CL - Earnings call transcript Q3 2018 | Colgate-Palmolive Company

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Operator

Ladies and gentlemen, good day and welcome to today’s Colgate-Palmolive Company Third Quarter 2018 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.

Now for opening remarks, I would like to turn the call over to the Senior Vice President of Investor Relations, John Faucher. Please go ahead, John.

John Faucher

Thank you. to quarter welcome call. release and morning, our earnings third conference Good is President Vice Faucher, Investor This Senior for John Relations.

website, the Today’s Jakobsen, Joining Cook, me could Financial differ Henning that a discussion these the also Actual of Chairman press reconciliation Ian will cause measures, including Officer. to Chief the and the included of full statements. XX-K is release release is measures earnings SEC, Colgate’s Chief and corresponding to materially forward-looking financial this call XXXX Annual non-GAAP financial and Executive factors our differ Officer, the results on available including these SEC for A to Report earnings materially most in all will recent morning This refer Please statements. those of Form conference press call conference our earnings available are and could press from identified statements. results on release. X subsequent tables and discussion include a filings, the filings website. include actual GAAP Colgate’s with in X from and on

Ian Cook

comments. This Good make introductory I’d Ian, like is some to and morning, everyone.

levels. to and that on commitment intend our and to focus two continuing on we around capabilities. on to not challenging us. was urgency I are will areas. our and growth today people earnings shopping, what and a for disappointing Challenging dwell and You some What in depth derive advertising recall building and intend is efficiency those do previous focus quarter quarterly I on to And with innovation talked from call some in our channels where

top-line, roll margin transaction and growth forward, particularly up margin. from which American points packing impact this John, moved over of our And earnings of Underlying that hear the necessary the were points that have pricing forward, as the in quarter quarter, exchange. took heard the the the partly up who sharply that both fourth know, in X%; is pricing materials competitors top-line in pressure be will about underlying in to basis foreign to quite weak First, And were why, divisions to secondly, in focus gross drove materials third, America our up, and our our continue you forward, as from but and will Brazil and affected you we against Latin with so quarter-on-quarter. report part by oil, expect recently. And as for did Asia we from is was to costs, going quarter. China XXX area will we exchange raw of from foreign negative. foreign of positive we you spoke material XX% exchange, go some X negative, large and commodity the division; Latin an this impact The continue view, of disappointing which in in second negative

second quarter. Brazil. in from are competitors seen this, situations as there in said both price and as The for and the the know we like following. And as our pricing less turned negative retail volume uncertainty principal moving well, we competitors or around lead. of you’ve move would, trucker Brazil, And the including the have volatile, as heard with pricing we yet our early a took macroeconomics We gap start between often and in is in third businesses, up a from lead pricing me have you others, not and strike others you from still value. hangover let and So, quarter, as course, the but heard In now, in categories, the elections. in

And took. impact competitors, and volume a pricing our a have the negative we well. may recall, than reported, quarter impact quarter we from little our performance that We seen have also in trucker of obviously second the therefore bit as because strike you may negatively a less the affected of third

continue going market year-to-date and pricing action. shares up our to the in through hold remain And our forward holding leading well, Our same. plans

sticking are commitment do pricing. to And return to We we our to expect the categories. with inflation

and business We’re ship pharmacy good moving a starting Personal premium in and course, the right marketplace. And to new in said we of the now. just on worldwide is at as OrthoGard growth particularly if XX% were our hopefully a off we well launching a a scale Barclays We the circumstances. quarter I different and And held share it as category, than go impact going augurs light, growth have beginning we products saw of elmex years. say, more on it to we our of third at offer favorable have to view forward. I would, we first heard and the constant of easing, that and our when start; number given the remain take Naturals this for on business, channel, We, positive in over applies PerioGard glimmer see have in toothpaste announced we set Care we the forward. XX the guarded in is must core category Brazil this relaunch to globally, Total a will say we declines But, a a look the we volume Brazil, good share quarter, the of China. There has our which others would China accessing is categories. situation fair data, from of is where

there spoken China. opportunity the premiumization the going consumption the one on environment second brands e-commerce is as share, in we that area of of very have change and about, shopping is value of things explosion categories, country. led Our slightly Number lower, have by about; the spoken big local the with represents because are two of some in and in the a big we patterns

marketplace. spoken we about category, before, offering price we to brought premiumization as to to have of the have premium a Now, respond the the Naturals

Dare year. whitening online whitening moving well initiatives did in We Love along the half we pricing so the -- offering repeated told as and premium with have To in-home second our like electric year also that we taken the meaningful XX/XX done last of over and brand will the brand. toothbrushes a quarter, price elmex, on a you in and Colgate at all offering. business toothpaste again be and country XX/XX also online this for Darlie have the both But, on

to category volume. the with And addition the move into impacted of we portfolio prices in tier to doing that more premium need our our Given premiumization premium, tier. mid it our extending the so, from up to in

