Strong Worldwide Organic Sales
Growth
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).
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, 2016 and 2015
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, 2016 and 2015 for a
comparison of free cash flow before dividends to Net cash provided
by operations as reported in accordance with GAAP.
Explanatory Note Regarding
Currency-Neutral Calculations
Diluted earnings per share growth for first quarter 2016, on a
currency-neutral basis, eliminates from Diluted earnings per share
growth (GAAP) the impact of charges related to the 2012
Restructuring Program, 2015 and 2016 Venezuela results 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 2016, on a currency-neutral basis, first
quarter 2016 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
2015.
Management’s estimate of earnings per share growth on a
currency-neutral basis for full year 2016 eliminates from earnings
per share growth (GAAP) the impact of charges related to the 2012
Restructuring Program, 2015 and 2016 Venezuela results 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 2016, on a currency-neutral basis, estimated full
year 2016 local currency results, which include the impact of
foreign currency transaction gains and losses, are translated into
U.S. dollars using 2015 average foreign exchange rates by
quarter.
(See attached tables for first quarter
results.)
Table 1 Colgate-Palmolive Company
Condensed Consolidated Statements of Income For
the Three Months Ended March 31, 2016 and 2015
(Dollars in Millions Except Per Share Amounts) (Unaudited)
2016 2015 Net sales $ 3,762 $ 4,070 Cost of
sales 1,514 1,678 Gross profit 2,248 2,392 Gross
profit margin 59.8 % 58.8 % Selling, general and
administrative expenses 1,354 1,450 Other (income) expense,
net 27 82 Operating profit 867 860 Operating profit
margin 23.0 % 21.1 % Interest (income) expense, net 28 8
Income before income taxes 839 852 Provision for
income taxes 265 269 Effective tax rate 31.6 % 31.6 %
Net income including noncontrolling interests 574 583 Less:
Net income attributable to noncontrolling interests 41 41
Net income attributable to Colgate-Palmolive Company $ 533 $ 542
Earnings per common share Basic $ 0.60 $ 0.60 Diluted $ 0.59
$ 0.59 Average common shares outstanding Basic 893.7 907.7
Diluted 900.2 916.3
Table 2 Colgate-Palmolive Company
Condensed Consolidated Balance Sheets As of March
31, 2016, December 31, 2015 and March 31, 2015
(Dollars in Millions) (Unaudited) March 31,
December 31, March 31, 2016 2015 2015 Cash and cash
equivalents $ 1,014 $ 970 $ 859 Receivables, net 1,546 1,427 1,611
Inventories 1,234 1,180 1,350 Other current assets 696 807 880
Property, plant and equipment, net 3,820 3,796 3,968 Other assets,
including goodwill and intangibles** 4,138
3,755 4,469 Total assets $ 12,448 $
11,935 $ 13,137 Total debt** $ 6,580 $ 6,548 $
6,109 Other current liabilities 3,760 3,232 3,817 Other non-current
liabilities 2,181 2,199 2,472
Total liabilities 12,521 11,979 12,398 Total
Colgate-Palmolive Company shareholders' equity (370 ) (299 ) 460
Noncontrolling interests 297 255
279
Total liabilities and equity
$ 12,448 $ 11,935 $ 13,137
Supplemental Balance Sheet Information Debt less cash, cash
equivalents and marketable securities* $ 5,429 $ 5,476 $ 5,000
Working capital % of sales (2.8 )% 0.5 % (1.3 )% *
Marketable securities of $137, $102, and $250 as of March 31, 2016,
December 31, 2015 and March 31, 2015, respectively, are included in
Other current assets. ** To conform to the current year
presentation required by the FASB Accounting Standards Update
(“ASU”) No. 2015-03 “Simplifying the Presentation of Debt Issuance
Costs,” prior period balances of debt issuance costs have been
reclassified from Other assets, including goodwill and intangibles
and are now presented as a direct deduction to Total debt.
