Colgate Announces 3rd Quarter 2021 Results
- Net sales increased 6.5%, Organic sales* increased 4.5%
- On a GAAP basis, EPS declined 7% to
$0.75 ; On a Base Business basis, EPS* grew 3% to$0.81 - GAAP Gross profit margin and Base Business Gross profit margin* decreased 180 basis points to 59.4%
- Net cash provided by operations was
$2,219 million for the first nine months of 2021 - Colgate’s leadership in toothpaste continued with its global market share at 39.5% year to date
- Colgate’s leadership in manual toothbrushes continued with its global market share at 31.0% year to date
- The Company confirmed its financial guidance for full year 2021
Third Quarter Total Company Results (GAAP) |
|
|
|
($ in millions except per share amounts) |
2021 |
2020 |
Change |
|
|
|
+6.5% |
EPS (diluted) |
|
|
-7% |
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|
|
|
|
|
|
Third Quarter Total Company Results (Base Business - Non-GAAP)* |
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|
|
($ in millions except per share amounts) |
2021 |
2020 |
Change |
Organic Sales Growth |
+4.5% |
||
Base Business EPS (diluted) |
|
|
+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. |
“Net income and earnings per share both increased on a Base Business basis, despite significant increases in raw material and logistics costs. We expect the difficult cost environment to continue for the next several quarters and we remain sharply focused on our funding the growth and revenue growth management initiatives, including additional pricing.
“We are encouraged by our performance this quarter, but as we look around the world, there is still much uncertainty stemming from the COVID-19 pandemic, supply chain disruptions and volatility in consumer demand and currencies. In this difficult environment, we remain committed to executing our plans with focus and agility and believe we have the right strategies in place to continue to deliver sustainable, profitable growth over the long term.”
Full Year 2021 Guidance
Based on current spot rates:
- The Company expects net sales to be up 4% to 7% including a low-single-digit benefit from foreign exchange.
- The Company expects organic sales to be up within its long-term targeted range of 3% to 5%.
- On a GAAP basis, the Company expects a decline in gross profit margin, increased advertising investment and earnings-per-share growth at the lower end of its low to mid-single-digit range.
- On a non-GAAP (Base Business) basis, the Company expects a decline in gross profit margin, increased advertising investment and earnings-per-share growth at the lower end of its mid to high-single-digit range.
Divisional Performance
The following are comments about divisional performance for third quarter 2021 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.
Third Quarter Sales Growth By Division (% change 3Q 2021 vs. 3Q 2020) |
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Net Sales |
Organic Sales* |
As Reported Volume |
Organic Volume |
Pricing |
FX |
|
+1.0% |
+0.5% |
—% |
—% |
+0.5% |
+0.5% |
|
+11.0% |
+8.0% |
+2.5% |
+2.5% |
+5.5% |
+3.0% |
|
+1.0% |
-1.0% |
-1.0% |
-1.0% |
—% |
+2.0% |
|
+1.0% |
-0.5% |
-1.0% |
-1.0% |
+0.5% |
+1.5% |
|
+1.0% |
-1.0% |
-4.5% |
-4.5% |
+3.5% |
+2.0% |
Hill's |
+20.0% |
+19.0% |
+11.0% |
+11.0% |
+8.0% |
+1.0% |
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|
|
|
|
|
|
|
+6.5% |
+4.5% |
+1.5% |
+1.5% |
+3.0% |
+2.0% |
*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 6 - Geographic Sales Analysis Percentage Changes” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures. |
Third Quarter Operating Profit By Division ($ in millions) |
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|||
|
3Q 2021 |
% Change vs 3Q 2020 |
% to Net |
Change in basis |
|
|
-24% |
19.7% |
-650 |
|
|
-1% |
26.6% |
-330 |
|
|
5% |
24.8% |
+110 |
|
|
-3% |
29.4% |
-130 |
|
|
-28% |
17.1% |
-680 |
Hill's |
|
19% |
27.6% |
-20 |
|
|
|
|
|
|
|
-5% |
21.9% |
-260 |
|
|
-3% |
21.9% |
-220 |
*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. |
- Organic sales growth in oral care was partially offset by organic sales declines in personal care and home care, as consumer demand in certain categories that had benefited from COVID-19 related demand declined year-over-year.