And that trade, in up. direct consumption, in the it But, down -- be change where through is is network by Company the to move longtail beginning inventory in has already impacting here. change that see to are pricing going get yet better time. trade earlier. through we’re consumption our fixed it patterns as over distribution working complicated should immediately, in indirect which it you move to realize through That the to we I to the Now, but from mentioned country which is the the not is

performance on our areas America, year. notwithstanding is growth to of been Africa/Eurasia growth continuing environment. the from that a is from quite innovation led that our nicely we come the focus now, prior rebounding rest underpinning will consistent is in North beginning that to a that focusing some having seeing pressures a seen troubles the We and now is on the strong to And and promotional continue underpinning are share U.S. and indeed back low believe of advertising and do volume the grow nicely behind we the distributor India businesses. have pricing, growing had the innovation toothpaste in problems, support. growth our quarters, on those performances slow you advertising have focused to business. do we overcome improve areas into in by on Hill’s our have in And Europe country. and future. we the we seen and is believe multiple have Now, consistent and and

we the pricing a improving, forward. pricing perhaps business of even though we we slightly We begun are, repeat for forward. in And going our have on going of Barclays, again, our continuing Total that starting XXXX. as will do of again, will scale focused we that impact I this have see quarter relaunch And first see competitors, be announced and the at we world, big ahead

So, on also those make the John. comments are the rest specific And I’ll but to business. wanted and I it to to back China, our now turn of Brazil

John Faucher

Ian. Thanks,

as QX favorable in X% offset X% by and declined sales foreign flat exchange. impact negative volume from net X% pricing Our were

profit gross from On points was that benefit down X.X%, in China businesses year-over-year. the a was Skin, and professional volume Brazil EltaMD skincare acquired issues by discussed. XXX Ian down the basis, driven GAAP PCA our and recently Excluding basis our margin

Efficiency points of XXX Program, and was it year-over-year. our Excluding the impact Global down Growth basis

of benefit transaction were a provided For the foreign XX Raw the margin. XXX basis exchange quarter, points our pricing drag year-over-year. basis-point of to basis-point costs gross costs material impact including margin on gross XXX

for was our led advertising while brands in from driven was to Despite On awareness XXX basis, markets, funding-the-growth to a foreign a year-over-year year-over-year. provided no in to build initiative, equity investment by by there to innovation. brand an Our invest faced trial benefits basis, XX productivity we to On was in we percentage advertising down continue up the our and QX, absolute margin, challenges other certain program, basis-point our sales impact advertising gross points to drive basis the quarter. in exchange. drive

down up resulting of as remainder Growth the SG&A charges expenses were basis, QX in a Excluding absolute Program, Efficiency Global an of on and percent but from sales. the our year-over-year

expenses $X.XX the a and as and down a overhead as headwind basis warehousing benefits percent from the continue logistics an GAAP were see in to XX% increased basis, sales year-over-year program. a in from QX. of our quarter down absolute Excluding diluted per productivity of share we On earnings on costs, freight, were

$X.XX Tax and resulting from our tax rate. provisional charges were to Program benefited a from related Growth Global U.S. lower we charge a Reform, at down and Efficiency earnings diluted X% per share as Excluding

North strength toothbrushes, The United in have toothpaste through particularly unmeasured are high States continued sales the market nice our continues maintained Net States as although the promotion, we with America liquid couponing, The hand electric continue X% of with North club We in straight category We’ll to of and organic Year-to-date, and e-commerce we see growth skincare growth in division in United the manual up pricing categories flat organic with X quarter take contributing and run our fourth see acquisitions quarter X% Now, of its growth. I’ll volume with North quick sales of combination a recent X%. sales increased the America levels in start XX in channels or leadership. through of in stores. our professional soap shares divisions. cleaners. off gains market saw like America. to strong posted a

quarter, Ian are foreign down As to QX, what difficult X%, discussed declined adjustments promotional seeing was reaction had headwinds the America of the last Brazil. X.X%. and we in Latin negative pricing declines our in exchange and we plans a was have exchange by marketplace. combination a driven to in American category quarter foreign XX% was in net volume X.X% sales as Latin up made

we recent raw similar Outside the as foreign moves not Argentinean weakness our generally to Our as and peso. as given transactional in materials exchange, of the from well pricing reals inflation, some have competitors. like pricing currencies impact quarter of seen in the the Brazilian we continued improved of offset Argentina, look

as and disciplined accelerate quarter. growth remain both pricing in inflation and third pricing we volume We rational in forward. in delivered going the expect regards to We Mexico will to

Although, promotion several soap to dish soap, bar toothpaste. continue in categories, of levels we and see heightened particularly

were down sales Moving with X.X% in were growth, QX. to offset in Organic Europe. positive up negative Net pricing. partially volume sales by Europe X.X%

in X% minus market for the volume to was quarter, in The quarter. posted gains which UK QX. exchange Foreign growth led strong the share

are particularly the our Max toothpaste performance premium continue the with Colgate business Total of UK pleased to in White Colgate and share. as We gain

to what Zero as physiologic environment high-end continues business well in Extracts rollout continues including of Sanex the as premium Charcoal difficult toothpaste priced the line market a latest Sanex percent trends White. which the our Colgate be should in Europe. pharma continued of Natural line, be our into to UK pricing by further grow plus is bolstered behind in line, category share body wash channel Our the Sanex bringing offering the mass

and Pacific. foreign Asia Asia were driven Pacific sales to declines by quarter, down X.X% the in pipelines. Moving volume Net in exchange

discussed, a in been contributor inventory biggest As weak to the reductions China performance. was

