Colgate-Palmolive Company (NYSE:CL) today reported worldwide Net sales
of $4,070 million in first quarter 2015, a decrease of 6.0% versus first
quarter 2014. Global unit volume grew 1.5%, pricing increased 2.5% and
foreign exchange was negative 10.0%. Organic sales (Net sales excluding
foreign exchange, acquisitions and divestments) grew 4.0%.
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 implementation of the Company’s four-year Global
Growth and Efficiency Program (the “2012 Restructuring Program”).
Net income and Diluted earnings per share in first quarter 2014 were
$388 million and $0.42, respectively. Net income in first quarter 2014
included $248 million ($0.26 per diluted share) of aftertax charges
resulting from the items described in Table 6.
Excluding the above noted items in both periods, Net income in first
quarter 2015 was $609 million, a decrease of 4% versus first quarter
2014, and Diluted earnings per share in first quarter 2015 was $0.66, a
decrease of 3% versus first quarter 2014. On a currency-neutral basis
and excluding the above noted items in both periods, Diluted earnings
per share increased double digit.
Gross profit margin was 58.8% in first quarter 2015 versus 58.4% in
first quarter 2014. Excluding the above noted items in both periods,
Gross profit margin was 58.9% in first quarter 2015, an increase of 30
basis points versus the year ago quarter, primarily as a result of
higher pricing and the benefits from cost savings from the Company’s
funding-the-growth initiatives and the 2012 Restructuring Program,
partially offset by higher raw and packaging material costs, driven by
significant foreign exchange transaction costs.
Selling, general and administrative expenses were 35.6% of Net sales in
first quarter 2015 versus 35.7% of Net sales in first quarter 2014.
Excluding the above noted items in both periods, Selling, general and
administrative expenses decreased by 10 basis points to 35.2% of Net
sales in first quarter 2015, due to decreased advertising investment,
partially offset by higher overhead expenses, both as a percentage of
Net sales. Worldwide advertising investment decreased 10% to $430
million versus the year ago quarter.
Operating profit increased 36% to $860 million in first quarter 2015
compared to $634 million in first quarter 2014. Excluding the above
noted items in both periods, Operating profit decreased 4% to $960
million in first quarter 2015. Operating profit margin was 21.1% in
first quarter 2015 versus 14.7% in first quarter 2014. Excluding the
above noted items in both periods, Operating profit margin was 23.6% in
first quarter 2015, an increase of 40 basis points versus the year ago
quarter.
Net cash provided by operations year to date was $727 million compared
to $820 million in the comparable 2014 period, primarily due to lower
operating earnings and an increase in tax receivables. Free cash flow
before dividends (Net cash provided by operations less Capital
expenditures) exceeded 100% of Net income. Working capital as a
percentage of Net sales was negative 1.3%, an improvement of 50 basis
points versus the year ago period.
Ian Cook, Chairman, President and Chief Executive Officer, commented on
the results and outlook excluding the 2015 and 2014 items noted above,
“In the face of challenging macroeconomic conditions worldwide, we are
pleased to have started the year with solid organic sales growth and
higher profitability as a percent to sales, despite significant foreign
currency headwinds. Gross profit margin and operating profit margin both
increased versus the year ago period.
“The 4.0% organic sales growth worldwide was led by emerging markets
where organic sales grew a strong 6.5%, despite economic challenges in
certain countries.
“Colgate’s leading share of the global toothpaste market strengthened
during the quarter to 45.2% year to date, up 0.7 share points versus the
year ago period. Our global leadership in manual toothbrushes also
strengthened during the quarter with Colgate’s global market share in
that category reaching 33.8% year to date, up 0.3 share points versus
the year ago period.”
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 driven by
a full new product pipeline across all categories and geographies. While
our long-term goal of double-digit annual earnings per share growth
remains unchanged, we continue to see significant deterioration in
foreign exchange rates. We are planning for a year of gross margin
expansion, however, based on current spot rates, we now expect a
low-single-digit earnings per share decline on a dollar basis, excluding
charges related to the 2012 Restructuring Program. This earnings per
share decline would reflect a double-digit increase on a
currency-neutral basis.”
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 2015 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 (20% of Company Sales)
North America Net sales increased 0.5% in first quarter 2015. Unit
volume was even with the year ago quarter with 1.5% higher pricing,
while foreign exchange was negative 1.0%. Organic sales increased 1.5%
during the quarter.
