Skip to content

News

<< Back
Jul 31, 2020

Colgate Announces 2nd Quarter 2020 Results

NEW YORK--(BUSINESS WIRE)--Jul. 31, 2020-- Colgate-Palmolive Company (NYSE:CL)

  • Net sales increased 1.0%, Organic sales* increased 5.5%
  • GAAP EPS grew 9% to $0.74, Base Business EPS* grew 3% to $0.74
  • GAAP Gross profit margin increased 110 basis points to 60.8%, Base Business Gross profit margin* increased 120 basis points to 60.8%
  • Net cash provided by operations was $1,794 million
  • Colgate’s leadership in toothpaste continued with its global market share at 40.0% year to date
  • Colgate’s leadership in manual toothbrushes continued with its global market share at 31.0% year to date
  • The Company is not providing 2020 financial guidance due to the continued uncertainty surrounding the business impacts from COVID-19 and related macroeconomic volatility

Second Quarter Total Company Results (GAAP)

($ in millions except per share amounts)

2020

2019

Change

Net Sales

$3,897

$3,866

+1.0%

EPS (diluted)

$0.74

$0.68

+9%

 

 

 

 

 

 

 

 

Second Quarter Total Company Results (Base Business - Non-GAAP)*

($ in millions except per share amounts)

2020

2019

Change

Organic Sales Growth

+5.5%

Base Business EPS (diluted)

$0.74

$0.72

+3%

*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 second quarter 2020. Noel Wallace, Chairman, President and Chief Executive Officer, commented, “Our momentum continued in the second quarter, despite the many challenges brought on by the global COVID-19 pandemic, including government actions to stem the spread of the virus. Our strategy has accelerated our growth over the past two years, and we continue to execute that strategy with agility to position us to win both during the pandemic and during the recovery. The ability of our teams on the ground to quickly adapt to new ways of working in the face of these challenges has been extraordinary.

 

“While net sales growth was significantly impacted by foreign exchange, the 5.5% organic sales growth reflected a good balance of positive volume and higher pricing on a worldwide basis and was led by strong growth in North America and Hill’s.

“We continue to see elevated demand across our geographies in certain categories such as liquid hand soap, dish liquid, bar soap and cleaners. In other categories, we are starting to see the impact of consumers working down their pantry inventories, particularly in Europe.

"The gross margin expansion in the quarter allowed us to invest behind our brands. Over the second half of the year, we will continue to fund strong consumer programs to drive our business.

“Looking ahead, we continue to expect a mid-single digit negative impact on net sales for the year from foreign exchange, based on current spot rates. Given the continued uncertainty related to the impact of the virus and government actions to stem the virus, including macroeconomic impacts, we have decided not to reinstate our financial guidance for 2020 at this time. As we proceed through this pandemic we plan to reinstate our guidance when we have the visibility to forecast our results with more confidence.”

Divisional Performance

The following are comments about divisional performance for second 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.

 

Second Quarter Sales Growth By Division

(% change 2Q 2020 vs. 2Q 2019)

 

Net
Sales

Organic
Sales*

As Reported
Volume

Organic
Volume

Pricing

FX

North America

+12.0%

+11.0%

+13.0%

+11.5%

-0.5%

-0.5%

Latin America

-13.5%

+4.5%

-4.5%

-4.5%

+9.0%

-18.0%

Europe

+5.0%

-1.5%

+7.5%

-1.5%

—%

-2.5%

Asia Pacific

-3.0%

+0.5%

-3.0%

-3.0%

+3.5%

-3.5%

Africa/Eurasia

-6.0%

+2.5%

+0.5%

-1.5%

+4.0%

-10.5%

Hill's

+9.5%

+11.5%

+7.5%

+7.5%

+4.0%

-2.0%

 

 

 

 

 

 

 

Total Company

+1.0%

+5.5%

+3.5%

+2.0%

+3.5%

-6.0%

*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, the new joint venture in Nigeria and the Hello oral care business on as reported volume was 1.5% for Total Company and 9.0%, 2.0% and 1.5% for Europe, Africa/Eurasia and North America, respectively.

Second Quarter Operating Profit By Division

($ in millions)

 

2Q 2020

% Change vs

2Q 2019

% to Net

Sales

Change in basis

points vs 2Q 2019

% to Net Sales

North America

$254

—%

26.8%

-320

Latin America

$229

-9%

28.4%

+140

Europe

$158

7%

25.6%

+40

Asia Pacific

$176

1%

28.2%

+130

Africa/Eurasia

$56

19%

24.5%

+520

Hill's

$191

14%

28.4%

+110

 

 

 

 

 

Total Company, As Reported

$946

7.0%

24.3%

+130

Total Company, Base Business*

$946

1.9%

24.3%

+30

*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 (24% 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 40.9% year to date.
  • The decrease in Operating profit as a percentage of Net sales was primarily due to increased advertising investment, unfavorable mix, higher overhead expenses, primarily driven by higher logistics costs, and higher raw and packaging material costs, partially offset by cost savings from the Company’s funding-the-growth initiatives.
 