We in be continue by to India encouraged our performance improvement business. the of

activity. of We despite growth continue positive to deliver competitive volume pricing high with levels

Vedshakti Cibaca the with encouraged market performance our are Swarna We lines. and toothpaste of share

As we the see further category invest in segment grow. to of continue to advertising, in toothpaste the our and continue distribution to gains Ayurvedic expect we share

in in in launched price sales growth Colgate Turkish quarter, a offset from by to pricing new herbal further QX the a In growth. offering the offset our quarter lira. X%, high-single-digit inflation also Africa/Eurasia additional Naturals in division We expanding negative the material Net positive raw due country in in in driven to pricing decreased this by higher was segment. partially foreign Thailand foreign transaction Africa/Eurasia, exchange primarily that volume exchange, slightly in portfolio Panjaved, negative ruble the took help Russian weakness We and Naturals costs. impact

volume of flat and Year-to-date, is improve of Africa following be return distributor are to we’ll We our the the or U.S. delivered place has the quarters. put with seen continues well additional vet in is Turkey continues We The late the XXXX. as were business straight growth to emerging dealt market for to our XXXX quarter, which driven pricing by channel encouraged brand closing encouraged on the the by X.X% pleased strong XX by in growth be sales as net the in growth. the quarter. XX despite we in we the over toothpaste Hill’s up growth particularly also with share United our by few which further performance led Volume delivered past leader. Prescription And And share Colgate the in a in to with markets, pricing in States, grew continue online. some we share Diet up which issues Sub-Saharan to third Hill’s. markets. rebound where business, in growth finish

the in in excited Science Diet our gains was share year-over-year. time continue on improved X,XXX specialty is the help program, more continuing to to to and pets market Science shares with Hill’s seeing with also sponsor To adopted. NBCUniversal’s business, successful XXX,XXX than which adoption. Diet, pet The shelters We’re This momentum improve most Shelters ever designed has over the fourth year Clear boost been participating pet

the food. share We select can uses also genes biology Recipe of so gains and dogs dog’s which get grew most respond that ingredients dog with knowledge Hill’s out our their Bioactive food, to Hill’s of

Now, outlook XXXX. the I our of to will turn for balance

stated fourth low growth. release, with on our low organic due sales quarter to digits spot we be to digit down for As sales the current in rates, exchange press based single expect net foreign single

the full-year the We rates, both expect gross quarter of our and spot on the XXXX. to Argentina is versus due both of markets continued exchange some the third and down flow including gross headwinds costs expect of current additional flat quarter. to expect mix an will and Based impact the to the full taken be we during material basis transactional year-over-year be raw Efficiency issues. GAAP will impact for of excluding pressure through, macro the pricing continue the change expect year, less for fourth as Growth foreign from a basis destocking the we as in Program. Global increase well on in The on We divisional in margin. some now impact to like percentage as of sales an advertising that and absolute This margin

expect to within portion to that, XX%. still a the on we within to rate And XX% On efficiencies invest versus GAAP between brand. an projected However, for spending to as media we tax be full-year and XXXX the behind up working our our of non-working as absolute shift our marketing media advertising we drive basis, from continue is budget. basis continues media,

tax a our Program, expect GAAP Growth and the on U.S. year. Based rates, from charges and Excluding up for double the spot around be rate be impact Reform digit foreign to XXXX, in Global related full now expect share to current from to for we Efficiency matter XX% per earnings benefits tax the Tax our the we year.

year. with U.S. Program, earnings to a XXXX, related benefit it we now Tax tax per to Excluding charges in and questions. charges Efficiency open Growth matter for that, the X% related to up and the the growth share And Reform Global for X% foreign we’ll be to expect from

Operator

question Mohsenian ahead. [Operator Thank is our Dara go Morgan first you. And Stanley. with from instructions] Please

Dara Mohsenian

morning. Good Hey.

landscape. in remarks, the to drive improving ad plan So, spend, Ian, talked previously of e-commerce in you been specifics were growth mentioned feels about of to you weakness changing guys enough of focus the this And it like made changes you Brazil, China helpful et as sort quarter. light us this of innovation, terms execution top-line cetera. But, haven’t was, you have in

do from wise, to And, the you of forward stay hear two significantly ahead more need these going changing differently. do think execution to you areas. I’d to forward the I’m areas B, And manage you previously? of on channel there could get business behind a had love level point focused than from of desire some So, the sort top-line this Thanks. today things going at landscape the you differently might payback spend you of how sort reinvest competition you to are standpoint? and in increase of some A,

Ian Cook

the for Dara. question, Thanks Yes.

