Colgate Announces 1st Quarter 2016 Results

Strong Worldwide Organic Sales Growth

NEW YORK–(BUSINESS WIRE)–Colgate-Palmolive Company (NYSE:CL) today reported worldwide Net sales
of $3,762 million in first quarter 2016, a decrease of 7.5% versus first
quarter 2015. Excluding divested businesses and the impact of the
previously disclosed deconsolidation of the Company’s Venezuelan
operations, unit volume increased 3.5%, pricing increased 1.5% and
foreign exchange was negative 8.0%. Organic sales (Net sales excluding
foreign exchange, acquisitions, divestments and the impact of the
deconsolidation of the Company’s Venezuelan operations) grew 5.0%.

Net income and Diluted earnings per share in first quarter 2016 were
$533 million and $0.59, respectively. Net income in first quarter 2016
included $38 million ($0.04 per diluted share) of aftertax charges
resulting from the implementation of the Company’s Global Growth and
Efficiency Program (the “2012 Restructuring Program”).

Net income and Diluted earnings per share in first quarter 2015 were
$542 million and $0.59, respectively. Net income in first quarter 2015
included $67 million ($0.07 per diluted share) of aftertax charges
resulting from the 2012 Restructuring Program.

Excluding charges from the 2012 Restructuring Program in both periods,
Net income in first quarter 2016 was $571 million, a decrease of 6%
versus first quarter 2015, and Diluted earnings per share in first
quarter 2016 was $0.63, a decrease of 5% versus first quarter 2015. On a
currency-neutral basis and excluding charges from the 2012 Restructuring
Program and Venezuela in both periods, Diluted earnings per share
increased double digit.

Gross profit margin was 59.8% in first quarter 2016 versus 58.8% in
first quarter 2015. Excluding charges from the 2012 Restructuring
Program in both periods, Gross profit margin was 60.0% in first quarter
2016, an increase of 110 basis points versus the year ago quarter, as
cost savings from the Company’s funding-the-growth initiatives and the
2012 Restructuring Program and higher pricing, were partially offset by
higher raw and packaging material costs, which included foreign exchange
transaction costs and the impact of the deconsolidation of the Company’s
Venezuelan operations effective December 31, 2015.

Selling, general and administrative expenses were 36.0% of Net sales in
first quarter 2016 versus 35.6% of Net sales in first quarter 2015.
Excluding charges from the 2012 Restructuring Program in both periods,
Selling, general and administrative expenses increased by 10 basis
points to 35.3% of Net sales in first quarter 2016, due to higher
overhead expenses. Worldwide advertising investment decreased 7% to $398
million versus $430 million in the year ago quarter.

Operating profit increased to $867 million in first quarter 2016
compared to $860 million in first quarter 2015. Excluding charges from
the 2012 Restructuring Program in both periods, Operating profit
decreased 4% to $922 million in first quarter 2016. Operating profit
margin was 23.0% in first quarter 2016 versus 21.1% in first quarter
2015. Excluding charges from the 2012 Restructuring Program in both
periods, Operating profit margin was 24.5% in first quarter 2016, an
increase of 90 basis points versus the year ago quarter.

Net cash provided by operations year-to-date was $614 million compared
to $727 million in the comparable 2015 period, reflecting the impact of
the deconsolidation of the Company’s Venezuelan operations effective
December 31, 2015, higher income tax payments and a voluntary
contribution to an employee postretirement plan. Working capital as a
percentage of Net sales was negative 2.8% compared to negative 1.3% in
the year ago period, reflecting the Company’s tight focus on working
capital and the impact of reclassifying current deferred tax assets to
noncurrent deferred tax assets upon the adoption of a new accounting
standard.

Ian Cook, Chairman, President and Chief Executive Officer, commented on
the first quarter results and outlook for 2016, excluding the charges
relating to the 2012 Restructuring Program, “In the face of continued
challenging macroeconomic conditions worldwide, we are pleased to start
the year with another quarter of strong organic sales growth, with every
operating division contributing.

