Colgate Sales Increase Slightly in the Fourth Quarter

Colgate-Palmolive Company, New York, NY, announced worldwide dollar sales increased only slightly from the all time high in last year’s fourth quarter. Earnings per share rose 7% in the quarter after the one-time charge to $.49 per diluted share. Executives said this is Colgate’s 23rd consecutive quarter of increased E.P.S., net earnings and gross profit margin. Net income also rose 3% in the quarter to $295.3 million after the one-time charge. Colgate-Palmolive attributed this to the strength of the U.S. dollar during the quarter.

For the full year, Colgate’s global unit volume increased 5%, with each operating division contributing strong unit growth. Dollar sales from continuing businesses increased 1.5% to an all time high of $9.4 billion and would have increased 5.5% excluding foreign exchange, according to executives. Net income rose 8% for the year to $1.1 million after the one-time charge.

“With weak economic conditions around the world, this was a strong finish to a strong year,” said Reuben Mark, chairman and chief executive officer. “The combination of sharply higher gross margin and excellent overhead control allowed us to provide a healthy increase in total marketing spending worldwide while also meeting our profit expectations. In addition, a special fourth quarter overseas income tax benefit allowed us to provide even more brand marketing support than we would have done otherwise. Market shares in our core categories are growing in the U.S. and abroad, so we enter 2002 with excellent momentum.”

Mr. Mark added Colgate-Palmolive’s efficiency gains were based on the implementation of the next generation of SAP applications and other productivity programs.

Global market shares increased across key categories including toothpaste, toothbrushes, dishwashing liquid, deodorants, bar and liquid soap, body wash, all-purpose cleaners, fabric softeners and pet nutrition. Key product introductions included Colgate Total Plus Whitening and Colgate Herbal toothpastes, Colgate Navigator toothbrush, Palmolive Fresh Green Apple dishwashing liquid, Lady Speed Stick Ultra Dry deodorant, Palmolive Vitamins body wash and liquid hand soap and Science Diet Canine and Feline Oral Care, executives said.

North American operating profit rose 5% against record operating profit in the year ago period excluding this one-time charge. For the year, unit volume grew 4.5%, sales rose 3.5% and operating profit increased 6%. The results were fueled by new product introductions.

In the U.S., consumer takeaway of Colgate’s products grew more than three times faster than the aggregate category growth for 2001 as a result of strong market share gains. Executives said this growth reached an all time high during the month of December. Colgate’s U.S. toothpaste category increased 34.8% for the year, according to A.C. Nielsen. In oral care, the new Colgate Total Plus Whitening toothpaste, Colgate 2in1 toothpaste and mouthwash and Colgate Motion battery powered toothbrush each contributed incremental share. Standouts in other categories include Softsoap Vitamins body wash and liquid hand soap, Palmolive Spring Sensations dishwashing liquid, Mennen Speed Stick Power of Nature deodorants and Suavitel fabric softener, said Colgate executives.

Aggressive new product activity continued in 2001 with a record 21 new introductions. In Latin America, volume grew 3.5% for the fourth quarter led by gains in Mexico, Venezuela, Colombia, Central America, Chile and Jamaica, most notably in the oral care sector. Brazil, which enjoyed increased volume for the full year, had lower fourth quarter volume than the previous year. Excluding foreign exchange, continuing sales rose 4% in the quarter and 6% for the year. Dollar operating profits for the year increased 11% compared to 2000 results.

European unit volume grew 4% in the fourth quarter with especially strong performance in the UK, Belgium, Switzerland, Holland, Greece, the Nordic group, Russia, Poland and the Czech Republic. Sales increased 4.5% and operating profits were up 18%. For the year, volume growth was 5.5% and sales increased 1%, which reflect difficult currency comparisons earlier in the year, executives insisted. Operating profits increased 7% for the year.

Unit volume in Asia/Africa grew 4% in the quarter as a result of successful new product activity. Excellent volume gains were achieved in China, Malaysia, Thailand, Australia, New Zealand, Fiji, Vietnam and South Africa. Volume rose 6% for the full year. Sales declined 2% for the fourth quarter and 1% for the year due to currency translation. Operating profits declined 4% in the fourth quarter and increased 1% for the year.