10-K/APeriod: FY2017

COLGATE PALMOLIVE CO Annual Report (Amendment), Year Ended Dec 31, 2017

Filed February 21, 2018For Securities:CL

Summary

Colgate-Palmolive Company's 2017 Form 10-K report highlights the company's continued focus on its core Oral, Personal, and Home Care, and Pet Nutrition segments. Despite facing a challenging global macroeconomic environment with increased competition and volatile raw material costs, Colgate-Palmolive demonstrated resilience, with net sales increasing slightly year-over-year. The company's strategic initiatives, including the Global Growth and Efficiency Program, are aimed at driving sustainable growth and enhancing leadership positions in key product categories. Key financial and operational aspects include a slight increase in net sales driven by modest volume growth and pricing, alongside a strong gross profit margin maintained through cost savings initiatives like 'funding-the-growth.' The company also reported a significant charge related to the U.S. Tax Cuts and Jobs Act of 2017. Colgate-Palmolive continues to prioritize shareholder returns through dividends and share repurchases, underscoring its commitment to delivering value despite operational headwinds.

Financial Highlights

56 data points
Beta

Revenue

$15.45B

60.0% Gross Margin

Net Income

$2.02B

13.1% Net Margin

EPS (Diluted)

$2.28

Total Assets

$12.68B

Cash & Equivalents

$1.53B

Free Cash Flow

$2.50B

Financial Statements
Beta
Revenue$15.45B
Cost of Revenue$6.17B
Gross Profit$9.28B
R&D Expenses$285.00M
SG&A Expenses$5.40B
Operating Income$3.71B
Interest Expense$156.00M
Net Income$2.02B
EPS (Basic)$2.30
EPS (Diluted)$2.28
Shares Outstanding (Basic)881.80M
Shares Outstanding (Diluted)887.80M

Key Highlights

  • 1Colgate-Palmolive operates in two primary segments: Oral, Personal, and Home Care; and Pet Nutrition, with a global presence in over 200 countries and territories.
  • 2Net sales for 2017 were $15,454 million, a 1.5% increase from 2016, driven by volume, pricing, and foreign exchange.
  • 3The 'Global Growth and Efficiency Program' is ongoing, aiming to streamline operations, reduce costs, and enhance long-term business performance, with projected annual pretax savings of $560-$635 million.
  • 4The company experienced a significant charge of $275 million related to the U.S. Tax Cuts and Jobs Act of 2017, impacting its effective tax rate.
  • 5Colgate-Palmolive maintained strong gross profit margins, with non-GAAP gross profit margin at 60.5% in 2017, driven by cost savings and pricing, partially offset by increased raw material costs.
  • 6The company returned value to shareholders through dividends ($1,529 million) and share repurchases ($1,399 million) in 2017.
  • 7Significant risks identified include international operations exposure (currency fluctuations, political instability), intense competition, regulatory changes, and supply chain disruptions.

Frequently Asked Questions

Colgate-Palmolive's net sales growth in 2017 was driven by a combination of factors: a 0.5% increase in volume, a 0.5% increase in net selling prices, and a 0.5% positive impact from foreign exchange. Organic sales, which exclude these external factors, grew by 1.0%.

The company is executing its 'Global Growth and Efficiency Program,' which aims to streamline operations, expand commercial hubs, extend shared business services, and optimize its global supply chain. This program is projected to generate annual pretax savings between $560 million and $635 million once fully implemented.

The Tax Cuts and Jobs Act (TCJA) led to a provisional charge of $275 million in 2017. This charge is primarily related to the mandatory deemed repatriation tax on undistributed earnings of foreign subsidiaries and a reduction in the U.S. corporate income tax rate. The company expects the TCJA to lower its future effective income tax rate.

Colgate-Palmolive identifies several key risks, including: significant exposure from its international operations (currency fluctuations, political and economic instability), intense competition from global and local players, evolving legal and regulatory requirements (including ingredient scrutiny like triclosan), dependence on key retailers, potential disruptions to its global supply chain, and cybersecurity threats.