“The 5.0% worldwide organic sales growth was led by emerging markets
where organic sales grew a robust 7.5%, despite economic challenges in
certain countries.

“Gross profit margin, operating profit margin and net income as a
percent to sales all increased versus the year ago period. We are
particularly pleased to have achieved a record 60.0% gross profit
margin, a new milestone for Colgate.

“Colgate’s leadership of the global toothpaste market continued during
the quarter with its global market share now at 43.8% year-to-date. Our
global leadership in manual toothbrushes also continued with Colgate’s
global market share in that category now at 33.5% year-to-date.”

In closing, Mr. Cook commented, “As we look ahead, macroeconomic
conditions and foreign exchange volatility remain challenging. Despite
that, we anticipate another year of solid organic sales growth in 2016,
driven by a full new product pipeline across all categories and
geographies. Based on current spot rates, we continue to plan for a year
of gross margin expansion, and now expect earnings per share to be flat
with 2015 on a dollar basis, excluding charges related to the 2012
Restructuring Program. This reflects a double-digit increase in earnings
per share on a currency-neutral basis, excluding Venezuela from 2015 and
2016 results.”

At 11:00 a.m. ET today, Colgate will host a conference call to elaborate
on first quarter results. To access this call as a webcast, please go to
Colgate’s web site at http://www.colgatepalmolive.com.

The following are comments about divisional performance for first
quarter 2016 versus the year ago period. See attached Geographic Sales
Analysis Percentage Changes and Segment Information schedules for
additional information on divisional net sales and operating profit.

North America (21% of Company Sales)

North America Net sales increased 1.5% in first quarter 2016. Unit
volume increased 4.0% with 2.0% lower pricing, while foreign exchange
was negative 0.5%. Organic sales increased 2.0% during the quarter.

Operating profit in North America increased 10% in the first quarter of
2016 to $239 million, or 230 basis points to 29.9% of Net sales. This
increase in Operating profit as a percentage of Net sales was primarily
due to an increase in Gross profit and a decrease in Selling, general
and administrative expenses, both as a percentage of Net sales. This
increase in Gross profit was primarily driven by cost savings from the
Company’s funding-the-growth initiatives and lower raw and packaging
material costs, which were partially offset by lower pricing due to
increased in-store promotional activities. This decrease in Selling,
general and administrative expenses was primarily due to decreased
advertising investment, in part reflecting a shift from advertising
investment to in-store promotional activities.

In the U.S., new product launches are contributing to volume growth.
Market share gains year-to-date were seen in toothpaste, manual
toothbrushes, body wash, liquid cleaners and fabric conditioners.
Colgate gained leadership in toothpaste during the quarter with its
market share in that category strengthening to 35.9% year-to-date, up
0.5 share points versus the year ago period, driven by strong sales of
Colgate Total Daily Repair, Colgate Enamel Health Mineral Repair,
Colgate Optic White Platinum High Impact White, Colgate Sensitive Smart
White and Tom’s of Maine toothpastes. In manual toothbrushes, Colgate
strengthened its brand market leadership in the U.S. with its market
share in that category at 42.5% year-to-date, up 0.7 share points versus
the year ago period. Strong sales of Colgate 360° Enamel Health
Whitening, Colgate 360° Optic White Platinum and Colgate 360° Total
Advanced Floss-Tip manual toothbrushes contributed to volume growth in
the quarter.

Successful new products driving volume growth in the U.S. in other
categories include Colgate Total Daily Repair and Colgate Kids
mouthwashes, Softsoap Pure foaming hand soap, Softsoap Luminous Oils and
Irish Spring Signature For Men body washes and Palmolive Fusion Clean
dish liquid.

Latin America (23% of Company Sales)

Latin America Net sales decreased 22.0% in first quarter 2016. Excluding
the impact of the deconsolidation of the Company’s Venezuelan
operations, unit volume increased 2.5%. Volume gains were led by Brazil,
Mexico and Colombia. Pricing increased 7.0%, while foreign exchange was
negative 19.0%. Organic sales for Latin America increased 9.5%.

