CL - Earnings call transcript Q1 2019 | Colgate-Palmolive Company

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Operator

Please standby. Good day. And welcome to today’s Colgate-Palmolive Company First Quarter 2019 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgate-palmolive.com.

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

John Faucher

to forward-looking Please morning. call. these to on Senior This that a Colgate’s This all to from Relations. earnings GAAP the will with release XX-K in filings to for the the is Good SEC financial included could earnings website Vice for first include and a on release identified available Form those release including Colgate’s statements. our of subsequent discussion differ and discussion statements. Investor include press measures call earnings differ most corresponding conference filings could our of press conference factors including is in Today’s Table conference Actual X these reconciliation materially the And Vickie. refer also financial the of measures, results is earnings from our welcome report website. available SEC quarter results cause recent President statements. the Thanks, will and on John full non-GAAP release. call actual materially press XXXX Faucher, A annual

open Officer. me up a will outlook. are this President Financial Wallace, Chief start it Officer; then provide full will Joining Noel thoughts and quarter Chief we Jakobsen, to off quick Noel Executive with and the before review Henning XXXX of and our morning I year few a Q&A.

delivered quarter, the reaccelerate growth growth further of X% but sales impact by our pricing. do, sales to know sales foreign are X% offset beginning as We net improvement volume the in bear We growth to X% are we organic in to fruit. believe organic negative work QX. with pleased strategies X%. growth in still favorable is was there Our that we This declined X% unit with and exchange

Oral in growth for Importantly, both are time an the On to pricing composition categories, we volume with two with breadth Care. of more developed growth emerging all Home and sales our organic Care, growth X% delivered than years, with delivered basis, growth we organic delivered four gives the organic quarter. sales we and us that growth volume in organic returning more markets of over sales our hubs Pet the comfort Nutrition, sustainable and of growth geographically our pricing both and the Personal a in balanced up trajectory. Care first markets We delivering in and XX%

points is the with and growth driving brand Our on core we higher availability we adjacent brands basis the of that laid channels focus and expectations to On XXX optimistic the profit a fourth attacking GAAP beginning margin the earnings expanding gross was that markets our deliver XXXX and down pay are for innovation, quarter against support, to off. segments call. our in newer we Coupled on increased out continue basis, through can year-over-year. our

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

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

on basis percent initiatives XXX-basis-point investment advertising Our a absolute productivity up margin. a a sale in the XX year-over-year. benefit division. programs was up was to year-over-year Funding basis X% gross points an basis, with drag. led advertising percent Growth On Other by every On sales XX-basis-point our provided a basis, was to to increases

share On an diluted first a quarter year-over-year from Program year-over-year per on down in QX. GAAP earnings resulting charges our were productivity absolute advertising were Efficiency our as and in and Excluding from a expenses basis, percent our and sales, $X.XX the basis XX% Global to SG&A spending, benefiting down of Growth programs.

per earnings resulting and to $X.XX. Efficiency Growth share down Global charges from diluted Program our XX% Excluding were

negative to come shorter back downsizing, strong and $XXX a of and X.X% accelerate was North White, QX, brands by our in Cloud DTC in foreign forward sales X.X% quarter up Skin sales down Organic driven should growth including growth PCA strong the net North Taking and particularly toothpaste in in year-over-year of Professional, from Colgate delivered as X% since we flow MD X%. in and Total pricing growth more strong In e-commerce. strong delivered growth growth. is sales U.S., XXXX. quarter growth the Total’s volume divisional should is by which a America businesses was were are the QX was SF, unit million, of the and launch. results. net Colgate a volume as cycle, delivering this QX growth market care re-launch cash benefited pricing proceeding growth Essentials Colgate the the up saw organic with channels, mostly very Colgate by sales up We look negative X% which of X% a going in and X.X% growth the free The XXXX. across quarter. acquired exchange. in at toothpaste versus Our in-line quarter, quarter, America quickly. number through growth this were during pricing Optic X% repurchase of took e-commerce X.X% consumers the and Elta sales share Tom’s driven Europe’s lead Maine. with Total offset we expectations, as These also the

the Total shares of volume the up strong flat While XX categories of sluggish, Europe We categories. were Colgate remain in back on our with delivered the Scandinavia or and re-launch. U.K. in market Northern up seven growth in Europe both

gains and have market Total incremental that driving strong is in region. Scandinavia Colgate share in it We reintroduced