Operating profit in North America increased 1% in first quarter 2015 to
$218 million, or 10 basis points to 27.6% of Net sales. This increase in
Operating profit as a percentage of Net sales was due to an increase in
Gross profit and a decrease in Selling, general and administrative
expenses, partially offset by an increase in Other (income) expense,
net, all 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 higher pricing, which more than offset higher costs,
primarily due to higher raw and packaging material costs. This decrease
in Selling, general and administrative expenses was due to decreased
advertising investment due to the timing of new product launches. This
increase in Other (income) expense, net was due to higher expense from
purchases of inventory from the Latin America reportable operating
segment.
In the U.S., new product launches are contributing to volume growth.
Market share gains year to date were seen in toothpaste, mouthwash,
liquid hand soaps, body wash and fabric conditioners. Colgate’s share of
the toothpaste market increased 0.6 share points to 35.4% year to date
driven by strong sales of Colgate Enamel Health, Colgate Optic White
Platinum Express White and Tom’s of Maine toothpastes. In manual
toothbrushes, Colgate continued its brand market leadership in the U.S.
with its market share in that category at 41.7% year to date. Strong
sales of Colgate Sensitive Toothbrush + Built-In Sensitivity Relief Pen,
Colgate 360° Enamel Health and Colgate 360° Optic White Platinum manual
toothbrushes contributed to volume growth in the quarter.
Successful products driving volume growth in the U.S. in other
categories include Colgate Total Gum Health, Colgate Total Lasting White
and Colgate Kids mouthwashes, Softsoap Fragrant Foaming Collection of
liquid hand soaps, Softsoap Fresh & Glow body washes, Irish Spring
Signature For Men body wash and bar soap and Suavitel Fast Dry fabric
conditioner.
Latin America (27% of Company Sales)
Latin America Net sales decreased 5.5% in first quarter 2015. Unit
volume increased 1.5% with 8.0% higher pricing, while foreign exchange
was negative 15.0%. Acquisitions contributed 0.5% to volume. Volume
gains were led by Mexico, Ecuador and Central America and were partially
offset by volume declines in Brazil and Venezuela. Organic sales for
Latin America increased 9.0%.
Operating profit in Latin America increased 6% in first quarter 2015 to
$308 million, or 310 basis points to 28.3% of Net sales. This increase
in Operating profit as a percentage of Net sales was due to an increase
in Gross profit, a decrease in Selling, general and administrative
expenses and a decrease in Other (income) expense, net, all 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 the 2012 Restructuring Program and higher pricing, which more than
offset higher costs, primarily due to higher raw and packaging material
costs, driven by foreign exchange transaction costs. This decrease in
Selling, general and administrative expenses was due to lower overhead
expenses and decreased advertising investment, reflecting a shift from
advertising investment to in-store promotional activities. This decrease
in Other (income) expense, net was primarily due to higher income from
sales of inventory to the North America reportable operating segment.
Colgate strengthened its leadership in toothpaste throughout Latin
America during the quarter driven by market share gains in Mexico,
Brazil, Venezuela, Argentina, Chile and El Salvador. Strong sales of
Colgate Luminous White Advanced, Colgate Luminous White Instant, Colgate
Total Professional Breath Health, Colgate Sensitive Pro-Relief Enamel
Repair and Colgate Maximum Cavity Protection plus Neutrazucar
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 360°
Interdental, Colgate 360° Breath Health, Colgate Slim Soft, Colgate
Extra Clean and Colgate Premier manual toothbrushes.
Products in other categories contributing to volume growth include
Colgate Plax Ice Infinity mouthwash, Protex Men, Protex Vitamin E,
Protex Omega 3, Palmolive Men and Palmolive Naturals Yogurt and Royal
Jelly bar soaps, Protex Intimate Care feminine wash, Suavitel Complete
and Suavitel Aroma Intense fabric conditioners, Axion Goodbye Odors dish
liquid and Fabuloso Lavender liquid cleaner.
Europe/South Pacific (18% of Company Sales)
Europe/South Pacific Net sales decreased 14.5% in first quarter 2015.
Unit volume increased 5.0% with 4.5% lower pricing due to increased
promotional activities, while foreign exchange was negative 15.0%.
Divestments decreased volume by 0.5%. Volume gains were led by the
United Kingdom, Australia and Germany. Organic sales for Europe/South
Pacific increased 1.0%.
Operating profit in Europe/South Pacific decreased 15% in first quarter
2015 to $184 million, or 30 basis points to 24.8% 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 as a
percentage of Net sales. Gross profit as a percentage of Net sales was
even with the first quarter of 2014, as cost savings from the Company’s
funding-the-growth initiatives and the 2012 Restructuring Program fully
offset higher raw and packaging material costs, driven by foreign
exchange transaction costs, and the impact of lower pricing due to
increased promotional activities. This increase in Selling, general and
administrative expenses was due to higher overhead expenses and
increased advertising investment.
