Colgate Announces 4th Quarter and Full Year 2012 R
Colgate Announces 4th Quarter and Full Year 2012 Results
Operating Profit, Net Income and Diluted EPS All Up for 4Q and Full Year
January 31, 2013
NEW YORK--(BUSINESS WIRE)-- Colgate-Palmolive Company (NYSE:CL) today reported worldwide Net sales of $4,286 million in fourth quarter 2012, an increase of 2.5% versus fourth quarter 2011. Global unit volume grew 1.5%, pricing increased 2.5% and foreign exchange was negative 1.5%. Organic sales (Net sales excluding foreign exchange, acquisitions and divestments) grew 4.0%.
Net income and Diluted earnings per share in fourth quarter 2012 were $598 million and $1.26, respectively. Net income in fourth quarter 2012 included $73 million ($0.15 per diluted share) of aftertax charges resulting from the implementation of the previously disclosed four-year Global Growth and Efficiency Program (the "2012 Restructuring Program") and costs associated with the sale of land in Mexico.
Net income and Diluted earnings per share in fourth quarter 2011 were $590 million and $1.21, respectively. As previously disclosed, Net income in fourth quarter 2011 included aftertax charges of $44 million ($0.09 per diluted share) resulting from the items described in Table 8.
Excluding the above noted items in both periods, Net income in fourth quarter 2012 was $671 million, an increase of 6% versus fourth quarter 2011, and Diluted earnings per share in fourth quarter 2012 was $1.41, an increase of 8% versus fourth quarter 2011.
Gross profit margin was 58.4% in fourth quarter 2012 versus 57.4% in the year ago quarter. Excluding the above noted items in both periods, Gross profit margin was 58.6% in fourth quarter 2012, an increase of 90 basis points versus the year ago quarter, as higher pricing and cost savings from the Company's funding-the-growth initiatives more than offset the impact of increases in raw and packaging material costs and higher production costs in Venezuela.
Selling, general and administrative expenses were 34.7% of Net sales in fourth quarter 2012 versus 34.6% in fourth quarter 2011. Excluding the above noted items in both periods, Selling, general and administrative expenses increased by 10 basis points to 34.6% of Net sales in fourth quarter 2012, as overhead expenses increased by 20 basis points and advertising decreased by 10 basis points. Worldwide advertising spending on an absolute basis increased 1.4% versus the year ago quarter to $434 million.
Operating profit increased 2% to $942 million in fourth quarter 2012 compared to $923 million in fourth quarter 2011. Excluding the above noted items in both periods, Operating profit increased 6% to $1,035 million.
Net cash provided by operations for the full year 2012 increased 10% to $3,196 million compared to $2,896 million for the full year 2011. The increase was driven by strong operating earnings as well as a continued tight focus on working capital, especially accounts receivable and inventory management. Free cash flow before dividends exceeded 100% of Net income. Working capital as a percentage of Net sales was 0.7%, even with the year ago period.
For the full year 2012, worldwide Net sales were $17,085 million, up 2.0% versus full year 2011. Global unit volume grew 3.0%, pricing increased 3.0% and foreign exchange was negative 4.0%. Excluding divested businesses, global unit volume grew 3.5%. The Sanex acquisition contributed 0.5% to full year sales and volume growth. Organic sales grew 6.0%.
Net income and Diluted earnings per share for full year 2012 were $2,472 million and $5.15, respectively. Full year 2012 results include $102 million ($0.21 per diluted share) of aftertax charges resulting from the implementation of the 2012 Restructuring Program, the implementation of the previously disclosed business realignment and other cost-saving initiatives and costs associated with the sale of land in Mexico.
Net income and Diluted earnings per share for full year 2011 were $2,431 million and $4.94, respectively. As previously disclosed, full year 2011 results included net aftertax charges of $42 million ($0.09 per diluted share) resulting from the items described in Table 9.
Excluding the items noted above in both periods, Net income for full year 2012 increased 4% versus full year 2011 and Diluted earnings per share increased 7% versus full year 2011.
Gross profit margin was 58.1% for full year 2012 versus 57.3% in full year 2011. Excluding the items noted above in both periods, gross profit margin was 58.3% in full year 2012, up 70 basis points versus full year 2011, as higher pricing and cost savings from the Company's funding-the-growth initiatives more than offset the impact of increases in raw and packaging material costs and negative foreign exchange transaction costs.
As previously disclosed, the 2012 Restructuring Program is projected to result in cumulative pretax charges, once all phases are approved and implemented, totaling between $1,100 and $1,250 million ($775 and $875 million aftertax), with pretax savings projected to be in the range of $365 to $435 million ($275 to $325 million aftertax) annually by the fourth year of the program. Fourth quarter projects under the 2012 Restructuring Program have been initiated largely as planned, with savings from the 2012 Restructuring Program expected to be realized beginning in 2013.
Ian Cook, Chairman, President and Chief Executive Officer, commented on the results and outlook excluding the 2012 and 2011 items noted above, "We are very pleased to have ended the year with another quarter of strong profitability. Gross profit margin, operating profit margin and net income as a percent of sales all increased versus the year ago period.
"As we began 2012, we anticipated an intense competitive environment, and challenging foreign currency exchange and macroeconomic conditions worldwide. Despite this, we planned to improve worldwide market shares and volume growth, achieve gross margin expansion, increase commercial spending and grow diluted earnings per share at a double-digit rate, on a currency-neutral basis.
"We are delighted that we were able to achieve all of these objectives in 2012. It was another year of healthy top-line growth as well, with organic sales increasing 6.0%, led by the emerging markets where organic sales grew a robust 10.0%. Pleasingly, this growth was well balanced between solid unit volume gains and higher pricing worldwide.
"Colgate's global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate's share of the global toothpaste market strengthened to 44.6% year to date, up 0.5 share points versus year ago. Our global leadership in manual toothbrushes also strengthened during the quarter with Colgate's global market share in that category reaching 32.7% year to date, up 0.8 share points versus year ago.
"Looking forward, we expect our growth momentum to continue as we enter 2013. Our new product pipeline is very full around the world and we are pleased that our global restructuring program is on track and proceeding smoothly. We also continue to be sharply focused on our aggressive funding-the-growth programs and our strategic worldwide pricing initiatives.
"Based on this, we anticipate another year of gross margin expansion in 2013 and that diluted earnings per share will grow at a double-digit rate, on a dollar basis, excluding charges related to the 2012 Restructuring Program and absent any major currency devaluations or significant macroeconomic events."