XX.X% our a more in markets Care, which therapeutic Sanex in natural we our acceleration body and behind quarter, points Physiologic growth than Latin behind negative drive zero several in X.X% than in body basis in X.X% exchange more Europe America, wash share QX, gains as X.X% pleased Sanex’s growth continue XXX space declined wash with share up is sales We organic foreign meridol top launched Net QX. the quarter. offering we pricing in In percent Latin Sanex and also the the America year-to-date volume brings in premium brand. gum Personal in growth into are In our the Sanex Pur business. offset price. significant the to sales at France,

delivered Importantly, growth in the as growth was broad-based every organic we sales hub.

XXXX We very we in category growth. better pleased we the improvement be volume Brazil quarter both the are trends do and versus in seem particularly sequential in Encouragingly, promotional. market with as saw pricing remains delivered Brazil to the although QX

share our Colgate Care our were volume, nicely for by Guard Natural X%, off Oral and Colgate Brazil, in paying seeing of toothpaste franchise sales Advanced line, as a in Asia-Pacific down the Extracts foreign innovations negative recent Soft flat Our are toothbrush. pricing. market X.X%, X.X% in pharmacies Colgate Net Slim driven exchange in we in decline are gains and

steps rapidly China the by are premiumizing reorient difficult into portfolio in and challenged shifting to results Our our Oral remain e-commerce. that an we in taking category is Care

in in recently Colgate still the year. order Encouragingly, expect gave indicated to improve Kumbh in second pricing in coming in growth we strong volume with January, MaxFresh In India. we trends and we we penetration franchises. Vedshakti Vedshakti, Mela and Ardh of drive half on both the samples Colgate growth festival India, at to As saw away the of XX million both, the

foreign FX growth momentum QX, a on drag the and showed in solid the exchange. despite flat impact underlying X% business negative business was Africa/Eurasia quarter, XX% pricing in volume. Our offsetting growth of sales

the Our driven growth volume Eurasia delivered of in strong hub by quarter mixture a Russia. pricing and

order the in delivered in volume the also hub Turkey momentum, toothbrushes East, in mouth quarter. to Middle help and full to pricing regimen, channel we significant despite growth the first exchange. Africa, In North Turkey foreign launched rinse Our Meridol the this quarter, pharmacy continue in toothpaste, offset

the shower America. Europe, particularly strong also and and growth feed. farm Russia taking Care very our United launched broad-based, past Canada, advantage personal e-commerce, we Growth growth finally, of at was growth States specialty, by Internationally, in Hills, growth continued in both QX. this trend. Australia, gel strong big and Asia We Hills quarter delivered Palmolive led our pricing Micellar care was And volume a and Latin with in pet in

CAGNY, the will re-launch continue been Diet as we QX the share Science has we positive trends marked beginning globe The the our our with response of at continue packaging across Initial market speak. Diet as re-launch through QX. As Science on-shelf brand XXXX. new in discussed of to the of half year-over-year increase first

exceeded of home significantly our realize which maintaining targets also contact while have veterinarian. home with delivery, We allows benefits to the our parents Hill's pet service the subscription to for

full to net expect to digits. to guidance, flat Moving to on up we be continue low-single year sales

rates. based sales We be to continue to current to up organic on spot X% to expect X%

GAAP a global efficiency excluding basis year on margin full to related gross the year-over-year we to For growth up both, be expect charges still and program. our and

benefits costs which the and pricing material of to offset includes of exchange. impact our programs transnational foreign raw the an We increase productivity in expect overall

We a year as the sales be and advertising with notably, percent on the be of of expect absolute advertising a to expect consistent to our basis year-over-year as spending an We both, sales. up QX would for full percent fairly level.

per a between to foreign our to current XXXX. XXXX reform we and spot a benefit in XXXX charges XXXX, XX.X%, the U.S. GAAP from earnings down our rate to and in continue and rates, on related for to digits share on Efficiency be both to Global low-single and and expect be the GAAP charge tax XX.X% full basis tax expect related We year and the tax excluding Program Growth Based matter year.

