10-KPeriod: FY2023

COLGATE PALMOLIVE CO Annual Report, Year Ended Dec 31, 2023

Filed February 15, 2024For Securities:CL

Summary

Colgate-Palmolive Company (CL) reported a solid financial performance for the fiscal year ending December 31, 2023, demonstrating resilience in a challenging global economic environment. The company achieved net sales growth of 8.5%, driven primarily by net selling price increases of 10.0%, with a slight volume decline of 0.5%. Organic sales, a key metric excluding foreign exchange, acquisitions, and divestments, also grew by a robust 8.5%, indicating underlying business strength. The Pet Nutrition segment, particularly Hill's Pet Nutrition, was a significant growth driver, with net sales increasing by 15.5% and organic sales up 10.5%. The Oral, Personal, and Home Care segment also saw net sales increase by 6.5% and organic sales by 8.0%. Despite facing increased raw and packaging material costs, the company successfully managed its gross profit margin, which improved to 58.2% from 57.0% in the prior year, aided by pricing actions and cost-saving initiatives. Diluted earnings per share (EPS) saw a notable increase to $2.77 from $2.13, reflecting improved profitability.

Financial Highlights

53 data points
Beta

Revenue

$19.46B

58.2% Gross Margin

Net Income

$2.30B

11.8% Net Margin

EPS (Diluted)

$2.77

Total Assets

$16.39B

Cash & Equivalents

$966.00M

Free Cash Flow

$3.75B

Financial Statements
Beta
Revenue$19.46B
Cost of Revenue$8.13B
Gross Profit$11.33B
R&D Expenses$343.00M
SG&A Expenses$7.15B
Operating Income$3.98B
Interest Expense$299.00M
Net Income$2.30B
EPS (Basic)$2.78
EPS (Diluted)$2.77
Shares Outstanding (Basic)827.40M
Shares Outstanding (Diluted)829.20M

Key Highlights

  • 1Colgate-Palmolive reported an 8.5% increase in Net Sales for 2023, driven by a 10.0% increase in net selling prices, despite a 0.5% volume decline.
  • 2Organic sales grew by 8.5%, indicating strong underlying business performance excluding currency fluctuations and acquisition/divestment impacts.
  • 3The Pet Nutrition segment (Hill's Pet Nutrition) showed significant strength with a 15.5% increase in Net Sales and 10.5% organic sales growth.
  • 4Gross profit margin improved to 58.2% in 2023 from 57.0% in 2022, benefiting from pricing actions and cost savings initiatives.
  • 5Diluted Earnings Per Share (EPS) increased to $2.77 in 2023, up from $2.13 in 2022, signaling enhanced profitability.
  • 6The company continued to invest in advertising and promotion, with SG&A expenses increasing to 36.8% of Net Sales, up from 36.5% in the prior year, reflecting a strategic focus on brand support.
  • 7Colgate-Palmolive demonstrated strong cash flow generation, with net cash provided by operations increasing to $3,745 million in 2023 from $2,556 million in 2022.

Frequently Asked Questions

Colgate-Palmolive's net sales growth in 2023 was primarily driven by net selling price increases of 10.0%. While volume saw a slight decline of 0.5%, the overall net sales increased by 8.5%. The Pet Nutrition segment was a particularly strong contributor to this growth.

Colgate-Palmolive experienced higher raw and packaging material costs in 2023. The company managed this by implementing net selling price increases and through cost-saving initiatives under its 'funding-the-growth' programs. These measures helped to offset the impact of increased material costs and improve the gross profit margin.

The company anticipates continued challenging global macroeconomic, political, and market conditions, including persistent inflation and higher interest rates, which may impact consumer demand. Colgate-Palmolive expects continued volatility across its categories but remains confident in its strategy, strong financial position, and brand portfolio to navigate these challenges and drive shareholder value.

Colgate-Palmolive is focused on its 2025 Sustainability & Social Impact Strategy, which includes making all packaging recyclable, reusable, or compostable by 2025, with significant progress made on recyclable toothpaste tubes. The company is also working to reduce its use of virgin plastic and accelerate action on climate change through science-based emissions targets and renewable energy initiatives, aiming for Net Zero by 2040.