Operating profit in Latin America decreased 20% in the first quarter of
2016 to $247 million, while as a percentage of Net sales, it increased
80 basis points to 29.1% of Net sales. This increase in Operating profit
as a percentage of Net sales was primarily due to an increase in Gross
profit, partially offset by an increase in Selling, general and
administrative expenses, both as a percentage of Net sales. This
increase in Gross profit was due to cost savings from the Company’s
funding-the-growth initiatives and the 2012 Restructuring Program and
higher pricing, which were partially offset by higher raw and packaging
material costs, which included foreign exchange transaction costs and
the impact of the deconsolidation of the Company’s Venezuelan operations
effective December 31, 2015. This increase in Selling, general and
administrative expenses was due to increased advertising investment,
which was partially offset by lower overhead expenses.

Colgate strengthened its leadership in toothpaste throughout Latin
America during the quarter, driven by market share gains in Brazil,
Argentina, Colombia, Honduras, Nicaragua, Peru, Uruguay, Paraguay and
Costa Rica. Strong sales of Colgate Total 12, Colgate Luminous White
Advanced Expert and Colgate Total Professional Breath Health toothpastes
contributed to volume growth throughout the region. Colgate’s leadership
in the manual toothbrush category continued throughout the region,
driven by strong sales of Colgate Luminous White Advanced Toothbrush +
Built-In Whitening Pen, Colgate Slim Soft and Colgate Triple Action
manual toothbrushes.

Products in other categories contributing to growth throughout the
region include Colgate Luminous White and Colgate Plax 2 in 1
mouthwashes, Protex Pro-Hidrata shower gel, bar soap and liquid hand
soap, Lady Speed Stick and Speed Stick Clinical deodorants, Suavitel
Complete and Suavitel Aroma Intense fabric conditioners, Axion Complete
dish liquid and Fabuloso Pure Cleaning liquid cleaner.

Europe/South Pacific (18% of Company Sales)

Europe/South Pacific Net sales decreased 7.5% in first quarter 2016.
Unit volume was even with the year ago quarter. Pricing decreased 3.0%
and foreign exchange was negative 4.5%. Excluding divested businesses,
volume increased 4.0% led by volume gains in France, Australia and
Poland. Organic sales for Europe/South Pacific increased 1.0%.

Operating profit in Europe/South Pacific decreased 9% in the first
quarter of 2016 to $168 million, or 30 basis points to 24.5% of Net
sales. This decrease in Operating profit as a percentage of Net sales
was primarily due to an increase in Selling, general and administrative
expenses, partially offset by an increase in Gross profit, both as a
percentage of Net sales. This increase in Gross profit was due to cost
savings from the Company’s funding-the-growth initiatives and the 2012
Restructuring Program, which were partially offset by higher raw and
packaging material costs, driven by foreign exchange transaction costs,
and lower pricing due to increased in-store promotional activities. This
increase in Selling, general and administrative expenses as a percentage
of Net sales was due to higher overhead expenses, which were partially
offset by decreased advertising investment, in part reflecting a shift
from advertising investment to in-store promotional activities.

Colgate strengthened its oral care leadership in the Europe/South
Pacific region, driven by toothpaste market share gains in Spain,
France, Belgium, Germany, Poland, Greece, Austria, Latvia, Bosnia,
Serbia and Australia. Successful premium products contributing to volume
gains in oral care include Colgate Max White Whiten & Protect, elmex
Sensitive Professional Repair & Prevent, Colgate Total Proof and Colgate
Sensitive Pro-Relief Extra Strength toothpastes, Colgate Max White
Expert White Toothbrush + Built-In Whitening Pen, Colgate Sensitive
Pro-Relief Toothbrush + Built-In Sensitivity Pen and Colgate 360°
Advanced manual toothbrush.

Premium innovations contributing to volume growth in other product
categories include the Sanex Advanced line of shower gels, shower oils,
deodorants, hand creams, body lotions and body balms, Palmolive Naturals
and Palmolive Gourmet shower gels, Palmolive Sensorials line of dish
liquids, Ajax Kitchen Specialist line of spray cleaners and Soupline
Complete Care fabric conditioner.