Latin America (21% of Company Sales)

  • Organic sales growth in Argentina, Brazil, the Caribbean region and Colombia was partially offset by an organic sales decline in Mexico.
  • 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, higher pricing and lower overhead costs, partially offset by higher raw and packaging material costs, which included foreign exchange transaction costs.

Europe (16% of Company Sales)

  • Organic sales declines in the United Kingdom, Germany and Spain were partially offset by organic sales growth in Switzerland and Belgium.
  • 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, favorable mix and decreased advertising investment, partially offset by higher overhead expenses, higher raw and packaging material costs, which included foreign exchange transaction costs, and amortization expense related to the Filorga skin health acquisition.

Asia Pacific (16% of Company Sales)

  • Organic sales growth in the Greater China region and Australia was partially offset by organic sales declines in Thailand and India.
  • The increase in Operating profit as a percentage of Net sales was primarily due to higher pricing, cost savings from the Company's funding-the-growth initiatives and decreased advertising investment, partially offset by higher raw and packaging material costs, which included foreign exchange transaction costs, and higher overhead expenses.

Africa/Eurasia (6% of Company Sales)

  • Organic sales growth was led by Turkey, the Saudi Arabia/Gulf States region and South Africa.
  • The increase in Operating profit as a percentage of Net sales was primarily due to decreased advertising investment, cost savings from the Company’s funding-the-growth initiatives and higher pricing, partially offset by higher overhead expenses and higher raw and packaging material costs, which included foreign exchange transaction costs.
 

Hill's Pet Nutrition (17% of Company Sales)

  • Organic sales growth was led by the United States and Europe.
  • The increase in Operating profit as a percentage of Net sales was primarily due to lower overhead expenses, cost savings from the Company’s funding-the-growth initiatives and higher pricing, partially offset by increased advertising investment and higher raw and packaging material costs.

Webcast Information

At 8:30 a.m. ET today, Colgate will host a conference call regarding second quarter results. To access this call as a webcast, please go to Colgate’s website at www.colgatepalmolive.com.

About Colgate-Palmolive

Colgate-Palmolive is a leading global consumer products company with 34,000 people dedicated to improving the health and wellness of people and their pets. Focused on Oral Care, Personal Care, Home Care and Pet Nutrition and reaching more than 200 countries and territories, Colgate teams are developing, producing, distributing and selling health and hygiene products and pet nutrition offerings essential to society through brands such as Colgate, Palmolive, elmex, meridol, Tom’s of Maine, hello, Sorriso, Speed Stick, Softsoap, Irish Spring, Protex, Sanex, Filorga, eltaMD, PCA Skin, Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science Diet and Hill’s Prescription Diet. The Company also 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 the oral health of children 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

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).

 

Market share data is subject to limitations on the availability of up-to-date information. In particular, market share data is currently not generally available for certain retail channels, such as eCommerce and certain club retailers and discounters. 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 certain limited circumstances, the COVID-19 pandemic has impacted the ability of our third-party vendors to provide the Company with reliable updated market share data. In addition, market share information reported by the Company may be different from market share information reported 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 (as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (SEC) in its rules, regulations and releases) that set forth anticipated results based on management’s current plans and assumptions. Such statements may relate, for example, to sales or volume growth, net selling price increases, organic sales growth, profit or profit margin growth, earnings per share levels, financial goals, the impact of foreign exchange, the impact of COVID-19, cost-reduction plans, tax rates, new product introductions, commercial investment levels, acquisitions, divestitures, share repurchases, or legal or tax proceedings, among other matters. These statements are made on the basis of the Company’s views and assumptions as of this time and the Company undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC. Moreover, the Company does not, nor does any other person, assume responsibility for the accuracy and completeness of these statements. The Company cautions 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. For more information about factors that could impact the Company’s business and cause actual results to differ materially from forward-looking statements, investors should refer to the Company’s filings with the SEC (including, but not limited to, the information set forth under the captions “Risk Factors” and “Cautionary Statement on Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2019 and subsequent Quarterly Reports on Form 10-Q). Copies of these filings may be obtained upon request from the Company’s Investor Relations Department or on the Company’s website at www.colgatepalmolive.com.

 

Non-GAAP Financial Measures

The following provides definitions and other information regarding the non-GAAP financial measures used in this press release and/or the related webcast, which may not be the same as or comparable to similar measures presented by other companies:

  • Base Business: Base Business refers to non-GAAP measures of operating results that exclude certain items. Base Business operating results exclude, as applicable, charges resulting from the Global Growth and Efficiency Program, acquisition-related costs and a benefit related to a recent reorganization of the ownership structure of certain foreign subsidiaries and a new operating structure being implemented within one of the Company's divisions.
  • Organic sales growth: Net sales growth excluding the impact of foreign exchange, acquisitions and divestments.
  • Free cash flow before dividends: Net cash provided by operations less Capital expenditures.

