Top Companies Report

2. Colgate-Palmolive

July 11, 2011

New York, NY

212.310.2000

www.colgate.com

Sales: $13.3 billion


Sales:

$13.3 billion for oral, personal care and household products. Corporate sales: $15.5 billion. Net income: $2.2 billion.


Key Personnel:

Ian M. Cook, chairman, president and chief executive officer; Michael J. Tangney, vice chairman; Fabian Garcia, chief operating officer, global innovation and growth & Europe; Franck J. Moison, chief operating officer, emerging markets; Dennis Hickey, chief financial officer; Andrew D. Hendry, chief legal officer and secretary.

 

Major Products:

Oral Care—Colgate, Elmex, Kolynos, Meridol, Sorriso, Tom’s of Maine and Ultra Brite toothpastes; Colgate, Elmex and Meridol toothbrushes; Colgate Total and Tom’s of Maine dental floss. Personal Care—Irish Spring, Palmolive, Protex, Softsoap and Tom’s of Maine body wash and shower gel; Palmolive shampoos and conditioners; Afta and Skin Bracer; and Colgate, Palmolive and Tom’s of Maine shave cream. Home Care—Ajax, Axion and Palmolive dishwashing; Ajax, Fabuloso, La Croix and Murphy Oil Soap cleaners and cleansers; Fabric Care—Cold Power, Dynamo, Softlan, Soupline and Suavitel.


New Products:

Oral Care—Colgate Total Gum Defense, Colgate Sensitive Multi Protection and Colgate Max Clean SmartFoam toothpastes; Household Care—Palmolive Antibacterial dish liquid and Sanex (acquisition); Personal Care—Softsoap Body Butter Mega Moisture and Strawberry Smoother and Irish Spring Intensify body washes and Sanex (acquisition).


The company may be best known for its oral care products, but Colgate-Palmolive made news with the launch of Palmolive Antibacterial dish liquid.

Comments:

Corporate sales rose 1.5% to a record high, but net income declined 4% to $2.2 billion. Unit volume was up 3%. Sales of oral, personal care and home care products rose 2% on a 4% gain in volume.


Emerging markets represent half of Colgate’s sales and the acceptance of Colgate oral care products plays a big role in that success. For example, in Brazil, 77% of professionals recommend Colgate, and those recommendations are even more numerous in India and China, where professionals prefer Colgate at 81% and 85%, respectively.


By region, sales in North America rose 2% to just over $3 billion to account for 19% of sales last year. Unit volume increased 3.5%. The company credited the gain to Colgate Triple Action and Colgate Sensitive MultiProtection toothpastes and the relaunch of Colgate Total. Also, Colgate’s share of the US manual toothbrush market rose 1.3 share points to a record 33.4% on the strength of Colgate 360° ActiFlex and Colgate Wisp mini-brush.


Sales in Latin America accounted for 27% of 2010 sales, but they fell 1.5% to about $4.2 billion on a 2.0% gain in unit volume. The success of Colgate Sensitive Pro-Relief and Colgate Total toothpastes, Colgate 360° ActiFlex, Colgate Plax Complete Care mouthwash, Palmolive Naturals Perfect Tone bar soap and Lady Speed Stick Waterproof deodorant contributed to market share gains throughout the region.


Europe/South Pacific accounted for 21% of sales last year (about $3.2 billion), but while volume rose 2%, sales declined 1%. The company credited the volume gain to toothpastes such as Colgate Sensitive Pro-Relief and Pro-Relief Whitening, as well as Palmolive Nutra Fruit shower cream and the Natura Verde home care product line.


Greater Asia/Africa represented 19% of sales (nearly $3 billion). Regional results were encouraging as sales jumped 13% and unit volume increased 10.5%. What led to the big increase? Strong sales of Colgate Sensitive Pro-Relief, Colgate Total and Colgate Herbal Salt toothpastes, Colgate 360° ActiFlex, Colgate Massager and Colgate Twister Gum Care manual toothbrushes and Colgate Plax Complete Care mouthwash.


Finally, pet care (primarily food), a segment not tracked by Happi, accounted for 14% of sales in 2010.


For the first quarter of 2011, the company reported a 4% increase in sales to nearly $4 billion. Sales in Latin America jumped 9% to nearly $1.1 billion, sales in Europe/South Pacific rose 1% to $832 million and sales in Greater Asia/Africa surged 11.5% to $813 million.


On June 20, Colgate-Palmolive completed its $952 million purchase of the personal care brand Sanex from Unilever PLC. The deal strengthens Colgate’s positions in the shower gel, deodorant and personal care business in Europe. The purchase is Colgate’s biggest purchase in more than a decade and analysts view it as an opportunity for Colgate to reduce its dependence on oral care. Unilever was forced to sell Sanex after acquiring the international toiletries business from Sara Lee.


Also last month, investment bank Rothschild hired Steve Patrick, the former vice chairman of Colgate, as a senior advisor. Patrick will counsel the investment bank’s mergers and financing advisory teams on consumer and retail companies.

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