Colgate Announces Second Quarter Results
Colgate Announces Second Quarter Results
Jul 20, 1995
Colgate Announces Second Quarter Results
New York, New York, July 20th, 1995 ... -
Colgate-Palmolive Company (NYSE symbol: CL) today announced strong worldwide sales improvement and profits slightly ahead of a year ago for the three months ended June 30, 1995. These results were in line with the announcement the Company made to the financial community on July 13. Sales from ongoing operations increased 13% to $2.1 billion, and unit volume rose 8%, of which 3% came from the Kolynos Latin American Oral Care acquisition. Net income was $143.2 million, or $.95 per share, slightly ahead of the $142.5 million, or $.93 per share in 1994. Earnings in the latest quarter were impacted by reduced profits in Mexico vs. original expectations (approximately $.12 per share) and dilution from the early 1995 acquisition of Kolynos (approximately $.06 per share).
Divisions which reported strong sales and volume momentum were North America, Asia/Africa and Latin America excluding Mexico.
Reuben Mark, Chairman and CEO, said: "Colgate's worldwide business is sound and growing, in terms of sales, operating earnings and market shares. Earnings before Interest and Taxes (EBIT) were up 12% from continuing operations. Overhead costs were again reduced in relation to sales and advertising spending was significantly increased in support of Colgate's strong global franchises. Excluding the impact of Mexico and Kolynos, EBIT rose more than 19% and advertising was up 15%, with advertising increasing in every geographic region.
"Despite the effect of the current macroeconomic situation in Mexico, we are confident in the health and vibrancy of Colgate businesses worldwide." Reflecting this confidence in the Company's prospects, the Colgate Board of Directors on July 13 voted to increase the quarterly common stock dividend by 15% from $.41 to $.47 per share.
Following are comments about Colgate's business by geographic region and Hill's.
Colgate-Latin America (approximately 25% of Company sales)
Colgate's sales increased 19% on unit volume growth of 23% for the entire region. Outside of Mexico, Colgate's Latin American business was extremely strong in the second quarter, especially in Brazil, Colombia and Venezuela. Sales in the region were up more than 30% and unit volume up 25% if both Mexico and Kolynos are excluded. And although the slowed Mexican economy caused a 9% unit volume decline in that country, Colgate's Mexican market shares are healthy and growing. Colgate market shares since the devaluation have improved in all but three of its 18 categories, in most of which the Company has a leadership position. This includes market share increases in such important product categories as toothpaste, detergents, dishwashing products, deodorants and soaps.
Colgate-North America (approximately 20% of Company sales)
Colgate-North America increased sales by 12% and unit volume by 10%, its best performance in 9 quarters. Profits increased as well, both in absolute terms and as a percent to sales. Advertising spending increased to support new product activity, including the major marketplace successes of Colgate Baking Soda & Peroxide toothpaste, Palmolive Dishwashing Liquid & Antibacterial Hand Soap and Irish Spring Waterfall Clean soap. Colgate has gained domestic market share in 9 out of 12 major product categories since the end of 1994, including the key toothpaste, toothbrush, dishwashing liquid, soap and deodorant categories.
Colgate-Asia/Africa (approximately 20% of Company sales)
Colgate-Asia/Africa continues to expand; sales increased 17% and unit volume was up 12%. New product activity, economic growth in emerging markets and geographic expansion drove the increases, the best performers being China, India, Malaysia and the Philippines. Colgate increased its advertising spending for the region, supporting new products and its healthy brand franchises. Colgate Baking Soda toothpaste, Colgate Total toothpaste, Protex bar and liquid soaps, and Ajax/Fab all-in-one color-protecting detergents were among the new products contributing to growth.
Colgate-Europe (approximately 25% of Company sales)
Sales for Colgate-Europe increased 8%, aided by positive currency translation; unit volume declined 4% due to generally slow consumer markets and comparison with the second quarter of 1994, when Colgate-Europe had unusually high double-digit volume growth because of the timing of new product introductions. In 1995, new product introductions are occurring more evenly throughout the year. With increased advertising support, Colgate has maintained or increased European market shares in its important categories, including increases in toothpaste, fabric softeners, all-purpose cleaners and soaps. In Eastern Europe, Colgate continued to achieve rapid growth, particularly in Romania, Poland and Russia.
Hill's Pet Nutrition (approximately 10% of sales)
The worldwide Hill's Pet Nutrition business continues to grow. Domestic pet food volume, as measured by consumer takeaway, was up approximately 10%. As Hill's completes its program to bring its US distribution in-house, thereby improving customer service and profit margins, there have been one-time inventory reductions by discontinued outside distributors. Reflecting this, Hill's sales grew 6% on an all-in basis; unit volume was level with the record quarter of a year ago and up 17% from the first quarter of 1995. Market shares increased on higher advertising spending, and the veterinarians' endorsement for Hill's is seven times higher than for any competitor.
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 nearly 80 countries around the world, Colgate sells its products in 194 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.