- In
the United States , Colgate's share of the toothpaste market is 34.3% year to date and its share of the manual toothbrush market is 39.3% year to date. - The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs, higher overhead expenses, driven by higher logistics costs, and increased advertising investment, partially offset by cost savings from the Company’s funding-the-growth initiatives.
- Organic sales growth was led by
Mexico ,Brazil ,Colombia andArgentina . - The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs and higher overhead expenses, driven by higher logistics costs, partially offset by cost savings from the Company’s funding-the-growth initiatives, higher pricing and decreased advertising investment.
- Organic sales declines in the Filorga duty-free business and
France were partially offset by organic sales growth in theUnited Kingdom andGermany . - 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, decreased advertising investment and lower overhead expenses, partially offset by significantly higher raw and packaging material costs.
- Organic sales declines in the
Greater China region andAustralia were partially offset by organic sales growth inIndia . - The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs, higher overhead expenses, primarily driven by higher logistics costs, and increased advertising investment, partially offset by cost savings from the Company's funding-the-growth initiatives and higher pricing.
- Organic sales declines in the
North Africa /Middle East region andSouth Africa were partially offset by organic sales growth in Turkiye and the Eurasia region. - The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs and higher overhead expenses, primarily driven by higher logistics costs, partially offset by cost savings from the Company’s funding-the-growth initiatives, higher pricing and decreased advertising investment.
Hill's Pet Nutrition (19% of Company Sales)
- Organic sales growth was led by
the United States andEurope . - The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs and increased advertising investment, partially offset by higher pricing, cost savings from the Company’s funding-the-growth initiatives and lower overhead expenses.
Webcast Information
At
About
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
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
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
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, a loss on the early extinguishment of debt, a value-added tax matter in
Brazil , benefits resulting from the Global Growth and Efficiency Program, acquisition-related costs and a benefit related to a reorganization of the ownership structure of certain foreign subsidiaries and a new operating structure 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 nine months ended
Worldwide Gross profit, Gross profit margin, Other (income) expense, net, Operating profit, Operating profit margin, Effective income tax rate, Net income attributable to
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, pay dividends, fund future business opportunities and repurchase stock, 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 nine months ended
(See attached tables for third quarter results.)
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Table 1 |
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|||||||||
Condensed Consolidated Statements of Income |
|||||||||
|
|||||||||