This press release discusses Net sales growth (GAAP) and Organic sales growth (non-GAAP). Management believes the organic sales growth measure provides investors and analysts 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 and six months ended June 30, 2020 versus 2019 included with this release for a comparison of Organic sales growth to Net sales growth in accordance with GAAP.

 

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, Non-service related postretirement costs, Effective income tax rate, Net income attributable to Colgate-Palmolive Company and Diluted earnings per common share are disclosed on both an as reported (GAAP) and Base Business (non-GAAP) basis. These non-GAAP financial measures exclude items that, either by their nature or amount, management would not expect to occur as part of the Company’s normal business on a regular basis, such as restructuring charges, charges for certain litigation and tax matters, gains and losses from certain divestitures and certain unusual, non-recurring items. Investors and analysts use these financial measures in assessing the Company’s business performance, and management believes that presenting these financial measures on a non-GAAP basis provides them with useful supplemental information to enhance their understanding of the Company’s underlying business performance and trends. These non-GAAP financial measures also enhance the ability to compare period-to-period financial results. See “Non-GAAP Reconciliations” for the three and six months ended June 30, 2020 and 2019 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, to evaluate segment and overall operating performance and as factors in determining compensation. While the Company believes that these financial measures are useful in evaluating the Company’s underlying business performance and trends, 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.

As management uses free cash flow before dividends 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. See “Condensed Consolidated Statements of Cash Flows” for the six months ended June 30, 2020 and 2019 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 second quarter results.)

 

Table 1

Colgate-Palmolive Company

 

               

Condensed Consolidated Statements of Income

 

               

For the Three Months Ended June 30, 2020 and 2019

 

               

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

               

 

 

2020

 

2019

 

 

 

     

 

   

Net sales

 

$

3,897

 

 

$

3,866

 

 

 

 

     

 

   

Cost of sales

 

 

1,528

 

 

 

1,558

 

 

 

 

     

 

   

Gross profit

 

 

2,369

 

 

 

2,308

 

 

 

 

     

 

   

Gross profit margin

 

 

60.8

%

 

 

59.7

%

 

 

 

     

 

   

Selling, general and administrative expenses

 

 

1,395

 

 

 

1,369

 

 

 

 

     

 

   

Other (income) expense, net

 

 

28

 

 

 

51

 

 

 

 

     

 

   

Operating profit

 

 

946

 

 

 

888

 

 

 

 

     

 

   

Operating profit margin

 

 

24.3

%

 

 

23.0

%

 

 

 

     

 

   

Non-service related postretirement costs

 

 

20

 

 

 

27

 

 

 

 

     

 

   

Interest (income) expense, net

 

 

35

 

 

 

38

 

 

 

 

     

 

   

Income before income taxes

 

 

891

 

 

 

823

 

 

 

 

     

 

   

Provision for income taxes

 

 

216

 

 

 

205

 

 

 

 

     

 

   

Effective tax rate

 

 

24.2

%

 

 

24.9

%

 

 

 

     

 

   

Net income including noncontrolling interests

 

 

675

 

 

 

618

 

 

 

 

     

 

   

Less: Net income attributable to noncontrolling interests

 

 

40

 

 

 

32

 

 

 

 

     

 

   

Net income attributable to Colgate-Palmolive Company

 

$

635

 

 

$

586

 

 

 

 

     

 

   

Earnings per common share

 

 

     

 

   

Basic

 

$

0.74

 

 

$

0.68

 

Diluted

 

$

0.74

 

 

$

0.68

 

 

 

 

     

 

   

Supplemental Income Statement Information

 

 

     

 

   

Average common shares outstanding

 

 

     

 

   

Basic

 

 

857.4

 

 

 

859.4

 

Diluted

 

 

858.9

 

 

 

861.9

 

 

 

 

     

 

   

Advertising

 

$

439

 

 

$

416

 

 

Table 2

Colgate-Palmolive Company

 

               

Condensed Consolidated Statements of Income

 

               

For the Six Months Ended June 30, 2020 and 2019

 

               

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

               

 

 

2020

 

2019

 

 

 

     

 

   

Net sales

 

$

7,994

 

 

$

7,750

 

 

 

 

     

 

   

Cost of sales

   

3,160

 

   

3,155

 

 

 

 

     

 

   

Gross profit

   

4,834

 

   

4,595

 

 

 

 

     

 

   

Gross profit margin

 

 

60.5

%

 

 

59.3

%

 

 

 

     

 

   

Selling, general and administrative expenses

 

 

2,868

 

   

2,734

 

 

 

 

     

 

   

Other (income) expense, net

 

 

68

 

   

94

 

 

 

 

     

 

   

Operating profit

 

 

1,898

 

   

1,767

 

 