Table 3 Colgate-Palmolive Company
Condensed Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2016 and 2015
(Dollars in Millions) (Unaudited) 2016 2015
Operating Activities Net income including noncontrolling
interests $ 574 $ 583 Adjustments to reconcile net income including
noncontrolling interests to net cash provided by operations:
Depreciation and amortization 106 114 Restructuring and termination
benefits, net of cash 6 57 Stock-based compensation expense 31 32
Deferred income taxes (36 ) (22 ) Voluntary benefit plan
contributions (50 ) - Cash effects of changes in: Receivables (95 )
(150 ) Inventories (32 ) (23 ) Accounts payable and other accruals
80 111 Other non-current assets and liabilities 30
25 Net cash provided by operations 614 727
Investing Activities Capital expenditures (114 ) (122 )
Purchases of marketable securities and investments (80 ) (252 )
Proceeds from sale of marketable securities and investments 50 110
Other - 7 Net cash used in investing
activities (144 ) (257 )
Financing Activities
Principal payments on debt (2,388 ) (2,171 ) Proceeds from issuance
of debt 2,370 2,105 Dividends paid (340 ) (329 ) Purchases of
treasury shares (229 ) (374 ) Proceeds from exercise of stock
options and excess tax benefits 146 128
Net cash used in financing activities
(441 ) (641 ) Effect of exchange rate changes on Cash and
cash equivalents 15 (59 ) Net increase
(decrease) in Cash and cash equivalents 44 (230 ) Cash and cash
equivalents at beginning of the period 970
1,089 Cash and cash equivalents at end of the period $ 1,014
$ 859
Supplemental Cash Flow
Information Free cash flow before dividends (Net cash provided
by operations less Capital expenditures) Net cash provided by
operations $ 614 $ 727 Less: Capital expenditures (114 )
(122 ) Free cash flow before dividends $ 500 $ 605
Income taxes paid $ 217 $ 164
Table 4 Colgate-Palmolive Company
Segment Information For the Three Months Ended
March 31, 2016 and 2015 (Dollars in Millions)
(Unaudited) Three Months Ended
March 31,
2016 2015
Net Sales Oral, Personal and Home Care
North America $ 800 $ 789 Latin America 848 1,087 Europe/South
Pacific 685 741 Asia 646 661 Africa/Eurasia 231
254 Total Oral, Personal and Home Care 3,210
3,532 Pet Nutrition 552 538
Total Net Sales $ 3,762 $ 4,070
Three Months Ended
March 31,
2016 2015
Operating Profit Oral, Personal and Home Care
North America $ 239 $ 218 Latin America 247 308 Europe/South
Pacific 168 184 Asia 192 193 Africa/Eurasia 43
39 Total Oral, Personal and Home Care 889 942
Pet Nutrition 155 147 Corporate(1) (177 ) (229 )
Total Operating Profit $ 867 $ 860
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, 2016 includes costs of $55 related to the 2012
Restructuring Program. Corporate Operating profit (loss) for the
three months ended March 31, 2015 includes costs of $100 related to
the 2012 Restructuring Program.
Table 5 Colgate-Palmolive Company
Geographic Sales Analysis Percentage Changes
For the Three Months Ended March 31, 2016 vs 2015
(Unaudited) COMPONENTS OF SALES
CHANGE Pricing Coupons Sales
Consumer & Change Organic Organic
Ex-Divested Trade Foreign
Region
As
Reported
Sales
Change
Volume
(1)
Volume
Volume
(2)
Incentives
Exchange
Total Company (3)(4) (7.5 )% 5.0 % (1.0 )% 3.5
% 3.5 % 1.5 % (8.0 )%
Europe/South Pacific (3)
(7.5 )% 1.0 % - % 4.0 % 4.0 % (3.0 )% (4.5 )%
Latin
America (4) (22.0 )% 9.5 % (10.0 )% 2.5 % 2.5 % 7.0 %
(19.0 )%
Asia (2.5 )% 4.0 % 4.0 % 4.0 % 4.0 % - %
(6.5 )%
Africa/Eurasia (9.0 )% 8.0 % - % - % - % 8.0
% (17.0 )%
Total International (12.0 )% 5.5 % (3.0 )%
3.0 % 3.0 % 2.5 % (11.5 )%
North America 1.5 % 2.0 %
4.0 % 4.0 % 4.0 % (2.0 )% (0.5 )%
Total CP Products
(9.0 )% 5.0 % (1.5 )% 3.5 % 3.5 % 1.5 % (9.0 )%
Hill's 2.5 % 5.0 % 3.5 % 3.5 % 3.5 % 1.5 % (2.5 )%
Emerging Markets (5) (13.5 )% 7.5 % (3.5 )%
3.0 % 3.0 % 4.5 % (14.5 )%
Developed Markets (1.5 )%
2.5 % 2.0 % 4.0 % 4.0 % (1.5 )% (2.0 )% Note:
(1) Volume includes the impact of acquisitions, divestments and the
deconsolidation of the Company's Venezuelan operations, as
applicable (see note 4 below). (2) Ex-Divested Volume
excludes the impact of divestments and the deconsolidation of the
Company's Venezuelan operations, as applicable (see note 4 below).