For the Three Months Ended |
|||||||||
|
|||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||
|
|||||||||
|
|
2021 |
|
2020 |
|||||
|
|
|
|
|
|||||
Net sales |
|
$ |
4,414 |
|
|
$ |
4,153 |
|
|
|
|
|
|
|
|||||
Cost of sales |
|
1,791 |
|
|
1,613 |
|
|||
|
|
|
|
|
|||||
Gross profit |
|
2,623 |
|
|
2,540 |
|
|||
|
|
|
|
|
|||||
Gross profit margin |
|
59.4 |
% |
|
61.2 |
% |
|||
|
|
|
|
|
|||||
Selling, general and administrative expenses |
|
1,636 |
|
|
1,518 |
|
|||
|
|
|
|
|
|||||
Other (income) expense, net |
|
20 |
|
|
4 |
|
|||
|
|
|
|
|
|||||
Operating profit |
|
967 |
|
|
1,018 |
|
|||
|
|
|
|
|
|||||
Operating profit margin |
|
21.9 |
% |
|
24.5 |
% |
|||
|
|
|
|
|
|||||
Non-service related postretirement costs |
|
16 |
|
|
15 |
|
|||
|
|
|
|
|
|||||
Interest (income) expense, net |
|
98 |
|
|
36 |
|
|||
|
|
|
|
|
|||||
Income before income taxes |
|
853 |
|
|
967 |
|
|||
|
|
|
|
|
|||||
Provision for income taxes |
|
172 |
|
|
222 |
|
|||
|
|
|
|
|
|||||
Effective tax rate |
|
20.2 |
% |
|
23.0 |
% |
|||
|
|
|
|
|
|||||
Net income including noncontrolling interests |
|
681 |
|
|
745 |
|
|||
|
|
|
|
|
|||||
Less: Net income attributable to noncontrolling interests |
|
47 |
|
|
47 |
|
|||
|
|
|
|
|
|||||
Net income attributable to |
|
$ |
634 |
|
|
$ |
698 |
|
|
|
|
|
|
|
|||||
Earnings per common share |
|
|
|
|
|||||
Basic |
|
$ |
0.75 |
|
|
$ |
0.81 |
|
|
Diluted |
|
$ |
0.75 |
|
|
$ |
0.81 |
|
|
|
|
|
|
|
|||||
Supplemental Income Statement Information |
|
|
|
|
|||||
Average common shares outstanding |
|
|
|
|
|||||
Basic |
|
843.6 |
|
|
859.0 |
|
|||
Diluted |
|
846.4 |
|
|
861.8 |
|
|||
|
|
|
|
|
|||||
Advertising |
|
$ |
503 |
|
|
$ |
476 |
|
|
|
|
Table 2 |
||||||
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|||||||||
|
|||||||||
Condensed Consolidated Statements of Income |
|||||||||
|
|||||||||
For the Nine Months Ended |
|||||||||
|
|||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||
|
|||||||||
|
|
2021 |
|
2020 |
|||||
|
|
|
|
|
|||||
Net sales |
|
$ |
13,018 |
|
|
$ |
12,147 |
|
|
|
|
|
|
|
|||||
Cost of sales |
|
5,202 |
|
|
4,773 |
|
|||
|
|
|
|
|
|||||
Gross profit |
|
7,816 |
|
|
7,374 |
|
|||
|
|
|
|
|
|||||
Gross profit margin |
|
60.0 |
% |
|
60.7 |
% |
|||
|
|
|
|
|
|||||
Selling, general and administrative expenses |
|
4,809 |
|
|
4,386 |
|
|||
|
|
|
|
|
|||||
Other (income) expense, net |
|
40 |
|
|
72 |
|
|||
|
|
|
|
|
|||||
Operating profit |
|
2,967 |
|
|
2,916 |
|
|||
|
|
|
|
|
|||||
Operating profit margin |
|
22.8 |
% |
|
24.0 |
% |
|||
|
|
|
|
|
|||||
Non-service related postretirement costs |
|
52 |
|
|
56 |
|
|||
|
|
|
|
|
|||||
Interest (income) expense, net |
|
152 |
|
|
107 |
|
|||
|
|
|
|
|
|||||
Income before income taxes |
|
2,763 |
|
|
2,753 |
|
|||
|
|
|
|
|
|||||
Provision for income taxes |
|
613 |
|
|
585 |
|
|||
|
|
|
|
|
|||||
Effective tax rate |
|
22.2 |
% |
|
21.2 |
% |
|||
|
|
|
|
|
|||||
Net income including noncontrolling interests |
|
2,150 |
|
|
2,168 |
|
|||
|
|
|
|
|
|||||
Less: Net income attributable to noncontrolling interests |
|
132 |
|
|
120 |
|
|||
|
|
|
|
|
|||||
Net income attributable to |
|
$ |
2,018 |
|
|
$ |
2,048 |
|
|
|
|
|
|
|
|||||
Earnings per common share |
|
|
|
|
|||||
Basic(1) |
|
$ |
2.39 |
|
|
$ |
2.39 |
|
|
Diluted(1) |
|
$ |
2.38 |
|
|
$ |
2.38 |
|
|
|
|
|
|
|
|||||
Supplemental Income Statement Information |
|
|
|
|
|||||
Average common shares outstanding |
|
|
|
|
|||||
Basic |
|
845.9 |
|
|
857.7 |
|
|||
Diluted |
|
