Colgate-Palmolive Company

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, the Company sells its products in more than 200 countries and territories.

Employees: 34,000+

Revenue: $18.0B in FY22

HQ Location: New York, New York, U.S.

What they do:

A caring, innovative growth company reimagining a healthier future for all people, their pets, and our planet.

• They operate under brands such as Colgate, Palmolive, elmex, hello, meridol, Sorriso, Tom’s of Maine, EltaMD, Filorga, Irish Spring, PCA Skin, Protex, Sanex, Softsoap, Speed Stick, Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science Diet and Hill’s Prescription Diet.

• The Company is recognized for its leadership and innovation in promoting environmental sustainability and community well-being, including its achievements in saving water, reducing waste, promoting recyclability, and improving children’s oral health through its Bright Smiles, Bright Futures program, which has reached more than 1.4 billion children since 1991.

Their vision and priorities:

• Collaboration with Influencers.

• Location-Based Targeting

• Creative Packaging with a Strong Message

• Building Trust Among Customers

• Reflecting the Innovation

Outlook 2023

• The Company expects net sales growth to be 2% to 5% including the benefit from its acquisitions of pet food businesses and a low-single-digit negative impact from foreign exchange.

• The Company expects organic sales growth to be towards the high end of its long-term targeted range of 3% to 5%.

• On a GAAP basis, the Company expects gross profit margin expansion, increased advertising investment, and double-digit earnings-per-share growth.

• On a non-GAAP (Base Business) basis, the Company expects gross profit margin expansion, increased advertising investment, and low to mid-single-digit earnings-per share growth.

• They expect raw and packaging material costs to increase in 2023 by several hundred million dollars, predominantly driven by agriculture costs

• They expect logistics costs to still be up on a US$ basis in 2023, but down as a % to sales

Things to know right now

• Colgate elects Steve Cahillane to its Board of Directors

  Steve Cahillane, Chairman of the Board, President and Chief Executive Officer of Kellogg Company, has been elected to Colgate's Board of Directors. His position was effective since February 1, 2023.

• Latest innovations include:

  • Advances in U.S. Whitening Segment Through Hydrogen Peroxide

  • Proven Whitening Benefits Without Hydrogen Peroxide - Asia Pacific

  • Hill’s Prescription Diet ONC Careit

  • Hill’s Prescription Diet Derm Complete

  • Expanding Sunscreen Into New Forms

  • Protex Pro Providing New Skin Health Benefits

  • New Benefits to Suavitel

Operating Business Segments:

Two main segments:

• Oral, Personal and Home Care

  • They sell their toothpaste under brands such as Colgate, Darlie, elmex, hello, meridol, Sorriso and Tom’s of Maine, our toothbrushes under brands such as Colgate, Darlie, elmex and meridol and their mouthwashes under brands such as Colgate, elmex and meridol.

  • Their Oral Care business also includes pharmaceutical products for dentists and other oral health professionals. They are a leader in many product categories of the Personal Care market with global leadership in liquid hand soap, according to market share data, which we sell under brands such as Palmolive, Protex and Softsoap.

  • Their Personal Care products also include Irish Spring, Palmolive and Protex bar soaps, Irish Spring, Palmolive, Sanex and Softsoap shower gels, Lady Speed Stick, Sanex, Speed Stick and Tom’s of Maine deodorants and antiperspirants, EltaMD, Filorga and PCA SKIN skin health products and Palmolive shampoos and conditioners.

  • In the Home Care market products include Ajax, Axion and Palmolive dishwashing liquids and Ajax, Fabuloso and Murphy household cleaners. They are a market leader in fabric conditioners with leading brands, including Suavitel in Latin America, Soupline in Europe, and Cuddly in the South Pacific, according to market share data.

• Pet Nutrition

  In this segment, they are a world leader in specialty pet nutrition products for dogs and cats with products marketed in over 80 countries and territories worldwide. Hill’s markets pet foods primarily under two brands.

  • Hill’s Science Diet, which is called Hill’s Science Plan in Europe, is a range of products for everyday nutritional needs.

  • Hill’s Prescription Diet is a range of therapeutic products to help nutritionally manage disease conditions in dogs and cats.

