Top Companies Report

2. Colgate-Palmolive

June 28, 2012

2. Colgate-Palmolive

New York, NY
Sales: $14.5 billion for oral, personal and home care products.
Corporate sales: $16.7 billion. Net income: $2.4 billion.

Key Personnel: Ian Cook, chairman, president and chief executive officer; Fabian Garcia, chief operating officer, global innovation and growth, Europe and Hill’s Pet Nutrition; Franck J. Moison, chief operating officer, emerging markets and south Pacific; Dennis Hickey, chief financial officer; Andrew D. Hendry, chief legal officer and secretary; JackHuston, SVP, office of the chairman; NigelB.Burton, chief marketing officer; MikeCorbo, VP, global supply chain; Alecde Guillenchmidt, president, Colgate-Europe; VictoriaDolan, VP and corporate controller; TomGreene, chief information officer; DanielMarsili, SVP-global human resources; RonaldT.Martin, VP-global sustainability and social responsibility; RosemaryNelson, VP, deputy general counsel, operations; ElainePaik, VP and corporate treasurer; Katherine HargroveRamundo, VP, deputy general counsel and assistant secretary; JustinSkala, president, Colgate-Latin America; PatriciaVerduin, chief technology officer; NoelR.Wallace, president, Colgate-North America and global sustainability; FrancisM.Williamson, VP, Colgate-Latin America; GregWoodson, VP, chief ethics and compliance officer.

Major Products: Oral Care—Total Advanced, Optic White, ProClinical White toothpastes; 360°, Max White, Professional toothbrushes; Dora the Explorer, SpongeBob SquarePants, 2-in-1 children’s toothpastes; Orabase mouth pain relief, Phos-Flur rinse, Peroxyl oral cleanser; dental professional products. Personal Care—Speed Stick, Lady Speed Stick, Irish Spring deodorants; Softsoap and Irish Spring body washes, Softsoap hand soap; Irish Spring and Softsoap bar soaps; Afta men’s toiletries. Home Care—Palmolive, Ajax and Dermassage dishwashing liquids; Murphy Oil Soap, Fabuloso and Ajax household cleaners; Suavitel fabric conditioner.

New Products: Colgate Optic White and Colgate Sensitive Pro Relief toothpastes, Sanex Zero.

Comments: Corporate sales rose 7.5% last year. Sales of oral, personal and home care products rose 8%, driven by volume growth of 4%, net selling price increases of 1.0% and a positive foreign exchange impact of 3.0%. Excluding the impact of the divestment of the non-core detergent business in Colombia, volume increased 4.5%. The Sanex business contributed 1.0% to sales and volume growth in 2011. Organic sales in the oral, personal and home care segment increased 4.5% on organic volume growth of 3.5% in 2011.

Of course, the bulk of Colgate’s sales come from toothpaste and the company is quick to note that its worldwide share is approaching 45%—well ahead of its nearest competitor. Colgate says the share growth is due, in part, to professional recommendations. Back in 2004, 28% of dentists worldwide recommended Colgate. Last year, that percentage rose to 48%.

Approximately 80% of Colgate’s net sales are generated from markets outside the US, with approximately 50% of net sales coming from emerging markets—which consist of Latin America, Greater Asia/Africa (excluding Japan) and Central Europe. Last year, sales in North America declined .5% to nearly $3 billion, due to a 3% decline in selling price. Sales in Latin America jumped 12% to nearly $4.8 billion, driven by volume growth of 3% and a 7% surge in selling price. Europe/South Pacific sales jumped 9% to $3.5 billion on a 5% gain in volume and a positive impact of foreign exchange of 7.0%. The United Kingdom, Spain, France, Denmark and the GABA oral care business led volume gains. Sales in Greater Asia/Africa increased 9.5% to nearly $3.3 billion driven by a 6.5% volume growth. Gains were led by India, the Greater China region, Russia, and South Africa.

On July 29, 2011, in connection with the Sanex acquisition, Colgate sold its laundry detergent business in Colombia to Unilever for $215 million, resulting in a pretax gain of $207 million ($135 million aftertax gain).

Taking the Initiative
In 2012, Colgate is focused on four strategic initiatives:
  • Engaging to build its brands;
  • Innovation for growth;
  • Effectiveness and efficiency; and
  • Leading to win.
That means engaging with consumers, shoppers, customers and professionals through products, packaging, communication and in-store promotion. For example, Colgate is ranked as the No. 1 most trusted brand in India and has a 52.3% share of the market (compared to 25.6% for the No. 2 brand). In Brazil, Colgate’s toothpaste share exceeds 70%. In the US, it provides oral health education for more than 10 million children each year.

In terms of innovation, Colgate says its new Optic White toothpaste formula contains the same whitening ingredient as whitening strips. Meanwhile new Colgate Sensitive Pro-Relief with Pro-Argin technology is said to provide instant and long-lasting relief from sensitivity. Meanwhile, Colgate is promoting its new Sanex Zero% with the tagline “contains only what your skin needs.” That means, 0% parabens, 0% colorants, 0% phthalates and 0% phenoxyethanol.

To promote efficiency, Colgate is generating efficiency through a variety of programs. One of the biggest has resulted in a 35% reduction in product formulas during the past four years.

Finally, leading to win, means Colgate is living its values, helping Colgate staff to perform at their best and fulfilling its commitment to the communities it serves.

For the first quarter of 2012, corporate sales rose 5% to $4.2 billion. Sales in the oral, personal and home care segment rose 6% to more than $3.6 billion. Net sales in North America increased 5.0% to $755 million, as volume growth of 5.0% and net selling price increases of 0.5% were partially offset by a negative foreign exchange impact of 0.5%.Net sales in Latin America increased 6.5% in the first quarter of 2012 to nearly $1.2 billion, as volume growth of 1.0% and net selling price increases of 10.0% were partially offset by a negative foreign exchange impact of 4.5%. Net sales in Europe/South Pacific increased 2.5% in the first quarter of 2012 to $854 million, as volume growth of 7.0% was partially offset by net selling price decreases of 2.5% and a negative impact of foreign exchange of 2.0%.


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