CL - Earnings call transcript Q4 2019 | Colgate-Palmolive Company

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Operator

Good day and welcome to today's Colgate-Palmolive Company Fourth Quarter 2019 Earnings Conference Call. This call is being recorded and is being simulcast live at www.colgatepalmolive.com.

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

John Faucher

Thanks, Aaron. to quarter welcome call. release and morning, our earnings fourth conference Good is Faucher. This John call statements. Today's include will conference forward-looking Actual results could differ materially from these statements. the the could results from XXXX for a Please recent cause filings all XX-K actual to earnings of Colgate's and SEC statements. release these refer website on our and filings subsequent with materially report the SEC, to annual our discussion differ available including on Form press most factors that

financial also earnings in include GAAP those a full This measures, conference is non-GAAP and the including is the in of of reconciliation call and release press available X tables included will press financial measures corresponding identified Colgate's discussion on A earnings to X the release. website.

Wallace, Henning Officer; Chief Noel President Officer. Joining and Jakobsen Financial me and morning Executive Chief this are

growth. our path with will moving XXXX our XXXX begin I progress returning We thoughts to on to to some in in before meaningful profitable made guidance. our XXXX, performance on sustainable

beginning increased As to at XXXX, the our growth that are investment and brands changing we in in the behind deliver markets. required our capabilities said of global we

pay We strategic empowerment and have faster. to us work changes Those how off. to streamline drive our make started in also to implemented processes choices we

to X%. growth X% and XXXX, the of organic X% our sales guidance within in high-end XXXX range in growth our target to of delivered As X% net initial we of sales range at of long-term excess guidance and our initial

guidance. in On per year, initial beginning of GAAP the share earnings of our range a within the excess non-GAAP at we you we basis, delivered earnings were gave guidance share while the per

and economic to some XXXX, delivering performance third India. fourth return And both and in capital spending. on growth free and We organic delivered our markets we delivered Brazil the from growth cash Mexico, discipline in despite due improved on to working sales flow uncertainty quarters. like performance in Our up importantly, to was capital commitment this headwinds in X% China,

So growth business, focus around in drive markets successfully in and better core is We of on Our growth growth off. paying our we adjacent driving availability innovating segments, several our XXXX? franchises. core of faster our channels and how do in continued the re-launched expanding

we year-ago by delivered several double-digit major the contributions markets U.S., sales Brazil like On organic with Mexico. from QX, growth In while to the growth Hill's in Colgate cycling in brand's period. delivered Diet years that deliver a fastest Science in North America, double-digit key Total, and re-launch. Sales continues led strong coming growth the comparison

come personal key more XXXX, have core care on to in oral especially and innovation We care brands.

in performance contributor with for products has improvement our faster-growing appeal growth new that natural Our adjacencies that delivered and in to a consumers' products significant XXXX. more We sustainable. preferences been are to

our launches sales as well. charcoal with share driven the continues and have Zero% Sanex growth around and market toothbrush bamboo and world We toothpaste to grow

brand. forward. on In a PCA we skin of Care reporting These double-digit health, also note to growth earlier excited acquisitions in and QX Filorga on we for that A closed announce are currently EltaMD the sales Hello are the year. to skin acquired growth today contribute quick acquisition Filorga, one-month We our and should Filorga we both going lag. Oral achieved

from the November. the mid-September the of fourth includes results Filorga quarter only through in end So the closing deal of

our reporting Filorga calendars. transition we will to we When SAP, up line

very and pharmacy, us the has channels growth focus e-commerce. and carry deliver strong cash club, seen availability on especially faster-growth markets Our in in and

across the a sign new into the We're model we prescription Hill's and easy efforts grew It's established with from our patients leveraging compliance. for Our to way which new e-commerce venture XXXX, XX% for organic rest diet. a in Home, Hill's new and business to provides of that a learning's direct-to-consumer business. sales subscription fast our up increases direct-to-consumer veterinarians

also the America. of by and Recyclers, first tube of its We on recyclable which certified Plastic kind significant the inroads toothpaste the Europe in during Association North both launched sustainability We is year. made now available

we facilities recognition ever for received on taking and TRUE XXXX, our certification Jones our industry lead Sustainability Zero highest earned XX As Waste we Dow Worldwide time. the in have from of first the Index sector the

delivered Our we We acceleration our sequential growth leverage that fifth returned I overheads. expansion performance fourth out. sales to quarter quarter our reinforces gross laid the and organic of just progress in delivered margin consecutive and on

