RNS Number:9963Q
Colgate-Palmolive Co
5 February 2002
CONTACT:
Bina Thompson 212-310-3072
Hope Borkenstein 212-310-2291
Colgate Announces Strong 4th Quarter and Year Results
23rd Consecutive Quarter with Increased E.P.S.
Gross Profit Margin and Unit Volume Increases Across All Divisions
NEW YORK, NEW YORK, February 5, 2002... Colgate-Palmolive Company (NYSE:CL)
announced the successful completion of a strong year in 2001, with E.P.S
reaching $.52 per diluted share in the fourth quarter, an increase of 13% versus
the year ago period, excluding a one-time charge in the quarter of $15 million.
After the one-time charge, earnings per share rose 7% in the quarter to $.49 per
diluted share. The one-time charge incorporates several items including a write
down due to the bankruptcy of a major U.S. retail account and a write down in
the value of the Company's Argentinean operation. This is Colgate's 23rd
consecutive quarter of increased E.P.S., net earnings and gross profit margin.
Unit volume and gross profit margin increased in every operating division
worldwide during the quarter.
In the fourth quarter, worldwide unit volume rose 4.0% and global gross profit
margin increased 100 basis points, at the top end of the Company's target range.
Due to the strength of the U.S, dollar during the quarter, worldwide dollar
sales increased only slightly from the all time high year ago fourth quarter.
Net income increased 8% versus the fourth quarter 2000, excluding the one-time
charge noted above. After the one-time charge, net income rose 3% in the quarter
to $295.3 million.
Colgate's global unit volume increased 5.0% for the full year 2001, with each
operating division contributing strong unit growth. During the year, unit
volume, operating profit and operating profit margin increased in every
operating division worldwide. Diluted earnings per share rose 12% to $1.91
versus $1.70 in 2000 before the one-time charge in the fourth quarter previously
discussed. After the one-time charge, diluted earnings per share increased 11%
to $1.89. Full year dollar sales from continuing business increased 1.5% to an
all time high of $9.4 billion and would have increased 5.5% excluding foreign
exchange. Net income increased 9% versus 2000, excluding the one-time charge.
After the one-time charge, net income rose 8% for the year to $1,146.6 million.
Reuben Mark, Chairman and CEO, said: "With weak economic conditions around the
world, this was a strong finish to a strong year. 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 additions, 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.
"Our efficiency gains continue to exceed our expectations as the next generation
of SAP applications and other productivity programs are implemented around the
globe. Cash generation remains strong reaching $1.6 billion in 2001, another
all time record. After-tax return on capital was also a record at 29.7% versus
26.4% in 2000.
"In each of the last six years Colgate has delivered double-digit earnings per
share increases in conjunction with strong worldwide volume growth and gross
profit margin improvement. In the year 2002 we again expect excellent volume
growth and gross profit margin increases which will support another double digit
improvement in E.P.S."
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. 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 are among the innovative new products strengthening
Colgate's market leadership positions worldwide.
During 2001, Colgate purchase 21.7 million common shares at a cost of $1.2
billion as part of its ongoing share repurchase program.
At 11:00 a.m. EST today, Colgate will host a conference call to further
elaborate on fourth quarter and year results and to discuss the Company's
ongoing expectations. To access this call as a webcast, please go to Colgate's
web site on the Internet at www.colgate-palmolive.com.
The following are comments about divisional performance:
Colgate-North America (25% of Company Sales)
Fueled by broad-based new product momentum, unit volume grew 4.0% and sales
increased 2.0% in the fourth quarter. This growth is on top of very strong
volume and sales growth in the year ago period. Further, consumer takeaway
exceeded Company shipments as the level of trade inventories dropped nationwide.
Divisional operating profits in the fourth quarter were flat with the year ago
period due to the one-time charge noted above brought about by the bankruptcy of
a major U.S. retail account. Excluding this one-time charge, North American
operating profit rose 5% against record operating profit in the year ago period.
For the year, unit volume grew 4.5%, sales rose 3.5% and operating profit
increased 6%.
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. The positive growth momentum continued in the most recent quarter
with retail consumption of Colgate's products reaching an all time high during
the month of December. Impressive share gains were achieved broadly across
categories including toothpaste, deodorants, body wash, bar and liquid soaps,
fabric softeners, all purpose cleaners and automatic dishwasher detergents.
Colgate's leadership of the U.S. toothpaste market increased to a national A.C.
Nielsen market share of 34.8% for the year, up 2.4 share points versus 2000. In
Oral Care, new Colgate Total Plus Whitening toothpaste, Colgate 2inl 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.
