10-KPeriod: FY2011

COLGATE PALMOLIVE CO Annual Report, Year Ended Dec 31, 2011

Filed February 23, 2012For Securities:CL

Summary

Colgate-Palmolive Company's 2011 10-K filing highlights a year of steady growth driven by volume increases and strategic acquisitions, particularly the Sanex personal care business. The company continues to benefit from its strong global presence, with approximately 80% of net sales generated outside the U.S., including a significant portion from emerging markets. Despite facing challenges such as foreign currency fluctuations, volatile commodity costs, and intense competition, Colgate-Palmolive demonstrated resilience, supported by its robust "funding-the-growth" initiatives aimed at cost savings and efficiency. The company's core segments, Oral, Personal and Home Care, and Pet Nutrition, performed well, with notable contributions from key brands and geographic regions. Financially, the company maintained strong operational cash flow, which supported its capital allocation strategies, including dividends and share repurchases. While certain one-time charges and integration costs, particularly related to the Sanex acquisition and restructuring efforts, impacted reported net income, the underlying operational performance remained solid. Management expressed confidence in the company's strategic initiatives and financial position to navigate future economic uncertainties and continue delivering shareholder value.

Financial Highlights

55 data points
Beta

Revenue

$16.73B

57.3% Gross Margin

Net Income

$2.43B

14.5% Net Margin

EPS (Diluted)

$2.47

Total Assets

$12.72B

Cash & Equivalents

$878.00M

Free Cash Flow

$2.36B

Financial Statements
Beta
Revenue$16.73B
Cost of Revenue$7.14B
Gross Profit$9.59B
R&D Expenses$262.00M
SG&A Expenses$5.76B
Operating Income$3.84B
Interest Expense$59.00M
Net Income$2.43B
EPS (Basic)$2.49
EPS (Diluted)$2.47
Shares Outstanding (Basic)976.70M
Shares Outstanding (Diluted)984.10M

Key Highlights

  • 1Worldwide Net sales increased by 7.5% to $16,734 million in 2011, driven by 3.5% volume growth and a 3.0% positive foreign exchange impact.
  • 2The acquisition of the Sanex personal care business contributed 1.0% to worldwide Net sales and volume growth in 2011.
  • 3Oral, Personal and Home Care segment sales grew 8.0%, while Hill's Pet Nutrition segment sales increased by 4.5%.
  • 4Gross profit margin slightly decreased to 57.3% from 59.1% in the prior year, primarily due to higher raw and packaging material costs.
  • 5Operating profit increased by 10% to $3,841 million, demonstrating operational leverage despite some one-time charges.
  • 6Net income attributable to Colgate-Palmolive was $2,431 million, or $4.94 per diluted share, impacted by business realignment costs and acquisition-related expenses.
  • 7The company repurchased 20.4 million common shares under its share repurchase programs in 2011, demonstrating a commitment to returning capital to shareholders.

Frequently Asked Questions

Colgate-Palmolive's sales growth in 2011 was primarily driven by a combination of volume growth (3.5%), net selling price increases (1.0%), and a positive foreign exchange impact (3.0%). The acquisition of the Sanex personal care business also contributed to the overall sales increase.

The company identified several key risks, including significant exposure to international operations and foreign currency fluctuations, uncertain global economic conditions, intense competition, changes in retail customer policies, the dependency on successful new product innovation, volatility in raw material costs, potential damage to its reputation, product liability claims, regulatory compliance, and risks associated with global manufacturing and sourcing.

The acquisition of Sanex in June 2011 contributed positively to net sales and volume growth. However, it also incurred transaction costs and was part of broader business realignment initiatives which, along with other costs, impacted reported net income. The company financed the acquisition using available cash, investment portfolio proceeds, and commercial paper issuance.

Colgate-Palmolive employs 'funding-the-growth' initiatives to drive continuous cost reduction and increase asset utilization, aiming to become more effective and efficient across its businesses. These initiatives are crucial for offsetting increased costs, such as raw material price increases, and funding growth opportunities through innovation and marketing.