GAAP a was fourth basis, the gross up our quarter basis margin profit On in XXX points.

our and costs, Excluding gross the efficiency profit growth impact global up our and was basis program charges margin acquisition-related points. XX of from

our quarter, XX fourth unfavorable points. points. the almost Raw from productivity initiatives by For XXX the Other, of basis by basis offset XX from points, by basis gross pricing basis were funding to by was XXX favorable entirely margin mix our growth Filorga favorable was primarily materials points.

full Our as In from charges the logistics basis advertising, growth year. for lower our advertising benefited from efficiency quarter, XX fourth was fourth we spending up quarter, SG&A X.X% and leverage, costs. program the and the and year-over-year the points savings up our finishing operating for down excluding global was XX% productivity

we on the progress door advance close this XXXX, as through XXXX. our to So is focus on

to exchange. to X% X% For X% in long-term foreign our growth growth organic range, driven acquisitions net the from and to and negative of with XXXX, by the X%, we X% from expect X% impact a sales modest Filorga a consistent Hello benefit targets, of sales

gross by expansion the the in underlying XXXX We Filorga. as driven benefits from as business mix margin well expect profit

positive modest inflation. expect productivity We more and the continued offset materials strength our of pricing initiatives to raw than

behind We organic we in but key capabilities expect will just which also in building brands innovation not like analytics. data advertising, growth of our to and be in sales growth, terms to year-over-year, up areas and to maintain invest continue

also growing of discipline, get crucial of to but combination These cost and growth, to sustain cost expect market growth, the to organic leverage sales We shares not our mix. through investments base drive rest topline through productivity our a are only again.

think part is particularly and key we've true about strong a overall channels are through strategy talked This in performance. North focused our a where premium is in few of And improving delivering our track growth market in Our quarters will factor particularly shares. still all a on away. channels better in is be Accelerating in share we XXXX. turnaround segments the the we innovation non-measured America, efforts, share this key is very

the should Hello the expense be Interest Filorga and up slightly year to due the in debt increased transactions. from

a share. earnings rate be a single-digit high planning GAAP based mid tax XX.X% on on our for costs. to and we current expect a basis and GAAP are We On rates, to XX.X% acquisition excluding spot both between per increase in basis,

the global on program, the costs, in for acquisition-related from benefit that planning benefit efficiency spot low seems a a from to increase we earnings at share. are from reform businesses resulting income will and negative the on mid first single-digit value-added tax for in in impact the growth quarter. Swiss the certain least in there charges point, a matter company the rates, China this based be current our from and per tax it XXXX, coronavirus Excluding Brazil and At total

we this impact. in to it guidance. too included early is not therefore, has still While temporary, it our to been And quantify the expect be

provide performance, growth, first our out our call. to organic P&L cost We exist that volatile an year expect our a believe to on sales quarter position We plan of well the as in our need sustain be our in a this focus appropriately on CAGNY update improved to uncertainties driving as our for at balances fairly and world.

And on give XXXX here you his to thoughts is Noel.

Noel Wallace

Happy Year, Thanks, everyone. John, New and

of we organic organic volume in progress than made we Care business. Pet XXXX. closed And meaningful year, with discussed, sales in year Oral categories, highest do. our Personal organic growth toothpaste delivered we and our led in sales We sales grew grew have now work all by years. Care, we our in rate John and out three quarterly four Care, know we're more sales the Nutrition. XXXX in We we mid-single In more the in Oral business every division. to of organic our As in Care, Home But digits growth

our for are here top priorities three my thoughts this So on year.

like consumer growth. lot for delivered innovation products wet our us. forms more potential whitening, sustainable adjacencies in Hello given therapeutic, acquisition core in see and drive is We more business. health the new winning, focusing area year by opportunity about to premium categories, still that opportunity excited innovation in are successful us for that new are importantly and premium of the and deeply pet is brand markets, And lifestyle, skin and is for preferences of natural. last big a first core but we of our channels, We're The a on obviously top changing on

innovation, improved while need we of our we've to Lastly, get faster. speed

XXXX. reach to you'll the out it and We over play are innovation cutting see time aggressively the that market takes

need methods get replace digital more on becoming is do speed tools use to in we to digital to in to order priority data-driven innovation. second we innovation testing traditional Continuing everything our Our up and commercially. faster, our

using effectively our businesses accelerating our and across and our a and plays through a standardize P&L to and will drive and e-commerce working. Projects resources to drive allow higher We're ROI. to we're best of share and areas co-locating becoming efficiencies. and as move like across Digital growth. that analytics our sharing us global We're productivity digital processes finally, learning delivering more part data-driven. ways business Colgate spending businesses more to We're new drive by here move target simplify practices And toward the geographies S/XHANA real well. Hill's

deliver In savings program, tackling culture, continue growth our Colgate opportunities to enhancing more chain, supply to and drive best-in-class employees other our drive with robotics cost we and more so our for we're opportunities to funding efficiencies. automation productivity can along the have our