Aggressive new product activity continued in 2001 with a record 21 new
introductions. Keeping with its fast launch pace, Colgate U.S. has already
announced several new products for early 2002 including Softsoap Naturals
moisturizing body wash enriched with pure milk proteins and natural milk
extracts, Colgate Active Angle toothbrush, Lady Speed Stick Clean Glide
deodorant and new Softsoap Rainforest Series liquid hand soap.
Colgate-Latin America (26% of Company Sales)
Latin America achieved 3.5% volume growth from continuing business in the fourth
quarter led by robust gains in Mexico, Venezuela, Colombia, Central America,
Chile and Jamaica. Brazil, which enjoyed increased volume for the full year,
had lower fourth quarter volume when compared to an extremely strong year ago
period. Brazil is budgeted up in volume in 2002 as well. Continuing sales for
the Division declined 2.0% in the quarter due to exchange while fourth quarter
dollar operating profits increased 3% to another quarterly record. For the
year, volume and sales from ongoing businesses grew 5.0% and 0.5%, respectively.
Excluding foreign exchange, continuing sales rose 4% in the quarter and 6% for
the year. Dollar operating profits for the year increased 11% versus 2000.
Colgate continues to strengthen its Oral Care leadership throughout Latin
America. Toothpaste market shares in Mexico, Venezuela and Central America
reached all time high during the quarter driven by the widespread success of
Colgate Fresh Confidence, Colgate Triple Action and Colgate Herbal toothpastes.
In toothbrushes, Colgate Navigator, Colgate Replace and new Colgate Active
Flexible toothbrushes strengthened shares throughout the region. Contributing
to gains in Personal Care were Lady Speed Stick Ultra Dry deodorant, and
Palmolive Naturals and Caprice shampoos. Axion Spring Sensations dishwashing
liquid and Suavitel Fresca Primavera fabric softener were standout performers in
other categories.
Colgate-Europe (20% of Company Sales)
European unit volume grew 4.0% in the fourth quarter with especially strong
performance in the United Kingdom, Belgium, Switzerland, Holland, Greece, the
Nordic group, Russia, Poland and the Czech Republic. Dollar sales rose 4.5%
versus the fourth quarter 2000 and dollar operating profits were up 18%. For the
year, volume growth was 5.5% and dollar sales increased 1.0%, reflecting more
difficult currency comparisons earlier in the year. Dollar operating profits
increased 7% for the year.
Product innovation and well-executed pan-European new product rollouts are
driving growth across categories in Western Europe. Gains in Oral Care were
driven by the broad based success of Colgate Herbal and Colgate Total Plus
Whitening toothpastes, Actibrush Bzzz for kids battery powered toothbrushes and
a new line of children's toothbrushes adorned with characters from the Warner
Bros. movie Harry Potter and the Sorcerer's Stone. Palmolive Aromatherapy shower
gel and bath foam, and Palmolive Vitamins shower gel and liquid hand soap
boosted shares in Personal Care while new Ajax wipes contributed incremental
share in Surface Care.
New products spurring growth throughout the high growth regions of Central
Europe and Russia include Colgate Herbal Plus Whitening toothpaste, Colgate
Navigator toothbrush, Palmolive Aromatherapy shower gel and bath foam, Palmolive
Milk and Honey bar soap and Ajax Floral Fiesta cream cleanser.
Colgate-Asia/Africa (16% of Company Sales)
Unit volume in Asia/Africa grew 4.0% in the quarter reflecting successful new
product activity throughout the region. Excellent volume gains were achieved in
China, Malaysia, Thailand, Australia, New Zealand, Fiji, Vietnam and South
Africa. These strong results contributed to the Division's 6.0% volume growth
for the full year. Dollar sales declined 2.0% for the quarter and 1.0% for the
year due to currency translation. Excluding exchange, sales rose 2% and 6% for
the quarter and year, respectively. Dollar operating profits declined 4% in the
fourth quarter and increased 1% for the year.
Colgate's market leadership in toothpaste continues to expand in China where our
national A.C. Nielsen market share now stands at a record 29.1%, up over three
share points from the year ago period. Expanded distribution, now in 524 cities,
and winning new products including Colgate Herbal and Colgate Triple Action
toothpastes, contributed to China's double-digit volume growth in the quarter.
Innovative new products fueling growth elsewhere in the region include Colgate
Fresh Confidence toothpaste, Colgate Active Flexible toothbrush, Palmolive Fruit
Essentials shower gel and bar soap, Protex Herbal bar soap, Axion Orange Fantasy
dishwashing paste and Softlan fabric softener.