849.0 |
|
|
859.5 |
|
|||
|
|
|
|
|
|||||
Advertising |
|
$ |
1,532 |
|
|
$ |
1,399 |
|
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. |
|
|
|
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Table 3 |
|||||||
|
||||||||||||
|
||||||||||||
Condensed Consolidated Balance Sheets |
||||||||||||
|
||||||||||||
As of |
||||||||||||
|
||||||||||||
(Dollars in Millions) (Unaudited) |
||||||||||||
|
|
|
|
|
|
|
||||||
|
|
|
|
|
|
|
||||||
|
|
2021 |
|
2020 |
|
2020 |
||||||
Cash and cash equivalents |
|
$ |
958 |
|
|
$ |
888 |
|
|
$ |
989 |
|
Receivables, net |
|
1,424 |
|
|
1,264 |
|
|
1,292 |
|
|||
Inventories |
|
1,670 |
|
|
1,673 |
|
|
1,578 |
|
|||
Other current assets |
|
618 |
|
|
513 |
|
|
508 |
|
|||
Property, plant and equipment, net |
|
3,633 |
|
|
3,716 |
|
|
3,506 |
|
|||
|
|
3,685 |
|
|
3,824 |
|
|
3,711 |
|
|||
Other intangible assets, net |
|
2,719 |
|
|
2,894 |
|
|
2,838 |
|
|||
Other assets |
|
1,173 |
|
|
1,148 |
|
|
1,044 |
|
|||
Total assets |
|
$ |
15,880 |
|
|
$ |
15,920 |
|
|
$ |
15,466 |
|
|
|
|
|
|
|
|
||||||
Total debt |
|
$ |
7,696 |
|
|
$ |
7,601 |
|
|
$ |
7,236 |
|
Other current liabilities |
|
4,267 |
|
|
4,137 |
|
|
4,216 |
|
|||
Other non-current liabilities |
|
2,890 |
|
|
3,081 |
|
|
2,941 |
|
|||
Total liabilities |
|
14,853 |
|
|
14,819 |
|
|
14,393 |
|
|||
|
|
591 |
|
|
743 |
|
|
653 |
|
|||
Noncontrolling interests |
|
436 |
|
|
358 |
|
|
420 |
|
|||
Total liabilities and equity |
|
$ |
15,880 |
|
|
$ |
15,920 |
|
|
$ |
15,466 |
|
|
|
|
|
|
|
|
||||||
Supplemental Balance Sheet Information |
|
|
|
|
|
|
||||||
Debt less cash, cash equivalents and marketable securities(1) |
|
$ |
6,638 |
|
|
$ |
6,676 |
|
|
$ |
6,167 |
|
Working capital % of sales |
|
(3.8) |
% |
|
(4.4) |
% |
|
(5.7) |
% |
Note: (1) Marketable securities of |
|
|
|
Table 4 |
|||||
|
||||||||
|
||||||||
Condensed Consolidated Statements of Cash Flows |
||||||||
|
||||||||
For the Nine Months Ended |
||||||||
|
||||||||
(Dollars in Millions) (Unaudited) |
||||||||
|
|
|
|
|
||||
|
|
2021 |
|
2020 |
||||
Operating Activities |
|
|
|
|
||||
Net income including noncontrolling interests |
|
$ |
2,150 |
|
|
$ |
2,168 |
|
Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operations: |
|
|
||||||
Depreciation and amortization |
|
414 |
|
|
400 |
|
||
Restructuring and termination benefits, net of cash |
|
(19) |
|
|
(66) |
|
||
Stock-based compensation expense |
|
107 |
|
|
85 |
|
||
Loss on early extinguishment of debt |
|
75 |
|
|
— |
|
||
Deferred income taxes |
|
(146) |
|
|
(124) |
|
||
Cash effects of changes in: |
|
|
|
|
||||
Receivables |
|
(198) |
|
|
62 |
|
||
Inventories |
|
(37) |
|
|
(214) |
|
||
Accounts payable and other accruals |
|
(107) |
|
|
468 |
|
||
Other non-current assets and liabilities |
|
(20) |
|
|
(23) |
|
||
Net cash provided by (used in) operations |
|
2,219 |
|
|
2,756 |
|
||
|
|
|
|
|
||||
Investing Activities |
|
|
|
|
||||
Capital expenditures |
|
(374) |
|
|
(249) |
|
||
Purchases of marketable securities and investments |
|
(118) |
|
|
(109) |
|
||
Proceeds from sale of marketable securities and investments |
|
55 |
|
|
42 |
|
||
Payment for acquisitions, net of cash acquired |
|
— |
|
|
(352) |
|
||
Other investing activities |
|
(25) |
|
|
— |
|
||
Net cash provided by (used in) investing activities |
|
(462) |
|
|
(668) |
|
||
|
|
|
|
|
||||
Financing Activities |
|
|
|
|
||||
Short-term borrowing (repayment) less than 90 days, net |
|
205 |
|
|
(796) |
|
||
Principal payments on debt |
