Colgate Announces Record Sales for Third Quarter; Worldwide Unit Volume Up 9%
Colgate Announces Record Sales for Third Quarter; Worldwide Unit Volume Up 9%
Oct 19, 1995
Colgate Announces Record Sales for Third Quarter; Worldwide Unit Volume Up 9%
New York, New York, October 19th, 1995 ... -
Colgate-Palmolive Company (NYSE symbol--CL) today announced record sales for the third quarter of 1995, its largest unit volume increase in more than a year, and a loss for the quarter brought about by the $369.2 million third quarter restructuring charge ($2.54 per share) announced on September 20th.
Driven by a 9% increase in unit volume, sales increased 11% to $2.1 billion, a record for any quarter ever. Colgate's businesses in North America, Asia/Africa and Latin America outside of Mexico all achieved excellent growth.
After deducting the restructuring charge, Colgate reported a loss of $250.2 million or $1.76 per share for the third quarter, compared to net income of $151.0 million or $1.00 per share in the third quarter of 1994. Excluding the restructuring provision, Colgate earned $119.0 million or $.78 in the 1995 third quarter. These results are in line with the Company's announcement on September 20.
Reuben Mark, Colgate Chairman and Chief Executive Officer, said "I am pleased that Colgate's worldwide operations again achieved excellent sales and volume growth this quarter, a result of our strong global positioning. Colgate-North America continues to gain momentum and increased unit volume 13%, following its 10% increase in the second quarter. Our developing world business in Latin America and Asia/Africa also had double-digit unit volume growth, with the exception of Mexico, and Colgate-Europe achieved its best volume performance of the year to date.
"As anticipated, sales and earnings in the most recent quarter were impacted by the severe recession in Mexico. Earnings also reflect the effect of the planned transition at Hill's Pet Nutrition from outside distributors to a direct Hill's sales force.
"Importantly, Colgate's operating earnings everywhere else -- North America, Latin America outside of Mexico, Asia/Africa and Europe -- showed solid increases, indicating the continued strength of our business. Given our strong market share positions and the volume growth we are experiencing around the world, combined with the recently announced major restructuring underway to improve efficiency, we have strong confidence in Colgate's ability to achieve continued profitable growth in the future, as we have consistently done in the past."
On September 20, Colgate announced a major restructuring of its manufacturing and administrative operations to enhance profitable growth and strengthen the Company's status as a low-cost producer of quality consumer products. Being implemented over the next two years, the restructuring is expected to produce savings that start in the second half of 1996 and exceed an annual rate of $100 million per year by 1998. Approximately three-fourths of the restructuring will take place in the United States and Europe
Following are comments about Colgate's business in the 1995 third quarter by geographic region and Hill's:
Colgate-Asia/Africa (approximately 20% of Company sales)
Colgate continues to grow strongly in Asia/Africa. Sales increased 17% and unit volume was up 12% in the third quarter, with large increases from India, China, Malaysia, the Philippines, Türkiye and Kenya. New products, distribution outreach programs in rural and hard-to-reach areas, and geographic expansion are all contributing to Colgate's momentum in these fast-growing regions.
Colgate-Europe (approximately 25% of Company sales)
Colgate-Europe achieved 3% unit volume growth, which, when combined with the strengthening of European currencies, resulted in an 11% sales increase. Countries exhibiting the best growth were France, which is Colgate's largest European market, the United Kingdom, Portugal, Greece, and Holland. Successful introductions of Colgate Platinum toothpaste, the revitalized Palmolive personal care line, multi-surface bleach cleaners, Ajax bathroom gel and Fabuloso cleaner contributed to sales and unit volume gains in Europe.
Colgate-Latin America (approximately 25% of Company sales)
Sales increased 8% on 16% unit volume growth. Colgate-Latin America continues to build its Number One position in toothpaste, introducing new products under the Colgate brand name and increasing support for the Kolynos brand, which has gained Brazilian market share since Colgate acquired this business. Volume continued to grow in Colombia and Venezuela; recently expanded operations in Peru, Chile, Uruguay, Ecuador and Argentina also are doing well. Colgate's market shares in Mexico continue strong, but unit volume there declined significantly due to the severe recession. Excluding Mexico and the Kolynos acquisition, sales and unit volume each increased 15% for all the rest of Latin America.
Colgate-North America (approximately 20% of Company sales)
Successful new products and good market shares fueled the 13% increases in sales and unit volume for Colgate-North America. In the United States, Colgate has increased market share in 9 out of its 12 major product categories since the 1994 year-end. Canada and Puerto Rico are also achieving excellent growth. Palmolive dishwashing liquid & antibacterial hand soap is delivering incremental share in the U.S., Canada and Puerto Rico. Colgate baking soda & peroxide toothpaste, along with significant increases in advertising, is contributing to U.S. growth as well, while Canada is also growing behind Colgate Total plaque-fighting toothpaste, Javex bleach and Fleecy liquid and sheet fabric softeners.