(3) The sale of the Company's laundry detergent business in
the South Pacific was completed on August 31, 2015. The impact of
the sale of the Company's laundry detergent business in the South
Pacific on three months sales and volume was 0.5% for the Total
Company.
(4) Effective December 31, 2015, the
Company concluded it no longer met the accounting criteria for
consolidation of its Venezuelan subsidiary (“CP Venezuela”) and
began accounting for CP Venezuela using the cost method of
accounting. As a result, effective December 31, 2015, CP
Venezuela's net assets and results are no longer included in the
Company's Consolidated Financial Statements. The impact of the
deconsolidation of the Company's Venezuelan operations on three
months sales and volume was 4.0% for the Total Company.
(5) 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, 2016 and 2015 (Dollars in Millions
Except Per Share Amounts) (Unaudited)
Gross Profit 2016 2015 Gross profit, GAAP $
2,248 $ 2,392 2012 Restructuring Program 8 4
Gross profit, non-GAAP $ 2,256 $ 2,396
Basis Point Gross Profit Margin 2016
2015 Change Gross profit margin, GAAP 59.8 % 58.8 %
100 2012 Restructuring Program 0.2 % 0.1 %
Gross profit margin, non-GAAP 60.0 % 58.9 % 110
Selling, General and Administrative
Expenses 2016 2015 Selling, general and
administrative expenses, GAAP $ 1,354 $ 1,450 2012 Restructuring
Program (26 ) (18 ) Selling, general and
administrative expenses, non-GAAP $ 1,328 $ 1,432
Basis Point Selling, General and Administrative
Expenses as a Percentage of Net Sales 2016 2015
Change Selling, general and administrative expenses as a
percentage of Net sales, GAAP 36.0 % 35.6 % 40 2012 Restructuring
Program (0.7 %) (0.4 %) Selling, general and
administrative expenses as a percentage of Net sales, non-GAAP
35.3 % 35.2 % 10
Other
(Income) Expense, Net 2016 2015 Other (income)
expense, net, GAAP $ 27 $ 82 2012 Restructuring Program (21
) (78 ) Other (income) expense, net, non-GAAP $ 6 $ 4
Operating Profit 2016
2015 % Change Operating profit, GAAP $ 867 $ 860 1 %
2012 Restructuring Program 55 100
Operating profit, non-GAAP $ 922 $ 960 (4 %)
Basis Point Operating Profit Margin
2016 2015 Change Operating profit margin, GAAP
23.0 % 21.1 % 190 2012 Restructuring Program 1.5 %
2.5 % Operating profit margin, non-GAAP 24.5 %
23.6 % 90
Net Income Attributable to
Colgate-Palmolive Company 2016 2015 %
Change Net income attributable to Colgate-Palmolive Company,
GAAP $ 533 $ 542 (2 %) 2012 Restructuring Program 38
67 Net income attributable to
Colgate-Palmolive Company, non-GAAP $ 571 $ 609 (6 %)
Diluted Earnings Per Common Share(1)
2016 2015 % Change Diluted earnings per common
share, GAAP $ 0.59 $ 0.59 0 % 2012 Restructuring Program
0.04 0.07 Diluted earnings per common
share, non-GAAP $ 0.63 $ 0.66 (5 %)
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.
View source
version on businesswire.com: http://www.businesswire.com/news/home/20160428005336/en/
Colgate-Palmolive CompanyBina Thompson, 212-310-3072orHope
Spiller, 212-310-2291
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