Sales per region

• North America - 21% of company sales

• Latin America - 22% of company sales

• Europe - 13% of company sales

• Asia Pacific - 15% of company sales

• Africa/Eurasia - 6% of company sales

• Hill's Pet Nutrition - 23% of company sales

Competitors

• Johnson & Johnson

• Kimberly-Clark

• Unilever

• Procter & Gamble

• Clorox

Their financial calendar

Q1: January-March - Around 29th April 2023

Q2: April-June - Around 2nd July 2023

Q3: July-September - Around 3rd October 2023

Q4: October-December- Earnings 27th January 2023

Next Earnings Report:

Around 29th April 2023

Positives from the last earnings report Q4FY22:

• Net sales increased 5.0%,

• Organic sales increased 8.5%

• Net cash provided by operations was $2,556 year to date

• Colgate’s leadership in toothpaste continued with its global market share at 39.8% year to date

• Colgate’s leadership in manual toothbrushes continued with its global market share at 31.7% year to date

• Organic sales growth in every division and all four categories

• Overheads, excluding logistics, were down 50 basis points in the quarter, on top of a 150 basis point decrease in the year ago period

• Per Business Segment:

  • North America - 21% of company sales

    • Organic sales growth was broad-based across oral care, personal care, and home care.

    • In the United States, Colgate's share of the toothpaste market is 34.5% year to date and its share of the manual toothbrush market is 42.2% year to date.

  • Latin America

    • Organic sales growth was led by Mexico, Argentina, Brazil and Colombia

  • Europe

    • Organic sales growth was led by Germany, Poland, France and the United Kingdom, partially offset by organic sales declines in the Filorga business.

    • The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs, higher overhead expenses, primarily due to higher logistics costs, and increased advertising investment, partially offset by cost savings from the Company’s funding-the-growth initiatives and higher pricing.

  • Asia Pacific

    • Organic sales growth was led by Mexico, Argentina, Brazil and Colombia.

  • Africa/Eurasia

    • 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 significantly higher raw and packaging material costs and higher overhead expenses.

  • Hill's

    • Organic sales growth was led by the United States and Europe.

    • The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs and unfavorable mix due to private label sales resulting from the previously disclosed acquisitions of pet food businesses, partially offset by higher pricing, lower overhead expenses, decreased advertising investment and cost savings from the Company’s funding-the-growth initiatives.

Challenges from the last earnings report Q4FY22:

• On a GAAP basis, EPS declined 94% to $0.01, driven by goodwill and intangible assets impairment charges related to the Filorga skin health business

• On a Base Business basis, EPS declined 3% to $0.77

• GAAP Gross profit margin and Base Business Gross profit margin both decreased 250 basis points to 55.6%, including a negative 90 basis point impact from private label sales resulting from the previously disclosed acquisitions of pet food businesses.

• Difficult consumer environment, particularly in Europe

• Volume was impacted by pricing elasticities, continued softness in the skin health business in China, retailer destocking and the war in Ukraine

• Translational foreign exchange was a 5% headwind to net sales and a $0.04 headwind to EPS

• Per Business Segment:

  • North America

    • 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 lower logistics and overhead expenses, partially offset by significantly higher raw and packaging material costs and increased advertising investment.

  • Latin America

    • The increase in Operating profit as a percentage of Net sales was primarily due to higher pricing, savings from the Company’s funding-the-growth initiatives, and lower overhead expenses, partially offset by significantly higher raw and packaging material costs and increased advertising investment.

  • Asia Pacific

    • The increase in Operating profit as a percentage of Net sales was primarily due to higher pricing, savings from the Company’s funding-the-growth initiatives, and lower overhead expenses, partially offset by significantly higher raw and packaging material costs and increased advertising investment.

  • Africa/Eurasia

    • Organic sales growth was led by Turkey, Nigeria and South Africa.

Highlights in FY22:

• Full Year 2022 Net sales increased 3.0%

• Organic sales increased 7.0%

Challenges in FY22:

• On a GAAP basis, EPS declined 16% to $2.13, driven by goodwill and intangible assets impairment charges in the fourth quarter related to the Filorga skin health business

• On a Base Business basis, EPS* declined 7% to $2.97, in line with the Company's full-year guidance