terms think same see on and panel reach In consumers. are Interestingly, if think they today’s we the millennials market look things. I focused those shares of we market I actually, have our geographies of consumers connecting data share way as lots our think some is we in data market is with higher we with clearly general the growing. way our shares. and we’re the the we at innovation have, we and to And examples that household are are consumers. business, tomorrow’s of right Innovation a advancing that

geography we lot of like to new that global a be that or our forward. the think portfolio of of now so competitor, in channel, part or place And now we we We of will development local edge described response with stepped important time it. well about big the experimented we day. into an a part do in one find of last into believe earlier And those And changing innovation. go-to-market correction is a of combination as transfer a as need geographies will leading as Vedshakti the case world retail Thailand. is also its brand So, advertising a of the new may to innovation, we our India we’ve where that of new innovation brand, name in e-commerce. we from the think I And we we think what in issues and the innovation the which have continue. and And transferred a it piece shape is and have the indeed that of with are pronounced a a indeed faced rebound a by seeing consistent now advertising execution either John the under Hill’s going talked in

that and is much sustainable in offerings, that I and to the the to in our area, difference oral more recommendation businesses. Personal much so addition portfolio, our know linking So, skin is PCA the of the Care shape forward. the of Elta changing from and going finally, making nutrition more health would the And that about we say, think pet well model

which be to overall will the And to consumer big I on And array stress in right purchasing decisions. to we where terms to Total we next would in So, making their a quite our year, the are continue. in get freshness focused have we of journey portfolio. the those a think what in shift of core an like areas will and relaunch the are consumers that undertaken are of business again, bringing

on certainly and our Company, a with is necessary build commitment we taking we making activity As regards towards But, offset appropriate say, when our of taken. the of XXXX, at that seen the our of XXXX, invest innovation this have portfolio certainly given costs coming stance you are is margin year. achieving I commodity we we Total growth, reinvestment, will we think, that give right will I have sure now only that reflect to while our deem drive we for continue rich. top-line significant must and certainly value the pricing of will quite guidance we into the our And to the to public mindset and the that premiumization level which

is Dara, year. on would will simple continue say, So, I focus summary, recovering next do to we growth our right in momentum what

Operator

of Our Tong America. is go next question from ahead. Olivia Please Bank with

Olivia Tong

to markets? I why from you understanding Thanks. better markets better want to are in you seems markets emerging developed is the better sales get going also it emerging what’s drive expect more lower had get it to comp, difficult. that a China And actually retailer as new in well. volatility But, and for I’m because the to a the unlikely coming destocking sure slow level. more get broader bit entirely a Because to fair down, just managing QX? really to organic mentioned does abate of expectations so market First, not developed or Brazil,

So, volume doesn’t while at it have driven seem at you’re point, this this really much more, spending least to course. for

you. you just So, great. would elaborate that on Thank if be QX

Ian Cook

of Lot there. Olivia. Thanks, questions

Now, context, depending you volatility often the of take course, in competitive on see when volume. you pricing,

that on will point I the guess, to are have we continue be forward. pressures, We before. going is we that that experienced And will and articulating focus pricing given necessary inflationary the

John on a China to that a commented less see we or destocking, the factor. we the expect that I quarter. And benefit of course will mean to be We given Brazil. to do driving the quarter, fourth We continuing do it. our developed that in As performance see is And think fourth advertising market and that. innovation continue, the expect the whether of

to it’s destocking, So, China the other continues developed. other generally, inventory and The I geographies. its to where as improvement have we are said, less very rate a mid in do has is high be growth etailers although still a of level. to And take growing e-commerce putting China. we compounding simple in in from emerging digits in not slowed inventory it the new end, it China still contributor of as at growth front is in continuation guess, category and a specifically, In believe the terms, single

Operator

from question next Our is with ahead. Bernstein. Dibadj Please Ali go

Ali Dibadj

Hey, guys.

So, two questions.

easy. first pricing one about what X% sales wondering XX%. heard is think; we’ve just of you, inflation, I Argentina The it’s XX% I’m to And contributed to

So, about? organic think like think the That’s a kind bit. pricing about? little right there’s It helping is that brewing your to number of this the Venezuela feels to artificially numbers

want that So, put to little rest [technical kind difficulty] more one And to just of then, a bit? broadly

Ian Cook

disappeared. you Ali,

Ali Dibadj

Hello. Can me? you hear

Ian Cook

back. came You

got You the yes, anything didn’t on to I second. -- second hear the

So, start the second again.

Ali Dibadj

you. for Thank Okay. you that. Thank

is, So, very commentary a with and Is Ian, said at as anything, the mistakes? gosh, look didn’t ones And costs, anything we helpful is the you still do for seeing well. tough transportation right? second it the right? market all externalities, really know of than is outset, FX, we’re peers of your find, there Because destocking different struggling one for agree about that share you I peers. is am that do around you everybody, that, tough, all externalities accepting still of you things this kind and there of just those as Colgate I didn’t sort But some tough clearly environment your some introspectively and costs the lot some stuff. that to and are losses of packaging Are there

I do did Thank trying wrong? look understand, So, heard at you. as to I what you you those. am yourself, hope you