|
(118) |
|
|
(7) |
|
||
Proceeds from issuance of debt |
|
119 |
|
|
— |
|
||
Dividends paid |
|
(1,183) |
|
|
(1,162) |
|
||
Purchases of treasury shares |
|
(964) |
|
|
(578) |
|
||
Proceeds from exercise of stock options |
|
282 |
|
|
640 |
|
||
Purchase of non-controlling interest in subsidiaries |
|
— |
|
|
(99) |
|
||
Other |
|
(9) |
|
|
34 |
|
||
Net cash provided by (used in) financing activities |
|
(1,668) |
|
|
(1,968) |
|
||
|
|
|
|
|
||||
Effect of exchange rate changes on Cash and cash equivalents |
|
(19) |
|
|
(14) |
|
||
Net increase (decrease) in Cash and cash equivalents |
|
70 |
|
|
106 |
|
||
Cash and cash equivalents at beginning of the period |
|
888 |
|
|
883 |
|
||
Cash and cash equivalents at end of the period |
|
$ |
958 |
|
|
$ |
989 |
|
|
|
|
|
|
||||
Supplemental Cash Flow Information |
|
|
|
|
||||
Free cash flow before dividends (Net cash provided by operations less Capital expenditures) |
|
|
|
|
||||
Net cash provided by operations |
|
$ |
2,219 |
|
|
$ |
2,756 |
|
Less: Capital expenditures |
|
(374) |
|
|
(249) |
|
||
Free cash flow before dividends |
|
$ |
1,845 |
|
|
$ |
2,507 |
|
|
|
|
|
|
||||
|
|
|
|
|
||||
Income taxes paid |
|
$ |
742 |
|
|
$ |
606 |
|
|
|
|
|
|
|
|
Table 5 |
|||||||||
|
||||||||||||||||
|
|
|
|
|
||||||||||||
Segment Information |
||||||||||||||||
|
|
|
|
|
||||||||||||
For the Three and Nine Months Ended |
||||||||||||||||
|
|
|
|
|
||||||||||||
(Dollars in Millions) (Unaudited) |
||||||||||||||||
|
|
|
|
|
|
|
||||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
|
|
|
|
|
|
|
|
|
||||||||
Oral, Personal and Home Care |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
931 |
|
|
$ |
923 |
|
|
$ |
2,765 |
|
|
$ |
2,801 |
|
|
|
931 |
|
|
837 |
|
|
2,745 |
|
|
2,531 |
|
||||
|
|
718 |
|
|
712 |
|
|
2,144 |
|
|
2,004 |
|
||||
|
|
731 |
|
|
722 |
|
|
2,142 |
|
|
1,980 |
|
||||
|
|
258 |
|
|
255 |
|
|
796 |
|
|
736 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Oral, Personal and Home Care |
|
3,569 |
|
|
3,449 |
|
|
10,592 |
|
|
10,052 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Pet Nutrition |
|
845 |
|
|
704 |
|
|
2,426 |
|
|
2,095 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total |
|
$ |
4,414 |
|
|
$ |
4,153 |
|
|
$ |
13,018 |
|
|
$ |
12,147 |
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
Three Months Ended |
|
Nine Months Ended |
||||||||||||
|
|
2021 |
|
2020 |
|
2021 |
|
2020 |
||||||||
Operating Profit |
|
|
|
|
|
|
|
|
||||||||
Oral, Personal and Home Care |
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
||||||||
|
|
$ |
183 |
|
|
$ |
242 |
|
|
$ |
585 |
|
|
$ |
753 |
|
|
|
248 |
|
|
250 |
|
|
774 |
|
|
728 |
|
||||
|
|
178 |
|
|
169 |
|
|
524 |
|
|
482 |
|
||||
|
|
215 |
|
|
222 |
|
|
639 |
|
|
559 |
|
||||
|
|
44 |
|
|
61 |
|
|
153 |
|
|
174 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Oral, Personal and Home Care |
|
868 |
|
|
944 |
|
|
2,675 |
|
|
2,696 |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Pet Nutrition |
|
233 |
|
|
196 |
|
|
661 |
|
|
588 |
|
||||
Corporate(1) |
|
(134) |
|
|
(122) |
|
|
(369) |
|
|
(368) |
|
||||
|
|
|
|
|
|
|
|
|
||||||||
Total Operating Profit |
|
$ |
967 |
|
|
$ |
1,018 |
|
|
$ |
2,967 |
|
|
$ |
2,916 |
|
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 nine months ended |
Table 6 |
||||||||||||
|
||||||||||||
|
||||||||||||
Geographic Sales Analysis Percentage Changes |
||||||||||||
|
||||||||||||
For the Three Months Ended |
||||||||||||
|