We Efficiency charge mid-single from earnings his tax in would that the U.S. is And before the current that per tax digits for range. Global to Noel over Program the the related XXXX, matter middle Excluding consensus related for share XXXX, to estimate I XXXX the of rates to and charges Q&A. expect in the that will on EPS spot we reform turn and year. it Growth a and foreign and with the to the decline in thoughts based note benefit

Noel Wallace

us three will I and call our thought company quarter. the be you to Thanks, good we for everyone certainly success, on critical ongoing today. to our strategic of framing areas John transpire begin first joining I it appropriate and focus to in and the thank see believe that morning for started by

need going The to thinking we long-term focus going are sales are that's No differently. we we how after sustainable, growth first and is aggressive organic question growth to that after be of deliver about growth. growth, more revenue about area

brand specifically real fourth bringing and also of I penetration and CAGNY, with formulations. brand Diet, many As in to that alongside mindset, remember at are brands, Total the product our growth with some innovation Science superior these spoke the and along Colgate big that world, you global those recall businesses about in a the and would call the around we like are with driving market significant we We quarter and big brands that way. countries purpose are new different significant through bringing resonates in consumers building brands

adjacent and focus our on Meridol very Second, with us, and expanding doing and we skincare going new naturals continuing Elmex which markets, select is product to after segments that therapeutics like are and and expanding well by doors category. importantly, channels categories for investment opening to

period. Third, we were XX% ago we but regard in forward. and very being up in versus our growth are was the new through with particularly We markets, that the e-commerce channels, expanding the in very moving which of first the to our channels growth which products is new distribution see like e-commerce key opportunities quarter availability in pleased thoughtful continued year in

and areas. So, more do are those certainly to come to more focused and we on

processes around respond change to ease a Our recognize the our our that focus of of in world. we second rapidly and terms our how to and key changing We to order simplify consumers is shopping. are need area in to marketplace structures

revamping example, time to dramatically our we For market. have innovation the reduce process to

we You of heard Latin and out underway those that begin world those roll fellows we are at in and to about beginning will speak around the move my year. the the into CAGNY changes dear America, balance as

that ROI the to Third marketing faster data in data know way far know very area know drives differently. decision-making. we better of we and and focus that data-driven faster digitize We the that and growth looking enable further can data is organization using return-on-investment are spending than for is us media, We today.

use pipeline down is data across us assortment organization. can the know In e-commerce. also the productivity thing area we that of digitization exciting our in the improve for to coming some to drive We

that. started and are better in our SAP reporting standardization have in to of the all We upgraded we that around think processes we - drive we system from simplify is decision-making from to to change going our S/XHANA and which the that going had world, XXXX significantly more SAP

see to year. begin a we you into move balance the lot of So the this as unfold of

of quarter the taking hold this We in are first that some year. of pleased see to

prepared to this take to and extraordinary and Q&A over commitment, has wise for thank wanted leadership. and I grateful that months extremely mentorship I to we for transition listen forever extraordinary this continued and counsel smile people new want leadership to I want future special on be for that I proud transformed his in for supporting it's and this extend years jump this Colgate know XX of the for year. will the the Cook a team, him growth, the drive last a company. to role. six into and And he especially his XX,XXX will has am we So, build to I learn as from Ian a He over lead, me people our many their with to thank I before thanks his those important during of me organization as moment focus last ways to to CEO past about.

let with turn So that it questions. to the over me

Operator

[Operator Please go Barclays. And ahead. Lauren we first Lieberman take question will our today with Instructions] from

Lauren Lieberman

was shares. curious you could little talk a I Noel, market about bit we if

know, key for where of quarter, on, of improved at India. I in Mexico, versus so topline the frankly. them are but you talked markets down in end like of shares both certainly market about and globally like badge oral sequentially honor, have and business, this shares Brazil, a health think metric some been January, the like we important care - Just an And business and the

think about So bit in can in how the path forward share you mindset you that, you putting about would about market When you some just a are that expect little talk turn you the are thinking and greater particular? play? to to growth as

