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Colgate Announces 4th Quarter and Full Year 2022 Results

4Q 2022 Net sales increased 5.0%, Organic sales increased 8.5%

Full Year 2022 Net sales increased 3.0%, Organic sales increased 7.0%

Colgate-Palmolive Company (NYSE:CL) today reported results for fourth quarter and full year 2022. Noel Wallace, Chairman, President and Chief Executive Officer, commented, “We are very pleased to have finished 2022 with a continuation of our strong growth momentum, as 2022 was our fourth consecutive year delivering organic sales growth at or above our 3% to 5% long-term targeted range. Net sales increased 5.0% in the fourth quarter, and organic sales grew 8.5% with growth in every division and in all four of our categories, despite challenging macroeconomic conditions worldwide.

“By delivering on our revenue growth management and productivity initiatives, we are continuing to fund increased investment behind innovation, advertising and digital transformation, which is helping to drive this broad-based growth and deliver improved market share performance.

“Looking ahead, we have a proven strategy, a focused portfolio of leading brands in growing, everyday usage categories and product offerings across price points. We are also strengthening and scaling our digital, data analytics, innovation and other capabilities across the company. All this adds to our confidence that despite uncertain macroeconomic conditions worldwide, we are executing against the right strategy and are well-positioned to deliver sustainable, profitable growth in 2023 and beyond.”

Full Year

  • Net sales increased 3.0%, Organic sales* increased 7.0%
  • On a GAAP basis, EPS declined 16% to $2.13, driven by goodwill and intangible assets impairment charges in the fourth quarter related to the Filorga skin health business
  • On a Base Business basis, EPS* declined 7% to $2.97, in line with the Company's full year guidance

Full Year Total Company Results (GAAP)

($ in millions except per share amounts)

2022

2021

Change

Net Sales

$17,967

$17,421

+3.0%

EPS (diluted)

$2.13

$2.55

-16%

 

 

 

 

 

 

 

 

Full Year Total Company Results (Base Business - Non-GAAP)*

($ in millions except per share amounts)

2022

2021

Change

Organic Sales Growth

+7.0%

Base Business EPS (diluted)

$2.97

$3.21

-7%

*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 7 - Geographic Sales Analysis Percentage Changes” and “Table 9 - Non-GAAP Reconciliations” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures.

Fourth Quarter

  • Net sales increased 5.0%, Organic sales* increased 8.5%
  • On a GAAP basis, EPS declined 94% to $0.01, driven by goodwill and intangible assets impairment charges related to the Filorga skin health business
  • On a Base Business basis, EPS* declined 3% to $0.77
  • GAAP Gross profit margin and Base Business Gross profit margin* both decreased 250 basis points to 55.6%, including a negative 90 basis point impact from private label sales resulting from the previously disclosed acquisitions of pet food businesses
  • Net cash provided by operations was $2,556 year to date
  • Colgate’s leadership in toothpaste continued with its global market share at 39.8% year to date
  • Colgate’s leadership in manual toothbrushes continued with its global market share at 31.7% year to date

Fourth Quarter Total Company Results (GAAP)

($ in millions except per share amounts)

2022

2021

Change

Net Sales

$4,629

$4,403

+5.0%

EPS (diluted)

$0.01

$0.18

-94%

 

 

 

 

 

 

 

 

Fourth Quarter Total Company Results (Base Business - Non-GAAP)*

($ in millions except per share amounts)

2022

2021

Change

Organic Sales Growth

+8.5%

Base Business EPS (diluted)

$0.77

$0.79

-3%

*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 6 - Geographic Sales Analysis Percentage Changes” and “Table 8 - Non-GAAP Reconciliations” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures.

Goodwill and Intangible Assets Impairment

During the fourth quarter, the Company took a non-cash, after-tax charge of $620 million to adjust the carrying values of goodwill and intangible assets related to the Filorga skin health business. The impairment was due to the continued impact of the COVID-19 pandemic on the Filorga business, particularly in China, as a result of government restrictions and reduced consumer mobility, which negatively impacted consumption in the duty-free, travel retail and pharmacy channels, and the impact of significantly higher interest rates. The Company continues to believe in the strength of the Filorga brand and is confident about its long-term growth opportunities.

Full Year 2023 Guidance

Based on current spot rates:

  • The Company expects net sales growth to be 2% to 5% including the benefit from our acquisitions of pet food businesses and a low-single-digit negative impact from foreign exchange.
  • The Company expects organic sales growth to be towards the high end of its long-term targeted range of 3% to 5%.
  • On a GAAP basis, the Company expects gross profit margin expansion, increased advertising investment and double-digit earnings-per-share growth.
  • On a non-GAAP (Base Business) basis, the Company expects gross profit margin expansion, increased advertising investment and low to mid-single-digit earnings-per-share growth.

Divisional Performance

The following are comments about divisional performance for fourth quarter 2022 versus the year ago period. See attached "Table 6 - Geographic Sales Analysis Percentage Changes" and "Table 5 - Segment Information" for additional information on net sales and operating profit by division.