||||||||||||
(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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
6.5% |
|
4.5% |
|
1.5% |
|
1.5% |
|
3.0% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0% |
|
0.5% |
|
—% |
|
—% |
|
0.5% |
|
0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
11.0% |
|
8.0% |
|
2.5% |
|
2.5% |
|
5.5% |
|
3.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0% |
|
(1.0)% |
|
(1.0)% |
|
(1.0)% |
|
—% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0% |
|
(0.5)% |
|
(1.0)% |
|
(1.0)% |
|
0.5% |
|
1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
1.0% |
|
(1.0)% |
|
(4.5)% |
|
(4.5)% |
|
3.5% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total CP Products |
|
3.5% |
|
1.5% |
|
—% |
|
—% |
|
1.5% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hill’s |
|
20.0% |
|
19.0% |
|
11.0% |
|
11.0% |
|
8.0% |
|
1.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets(1) |
|
6.5% |
|
4.0% |
|
0.5% |
|
0.5% |
|
3.5% |
|
2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed Markets |
|
6.0% |
|
5.0% |
|
2.5% |
|
2.5% |
|
2.5% |
|
1.0% |
Note: (1) Emerging Markets include |
Table 7 |
||||||||||||
|
||||||||||||
|
||||||||||||
Geographic Sales Analysis Percentage Changes |
||||||||||||
|
||||||||||||
For the Nine Months Ended |
||||||||||||
|
||||||||||||
(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 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.0% |
|
5.0% |
|
1.5% |
|
1.5% |
|
3.5% |
|
2.0% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.5)% |
|
(2.0)% |
|
(5.0)% |
|
(5.0)% |
|
3.0% |
|
0.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.5% |
|
8.5% |
|
2.0% |
|
2.0% |
|
6.5% |
|
—% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
7.0% |
|
0.5% |
|
0.5% |
|
0.5% |
|
—% |
|
6.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.0% |
|
3.5% |
|
4.0% |
|
4.0% |
|
(0.5)% |
|
4.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
8.0% |
|
8.0% |
|
3.0% |
|
3.0% |
|
5.0% |
|
—% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Total CP Products |
|
5.5% |
|
3.0% |
|
—% |
|
—% |
|
3.0% |
|
2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Hill’s |
|
16.0% |
|
13.5% |
|
8.0% |
|
8.0% |
|
5.5% |
|
2.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Emerging Markets(1) |
|
9.0% |
|
7.5% |
|
3.5% |
|
3.5% |
|
4.0% |
|
1.5% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Developed Markets |
|
6.0% |
|
3.0% |
|
0.5% |
|
0.5% |
|
2.5% |
|
3.0% |
Note: (1) Emerging Markets include |
Table 8 |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Selling, General and Administrative Expenses |
|
|
|
|
|
2021 |
|
2020 |
|
|
|||||||||||||||
Selling, general and administrative expenses, GAAP |
|
|
|
|
$ |
1,636 |
|
|
$ |
1,518 |
|
|
|
||||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
|
|
3 |
|
|
|
||||||||||||||
Selling, general and administrative expenses, non-GAAP |
|
$ |
1,636 |
|
|
$ |
1,521 |
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other (Income) Expense, Net |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
|
|||||||||||||
Other (income) expense, net, GAAP |
|
|
|
|
$ |
20 |
|
|
$ |
4 |
|
|
|
||||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
|
|
13 |
|
|
|
||||||||||||||
Other (income) expense, net, non-GAAP |
|
|
|
|
$ |
20 |
|
|
$ |
17 |
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Profit |
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
% Change |
||||||||||||
Operating profit, GAAP |
|
|