XXXX, us those smarter, growth, our digital margins. and focused our drive are data for to three and our we're to to priorities premium more make drive top innovation productivity So, faster on

any be And questions. now take happy I'll to

Operator

audience. And conducted telephone Steve will Instructions] the from question-and-answer ladies Strycula UBS. We'll with and our today’s question electronically [Operator first gentlemen, session for be take

Steve Strycula

morning. good Hi,

about manage of this my you about a how of category I assortment the such with John first as to question the of think be as we his to within would American forward? ability desire premiumize do is North how brands in mentioned should oral new remarks. inclusion think prepared your Hello, some we So think kind build care business

as names United that the do to and we with and returning how growth Tom’s? Colgate in about say States such think So growth platforms Hello balancing

Noel Wallace

morning. Yeah, good Steve and thanks,

had brand our brands around don't brands Hello has at look U.S. so a we last successful are here SKUs quite positioning portfolio our of successfully. its very years. multiple now. what's of entire where our growth given And brand Obviously Z you the as positioning in and portfolio the the doing have the perform on and history it clearly been world, over a is a So, well. the type driver form managing couple amongst extraordinarily brand high about really some lifestyle Gen of type It's other free and exciting it obviously complements a millennials Tom's

and terms look we it's manage think we world, in positioned brand incremental core delivering North as of growth to America to around franchise. this So the uniquely the in particularly

in was one saw business. care we care toothpaste. XXXX, growth across of we in on we've the to And it As particularly had accelerate oral the year years continue last oral better

And know for so we the historically very us integrate and going Hello. we're the XXXX run case what shown and to is Hello be bring with them about and will multiple brands acquisitions excited how portfolios to in with to brands in business. that We've

Operator

with go We’ll Lauren next Lieberman Barclays. to

Lauren Lieberman

Thanks. morning. Good

for give interesting very you that target gross a margin did XXXX. So not

about that bit change think held So different has being I wanted address gross approach a have. we if if Colgate, margins to whereas, just a as at a must up should know been always could as of that you maybe

a that Thanks. So bit talk about if great. little that would you just can be

Noel Wallace

the is and mix that provided lot raw driving focus a foreign it of focus there's lot in gross in Listen, well. guidance lot unpredictability And a continued play while of mix laser it of to was have a we we a and John the felt margins on really to today, and lot Lauren. packed whether as morning, whether morning. to exchange, driving The it live top still gross geography important as the Good EPS be world materials, priority, line outlined of we in Sure. margin this we volatility delivering we be growth plan on grow XXXX, in Street which commentary, his play,

productivity, we believe bringing those the opportunities the have, business, As margins growth mix that initiatives our have, to we to funding go, obviously, us allow focus far we all care Hello continue skin like as gross into the brands complementing accelerate margins. gross of the will

Operator

take Dara next Mohsenian Morgan We'll our question with Stanley. from

Dara Mohsenian

morning good Hi, guys.

Noel Wallace

Morning. Good

Dara Mohsenian

bit but America uneven substantially the company. Europe. the rebound far QX, both year growth also in results been in it's of but So and pet accelerating we've seen markets with a not a North organic clear businesses But sales full in strong for a so and emerging

So strategy and Europe? compare I those can markets in your anything learned And you comments America was or on time two should could areas. emerging and pet Europe from hoping in America changes just any may Is the contrast you you've that apply green when Thanks. North shoots channels there impact separate to the in at turn? to America, particularly North to take there see we North expect of in track some light improvement the and least