Asia (17% of Company Sales)

Asia Net sales decreased 2.5% during first quarter 2016. Unit volume
increased 4.0%, pricing was even with the year ago quarter and foreign
exchange was negative 6.5%. Volume gains were led by the Greater China
region, India and the Philippines. Organic sales for Asia increased 4.0%.

Operating profit in Asia decreased 1% in the first quarter of 2016 to
$192 million, while as a percentage of Net sales, it increased 50 basis
points to 29.7% of Net sales. This increase in Operating profit as a
percentage of Net sales was due to an increase in Gross profit,
partially offset by an increase in Selling, general and administrative
expenses, both as a percentage of Net sales. This increase in Gross
profit was mainly driven by cost savings from the Company’s
funding-the-growth initiatives, which were partially offset by higher
raw and packaging material costs, driven by foreign exchange transaction
costs. This increase in Selling, general and administrative expenses was
due to increased advertising investment.

Colgate continued its toothpaste leadership in Asia during the quarter,
driven by toothpaste market share gains in Hong Kong, Taiwan, the
Philippines and Pakistan. Successful new products including Colgate 360°
Gold Ginseng Protect Gum, Colgate Power White Lemon Mineral Salt,
Colgate Total Deep Clean Gel, Colgate Total Pro Gum Health Gel and
Colgate Naturals toothpastes contributed to volume growth in the region.

Successful products contributing to volume growth in other categories in
the region include Colgate Pain Out dental gel, Colgate Slim Soft
Charcoal Gold, Colgate Slim Soft Tri Tip, Colgate Super High-Density
Tapered Bristles, Colgate Zig Zag Charcoal and Colgate Super Flexi Black
manual toothbrushes, Colgate Plax Bamboo Charcoal Mint mouthwash and
Palmolive Naturals shampoo and conditioner.

Africa/Eurasia (6% of Company Sales)

Africa/Eurasia Net sales decreased 9.0% during first quarter 2016. Unit
volume was even with the year ago quarter, pricing increased 8.0% and
foreign exchange was negative 17.0%. Volume gains led by Russia and the
Gulf States offset volume declines in South Africa and Ukraine. Organic
sales for Africa/Eurasia increased 8.0%.

Operating profit in Africa/Eurasia increased 10% in the first quarter of
2016 to $43 million, or 320 basis points to 18.6% of Net sales. This
increase in Operating profit as a percentage of Net sales was primarily
due to an increase in Gross profit and a decrease in Selling, general
and administrative expenses, both as a percentage of Net sales. This
increase in Gross profit was primarily due to cost savings from the
Company’s funding-the-growth initiatives and higher pricing, partially
offset by higher raw and packaging material costs, driven by higher
foreign exchange transaction costs. This decrease in Selling, general
and administrative expenses was due to lower overhead costs and
decreased advertising investment.

Successful products contributing to growth in the region include Colgate
Total Breath Health, Colgate Sensitive Pro-Relief Repair & Prevent,
Colgate Optic White Lasting White and Colgate Altai Herbs Ginseng
toothpastes, Colgate 360° Charcoal Gold and Colgate Slim Soft Sensitive
Gum Care manual toothbrushes, Palmolive Gourmet Spa, Palmolive Aroma
Sensations and Palmolive Naturals shower gels and Lady Speed Stick Bio
Protection deodorant.

Hill’s Pet Nutrition (15% of Company Sales)

Hill’s Net sales increased 2.5% in first quarter 2016. Unit volume
increased 3.5% with 1.5% higher pricing, while foreign exchange was
negative 2.5%. Volume gains were led by the United States and Western
Europe. Hill’s organic sales increased 5.0%.

Hill’s Operating profit increased 5% in the first quarter of 2016 to
$155 million, or 80 basis points to 28.1% of Net sales. This increase in
Operating profit as a percentage of Net sales was due to a decrease in
Selling, general and administrative expenses, partially offset by a
decrease in Gross profit, both as a percentage of Net sales. This
decrease in Gross profit was primarily due to higher costs, primarily
driven by higher raw and packaging material costs, which included
foreign exchange transaction costs, partially offset by cost savings
from the Company’s funding-the-growth initiatives and higher pricing.
This decrease in Selling, general and administrative expenses was due to
decreased advertising investment, in part reflecting a shift from
advertising investment to in-store promotional activities, and lower
overhead expenses.

