NEW YORK--(BUSINESS WIRE)--Colgate-Palmolive Company (NYSE:CL)
- Net sales increased 7.5%, Organic sales* increased 8.5%
- GAAP EPS was even with fourth quarter 2019 at $0.75, Base Business EPS* grew 5% to $0.77
- GAAP Gross profit margin increased 100 basis points to 61.1%, Base Business Gross profit margin* increased 90 basis points to 61.1%
- Net cash provided by operations was $3,719 million for full year 2020
- Colgate’s leadership in toothpaste continued with its global market share at 39.8% year to date
- Colgate’s leadership in manual toothbrushes continued with its global market share at 31.1% year to date
- The Company is providing financial guidance for full year 2021
| Fourth Quarter Total Company Results (GAAP) | ||||
| ($ in millions except per share amounts) | 2020 | 2019 | Change | |
| Net Sales | $4,324 | $4,015 | +7.5% | |
| EPS (diluted) | $0.75 | $0.75 | —% | |
| Fourth Quarter Total Company Results (Base Business - Non-GAAP)* | ||||
| ($ in millions except per share amounts) | 2020 | 2019 | Change | |
| Organic Sales Growth | +8.5% | |||
| Base Business EPS (diluted) | $0.77 | $0.73 | +5% | |
| *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 fourth quarter 2020. Noel Wallace, Chairman, President and Chief Executive Officer, commented, “We are very pleased to end 2020 with another quarter of strong, broad-based organic sales growth. Every division grew mid-single-digit or higher, with double-digit growth in our Hill’s and Latin America businesses.“Our choices to invest in innovation, digital transformation and advertising are helping to deliver growth across our portfolio. While several of our categories continue to benefit from higher consumer demand due to the COVID-19 pandemic, we believe we have the right strategies in place to deliver profitable growth over the longer term.
“Our strong gross profit performance in the quarter funded a significant increase in advertising while still allowing us to deliver increases in operating profit, net income and earnings per share on a base business basis. The increased investment was widespread across categories and geographies in support of new product launches, expanded eCommerce activity and strengthened digital engagement.
“As we enter 2021, we expect high levels of uncertainty as we lap the benefits from pantry loading and other impacts of the COVID-19 pandemic. We also expect volatility in raw material and logistics costs and foreign exchange."
Full Year 2021 Guidance
Based on current spot rates:
- The Company expects net sales to be up 4% to 7% including a low-single-digit benefit from foreign exchange.
- The Company expects organic sales to be up within its long-term targeted range of 3% to 5%.
- On a GAAP basis, the Company expects gross margin expansion, increased advertising investment and low to mid-single-digit earnings-per-share growth.
- On a non-GAAP (Base Business) basis, the Company expects gross margin expansion, increased advertising investment and mid to high-single-digit earnings-per-share growth.
Divisional Performance
The following are comments about divisional performance for fourth 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.
| Fourth Quarter Sales Growth By Division (% change 4Q 2020 vs. 4Q 2019) | ||||||
| Net Sales | Organic Sales* | As Reported Volume | Organic Volume | Pricing | FX | |
| North America | +10.0% | +8.5% | +6.5% | +5.0% | +3.5% | —% |
| Latin America | -2.5% | +10.5% | +1.0% | +1.0% | +9.5% | -13.0% |
| Europe | +14.0% | +4.5% | +8.5% | +5.5% | -1.0% | +6.5% |
| Asia Pacific | +7.0% | +5.0% | +4.0% | +4.0% | +1.0% | +2.0% |
| Africa/Eurasia | -1.5% | +8.0% | +4.5% | +4.5% | +3.5% | -9.5% |
| Hill's | +16.0% | +14.5% | +11.0% | +11.0% | +3.5% | +1.5% |
| Total Company | +7.5% | +8.5% | +6.0% | +5.0% | +3.5% | -2.0% |
| *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 and the hello oral care business on as reported volume was 1.0% for Total Company and 3.0% and 1.5% for Europe and North America, respectively. | ||||||
| Fourth Quarter Operating Profit By Division($ in millions) | ||||
| 4Q 2020 | % Change vs 4Q 2019 | % to Net Sales | Change in basis points vs 4Q 2019 % to Net Sales | |
| North America | $235 | +1% | 25.0% | -210 |
| Latin America | $247 | +1% | 27.9% | +90 |
| Europe | $170 | -1% | 22.9% | -350 |
| Asia Pacific | $215 | +12% | 29.8% | +120 |
| Africa/Eurasia | $32 | -30% | 13.1% | -530 |
| Hill's | $205 | +1% | 26.0% | -390 |
| Total Company, As Reported | $969 | +4% | 22.4% | -80 |
| Total Company, Base Business* | $969 | +3% | 22.4% | -100 |
| *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 driven by the United States and Canada.
- In the United States, Colgate's share of the toothpaste market is 34.9% year to date and its share of the manual toothbrush market is 41.0% year to date.
- The decrease in Operating profit as a percentage of Net sales was primarily due to higher raw and packaging material costs, increased advertising investment and higher overhead expenses, driven by higher logistics 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, Mexico, Argentina 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 and higher pricing, partially offset by higher raw and packaging material costs, which included foreign exchange transaction costs, and higher overhead expenses.
Europe (17% of Company Sales)
- Organic sales growth was led by Poland, the United Kingdom, Germany and France.
- The decrease in Operating profit as a percentage of Net sales was primarily due to increased advertising investment, higher raw and packaging material costs, unfavorable mix and lower pricing, partially offset by cost savings from the Company’s funding-the-growth initiatives.
Asia Pacific (17% of Company Sales)
- Organic sales growth was led by India, the Greater China region and the South Pacific 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, partially offset by increased advertising investment and higher raw and packaging material costs.
Africa/Eurasia (6% of Company Sales)
- Organic sales growth was led by Russia and Turkey.
- The decrease in Operating profit as a percentage of Net sales was primarily due to higher raw and packaging material costs, which included foreign exchange transaction costs, higher overhead expenses and increased advertising investment, partially offset by cost savings from the Company’s funding-the-growth initiatives and higher pricing.
Hill’s Pet Nutrition (18% of Company Sales)
- Organic sales growth was led by the United States, Europe, Canada and Australia.
- The decrease in Operating profit as a percentage of Net sales was primarily due to increased advertising investment and higher raw and packaging material costs, partially offset by cost savings from the Company’s funding-the-growth initiatives, higher pricing and lower overhead expenses.
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, the Company sells its products in more than 200 countries and territories 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 wellbeing, 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 one billion children since 1991. For more information about Colgate’s global business and how the Company is building a future to smile about, visit www.colgatepalmolive.com. CL-E