Colgate-Palmolive Company Summary of Consolidated Results
Three Months and Six Months Ended June 30, 1995 and 1994
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Assuming full dilution, earnings per common share were $.88 vs. $.87* for the second quarter and $1.85 vs. $1.78* for the first six months ended June 30, 1995 and 1994. Average common shares outstanding assuming full dilution were 159,785,000 vs. 160,478,000 in the second quarters and 159,396,000 vs. 161,166,000 in the first six months.
* Includes a one-time charge of $5.2 aftertax or $.04 per share for the sale of a non-core business.
Divisions which reported strong sales and volume momentum were North America, Asia/Africa and Latin America excluding Mexico.
Reuben Mark, Chairman and CEO, said: "Colgate's worldwide business is sound and growing, in terms of sales, operating earnings and market shares. Earnings before Interest and Taxes (EBIT) were up 12% from continuing operations. Overhead costs were again reduced in relation to sales and advertising spending was significantly increased in support of Colgate's strong global franchises. Excluding the impact of Mexico and Kolynos, EBIT rose more than 19% and advertising was up 15%, with advertising increasing in every geographic region.
"Despite the effect of the current macroeconomic situation in Mexico, we are confident in the health and vibrancy of Colgate businesses worldwide." Reflecting this confidence in the Company's prospects, the Colgate Board of Directors on July 13 voted to increase the quarterly common stock dividend by 15% from $.41 to $.47 per share.
Following are comments about Colgate's business by geographic region and Hill's.
Colgate-Latin America (approximately 25% of Company sales)
Colgate's sales increased 19% on unit volume growth of 23% for the entire region. Outside of Mexico, Colgate's Latin American business was extremely strong in the second quarter, especially in Brazil, Colombia and Venezuela. Sales in the region were up more than 30% and unit volume up 25% if both Mexico and Kolynos are excluded. And although the slowed Mexican economy caused a 9% unit volume decline in that country, Colgate's Mexican market shares are healthy and growing. Colgate market shares since the devaluation have improved in all but three of its 18 categories, in most of which the Company has a leadership position. This includes market share increases in such important product categories as toothpaste, detergents, dishwashing products, deodorants and soaps.
Colgate-North America (approximately 20% of Company sales)
Colgate-North America increased sales by 12% and unit volume by 10%, its best performance in 9 quarters. Profits increased as well, both in absolute terms and as a percent to sales. Advertising spending increased to support new product activity, including the major marketplace successes of Colgate Baking Soda & Peroxide toothpaste, Palmolive Dishwashing Liquid & Antibacterial Hand Soap and Irish Spring Waterfall Clean soap. Colgate has gained domestic market share in 9 out of 12 major product categories since the end of 1994, including the key toothpaste, toothbrush, dishwashing liquid, soap and deodorant categories.
Colgate-Asia/Africa (approximately 20% of Company sales)
Colgate-Asia/Africa continues to expand; sales increased 17% and unit volume was up 12%. New product activity, economic growth in emerging markets and geographic expansion drove the increases, the best performers being China, India, Malaysia and the Philippines. Colgate increased its advertising spending for the region, supporting new products and its healthy brand franchises. Colgate Baking Soda toothpaste, Colgate Total toothpaste, Protex bar and liquid soaps, and Ajax/Fab all-in-one color-protecting detergents were among the new products contributing to growth.
Colgate-Europe (approximately 25% of Company sales)
Sales for Colgate-Europe increased 8%, aided by positive currency translation; unit volume declined 4% due to generally slow consumer markets and comparison with the second quarter of 1994, when Colgate-Europe had unusually high double-digit volume growth because of the timing of new product introductions. In 1995, new product introductions are occurring more evenly throughout the year. With increased advertising support, Colgate has maintained or increased European market shares in its important categories, including increases in toothpaste, fabric softeners, all-purpose cleaners and soaps. In Eastern Europe, Colgate continued to achieve rapid growth, particularly in Romania, Poland and Russia.
Hill's Pet Nutrition (approximately 10% of sales)
The worldwide Hill's Pet Nutrition business continues to grow. Domestic pet food volume, as measured by consumer takeaway, was up approximately 10%. As Hill's completes its program to bring its US distribution in-house, thereby improving customer service and profit margins, there have been one-time inventory reductions by discontinued outside distributors. Reflecting this, Hill's sales grew 6% on an all-in basis; unit volume was level with the record quarter of a year ago and up 17% from the first quarter of 1995. Market shares increased on higher advertising spending, and the veterinarians' endorsement for Hill's is seven times higher than for any competitor.
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 nearly 80 countries around the world, Colgate sells its products in 194 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.
Colgate-Palmolive Company Summary of Consolidated Results
Three Months and Six Months Ended June 30, 1995 and 1994
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Assuming full dilution, earnings per common share were $.88 vs. $.87* for the second quarter and $1.85 vs. $1.78* for the first six months ended June 30, 1995 and 1994. Average common shares outstanding assuming full dilution were 159,785,000 vs. 160,478,000 in the second quarters and 159,396,000 vs. 161,166,000 in the first six months.
* Includes a one-time charge of $5.2 aftertax or $.04 per share for the sale of a non-core business.