Fourth Quarter Sales Growth By Division

(% change 4Q 2022 vs. 4Q 2021)

 

 

 

 

Net

Sales

Organic

Sales*

As Reported

Volume**

Organic

Volume

Pricing

FX

North America

+4.0%

+4.5%

-6.0%

-6.0%

+10.5%

-0.5%

Latin America

+10.0%

+12.0%

-7.0%

-7.0%

+19.0%

-2.0%

Europe

-10.5%

+1.0%

-6.0%

-6.0%

+7.0%

-11.5%

Asia Pacific

-4.0%

+6.0%

-1.0%

-1.0%

+7.0%

-10.0%

Africa/Eurasia

+9.0%

+16.5%

-7.0%

-7.0%

+23.5%

-7.5%

Hill's

+20.0%

+14.0%

+10.0%

+0.5%

+13.5%

-3.5%

 

 

 

 

 

 

 

Total Company

+5.0%

+8.5%

-2.5%

-4.0%

+12.5%

-5.0%

*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 6 - Geographic Sales Analysis Percentage Changes” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures.

**The impact of the previously disclosed acquisitions of pet food businesses on as reported volume was 9.5% and 1.5% for Hill's and Total Company, respectively.

Fourth Quarter Operating Profit By Division

($ in millions)

 

 

4Q 2022

% Change vs

4Q 2021

% to Net

Sales

Change in basis

points vs 4Q 2021

% to Net Sales

North America

$204

21%

21.1%

+300

Latin America

$290

22%

28.7%

+270

Europe

$104

-34%

16.7%

-590

Asia Pacific

$181

-11%

26.0%

-220

Africa/Eurasia

$69

38%

25.3%

+520

Hill's

$233

-3%

22.0%

-520

 

 

 

 

 

Total Company, As Reported

$202

-45%

4.4%

-390

Total Company, Base Business*

$941

1%

20.3%

-100

*Indicates a non-GAAP financial measure. Please refer to “Non-GAAP Financial Measures” later in this release for definitions of non-GAAP financial measures and to “Table 8 - Non-GAAP Reconciliations” included with this release for a reconciliation of these non-GAAP financial measures to the related GAAP measures.

North America (21% of Company Sales)

  • Organic sales growth was broad based across oral care, personal care and home care.
  • In the United States, Colgate's share of the toothpaste market is 34.5% year to date and its share of the manual toothbrush market is 42.2% year to date.
  • The increase in Operating profit as a percentage of Net sales was primarily due to higher pricing, cost savings from the Company’s funding-the-growth initiatives and lower logistics and overhead expenses, partially offset by significantly higher raw and packaging material costs and increased advertising investment.

Latin America (22% of Company Sales)

  • Organic sales growth was led by Mexico, Argentina, Brazil and Colombia.
  • The increase in Operating profit as a percentage of Net sales was primarily due to higher pricing, savings from the Company’s funding-the-growth initiatives and lower overhead expenses, partially offset by significantly higher raw and packaging material costs and increased advertising investment.

Europe (13% of Company Sales)

  • Organic sales growth was led by Germany, Poland, France and the United Kingdom, partially offset by organic sales declines in the Filorga business.
  • The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs, higher overhead expenses, primarily due to higher logistics costs, and increased advertising investment, partially offset by cost savings from the Company’s funding-the-growth initiatives and higher pricing.

Asia Pacific (15% of Company Sales)

  • Organic sales growth was led by the Greater China region, Australia and the Philippines.
  • The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs, partially offset by cost savings from the Company's funding-the-growth initiatives, higher pricing, decreased advertising investment and lower overhead expenses despite increases in logistics costs.

Africa/Eurasia (6% of Company Sales)

  • Organic sales growth was led by Turkiye, Nigeria and South Africa.
  • The increase in Operating profit as a percentage of Net sales was primarily due to higher pricing, cost savings from the Company’s funding-the-growth initiatives and decreased advertising investment, partially offset by significantly higher raw and packaging material costs and higher overhead expenses.

Hill's Pet Nutrition (23% of Company Sales)

  • Organic sales growth was led by the United States and Europe.
  • The decrease in Operating profit as a percentage of Net sales was primarily due to significantly higher raw and packaging material costs and unfavorable mix due to private label sales resulting from the previously disclosed acquisitions of pet food businesses, partially offset by higher pricing, lower overhead expenses, decreased advertising investment and cost savings from the Company’s funding-the-growth initiatives.

Prepared Materials and Webcast Information

At approximately 7:00 a.m. ET today, Colgate will post its prepared materials (in PDF format) regarding fourth quarter and full year 2022 results to the Investor Center section of its website at https://investor.colgatepalmolive.com/events-and-presentations.

At 8:30 a.m. ET today, Colgate will host a conference call regarding fourth quarter and full year 2022 results. To access this call as a webcast, please go to Colgate’s website at www.colgatepalmolive.com.

About Colgate-Palmolive

Colgate-Palmolive Company is a caring, innovative growth company reimagining a healthier future for all people, their pets and our planet. Focused on Oral Care, Personal Care, Home Care and Pet Nutrition, the Company sells its products in more than 200 countries and territories under brands such as Colgate, Palmolive, elmex, hello, meridol, Sorriso, Tom’s of Maine, EltaMD, Filorga, Irish Spring, PCA Skin, Protex, Sanex, Softsoap, Speed Stick, Ajax, Axion, Fabuloso, Soupline and Suavitel, as well as Hill’s Science Diet and Hill’s Prescription Diet. The Company is recognized for its leadership and innovation in promoting environmental sustainability and community wellbeing, including its achievements in saving water, reducing waste, promoting recyclability and improving children’s oral health through its Bright Smiles, Bright Futures program, which has reached more than 1.4 billion children since 1991. For more information about Colgate’s global business and how the Company is building a future to smile about, visit www.colgatepalmolive.com. CL-E

The Company's annual meeting of stockholders is currently scheduled for Friday, May 12, 2023.