Colgate strengthened its oral care leadership in the Europe/South
Pacific region driven by toothpaste market share gains in France, Italy,
Spain, the Netherlands, the Baltic region and the Nordic region.
Successful premium products driving market share gains include Colgate
Max White One Optic, Colgate Maximum Cavity Protection plus Sugar Acid
Neutralizer and elmex Sensitive Plus Gentle Whitening toothpastes. In
the manual toothbrush category, Colgate Cavity Protection, Colgate 360°
Interdental and Colgate Slim Soft Charcoal manual toothbrushes
contributed to market share gains across the region.
Recent premium innovations contributing to volume growth in other
product categories include the Sanex Advanced line of shower gels,
deodorants, hand creams and body lotions, Ajax All Usage Gel liquid
cleaner, Ajax Easy Rinse spray cleaner and Soupline Paradise Sensations
fabric conditioner.
Asia (16% of Company Sales)
Asia Net sales decreased 1.5% during first quarter 2015. Unit volume
increased 1.0% with 1.0% lower pricing, while foreign exchange was
negative 1.5%. Acquisitions contributed 0.5% to volume. Volume gains
were led by India, the Philippines and Thailand and were partially
offset by volume declines in the Greater China region. Organic sales for
Asia decreased 0.5%.
Operating profit in Asia was $193 million in first quarter 2015, even
with the first quarter of 2014, while as a percentage of Net sales, it
increased 50 basis points to 29.2%. This increase in Operating profit as
a percentage of Net sales was due to a decrease in Selling, general and
administrative expenses, which was 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 raw and packaging material costs,
which included foreign exchange transaction costs, and lower pricing,
partially offset by cost savings from the Company’s funding-the-growth
initiatives. This decrease in Selling, general and administrative
expenses was due to lower overhead expenses and decreased advertising
investment, the latter due to the timing of new product launches and a
shift from advertising investment to in-store promotional activities.
Colgate continued its toothpaste leadership in Asia, with market share
gains led by India, the Philippines and Pakistan. Successful new
products including Colgate 360° Charcoal Deep Clean, Colgate Optic White
Plus Shine, Colgate Active Salt Healthy White and Colgate Maximum Cavity
Protection plus Sugar Acid Neutralizer toothpastes contributed to volume
growth in the region. Successful products contributing to volume growth
in other categories in the region include Colgate Slim Soft Dual Action,
Colgate 360° Charcoal Gold and Colgate 360° Pro Gum Health manual
toothbrushes, Colgate Plax Visible White, Colgate Plax Active Salt and
Colgate Plax Bamboo Charcoal Mint mouthwashes and Palmolive Naturals
shampoo and conditioner.
Africa/Eurasia (6% of Company Sales)
Africa/Eurasia Net sales decreased 15.0% during first quarter 2015. Unit
volume increased 0.5% with 7.5% higher pricing, while foreign exchange
was negative 23.0%. Volume gains were led by the Sub-Saharan Africa
region and South Africa and were partially offset by volume declines in
the Central Asia/Caucasus Region. Organic sales for Africa/Eurasia
increased 8.0%.
Operating profit in Africa/Eurasia decreased 34% in first quarter 2015
to $39 million, or 440 basis points to 15.4% of Net sales. This decrease
in Operating profit as a percentage of Net sales was primarily due to a
decrease in Gross profit and an increase in Selling, general and
administrative expenses, both as a percentage of Net sales. This
decrease in Gross profit was primarily due to higher raw and packaging
material costs, driven by higher foreign exchange transaction costs,
partially offset by cost savings from the Company’s funding-the-growth
initiatives and higher pricing. This increase in Selling, general and
administrative expenses was due to higher overhead expenses, partially
offset by decreased advertising investment.
Colgate continued its toothpaste leadership in Africa/Eurasia, driven by
market share gains in the Sub-Saharan Africa region, North Africa,
Russia, South Africa, Turkey and Ukraine. Successful products
contributing to volume growth in the region include Colgate Optic White
Instant and Colgate Maximum Cavity Protection plus Sugar Acid
Neutralizer toothpastes, Colgate Slim Soft Charcoal and Colgate 360°
Whole Mouth Clean manual toothbrushes, Colgate Plax Forte Oak Bark & Fir
mouthwash, Palmolive Gourmet Spa Peach Sorbet, Palmolive Gourmet Spa
Creamy Coffee, Palmolive Men Taiga Freshness and Protex for Men shower
gels and Protex African Therapy bar soap.