Noel Wallace

Dara. Thanks

play different exploring channels. on the been in on growth. months, seen strategy organic differently deploying is obviously last operating overarching out So of new adjacencies which you've core, we've let's obviously take XX focused and over a to acceleration our that that step And back with driving with our and the the -- XX

said of our categories. obviously across all accelerated all our as regard the in statements, And upfront of that all we growth of geographies, divisions in we and our

the we executing we're think strategy doing is on So that underlying the how quite well. around world

just are about business. on And Europe particularly one Shares U.K., very executing we of pretty obviously, the which Colgate the across franchise base. we've markets. Obviously different got are well out in categories a the with we all And Europe is you good the our Now, geographies, as there. are talked business a strong and different earlier, pull largest there mix very, we slower, performed both bit our Total well articulated competitive very franchise. strategy that as really

overall optimistic relative where we're the deploying. we're to of strategies see So we going Europe some on

the Categories bear the to the times in developed are growing nearly emerging in But fast in as growing basically X in aren't mind, Europe about world. markets of they the categories our of as categories are part in the rest world. at

slower at of So America a be both and growth. would again, in pace North expect line you Europe terms top to

on that work business Relative we how go turning we to There'll done not being focus North for on transforming focused a we team think R&D to We're potential it throughout from standpoint how the We're America of more that technologies the the John on we accelerate on around be America, obviously a that under from how growth. at year. the have very, we innovation weighted. structure that be Most look about will there's right team a standpoint, currently lot we business. leadership we back-half rethinking way. the lot look premium looks coming we of at see as very premium innovation. we're speak. we're how and The is fix good pipeline down going at think from really North to some a that will continue as But

going sustainable on have the business and that growth driving focus. the based key disappointed not our have seen, fourth progress long-term with piece We're sure but buy say the making we plans terms to the on to is we we're that We're going in in the I really of made I've we're of share encouraged premium do Obviously, the they're back. in quarter, going. things that to business where

Operator

move Sachs. with We'll next English Goldman Jason to

Jason English

and Hey, good morning happy belated year. new folks

Noel Wallace

Hi, Jason.

Jason English

this it's back I durability want been -- guess, of highlighted that guess been impressive that's of to time Really because I is seen pet performed long question pieces food. type key that's one we've growth. growth. one the to the it's well since I Dara and come a of

looking shift? more ones brands not but their shelves space, hearing have hugest turned vocal are some and give of seeing one that We expect the that give you bet they're same to reset brands we less as yesterday do some and XXXX? retailer, supply And it And that space. that positive grain-free know legacy of you? at I tractor from it of this they're to believe to they're Are more track the type see reason to is a to we continue you momentum the can

Noel Wallace

seen which growth very terrific Diet the seen kind in obviously which harkens company strategy we're out And core, the of Science North on numbers as is our on Hill's. focusing you've across cornerstone across America. we of rolled to we've as with back pleased Listen, Yes. this the the

And be rolling that strategy of channel around Science executing that and in into XXXX. relaunch, getting in the in will started well we XXXX Diet will with at looked are as the world in Europe we core. the the we're expansion the expand rest to had We world. late that both the how adjacencies the the as We sits farm as e-commerce, we feed really and with we're confident well obviously,

a coming that in of and continue quarter year growth so double-digit go double-digit of that the durability think as business of will given in XXXX. have the strong Diet delivered Hill's throughout fact U.S. the business a aside in they is on that from the innovation rollout Science we that rest last an pipeline Now durability specifically quarter, the Take another there. to on this example. of the the the clear the fourth indication I We business, delivered year growth the size world fourth

question more no difficult comps will move there's we get forward. as the Now

executing So well focus opportunities to innovation piece we and is of moving the in against growth in do we some channels business, we see comments adjacencies, of which mentioned the new really need exploring continue wet about I the things my the on forward. new up that which to

Operator

next to Teixeira Andrea move with JPMorgan. We'll

Andrea Teixeira

everyone. morning Hi, good

little since And then got fourth America. third thinking in through if can Europe more there. and more bit So America if volumes I us LatAm, in if in you to as developing see -- we've more growth but you your a have quarter as know North March momentum see bit quarter in Asia you you a out roll premium more can markets. a balanced been if But the the embedded the And North since Pacific a you. you're impact, products of still quarter. pricing balanced also the explore continue of between more wanted to you coming elaborate volume took obviously you back growth Thank can the coronavirus And and guidance, there?

