Colgate-Palmolive takes a bite out of grime. The company is a top global maker and marketer of toothpaste and soap and cleaning products. Colgate-Palmolive also offers pet nutrition products through subsidiary Hill's Pet Nutrition, which makes Science Diet and Prescription Diet pet foods. Many of its oral care products fall under the Colgate brand and include toothbrushes, mouthwash, and dental floss. Its Tom's of Maine unit covers the natural toothpaste niche. Personal and home care items include Ajax brand household cleaner, Palmolive dishwashing liquid, Softsoap shower gel, and Sanex and Speed Stick deodorants. The company has operations in 70-plus countries and sells its products in more than 200 countries.
Overseas, Colgate-Palmolive operates approximately 280 properties, of which 80 are company owned, in 70-plus countries. Major overseas facilities used by the Oral, Personal, and Home Care segment are located in Australia, Brazil, China, Colombia, France, Italy, Mexico, Poland, South Africa, Thailand, Venezuela, and Vietnam. The Pet Nutrition business has a major plant in the Czech Republic.
Colgate-Palmolive comprises two product segments: Oral, Personal, and Home Care (87% of sales); and Pet Nutrition (13%). Within the larger segment, oral care products account for 46% of sales, while personal and home care account for 21% and 20%, respectively. Colgate is a leader in the global oral care market with the leading toothpaste and manual toothbrush brands in many parts of the world. The oral care business also includes dental floss and pharmaceutical products for dentists and other oral health practitioners.
New York-based Colgate-Palmolive rings up about 80% of its sales outside of North America. The company's largest market is Latin America, which accounts for a third of total sales. Two other geographic regions -- Greater Asia/Africa and Europe/South Pacific -- each contribute nearly a quarter of its sales.
Sales and Marketing
Colgate-Palmolive markets its products through advertising, including TV and print, and other promotional activities. In total the company spent $1.9 billion on ads in 2013, up from $1.8 billion and $1.7 billion in 2012 and 2011, respectively.
In 2014 the company announced a partnership with American stock car driver Cole Whitt to market its Speed Stick GEAR product. As part of the arrangement, Colgate-Palmolive will film a documentary series chronicling Whitt's participation in the Daytona 500.
Colgate-Palmolive has logged a decade of increasing sales (with the exception of a single negative annual sales comparison during the global financial crisis), with sales up 72% since 2003. Revenues increased 2% to $17.4 billion in 2013 versus $17.1 billion in 2012. The higher revenues were driven by a 5% growth in volume as well as a modest selling price increase of 1%, but were partially offset by a negative foreign exchange climate. Hill's Pet Nutrition's net sales rose 3%; its organic sales rose 5% that year.
Net income fell 9% in 2013 to $2.2 billion (versus $2.5 billion in 2012) as operating costs rose. Cash flow from operations remained relatively flat at $3.2 billion, compared to $3.19 billion the previous year.
Colgate-Palmolive's strategy is to increase its market share in key product categories; the company is organized to achieve this goal. Its management teams function along geographic lines and are accountable for each region's business and financial results. Colgate-Palmolive points to its geographic diversity as a way to reduce its risk in any one part of its business. The completion of a major four-year restructuring helped tighten Colgate-Palmolive's global supply chain and realign its sales, marketing, and new product organizations to serve both mature and developing markets. This and other cost-saving initiatives have freed up additional funds to invest in product research and support. (The company's growth is reliant on the success of its existing product line, as well as the successful development and launch of new products.)