Market Share Information

Management uses market share information as a key indicator to monitor business health and performance. References to market share in this press release are based on a combination of consumption and market share data provided by third-party vendors, primarily Nielsen, and internal estimates. All market share references represent the percentage of the dollar value of sales of our products, relative to all product sales in the category in the countries in which the Company competes and purchases data (excluding Venezuela from all periods).

Market share data is subject to limitations on the availability of up-to-date information. In particular, market share data is currently not generally available for certain retail channels, such as eCommerce and certain club retailers and discounters. The Company measures year-to-date market shares from January 1 of the relevant year through the most recent period for which market share data is available, which typically reflects a lag time of one or two months. The Company believes that the third-party vendors it uses to provide data are reliable, but it has not verified the accuracy or completeness of the data or any assumptions underlying the data. In addition, market share information reported by the Company may be different from market share information reported by other companies due to differences in category definitions, the use of data from different countries, internal estimates and other factors.

Cautionary Statement on Forward-Looking Statements

This press release and the related webcast may contain forward-looking statements (as that term is defined in the U.S. Private Securities Litigation Reform Act of 1995 or by the Securities and Exchange Commission (SEC) in its rules, regulations and releases) that set forth anticipated results based on management’s current plans and assumptions. Such statements may relate, for example, to sales or volume growth, net selling price increases, organic sales growth, profit or profit margin levels, earnings per share levels, financial goals, the impact of foreign exchange, the impact of COVID-19, the impact of the war in Ukraine, cost-reduction plans, including the 2022 Global Productivity Initiative, tax rates, interest rates, new product introductions, digital capabilities, commercial investment levels, acquisitions, divestitures, share repurchases, or legal or tax proceedings, among other matters. These statements are made on the basis of the Company’s views and assumptions as of this time and the Company undertakes no obligation to update these statements whether as a result of new information, future events or otherwise, except as required by law or by the rules and regulations of the SEC. Moreover, the Company does not, nor does any other person, assume responsibility for the accuracy and completeness of these statements. The Company cautions investors that any such forward-looking statements are not guarantees of future performance and that actual events or results may differ materially from those statements. For more information about factors that could impact the Company’s business and cause actual results to differ materially from forward-looking statements, investors should refer to the Company’s filings with the SEC (including, but not limited to, the information set forth under the captions “Risk Factors” and “Cautionary Statement on Forward-Looking Statements” in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 and subsequent filings with the SEC). Copies of these filings may be obtained upon request from the Company’s Investor Relations Department or on the Company’s website at www.colgatepalmolive.com.

Non-GAAP Financial Measures

The following provides definitions and other information regarding the non-GAAP financial measures used in this press release and the related prepared materials and webcast, which may not be the same as or comparable to similar measures presented by other companies:

  • Base Business: Base Business refers to non-GAAP measures of operating results that exclude certain items. Base Business operating results exclude, as applicable, charges relating to the 2022 Global Productivity Initiative, goodwill and intangible assets impairment charges, a gain on the sale of land in Asia Pacific, acquisition-related costs, a loss on the early extinguishment of debt and a benefit related to a value-added tax matter in Brazil.
  • Organic sales growth: Net sales growth excluding the impact of foreign exchange, acquisitions and divestments.
  • Free cash flow before dividends: Net cash provided by operations less Capital expenditures.

This press release discusses Net sales growth (GAAP) and Organic sales growth (non-GAAP). Management believes the organic sales growth measure provides investors and analysts with useful supplemental information regarding the Company’s underlying sales trends by presenting sales growth excluding the external factor of foreign exchange as well as the impact from acquisitions and divestments. See “Geographic Sales Analysis Percentage Changes” for the three and twelve months ended December 31, 2022 versus 2021 included with this release for a comparison of Organic sales growth to Net sales growth in accordance with GAAP.

Selling, general and administrative expenses, Other (income) expense, net, Operating profit, Operating profit margin, Non-service related postretirement costs, Effective income tax rate, Net income attributable to Colgate-Palmolive Company and Diluted earnings per common share are disclosed on both an as reported (GAAP) and Base Business (non-GAAP) basis. These non-GAAP financial measures exclude items that, either by their nature or amount, management would not expect to occur as part of the Company’s normal business on a regular basis, such as restructuring charges, charges for certain litigation and tax matters, gains and losses from certain acquisitions, divestitures and certain other unusual, non-recurring items. Investors and analysts use these financial measures in assessing the Company’s business performance, and management believes that presenting these financial measures on a non-GAAP basis provides them with useful supplemental information to enhance their understanding of the Company’s underlying business performance and trends. These non-GAAP financial measures also enhance the ability to compare period-to-period financial results. See “Non-GAAP Reconciliations” for the three and twelve months ended December 31, 2022 and 2021 included with this release for a reconciliation of these financial measures to the related GAAP measures.

The Company uses these financial measures internally in its budgeting process, to evaluate segment and overall operating performance and as factors in determining compensation. While the Company believes that these financial measures are useful in evaluating the Company’s underlying business performance and trends, this information should be considered as supplemental in nature and is not meant to be considered in isolation or as a substitute for the related financial information prepared in accordance with GAAP.