Noel Wallace

Thanks.

a markets. So let's emerging talk little bit about

do know, revenues you less XX% As of outside U.S. more well we the or XX% our

the emerging the growing of market So mentioned are categories least the at healthy I rates growth as developed where we earlier, above focused core markets. in our we're emerging on see pace part a very at world moving. And

So developing with what X% on our the to in strength of like in consistent we'd organic the moving in obviously emerging that growth X% year have given we markets. is organic growth versus the of see profile forward emerging

Latin solid well going in Brazil. rate there's is Brazil And be pretty up holding X% to recession. some -- that in time. fact X% seem they America well, given a the in specifically there. in should America quite business category technically is are over doing the We'll on improving. are be Mexico But where well. macroeconomics to We Latin seem that the Categories how doing unfolds Mexico in obviously to the see and uncertainty

pleased be and to going growth Asia. take organic be on getting we going the Moving Asia is said, turnaround to seem is Obviously time. to as with on in of -- some another quarter very to track. we've But

innovate long-term that as the structure growth right we're channel. year, half in on to growing executing get saw e-commerce how look the the get right, we and we the particularly the go-to-market While of innovation right, we to the portfolio good get strategy is in Asia at this back a

coronavirus there's more not add on The that. much to

all First employees very that safe. our pleased and are foremost, we're of

very on focused that. are We

contingency back dates. of current planning the more look the at we're extend CAGNY. chain implications mobilized everyone to the to all virus relative intending at with come And have We should the information to production to supply beyond

in business one Obviously, a months issues XX don't is that Africa about talk we lot. to XX ago. we had

play You've the strategy seen think numbers, the seen I growth. durability out consistent where Africa of the in we've

of had good half. one Importantly, markets South Africa our back a largest

geography as be to performing the our in seem And important so business quite well that well. as categories

Operator

with We'll next Steve take Bank. Deutsche Powers from our question

Steve Powers

pricing your Great. first you strength. said, just came back clean our North to profitability Thanks. there share way up quarter Maybe know and America. wouldn't below to on this in buy just I expectations. the But you

maybe the happened half will in at So of what least carry help you until could quarter unpack first over whether the that and XXXX?

if across question main you that just maybe businesses could has play your broadly, My skin more and the been just category care accelerating.

brands care, additional expanding pursuing just a maybe expectations. performing various against bit context your a prioritizing like Or M&A? also love skin to little investment Thanks. whether more or in your you that direction? Tom's organic And Just Hello how from even about more do would are brands appetite comment obviously then on in

Noel Wallace

Sure. Sure, Steve.

were pricing of we our preparation frankly in of Total. quite quarter most across of On bear for promoting franchise mind that the the the given not year in at all fourth launch last toothpaste the

in So the year very this they were for obviously quarter the year. comps were versus fourth in last fourth where difficult the quarter us

of both and We the also quarter. category mix in had the impacted the bit a that the in margins mix channel

John U.S. his that the sustainable Moving innovation, XXXX. and particularly around forward, the U.S. in premium in the very for half comments, back mentioned in to the of most prepare in focused our strategy in, of work we're with will as growth that consistent kick long-term doing

Relative to very care, skin we're pleased.

accelerate we're the categories the XXXX. to currently innovation we as our we What in and they've of those carefully move got compete. double-digits a heard investment and are continue very upside businesses and the which to balance we geographies. is pipeline those we focus thinking geographies expansion upfront And comments intend in growing do new You our in good see into in about obviously significant through

impact of big on has moving retail business specifically Filorga, there. Filorga, the in so a a good how for skin that and forward. we'll so care to for have see business the we'll the travel piece of unfolds both on terms our – we're coronavirus see and a is of Elta wait business, China Obviously,

attention across PCA assets if relates we've that between we're Elta then in where we our we're listen acquisition it right We with terms And there. as Hello, skin And right to care be got now. got Filorga, M&A it. the in we to came never. right consider something would M&A, of never really and Obviously, say growth the excited need of but of think terms we tremendously potential the think

Operator

take next Nik RBC. from question our We'll with Modi

Nik Modi

mean, struggling Yes, provide for and bit. can you everyone. contrast. morning, some very Hill's I been good a has was compare doing after hoping well I

hear just what I how on kind the Care to Hill's thoughts evolution progression of of wanted Oral the terms happened been to you your the so And some strategies and core of of in you've about business that of kind think and place? putting in

Noel Wallace

to deploying cylinders relative that that core the world Again Hill's channels, which on Sure. strategy hitting and we're adjacencies across regard. is the is in all

we're The XX% e-commerce other very our in the they're in important area business, which incidentally they on a use advantage the almost that how thinking digitally how that drive we to now analytics have embracing much about to was see business and unique quarter. is up focused

the hitting diet more they're comps prescription But the obviously good news I've of get right on now good the an all The So is plans things said, moving is as business. that part business, difficult. forward. and growth right which obviously important they've got

think have We XXXX recover innovation recall had we're moving given to we in XXXX the of that well of forward. some in that obviously coming from the impacts strong we positioned, and down

efficiencies from our Obviously as digital benefits on and really ground learnings share seeing mentioned, terms the on relative we're to we particularly maximize in I how and pay my combining by learnings Hill's likewise and learning upfront the across against around great have we in comments, Hill's, e-commerce teams, for in to execute we're is digital, Matt. that learnings the broadly we how at the and data how we business us. that digital look quite those buy dividends sharing will Colgate of advanced