New product introductions driving volume growth in the U.S. include
Hill’s Prescription Diet Metabolic Plus Mobility and Metabolic Plus
Urinary, Hill’s Prescription Diet i/d Stress and i/d Sensitive, Hill’s
Prescription Diet Derm Defense, Hill’s Science Diet Urinary Plus
Hairball Control, Hill’s Science Diet Healthy Cuisine and Hill’s Science
Diet Sensitive Stomach and Skin Small & Toy Breed. Successful products
that also contributed to U.S. volume growth included Hill’s Prescription
Diet stews and Hill’s Science Diet Perfect Weight Small Kibble.

New product introductions driving volume growth internationally include
Hill’s Prescription Diet Metabolic Plus Mobility and Metabolic Plus
Urinary, Hill’s Prescription Diet i/d Stress and i/d Sensitive and
Hill’s Science Diet Perfect Weight.

***

About Colgate-Palmolive: Colgate-Palmolive is a leading global consumer
products company, tightly focused on Oral Care, Personal Care, Home Care
and Pet Nutrition. Colgate sells its products in over 200 countries and
territories around the world under such internationally recognized brand
names as Colgate, Palmolive, Speed Stick, Lady Speed Stick, Softsoap,
Irish Spring, Protex, Sorriso, Kolynos, elmex, Tom’s of Maine, Sanex,
Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science
Diet, Hill’s Prescription Diet and Hill’s Ideal Balance. For more
information about Colgate’s global business, visit the Company’s web
site at http://www.colgatepalmolive.com.
To learn more about Colgate Bright Smiles, Bright Futures® oral health
education program, please visit http://www.colgatebsbf.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). 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 addition, market share
information calculated by the Company may be different from market share
information calculated 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. Such statements may relate, for example, to sales or volume
growth, organic sales growth, profit or profit margin growth, earnings
per share growth (including on a currency neutral basis), financial
goals, the impact of currency devaluations, exchange controls, price
controls and labor unrest, cost-reduction plans including the 2012
Restructuring Program, tax rates, new product introductions or
commercial investment levels, among other matters. These statements are
made on the basis of our views and assumptions as of this time and we
undertake no obligation to update these statements except as required by
law. We caution 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. Investors should consult
the Company’s filings with the Securities and Exchange Commission
(including the information set forth under the caption “Risk Factors” in
the Company’s Annual Report on Form 10-K for the year ended December 31,
2015) for information about certain factors that could cause such
differences. Copies of these filings may be obtained upon request from
the Company’s Investor Relations Department or on the Company’s web site
at http://www.colgatepalmolive.com.

Non-GAAP Financial Measures

The following provides information regarding the non-GAAP financial
measures used in this earnings release and/or the related webcast:

This release discusses organic sales growth, which is Net sales growth
excluding the impact of foreign exchange, acquisitions, divestments and
the deconsolidation of the Company’s Venezuelan operations. Management
believes this measure provides investors 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, divestments and the
deconsolidation of the Company’s Venezuelan operations. See “Geographic
Sales Analysis Percentage Changes” for the three months ended March 31,
2016 vs 2015 included with this release for a comparison of organic
sales growth to net sales growth in accordance with accounting
principles generally accepted in the United States of America (“GAAP”).

To supplement Colgate’s Condensed Consolidated Statements of Income
presented in accordance with GAAP, the Company has disclosed non-GAAP
measures of operating results that exclude certain items. 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, Net income attributable to Colgate-Palmolive Company and
Diluted earnings per common share are discussed both as reported (on a
GAAP basis) and excluding charges related to the 2012 Restructuring
Program (non-GAAP).

Contacts

Colgate-Palmolive Company
Bina Thompson, 212-310-3072
or
Hope
Spiller, 212-310-2291

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