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 -- Greater Asia/Africa and Europe/South Pacific -- each contribute nearly a quarter of its sales.
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 44% of sales, while personal and home care account for 22% and 21%, respectively. Indeed, 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 & Marketing
Colgate-Palmolive markets its products through advertising, including TV and print, and other promotional activities. In total the company spent $1.8 billion on ads in 2012, up from $1.7 billion and $1.6 billion in 2011 and 2010, respectively.
Colgate-Palmolive's sales increased 2% in 2012 versus 2011, while net income rose nearly 2% over the same period. Its Oral, Personal and Home Care business unit's sales rose 2.5%, while the Pet Nutrition unit's sales declined by less than 1%. Sales increased in all of the company's markets, except for Europe/South Pacific. Price increases of 3% and volume growth contributed to the sales gain, partially offset by negative foreign exchange rates. 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.
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 years ago has helped to 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. Indeed, Colgate-Palmolive's worldwide gross profit margin in 2012 was more than 58%, thanks to its cost-cutting and despite rises in commodity costs and negative foreign exchange during the same time period.
Mergers, Acquisitions and Divestments
The consumer products company continues to acquire high-performing brands, while shedding those that don't fit its strategy. To this end, Colgate-Palmolive in 2011 acquired the Sanex personal care brand from Unilever PLC for about $950 million. Sanex, with net sales of nearly €190 million ($260 million) in 2010, enjoys strong market share in Europe with its deodorants and shower gels. The deal with Unilever was a swap, of sorts, as that company in 2011 bought Colgate-Palmolive's laundry detergent business consisting of the Fab, Lavomatic, and Vel brands in Colombia for $215 million. Paring down its products portfolio for international markets, Colgate-Palmolive sold its Pom Pom children's soap brand to Brazil's Hypermarcas in 2010. Consumer products conglomerate Hypermarcas paid about R$85 million ($50 million) for the brand to expand its assortment of personal care products.