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 80-plus countries and sells its products in more than 200 countries.
Colgate-Palmolive comprises two product segments: Oral, Personal, and Home Care (86% of 2015 sales); and Pet Nutrition (14%). 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.
The Oral, Personal and Home Care product segment ia managed geographically in five reportable operating segments: North America, Latin America, Europe/South Pacific, Asia, and Africa/Eurasia.
Through its Hill's Pet Nutrition segment, Colgate-Palmolive is a world leader in specialty pet nutrition products for dogs and cats with products marketed in more than 80 countries worldwide.
About 75% of the company's revenues are generated from markets outside the US, with more than 50% coming from emerging markets (Latin America, Asia -- excluding Japan, Africa/Eurasia, and Central Europe).
Outside of the US, Colgate-Palmolive operates approximately 270 properties, of which 76 are company owned, in 80 countries. Major non-US facilities of by the Oral, Personal, and Home Care segment are located in Australia, Brazil, China, Colombia, France, Greece, India, Italy, Mexico, Poland, South Africa, Thailand, Turkey, Venezuela, and Vietnam. The Pet Nutrition business has major plants in the Czech Republic and the Netherlands.
Colgate-Palmolive has shared business service centers in Mexico, Poland, and India.
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 $1.5 billion in 2015, down from $1.8 billion in 2014, and $1.9 billion in 2013.
Oral, Personal, and Home Care sales to Wal-Mart represented 11% of the company's total sales in 2015.
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 agreed to film a documentary series chronicling Whitt's participation in the Daytona 500.
In 2015, the company's net revenues decreased by 7% due to a decline in Oral, Personal, and Home Care product segment revenues, especially n Europe and the South Pacific.
The Oral, Personal, and Home Care product segment decreased as volume growth and net selling price increases of 3% were more than offset by a negative foreign exchange translation of 12%.
Net income decreased by 37% due to lower net sales and the presence of a charge for Venezuela accounting changes related to Venezuela remeasurements and foreign competition law revisions.
In 2015 Colgate-Palmolive's operating cash inflow decreased by 11%.
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.)
The company focuses on wide distribution network through a very strong network of distributors, wholesalers, and retailers and new manufacturing facilities. In 2015 it made substantial investments in two new manufacturing facilities in India at Sanand, Gujarat, and in Sricity, Andhra Pradesh.
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.