Noel Wallace

I aggressive we stay and accordingly we growth competitive significant we double-digit If toothpaste very it's first a of new mind, Total launch in particularly flat, in the seen penetration, space drive overly within deal are all, a drive growth Overall, to saw shares in North Colgate this February, to lot untracked not introduce are with obviously which the going America, of we order we saw are for Colgate sprint Bear that this long-term, untracked but responded is in Total, significant marathon and middle a introducing the we where of have looking share. in encouraged the and like the throughout we to have existing brand on are not it's those about. we weren't response the in we shelf repeat trial a channels, continue have existing product, we and a big of year. U.S. channels, a

and balance would to our business. in is So year, the the strategized for structured quarter-on-quarter and spending we the of continue have media high with sustained way the growth year through the over that end we investments the think generate

launch flat, some in we Brazil and from Moving are actually was shares other to a recognize volume Total Mexico to environment, aggressive significant - those premium slightly the a the value on competitive that share in are will promotion will due where and which the sizeable of both that quarter. some shares launched markets, it second have which the markets, in in our has Colgate down

most in Our are, comfortable so on only go. quite we down given to spending coming particularly, XX the year where total we of balance feel are the with activity in volume points, basis shares the

Operator

question We with will Fargo. Herzog take from the next Wells Bonnie

Bonnie Herzog

And I also on for quarter. - would assume So, slowed then why your about had you curious emerging I guess markets am I I it pricing in where question a your am I on you you at essentially update wondering the sequentially. future us Or for have been any levels? do pricing pricing future FX. plan to pricing? And constant then in more the or accelerate expect Thanks. current could to your taking this remain

Noel Wallace

We quarter in quarter, good quarter, the good balance and the the pricing very quite pricing first growth fourth have with were are out, of likewise, both off of that, pricing the coming in actually had pleased. pointed pleased so we obviously you in and organic we up, first as volume

how the and we third quite year. out from rates we spot we yet that that look we spot confident if pricing set the XXXX, rates, still Certainly about come, the but are change, at two-thirds on certainly roll with for that's through. to current ourselves we pricing the have quite we to to take have quarter, are pricing generate are more the and we we of will the through talked Some where comfortable a XXXX would flowed go, to in fourth to

we per Coming have downsized, very the so come up pricing equivalized of move John we X%, Total, from our up XX% everywhere mentioned, price and have the to shares we the the seen U.S. fact toothpaste Total. U.S., to the more on and as launched franchise about are balance Specifically the we is stick is pleased Colgate ounce - back holding that price is in the Total as year. through we

Operator

Wendy question Nicholson with come next the And from Citi. will

Wendy Nicholson

Just So, timing on new you us know specific give you exactly new or stronger market down products Are of following think how going coming through China? volumes that, anything were China in in on a we Thanks. that I turn some see numbers? in out up should expect the when product and or advertising there are positive assortment And sort brand do you to like China? specifically, when that? you we us tell could can repositioning but big much of

Noel Wallace

Sure.

that timing the in to the exactly fourth the for. China that China in back think call looking quarter quarter, that's are half I still we in in and we we communicated the expected turn as came expected - So we had

are getting structured we get the putting think in we where Some organization that the we the at looking and come as forward. the into structure appropriately, obviously investment China in are will going business in to significant moving speak, growth we changes resources portfolio

investments business we - that back that short-term to see start will in half So we for believe the our we which the business would in making the in the long-term drive be are some will turn the growth in year. sustainable of

Operator

will we with And go Teixeira Andrea JPMorgan. to

Andrea Teixeira

is America on my on organic volumes, the Total a So re-launch. and question Colgate North follow-up

sort not you. America, growth. about on inclusion Brazil specifically, on the Total and PCA of first with EltaMD of organic in Colgate û that of that growth? prepared through the that of give as the you launch the some the remarks launch second lumpiness trying magnitude also re-launch quarter, in the a benefit if kind terms So - Latin timing on the like, and North on organic will progress during done is the from called I thinking Skin of the see included of be now us you the quarters. not all Can a the And America so the Thank magnitude had out shipped there on quarter? any to You launch volume the in we am of re-launch, volume

Noel Wallace

in Tom's growth significant and business as suffice North seen but America a growth added so into progress very had grew we sell-in break Again, PCA Andrea. quarter going portion, we significant last with say, out, have pleased business are to you quarter. well, far. with pointed we were it performed organic a over a out first three of on growth, well. the of the Maine Elta particularly to were in that not that's good Obviously thus but Total sequential which pleased the doing not growth that America, the on another of the quarters, following have the are key first elements Thanks, North out We the all the of

organic North core of So and America their all overall, their a categories in good a balanced in businesses. well across growth performance

Colgate terms Latin the second first Total started of America, the with shipping the most In of of all re-launch the to investment in of quarter. we activity just at come and our of the in quarter end the

most the in portion come say the would move a I forward. in to first, second we as So