|
|
$ |
967 |
|
|
$ |
1,018 |
|
|
(5) |
% |
|||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
|
|
(16) |
|
|
|
||||||||||||||
Operating profit, non-GAAP |
|
|
|
|
$ |
967 |
|
|
$ |
1,002 |
|
|
(3) |
% |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Profit Margin |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
Change |
|||||||||||||
Operating profit margin, GAAP |
|
|
|
|
|
|
|
21.9 |
% |
|
24.5 |
% |
|
(260) |
|
||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
% |
|
(0.4) |
% |
|
|
||||||||||||||
Operating profit margin, non-GAAP |
|
|
|
|
|
|
|
21.9 |
% |
|
24.1 |
% |
|
(220) |
|
||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Interest (Income) Expense, Net |
|
|
|
2021 |
|
2020 |
|
|
|||||||||||||||||
Interest (income) expense, net, GAAP |
|
|
|
$ |
98 |
|
|
$ |
36 |
|
|
|
|||||||||||||
Loss on early extinguishment of debt |
|
|
|
|
(75) |
|
|
— |
|
|
|
||||||||||||||
Interest (income) expense, net, non-GAAP |
|
|
|
$ |
23 |
|
|
$ |
36 |
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Table 8 |
|||||||||||||||||||||||||
Continued |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
For the Three Months Ended |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
2021 |
||||||||||||||||||||||||
|
Income Before |
|
Provision For |
|
Net Income |
|
Net Income |
|
Effective Income |
|
Diluted Earnings |
||||||||||||||
As Reported GAAP |
$ |
853 |
|
|
$ |
172 |
|
|
$ |
681 |
|
|
$ |
634 |
|
|
20.2 |
% |
|
$ |
0.75 |
|
|||
Loss on early extinguishment of debt |
75 |
|
|
20 |
|
|
55 |
|
|
55 |
|
|
0.5 |
% |
|
0.06 |
|
||||||||
Non-GAAP |
$ |
928 |
|
|
$ |
192 |
|
|
$ |
736 |
|
|
$ |
689 |
|
|
20.7 |
% |
|
$ |
0.81 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2020 |
||||||||||||||||||||||||
|
Income Before |
|
Provision For |
|
Net Income |
|
Net Income |
|
Effective Income |
|
Diluted Earnings |
||||||||||||||
As Reported GAAP |
$ |
967 |
|
|
$ |
222 |
|
|
$ |
745 |
|
|
$ |
698 |
|
|
23.0 |
% |
|
$ |
0.81 |
|
|||
Global Growth and Efficiency Program |
(16) |
|
|
(3) |
|
|
(13) |
|
|
(13) |
|
|
— |
% |
|
(0.02) |
|
||||||||
Non-GAAP |
$ |
951 |
|
|
$ |
219 |
|
|
$ |
732 |
|
|
$ |
685 |
|
|
23.0 |
% |
|
$ |
0.79 |
|
|||
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 |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
For the Nine Months Ended |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Gross Profit |
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
|
||||||||||||
Gross profit, GAAP |
|
|
|
|
|
|
|
$ |
7,816 |
|
|
$ |
7,374 |
|
|
|
|||||||||
Acquisition-related costs |
|
|
|
|
|
|
|
— |
|
|
4 |
|
|
|
|||||||||||
Gross profit, non-GAAP |
|
|
|
|
|
|
|
$ |
7,816 |
|
|
$ |
7,378 |
|
|
|
|||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Selling, General and Administrative Expenses |
|
|
|
|
|
2021 |
|
2020 |
|
|
|||||||||||||||
Selling, general and administrative expenses, GAAP |
|
|
|
|
$ |
4,809 |
|
|
$ |
4,386 |
|
|
|
||||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
|
|
3 |
|
|
|
||||||||||||||
Selling, general and administrative expenses, non-GAAP |
|
$ |
4,809 |
|
|
$ |
4,389 |
|
|
|
|||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Other (Income) Expense, Net |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
|
|||||||||||||
Other (income) expense, net, GAAP |
|
|
|
|
$ |
40 |
|
|
$ |
72 |
|
|
|
||||||||||||
Value-added tax matter in |
|
|
|
|
26 |
|
|
— |
|
|
|
||||||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
|
|
13 |
