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Oct 29, 2021

Colgate Announces 3rd Quarter 2021 Results

 

NEW YORK--(BUSINESS WIRE)--Oct. 29, 2021-- Colgate-Palmolive Company (NYSE:CL):

  • 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

Net Sales

$4,414

$4,153

+6.5%

EPS (diluted)

$0.75

$0.81

-7%

 

 

 

 

 

 

 

 

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

 

 

 

($ in millions except per share amounts)

2021

2020

Change

Organic Sales Growth

+4.5%

Base Business EPS (diluted)

$0.81

$0.79

+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 third quarter 2021. Noel Wallace, Chairman, President and Chief Executive Officer, commented on the third quarter results, “We are pleased to have delivered another quarter of organic sales growth at the high end of our targeted range of 3% to 5% despite a difficult comparison in the year ago period and the impact of restricted mobility and supply chain disruptions due to COVID-19. Net sales increased 6.5% and organic sales grew 4.5% driven by both volume growth and higher pricing.

 

“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)

 

 

 

 

Net

Sales

Organic

Sales*

As Reported

Volume

Organic Volume

Pricing

FX

North America

+1.0%

+0.5%

—%

—%

+0.5%

+0.5%

Latin America

+11.0%

+8.0%

+2.5%

+2.5%

+5.5%

+3.0%

Europe

+1.0%

-1.0%

-1.0%

-1.0%

—%

+2.0%

Asia Pacific

+1.0%

-0.5%

-1.0%

-1.0%

+0.5%

+1.5%

Africa/Eurasia

+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%

 

 

 

 

 

 

 

Total Company

+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)

 

 

3Q 2021

% Change vs

3Q 2020

% to Net
Sales

Change in basis
points vs 3Q 2020
% to Net Sales

North America

$183

-24%

19.7%

-650

Latin America

$248

-1%

26.6%

-330

Europe

$178

5%

24.8%

+110

Asia Pacific

$215

-3%

29.4%

-130

Africa/Eurasia

$44

-28%

17.1%

-680

Hill's

$233

19%

27.6%

-20

 

 

 

 

 

Total Company, As Reported

$967

-5%

21.9%

-260

Total Company, Base Business*

$967

-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.

 

North America (21% of Company Sales)

  • 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.

Latin America (21% of Company Sales)

  • Organic sales growth was led by Mexico, Brazil, Colombia and Argentina.
  • 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.

Europe (16% of Company Sales)

  • Organic sales declines in the Filorga duty-free business and France were partially offset by organic sales growth in the United Kingdom and Germany.
  • 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.

Asia Pacific (17% of Company Sales)

  • Organic sales declines in the Greater China region and Australia were partially offset by organic sales growth in India.
  • 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.

Africa/Eurasia (6% of Company Sales)

  • Organic sales declines in the North Africa/Middle East region and South 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 and Europe.
  • 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 8:30 a.m. ET today, Colgate will host a conference call regarding third quarter results. To access this call as a webcast, please go to Colgate’s website at www.colgatepalmolive.com.

About Colgate-Palmolive

Colgate-Palmolive Company is a caring, innovative growth company reimagining a healthier future for all people, their pets and our planet. Focused on Oral Care, Personal Care, Home Care and Pet Nutrition, the Company sells its products in more than 200 countries and territories under brands such as Colgate, Palmolive, elmex, hello, meridol, Sorriso, Tom’s of Maine, EltaMD, Filorga, Irish Spring, PCA Skin, Protex, Sanex, Softsoap, Speed Stick, Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science Diet and Hill’s Prescription Diet. The Company is recognized for its leadership and innovation in promoting environmental sustainability and community well-being, including its achievements in saving water, reducing waste, promoting recyclability and improving children’s oral health through its Bright Smiles, Bright Futures program, which has reached more than 1.3 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 levels, 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, 2020 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, 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 September 30, 2021 versus 2020 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, Other (income) expense, net, Operating profit, Operating profit margin, 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 acquisitions, divestitures and certain other 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 nine months ended September 30, 2021 and 2020 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, 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 September 30, 2021 and 2020 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 third quarter results.)

 

 

 

 

 

Table 1

 

Colgate-Palmolive Company

 

 

 

Condensed Consolidated Statements of Income

 

 

 

For the Three Months Ended September 30, 2021 and 2020

 

 

 

(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 Colgate-Palmolive Company

 

$

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

 

Colgate-Palmolive Company

 

 

 

Condensed Consolidated Statements of Income

 

 

 

For the Nine Months Ended September 30, 2021 and 2020

 

 

 

(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 Colgate-Palmolive Company

 

$

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.

 
 
 
 
 
 

 

 

 

 

 

Table 3

Colgate-Palmolive Company

 

Condensed Consolidated Balance Sheets

 

As of September 30, 2021, December 31, 2020 and September 30, 2020

 

(Dollars in Millions) (Unaudited)

 

 

 

 

 

 

 

 

 

September 30,

 

December 31,

 

September 30,

 

 

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

 

Goodwill

 

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

 

Total Colgate-Palmolive Company shareholders’ equity

 

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 $100, $37 and $80 as of September 30, 2021, December 31, 2020 and September 30, 2020, respectively, are included in Other current assets.

