Colgate-Palmolive 2015 Annual Report

Financial Highlights

(Dollars in Millions Except Per Share Amounts)

2015 2014 Change
Worldwide Net Sales $16,034 $17,277 -7.0%
Organic Sales Growth     +5.0%
Gross Profit Margin 58.6% 58.5% +10 basis points
Operating Profit $2,789 $3,557 -22%
Operating Profit Margin 17.4% 20.6% -320 basis points
Net Income Attributable to Colgate-Palmolive Company (1) $1,384 $2,180 -37%
Diluted Earnings Per Share (1) $1.52 $2.36 -36%
Dividends Paid Per Share $1.50 $1.42 +6%
Operating Cash Flow $2,949 $3,298 -11%
Year-end Stock Price $66.62 $69.19 -4%
  • (1)Net income attributable to Colgate-Palmolive Company and diluted earnings per share in 2015 include an aftertax gain of $120 million ($0.13 per diluted share) from the sale of the Company’s laundry detergent business in the South Pacific, an aftertax charge of $1,058 million ($1.16 per diluted share) related to a change in accounting for the Company’s Venezuelan operations and aftertax charges of $234 million ($0.26 per diluted share) related to the 2012 Restructuring Program and certain other items. Net income attributable to Colgate-Palmolive Company and diluted earnings per share in 2014 include aftertax charges of $532 million ($0.57 per diluted share) related to the 2012 Restructuring Program, remeasurement charges resulting from effective devaluations in Venezuela and certain other items. A complete reconciliation between reported results (GAAP) and results excluding the above noted items (Non-GAAP), including a description of such items, is available on Colgate’s website and on the Non-GAAP Reconciliation page of this report.

2015 Net Sales By
Geographic Region

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6%
15%
27%
18%
20%
14%

2015 Net Sales By
Market Maturity

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49%
51%

net sales

($ billions)

16.7
'11
17.1
'12
17.4
'13
17.3
'14
16.0
'15

gross profit margin

(% of sales)

57.6 (1)
57.3
'11
58.3 (1)
58.1
'12
58.8 (1)
58.6
'13
58.7 (1)
58.5
'14
58.7 (1)
58.6
'15

diluted earnings (3)

($ per share)

2.51 (2)
2.47
'11
2.68 (2)
2.57
'12
2.84(2)
2.38
'13
2.93 (2)
2.36
'14
2.81 (2)
1.52
'15

dividends paid (3)

($ per share)

1.14
'11
1.22
'12
1.33
'13
1.42
'14
1.50
'15
  • (1) 2013-2015 exclude charges related to the 2012 Restructuring Program. 2012-2014 exclude costs related to the sale of land in Mexico. 2011 excludes costs associated with various business realignment and other cost-saving initiatives. A complete reconciliation between reported results (GAAP) and results excluding these items (Non-GAAP), including a description of such items, is available on Colgate’s website and on the Non-GAAP Reconciliation page of this report.
  • (2) 2015 excludes a gain from the sale of the Company’s laundry detergent business in the South Pacific and excludes charges related to a change in accounting for the Company’s Venezuelan operations, the 2012 Restructuring Program and certain other 2015 items. 2013 and 2014 exclude charges related to the 2012 Restructuring Program, remeasurement charges resulting from devaluations and effective devaluations in Venezuela and certain other 2013 and 2014 items. 2012 excludes charges related to the 2012 Restructuring Program and certain other 2012 items. 2011 excludes costs associated with business realignment and other cost-saving initiatives and certain other 2011 items. A complete reconciliation between reported results (GAAP) and results excluding these items (Non-GAAP), including a description of such items, is available on Colgate’s website and on the Non-GAAP Reconciliation page of this report.
  • (3) Per share amounts have been restated for the 2013 two-for-one stock split.

Reconciliation Of Non-GAAP Financial Measures

The following is provided to supplement certain financial measures discussed in the letter to shareholders and the financial highlights section of this report both as reported (on a GAAP basis) and excluding the impact of certain items (Non-GAAP) as explained below. Management believes these Non-GAAP financial measures provide useful supplemental information to investors regarding the performance of the Company's ongoing operations. The Company uses these financial measures internally in its budgeting process and as a factor in determining compensation. While the Company believes that these Non-GAAP financial measures are useful in evaluating the Company's business, 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. In addition, these Non-GAAP financial measures may not be the same as similar measures presented by other companies. This report also discusses organic sales growth (net sales growth excluding the impact of foreign exchange, acquisitions and divestments). For a reconciliation of organic sales growth to net sales growth for full year 2015, see page 39 of the Company’s Annual Report on Form 10-K.