Ian Cook

Yes, I clearly. Thank I heard you. very did. them

economy, Ali, dollarized had Argentina and a official rate exchange is not rate. you and the exchange operating is know fixing Argentina Argentina, rate the that an you rate In is and as exchange well itself. is So, will Venezuela it the not another was brewing. exchange Venezuela,

half those Argentina this old today the is wrong. also year And are around is last time than about good last of the Argentina was X.X% it stats X% your our sales. So, of were was than days. more and sales; our of year smaller

there zero. contribution in basically, is, the the to growth So, The bigger to organic of Argentina think ex to -- is no rounds answer take Argentina. But, brewing the will itself. I our exchange issue care overall Argentina question

move our the brings with But, is very focus through. the on geographies. now rich want for we face. not across and understood we of, we challenges, you second premiumization know, be being as that pricing businesses, and constructive businesses good some I of upon we you as to core be we terms urgency the we one some the it come premiumization work consumer terrific that the And in beyond said, to you say, simply that brings would requires, China, across and described the answer and portfolio engaged which issues as at Barclays, that in as going what on for -- with value when moving singularly thank create And fully acted with benefits will the of Total and to. deliver recognizing changing mean a relaunch, that. if and that a would But forward. to additional quickly question bold technology, is self-critical which would a are move does I of as Secondly, indeed now, new value of the is opportunity nature well But

that’s the way So, I Ali. think respond, I would

Operator

from Please is go Lauren question next with Our ahead. Lieberman Barclays.

Lauren Lieberman

since that introduced And productivity program was Efficiency you more margin and efforts Just years Growth and thing Program. about six been beyond one Global the reflecting fact SG&A. it’s think of that -- pretty that thought around sort into on that expanding I demonstrably your I gross

top-line embarking And on but been six ensuing growth slowed, macro this you I there’s dynamics, as has years, know were productivity also so, path. broader over these even

I’m coincidental, on. you over things some you’ve if X the sort purely there at areas of growth there’s generate, able that, unintended it’s of efficiencies where of like areas So, back look if maybe detrimental repercussions some wrong that the a wondering from years, some as into or Thanks. way? last or just savings you in to just X that on the standpoint? focused had back been savings in been that tapped you’ve the maybe the Are outcome, thinking hubbing was

Ian Cook

technology centers the journey. Thanks because would which was the therefore the on this more world, drivers have challenges conservative. down without implementation the the in moves, same connected we on of across But, efficient Lauren never set cheaper their a the questions. geographies, for more be SAP by them. and And back allow visibility, When we and service having us they’re would of two around administrative with Colgate were that to office The them those that don’t typical see what happen indeed us linked time. the have we the way in And to little those to place. in services One started locations more to multiple is be difficulties in the fashion, centers starts any the to pushing your they’re journey, bringing us world. that everybody system bit believe structural the enterprise-wide services we you path same once at

So, were it, plan, benefit cautious for good correct that a decision, of stepping and the life we it the up decision today the future. we accruing we and a was is think that one too, built while into over and have will

a the while contact consumers at the adequate ground, the the indeed, And and ground the a it ground over customers resources allows the geographies, Now, both were of very, strategic worth increased same way customers requires the sensitive -- careful efficient, on the what manage do with particularly course, geographies, focused of incentivize the ground become Nordic on decade people, are we when talent started time way on pluses in implication where experience And have on that more I out that we and against very on consumers. Because we make maintain yes, sure to hubbing, think And hubbing, compensation, and and but couple resources economics do to allows it quality focus to. what the America is we this were the have And from, was of and we -- higher minuses. countries, it building winning in be also a and in and some agility we may is keep we we which to on had have of governing the essentially of winning terms we to is that cost we that did with the and have on higher you and the been passion ground. the learned ground. hubbing we issues now multiple and you focused managed our building. capability the financials on as we brand company, Central having question, the really and and we to the and

So, the think learning. years, from historical sound, its make was way quite of executed has a sure the thinking our inception, the And over on based I course, we experience evolving, learned well. to have been we and program

both wise Company. on choice this think an we a appropriate been and for So, levels, the has

Operator

JP Morgan. Our next Andrea from go ahead. with question Please Teixeira is

Andrea Teixeira

Thank you, morning. good and

the So, back the Europe. environment, U.S. I go particular wanted competitive in and to so in to

other cycling So, are seeing for of Europe, negative finally you categories for and some pricing. specifically the U.S., couponing for -- -- quarters in this care, your some couple oral what are major of of competitors terms care? of several across you in oral pricing, a And

still you believe price you into you take can do consumers and there? some sensitive pricing are hopefully do you. So, pricing XXXX to or finally believe Thank now flat

Ian Cook

the questions, for thanks Andrea. Well,

United I be what over that in terms marketplace, the I increases of in will commodity everybody very think faces as now prudence plans as pressures think have pricing whether that We last be that space. of the as couponing, promotional obviously seen the competitive calls lower to And adjusted attentive year some price electronic this of more before, promotional or the quite John clear forward, been our in the unfolds activity, cost balance States. require to have activity. going for we we specifically commented in elevated morning, the we’ve with couple

seen but From a pricing challenged environment haven’t for It new view, point from of has is several we any we in Europe. quite has be Europe European point continued a years. attentive. always and of will that change a the view, been So, phenomenon yet not

And third as European And business trend sure, some of can clearly, over customers quarter. in as we we the that we to in has to And intimate, that with tensions we the years. negative will have make forward. go very and our pricing well-positioned believe And try our now was you obviously, be that we attentive European improving continue led context.

