeria
and the Hello oral care business on as reported volume was 2.0% for
Total Company and 1.5%, 9.0%, 1.5% 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 joint venture in Nigeria and the Hello oral care
business on as reported volume was 0.0% for Emerging Markets and
3.0% for Developed Markets.
Table 8
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Three Months Ended
September 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
Gross Profit
2020
2019
Gross profit, GAAP
$
2,540
$
2,316
Global Growth and Efficiency Program
—
1
Gross profit, non-GAAP
$
2,540
$
2,317
Basis Point
Gross Profit Margin
2020
2019
Change
Gross profit margin, GAAP
61.2
%
59.0
%
220
Global Growth and Efficiency Program
—
%
—
%
Gross profit margin, non-GAAP
61.2
%
59.0
%
220
Selling, General and Administrative
Expenses
2020
2019
Selling, general and administrative
expenses, GAAP
$
1,518
$
1,429
Global Growth and Efficiency Program
(1)
3
(28)
Selling, general and administrative
expenses, non-GAAP
$
1,521
$
1,401
Basis Point
Selling, General and Administrative
Expenses as a Percentage of Net Sales
2020
2019
Change
Selling, general and administrative
expenses as a percentage of Net sales, GAAP
36.6
%
36.4
%
20
Global Growth and Efficiency Program
—
%
(0.7)
%
Selling, general and administrative
expenses as a percentage of Net sales, non-GAAP
36.6
%
35.7
%
90
Other (Income) Expense, Net
2020
2019
Other (income) expense, net, GAAP
$
4
$
31
Global Growth and Efficiency Program
(1)
13
3
Acquisition-related costs
—
(18)
Other (income) expense, net, non-GAAP
$
17
$
16
Operating Profit
2020
2019
% Change
Operating profit, GAAP
$
1,018
$
856
19
%
Global Growth and Efficiency Program
(1)
(16)
26
Acquisition-related costs
—
18
Operating profit, non-GAAP
$
1,002
$
900
11
%
Basis Point
Operating Profit Margin
2020
2019
Change
Operating profit margin, GAAP
24.5
%
21.8
%
270
Global Growth and Efficiency Program
(1)
(0.4)
%
0.7
%
Acquisition-related costs
—
%
0.4
%
Operating profit margin, non-GAAP
24.1
%
22.9
%
120
Non-Service Related Postretirement
Costs
2020
2019
Non-service related postretirement costs,
GAAP
$
15
$
27
Global Growth and Efficiency Program
—
(1)
Non-service related postretirement costs,
non-GAAP
$
15
$
26
Table 8
Continued
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Three Months Ended
September 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
Income Before Income
Taxes
Provision For
Income Taxes(2)
Net Income
Including Noncontrolling Interests
Net Income Attributable
To Colgate-Palmolive Company
Effective
Income
Tax Rate(3)
Diluted Earnings Per
Share
As Reported GAAP
$
967
$
222
$
745
$
698
23.0
%
$
0.81
Global Growth and Efficiency Program
(1)
(16)
(3)
(13)
(13)
—
%
(0.02)
Non-GAAP
$
951
$
219
$
732
$
685
23.0
%
$
0.79
2019
Income Before Income
Taxes
Provision For
Income Taxes(2)
Net Income
Including Noncontrolling Interests
Net Income Attributable
To Colgate-Palmolive Company
Effective
Income
Tax Rate(3)
Diluted Earnings Per
Share
As Reported GAAP
$
794
$
167
$
627
$
578
21.0
%
$
0.67
Global Growth and Efficiency Program
27
5
22
22
(0.1)
%
0.03
Acquisition-related costs
18
4
14
14
0.1
%
0.01
Non-GAAP
$
839
$
176
$
663
$
614
21.0
%
$
0.71
The impact of non-GAAP adjustments may not necessarily equal the
difference between “GAAP” and “non-GAAP” as a result of
rounding.
Notes: (1) During the three months ended September 30, 2020, the
Company adjusted the accrual balances related to certain projects
approved prior to the conclusion of the Global Growth and
Efficiency Program, which ended on December 31, 2019, resulting in
a reduction of $16 ($13 aftertax). No new restructuring projects
were approved for implementation during the nine months ended
September 30, 2020.
(2) 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.