Hill’s Pet Nutrition (13% of Company Sales)
Hill’s Net sales decreased 2.5% during first quarter 2015. Unit volume
increased 2.0% with 3.5% higher pricing, while foreign exchange was
negative 8.0%. Volume gains were led by the United States and Australia
and were partially offset by volume declines in Japan. Hill’s organic
sales increased 5.5%.
Hill’s Operating profit increased 2% in first quarter 2015 to $147
million, or 130 basis points to 27.3% of Net sales. This increase in
Operating profit as a percentage of Net sales was due to an increase in
Gross profit and a decrease in Selling, general and administrative
expenses, partially offset by an increase in Other (income) expense,
net, all 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 higher pricing, which more than offset higher raw and
packaging material costs, which included foreign exchange transaction
costs. This decrease in Selling, general and administrative expenses was
primarily due to lower overhead expenses and decreased advertising
investment. This increase in Other (income) expense, net was in part due
to the expiration of a foreign sales tax exemption.
New product introductions driving volume growth in the U.S. include
Hill’s Ideal Balance Crafted, Hill’s Science Diet Multiple Benefit and
Hill’s Prescription Diet stews. Other products contributing to volume
growth include Hill’s Ideal Balance Slim & Healthy and Hill’s Science
Diet Sensitive Stomach & Skin.
New product introductions driving volume growth internationally include
Hill’s Science Diet Perfect Weight, Hill’s Prescription Diet Metabolic
and c/d Multicare Urinary Stress, Hill’s Ideal Balance and Hill’s
Science Plan Small & Miniature Breed.
***
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. Market share data is subject to limitations on the
availability of up-to-date information. We believe that the third-party
vendors we use to provide data are reliable, but we have 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.
Explanatory Note Regarding Currency-Neutral
Calculations
Diluted earnings per share growth for first quarter 2015, on a
currency-neutral basis, eliminates from Diluted earnings per share
growth (GAAP) the impact of the items described in Table 6, and the
period-over-period changes in foreign exchange rates in the translation
of local currency results into U.S. dollars. Accordingly, for purposes
of calculating Diluted earnings per share growth for first quarter 2015,
on a currency-neutral basis, first quarter 2015 local currency results,
which include the impact of foreign currency transaction gains and
losses, are translated into U.S. dollars using average foreign exchange
rates for first quarter 2014.
Management’s estimate of earnings per share growth on a currency-neutral
basis for full year 2015 eliminates from earnings per share growth
(GAAP) the impact of the items described in Table 6, the 2012
Restructuring Program and period-over-period changes in foreign exchange
rates in the translation of local currency results into U.S. dollars.
Accordingly, for purposes of estimating earnings per share growth for
full year 2015, on a currency-neutral basis, estimated full year 2015
local currency results, which include the impact of estimated foreign
currency transaction gains and losses, are translated into U.S. dollars
using 2014 average foreign exchange rates by quarter.
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, including in Venezuela, cost-reduction plans
including the 2012 Restructuring Program, tax rates, new product
introductions or commercial investment levels. 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,
2014) 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 and divestments.
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 and divestments. See
“Geographic Sales Analysis Percentage Changes” for the three months
ended March 31, 2015 vs 2014 included with this release for a comparison
of organic sales growth to 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, as applicable, excluding charges related to the 2012
Restructuring Program, charges related to the effective devaluations as
a result of the changes to Venezuela’s foreign exchange system in 2014
and costs related to the sale of land in Mexico (non-GAAP). Management
believes these non-GAAP financial measures provide investors with useful
supplemental information regarding the performance of the Company’s
ongoing operations. See “Non-GAAP Reconciliations” for the three months
ended March 31, 2015 and 2014 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 and as factors in determining compensation. While the Company
believes that these financial measures are useful in evaluating the
Company’s business, 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. In addition, these non-GAAP financial measures may
not be the same as similar measures presented by other companies.
The Company defines free cash flow before dividends as Net cash provided
by operations less Capital expenditures. As management uses this measure
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. Free cash flow before dividends is not a GAAP
measurement and may not be comparable to similarly titled measures
reported by other companies. See “Condensed Consolidated Statements of
Cash Flows” for the three months ended March 31, 2015 and 2014 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 first quarter results.)