Operator

Dibadj to Ali with go Bernstein. will We

Ali Dibadj

a that am most. little in I a one are I want the enough, debate that's discussions on and some couple so of of The is, you theme. quarterly but big bit contextualize results more to you continue have broad, I spending the times to done hear in I the just that the trying think far

mean thought and Brazil, up, But which activity quite I in so we results, more U.S. all U.K. tracked so, consistent by as you I narrative, sequential pricing, much enough with share the are you market And some what wonder create turn as - it's looks this sell-in is quarter's the ship. do see spending are The look you not could look that probably promo lot China, at in more India, be right, doesn't and of maybe little that this Elmex I i.e. to of argue they if example, not the in to America, way, a sell-out but for shelf Russia, quarter load, that bit we spend, guys concerning more lot pressure it issues about loaded was channels. Total, others. on so good. the that on but so the was in get still space, still inventory versus North the there better great AMP you clearly the Mexico, might pricing it and talked guess the a up the and - inventory Colgate in was those right, U.S. far,

are going am think XXX% are should happen seeing I actually be And so spending more rebase the And underneath get wrong. around what just enough we or just just this guess to terms? so spending to should is not to about messaging, corner far that see more see this but just you so another be are view concern you this to you confident idea that's patient enough? that of I upturn? your So, to we I patient be - trying those

Noel Wallace

question. in lot that A Ali. Thanks,

we We a back measured So about our talk thoughtfully for do sustainable let in way. to drive step a growth to bit that strategy. a and things moment, me try little realized long-term very

first you in of as significantly brands, in building the balance pointed levels continuity really for hold will through the the well off as create the up, our everything and to advertising long we about we quarter, what like we as the pays view, and don't big as out, We and Colgate to we do scalable We to those brands right Total, that Colgate exactly a the it's year engagement that up what have know quite taken sales, need and run. behind right are a that impressions do percent that's significant look doing. we the look in to innovation particularly Total,

We Colgate balance are which brand going the to in necessarily out that. spending not that's continue successful heard XX-share, we quarter, shelf over to plot existing to the away we of a year, with money the the - brand you we very I were a like plan already. and all making our that first we strategic have, not buying not in in an mention And brand U.S. is are space, Total, want at

of necessarily increasing off-the-shelf, what not in we increases of any are the trying necessarily quarter. is shelf in So velocity didn't terms we to and drive are more basically we see shelf that doing first

is high to little give got on I Colgate So shelf and up about reactions continue shares, the have in we on competitive March, through on build Colgate XX% X to space, February consumption share move our that. four some as strong and are going point. Total. we we Obviously, is will and consumption the weeks of bit the last you strong up Total, a

the see obviously to move advertising, markets in it the like we particularly, we we America. work in there in of year. relative lot a those roll will position out, as come a are And good increases to through what the likewise to we seeing of terms Latin come as are bear big we balance So and of

Operator

Powers Bank. Deutsche next Steve the And is question with from

Steve Powers

Elmex, you franchise am talked as larger number into Oral history. - the growth, more managing reach the relative a first - are that, as naturals, driving about is as you core around are you guess other. each the of Care are got exclusive can I allocating but to up brands are like And relative and investment those dollar, to about what you of you most organically or had thoughts are If them talked in it thinking for those you am And how an all opened growth And bucket obviously, well. we Colgate one talk open, ensuring to you initiatives of the if can wondering support initiatives? add as I do sure e-commerce, Colgate skincare, you market-leading order support all them? M&A extra returns prioritizing priorities you of Hill's about dollars again, of how to? which likely today Thanks. you the increasingly arguably I you professional to are in broadening in So not the versus stepping to investing of you obviously about, - expansion any but mutually are business

Noel Wallace

Thanks, Steve.

with my - how back upfront framing around me go to to a bit comments little regards we So about are growth. let

M&A, through a big has and we have to up certain at the many we and were core to behind it. Relative line to relative recognized there, moving very we really to are on that prioritize have that three to prioritize order are to quickly growing approach we that we exactly core, about core still balance. talked looking the real therapeutics, had not when significant countries share around lot businesses need get like I balance adjacencies, in specific As Colgate needed, certainly on the spending, we driving many and how our that forward real we a we would innovation in are that growth Historically, to incremental the focused we unfold kind respects M&A. we going of shore and bundles in at that the the year. we the behind are CAGNY, with balance naturals, were that leakage put out increased extensions so the hence superior growth extremely be like of adjacencies and priorities in that's to thoughtful how of there are world how will extent that activity is a going

over those will obviously find have will done strategic value PCA specifically we couple after to very the carefully the as if we years, them. relative through fit business which we think are about, M&A Elta bring, certainly go We available very what of they right their last and great we become them excited some in the and and assets