Operator

is Our Please go with next Wells Herzog from Fargo. question ahead Bonnie

Bonnie Herzog

question a on growth. had I

even in in XH? Thanks. rationale. QX environment growth, U.S. or any just in environment the of the versus in been few this like fact the Have or given rate have any seen you slow I change has You growth either then, described the I’d like And on and the growth if guess getting promotional competitive calls. mentioned you’ve this category change category understand, slow growth you past And But, the markets? emerging hear morning to is to worse. category if the noticed

Ian Cook

up. given And you U.S. mid-single-digit is the at to If in And parts global X X, value between think growth Bonnie. as flat slowdown we there negative history. in I an particular, generally, all Latin categories of say, Africa/Eurasia in the choppy, volume, economic category years take from you one a Thanks, has improvement probably categories, pricing a of competitors John have it pricing our perhaps those and be talked little take I underlying would of commodity to geographies competitors elevated that foreign intimated the I pockets demand will leader assessment in a say secondly, we back; inflation morning, is I it pressures about -- forward. promotional to talked will that will pricing continues grab cost going and Latin I the short will that and and in think this a Europe if as volume snapshot, we certainly particularly exchange as is to the That there. both seen volatility quarter X% modestly that we be said. to the to in that is that think if offset The earlier the the been, that and bit recent and channels. America case. I you and Brazil term. headwinds, is our would definite third will need our the thinking But, to Latin take and include discussed Asia advantage X% moving to to when in activity. unfolded, has world, look and about some continue of come America,

Operator

is Nicholson Wendy from next Our Please go with Citi. ahead. question

Wendy Nicholson

questions. Two Hi.

your strike just cetera, this external share to data isn’t remember you year I that give, the is. category, bad. external I performance. internal is what’s issue. year-to-date, as wrong consumers the your changing don’t market this environment last that was it’s I mean, time care is So it’s And kind in difficult maybe so it’s XX.X how because commentary, don’t ever bad. it that an you is and understand Ian, more much time, it oral now, by I why seems alarming of toothpaste; just marketplace, in But I’m been own very me the just cetera, XX.X. an et the with just for me it’s what’s doesn’t shocked number your of to It so mean et much issue.

So, I’m holy by of grabbing kind me, shares holy you the saying are crap, surprised excuse horns bulls more stink. moly, our the and market

that’s your the then, pretty had in So, is, in you around China. two listened webcast when pretty one. arms the had to at thought question question you Brazil, I number you issues upbeat. And clearly the I you you sounded I issues I Barclays said mean arms number were thought around your and

misunderstand did or to come that, quarter I to the I to you is, this expectations end you a a so, miss going guess at that third did it. telegraphing quarter? were the big of consensus That’s was surprise be And the my as question Thanks.

Ian Cook

reaction. you’re I shocked. I’m surprised guess, you’re Okay. Yes. surprised my surprised, not I’m Well, by

enormous The Latin as U.S. five basis shares back market year-on-year there become like Let years for, of me as strengthens, basis that down-weighted, XX.X, The market extremely down XXX component on come frankly, on basis, there you over foreign to our shares. a is it’s with example, the is mix. dollar a in share American exchange been that. challenge last that a part is points. Wendy, that an something and roll-up the And challenge see the strong, for the

there market indeed mix half fact X.X. share is than a So, effect in of is exchange down that and foreign year-on-year our less

than share world. tubes And comparable decline is view, sold down X around Secondly, our about X X.X from half ownership on less of the year-to-date are is indeed, basis. in volume under Colgate point a a volume share volume toothpaste again, our

the we those was progress was against deterioration? And match, we the this cash we you local are happy we up positive Russia. you it don’t point matter. India. a are our sometime. markets said, things. I Asia, to recovering different Asia, back meet. to taking the share; as encouraged if lose when that will we Mexico, that I have market any share. at is same positive think the in John year, margin around In one-time dilutive, had the promotional said world The look not the local some is brands being share a by year brands Answer, in seeing it in States. And that the match. we activity, of major in earlier parts now United quoted we of with mentioned unfolds, we share have when few not. And some Now progression one, But, are world, no, Number But, in UK are And

we we have having the frankly are promotions We’re certain to seeing some Because a that the bringing, support advertising, innovation build of where are pressure. the Mexico. seeing match shares consistent to back us shares in up recent share now under of extent been the

take absolutely focus. o the is month-by-month another focused much maintaining some point geography. next the think And relaunch the that. don’t And the it Total We say oral we to that activity, year on the behind the on we pleasure that what the of I know tracking care we are over week-by-week, depending beginning other in we literally have all are understand at point, that step again the country-by-country, I else and to of point, than and all of

promise will I to be excitable market share more So, the in talk future. I when about

more And, transaction slides costs. of foreign you a by one right. maybe delivery, yes, It headwind impact signaling. going commodities up in in Boston, to aggressively, didn’t we emphatic hear indeed ramping to the we a exchange thought were foreign clear but that be lot were and that be the the on exchange big for was As obviously was influenced needs quite

is I I’m you that. question of part the guess answer your second surprised, missed So, my to

