10-KPeriod: FY2001

COLGATE PALMOLIVE CO Annual Report, Year Ended Dec 31, 2001

Filed March 20, 2002For Securities:CL

Summary

Colgate-Palmolive Company's 2001 10-K filing reveals a financially robust year, marked by steady sales growth and improved profitability across its key segments: Oral, Personal, and Household Care, and Pet Nutrition. The company demonstrated strong operational execution, with a notable 1.5% increase in worldwide net sales to $9.43 billion, driven by a solid 5.0% volume growth. This growth was achieved despite some foreign currency headwinds, highlighting the underlying strength of consumer demand for its diverse product portfolio. Profitability saw a significant uplift, with Earnings Before Interest and Taxes (EBIT) rising 5% to $1.83 billion, supported by enhanced gross profit margins (55.1%) and effective cost management, particularly in selling, general, and administrative expenses. The company also maintained a healthy effective tax rate and generated substantial net income of $1.15 billion. Colgate-Palmolive's commitment to shareholder returns is evident through increased dividend payments and substantial share repurchases, underscoring a focus on delivering value to investors while strategically managing its global operations and investing in innovation.

Key Highlights

  • 1Worldwide net sales grew by 1.5% to $9.43 billion in 2001, driven by 5.0% volume growth.
  • 2EBIT increased by 5% to $1.83 billion, reflecting improved margins and cost controls.
  • 3Gross profit margin expanded to 55.1% from 54.4% in the prior year, attributed to supply chain efficiencies and a focus on higher-margin products.
  • 4Net income reached $1.15 billion, or $1.89 per diluted share, up from $1.06 billion, or $1.70 per diluted share, in 2000.
  • 5The company returned significant capital to shareholders through dividends ($396.7 million) and share repurchases ($1.23 billion).
  • 6Colgate-Palmolive maintained a strong liquidity position with $1.6 billion in cash from operations and $1.37 billion in unused lines of credit.
  • 7The company experienced strong volume growth in key international markets, including Latin America and Asia/Africa, despite some currency challenges.

Frequently Asked Questions

Sales growth in 2001 was primarily driven by a 5.0% increase in sales volume across its Oral, Personal, and Household Care segments, and its Pet Nutrition business. New product introductions and strong performance in key international markets, particularly Latin America and Asia/Africa, contributed significantly to this volume expansion.

Colgate-Palmolive improved profitability through strong volume growth, enhanced gross profit margins due to supply chain efficiencies and a focus on higher-margin products, and effective cost management. Selling, general, and administrative expenses as a percentage of sales decreased, indicating successful overhead reduction initiatives.

The company demonstrated a commitment to shareholder returns by increasing dividend payments to $396.7 million in 2001 and engaging in substantial share repurchases totaling $1.23 billion. This indicates a balanced approach to reinvesting in the business and rewarding shareholders.

The most significant disclosed legal matter involves an administrative proceeding and a tax assessment in Brazil related to the financing of the Kolynos acquisition, potentially resulting in fines and assessments totaling approximately $150 million. Management believes the company will prevail on appeal. Environmental expenditures were reported in the range of $27 million for 2001, with similar future expectations.