Operator

ISI. Rob with next go Ottenstein We'll Evercore to

Rob Ottenstein

very Thank Great. much. you

have XX%; you U.S. Hill's and on Can of in to kind Thank e-commerce of a give brand I to on seeing? large think sense China, side? Care what get whether particularly, percentage business it, bit points, Chinese the us of overall China technology granularity rates e-commerce perhaps whether touch XX%. question the Oral of initiatives you're in the providers going kind on little with on right terms market you're more portfolio, specifically what's and e-commerce started And the What but of most you growth And of business a just e-commerce? right to it's price rocking the you doing? in love rolling? mentioned, you Kind of get really is relationships up e-commerce almost in the you. a the

Noel Wallace

Sure.

So, with e-commerce overall. pleased

were business As mentioned, that we about continually year. it's the that fluid working, bring what's the you're This to what's XX% quickly. new is which pretty and a business, not in data-driven, up John able because is upon act you ascertain, and great learnings so

quite empowered make we differently take fully So very decisions can we're how live managing they thinking around than among ourselves those to that taking structure decisions -- e-commerce they're that. with so business, teams independent rather that and to having wait for

as both well side the or side. as us care on that's Hill's benefiting oral certainly Colgate side So the

will that our as up well. business growth. Maine strong Colgate e-commerce is Colgate up XX%. strong which of was on the again. franchise is of very come was last ticked shy business the Tom’s Remember nice up e-commerce now, in significantly we quite have The just a driving the year Hello into U.S., And business Shares business.

data to things with that the bode uniquely of in ensure going innovation structuring to flexibility As business the our we much order terms and a likewise specifically, side in look relationships develop well on we're getting on ourselves to do forward. we're moving the the whether of mentioned will for to not of I think the of a where in way different We're it big some differently China really we the Alibaba but business, partners of to only focus business the and at need the looking JD. premium collaborating we're more which -- them with bit very strategic having with more or side, starting be side big partnering there, some platforms at

Operator

We'll question from take next with Bank our Olivia Tong of America.

Olivia Tong

Great. Thanks.

on pretty come First there, on margins? you the your they've remediation actions think Because you're taking as view in dramatically. just about America, obviously what's North

you certain of Do here sort going gets is premiumization. better So now you stay. Or forward of this is focus premiumization? on a talked think of investment because the level about the margin the to

Noel Wallace

improved obviously in third from Thanks the quarter. margins they the Listen Olivia. Sure. were where fourth the in quarter

As I talked ago. about, environment we had comparisons some year more promotional given difficult a the

of in in our couponing little category that have carefully. step-up very We seen bit manage but particularly as toothpaste in of promotional around increase their we'll we've competitors seen space, a some the that values a

move innovation accretive the we obviously be mentioned to that premium is focus at to as and getting continue back Naturals the I behind increase premium that with in margin growth as which incidentally the only will we sustainable brands to the in to which lifestyle of Maine, naturals X% As help push lifestyle move The as Obviously, area. U.S. the heart is our innovation will that continue earlier, like business of push market. towards durable Hello, mix investment and margins. business, the will has Tom’s forward, we brands, awareness and today the that a

will put well. that, the So that behind as out continue as we distribution, nicely for obviously, more the and play to expand we investment business

North the do and we're holistically fair as its for moving and that seen to to building share forward. long-term. that The America create obviously brands going we're sure for us we've again, rebuild right meant innovation out that way on the that we continue But the long-term business focused making top globally get and obviously play the on to line advertising and is sustainable growth will

Operator

We to Kevin Grundy go next Jefferies. with

Kevin Grundy

company's look morning the to on drive for everyone. the leverage line greater top and Good beyond earnings ability between we Question as XXXX. Thanks. you

So clearly an this investment year. was

line relatively down -- look line mid Understanding to mid getting with FX single-digit you line you're You're a top excuse next guiding that mid the in me, which up to -- single-digits headwind. a payback, top a single-digit low is encouraging, out organically. a bit component EPS year the low me, of but as to single there bit excuse mid is little of single-digits little

be look you tell you now. will best adequate at But your guidance for company levels you the investment and at look as can budget as your

are levels to expect adequate? So get single-digit get community Thanks. should a you're investment return once better leverage EPS to beyond you as investment where the XXXX, growth able high