Operator

question with Sachs. Goldman is go ahead. Jason English Our from next Please

Jason English

market share, little region. a Good more I’m the going in bit to stay bring Hey. one on it of in -- just morning, zooming myopic folks. topic

with Brazil throughout XX-Quarter, looked your as gains me on what’s source of of I we discussion a you’ve what’s the look saw going too, I earlier market on fairly and headline to going Brazil, Europe the quarter. year think, you In the numbers share and highlighted of headline fine in a strength the for year. how upfront eroded that numbers China? surprise quickly. Europe was bit this it this half in know a discourse but fine on first

year-to-date weakness share the bit stated Can UK you these you’ve market suggesting of some third to where delve little that begun pockets Clearly into flipped has donation flat, in of in has the quarter. weigh and the your strength; actually trajectory there? pocket to Now, more us? are market have tell share into

Ian Cook

again, And too to going answer, much predominantly the detail, simple as It’s as again, were is beginning It’s simple is without that. recent the shares, to return. Jason. most it into I a going focus customer And It’s on period Germany. related. period if

Operator

from ahead. is go Macquarie. question Caroline Levy Please Our next

Caroline Levy

And good morning. still Thank you.

on question cost a Just the side.

long in that mentioned strategies just you cost quarter. are PET that transports? Just detail costs, little you a not fourth in issue? on any or on? expect particularly the how as but similar emerging more to particular a is -- this it you talk markets? could pressures Can PET you related, little the Is it is bit it think do about Which items oil think I hedging have go you

Ian Cook

Yes. Thanks Caroline.

expect up that costs be would continue. X%. of And see balance could quarter, over the just to heard up and more you the correctly, third on just were the frankly, were that foreign the logistics year costs well. exchange X% commodity yes, our pressure as for costs and we over And negative transaction For

the of materials cost are. of pressure we the can a hedge, tend against hedging. you expect in the as light categories business, where as balance rest, Hedging, we the and to to available start But and that this we only others our to we ability continue. offset buy materials pressures. price raw on on oil. for formula seeing year rotational the to basis. for to do do need on materials effect those we Many are logical of the most we So, There when Yes. hedge as cost is of of And that course the be rely we life our Hill’s

Operator

Our Bank. go next question is ahead. from Stephen Deutsche Please Powers with

Stephen Powers

thanks. Hey,

to sense trying talked maybe of a that a things quarter, the guess, of are head tie the number guess, we I recent my lot that’s So, running about last together. I been through initiatives. urgency underpinning

that and word you at and now pressures. a sense because used. think the pattern organic was time communicating at at you been gross a good seemingly the into job panic time, of of eight I we’re margin distinguishing I has think did urgency the But that same it from growth what least quarters

block basic I your push are compounding your over from just not is truly it’s if guess, fast-track a if recent problems, macro acknowledging power be I guess, there is, But, Could is So, catch-up the macro the acknowledge is be that you et at urgency challenges, more is cetera. hopefully question there anything of on incremental which in the in whether the into to think relaunch but I significant relief? power strip et bit of And or more with tackling to problems? time, premiumization is anything your risk a Thanks. your needs improvement, Colgate compounding cetera. total there it’s the it and actually that or urgent, away severe, here, the we e-commerce, all question underneath message the

Ian Cook

responded, And so want; not of to where said going I’m question, on but the before, the and meet quick would pressure you’re think into want is in we’re brands very and as return mentioned the won’t I we’re when of are sustainable quick be can which them this one focused. we to as those our was, we But, geography. remember the heart do one we to as there brands a and people does end, it’s about else? not available has right would we Wow, it sometimes. in taking panicking, philosophical consumers focused where as was So, again portfolio and one we go language brand, fix in that be, afraid, uses, from combination the accelerate the our and building the were it’s to we about was go the would time is do mean beaches. we’re bring particular it. not of we’re I panicking, to innovation a going you’re the we Steve. next did details, this and get PCA boy, on answer, worried think time market and if now and need shopping Elta seriously. I need be I find advertising, that ways truly building with strategy, reaction to to we way as one staying really is sometimes And we this are focus. everything And calm, and read is under make specific that that be and power, on not we first It -- that as expanding and to the clearly our And portfolio will something deep think. careful bear. And have is to that’s Steve I about the market my reaction well should that the I a capabilities

very of that the right a geography-by-geography, lot a the internal of that is to business, business think of a store-by-store, the things years year first a believe step it, heck control meaningful focus under And part what important linked and care I to of with quarter next our many again, advance be focus, in say I but So, company. will the category-by-category, developed be over to we is etailer-by-etailer. relunch oral total our on would urgency urgency

Operator

is Please next Kevin Our Jefferies. with from Grundy question go ahead.