Operator

Olivia go will Bank with we And Tong America. to of

Olivia Tong

I a the morning. wanted bit about little balance. Thanks, good to talk

the that You of as so volume assume do planning you balance emerging I are price, versus about you the price in between rolled the talked would would that just volume because balance talked performance, market becomes so markets, developed through overview then lot I turns still the you of different all factors? third a you year you about between of your of and component know, that. bigger some bit to that markets some think progress that little a a pricing about you how sort Do versus through of there, that those on do it a hasn't think assume the

Noel Wallace

Sure.

in year, heart our given to which encouraging of balance the see we is particularly this emerging particularly of fact that and the for good markets some us the that the at categories think developed between a emerging turn was the footprint. I lot world starting of are

to volume The the forward, Diet to Science and support moving premiumization and see the the volume see we just particularly hold. and going pricing after, the balance will innovation of will the we the balance take U.S. would business, going the the through balance year. into out the roll that support moving So which we start that year that of is through now the continue of are total as innovation

will will investment as we that. move right we to drive keeping the So help there the forward see continue balance

Operator

Next Grundy with Jefferies. is Kevin

Kevin Grundy

Thanks. Good morning.

Noel Wallace

Kevin. Hi,

Kevin Grundy

your question X% at guidance So, on rates to sales X%. my growth growth Noel, is relative organic industry to

year-over-year over comps and fair the So seasons for How that at expect industry this peg of X% acceleration place? couple in business a which should organic upbeat the sound you the more organic you point more you where us, Total it as marketplace So obviously changed in thing. the in are goes seems markets, as is spending thank up your like then, emerging growth a relative emerging And into good to at and XQ, sales the is has we would next markets for in quarters if growth better that it an geographies since your you all roll growth on your that. quarter?

Noel Wallace

as have tick-up categories Sure. in you The emerging. a particularly seen we mentioned,

are flat acceleration are but the rates continues world. that modeling organic, seen around seeing a the X.X%, in we a bit on little in somewhere the to move little between Europe market sideways, X.X% U.S. modeling of we we to excuse world, around are developed bit We tick-up In to depending there. me, category the of the growth U.S., X%

to we So X%. guidance think to we are relative our the X% on

there. America accelerate categories Africa and and for well levels are We we more quarters to where the particularly if bode relative that would from well-positioned underneath current that get hold us. to let’s we But those Latin continued will the us before, categories go are or a at said and couple

Operator

SunTrust. with now go Bill to Chappell We will

Bill Chappell

morning. Good Thanks.

Noel Wallace

Bill. Hey,

Bill Chappell

so the from it’s are just the us from is kind the give untracked to or get to you to two-thirds Noel, see vet first on share help came year why third of you getting can the pricing the from more maybe Is it did it. a a little you quarter? Bonnie’s or we better? or a a said specialty just question first it’s you you channel into do of channels Are clarification go market Hill’s, are to a still fair third second exactly more on to color where and go. doing give amount just during it a back emphasis color us strength hard well the doing still then, is much of don’t and understand perspective And had coming channel we

Noel Wallace

me let Yeah, Sure. pricing Well, right. the we take question first. about are

We right the business. of we we are would be where about two-thirds thought

got the into We through go quarter. a and some are we starting going a roll pricing and to third that’s second seeing have place

to the the expanding in of relative the great how well. will the the balance Hill’s core are growth strong our particularly in second the new mentioned of in on business ‘XX. strategy, be the very I to year, we adjacencies and So of indexed behind a quarters in investment the business going distribution there market it’s holding quarter. the of and had was and as we and quarter, are we a and we continue have new and share that. as into of in and those packaging U.S. roll channel, story. by particularly -- start of obviously quite at a to very mentioned from in through to is into shares America back of and gone driven Hill’s with and pricing feed market comfortable we CAGNY terms and that segments fourth particularly aggressively come the think e-commerce coupled the full extraordinarily and we new to farm come working We new lot fundamentals ticks again, had have that’s to into driving I I environments, is sales strong in the and Diet just and, have retail great growing which market were I great which quarter, now terms strong re-launch channels, obviously We go gains under Science impact new which incremental start a expanding really with media terms that will what the now going specialty. in boxes pet seeing growth the increased into seen North first formulations,

the the the move stuff the in we as balance and right is of lot all-in-all, the U.S. Hill’s out into we to of second is that particularly where given really Diet world and pleased now start Science with will to half. pleased in still So, a roll come

Operator

We Evercore will with Robert go to ISI. Ottenstein

Robert Ottenstein

the year. you to Thank start and much Great. very nice

Noel Wallace

Thanks, Robert.