As management uses free cash flow before dividends to evaluate the Company’s ability to satisfy current and future obligations, pay dividends, fund future business opportunities and repurchase stock, the Company believes that it provides useful information to investors. Free cash flow before dividends is not a measure of cash available for discretionary expenditures since the Company has certain non-discretionary obligations such as debt service that are not deducted from the measure. See “Condensed Consolidated Statements of Cash Flows” for the twelve months ended December 31, 2022 and 2021 for a comparison of free cash flow before dividends to Net cash provided by operations as reported in accordance with GAAP.

(See attached tables for fourth quarter and full year results.)

 

 

 

 

Table 1

Colgate-Palmolive Company

 

Condensed Consolidated Statements of Income

 

For the Three Months Ended December 31, 2022 and 2021

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

2022

 

2021

 

 

 

 

 

Net sales

 

$

4,629

 

 

$

4,403

 

 

 

 

 

 

Cost of sales

 

 

2,055

 

 

 

1,844

 

 

 

 

 

 

Gross profit

 

 

2,574

 

 

 

2,559

 

 

 

 

 

 

Gross profit margin

 

 

55.6

%

 

 

58.1

%

 

 

 

 

 

Selling, general and administrative expenses

 

 

1,633

 

 

 

1,598

 

 

 

 

 

 

Other (income) expense, net

 

 

18

 

 

 

25

 

 

 

 

 

 

Goodwill and intangible assets impairment charges

 

 

721

 

 

 

571

 

 

 

 

 

 

Operating profit

 

 

202

 

 

 

365

 

 

 

 

 

 

Operating profit margin

 

 

4.4

%

 

 

8.3

%

 

 

 

 

 

Non-service related postretirement costs

 

 

15

 

 

 

18

 

 

 

 

 

 

Interest (income) expense, net

 

 

55

 

 

 

23

 

 

 

 

 

 

Income before income taxes

 

 

132

 

 

 

324

 

 

 

 

 

 

Provision for income taxes

 

 

89

 

 

 

136

 

 

 

 

 

 

Effective tax rate

 

 

67.4

%

 

 

42.0

%

 

 

 

 

 

Net income including noncontrolling interests

 

 

43

 

 

 

188

 

 

 

 

 

 

Less: Net income attributable to noncontrolling interests

 

 

38

 

 

 

40

 

 

 

 

 

 

Net income attributable to Colgate-Palmolive Company

 

$

5

 

 

$

148

 

 

 

 

 

 

Earnings per common share

 

 

 

 

Basic

 

$

0.01

 

 

$

0.18

 

Diluted

 

$

0.01

 

 

$

0.18

 

 

 

 

 

 

Supplemental Income Statement Information

 

 

 

 

Average common shares outstanding

 

 

 

 

Basic

 

 

832.6

 

 

 

842.1

 

Diluted

 

 

834.4

 

 

 

845.0

 

 

 

 

 

 

Advertising

 

$

504

 

 

$

489

 

 

 

Table 2

Colgate-Palmolive Company

 

Condensed Consolidated Statements of Income

 

For the Twelve Months Ended December 31, 2022 and 2021

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

2022

2021

 

 

 

Net sales

$

17,967

 

$

17,421

 

 

 

 

Cost of sales

 

7,719

 

 

7,046

 

 

 

 

Gross profit

 

10,248

 

 

10,375

 

 

 

 

Gross profit margin

 

57.0

%

 

59.6

%

 

 

 

Selling, general and administrative expenses

 

6,565

 

 

6,407

 

 

 

 

Other (income) expense, net

 

69

 

 

65

 

 

 

 

Goodwill and intangible assets impairment charges

 

721

 

 

571

 

 

 

 

Operating profit

 

2,893

 

 

3,332

 

 

 

 

Operating profit margin

 

16.1

%

 

19.1

%

 

 

 

Non-service related postretirement costs

 

80

 

 

70

 

 

 

 

Interest (income) expense, net

 

153

 

 

175

 

 

 

 

Income before income taxes

 

2,660

 

 

3,087

 

 

 

 

Provision for income taxes

 

693

 

 

749

 

 

 

 

Effective tax rate

 

26.1

%

 

24.3

%

 

 

 

Net income including noncontrolling interests

 

1,967

 

 

2,338

 

 

 

 

Less: Net income attributable to noncontrolling interests

 

182

 

 

172

 

 

 

 

Net income attributable to Colgate-Palmolive Company

$

1,785

 

$

2,166

 

 

 

 

Earnings per common share

 

 

Basic(1)

$

2.13

 

$

2.56

 

Diluted(1)

$

2.13

 

$

2.55

 

 

 

 

Supplemental Income Statement Information

 

 

Average common shares outstanding

 

 

Basic

 

836.4

 

 

845.0

 

Diluted

 

838.8

 

 

848.3

 

 

 

 

Advertising

$

1,997

 

$

2,021

 

Note:

(1) Basic and diluted earnings per share are computed independently for each quarter and any year-to-date period presented. As a result of changes in shares outstanding during the year and rounding, the sum of the quarters' earnings per share may not equal the earnings per share for any year-to-date period.