 

 

     

 

   

Operating profit margin

 

 

23.7

%

 

 

22.8

%

 

 

 

     

 

   

Non-service related postretirement costs

 

 

41

 

   

52

 

 

 

 

     

 

   

Interest (income) expense, net

 

 

71

 

   

78

 

 

 

 

     

 

   

Income before income taxes

 

 

1,786

 

   

1,637

 

 

 

 

     

 

   

Provision for income taxes

 

 

363

 

   

419

 

 

 

 

     

 

   

Effective tax rate

 

 

20.3

%

 

 

25.6

%

 

 

 

     

 

   

Net income including noncontrolling interests

 

 

1,423

 

   

1,218

 

 

 

 

     

 

   

Less: Net income attributable to noncontrolling interests

 

 

73

 

   

72

 

 

 

 

     

 

   

Net income attributable to Colgate-Palmolive Company

 

$

1,350

 

 

$

1,146

 

 

 

 

     

 

   

Earnings per common share

 

 

     

 

   

Basic(1)

 

$

1.58

 

 

$

1.33

 

Diluted(1)

 

$

1.57

 

 

$

1.33

 

 

 

 

     

 

   

Supplemental Income Statement Information

 

 

     

 

   

Average common shares outstanding

 

 

     

 

   

Basic

 

 

857.1

 

 

 

860.7

 

Diluted

 

 

858.6

 

 

 

862.7

 

 

 

 

     

 

   

Advertising

 

$

923

 

 

$

845

 

Note:

(1) Basic and diluted earnings per share are computed independently for each quarter and any year-to-date period presented. As a result of changes in shares outstanding during the year and rounding, the sum of the quarters' earnings per share may not equal the earnings per share for any year-to-date period.

 

Table 3

Colgate-Palmolive Company

 

                       

Condensed Consolidated Balance Sheets

 

                       

As of June 30, 2020, December 31, 2019 and June 30, 2019

 

                       

(Dollars in Millions) (Unaudited)

 

 

 

     

 

     

 

   

 

 

June 30,

 

December 31,

 

June 30,

 

 

2020

 

2019

 

2019

Cash and cash equivalents

 

$

997

 

 

$

883

 

 

$

863

 

Receivables, net

 

 

1,231

 

 

 

1,440

 

 

 

1,590

 

Inventories

 

 

1,524

 

 

 

1,400

 

 

 

1,322

 

Other current assets

 

 

460

 

 

 

456

 

 

 

480

 

Property, plant and equipment, net

 

 

3,483

 

 

 

3,750

 

 

 

3,793

 

Goodwill

 

 

3,628

 

 

 

3,508

 

 

 

2,536

 

Other intangible assets, net

 

 

2,787

 

 

 

2,667

 

 

 

1,609

 

Other assets

 

 

1,031

 

 

 

930

 

 

 

958

 

Total assets

 

$

15,141

 

 

$

15,034

 

 

$

13,151

 

 

 

 

     

 

     

 

   

Total debt

 

$

7,392

 

 

$

7,847

 

 

$

6,645

 

Other current liabilities

 

 

4,072

 

 

 

3,524

 

 

 

3,777

 

Other non-current liabilities

 

 

2,945

 

 

 

3,105

 

 

 

2,739

 

Total liabilities

 

 

14,409

 

 

 

14,476

 

 

 

13,161

 

Total Colgate-Palmolive Company shareholders’ equity

 

 

268

 

 

 

117

 

 

 

(347

)

Noncontrolling interests

 

 

464

 

 

 

441

 

 

 

337

 

Total liabilities and equity

 

$

15,141

 

 

$

15,034

 

 

$

13,151

 

 

 

 

     

 

     

 

   

Supplemental Balance Sheet Information

 

 

     

 

     

 

   

Debt less cash, cash equivalents and marketable securities(1)

 

$

6,370

 

 

$

6,941

 

 

$

5,716

 

Working capital % of sales

 

 

(5.5

)%

 

 

(1.6

)%

 

 

(2.9

)%

Note:
(1) Marketable securities of $25, $23 and $66 as of June 30, 2020, December 31, 2019 and June 30, 2019, respectively, are included in Other current assets.