Robert Ottenstein

sub how therapeutics, we it guess changing the Thank Is be that? a Is so if channel? of competitive could going? still Brazil into any you point, the the you. there? mentioned to bit going Do Second, at and deal the and that you in more of little there down points, do tied on tough how rollout I going with kind expect in about are you a a of situation self-funding couple promo you on very Wondering what’s need this little elmex, meridol to more talk doing that, that’s to pharmacy environment. in bit more investment visibility and you drill perhaps, can How Brazil. if

Noel Wallace

Great. Thanks, Robert.

chase aggressive decided point again first quarter, promotion pricing of with some quite yeah good saw We quarter, we we the on were of generated the pleased to business. Brazil. It coming was which out first volume about business. the go So We and competitors which Brazil the results terrific was in share Relative our to that the not saw to particularly is quarter. environment the our given we that in loss interesting in see. both that X roughly in

Early We brand we of which year. we through deep are seen exchange first that the foreign our That some headwinds on promotional some Sorriso elmex. came XX of because think particularly and that our we the competitors. market from will in discount days the see share, by is said that of a itself we [inaudible], often have a remainder be the at our do the in out quarter still saw brand, always out instinct we given that that chase is secondary being our activity high not driven balance that and

year. the investments as balance the we that more The through and move continue to it see the of XX% ring to rolled channel for elmex important about an XX% in Early good fenced terms on lots initiative into pharmacy will we the a particularly us point news channel. ACV it is channel The the so that in there driving really is strategic channel pharmacy optimistic pharmacy we far are are go. channel roughly have share it’s Brazil. we but to you incremental of We up grow in of the in

Operator

Jason is Next Sachs. with English Goldman

Jason English

Good Thank you question. folks. Hey. my morning, taking for

Noel Wallace

Hey, Jason.

Jason English

you the trajectory a on gross reduction you not the tracking little sorry a XQ topic or we your us been year, Can sales margin markets. that’s XQ. cost deeper of of think deeper flushed to out? the second and whether remainder net about still inventory your bit then beat into for and little is going on a Sticking are or should the following give year? stepped trend not bit the thinking inflation sizable for on, that the a to lagging fairly or And into us through whether down take on where consumption How expect headwinds and China,

Noel Wallace

Jason. Thanks,

add coming Not there. So quickly more China. to back to a lot

with the progress good came continued in-line it We our The fourth the de-stocking expectations. first. progress quarter, in in in made obviously inventory are We continues.

the that and as through as some product particularly mentioned portfolio it We of I to will structures are go-to-market the and take the we market, rebalancing, move our year. of we around the unfold as specifically, balance how results

first sequential So we speak. through of improvement in in that half the margin, cost, to fourth quarter, bit as the I and cost abate and yeah, around will move little Relative in moving occurred lapse as some significant said through expect we that quarter, that we of better saw your terms elevation the we profit see back the question first gross we so a the schedule through foreign in is expect moving range increases on and balance gross year of of to of the to half impact X% we line commodity to we of through the the and last that as in year as had better transaction the X% year. move get exchange the

given answer expect gross question your we forward. we the continue that margins abate, to moving to yes, hold So has is, and us which can confidence to that increase

Operator

Kaumil to go will We Credit Gajrawala Suisse. with

Kaumil Gajrawala

what contributed how to that like context you maybe look you remarks. I some perhaps was your e-commerce share then, And context on able your like versus margins you various much what up think, versus little are elsewhere guys. morning, growth? prepared online elsewhere? provide XX%, online Can said, Good looks e-commerce of Noel, to parts in your mentioned us more a organic give Hey. you

Noel Wallace

Sure.