 
 

 

 

 

Table 4

Colgate-Palmolive Company

 

Condensed Consolidated Statements of Cash Flows

 

For the Nine Months Ended September 30, 2021 and 2020

 

(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

Colgate-Palmolive Company

 

 

 

 

 

Segment Information

 

 

 

 

 

For the Three and Nine Months Ended September 30, 2021 and 2020

 

 

 

 

 

(Dollars in Millions) (Unaudited)

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2021

 

2020

 

2021

 

2020

Net Sales

 

 

 

 

 

 

 

 

Oral, Personal and Home Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

931

 

 

$

923

 

 

$

2,765

 

 

$

2,801

 

Latin America

 

931

 

 

837

 

 

2,745

 

 

2,531

 

Europe

 

718

 

 

712

 

 

2,144

 

 

2,004

 

Asia Pacific

 

731

 

 

722

 

 

2,142

 

 

1,980

 

Africa/Eurasia

 

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 Net Sales

 

$

4,414

 

 

$

4,153

 

 

$

13,018

 

 

$

12,147

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended September 30,

 

Nine Months Ended September 30,

 

 

2021

 

2020

 

2021

 

2020

Operating Profit

 

 

 

 

 

 

 

 

Oral, Personal and Home Care

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

$

183

 

 

$

242

 

 

$

585

 

 

$

753

 

Latin America

 

248

 

 

250

 

 

774

 

 

728

 

Europe

 

178

 

 

169

 

 

524

 

 

482

 

Asia Pacific

 

215

 

 

222

 

 

639

 

 

559

 

Africa/Eurasia

 

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 September 30, 2021 included a benefit related to a value-added tax matter in Brazil of $26. Corporate Operating profit (loss) for the nine months ended September 30, 2020 included a charge for acquisition-related costs of $6 and benefits of $16 resulting from the Global Growth and Efficiency Program.

 

Table 6

Colgate-Palmolive Company

 

Geographic Sales Analysis Percentage Changes

 

For the Three Months Ended September 30, 2021 vs. 2020

 

(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

 

6.5%

 

4.5%

 

1.5%

 

1.5%

 

3.0%

 

2.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

1.0%

 

0.5%

 

—%

 

—%

 

0.5%

 

0.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

11.0%

 

8.0%

 

2.5%

 

2.5%

 

5.5%

 

3.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

1.0%

 

(1.0)%

 

(1.0)%

 

(1.0)%

 

—%

 

2.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

1.0%

 

(0.5)%

 

(1.0)%

 

(1.0)%

 

0.5%

 

1.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Africa/Eurasia

 

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 Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.

 

Table 7

Colgate-Palmolive Company

 

Geographic Sales Analysis Percentage Changes

 

For the Nine Months Ended September 30, 2021 and 2020

 

(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

 

7.0%

 

5.0%

 

1.5%

 

1.5%

 

3.5%

 

2.0%

 

 

 

 

 

 

 

 

 

 

 

 

 

North America

 

(1.5)%

 

(2.0)%

 

(5.0)%

 

(5.0)%

 

3.0%

 

0.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

 

8.5%

 

8.5%

 

2.0%

 

2.0%

 

6.5%

 

—%

 

 

 

 

 

 

 

 

 

 

 

 

 

Europe

 

7.0%

 

0.5%

 

0.5%

 

0.5%

 

—%

 

6.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

 

8.0%

 

3.5%

 

4.0%

 

4.0%

 

(0.5)%

 

4.5%

 

 

 

 

 

 

 

 

 

 

 

 

 

Africa/Eurasia

 

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 Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.

 

Table 8

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Three Months Ended September 30, 2021 and 2020

 

(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)

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Point

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

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Three Months Ended September 30, 2021 and 2020

 

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

 

 

 

2021

 

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

$

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
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

$

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

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Nine Months Ended September 30, 2021 and 2020

 

(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 Brazil

 

 

 

 

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 Brazil

 

 

 

 

(26)

 

 

 

 

 

Global Growth and Efficiency Program

 

 

 

 

 

 

(16)

 

 

 

Acquisition-related costs

 

 

 

 

 

 

6

 

 

 

Operating profit, non-GAAP

 

 

 

 

$

2,941

 

 

$

2,906

 

 

1

%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Basis Point

Operating Profit Margin

 

 

 

 

 

 

 

2021

 

2020

 

Change

Operating profit margin, GAAP

 

 

 

 

 

 

 

22.8

%

 

24.0

%

 

(120)

 

Value-added tax matter in Brazil

 

 

 

 

(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

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Nine Months Ended September 30, 2021 and 2020

 

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

 

 

 

 

 

2021

 

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

$

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 Brazil

(26)

 

 

(6)

 

 

(20)

 

 

(20)

 

 

%

 

(0.02)

 

Non-GAAP

$

2,812

 

 

$

627

 

 

$

2,185

 

 

$

2,053

 

 

22.3

%

 

$

2.42

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

$

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.

 

John Faucher 212-310-3653
Hope Spiller 212-310-2291

Source: Colgate-Palmolive Company