 

Table 4

Colgate-Palmolive Company

 

               

Condensed Consolidated Statements of Cash Flows

 

               

For the Six Months Ended June 30, 2020 and 2019

 

               

(Dollars in Millions) (Unaudited)

 

 

 

     

 

   

 

 

2020

 

2019

Operating Activities

 

 

     

 

   

Net income including noncontrolling interests

 

$

1,423

 

 

$

1,218

 

Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operations:

 

 

           

Depreciation and amortization

 

 

266

 

 

 

256

 

Restructuring and termination benefits, net of cash

 

 

(35

)

 

 

21

 

Stock-based compensation expense

 

 

32

 

 

 

34

 

Deferred income taxes

 

 

(147

)

 

 

53

 

Voluntary benefit plan contributions

 

 

 

 

 

(102

)

Cash effects of changes in:

 

 

     

 

   

Receivables

 

 

121

 

 

 

(178

)

Inventories

 

 

(176

)

 

 

(63

)

Accounts payable and other accruals

 

 

347

 

 

 

(14

)

Other non-current assets and liabilities

 

 

(37

)

 

 

24

 

Net cash provided by operations

 

 

1,794

 

 

 

1,249

 

 

 

 

     

 

   

Investing Activities

 

 

     

 

   

Capital expenditures

 

 

(159

)

 

 

(146

)

Purchases of marketable securities and investments

 

 

(48

)

 

 

(80

)

Proceeds from sale of marketable securities and investments

 

 

42

 

 

 

14

 

Payment for acquisitions, net of cash acquired

 

 

(352

)

 

 

 

Net cash used in investing activities

 

 

(517

)

 

 

(212

)

 

 

 

     

 

   

Financing Activities

 

 

     

 

   

Principal payments on debt

 

 

(2,102

)

 

 

(3,105

)

Proceeds from issuance of debt

 

 

1,620

 

 

 

3,368

 

Dividends paid

 

 

(784

)

 

 

(770

)

Purchases of treasury shares

 

 

(228

)

 

 

(664

)

Proceeds from exercise of stock options

 

 

353

 

 

 

267

 

Net cash provided by (used in) financing activities

 

 

(1,141

)

 

 

(904

)

 

 

 

     

 

   

Effect of exchange rate changes on Cash and cash equivalents

 

 

(22

)

 

 

4

 

Net increase (decrease) in Cash and cash equivalents

 

 

114

 

 

 

137

 

Cash and cash equivalents at beginning of the period

 

 

883

 

 

 

726

 

Cash and cash equivalents at end of the period

 

$

997

 

 

$

863

 

 

 

 

     

 

   

Supplemental Cash Flow Information

 

 

     

 

   

Free cash flow before dividends (Net cash provided by operations less Capital expenditures)

 

 

     

 

   

Net cash provided by operations

 

$

1,794

 

 

$

1,249

 

Less: Capital expenditures

 

 

(159

)

 

 

(146

)

Free cash flow before dividends

 

$

1,635

 

 

$

1,103

 

 

 

 

     

 

   

 

 

 

     

 

   

Income taxes paid

 

$

349

 

 

$

463

 

 

Table 5

Colgate-Palmolive Company

 

                 

 

     

 

   

Segment Information

 

                 

 

     

 

   

For the Three and Six Months Ended June 30, 2020 and 2019

 

                 

 

     

 

   

(Dollars in Millions) (Unaudited)

 

 

 

             

 

     

 

   

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Net Sales

 

 

     

 

     

 

     

 

   

Oral, Personal and Home Care

 

 

     

 

     

 

     

 

   

 

 

 

     

 

     

 

     

 

   

North America

 

$

949

 

 

$

846

 

 

$

1,878

 

 

$

1,699

 

Latin America

 

 

805

 

 

 

929

 

 

 

1,694

 

 

 

1,818

 

Europe

 

 

617

 

 

 

588

 

 

 

1,292

 

 

 

1,190

 

Asia Pacific

 

 

625

 

 

 

646

 

 

 

1,258

 

 

 

1,346

 

Africa/Eurasia

 

 

229

 

 

 

244

 

 

 

481

 

 

 

484

 

 

 

 

     

 

     

 

     

 

   

Total Oral, Personal and Home Care

 

 

3,225

 

 

 

3,253

 

 

 

6,603

 

 

 

6,537

 

 

 

 

     

 

     

 

     

 

   

Pet Nutrition

 

 

672

 

 

 

613

 

 

 

1,391

 

 

 

1,213

 

 

 

 

     

 

     

 

     

 

   

Total Net Sales

 

$

3,897

 

 

$

3,866

 

 

$

7,994

 

 

$

7,750

 

 

 

 

     

 

     

 

     

 

   

 

 

 

     

 

     

 

     

 

   

 

 

Three Months Ended June 30,

 

Six Months Ended June 30,

 

 

2020

 

2019

 

2020

 

2019

Operating Profit

 

 

     

 

     

 

     

 

   

Oral, Personal and Home Care

 

 

     

 

     

 

     

 

   

 

 

 

     

 

     

 

     

 

   

North America

 

$

254

 

 

$

254

 

 

$

512

 

 

$

503

 

Latin America

 

 

229

 

 

 

251

 

 

 

478

 

 

 

483

 

Europe

 

 

158

 

 

 

148

 

 

 

312

 

 

 

299

 

Asia Pacific

 

 

176

 

 

 

174

 

 

 

337

 

 

 

363

 

Africa/Eurasia

 

 

56

 

 

 

47

 

 

 

112

 

 

 

93

 

 

 

 

     

 

     

 

     

 

   

Total Oral, Personal and Home Care

 

 

873

 

 

 

874

 

 

 

1,751

 

 

 

1,741

 

 

 

 

     

 

     

 

     

 

   

Pet Nutrition

 

 

191

 

 

 

167

 

 

 

393

 

 

 

331

 

Corporate(1)

 

 

(118

)

 

 

(153

)

 

 

(246

)

 

 

(305

)

 

 

 

     

 

     

 

     

 

   

Total Operating Profit

 

$

946

 

 

$

888

 

 

$

1,898

 

 

$

1,767

 

Note:
(1) Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs and gains and losses on sales of non-core product lines and assets.