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Table 1
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Colgate-Palmolive Company
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Condensed Consolidated Statements of Income
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For the Three Months Ended March 31, 2015 and 2014
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(Dollars in Millions Except Per Share Amounts) (Unaudited)
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2015
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|
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2014
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|
|
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Net sales
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$
|
4,070
|
|
|
$
|
4,325
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|
|
|
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Cost of sales
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|
1,678
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|
|
|
1,801
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|
|
|
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Gross profit
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|
|
2,392
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|
|
|
2,524
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|
|
|
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Gross profit margin
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|
58.8
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%
|
|
|
58.4
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%
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|
|
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Selling, general and administrative expenses
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|
1,450
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|
|
|
1,544
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|
|
|
|
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Other (income) expense, net
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|
|
82
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|
|
|
346
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|
|
|
|
|
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Operating profit
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|
|
860
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|
|
|
634
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|
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Operating profit margin
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|
21.1
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%
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|
|
14.7
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%
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Interest (income) expense, net
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8
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|
|
7
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Income before income taxes
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|
852
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|
|
|
627
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|
|
|
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Provision for income taxes
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|
|
269
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|
|
|
195
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Effective tax rate
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31.6
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%
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|
31.1
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%
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Net income including noncontrolling interests
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583
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|
|
|
432
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Less: Net income attributable to noncontrolling interests
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|
41
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|
|
|
44
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|
|
|
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Net income attributable to Colgate-Palmolive Company
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$
|
542
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|
|
$
|
388
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|
|
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Earnings per common share
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Basic
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$
|
0.60
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|
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$
|
0.42
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Diluted
|
|
$
|
0.59
|
|
|
$
|
0.42
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|
|
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Average common shares outstanding
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Basic
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907.7
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|
|
919.5
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Diluted
|
|
|
916.3
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|
|
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928.6
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Table 2
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Colgate-Palmolive Company
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Condensed Consolidated Balance Sheets
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As of March 31, 2015, December 31, 2014 and March 31, 2014
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(Dollars in Millions) (Unaudited)
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|
March 31,
|
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December 31,
|
|
March 31,
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|
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2015
|
|
2014
|
|
2014
|
|
|
|
|
|
|
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Cash and cash equivalents
|
|
$
|
859
|
|
|
$
|
1,089
|
|
|
$
|
1,795
|
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Receivables, net
|
|
|
1,611
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|
|
|
1,552
|
|
|
|
1,670
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Inventories
|
|
|
1,350
|
|
|
|
1,382
|
|
|
|
1,478
|
|
Other current assets
|
|
|
880
|
|
|
|
840
|
|
|
|
734
|
|
Property, plant and equipment, net
|
|
|
3,968
|
|
|
|
4,080
|
|
|
|
4,037
|
|
Other assets, including goodwill and intangibles
|
|
|
4,488
|
|
|
|
4,516
|
|
|
|
4,718
|
|
Total assets
|
|
$
|
13,156
|
|
|
$
|
13,459
|
|
|
$
|
14,432
|
|
|
|
|
|
|
|
|
Total debt
|
|
$
|
6,128
|
|
|
$
|
6,148
|
|
|
$
|
6,659
|
|
Other current liabilities
|
|
|
3,817
|
|
|
|
3,442
|
|
|
|
3,782
|
|
Other non-current liabilities
|
|
|
2,472
|
|
|
|
2,484
|
|
|
|
2,091
|
|
Total liabilities
|
|
|
12,417
|
|
|
|
12,074
|
|
|
|
12,532
|
|
Total Colgate-Palmolive Company shareholders' equity
|
|
|
460
|
|
|
|
1,145
|
|
|
|
1,630
|
|
Noncontrolling interests
|
|
|
279
|
|
|
|
240
|
|
|
|
270
|
|
Total liabilities and shareholders' equity
|
|
$
|
13,156
|
|
|
$
|
13,459
|
|
|
$
|
14,432
|
|
|
|
|
|
|
|
|
Supplemental Balance Sheet Information
|
|
|
|
|
|
|
Debt less cash, cash equivalents and marketable securities*
|
|
$
|
5,019
|
|
|
$
|
4,859
|
|
|
$
|
4,621
|
|
Working capital % of sales
|
|
|
(1.3
|
)%
|
|
|
0.8
|
%
|
|
|
(0.8
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
*
|
Marketable securities of $250, $200 and $243 as of March 31, 2015,
December 31, 2014 and March 31, 2014, respectively, are included in
Other current assets.