(3) 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 Nine Months Ended
September 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
Gross Profit
2020
2019
Gross profit, GAAP
$
7,374
$
6,911
Acquisition-related costs
4
—
Global Growth and Efficiency Program
—
9
Gross profit, non-GAAP
$
7,378
$
6,920
Basis Point
Gross Profit Margin
2020
2019
Change
Gross profit margin, GAAP
60.7
%
59.2
%
150
Global Growth and Efficiency Program
—
%
0.1
%
Gross profit margin, non-GAAP
60.7
%
59.3
%
140
Selling, General and Administrative
Expenses
2020
2019
Selling, general and administrative
expenses, GAAP
$
4,386
$
4,163
Global Growth and Efficiency Program
(1)
3
(42)
Selling, general and administrative
expenses, non-GAAP
$
4,389
$
4,121
Basis Point
Selling, General and Administrative
Expenses as a Percentage of Net Sales
2020
2019
Change
Selling, general and administrative
expenses as a percentage of Net sales, GAAP
36.1
%
35.6
%
50
Global Growth and Efficiency Program
—
%
(0.3)
%
Selling, general and administrative
expenses as a percentage of Net sales, non-GAAP
36.1
%
35.3
%
80
Other (Income) Expense, Net
2020
2019
Other (income) expense, net, GAAP
$
72
$
125
Global Growth and Efficiency Program
(1)
13
(43)
Acquisition-related costs
(2)
(18)
Other (income) expense, net, non-GAAP
$
83
$
64
Operating Profit
2020
2019
% Change
Operating profit, GAAP
$
2,916
$
2,623
11
%
Global Growth and Efficiency Program
(1)
(16)
94
Acquisition-related costs
6
18
Operating profit, non-GAAP
$
2,906
$
2,735
6
%
Basis Point
Operating Profit Margin
2020
2019
Change
Operating profit margin, GAAP
24.0
%
22.5
%
150
Global Growth and Efficiency Program
(1)
(0.1)
%
0.8
%
Acquisition-related costs
—
%
0.1
%
Operating profit margin, non-GAAP
23.9
%
23.4
%
50
Non-Service Related Postretirement
Costs
2020
2019
Non-service related postretirement costs,
GAAP
$
56
$
79
Global Growth and Efficiency Program
—
(4)
Non-service related postretirement costs,
non-GAAP
$
56
$
75
Table 9
Continued
Colgate-Palmolive
Company
Non-GAAP
Reconciliations
For the Nine Months Ended
September 30, 2020 and 2019
(Dollars in Millions Except
Per Share Amounts) (Unaudited)
2020
Income Before Income
Taxes
Provision For
Income Taxes(2)
Net Income
Including Noncontrolling Interests
Net Income Attributable
To Colgate-Palmolive Company
Effective
Income
Tax Rate(3)
Diluted Earnings Per
Share
As Reported GAAP
$
2,753
$
585
$
2,168
$
2,048
21.2
%
$
2.38
Global Growth and Efficiency Program
(1)
(16)
(3)
(13)
(13)
—
%
(0.02)
Subsidiary and operating structure
initiatives
—
71
(71)
(71)
2.7
%
(0.08)
Acquisition-related costs
6
2
4
4
—
%
0.01
Non-GAAP
$
2,743
$
655
$
2,088
$
1,968
23.9
%
$
2.29
2019
Income Before Income
Taxes
Provision For
Income Taxes(2)
Net Income
Including Noncontrolling Interests
Net Income Attributable
To Colgate-Palmolive Company
Effective
Income
Tax Rate(3)
Diluted Earnings Per
Share
As Reported GAAP
$
2,431
$
586
$
1,845
$
1,724
24.1
%
$
2.00
Global Growth and Efficiency Program
98
23
75
75
—
%
0.09
U.S. tax reform
18
4
14
14
—
%
0.01
Non-GAAP
$
2,547
$
613
$
1,934
$
1,813
24.1
%
$
2.10
The impact of non-GAAP adjustments may not necessarily equal the
difference between “GAAP” and “non-GAAP” as a result of
rounding.
Notes: (1) During the nine months ended September 30, 2020, the
Company adjusted the accrual balances related to certain projects
approved prior to the conclusion of the Global Growth and
Efficiency Program, which ended on December 31, 2019, resulting in
a reduction of $16 ($13 aftertax). No new restructuring projects
were approved for implementation during the nine months ended
September 30, 2020.
(2) 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.
(3) 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.
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