Corporate Operating profit (loss) for the three months ended June 30, 2019 included charges of $40 resulting from the Global Growth and Efficiency Program, which ended on December 31, 2019.

Corporate Operating profit (loss) for the six months ended June 30, 2020 included a charge for acquisition-related costs of $6. Corporate Operating profit (loss) for the six months ended June 30, 2019 included charges of $68 resulting from the Global Growth and Efficiency Program, which ended on December 31, 2019.

 

Table 6

Colgate-Palmolive Company

 

Geographic Sales Analysis Percentage Changes

 

For the Three Months Ended June 30, 2020 vs. 2019

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPONENTS OF SALES CHANGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pricing

 

 

 

 

 

 

 

 

 

 

 

 

Coupons

 

 

 

 

Sales

 

 

 

 

 

 

 

Consumer &

 

 

 

 

Change

 

Organic

 

As Reported

 

Organic

 

Trade

 

Foreign

Region

 

As Reported

 

Sales Change

 

Volume

 

Volume

 

Incentives

 

Exchange

                                     

Total Company(1)

 

1.0

%

 

5.5

%

 

3.5

%

 

2.0

%

 

3.5

%

 

(6.0

)%

                                     

North America(1)

 

12.0

%

 

11.0

%

 

13.0

%

 

11.5

%

 

(0.5

)%

 

(0.5

)%

                                     

Latin America 

 

(13.5

)%

 

4.5

%

 

(4.5

)%

 

(4.5

)%

 

9.0

%

 

(18.0

)%

                                     

Europe(1)

 

5.0

%

 

(1.5

)%

 

7.5

%

 

(1.5

)%

 

%

 

(2.5

)%

                                     

Asia Pacific 

 

(3.0

)%

 

0.5

%

 

(3.0

)%

 

(3.0

)%

 

3.5

%

 

(3.5

)%

                                     

Africa/Eurasia(1)

 

(6.0

)%

 

2.5

%

 

0.5

%

 

(1.5

)%

 

4.0

%

 

(10.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

Total CP Products(1)

 

(1.0

)%

 

4.0

%

 

2.5

%

 

0.5

%

 

3.5

%

 

(7.0

)%

                                     

Hill’s

 

9.5

%

 

11.5

%

 

7.5

%

 

7.5

%

 

4.0

%

 

(2.0

)%

                                     
                                     

Emerging Markets(2)

 

(9.0

)%

 

2.5

%

 

(3.5

)%

 

(4.0

)%

 

6.5

%

 

(12.0

)%

                                     

Developed Markets(2)

 

10.0

%

 

8.0

%

 

10.0

%

 

7.0

%

 

1.0

%

 

(1.0

)%

Notes:
(1) The impact of the previously disclosed acquisitions of the Filorga skin health business, the new joint venture in Nigeria and the Hello oral care business on as reported volume was 1.5% for Total Company and 1.5%, 9.0%, 2.0% and 2.0% for North America, Europe, Africa/Eurasia and Total CP Products, respectively.

(2) Emerging Markets include Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe. The impact of the previously disclosed acquisitions of the Filorga skin health business, the new joint venture in Nigeria and the Hello oral care business on as reported volume was 0.5% for Emerging Markets and 3.0% for Developed Markets.

 

Table 7

Colgate-Palmolive Company

 

Geographic Sales Analysis Percentage Changes

 

For the Six Months Ended June 30, 2020 and 2019

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPONENTS OF SALES CHANGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pricing

 

 

 

 

 

 

 

 

 

 

 

 

Coupons

 

 

 

 

Sales

 

 

 

 

 

 

 

Consumer &

 

 

 

 

Change

 

Organic

 

As Reported

 

Organic

 

Trade

 

Foreign

Region

 

As Reported

 

Sales Change

 

Volume

 

Volume

 

Incentives

 

Exchange

                                     

Total Company(1)

 

3.0

%

 

6.5

%

 

5.5

%

 

4.0

%

 

2.5

%

 

(5.0

)%

                                     

North America(1)

 

10.5

%

 

9.5

%

 

11.0

%

 

9.5

%

 

%

 

(0.5

)%

                                     

Latin America 

 

(7.0

)%

 

7.5

%

 

(0.5

)%

 

(0.5

)%

 

8.0

%

 