Hill's Pet Nutrition (13% of Company Sales)
Technology-based new products and veterinary endorsements are driving growth at
Hill's, the world leader in specialty pet food. Strong results both domestically
and internationally contributed to fourth quarter sales and volume growth of
4.5%. Operating profits increased 11% in the quarter reflecting logistics
optimization programs worldwide and continued productivity improvements at
Hill's Etten Leur manufacturing facility in the Netherlands and elsewhere. Sales
and unit volume each rose 5.5% for the year and operating profits increased 16%
versus 2000.
Hill's U.S. increased consumption of Science Diet in the specialty retail
channel, where its growth continues to outpace category growth, and also enjoyed
higher sales of Prescription Diet in the veterinary channel. Recent
introductions gaining wide acceptance are Science Diet Canine and Feline Oral
Care, Science Diet Canine Light Small Bites and new Prescription Diet Canine
b/d, a clinically proven product that reduces the effects of canine aging.
Hill's international growth was strong across Europe, South Pacific and Latin
America. Science Diet Canine and Feline Oral Care and Prescription Diet Canine
and Feline z/d for allergic animals contributed to gains, as did enhanced
merchandising programs.
About Colgate-Palmolive: Colgate-Palmolive is a leading global consumer products
company, tightly focused on Oral Care, Personal Care, Household Surface Care,
Fabric Care and Pet Nutrition. Colgate sells its products in over 200 countries
and territories around the world under such internationally recognized brand
names as Colgate, Palmolive, Mennen, Softsoap, Irish Spring, Protex, Sorriso,
Kolynos, Ajax, Axion, Soupline, Suavitel and Fab, as well as Hill's Science Diet
and Hill's Prescription Diet pet foods. For more information about Colgate's
global business, visit the Company's web site on the Internet at www.colgate-
palmolive.com.
The Company's annual meeting of shareholders is currently scheduled for May 8,
2002.
This press release (other than historical information) contains forward-looking
statements. Actual events or results may differ materially from those
statements. Investors should consult the Company's filings with the Securities
and Exchange Commission (including the Company's Form 8-K dated November 13,
1998) for information about factors that could cause such differences. Copies of
these filings may be obtained upon request from the Company's Investor Relations
Department.
(See below table for fourth quarter and year results.)
Colgate-Palmolive Company Summary of Consolidated Results
Three Months and Years Ended December 31, 2001 and 2000
(Dollars in Millions Except Per Share Amounts) (Unaudited)
Fourth Quarter Year
2001 2000 2001 2000
Net Sales $2,414.4 $2,412.9 $9,427.8 $9,357.9
Cost of Sales 1,081.1 1,106.1 4,236.9 4,265.5
Gross Profit 1,333.3 1,306.8 5,190.9 5,092.4
Gross Profit Margin 55.2% 54.2% 55.1% 54.4%
Selling, General and
Administrative Expenses 885.0 850.5 3,356.1 3,351.9
Earnings Before
Interest and Taxes 448.3 * 456.3 1,834.8 * 1,740.5
Operating Profit Margin 18.6% 18.9% 19.5% 18.6%
Net interest Expense 36.1 39.7 166.1 173.3
Income Before Income Taxes 412.2 416.6 1,668.7 1,567.2
Provision for income Taxes 116.9 129.9 522.1 503.4
Tax Rate 28.4%** 31.2% 31.3%** 32.1%
Net Income 295.3 * 286.7 1,146.6 * 1,063.8
Net Earnings Per Common Share
- Basic $.53 $.49 $2.02 $1.81
- Diluted $.49 * $.46 $1.89 * $1.70
Average Common Shares Outstanding
- Basic 551.6 571.5 557.8 574.9
- Diluted 600.8 623.2 607.7 627.3
* Excluding the one-time charge described in the release, fourth quarter
earnings before interest and taxes would have been $464.3 (+2%), net income
$309.8 (+8%) and diluted earnings per share $.52 (+13%). For the full year,
earnings before interest and taxes would have been $1,850.8 (+6%), net income
$1,161.1 (+9%) and diluted earnings per share $1.91 (+12%).
** Excluding the special fourth quarter overseas tax benefit described in the
release, the tax rate would have been 31.4% in the quarter and 32.0% in the
year.
The full text of Colgate releases is available:
Internet Address: http://www.colgatepalmolive.com
Shareholder Direct: 1-800-850-2654
E-mail: Investor_Relations@Colpal.com
This information is provided by RNS
The company news service from the London Stock Exchange
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