|
|
|
|
|
|
Table 3
|
Colgate-Palmolive Company
|
|
|
|
|
Condensed Consolidated Statements of Cash Flows
|
|
|
|
|
For the Three Months Ended March 31, 2015 and 2014
|
|
|
|
|
(Dollars in Millions) (Unaudited)
|
|
|
|
|
|
|
2015
|
|
|
|
2014
|
|
|
|
|
|
Operating Activities
|
|
|
|
Net income including noncontrolling interests
|
$
|
583
|
|
|
$
|
432
|
|
Adjustments to reconcile net income including noncontrolling
interests to net cash provided by operations:
|
|
|
|
Depreciation and amortization
|
|
114
|
|
|
|
108
|
|
Restructuring and termination benefits, net of cash
|
|
57
|
|
|
|
45
|
|
Venezuela remeasurement charges
|
|
-
|
|
|
|
266
|
|
Stock-based compensation expense
|
|
32
|
|
|
|
34
|
|
Deferred income taxes
|
|
(22
|
)
|
|
|
(21
|
)
|
Cash effects of changes in:
|
|
|
|
Receivables
|
|
(150
|
)
|
|
|
(77
|
)
|
Inventories
|
|
(23
|
)
|
|
|
(67
|
)
|
Accounts payable and other accruals
|
|
111
|
|
|
|
100
|
|
Other non-current assets and liabilities
|
|
25
|
|
|
|
-
|
|
Net cash provided by operations
|
|
727
|
|
|
|
820
|
|
|
|
|
|
Investing Activities
|
|
|
|
Capital expenditures
|
|
(122
|
)
|
|
|
(168
|
)
|
Purchases of marketable securities and investments
|
|
(252
|
)
|
|
|
(151
|
)
|
Proceeds from sale of marketable securities and investments
|
|
110
|
|
|
|
74
|
|
Payment for acquisitions, net of cash acquired
|
|
-
|
|
|
|
(25
|
)
|
Other
|
|
7
|
|
|
|
21
|
|
Net cash used in investing activities
|
|
(257
|
)
|
|
|
(249
|
)
|
|
|
|
|
Financing Activities
|
|
|
|
Principal payments on debt
|
|
(2,171
|
)
|
|
|
(1,938
|
)
|
Proceeds from issuance of debt
|
|
2,105
|
|
|
|
2,960
|
|
Dividends paid
|
|
(329
|
)
|
|
|
(316
|
)
|
Purchases of treasury shares
|
|
(374
|
)
|
|
|
(453
|
)
|
Proceeds from exercise of stock options and excess tax benefits
|
|
128
|
|
|
|
50
|
|
Net cash (used in) provided by financing activities
|
|
(641
|
)
|
|
|
303
|
|
|
|
|
|
Effect of exchange rate changes on Cash and cash equivalents
|
|
(59
|
)
|
|
|
(41
|
)
|
Net (decrease) increase in Cash and cash equivalents
|
|
(230
|
)
|
|
|
833
|
|
Cash and cash equivalents at beginning of the period
|
|
1,089
|
|
|
|
962
|
|
Cash and cash equivalents at end of the period
|
$
|
859
|
|
|
$
|
1,795
|
|
|
|
|
|
Supplemental Cash Flow Information
|
|
|
|
|
|
|
|
Free cash flow before dividends (Net cash provided by operations
less Capital expenditures)
|
|
|
|
Net cash provided by operations
|
$
|
727
|
|
|
$
|
820
|
|
Less: Capital expenditures
|
|
(122
|
)
|
|
|
(168
|
)
|
Free cash flow before dividends
|
$
|
605
|
|
|
$
|
652
|
|
|
|
|
|
Income taxes paid
|
$
|
164
|
|
|
$
|
171
|
|
|
|
|
|
|
|
|
|
|
Table 4
|
Colgate-Palmolive Company
|
|
Segment Information
|
|
For the Three Months Ended March 31, 2015 and 2014
|
|
(Dollars in Millions) (Unaudited)
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2015
|
|
2014
|
Net Sales
|
|
|
|
|
|
Oral, Personal and Home Care
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
789
|
|
|
$
|
785
|
|
Latin America
|
|
|
|
1,087
|
|
|
|
1,152
|
|
Europe/South Pacific
|
|
|
|
741
|
|
|
|
865
|
|
Asia
|
|
|
|
661
|
|
|
|
672
|
|
Africa/Eurasia
|
|
|
|
254
|
|
|
|
298
|
|
|
|
|
|
|
|
Total Oral, Personal and Home Care
|
|
|
|
3,532
|
|
|
|
3,772
|
|
|
|
|
|
|
|
Pet Nutrition
|
|
|
|
538
|
|
|
|
553
|
|
|
|
|
|
|
|
Total Net Sales
|
|
|
$
|
4,070
|
|
|
$
|
4,325
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31,
|
|
|
|
2015
|
|
2014
|
Operating Profit
|
|
|
|
|
|
Oral, Personal and Home Care
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
|
$
|
218
|
|
|
$
|
216
|
|
Latin America
|
|
|
|
308
|
|
|
|
290
|
|
Europe/South Pacific
|
|
|
|
184
|
|
|
|
217
|
|
Asia
|
|
|
|
193
|
|
|
|
193
|
|
Africa/Eurasia
|
|
|
|
39
|
|
|
|
59
|
|
|
|
|
|
|
|
Total Oral, Personal and Home Care
|
|
|
|
942
|
|
|
|
975
|
|
|
|
|
|
|
|
Pet Nutrition
|
|
|
|
147
|
|
|
|
144
|
|
Corporate(1)
|
|
|
|
(229
|
)
|
|
|
(485
|
)
|
|
|
|
|
|
|
Total Operating Profit
|
|
|
$
|
860
|
|
|
$
|
634
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
(1) Corporate operations includes costs related to stock
options and restricted stock units, research and development costs,
Corporate overhead costs, restructuring and related implementation
costs and gains and losses on sales of non-core product lines and
assets.