 

 

 

 

Table 3

Colgate-Palmolive Company

 

Condensed Consolidated Balance Sheets

 

As of December 31, 2022 and December 31, 2021

 

(Dollars in Millions) (Unaudited)

 

 

 

 

 

 

 

2022

 

2021

Cash and cash equivalents

 

$

775

 

 

$

832

 

Receivables, net

 

 

1,504

 

 

 

1,297

 

Inventories

 

 

2,074

 

 

 

1,692

 

Other current assets

 

 

760

 

 

 

576

 

Property, plant and equipment, net

 

 

4,307

 

 

 

3,730

 

Goodwill

 

 

3,352

 

 

 

3,284

 

Other intangible assets, net

 

 

1,920

 

 

 

2,462

 

Other assets

 

 

1,039

 

 

 

1,167

 

Total assets

 

$

15,731

 

 

$

15,040

 

 

 

 

 

 

Total debt

 

 

8,766

 

 

 

7,245

 

Other current liabilities

 

 

3,979

 

 

 

4,000

 

Other non-current liabilities

 

 

2,180

 

 

 

2,824

 

Total liabilities

 

 

14,925

 

 

 

14,069

 

Total Colgate-Palmolive Company shareholders’ equity

 

 

401

 

 

 

609

 

Noncontrolling interests

 

 

405

 

 

 

362

 

Total liabilities and equity

 

$

15,731

 

 

$

15,040

 

 

 

 

 

 

Supplemental Balance Sheet Information

 

 

 

 

Debt less cash, cash equivalents and marketable securities(1)

 

$

7,816

 

 

$

6,379

 

Working capital % of sales

 

 

1.0

%

 

 

(2.7

)%

Note:

(1) Marketable securities of $175 and $34 as of December 31, 2022 and 2021, respectively, are included in Other current assets.

 

 

Table 4

Colgate-Palmolive Company

 

Condensed Consolidated Statements of Cash Flows

 

For the Twelve Months Ended December 31, 2022 and 2021

 

(Dollars in Millions) (Unaudited)

 

 

 

 

2022

2021

Operating Activities

 

 

Net income including noncontrolling interests

$

1,967

 

$

2,338

 

Adjustments to reconcile Net income including noncontrolling interests to Net cash provided by operations:

 

 

Depreciation and amortization

 

545

 

 

556

 

Restructuring and termination benefits, net of cash

 

49

 

 

(21

)

Stock-based compensation expense

 

125

 

 

135

 

Gain on the sale of land

 

(47

)

 

 

Goodwill and intangible assets impairment charges

 

721

 

 

571

 

Loss on early extinguishment of debt

 

 

 

75

 

Deferred income taxes

 

(78

)

 

(132

)

Cash effects of changes in:

 

 

Receivables

 

(227

)

 

(84

)

Inventories

 

(333

)

 

(72

)

Accounts payable and other accruals

 

(115

)

 

14

 

Other non-current assets and liabilities

 

(51

)

 

(55

)

Net cash provided by operations

 

2,556

 

 

3,325

 

 

 

 

Investing Activities

 

 

Capital expenditures

 

(696

)

 

(567

)

Purchases of marketable securities and investments

 

(470

)

 

(141

)

Proceeds from sale of marketable securities and investments

 

322

 

 

141

 

Payment for acquisitions, net of cash acquired

 

(809

)

 

 

Proceeds from the sale of land

 

47

 

 

 

Other investing activities

 

5

 

 

(25

)

Net cash used in investing activities

 

(1,601

)

 

(592

)

 

 

 

Financing Activities

 

 

Short-term borrowing (repayment) less than 90 days, net

 

540

 

 

(171

)

Principal payments on debt

 

(406

)

 

(703

)

Proceeds from issuance of debt

 

1,513

 

 

699

 

Dividends paid

 

(1,691

)

 

(1,679

)

Purchases of treasury shares

 

(1,308

)

 

(1,320

)

Proceeds from exercise of stock options

 

418

 

 

424

 

Other financing activities

 

(18

)

 

(24

)

Net cash used in financing activities

 

(952

)

 

(2,774

)

 

 

 

Effect of exchange rate changes on Cash and cash equivalents

 

(60

)

 

(15

)

Net increase (decrease) in Cash and cash equivalents

 

(57

)

 

(56

)

Cash and cash equivalents at beginning of the period

 

832

 

 

888

 

Cash and cash equivalents at end of the period

$

775

 

$

832

 

 

 

 

Supplemental Cash Flow Information

 

 

Free cash flow before dividends (Net cash provided by operations less Capital expenditures)

 

 

Net cash provided by operations

 

2,556

 

 

3,325

 

Less: Capital expenditures

 

(696

)

 

(567

)

Free cash flow before dividends

$

1,860

 

$

2,758

 

 

 

 

Income taxes paid

$

945

 

$

890

 

 

 

 

 

Table 5

Colgate-Palmolive Company

 

 

 

Segment Information

 

 

 

For the Three and Twelve Months Ended December 31, 2022 and 2021

 

 

 

(Dollars in Millions) (Unaudited)

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2022

 

2021

 

2022

 

2021

Net Sales

 

 

 

 

Oral, Personal and Home Care

 

 

 

 

 

 

 

 

 

North America

$

966

 

$

930

 

$

3,816

 

$

3,694

 

Latin America

 

1,011

 

 

917

 

 

3,982

 

 

3,663

 

Europe

 

623

 

 

698

 

 

2,548

 

 

2,841

 

Asia Pacific

 

696

 

 

724

 

 

2,826

 

 

2,867

 

Africa/Eurasia

 

273

 

 

249

 

 

1,082

 

 

1,045

 

 

 

 

 

 

Total Oral, Personal and Home Care

 

3,569

 

 

3,518

 

 

14,254

 

 

14,110

 

 

 

 

 

 

Pet Nutrition

 

1,060

 

 