Noel Wallace

to let leverage how talk Yeah. not We're about productivity beyond little thinking a Thanks Steve. this obviously But me it. and we're guide stage. XXXX about bit and going at

We line we shall past quarters foremost, it sequentially deliver the through First and will strategy you've But that the the as and last year. we're where with again, get unpredictability is exchange through to less best in seen than and the top growth compete organic see this we line. that our it been the believe leverage consistent environments goes. the around very driving as going sustainable five top Obviously, see. growth, obviously punishing reinvigorating with P&L a of has we'll been the we be little foreign we've

the As I on P&L, and top across productivity focused innovation, the beyond leverage mentioned the very in the line are through drive premium which entire the obviously P&L. will upfront we very,

from efforts that list We projects at that will I of that the will from around have a and come the delivered SX on that. discussions leverage through. that We're technology had looking we come and simplification thinking obviously how the and standardization we're through productivity

So focused on we're very that.

chain, our likewise, efficiencies at and plants. forward. very supply looking drive looking to as around automation We're of facilities differently to segmentation I mentioned moving more the the use robotics in The world

So, drive productivity in back as we particularly see right the line, through in through see our And of of focus that North half we'll right America that the we'll the move now. that coming P&L. productivity XXXX. Most is productivity top for

Operator

We move to Stifel. Astrachan with next Mark

Mark Astrachan

ask M&A Thanks about and Hello of everybody. strategy specifically good kind morning, Wanted in to broadly.

not Thoughts necessarily you to on the a at the of M&A on specific here more done balance but than couldn't that you on multiple more the so to give And how about even I broadly, over own since Can that as describe potentially So, once digest guess that although company's maybe on or the brands? lot ability doing they're lot small in what think just M&A your handle increase this of at the year this over? not you certainly you driving deals. taken something leverage larger has get you've should there's going more just I there's take last point? How you And Hello do there with targets And what's kind but materialize? sheet deals. more does broadly a been. have leverage point do

Noel Wallace

Yeah.

So thanks Mark.

are China changing, and I the and changing, consumers upfront are months. in last particularly XX aggressively So over peak mentioned lot that more very seen categories of that in markets and changing, America out we've a Asia, are we've that certainly seen disruption North

brand strategies, And so in best obviously can as given for we the at to we looking position one we you're they obviously look at as the And a look our business, where particularly we're can't be all seeing in disruptions, our our brands compete. portfolio marketplace. areas,

Hello particularly the perfect our seek see us Care, And Oral for fit we after in for go if portfolio, a will to right those. brands we complementary And opportunity within was perfect, of not positioning Colgate in Gen Tom’s. millennials Z, It complements is and relative its strength obviously terms unique itself – the very to a well well it of with franchise. which

business the brand, going core think going well business very it and a into brand, where it is Tom’s run we very is bring business. fits to we're differently We're Hello the Colgate independently. lifestyle-oriented natural-oriented and the a not so to run

So we're over to Lloyd very fortunate coming and business. the to Craig have

of I them. you met think some have

strength You their leadership. know of the

how innovation You marketing, wonderful very world to Craig of Colgate know around the a approach and think intend business We And as think the help about for about the to of strength fully think them their our brands. both transforming very, we us will innovation across the differently. I how think instincts we're us to market. be about, use they ambassador

M&A to As very earlier able continue be comfortable made, with the we we're to I against that deliver we've mentioned, those. where

all best-practices, run to reason with is relative machine that them but very the training, And business We we're have to the I We successfully cultures, speak We of focused. maintain their to synergies, do we think against so name Hello. opportunities let Colgate a that the the flex and to offer record independently. continue M&A. it delivering we'll track you

Operator

next SunTrust. move with to Bill We'll Chappell

Bill Chappell

Thanks. Good morning.