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(Dollars in Millions Except Per Share Amounts)

Gross Profit
Margin
Operating
Profit
Net
Income
Diluted
EPS
2015
As Reported (GAAP)
Venezuela Accounting Change (1)
2012 Restructuring Program (2)
Sale of Non-Core Product Lines (3)
Venezuela Remeasurements (4)
Foreign Competition Law Matter (5)
Foreign Tax Matter (6)
Excluding Items (Non-GAAP)
58.6% $2,789 $1,384 $1.52
1,084 1,058 1.16
0.1% 254 183 0.20
(187) (120) (0.13)
34 22 0.02
14 14 0.02
15 0.02
58.7% $3,988 $2,556 $2.81

(Dollars in Millions Except Per Share Amounts)

Gross Profit
Margin
Operating
Profit
Net
Income
Diluted
EPS
2014
As Reported (GAAP)
2012 Restructing Program (2)
Venezuela Remeasurements (4)
Foreign Competition Law Matters (5)
Mexico Land Sale (7)
Foreign Tax Matter (6)
Excluding Items (Non-GAAP)
58.5% $3,557 $2,180 $2.36
0.2% 286 208 0.23
327 214 0.23
41 41 0.04
4 3
66 0.07
58.7% $4,215 $2,712 $2.93

(Dollars in Millions Except Per Share Amounts)

Gross Profit
Margin
Operating
Profit
Net
Income
Diluted
EPS
2013
As Reported (GAAP)
2012 Restructuring Program (2)
Venezuela Remeasurements (4)
Foreign Competition Law Matter (5)
Mexico Land Sale (7)
Excluding Items (Non-GAAP)
58.6% $3,556 $2,241 $2.38
0.2% 371 278 0.30
172 111 0.12
23 23 0.03
18 12 0.01
58.8% $4,140 $2,665 $2.84

(Dollars in Millions Except Per Share Amounts)

Gross Profit
Margin
Operating
Profit
Net
Income
Diluted
EPS
2012
As Reported (GAAP)
2012 Restructuring Program (2)
Mexico Land Sale (7)
Business Realignment Initiatives (8)
Excluding Items (Non-GAAP)
58.1% $3,889 $2,472 $2.57
89 70 0.07
0.2% 24 18 0.02
21 14 0.02
58.3% $4,023 $2,574 $2.68

(Dollars in Millions Except Per Share Amounts)

Gross Profit
Margin
Operating
Profit
Net
Income
Diluted
EPS
2011
As Reported (GAAP)
Foreign Competition Law Matter (5)
Mexico Land Sale (7)
Business Realignment Initiatives (8)
Sale of Non-Core Product Lines (3)
Excluding Items (Non-GAAP)
57.3% $3,841 $2,431 $2.47
21 21 0.02
13 9 0.01
0.3% 190 147 0.15
(207) (135) (0.14)
57.6% $3,858 $2,473 $2.51

Note: Per share amounts have been restated to reflect the 2013 two-for-one stock split.

  • (1) In 2015, the Company recorded a $1,058 million aftertax charge resulting from a change in accounting for the Company’s Venezuelan operations.
  • (2) Charges relate to the 2012 Restructuring Program that began in the fourth quarter of 2012.
  • (3) In 2015, the Company recorded a $120 million aftertax gain on the sale of its laundry detergent business in the South Pacific. In 2011, the Company recorded a $135 million aftertax gain on the sale of its laundry detergent business in Colombia.
  • (4) In 2015 and 2014, the Company recorded $22 million and $214 million, respectively, of aftertax remeasurement charges related to effective devaluations in Venezuela. In 2013, the Company recorded a $111 million aftertax charge related to a devaluation in Venezuela.
  • (5) Represents charges for a competition law matter in Australia in 2015 and competition law matters in Europe in 2011, 2013 and 2014.
  • (6) Represents income tax charges related to foreign tax matters.
  • (7) Represents costs related to the sale of land in Mexico.
  • (8) Represents costs associated with various global business realignment and other cost-saving initiatives.