(14.5

)%

                                     

Europe(1)

 

8.5

%

 

2.5

%

 

12.0

%

 

3.5

%

 

(1.0

)%

 

(2.5

)%

                                     

Asia Pacific 

 

(6.5

)%

 

(3.5

)%

 

(6.0

)%

 

(6.0

)%

 

2.5

%

 

(3.0

)%

                                     

Africa/Eurasia(1)

 

(0.5

)%

 

5.0

%

 

5.5

%

 

3.5

%

 

1.5

%

 

(7.5

)%

                                     

Total CP Products(1)

 

1.0

%

 

4.5

%

 

4.0

%

 

2.0

%

 

2.5

%

 

(5.5

)%

                                     

Hill’s

 

14.5

%

 

16.0

%

 

12.0

%

 

12.0

%

 

4.0

%

 

(1.5

)%

                                     
                                     

Emerging Markets(2)

 

(6.0

)%

 

2.5

%

 

(2.0

)%

 

(2.5

)%

 

5.0

%

 

(9.0

)%

                                     

Developed Markets(2)

 

12.0

%

 

10.0

%

 

12.0

%

 

9.0

%

 

1.0

%

 

(1.0

)%

Notes:
(1) The impact of the previously disclosed acquisitions of the Filorga skin health business, the new joint venture in Nigeria and the Hello oral care business on as reported volume was 1.5% for Total Company and 1.5%, 8.5%, 2.0% and 2.0% for North America, Europe, Africa/Eurasia and Total CP Products, respectively.

(2) Emerging Markets include Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe. The impact of the previously disclosed acquisitions of the Filorga skin health business, the new joint venture in Nigeria and the Hello oral care business on as reported volume was 0.5% for Emerging Markets and 3.0% for Developed Markets.

 

Table 8

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Three Months Ended June 30, 2020 and 2019

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

 

 

Gross Profit

 

2020

 

2019

 

 

Gross profit, GAAP

 

$

2,369

 

 

$

2,308

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(3

)

 

 

Gross profit, non-GAAP

 

$

2,369

 

 

$

2,305

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Point

Gross Profit Margin

 

2020

 

2019

 

Change

Gross profit margin, GAAP

 

 

60.8

%

 

 

59.7

%

 

110

 

Global Growth and Efficiency Program

 

 

%

 

 

(0.1

)%

 

 

Gross profit margin, non-GAAP

 

 

60.8

%

 

 

59.6

%

 

120

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses

 

2020

 

2019

 

 

Selling, general and administrative expenses, GAAP

 

$

1,395

 

 

$

1,369

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(10

)

 

 

Selling, general and administrative expenses, non-GAAP

 

$

1,395

 

 

$

1,359

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses as a Percentage of Net Sales

 

2020

 

2019

 

Basis Point

Change

Selling, general and administrative expenses as a percentage of Net sales, GAAP

 

 

35.8

%

 

 

35.4

%

 

40

 

Global Growth and Efficiency Program

 

 

%

 

 

(0.2

)%

 

 

Selling, general and administrative expenses as a percentage of Net sales, non-GAAP

 

 

35.8

%

 

 

35.2

%

 

60

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (Income) Expense, Net

 

2020

 

2019

 

 

Other (income) expense, net, GAAP

 

$

28

 

 

$

51

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(33

)

 

 

Other (income) expense, net, non-GAAP

 

$

28

 

 

$

18

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

2020

 

2019

 

% Change

Operating profit, GAAP

 

$

946

 

 

$

888

 

 

7

%

Global Growth and Efficiency Program

 

 

 

 

 

40

 

 

 

Operating profit, non-GAAP

 

$

946

 

 

$

928

 

 

2

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Point

Operating Profit Margin

 

2020

 

2019

 

Change

Operating profit margin, GAAP

 

 

24.3

%

 

 

23.0

%

 

130

 

Global Growth and Efficiency Program

 

 

%

 

 

1.0

%

 

 

Operating profit margin, non-GAAP

 

 

24.3

%

 

 

24.0

%

 

30

 

 

 

Non-Service Related Postretirement Costs

 

2020

 

2019

 

 

Non-service related postretirement costs, GAAP

 

$

20

 

 

$

27

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(2

)

 

 

Non-service related postretirement costs, non-GAAP

 

$

20

 

 

$

25

 

 

 

 

Table 8

Continued

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Three Months Ended June 30, 2020 and 2019

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

 

 

 

2020

 

 

Income Before

Income Taxes

 

Provision For

Income Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Net Income

Attributable To

Colgate-Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted Earnings

Per Share

As Reported GAAP

 

$

891

 

$

216

 

$

675

 

$

635

 

24.2

%

 

$

0.74

Non-GAAP

 

$

891

 

$

216

 

$

675

 

$

635

 

24.2

%

 

$

0.74

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

Income Before

Income Taxes

 

Provision For

Income Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Net Income

Attributable To

Colgate-Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted Earnings

Per Share

As Reported GAAP

 

$

823

 

$

205

 

$

618

 

$

586

 

24.9

%

 

$

0.68

Global Growth and Efficiency Program

 

 

42

 

 

11

 

 

31

 

 

31

 

0.1

%

 

 

0.04

Non-GAAP

 

$

865

 

$

216

 

$

649

 

$

617

 

25.0

%

 

$

0.72

The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding.

