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.
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 -- North America and Europe/South Pacific -- together contribute nearly half of its sales.
Outside of the US, 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, through its Hill’s Pet Nutrition segment (13% sales) (“Hill’s”), is a world leader in specialty pet nutrition products for dogs and cats with products marketed in over 95 countries worldwide.
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.
Sales and Marketing
Colgate-Palmolive markets its products through advertising, including TV and print, and other promotional activities. It has a direct sales force at individual operating subsidiaries or business units and also uses distributors or brokers.
The company’s advertising investment was $1.8 billion in 2014, compared to $1.9 billion in 2013, and $1.8 billion and 2012.
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.
Company revenues dipped by 1% in 2014 (after several years of growth) due the decrease in revenues in the oral, personal, and home care segment and lower sales in Latin America. Volume growth and net selling price increases were more than offset by a negative foreign exchange. Driven by growth in the prescription diet segment, organic sales in the oral, personal, and home care product segment increased by 5% that year.
In 2014, Colgate-Palmolive's net income decreased by 3% due to the decrease in revenues and increased interest expense as the result of higher debt levels and lower interest income on investments held outside of the US.
Cash provided by operations increased that year mainly due to a growth in accounts receivable.
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.
Colgate-Palmolive's management focuses on a variety of key indicators to monitor business health and performance like market share, net sales, organic sales growth, gross profit margin, operating profit, net income and earnings per share, as well as measures used to optimize the management of working capital, capital expenditures, cash flow and return on capital.
A major 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.)
In 2014, the company announced a plan to expand its 2012 restructuring program in the areas of expanding commercial hubs extending shared business services; streamlining global functions; and optimizing global supply chain and facilities.
Mergers and Acquisitions
Expanding geographically, in 2014 Colgate-Palmolive acquired an oral care company in Myanmar for $62 million.