|
|
|
Corporate Operating profit (loss) for the three months ended March
31, 2015 includes costs of $100 related to the 2012 Restructuring
Program.
|
|
|
Corporate Operating profit (loss) for the three months ended March
31, 2014 included costs of $102 related to the 2012 Restructuring
Program, a charge of $266 related to the 2014 Venezuela
remeasurements and costs of $1 related to the sale of land in Mexico.
|
|
|
Table 5
|
Colgate-Palmolive Company
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Geographic Sales Analysis Percentage Changes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2015 vs 2014
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
COMPONENTS OF SALES CHANGE
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pricing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Coupons
|
|
|
|
|
Sales
|
|
|
|
|
|
|
|
|
|
Consumer &
|
|
|
|
|
Change
|
|
Organic
|
|
As Reported
|
|
Organic
|
|
Ex-Divested
|
|
Trade
|
|
Foreign
|
Region
|
|
As Reported
|
|
Sales Change
|
|
Volume
|
|
Volume
|
|
Volume
|
|
Incentives
|
|
Exchange
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total Company
|
|
(6.0
|
)%
|
|
4.0
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
2.5
|
%
|
|
(10.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Europe/South Pacific
|
(14.5
|
)%
|
|
1.0
|
%
|
|
5.0
|
%
|
|
5.5
|
%
|
|
5.5
|
%
|
|
(4.5
|
)%
|
|
(15.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Latin America
|
|
(5.5
|
)%
|
|
9.0
|
%
|
|
1.5
|
%
|
|
1.0
|
%
|
|
1.5
|
%
|
|
8.0
|
%
|
|
(15.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Asia
|
|
(1.5
|
)%
|
|
(0.5
|
)%
|
|
1.0
|
%
|
|
0.5
|
%
|
|
1.0
|
%
|
|
(1.0
|
)%
|
|
(1.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Africa/Eurasia
|
|
(15.0
|
)%
|
|
8.0
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|
0.5
|
%
|
|
7.5
|
%
|
|
(23.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total International
|
|
(8.0
|
)%
|
|
4.5
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.5
|
%
|
|
(12.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
North America
|
|
0.5
|
%
|
|
1.5
|
%
|
|
-
|
%
|
|
-
|
%
|
|
-
|
%
|
|
1.5
|
%
|
|
(1.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total CP Products
|
|
(6.5
|
)%
|
|
4.0
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
2.5
|
%
|
|
(10.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Hill's
|
|
(2.5
|
)%
|
|
5.5
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
3.5
|
%
|
|
(8.0
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets (1)
|
(6.0
|
)%
|
|
6.5
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
1.5
|
%
|
|
5.0
|
%
|
|
(12.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed Markets
|
|
(6.0
|
)%
|
|
1.5
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
2.0
|
%
|
|
(0.5
|
)%
|
|
(7.5
|
)%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
|
|
(1) Emerging Markets include Latin America, Asia
(excluding Japan), Africa/Eurasia and Central Europe.