Notes:
(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes.

 

Table 9

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Six Months Ended June 30, 2020 and 2019

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

 

 

Gross Profit

 

2020

 

2019

 

 

Gross profit, GAAP

 

$

4,834

 

 

$

4,595

 

 

 

Acquisition-related costs

 

 

4

 

 

 

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

8

 

 

 

Gross profit, non-GAAP

 

$

4,838

 

 

$

4,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Point

Gross Profit Margin

 

2020

 

2019

 

Change

Gross profit margin, GAAP

 

 

60.5

%

 

 

59.3

%

 

120

 

Global Growth and Efficiency Program

 

 

%

 

 

0.1

%

 

 

Gross profit margin, non-GAAP

 

 

60.5

%

 

 

59.4

%

 

110

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses

 

2020

 

2019

 

 

Selling, general and administrative expenses, GAAP

 

$

2,868

 

 

$

2,734

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(14

)

 

 

Selling, general and administrative expenses, non-GAAP

 

$

2,868

 

 

$

2,720

 

 

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses as a Percentage of Net Sales

 

2020

 

2019

 

Basis Point

Change

Selling, general and administrative expenses as a percentage of Net sales, GAAP

 

 

35.9

%

 

 

35.3

%

 

60

 

Global Growth and Efficiency Program

 

 

%

 

 

(0.2

)%

 

 

Selling, general and administrative expenses as a percentage of Net sales, non-GAAP

 

 

35.9

%

 

 

35.1

%

 

80

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other (Income) Expense, Net

 

2020

 

2019

 

 

Other (income) expense, net, GAAP

 

$

68

 

 

$

94

 

 

 

Acquisition-related costs

 

 

(2

)

 

 

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(46

)

 

 

Other (income) expense, net, non-GAAP

 

$

66

 

 

$

48

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Operating Profit

 

2020

 

2019

 

% Change

Operating profit, GAAP

 

$

1,898

 

 

$

1,767

 

 

7

%

Acquisition-related costs

 

 

6

 

 

 

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

68

 

 

 

Operating profit, non-GAAP

 

$

1,904

 

 

$

1,835

 

 

4

%

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Point

Operating Profit Margin

 

2020

 

2019

 

Change

Operating profit margin, GAAP

 

 

23.7

%

 

 

22.8

%

 

90

 

Global Growth and Efficiency Program

 

 

%

 

 

0.9

%

 

 

Operating profit margin, non-GAAP

 

 

23.8

%

 

 

23.7

%

 

10

 

 

 

Non-Service Related Postretirement Costs

 

2020

 

2019

 

 

Non-service related postretirement costs, GAAP

 

$

41

 

 

$

52

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

(3

)

 

 

Non-service related postretirement costs, non-GAAP

 

$

41

 

 

$

49

 

 

 

 

Table 9

Continued

Colgate-Palmolive Company

 

 

Non-GAAP Reconciliations

 

 

For the Six Months Ended June 30, 2020 and 2019

 

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

 

 

2020

 

 

Income Before

Income Taxes

 

Provision For

Income Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Net Income

Attributable To

Colgate-Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted

Earnings

Per Share

As Reported GAAP

 

$

1,786

 

$

363

 

$

1,423

 

 

$

1,350

 

 

20.3

%

 

$

1.57

 

Subsidiary and operating structure initiatives

 

 

 

 

71

 

 

(71

)

 

 

(71

)

 

4

%

 

 

(0.08

)

Acquisition-related costs

 

 

6

 

 

2

 

 

4

 

 

 

4

 

 

%

 

 

 

Non-GAAP

 

$

1,792

 

$

436

 

$

1,356

 

 

$

1,283

 

 

24.3

%

 

$

1.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2019

 

 

Income Before

Income Taxes

 

Provision For

Income Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Net Income

Attributable To

Colgate-Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted

Earnings

Per Share

As Reported GAAP

 

$

1,637

 

$

419

 

$

1,218

 

 

$

1,146

 

 

25.6

%

 

$

1.33

 

Global Growth and Efficiency Program

 

 

71

 

 

18

 

 

53

 

 

 

53

 

 

%

 

 

0.06

 

Non-GAAP

 

$

1,708

 

$

437

 

$

1,271

 

 

$

1,199

 

 

25.6

%

 

$

1.39

 

The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding.

Notes:
(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes.

John Faucher 212-310-3653

Hope Spiller 212-310-2291

Source: Colgate-Palmolive Company