885

 

 

3,713

 

 

3,311

 

 

 

 

 

 

Total Net Sales

$

4,629

 

$

4,403

 

$

17,967

 

$

17,421

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended December 31,

 

Twelve Months Ended December 31,

 

2022

 

2021

 

2022

 

2021

Operating Profit

 

 

 

 

Oral, Personal and Home Care

 

 

 

 

 

 

 

 

 

North America

$

204

 

$

168

 

$

761

 

$

754

 

Latin America

 

290

 

 

238

 

 

1,108

 

 

1,012

 

Europe

 

104

 

 

158

 

 

514

 

 

682

 

Asia Pacific

 

181

 

 

204

 

 

737

 

 

844

 

Africa/Eurasia

 

69

 

 

50

 

 

228

 

 

203

 

 

 

 

 

 

Total Oral, Personal and Home Care

 

848

 

 

818

 

 

3,348

 

 

3,495

 

 

 

 

 

 

Pet Nutrition

 

233

 

 

241

 

 

850

 

 

901

 

Corporate(1)

 

(879

)

 

(694

)

 

(1,305

)

 

(1,064

)

 

 

 

 

 

Total Operating Profit

$

202

 

$

365

 

$

2,893

 

$

3,332

 

Note:

(1) Corporate operations include costs related to stock options and restricted stock units, research and development costs, Corporate overhead costs and gains and losses on sales of non-core product lines and assets.

 

Corporate Operating profit (loss) for the three months ended December 31, 2022 included charges resulting from the goodwill and intangible assets impairment of $721, 2022 Global Productivity Initiative of $15, and acquisition-related costs of $3.

 

Corporate Operating profit (loss) for the twelve months ended December 31, 2022 included charges resulting from the goodwill and intangible assets impairment of $721, 2022 Global Productivity Initiative of $95, a gain on the sale of land in Asia Pacific of $47, and acquisition-related costs of $19.

 

Corporate Operating profit (loss) for the three months ended December 31, 2021 included goodwill and intangible assets impairment charges of $571.

 

Corporate Operating profit (loss) for the twelve months ended December 31, 2021 included goodwill and intangible assets impairment charges of $571 and a benefit from a value-added tax matter in Brazil of $26.

Table 6

Colgate-Palmolive Company

 

 

Geographic Sales Analysis Percentage Changes

 

 

For the Three Months Ended December 31, 2022 vs. 2021

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPONENTS OF SALES CHANGE

 

 

 

 

 

 

 

 

 

 

 

 

Pricing

 

 

 

 

 

 

Coupons

 

 

Sales

 

 

 

Consumer &

 

 

Change

Organic

As Reported

Organic

Trade

Foreign

Region

As Reported

Sales Change

Volume(1)

Volume

Incentives

Exchange

 

 

 

 

 

 

 

Total Company

5.0

%

8.5

%

(2.5

)%

(4.0

)%

12.5

%

(5.0

)%

 

 

 

 

 

 

 

North America

4.0

%

4.5

%

(6.0

)%

(6.0

)%

10.5

%

(0.5

)%

 

 

 

 

 

 

 

Latin America

10.0

%

12.0

%

(7.0

)%

(7.0

)%

19.0

%

(2.0

)%

 

 

 

 

 

 

 

Europe

(10.5

)%

1.0

%

(6.0

)%

(6.0

)%

7.0

%

(11.5

)%

 

 

 

 

 

 

 

Asia Pacific

(4.0

)%

6.0

%

(1.0

)%

(1.0

)%

7.0

%

(10.0

)%

 

 

 

 

 

 

 

Africa/Eurasia

9.0

%

16.5

%

(7.0

)%

(7.0

)%

23.5

%

(7.5

)%

 

 

 

 

 

 

 

Total CP Products

1.5

%

7.0

%

(5.5

)%

(5.5

)%

12.5

%

(5.5

)%

 

 

 

 

 

 

 

Hill’s

20.0

%

14.0

%

10.0

%

0.5

%

13.5

%

(3.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging Markets(2)

4.5

%

9.5

%

(5.5

)%

(5.5

)%

15.0

%

(5.0

)%

 

 

 

 

 

 

 

Developed Markets

6.0

%

7.0

%

%

(3.5

)%

10.5

%

(4.5

)%

Notes:

(1) The impact of the previously disclosed acquisitions of pet food businesses on as reported volume was 1.5%, 9.5% and 3.5% for Total Company, Hill's and Developed Markets, respectively.

 

(2) Emerging Markets include Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.

Table 7

Colgate-Palmolive Company

 

 

Geographic Sales Analysis Percentage Changes

 

 

For the Twelve Months Ended December 31, 2022 vs. 2021

 

 

(Unaudited)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COMPONENTS OF SALES CHANGE

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pricing

 

 

 

 

 

 

 

 

 

 

 

Coupons

 

 

 

Sales

 

 

 

 

 

 

 

Consumer &

 

 

 

Change

 

Organic

 

As Reported

 

Organic

 

Trade

 

Foreign

Region

As Reported

 

Sales Change

 

Volume(1)

 

Volume

 

Incentives

 

Exchange

 

 

 

 

 

 

 

 

 

 

 

 

Total Company

3.0

%

 

7.0

%

 

(2.0

)%

 

(2.5

)%

 

9.5

%

 

(4.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

North America

3.5

%

 

3.5

%

 

(2.0

)%

 

(2.0

)%

 

5.5

%

 