Noel Wallace

Bill. Hey,

Bill Chappell

on kind trying rolled North mean, how But just I especially especially America, kind Bowl it your And year of to color platform the I commercial fourth to also back in part spent just new you the it been to good – would money kind money you the in don't needed would North the to in re-launch results before this of worldwide. from understand, – line Super a understand out light what of year. spent Could the of this taking products American expectations? done be with was the was kind I restage of quarter look but that great. total elsewhere? Just in there. be your grade of

Noel Wallace

Bill. Thanks, Yeah.

price we a probably through increase we best increase held the a XX% and listen the the Total that So if performance, And franchise on business took that pricing of in had better part the we've big take core year. price you like that's decade. Colgate

we've standpoint, three fastest pricing So Total on from excited. over quite a Colgate in And growth we're the had years.

delivered suggests our that that big successful. certain was in we So have expectation. Did like very relaunch we in expectations against its perhaps Mexico have North shares slightly the in But own U.K., Brazil, well did Sure. geographies? the high markets like America our where higher like we

drove differently the would recall, and a of But we okay. little oral overall, downsized through volume good it share care. brand, the perhaps done But Our drove year have some have and had bit launch. equity, we given learning's a the we it the was we brand that on

Operator

next question our from with Dibadj Ali Bernstein. take We'll

Ali Dibadj

Hey thanks. guys,

XXXX growth points basis to it like bottom of in if your something line. it back up suggest it XX reinvestment So And points XXX like into to another I'd basis better guidance, understand into out, maybe call the regarding love the leveraging your top-line XXXX. business it would again lack feels of you

share. get in in market continues put decline the so it to XXXX of assess how you your press in return out that And a you've context, release on spend that sense share better. far love getting seen so what market to The I'd you as not given particularly on

still You kind Mexico, share. losing have India France, of Brazil, China, your areas U.S., still core the

how hear overall in the returns context? that to love So you about think

Noel Wallace

Good. Well, part first. latter your question let me the of take

obviously, performance in think business. that the as the the fourth that need the We for behind think the played quarter, some sequentially discussed a invest up to organic Ali, highlighted the fourth. to and that we we've And quite we've I continue to have from the out and relative organic returns you delivered. time results X%

days XXXX strong P&L, premium percent the just mentioned full obviously, much line. Filorga adding advertising, on year a bit a of mechanics guide, brands and of growth. advertising we January, and businesses innovation Obviously order overall focus right couple lot on obviously, deliver continue this relative through But as the higher as a our to our the a long-term the work the macros. the to lot On we've only a investment sales we to of upfront, early behind a we have a to want to can It's It's do and change to now. accelerate in sustainable got year.

obviously the see We'll Mexico see as India seeing. You uncertainty. we're of earlier, a China lot markets of plays Brazil, real a softness likewise out. little where in bit I mentioned

we're So where sit of that continue as we terms necessary. where thinking in appropriate update from absolutely today guidance move the throughout and we are And we'll think year, how we the we about as is the to business.

Operator

take question with Barclays. today final We'll Lieberman our Lauren from

Lauren Lieberman

you not volume when had best coronavirus you. follow-up Thank outlook But since on to think the at just for XXXX. great. look pricing in in performance particular China Oh, about general, I and the Asia wanted seeking performance and Asia all. in XXXX I best back,

a really of what new you being the for you can performance So sort holistic ex-coronavirus talk if uptick have and the if just and about out little could about, bit a thinking like of, again of region? have triggered at that that level level a Thanks. as sustainability things base you're types

Noel Wallace

volume. Darlie now fourth pricing focused innovation particularly helped strategy, at premium very soda our China I we, but quarter. to on those being nicely continue that's you'll perform remind in portfolio around some Was premium question earlier business to again hear the and franchise only deliver back products the our the certainly came not -- There very, become Thanks the on an sold Both China. and in obviously, prices that franchise the businesses in and Lauren. are delivers popular that China. was able be the launch particularly baking have market position Colgate in have surprised the to our audience also well, leadership Darlie

relative mentioned XX/XX I had of to that lot a business here. still We premium as with we're of side earlier where business. do a long-term saw Colgate perform. the turnaround We're midst again good the a to On in we pricing. pleased We work got behind the

miracle our launched we products good product, quarter pricing. that volume Our good volcanic delivered repair and in the

what structuring predict given outwards, we'll growth you in of to deliver the in difficult But the going look As sustainable those point long-term very sustainability markets. that. fundamentals in place at are the the to it's happens this certainly putting implications and and impact we're ourselves we of of to corona now obviously, China, be see right where

Operator

turn I'll it back or to time, closing additional any this at And remarks. management for

Noel Wallace

to in Colgate So, your year no, focus incredible forward wholeheartedly and we And thank that look at support and CAGNY. let the you listening, all for forward discussions last to I everyone Obviously see people for for having everyone. your XXXX. more Thanks are me there. thank everyone. we'll the continued work look you

Operator

Ladies for and gentlemen, this thank participation. your does conference. conclude you today's We

You may disconnect. now

Colgate-Palmolive (CL) 31 Jan 202019 Q4 Earnings call transcript