Top Companies Report

2. Colgate-Palmolive

July 2, 2008

New York, NY
212.310.2000
www.colgate.com
Sales: $11.9 billion



Sales:

$11.9 billion for oral, personal and home care products. Corporate sales: $13.8 billion. Net income: $1.7 billion.

Key Personnel:

Reuben Mark, chairman; Ian M. Cook, president and chief executive officer; Michael Tangney, chief operating officer, Europe, Greater Asia and Africa; Stephen C. Patrick, chief financial officer; Fabian Garcia, executive vice president and president, Colgate-Latin America; Seamus McBride, executive vice president, president, North America and worldwide commercial effectiveness; Franck Moison, president, global business development.

Major Products:

Oral care—Colgate, Total, Fresh Confidence, 2 in 1 and Herbal White toothpastes and Colgate toothbrushes. Personal care—Speed Stick and Lady Speed Stick antiperspirants; Irish Spring, Palmolive Naturals and Protex soaps. Household care—Palmolive, Ajax, Crystal White Octagon and Dermassage dishwashing liquid; Palmolive automatic dishwashing liquid and tablets; Ajax, Fabuloso and Murphy’s Oil Soap household cleaners.

New Products:

Palmolive Pure Cashmere shower gel and liquid hand soap, Skin Essentials Nutra-Oil, Colgate Total Advanced Clean and Colgate Max Fresh Burst toothpastes.

Comments:

Corporate sales rose 12.5% on volume gains of 6.5% and net income increased 28%. The jump in net income was due, in part, to the sale of the household bleach business in Latin America. By business segment, oral care accounted for 40% of sales, followed by home care (24%), personal care (23%) and pet nutrition (13%).
   
Within the oral, home and personal care category, Latin America accounted for 29% of sales; followed by Europe, South Pacific (28%), North America (23%) and Greater Asia/Africa (20%). In North America, sales rose 5% on the strength of new product launches such as Colgate Total Advanced Clean and Clean Max Fresh Burst toothpastes, along with the continued success of the Colgate 360° and Colgate 360° Sensitive manual toothpastes. Other strong selling products included Irish Spring body wash for men, Softsoap brand Nutra-Oil moisturizing body wash, Mennen Speed Stick 24/7 deodorant, Fabuloso liquid cleaner, Suavitel fabric conditioner and Irish Spring bar soap.
   
Sales in Latin America increased more than 15% on a 9% volume gain. Volume gains were led by Brazil, Venezuela, Argentina and Central America. Top selling products in the region included Colgate Total Professional Clean, Colgate Sensitive and Colgate Max White toothpastes and Colgate 360° and Colgate 360° Sensitive manual toothbrushes. Other top sellers in Latin America included Colgate Plax Alcohol Free and Colgate Plax Ice mouthwashes, Palmolive Naturals Yogurt and Fruits, Palmolive Nutri-Milk and Protex Deo 12 bar soaps, Axion Tri-Cloro dish liquid, Lady Speed Stick Double Defense multi-form deodorant, Palmolive Caprice shampoo and Palmolive Nutri-Milk shower gels.
   
Net sales in Europe/South Pacific increased 14.5% on a volume gain of 6.5%. The best-performing regions included the UK, France, Denmark, Poland, Spain, Greece, Australia and the GABA business. Among the top selling products were Colgate Total and Colgate Max Fresh toothpastes; Colgate 360°, Colgate 360° Sensitive and Colgate Max Fresh manual toothbrushes; Colgate 360° Sonic Power battery toothbrush; Colgate Plax Whitening mouthrinse; Palmolive Pure Cashmere and Palmolive Aromatherapy Happyful shower gels, Palmolive Soft and Gentle Eden deodorant; and Ajax Professional bucket dilutable and Ajax Professional glass cleaners.
   
Net sales in Greater Asia/Africa increased 16.5% on volume gains of 8.5%. Strong results were posted in India, Russia, Malaysia, South Africa, the Gulf States and the Greater China region. Best performing new products included Colgate Total Professional Clean, Colgate Herbal Seabuckthorn, Colgate Herbal Gel and Darlie Double Action toothpastes; Colgate 360°, Colgate 360° Sensitive and Colgate Twister Fresh manual toothbrushes; Palmolive Vitamins and Oil shower gel; Palmolive Thermal Spa Seabuckthorn shower gel, bar soap and liquid hand soap; Palmolive Pure Cashmere shower cream and bar soap and Lady Speed Stick for Teens multi-form deodorant.
   
Colgate maintains that innovation remains a key factor in its growth plans. To facilitate growth, researchers are focused on three areas: oral care, pet nutrition and, new for 2008, body cleansing. The company notes that it conducts 175 clinical trials in 30 countries every year. To enhance its ability to develop new products and processes, Colgate is partnering with its suppliers, academia and research companies around the world to increase the rate of innovation. For example, Colgate partnered with a European supplier to develop Colgate 360° manual and power toothbrushes. Meanwhile, Colgate’s “Big Hits” program is designed to identify new product opportunities with the greatest growth potential. Thanks to Big Hits, Colgate rolled out its Colgate Total Professional Clean toothpaste to 18 Latin American countries in just six months.
   
But besides new product innovation, Colgate is committed to bringing innovation to all its business processes. Long a proponent of SAP, last year Colgate became the first company to implement SAP software in more than 100 countries. At the same time, the company’s ongoing cost-savings program is on track to produce $325-350 million, after taxes, a year. In other moves, in January, Colgate opened a new oral care plant in Morristown, TN. The site makes toothpaste faster than ever, in addition to using less energy, water and materials. As a result, the U.S. Green Building Council awarded the Morristown facility certification under its Leadership in Energy and Environmental Design (LEED) rating system. In another move, a new global process called Colgate Business Planning enables the company to grow net sales, market shares and margin through increased transparency on commercial investment, better cross-functional collaboration and longer-term planning goals.
   
For the first quarter of 2008, global sales rose 15.5% to more than $3.7 billion. Net income fell 4% to $466 million. The company noted its toothpaste market share rose in key countries around the world including the U.S., Mexico, Brazil, China and India. Colgate’s worldwide share of the manual toothbrush market also increased during the quarter to another record high.  Other categories achieving global share gains include mouth rinse, bar soaps, shower gels, hand dish liquid and pet nutrition.
   
"We are delighted to begin 2008 with excellent top and bottom line growth, building on the strong growth momentum we saw in 2007,” noted Ian Cook, president and chief executive officer. “Importantly, top-line growth was nicely balanced between developed and developing countries. Every operating division achieved sales, unit volume and operating profit increases.”