%

 

 

 

 

 

 

 

 

 

 

 

 

Latin America

8.5

%

 

10.5

%

 

(5.0

)%

 

(5.0

)%

 

15.5

%

 

(2.0

)%

 

 

 

 

 

 

 

 

 

 

 

 

Europe

(10.5

)%

 

%

 

(4.0

)%

 

(4.0

)%

 

4.0

%

 

(10.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

Asia Pacific

(1.5

)%

 

5.0

%

 

(0.5

)%

 

(0.5

)%

 

5.5

%

 

(6.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

Africa/Eurasia

3.5

%

 

12.0

%

 

(9.5

)%

 

(9.5

)%

 

21.5

%

 

(8.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

Total CP Products

1.0

%

 

5.5

%

 

(3.5

)%

 

(3.5

)%

 

9.0

%

 

(4.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

Hill’s

12.0

%

 

13.0

%

 

4.0

%

 

1.5

%

 

11.5

%

 

(3.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Emerging Markets(2)

3.5

%

 

8.0

%

 

(4.5

)%

 

(4.5

)%

 

12.5

%

 

(4.5

)%

 

 

 

 

 

 

 

 

 

 

 

 

Developed Markets

2.5

%

 

6.0

%

 

%

 

(1.0

)%

 

7.0

%

 

(4.5

)%

Notes:

(1) The impact of the previously disclosed acquisitions of pet food businesses on as reported volume was 0.5%, 2.5% and 1.0% for Total Company, Hill's and Developed Markets, respectively.

 

(2) Emerging Markets include Latin America, Asia (excluding Japan), Africa/Eurasia and Central Europe.

Table 8

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Three Months Ended December 31, 2022 and 2021

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

Selling, General and Administrative Expenses

2022

2021

 

Selling, general and administrative expenses, GAAP

$

1,633

 

$

1,598

 

 

2022 Global Productivity Initiative

 

(1

)

 

 

 

Selling, general and administrative expenses, non-GAAP

$

1,632

 

$

1,598

 

 

 

 

 

 

 

 

 

 

Other (Income) Expense, Net

2022

2021

 

Other (income) expense, net, GAAP

$

18

 

$

25

 

 

2022 Global Productivity Initiative

 

(14

)

 

 

 

Acquisition-related costs

 

(3

)

 

 

 

Other (income) expense, net, non-GAAP

$

1

 

$

25

 

 

 

 

 

 

 

 

 

 

Operating Profit

2022

2021

% Change

Operating profit, GAAP

$

202

 

$

365

 

(45

)%

Goodwill and intangible assets impairment charges

 

721

 

 

571

 

 

2022 Global Productivity Initiative

 

15

 

 

 

 

Acquisition-related costs

 

3

 

 

 

 

Operating profit, non-GAAP

$

941

 

$

936

 

1

%

 

 

 

 

 

 

 

Basis Point

Operating Profit Margin

2022

2021

Change

Operating profit margin, GAAP

 

4.4

%

 

8.3

%

(390

)

Goodwill and intangible assets impairment charges

 

15.5

%

 

13

%

 

2022 Global Productivity Initiative

 

0.3

%

 

%

 

Acquisition-related costs

 

0.1

%

 

%

 

Operating profit margin, non-GAAP

 

20.3

%

 

21.3

%

(100

)

 

 

Non-service related post retirement cost

2022

2021

 

Non-service related post retirement cost, GAAP

$

15

 

$

18

 

 

2022 Global Productivity Initiative

 

(2

)

 

 

 

Non-service post retirement cost, non-GAAP

$

13

 

$

18

 

 

Table 8

Continued

Colgate-Palmolive Company

 

Non-GAAP Reconciliations

 

For the Three Months Ended December 31, 2022 vs. 2021

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

2022

 

Income Before

Income Taxes

 

Provision For

Income Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Net Income

Attributable To

Colgate-

Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted

Earnings

Per Share

As Reported GAAP

$

132

$

89

$

43

$

5

67.4

%

$

0.01

Goodwill and intangible assets impairment charges

 

721

 

101

 

620

 

620

(45.1

)%

 

0.74

2022 Global Productivity Initiative

 

17

 

3

 

14

 

14

(0.1

)%

 

0.02

Acquisition-related costs

 

3

 

1

 

2

 

2

%

 

Non-GAAP

$

873

$

194

$

679

$

641

22.2

%

$

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

Income Before

Income Taxes

 

Provision For

Income Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Net Income

Attributable To

Colgate-

Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted

Earnings

Per Share

As Reported GAAP

$

324

$

136

$

188

$

148

42.0

%

$

0.18

Goodwill and intangible assets impairment charges

 

571

 

53

 

518

 

518

(20.9

)%

 

0.61

Non-GAAP

$

895

$

189

$

706

$

666

21.1

%

$

0.79

The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding.

 

Notes:

(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

 

(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes.