|
|
|
||||||||||||||
Acquisition-related costs |
|
|
|
|
|
|
|
— |
|
|
(2) |
|
|
|
|||||||||||
Other (income) expense, net, non-GAAP |
|
|
|
|
$ |
66 |
|
|
$ |
83 |
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Profit |
|
|
|
|
|
|
|
|
2021 |
|
2020 |
|
% Change |
||||||||||||
Operating profit, GAAP |
|
|
|
|
$ |
2,967 |
|
|
$ |
2,916 |
|
|
2 |
% |
|||||||||||
Value-added tax matter in |
|
|
|
|
(26) |
|
|
— |
|
|
|
||||||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
|
|
(16) |
|
|
|
||||||||||||||
Acquisition-related costs |
|
|
|
|
— |
|
|
6 |
|
|
|
||||||||||||||
Operating profit, non-GAAP |
|
|
|
|
$ |
2,941 |
|
|
$ |
2,906 |
|
|
1 |
% |
|||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Operating Profit Margin |
|
|
|
|
|
|
|
2021 |
|
2020 |
|
Change |
|||||||||||||
Operating profit margin, GAAP |
|
|
|
|
|
|
|
22.8 |
% |
|
24.0 |
% |
|
(120) |
|
||||||||||
Value-added tax matter in |
|
|
|
|
(0.2) |
% |
|
— |
% |
|
|
||||||||||||||
Global Growth and Efficiency Program |
|
|
|
|
— |
% |
|
(0.1) |
% |
|
|
||||||||||||||
Operating profit margin, non-GAAP |
|
|
|
|
|
|
|
22.6 |
% |
|
23.9 |
% |
|
(130) |
|
||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Interest (Income) Expense, Net |
|
|
|
2021 |
|
2020 |
|
|
|||||||||||||||||
Interest (income) expense, net, GAAP |
|
|
|
$ |
152 |
|
|
$ |
107 |
|
|
|
|||||||||||||
Loss on early extinguishment of debt |
|
|
|
|
(75) |
|
|
— |
|
|
|
||||||||||||||
Interest (income) expense, net, non-GAAP |
|
|
|
$ |
77 |
|
|
$ |
107 |
|
|
|
|||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Table 9 |
|||||||||||||||||||||||||
Continued |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
Non-GAAP Reconciliations |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
For the Nine Months Ended |
|||||||||||||||||||||||||
|
|||||||||||||||||||||||||
(Dollars in Millions Except Per Share Amounts) (Unaudited) |
|||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
|
||||||||||||||||||||||||
|
2021 |
||||||||||||||||||||||||
|
Income Before |
|
Provision For |
|
Net Income |
|
Net Income |
|
Effective |
|
Diluted |
||||||||||||||
As Reported GAAP |
$ |
2,763 |
|
|
$ |
613 |
|
|
$ |
2,150 |
|
|
$ |
2,018 |
|
|
22.2 |
% |
|
$ |
2.38 |
|
|||
Loss on early extinguishment of debt |
75 |
|
|
20 |
|
|
55 |
|
|
55 |
|
|
0.1 |
% |
|
0.06 |
|
||||||||
Value-added tax matter in |
(26) |
|
|
(6) |
|
|
(20) |
|
|
(20) |
|
|
— |
% |
|
(0.02) |
|
||||||||
Non-GAAP |
$ |
2,812 |
|
|
$ |
627 |
|
|
$ |
2,185 |
|
|
$ |
2,053 |
|
|
22.3 |
% |
|
$ |
2.42 |
|
|||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2020 |
||||||||||||||||||||||||
|
Income Before |
|
Provision For |
|
Net Income |
|
Net Income |
|
Effective |
|
Diluted |
||||||||||||||
As Reported GAAP |
$ |
2,753 |
|
|
$ |
585 |
|
|
$ |
2,168 |
|
|
$ |
2,048 |
|
|
21.2 |
% |
|
$ |
2.38 |
|
|||
Global Growth and Efficiency Program |
(16) |
|
|
(3) |
|
|
(13) |
|
|
(13) |
|
|
— |
% |
|
(0.02) |
|
||||||||
Subsidiary and operating structure initiatives |
— |
|
|
71 |
|
|
(71) |
|
|
(71) |
|
|
2.7 |
% |
|
(0.08) |
|
||||||||
Acquisition-related costs |
6 |
|
|
2 |
|
|
4 |
|
|
4 |
|
|
— |
% |
|
0.01 |
|
||||||||
Non-GAAP |
$ |
2,743 |
|
|
$ |
655 |
|
|
$ |
2,088 |
|
|
$ |
1,968 |
|
|
23.9 |
% |
|
$ |
2.29 |
|
|||
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 adjustments on Income before income taxes and Provision for income taxes. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20211029005092/en/
Source: