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Colgate-Palmolive Co. Message Board

  • bluecheese4u bluecheese4u Jan 31, 2013 3:36 PM Flag

    Colgate Announces 4th Quarter and Full Year 2012 Results

     

    Colgate Announces 4th Quarter and Full Year 2012 Results

    Operating Profit, Net Income and Diluted EPS All Up for 4Q and Full Year

    January 31, 2013
    NEW YORK--(BUSINESS WIRE)-- Colgate-Palmolive Company (NYSE:CL) today reported worldwide Net sales of $4,286 million in fourth quarter 2012, an increase of 2.5% versus fourth quarter 2011. Global unit volume grew 1.5%, pricing increased 2.5% and foreign exchange was negative 1.5%. Organic sales (Net sales excluding foreign exchange, acquisitions and divestments) grew 4.0%.

    Net income and Diluted earnings per share in fourth quarter 2012 were $598 million and $1.26, respectively. Net income in fourth quarter 2012 included $73 million ($0.15 per diluted share) of aftertax charges resulting from the implementation of the previously disclosed four-year Global Growth and Efficiency Program (the "2012 Restructuring Program") and costs associated with the sale of land in Mexico.

    Net income and Diluted earnings per share in fourth quarter 2011 were $590 million and $1.21, respectively. As previously disclosed, Net income in fourth quarter 2011 included aftertax charges of $44 million ($0.09 per diluted share) resulting from the items described in Table 8.

    Excluding the above noted items in both periods, Net income in fourth quarter 2012 was $671 million, an increase of 6% versus fourth quarter 2011, and Diluted earnings per share in fourth quarter 2012 was $1.41, an increase of 8% versus fourth quarter 2011.

    Gross profit margin was 58.4% in fourth quarter 2012 versus 57.4% in the year ago quarter. Excluding the above noted items in both periods, Gross profit margin was 58.6% in fourth quarter 2012, an increase of 90 basis points versus the year ago quarter, as higher pricing and cost savings from the Company's funding-the-growth initiatives more than offset the impact of increases in raw and packaging material costs and higher production costs in Venezuela.

    Selling, general and administrative expenses were 34.7% of Net sales in fourth quarter 2012 versus 34.6% in fourth quarter 2011. Excluding the above noted items in both periods, Selling, general and administrative expenses increased by 10 basis points to 34.6% of Net sales in fourth quarter 2012, as overhead expenses increased by 20 basis points and advertising decreased by 10 basis points. Worldwide advertising spending on an absolute basis increased 1.4% versus the year ago quarter to $434 million.

    Operating profit increased 2% to $942 million in fourth quarter 2012 compared to $923 million in fourth quarter 2011. Excluding the above noted items in both periods, Operating profit increased 6% to $1,035 million.

    Net cash provided by operations for the full year 2012 increased 10% to $3,196 million compared to $2,896 million for the full year 2011. The increase was driven by strong operating earnings as well as a continued tight focus on working capital, especially accounts receivable and inventory management. Free cash flow before dividends exceeded 100% of Net income. Working capital as a percentage of Net sales was 0.7%, even with the year ago period.

    For the full year 2012, worldwide Net sales were $17,085 million, up 2.0% versus full year 2011. Global unit volume grew 3.0%, pricing increased 3.0% and foreign exchange was negative 4.0%. Excluding divested businesses, global unit volume grew 3.5%. The Sanex acquisition contributed 0.5% to full year sales and volume growth. Organic sales grew 6.0%.

    Net income and Diluted earnings per share for full year 2012 were $2,472 million and $5.15, respectively. Full year 2012 results include $102 million ($0.21 per diluted share) of aftertax charges resulting from the implementation of the 2012 Restructuring Program, the implementation of the previously disclosed business realignment and other cost-saving initiatives and costs associated with the sale of land in Mexico.

    Net income and Diluted earnings per share for full year 2011 were $2,431 million and $4.94, respectively. As previously disclosed, full year 2011 results included net aftertax charges of $42 million ($0.09 per diluted share) resulting from the items described in Table 9.

    Excluding the items noted above in both periods, Net income for full year 2012 increased 4% versus full year 2011 and Diluted earnings per share increased 7% versus full year 2011.

    Gross profit margin was 58.1% for full year 2012 versus 57.3% in full year 2011. Excluding the items noted above in both periods, gross profit margin was 58.3% in full year 2012, up 70 basis points versus full year 2011, as higher pricing and cost savings from the Company's funding-the-growth initiatives more than offset the impact of increases in raw and packaging material costs and negative foreign exchange transaction costs.

    As previously disclosed, the 2012 Restructuring Program is projected to result in cumulative pretax charges, once all phases are approved and implemented, totaling between $1,100 and $1,250 million ($775 and $875 million aftertax), with pretax savings projected to be in the range of $365 to $435 million ($275 to $325 million aftertax) annually by the fourth year of the program. Fourth quarter projects under the 2012 Restructuring Program have been initiated largely as planned, with savings from the 2012 Restructuring Program expected to be realized beginning in 2013.

    Ian Cook, Chairman, President and Chief Executive Officer, commented on the results and outlook excluding the 2012 and 2011 items noted above, "We are very pleased to have ended the year with another quarter of strong profitability. Gross profit margin, operating profit margin and net income as a percent of sales all increased versus the year ago period.

    "As we began 2012, we anticipated an intense competitive environment, and challenging foreign currency exchange and macroeconomic conditions worldwide. Despite this, we planned to improve worldwide market shares and volume growth, achieve gross margin expansion, increase commercial spending and grow diluted earnings per share at a double-digit rate, on a currency-neutral basis.

    "We are delighted that we were able to achieve all of these objectives in 2012. It was another year of healthy top-line growth as well, with organic sales increasing 6.0%, led by the emerging markets where organic sales grew a robust 10.0%. Pleasingly, this growth was well balanced between solid unit volume gains and higher pricing worldwide.

    "Colgate's global market shares in toothpaste and manual toothbrushes are both at record highs year to date. Colgate's share of the global toothpaste market strengthened to 44.6% year to date, up 0.5 share points versus year ago. Our global leadership in manual toothbrushes also strengthened during the quarter with Colgate's global market share in that category reaching 32.7% year to date, up 0.8 share points versus year ago.

    "Looking forward, we expect our growth momentum to continue as we enter 2013. Our new product pipeline is very full around the world and we are pleased that our global restructuring program is on track and proceeding smoothly. We also continue to be sharply focused on our aggressive funding-the-growth programs and our strategic worldwide pricing initiatives.

    "Based on this, we anticipate another year of gross margin expansion in 2013 and that diluted earnings per share will grow at a double-digit rate, on a dollar basis, excluding charges related to the 2012 Restructuring Program and absent any major currency devaluations or significant macroeconomic events."

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    • Colgate-Palmolive Company





      Condensed Consolidated Statements of Income





      For the Three Months Ended December 31, 2012 and 2011





      (Dollars in Millions Except Per Share Amounts) (Unaudited)





      2012

      2011



      Net sales

      $

      4,286

      $

      4,172



      Cost of sales

      1,781

      1,779



      Gross profit

      2,505

      2,393



      Gross profit margin

      58.4

      %

      57.4

      %



      Selling, general and administrative expenses

      1,487

      1,444



      Other expense, net

      76

      26



      Operating profit

      942

      923



      Operating profit margin

      22.0

      %

      22.1

      %



      Interest (income) expense, net

      (5

      )

      15



      Income before income taxes

      947

      908



      Provision for income taxes

      311

      283



      Effective tax rate

      32.8

      %

      31.2

      %



      Net income including noncontrolling interests

      636

      625



      Less: Net income attributable to noncontrolling interests

      38

      35



      Net income attributable to Colgate-Palmolive Company

      $

      598

      $

      590



      Earnings per common share

      Basic

      $

      1.27

      $

      1.22

      Diluted

      $

      1.26

      $

      1.21



      Average common shares outstanding

      Basic

      472.0

      483.8

      Diluted

      476.0

      487.5



      Table 2






      Colgate-Palmolive Company





      Condensed Consolidated Statements of Income





      For the Twelve Months Ended December 31, 2012 and 2011





      (Dollars in Millions Except Per Share Amounts) (Unaudited)





      2012

      2011



      Net sales

      $

      17,085

      $

      16,734



      Cost of sales

      7,153

      7,144



      Gross profit

      9,932

      9,590



      Gross profit margin

      58.1

      %

      57.3

      %



      Selling, general and administrative expenses

      5,930

      5,758



      Other (income) expense, net

      113

      (9

      )



      Operating profit

      3,889

      3,841



      Operating profit margin

      22.8

      %

      23.0

      %



      Interest expense, net

      15

      52



      Income before income taxes

      3,874

      3,789



      Provision for income taxes

      1,243

      1,235



      Effective tax rate

      32.1

      %

      32.6

      %



      Net income including noncontrolling interests

      2,631

      2,554



      Less: Net income attributable to noncontrolling interests

      159

      123



      Net income attributable to Colgate-Palmolive Company

      $

      2,472

      $

      2,431



      Earnings per common share

      Basic

      $

      5.19

      $

      4.98

      Diluted

      $

      5.15

      $

      4.94



      Average common shares outstanding

      Basic

      476.1

      488.3

      Diluted

      480.1

      492.0



      Table 3






      Colgate-Palmolive Company





      Condensed Consolidated Balance Sheets





      As of December 31, 2012 and 2011





      (Dollars in Millions) (Unaudited)







      December 31,

      December 31,

      2012

      2011



      Cash and cash equivalents

      $

      884

      $

      878

      Receivables, net

      1,668

      1,675

      Inventories

      1,365

      1,327

      Other current assets

      639

      522

      Property, plant and equipment, net

      3,842

      3,668

      Other assets, including goodwill and intangibles



      4,996





      4,654



      Total assets

      $

      13,394



      $

      12,724





      Total debt

      $

      5,230

      $

      4,810

      Other current liabilities

      3,432

      3,336

      Other non-current liabilities



      2,342





      2,037



      Total liabilities

      11,004

      10,183

      Total Colgate-Palmolive Company shareholders' equity

      2,189

      2,375

      Noncontrolling interests



      201





      166



      Total liabilities and shareholders' equity

      $

      13,394



      $

      12,724





      Supplemental Balance Sheet Information



      Debt less cash, cash equivalents and marketable securities*

      $

      4,230

      $

      3,860

      Working capital % of sales

      0.7

      %

      0.7

      %



      *

      Marketable securities of $116 and $72 as of December 31, 2012 and 2011, respectively, are included in Other current assets.



      Table 4






      Colgate-Palmolive Company





      Condensed Consolidated Statements of Cash Flows





      For the Twelve Months Ended December 31, 2012 and 2011





      (Dollars in Millions) (Unaudited)





      2012

      2011



      Operating Activities



      Net income including noncontrolling interests

      $

      2,631

      $

      2,554

      Adjustments to reconcile net income including noncontrolling interests to net cash provided by operations:

      Depreciation and amortization

      425

      421

      Restructuring and termination benefits, net of cash

      35

      103

      Gain before tax on sales of non-core product lines

      -

      (207

      )

      Voluntary benefit plan contributions

      (101

      )

      (178

      )

      Stock-based compensation expense

      120

      122

      Deferred income taxes

      63

      88

      Cash effects of changes in:

      Receivables

      19

      (130

      )

      Inventories

      (21

      )

      (130

      )

      Accounts payable and other accruals

      (5

      )

      199

      Other non-current assets and liabilities



      30





      54



      Net cash provided by operations

      3,196

      2,896



      Investing Activities



      Capital expenditures

      (565

      )

      (537

      )

      Sale of property and non-core product lines

      72

      263

      Purchases of marketable securities and investments

      (545

      )

      (356

      )

      Proceeds from sale of marketable securities and investments

      147

      423

      Payment for acquisitions, net of cash acquired

      (29

      )

      (966

      )

      Other



      55





      (40

      )

      Net cash used in investing activities

      (865

      )

      (1,213

      )



      Financing Activities



      Principal payments on debt

      (5,011

      )

      (4,429

      )

      Proceeds from issuance of debt

      5,452

      5,843

      Dividends paid

      (1,277

      )

      (1,203

      )

      Purchases of treasury shares

      (1,943

      )

      (1,806

      )

      Proceeds from exercise of stock options and excess tax benefits



      478





      353



      Net cash used in financing activities

      (2,301

      )

      (1,242

      )



      Effect of exchange rate changes on Cash and cash equivalents



      (24

      )



      (53

      )

      Net increase in Cash and cash equivalents

      6

      388

      Cash and cash equivalents at beginning of period



      878





      490



      Cash and cash equivalents at end of period

      $

      884



      $

      878





      Supplemental Cash Flow Information



      Free cash flow before dividends (Net cash provided by operations less capital expenditures)

      Net cash provided by operations

      $

      3,196

      $

      2,896

      Less: Capital expenditures



      (565

      )



      (537

      )

      Free cash flow before dividends

      $

      2,631



      $

      2,359





      Income taxes paid

      $

      1,280

      $

      1,007

      Sentiment: Hold

 
CL
69.17-0.05(-0.07%)Apr 24 4:00 PMEDT