Kevin Grundy

called I wanted they’re categories. pricing pricing high much optimistic are to its price. pivot at into receptive And ability economic, to more And and take question plan of environment. on retailers the Proctor take in U.S. more to Ian, indicated said, across most a now U.S. also Proctor Question, earlier level, There’s to And investors price among cetera. year. narrative of that strength in to which lot oral Proctor care. businesses, the indicated these brand wasn’t uncertainty, et the certainly

up So, that. guide, lastly, a you Maybe or take or on it part, how oral much view environment basis ago, you see the receptivity pricing pricing, pricing share out North you in Proctor’s broader to So, even looking categories? now North talk shaping do in Proctor’s a we it in quarter exist first to about close elsewhere. to but the you plan to care? And improve it. conducive Is that you not pricing Should the down it across year can to America there thanks Ian, as follow expect all comment something expect Do a is little for two did more see XXX bit I to year-to-date America? points seems be? don’t margins margins then, next opportunities

Ian Cook

And on of to strategy a to in that pressures. we And ways to for. and their the relationships with including total a coming of can to the relaunch ones the a one which drives different industry and as earlier find price to need as this, are Thanks far saying And very responsibly than with do that’s they United And efficiency, responsive. be are their good are consumers working very to they in the going all many, key way answer would cost next in very one innovation, obviously increase. combination pay to of I calendars, like a that that were our our value things is, retail bring it’s closely industry lot fair trend it this cost go from I there are think partners to to have promotional that. retailers call, we what And it think their space this fair everybody activity. And promotional that in much, to understands be partner attentive public guess, is value call And here them that yes, States. to commodity think Kevin. I revised industry year. to can to I is indeed, was with thinking a think a see consistent real premium in players the say with we and

So, we responsive. both you rest will assured can be attentive and

Operator

SunTrust. of Bill from Please is Chappell question go ahead. next Our

Bill Chappell

year. ones. One China. to on Two what happened The identical last seems hopefully pretty quick destock

on destock Should up marketing So, a of kind kind kind you’re I’m is thinking e-commerce per the given growing I going going stepped be guidance, about behind of trying understand, Total, of advertising loaded a and -- kind going a in And we’re relaunch. not that thinking terms just of the the know way have we to it that, see giving to forward of year, quarter. frontend one and you this to is fairly but a plans second, kind normal launch? of or affect the normal within spend on that’s with then, the that

Ian Cook

a a on talking good once Bill. No, a we’re destock China. question, think in about don’t I China, year think I

distribution the has themselves. some in online the have players systems the indirect channels destocking created emergence candidly, now now and Because I channels. turbulence China, of online distribution and complicated particularly of think, the distribution

So, buy than very or sources, in different in e-commerce phenomenon from the year. began four different when can chain last five the retailers China which is

pricing So, equivalize and work different its the pricing with into now, more a impact by driven now taking the before and us it’s indirect through shelf structure new needing can way pricing to complicated customers. the we distribution on system really a get

this being activity next when of talked way from that would different to a better destocking. get we first Barclays, the of a global quarter in it reason first signaled the indirect rollout said, it was going as I next at for quarter is begin very the bit to the take But year, the Total trade. expect about in time So, that’s this of of And little And Bill, here. that year. one we we

such aware initiative in doesn’t of the yes, of get But chance greater technology to an and sure and of do we all activity we the that with such course, happening very the that will bring So, product. to a are be stakeholders say first important all when make diligently quarter. try investing is value,

Operator

And Mark our comes ahead. from with Astrachan final Please Stifel. question go

Mark Astrachan

to squeezing question ask Yes. spend of level to Good different Thanks the me try afternoon. in appropriate a for I’m going in. way.

you XXXX, end of to are on comment perhaps target long-term trends, but fast we to know year not you sales low even your and you end forward if So, guidance, unless accelerate I next where the extrapolate you if that’s to say up. towards going business

want get the had or So, had there, does if spend? about certain to from Are share you an spend. what of to overall way that would things think protect the you likely given to you you? period level Are I see the mean you that appropriate in loss markets, a you upon? different started improvement issues more about to advertising in likely key think share how to mean, you’ve

that from? about get So, to how you to you relative where need do growth. get rebase back back protecting not come necessarily to to feel you’ve that to But, just do you let’s say, growth,

Ian Cook

what think that it, advertising we and to good time. telegraph Very brands we’ve is question, Look, Yes. Mark. about been builds trying over

our the build of course, our to view so, equities and those base growth the equities, behind trial support awareness of point a core of from to And and and is businesses thinking generate continue to innovation.

new programs of time. markets, and digital emerging the longer products, over the and including building strength we of thinking, maintaining the consumption not process the equity deploying have awareness we our budgeting and underlying to building shift to what effective in our we yet to a be of that measure period which the to will commitment So, as advertising, regard levels trial haven’t do job for can begun benefit the forgetting deliver we and

our I work we say, as way will process that the through venture we that’s think So for the to it. way our will be tend about to way about we think XXXX. budgeting would And it

for forward And of we you thanks rest next wish part everybody So, a the good the to your look year. I questions. day. catching of up And with early

Operator

And participation. call. we this today’s you gentlemen, and for thank your Ladies concludes

may disconnect. You now

Colgate-Palmolive (CL) 26 Oct 182018 Q3 Earnings call transcript