Table 9

Colgate-Palmolive Company

 

 

Non-GAAP Reconciliations

 

 

For the Twelve Months Ended December 31, 2022 vs. 2021

 

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

 

 

 

Selling, General and Administrative Expenses

2022

2021

 

Selling, general and administrative expenses, GAAP

$

6,565

 

$

6,407

 

 

2022 Global Productivity Initiative

 

(5

)

 

 

 

Selling, general and administrative expenses, non-GAAP

$

6,560

 

$

6,407

 

 

 

 

 

 

 

 

 

 

Other (Income) Expense, Net

2022

2021

 

Other (income) expense, net, GAAP

$

69

 

$

65

 

 

2022 Global Productivity Initiative

 

(90

)

 

 

 

Gain on the sale of land in Asia Pacific

 

47

 

 

 

 

Acquisition-related costs

 

(19

)

 

 

 

Value-added tax matter in Brazil

 

 

 

26

 

 

Other (income) expense, net, non-GAAP

$

7

 

$

91

 

 

 

 

 

 

 

 

 

 

Operating Profit

2022

2021

% Change

Operating profit, GAAP

$

2,893

 

$

3,332

 

(13

)%

Goodwill and intangible assets impairment charges

 

721

 

 

571

 

 

2022 Global Productivity Initiative

 

95

 

 

 

 

Gain on the sale of land in Asia Pacific

 

(47

)

 

 

 

Acquisition-related costs

 

19

 

 

 

 

Value-added tax matter in Brazil

 

 

 

(26

)

 

Operating profit, non-GAAP

$

3,681

 

$

3,877

 

(5

)%

 

 

 

 

 

 

 

Basis Point

Operating Profit Margin

2022

2021

Change

Operating profit margin, GAAP

 

16.1

%

 

19.1

%

(300

)

Goodwill and intangible assets impairment charges

 

4.0

%

 

3.4

%

 

2022 Global Productivity Initiative

 

0.5

%

 

%

 

Gain on the sale of land in Asia Pacific

 

(0.2

)%

 

%

 

Acquisition-related costs

 

0.1

%

 

%

 

Value-added tax matter in Brazil

 

%

 

(0.2

)%

 

Operating profit margin, non-GAAP

 

20.5

%

 

22.3

%

(180

)

 

 

 

 

Interest (Income) Expense, Net

2022

2021

 

Interest (income) expense, net, GAAP

$

153

 

$

175

 

 

Loss on early extinguishment of debt

 

 

 

(75

)

 

Interest (income) expense, net, non-GAAP

$

153

 

$

100

 

 

 

 

 

 

 

 

 

 

Non-service related post retirement cost

2022

2021

 

Non-service related post retirement cost, GAAP

$

80

 

$

70

 

 

2022 Global Productivity Initiative

 

(15

)

 

 

 

Non-service post retirement cost, non-GAAP

$

65

 

$

70

 

 

Table 9

Continued

Colgate-Palmolive Company

 

 

Non-GAAP Reconciliations

 

 

For the Twelve Months Ended December 31, 2022 vs. 2021

 

 

(Dollars in Millions Except Per Share Amounts) (Unaudited)

 

 

 

 

 

 

 

2022

 

Income

Before

Income Taxes

 

Provision

For Income

Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Less: Income

Attributable to

Noncontrolling

Interests

 

Net Income

Attributable

To

Colgate-

Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted

Earnings

Per Share

As Reported GAAP

$

2,660

 

$

693

 

$

1,967

 

$

182

 

$

1,785

 

26.1

%

$

2.13

 

Goodwill and intangible assets impairment charges

 

721

 

 

101

 

 

620

 

 

 

 

620

 

(2.6

)%

 

0.74

 

2022 Global Productivity Initiative

 

110

 

 

22

 

 

88

 

 

1

 

 

87

 

(0.1

)%

 

0.10

 

Gain on the sale of land in Asia Pacific

 

(47

)

 

(11

)

 

(36

)

 

(21

)

 

(15

)

%

 

(0.02

)

Acquisition-related costs

 

19

 

 

3

 

 

16

 

 

 

 

16

 

(0.1

) %

 

0.02

 

Non-GAAP

$

3,463

 

$

808

 

$

2,655

 

$

162

 

$

2,493

 

23.3

%

$

2.97

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

2021

 

Income

Before

Income Taxes

 

Provision

For Income

Taxes(1)

 

Net Income

Including

Noncontrolling

Interests

 

Less: Income

Attributable to

Noncontrolling

Interests

 

Net Income

Attributable

To

Colgate-

Palmolive

Company

 

Effective

Income

Tax Rate(2)

 

Diluted

Earnings

Per Share

As Reported GAAP

$

3,087

 

$

749

 

$

2,338

 

$

172

 

$

2,166

 

24.3

%

$

2.55

 

Goodwill and intangible assets impairment charges

 

571

 

 

53

 

 

518

 

 

 

 

518

 

(2.1

)%

 

0.61

 

Loss on early extinguishment of debt

 

75

 

 

20

 

 

55

 

 

 

 

55

 

(0.3

)%

 

0.07

 

Value-added tax matter in Brazil

 

(26

)

 

(6

)

 

(20

)

 

 

 

(20

)

0.1

%

 

(0.02

)

Non-GAAP

$

3,707

 

$

816

 

$

2,891

 

$

172

 

$

2,719

 

22.0

%

$

3.21

 

The impact of non-GAAP adjustments may not necessarily equal the difference between “GAAP” and “non-GAAP” as a result of rounding.

 

Notes:

(1) The income tax effect on non-GAAP items is calculated based upon the tax laws and statutory income tax rates applicable in the tax jurisdiction(s) of the underlying non-GAAP adjustment.

 

(2) The impact of non-GAAP items on the Company’s effective tax rate represents the difference in the effective tax rate calculated with and without the non-GAAP adjustment on Income before income taxes and Provision for income taxes.

 

Contacts

John Faucher 212-310-3653

Hope Spiller 212-310-2291

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