new focus area important to we of earlier, an first listen, a strategies e-commerce very us. and retail is of expanding outlined share pleased. is And for I are back all, coming Again, so those that environments So, that. to fair in getting speak our real growth strategic

of move points the shy driven which The certain continued see growth Asia, we we there just a the importantly, quarter, are and Colgate year. XX% back the X.X the shares were driven half e-commerce on looking and Their we was North were a strategy the strong expecting turnaround by growth as of that’s softness business. extent through first on part this alone, we have to that to while the we that are with we the flat franchise up America mentioned, I are didn’t was likewise performance. shares Hill’s and in As execute is strong a terrific that up in of

Operator

with UBS. Steven Strycula is Next

Steven Strycula

Hi. Good new the and on seat. congratulations morning

Noel Wallace

Steve. Thanks,

Steven Strycula

is question have year do after which revenue your three incrementality my few guys And you would the guys dollar you next work for few given combinations biggest quick standpoint the countries margin of portfolio haven’t and the be, defined what done is as outlook relative years? as Thanks. the last did around last forward across gross for look to you years, think quarter? part category that opportunity reason the Noel, we look profit you So, are second there parameter the anymore any the an you and

Noel Wallace

equally the we focus love this Care on us. case, a real children all Oral in continues to for our obviously, listen be categories So

But ultimately organic focus quality and is always that Personal to as will prioritization, for. the across we The in we first growth John by regard. was priorities driven have Pet our opening composition so view Care, and by we a largely are certainly, top three and organic our Care, toothpaste the that looking encouraged. his quarter our But from we continue Food been mentioned in on that we Oral had categories and all the very which positive delivered remarks, and in are Hill’s,

I add. around mentioned In second gross was Listen, much question, your have it -- as more to not terms margins. we of

margins be gross up the to year. expect We on

quarter the we as abate to quarter fourth the expect first the balance cost and saw We that the through some of the of environment move year. we in

pricing world. We out and around and re-launch re-launch the to rolling more Science the Total Diet we have got come obviously have

of are comfortable the and the will outlook see at in spot terms given. that are unfolds, where that we we comfortable now we rates So how with current but we have

Operator

will to with Mark go Stifel. we Astrachan And

Mark Astrachan

specialty alluding PCA you can and And in and kind of into good channels, market of Elta. curious confidence and into am it to I forward? selling the that and of more me channels, morning, you you your think about take think a specific learning you Thanks, offices channels. Doctors’ am do Wanted to and kind success I competitive other broadly type mass perhaps like or can skincare about step How on specific skincare gives have to do those indulge in take comment what other given further differences brands the dynamics from everybody. going versus about just expanding ask

Noel Wallace

Yeah. Thanks, Mark.

particularly across bit Let core Elta and terms driven use. strategy as the business, at what and me back business those can we wonderful Likewise, e-commerce an go-to-market they level growth give a and they competencies strong the marketing from or there, at forward. are the monetize of we aspects and M&A. PCA businesses they love going their have perfectly. effectively. step minute Vet little learning just how learned businesses a you have done incredible importantly PCA that those have the parameters has particularly obviously has just for into Both Care in acquire. more and unique those that we an fit and terms insight that of Oral and economics how aspects Not from the a very and endorsement PCA the level in around our of dermatology levels. digital that to Elta in-office Obviously, But aesthetician what enterprise larger the model, Elta company, influencer we on with bring successfully data they how to simply of at at business and look have categories them. we

other So categories will of out them we across in into bring insights the and certainly business we quarter. the least in those the continue that coming dial growth that up initially to businesses are given investment some first seeing we and at the great great leverage

interesting is Skincare forward, Moving to us.

We right now. focused have got two businesses that on we are

have that after interested available value year. very But bring the focused lay will of we drive moving we Company, and in for it those. go are If come how forward. to we to real see and we to the certainly things continue will now going other what we we on are We those right think will out we are the balance that’s Colgate

Noel Wallace

Colgate to again, to all a we of should So, We that be let thanks obviously, lot do. there’s good of. me a the work extend my quarter proud team, entire know

let’s are very after get focused and We on it. growth

on and second and quarter. be we of balance much. we the the the in the are the through they will We say into quarter as with Thanks everyone third in move as so call touch quarter

Operator

disconnect. much. And today. call conclude and to That participation thank thank your like everyone very our you I’d now for you may does for

Colgate-Palmolive (CL) 26 Apr 192019 Q1 Earnings call transcript