Hill's Pet Nutrition (approximately 10% of Company sales)
Hill's continues to increase its worldwide pet food franchise but was affected by non-renewal of distributors in the third quarter. Hill's domestic market share of the specialty pet retail trade is up two full share points to 35% versus year-end 1994; however, the transfer of selling responsibility from outside distributors to Hill's own sales force, resulted in inventory liquidations at distributors. Reported sales were impacted by distributors' not reordering and were essentially flat versus the third quarter of 1994. Unit volume rose significantly from the first and second quarters of 1995 but was down 7% in a difficult comparison with the exceptionally strong third quarter of 1994.
Colgate-Palmolive is a leading global consumer products company tightly focused on Oral Care, Personal Care, Household Care, Fabric Care and Pet Nutrition. With on-the-ground operations in over 90 countries around the world, Colgate sells its products in 202 countries and territories under such internationally recognized brand names as Colgate, Palmolive, Mennen, Ajax, Soupline, Suavitel and Fab, as well as Hill's Science Diet and Hill's Prescription Diet pet foods.
(Tables Attached)
Colgate-Palmolive Company
Summary of Consolidated Results
Three Months and Nine Months Ended September 30, 1995 and 1994
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Colgate is restructuring its worldwide manufacturing and administrative operations to enhance profitable growth, which is reflected as an aftertax charge of $369.2 or $2.54 per share in the 1995 third quarter and $2.55 per share in the first nine months. Excluding this charge, net income was $119.0 in the 1995 third quarter, or $.78 per share vs. $1.00, and $418.7 in the first nine months of 1995, or $2.78 per share versus $2.91.
Assuming full dilution, the (loss) earnings per common share was $(1.76) vs. $.93 in the third quarter and $.23 vs. $2.72 in the first nine months for the periods ended September 30, 1995 and 1994. Average common shares used in the fully diluted computation were 145,455,000 vs. 159,567,000 in the third quarter and 147,293,000 vs. 160,726,000 in the first nine months.
Colgate-Palmolive Company
Supplemental Schedule of Consolidated Results
Excluding the Restructuring Charge
Three Months and Nine Months Ended September 30, 1995 and 1994
(Dollars in Millions Except Per Share Amounts)
(Unaudited) br x="y"/>
Notes:
This schedule is provided as a supplement to the Colgate-Palmolive Company earnings release of October 19, 1995 and should be read in conjunction with the Summary of Consolidated Results as included in the earnings release.
Assuming full dilution, earnings per common share before restructuring was $.74 vs. $.93 in the third quarter and $2.60 vs. $2.72 in the first nine months for the periods ended September 30, 1995 and 1994. Average common shares used in the fully diluted computation were 159,617,000 vs. 159,567,000 in the third quarter and 159,345,000 vs. 160,726,000 in the first nine months.
Driven by a 9% increase in unit volume, sales increased 11% to $2.1 billion, a record for any quarter ever. Colgate's businesses in North America, Asia/Africa and Latin America outside of Mexico all achieved excellent growth.
After deducting the restructuring charge, Colgate reported a loss of $250.2 million or $1.76 per share for the third quarter, compared to net income of $151.0 million or $1.00 per share in the third quarter of 1994. Excluding the restructuring provision, Colgate earned $119.0 million or $.78 in the 1995 third quarter. These results are in line with the Company's announcement on September 20.
Reuben Mark, Colgate Chairman and Chief Executive Officer, said "I am pleased that Colgate's worldwide operations again achieved excellent sales and volume growth this quarter, a result of our strong global positioning. Colgate-North America continues to gain momentum and increased unit volume 13%, following its 10% increase in the second quarter. Our developing world business in Latin America and Asia/Africa also had double-digit unit volume growth, with the exception of Mexico, and Colgate-Europe achieved its best volume performance of the year to date.
"As anticipated, sales and earnings in the most recent quarter were impacted by the severe recession in Mexico. Earnings also reflect the effect of the planned transition at Hill's Pet Nutrition from outside distributors to a direct Hill's sales force.
"Importantly, Colgate's operating earnings everywhere else -- North America, Latin America outside of Mexico, Asia/Africa and Europe -- showed solid increases, indicating the continued strength of our business. Given our strong market share positions and the volume growth we are experiencing around the world, combined with the recently announced major restructuring underway to improve efficiency, we have strong confidence in Colgate's ability to achieve continued profitable growth in the future, as we have consistently done in the past."
On September 20, Colgate announced a major restructuring of its manufacturing and administrative operations to enhance profitable growth and strengthen the Company's status as a low-cost producer of quality consumer products. Being implemented over the next two years, the restructuring is expected to produce savings that start in the second half of 1996 and exceed an annual rate of $100 million per year by 1998. Approximately three-fourths of the restructuring will take place in the United States and Europe
Following are comments about Colgate's business in the 1995 third quarter by geographic region and Hill's:
Colgate-Asia/Africa (approximately 20% of Company sales)
Colgate continues to grow strongly in Asia/Africa. Sales increased 17% and unit volume was up 12% in the third quarter, with large increases from India, China, Malaysia, the Philippines, Türkiye and Kenya. New products, distribution outreach programs in rural and hard-to-reach areas, and geographic expansion are all contributing to Colgate's momentum in these fast-growing regions.