|
|
|
|
|
Table 6
|
|
|
|
|
|
|
Colgate-Palmolive Company
|
|
|
|
|
|
|
Non-GAAP Reconciliations
|
|
|
|
|
|
|
For the Three Months Ended March 31, 2015 and 2014
|
|
|
|
|
|
|
(Dollars in Millions Except Per Share Amounts) (Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Gross Profit
|
2015
|
|
2014
|
|
|
Gross profit, GAAP
|
$
|
2,392
|
|
|
$
|
2,524
|
|
|
|
2012 Restructuring Program
|
|
4
|
|
|
|
10
|
|
|
|
Costs related to the sale of land in Mexico
|
|
-
|
|
|
|
1
|
|
|
|
Gross profit, non-GAAP
|
$
|
2,396
|
|
|
$
|
2,535
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis Point
|
Gross Profit Margin
|
2015
|
|
2014
|
|
Change
|
Gross profit margin, GAAP
|
|
58.8
|
%
|
|
|
58.4
|
%
|
|
40
|
|
2012 Restructuring Program
|
|
0.1
|
%
|
|
|
0.2
|
%
|
|
|
Gross profit margin, non-GAAP
|
|
58.9
|
%
|
|
|
58.6
|
%
|
|
30
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Selling, General and Administrative Expenses
|
2015
|
|
2014
|
|
|
Selling, general and administrative expenses, GAAP
|
$
|
1,450
|
|
|
$
|
1,544
|
|
|
|
2012 Restructuring Program
|
|
(18
|
)
|
|
|
(17
|
)
|
|
|
Selling, general and administrative expenses, non-GAAP
|
$
|
1,432
|
|
|
$
|
1,527
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basis Point
|
Selling, General and Administrative Expenses as a Percentage of
Net Sales
|
2015
|
|
2014
|
|
Change
|
Selling, general and administrative expenses as a percentage of Net
sales, GAAP
|
|
35.6
|
%
|
|
|
35.7
|
%
|
|
(10
|
)
|
2012 Restructuring Program
|
|
(0.4
|
%)
|
|
|
(0.4
|
%)
|
|
|
Selling, general and administrative expenses as a percentage of Net
sales, non-GAAP
|
|
35.2
|
%
|
|
|
35.3
|
%
|
|
(10
|
)
|
|
|
|
|
|
|
|
|
|
|
|
|
Other (Income) Expense, Net
|
2015
|
|
2014
|
|
|
Other (income) expense, net, GAAP
|
$
|
82
|
|
|
$
|
346
|
|
|
|
2012 Restructuring Program
|
|
(78
|
)
|
|
|
(75
|
)
|
|
|
Venezuela remeasurement charges
|
|
-
|
|
|
|
(266
|
)
|
|
|
Other (income) expense, net, non-GAAP
|
$
|
4
|
|
|
$
|
5
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating Profit
|
2015
|
|
2014
|
|
% Change
|
Operating profit, GAAP
|
$
|
860
|
|
|
$
|
634
|
|
|
36
|
%
|
2012 Restructuring Program
|
|
100
|
|
|
|
102
|
|
|
|
Venezuela remeasurement charges
|
|
-
|
|
|
|
266
|
|
|
|
Costs related to the sale of land in Mexico
|
|
-
|
|
|
|
1
|
|
|
|
Operating profit, non-GAAP
|
$
|
960
|
|
|
$
|
1,003
|
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Basis Point
|
Operating Profit Margin
|
2015
|
|
2014
|
|
Change
|
Operating profit margin, GAAP
|
|
21.1
|
%
|
|
|
14.7
|
%
|
|
640
|
|
2012 Restructuring Program
|
|
2.5
|
%
|
|
|
2.3
|
%
|
|
|
Venezuela remeasurement charges
|
|
-
|
%
|
|
|
6.2
|
%
|
|
|
Operating profit margin, non-GAAP
|
|
23.6
|
%
|
|
|
23.2
|
%
|
|
40
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net Income Attributable to Colgate-Palmolive Company
|
2015
|
|
2014
|
|
% Change
|
Net income attributable to Colgate-Palmolive Company, GAAP
|
$
|
542
|
|
|
$
|
388
|
|
|
40
|
%
|
2012 Restructuring Program
|
|
67
|
|
|
|
73
|
|
|
|
Venezuela remeasurement charges
|
|
-
|
|
|
|
174
|
|
|
|
Costs related to the sale of land in Mexico
|
|
-
|
|
|
|
1
|
|
|
|
Net income attributable to Colgate-Palmolive Company, non-GAAP
|
$
|
609
|
|
|
$
|
636
|
|
|
(4
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
Diluted Earnings Per Common Share(1)
|
2015
|
|
2014
|
|
% Change
|
Diluted earnings per common share, GAAP
|
$
|
0.59
|
|
|
$
|
0.42
|
|
|
40
|
%
|
2012 Restructuring Program
|
|
0.07
|
|
|
|
0.07
|
|
|
|
Venezuela remeasurement charges
|
|
-
|
|
|
|
0.19
|
|
|
|
Diluted earnings per common share, non-GAAP
|
$
|
0.66
|
|
|
$
|
0.68
|
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
Note:
|
|
(1) The impact of non-GAAP adjustments on diluted
earnings per share may not necessarily equal the difference between
"GAAP" and "non-GAAP" as a result of rounding.
|
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