Colgate-Europe (approximately 25% of Company sales)
Colgate-Europe achieved 3% unit volume growth, which, when combined with the strengthening of European currencies, resulted in an 11% sales increase. Countries exhibiting the best growth were France, which is Colgate's largest European market, the United Kingdom, Portugal, Greece, and Holland. Successful introductions of Colgate Platinum toothpaste, the revitalized Palmolive personal care line, multi-surface bleach cleaners, Ajax bathroom gel and Fabuloso cleaner contributed to sales and unit volume gains in Europe.
Colgate-Latin America (approximately 25% of Company sales)
Sales increased 8% on 16% unit volume growth. Colgate-Latin America continues to build its Number One position in toothpaste, introducing new products under the Colgate brand name and increasing support for the Kolynos brand, which has gained Brazilian market share since Colgate acquired this business. Volume continued to grow in Colombia and Venezuela; recently expanded operations in Peru, Chile, Uruguay, Ecuador and Argentina also are doing well. Colgate's market shares in Mexico continue strong, but unit volume there declined significantly due to the severe recession. Excluding Mexico and the Kolynos acquisition, sales and unit volume each increased 15% for all the rest of Latin America.
Colgate-North America (approximately 20% of Company sales)
Successful new products and good market shares fueled the 13% increases in sales and unit volume for Colgate-North America. In the United States, Colgate has increased market share in 9 out of its 12 major product categories since the 1994 year-end. Canada and Puerto Rico are also achieving excellent growth. Palmolive dishwashing liquid & antibacterial hand soap is delivering incremental share in the U.S., Canada and Puerto Rico. Colgate baking soda & peroxide toothpaste, along with significant increases in advertising, is contributing to U.S. growth as well, while Canada is also growing behind Colgate Total plaque-fighting toothpaste, Javex bleach and Fleecy liquid and sheet fabric softeners.
Hill's Pet Nutrition (approximately 10% of Company sales)
Hill's continues to increase its worldwide pet food franchise but was affected by non-renewal of distributors in the third quarter. Hill's domestic market share of the specialty pet retail trade is up two full share points to 35% versus year-end 1994; however, the transfer of selling responsibility from outside distributors to Hill's own sales force, resulted in inventory liquidations at distributors. Reported sales were impacted by distributors' not reordering and were essentially flat versus the third quarter of 1994. Unit volume rose significantly from the first and second quarters of 1995 but was down 7% in a difficult comparison with the exceptionally strong third quarter of 1994.
Colgate-Palmolive is a leading global consumer products company tightly focused on Oral Care, Personal Care, Household Care, Fabric Care and Pet Nutrition. With on-the-ground operations in over 90 countries around the world, Colgate sells its products in 202 countries and territories under such internationally recognized brand names as Colgate, Palmolive, Mennen, Ajax, Soupline, Suavitel and Fab, as well as Hill's Science Diet and Hill's Prescription Diet pet foods.
(Tables Attached)
Colgate-Palmolive Company
Summary of Consolidated Results
Three Months and Nine Months Ended September 30, 1995 and 1994
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Colgate is restructuring its worldwide manufacturing and administrative operations to enhance profitable growth, which is reflected as an aftertax charge of $369.2 or $2.54 per share in the 1995 third quarter and $2.55 per share in the first nine months. Excluding this charge, net income was $119.0 in the 1995 third quarter, or $.78 per share vs. $1.00, and $418.7 in the first nine months of 1995, or $2.78 per share versus $2.91.
Assuming full dilution, the (loss) earnings per common share was $(1.76) vs. $.93 in the third quarter and $.23 vs. $2.72 in the first nine months for the periods ended September 30, 1995 and 1994. Average common shares used in the fully diluted computation were 145,455,000 vs. 159,567,000 in the third quarter and 147,293,000 vs. 160,726,000 in the first nine months.
Colgate-Palmolive Company
Supplemental Schedule of Consolidated Results
Excluding the Restructuring Charge
Three Months and Nine Months Ended September 30, 1995 and 1994
(Dollars in Millions Except Per Share Amounts)
(Unaudited) br x="y"/>
Notes:This schedule is provided as a supplement to the Colgate-Palmolive Company earnings release of October 19, 1995 and should be read in conjunction with the Summary of Consolidated Results as included in the earnings release.
Assuming full dilution, earnings per common share before restructuring was $.74 vs. $.93 in the third quarter and $2.60 vs. $2.72 in the first nine months for the periods ended September 30, 1995 and 1994. Average common shares used in the fully diluted computation were 159,617,000 vs. 159,567,000 in the third quarter and 159,345,000 vs. 160,726,000 in the first nine months.
